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Plains All American Pipeline LP (PAA - Analyst Report) extended its practice of sharing more benefits with its unitholders through the increase of the cash distribution rate. The partnership announced a new quarterly cash distribution rate of $1.025 per unit on all of its outstanding limited partner units.

The partnership has a long history of increasing distributions to unitholders. With this distribution, Plains has increased the quarterly distribution to limited partners in 29 out of the past 31 quarters. Plains' consistent hike in distribution bespeaks the partnership's commitment to provide increasing returns to stakeholders, leveraging its profitable assets.

The new distribution reflects a 3.0% growth over the quarterly distribution of 99.5 cents per unit paid in November 2011 and an increase of 7.0% from the quarterly distribution of 95.75 cents per unit paid in February 2011. The new distribution will be paid on February 14, 2012, to unit holders of record as of February 3, 2012.

Plains’ cash distributions depend primarily on cash flow that includes cash flow from financial reserves and working capital borrowings. The distribution does not solely depend on profitability, which can be affected by noncash items. Hence, the partnership can carry on with cash distribution even during periods of losses.

Plains reported strong third quarter results, which surpassed the year-ago performance as well as our expectation. The partnership is optimistic about maintaining its growth momentum for the remainder of the year and expects earnings per unit to range from $1.23 to $1.49 for the fourth quarter and $4.81 to $5.08 for the full year. Our expectations for the fourth quarter and fiscal 2011 are $1.56 and $5.09 per unit, respectively.

Enterprise Products Partners LP (EPD - Analyst Report), a Plains All American peer, also increased its quarterly cash distribution rate in October 2011. The increased quarterly distribution of 61.25 cents per unit, paid in November 2011, represented a growth of 5.1% over the quarterly distribution of 58.25 per unit paid in November 2010 and an increase of 1.2% from the quarterly distribution of 60.50 cents per unit paid in August 2011.

Plains All American Pipeline currently retains a Zacks #1 Rank, which translates into a short-term Strong Buy rating. The partnership competes with Enterprise Products Partners LP and Sunoco Logistics Partners L.P. (SXL - Analyst Report) among others.

Houston, Texas based Plains All American is engaged in the transportation, storage, terminalling and marketing of crude oil, refined products and liquefied petroleum gas and other natural gas related petroleum products. The partnership is also involved in the development and operation of natural gas storage facilities.

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