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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 

FORM 8-K 
CURRENT REPORT 
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 
Date of Report (Date of earliest event reported)—September 30, 2003 
Plains All American Pipeline, L.P.
(Name of Registrant as specified in its charter) 
DELAWARE
(State or other jurisdiction
of incorporation or organization)	 	1-14569
(Commission File Number)	 	76-0582150
(I.R.S. Employer
Identification No.)	

333 Clay Street, Suite 1600
Houston, Texas 77002
(713) 646-4100
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)	

N/A
(Former name or former address, if changed since last report.)	

Item 7. Financial Statements and Exhibits 
(c)
Exhibits 

99.1	 	Unaudited Balance Sheet of Plains AAP, L.P., dated as of September 30, 2003.	
2

SIGNATURES 
        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. 
 	 	 	 	PLAINS ALL AMERICAN PIPELINE, L.P.	

Date: January 15, 2004	
 	
By:	
 	
Plains AAP, L.P., its general partner	

 	
By:	
 	
Plains All American GP LLC, its general partner	

 	
By:	
 	
/s/ Phil Kramer

Name: Phil Kramer
Title: Executive Vice President and Chief Financial Officer	
3

Index to Exhibits 
99.1	 	Unaudited Balance Sheet of Plains AAP, L.P., dated as of September 30, 2003.	
4

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Item 7. Financial Statements and Exhibits
SIGNATURES
Index to Exhibits

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Exhibit 99.1 

PLAINS AAP, L.P.
BALANCE SHEET
(in thousands) 
 	 	September 30,
2003
	
ASSETS	
Cash	 	$	8	
Accounts Receivable	 	 	57	
Investment in Plains All American Pipeline, L.P.	 	 	58,927	
 	 		
 	Total Assets	 	$	58,992	

LIABILITIES AND PARTNERS' CAPITAL	

LIABILITIES	

 	

Performance Options Obligation	
 	
$	
1,203	

COMMITMENTS AND CONTINGENCIES	

 	

PARTNERS' CAPITAL	

 	

Limited Partners	

57,352	
General Partner	 	 	437	
 	Total Partners' Capital	 	 	57,789	
 	 		
 	 	Total Liabilities and Partners' Capital	 	$	58,992	
 	 		
The accompanying notes are an integral part of this financial statement. 

PLAINS AAP, L.P.
Notes to the Financial Statement 
Note 1—Organization 
        Plains AAP, L.P. (the "Partnership") is a Delaware limited partnership, which was formed on May 21, 2001, and, through a series of transactions, was capitalized on June 8, 2001. Through this series of transactions Plains Holdings II Inc. conveyed to the Partnership its general partner interest in Plains All American Pipeline, L.P. ("PAA") and subsequently sold a portion of its interest in the newly formed partnership to certain investors. The ownership interests in the Partnership (collectively, the "Partners") at September 30, 2003, are comprised of a 1% general partner interest held by Plains All American GP LLC (the "General Partner") and the following limited partner interests: 
•
Plains Holdings II Inc.—43.560% 
•
Sable Investments, L.P.—19.800% 
•
KAFU Holdings, L.P.—16.253% 
•
E-Holdings III, L.P.—8.910% 
•
Mark E. Strome—2.113% 
•
PAA Management L.P.—3.960% 
•
Strome Hedgecap Fund, L.P.—1.055% 
•
First Union Investors—3.349% 
        As of September 30, 2003, we own a 2% general partner interest in PAA and a limited partner interest consisting of 446,875 subordinated units (see Note 4). PAA was formed in September of 1998, and in the fourth quarter of 1998 completed its initial public offering and the transactions whereby it became the successor to the midstream crude oil business and assets of Plains Resources Inc. and its midstream subsidiaries. PAA's operations are concentrated in Texas, Oklahoma, California and Louisiana and in the Canadian provinces of Alberta and Saskatchewan, and can be categorized into two primary business activities: 
•
Crude Oil Pipeline Transportation Operations. PAA owns and operates gathering and mainline crude oil pipelines located throughout the United States and Canada. Its activities from pipeline operations generally consist of transporting crude oil for a fee, third party leases of pipeline capacity, barrel exchanges and buy/sell arrangements. PAA also utilizes its pipelines in its merchant activities conducted under its gathering and marketing business. 
•
Gathering, Marketing, Terminalling and Storage Operations. In connection with its terminalling and storage activities, PAA owns and operates crude oil terminalling and storage facilities, including the terminalling and storage facility at Cushing, Oklahoma. PAA's terminalling and storage operations generate revenue through a combination of storage and throughput charges to third parties. PAA also utilizes its storage tanks to counter-cyclically balance its gathering and marketing operations and to execute different hedging strategies to stabilize profits and reduce the negative impact of crude oil market volatility. Its gathering and marketing operations include: 
•
the purchase of crude oil at the wellhead and the bulk purchase of crude oil at pipeline and terminal facilities; 
•
the transportation of crude oil on trucks, barges and pipelines; 
•
the subsequent resale or exchange of crude oil at various points along the crude oil distribution chain; and 

•
the purchase of liquefied petroleum gas ("LPG") and other petroleum products from producers, refiners and other marketers, and sale of LPG and other petroleum products to wholesalers, retailers and industrial end users. 

Note 2—Summary of Significant Accounting Policies 
Use of Estimates 
        The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet. These estimates include those made in determining the value of the vested options under our Performance Option Plan (see Note 6). Although management believes these estimates are reasonable, actual results could differ from these estimates. 
Investment in PAA 
        We account for our ownership investment in PAA in accordance with Accounting Principles Board Opinion No. 18, "The Equity Method of Accounting for Investments in Common Stock." We have the ability to exercise significant influence over PAA, but not control; and therefore, we account for the investment under the equity method (see Note 5). 
Stock-Based Compensation 
        The recipients of the options issued under the Performance Option Plan are employees of the General Partner. The options are for units of PAA. Thus, the accounting models prescribed by both Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation," as amended by SFAS No. 148 "Accounting for Stock-Based Compensation—Transition and Disclosure" and Accounting Principles Board Opinion No. 25 "Accounting for Stock Issued to Employees" are not appropriate. We account for the options using a probability approach based on when the options will vest. Once the options vest, we adjust the accrual each period based on their fair market value as calculated using the "Black-Scholes Model" (see Note 6). 
Income Taxes 
        No liability for U.S. Federal or Canadian income taxes related to our operations is included in the accompanying financial statement because, as a partnership, we are not subject to Federal, State or Provincial income tax; and the tax effect of our activities accrues to the Partners. The Partners may be required to file U.S. Federal and State, as well as Canadian Federal and Provincial, income tax returns. 

Note 3—Investment in PAA 
        Our investment in PAA at September 30, 2003, is approximately $58.9 million. The summarized financial information of PAA at September 30, 2003, is presented below (in thousands): 
Current assets	 	$	564,228	
Non-current assets	 	$	1,245,914	
Current liabilities	 	$	629,531	
Long-term debt and other long-term liabilities	 	$	475,223	
Partners' capital	 	$	705,388	
        At the date of inception, our investment in PAA exceeded our share of the underlying equity in the net assets of PAA by approximately $44.5 million. This excess is related to the fair value of PAA's crude oil pipelines and other assets and is amortized on a straight-line basis over their estimated useful life of 30 years. At September 30, 2003, the unamortized portion of this excess was approximately $41.0 million. 

Note 4—Contribution of Subordinated Units 
        On June 8, 2001, certain of our limited partners contributed to us an aggregate of 450,000 subordinated units of PAA. In November 2003, 25% of these subordinated units converted into common units. If certain financial tests continue to be met, the remaining 75% will convert in February 2004. These 450,000 units (the "Option Units") are intended for use in connection with an option plan pursuant to which certain members of the management of our general partner will, subject to the satisfaction of vesting criteria, have a right to purchase a portion of such Option Units. During September 2003, options for 3,125 Option Units were exercised (see Note 6). Until the exercise of the remainder of such options, we will continue to own and receive any distributions paid by PAA with respect to the Option Units. Any distributions we make as a result of the receipt of distributions on the Option Units will be paid to our limited partners in proportion to the original contribution of the Option Units. 
        The conversion of 25% of the subordinated units resulted in a gain for the Partnership. The gain represents the difference in our basis in the subordinated units that converted and the fair market value of the common units on the conversion date. The gain is non-cash and will be reflected in our Investment in PAA and Partners' Capital accounts in November 2003. 

Note 5—Partners' Capital 
        We distribute all of our available cash, less reserves established by management, on a quarterly basis. Except as described in Note 4, distributions are paid to the partners in proportion to their percentage interest in the Partnership. Included in partners' capital is accumulated other comprehensive income of approximately $5.0 million related to our share of PAA's accumulated other comprehensive income (loss). Other comprehensive income (loss) is allocated based on the partner ownership interest. 
        The General Partner manages the business and affairs of the Partnership. Except for situations in which the approval of the limited partners is expressly required by the Partnership agreement, or by nonwaivable provisions of applicable law, the General Partner has full and complete authority, power and discretion to manage and control the business, affairs and property of the Partnership, to make all decisions regarding those matters and to perform any and all other acts or activities customary or incident to the management of the Partnership's business, including the execution of contracts and management of litigation. The General Partner (or, in the case of PAA's Canadian operations, PMC (Nova Scotia) Company) employs all officers and personnel involved in the operation and management of PAA and its subsidiaries. PAA reimburses the General Partner for all expenses, including compensation expenses, related to such operation and management. The Partnership has no commitment or intent to fund cash flow deficits or furnish other financial assistance to PAA. 
        During September 2003, PAA completed the issuance and sale of 3,250,000 Common Units at a public offering price of $30.91 per unit. In conjunction with that offering, we received additional investments from the Partners and made a contribution to PAA totaling approximately $2.1 million. 
        During March 2003, PAA completed the issuance and sale of 2,645,000 Common Units at a public offering price of $24.80 per unit. In conjunction with that offering, we received additional investments from the Partners and made a contribution to PAA totaling approximately $1.3 million. 

Note 6—Performance Option Plan 
        In June 2001, the Performance Option Plan (the "Plan") was approved by the General Partner to grant options to purchase up to 450,000 Option Units of PAA to employees of the General Partner. See Note 4. Options to purchase 375,000 units have been issued under the Plan. The options were granted with a per unit exercise price of $22, less 80% of any per unit distribution on an Option Unit 

from June 2001, until the date of exercise. Currently, the exercise price has been reduced to $17.75 for distributions made since June 2001. 
        The options have ten-year term and vest in 25% increments upon PAA achieving quarterly distribution levels as follows: 
Vesting %
	 	Quarterly
Distribution
Level
	 	Annual
Distribution
Level
	
25%	 	$	0.525	 	$	2.10	
50%	 	$	0.575	 	$	2.30	
75%	 	$	0.625	 	$	2.50	
100%	 	$	0.675	 	$	2.70	
In April 2002, upon declaration of the first quarter 2002 distribution, PAA attained the distribution level necessary for 25% or 93,750 of the options to vest. On September 30, 2003, 3,125 options were exercised at a weighted average exercise price of $18.19. In conjunction with this exercise, we recorded a gain of approximately $62 thousand, which represents the difference between i) the combination of the exercise price and the exercised portion of the Performance Options Obligation and ii) our weighted average basis in the subordinated units. Additionally, we recorded approximately $57 thousand to Accounts Receivable for the amount owed for the exercise of the options. No options expired or were forfeited during the year. Future grants may include different vesting criteria. 
        These options are considered performance awards and are accounted for at fair value when vesting is probable and are revalued at each financial statement date based on the "Black-Scholes Model." At September 30, 2003, an estimated fair value of $13.28 per unit resulted in a cumulative reduction of the Partners' capital accounts and corresponding increase in the Performance Options Obligation of approximately $1.2 million. 
        The facts and assumptions used in the "Black-Scholes Model" at September 30, 2003, were as follows: 
Assumptions	 	
Options
Outstanding
	 	Percent
Vested
	 	Options
Vested
	 	Weighted
Average
Interest
Rate
	 	Weighted
Average
Expected
Life
	 	Weighted
Average
Expected
Volatility
	 	Weighted
Average
Expected
Dividend
Yield (1)
	 	
371,875	 	25	%	90,625	 	3.02	%	4.8	 	29.50	%	1.95	%	

(1)
Reflects 20% of anticipated dividend yield. The adjustment is to provide for the reduction in the exercise price of the options equal to 80% of distributions. 

Note 7—Subsequent Event 
        PAA declared cash distributions to the Partnership of $2.0 million ($0.6 million for its general partner interest and $1.4 million for its incentive distribution interest) for the third quarter of 2003. The distribution, which was declared on October 23, 2003, was received on November 14, 2003. 
        During December 2003, PAA completed the issuance and sale of 2,840,800 Common Units at a public offering price of $31.94 per unit. In conjunction with that offering, we received additional investments from the Partners and made a contribution to PAA totaling approximately $1.9 million. 

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Exhibit 99.1
PLAINS AAP, L.P. BALANCE SHEET (in thousands)
PLAINS AAP, L.P. Notes to the Financial Statement
Note 1—Organization
Note 2—Summary of Significant Accounting Policies
Note 3—Investment in PAA
Note 4—Contribution of Subordinated Units
Note 5—Partners' Capital
Note 6—Performance Option Plan
Note 7—Subsequent Event