Enterprise Products Partners LP (EPD) 2005 Q4 法說會逐字稿

Good morning. Thank you all for holding. I'd like to remind all parties that they will be on a listen-only mode until today's question-and-answer session. Also, the conference is being recorded. So if anyone has objections, they may disconnect at this time.

I'd like to turn the conference call over now to Randy Burkhalter, Director of Investor Relations. Sir, you may begin.

Thank you, Kelly. Good morning. Welcome to the Enterprise Products Partners conference call to discuss earnings for the fourth quarter of 2005. Bob Phillips, Enterprise's President and CEO, will lead the call, followed by Mike Creel, our Executive Vice President and CFO. Also included on the call today from Enterprise are Dan Duncan, our Chairman and Founder; Ralph Cunningham, Executive Vice President and our Chief Operating Officer; and several other members of our senior management (technical difficulty). Afterward, we will open the call up for your questions.

Before we get started, I would like to say during this call, we will make forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934 based on the beliefs of the Company, as well as assumptions made by information currently available to Enterprise's management. Although management believes that the expectations reflected in such forward-looking statements are reasonable, it can (technical difficulty) no assurance that such expectations will prove to be correct. Please refer to our latest filings with the Securities and Exchange Commission for a list of factors that may cause actual results to differ materially from those of the forward-looking statements made during this call.

With that, I will turn the call over to Bob.

Thanks, Randy. Good morning to all of you. Thank you for joining us. We're very pleased as you might expect to have announced a strong first and fourth quarter and to have the opportunity to look back on 2005 and declare it a success by any measure. It exceeded our expectations, particularly in light of the challenges that we faced from the hurricanes and the disruption to normal business conditions and operations during the end of the third quarter and beginning of the fourth quarter.

In that regard, I would like to start by recognizing our employees, who did a remarkable job by maintaining vital services to our customers during the hurricane period and then moving quickly to get our assets back in operation after the hurricane. Hats off to them. They did a fabulous job and clearly contributed to our success during the year.

I'd also like to highlight the diverse set of assets that we have here at Enterprise, which delivered as we expected, as lower volumes in the offshore and Gulf Coast regions were offset by a very strong performance in some of our other businesses in regions that diversification was one of the central themes of the merger with GulfTerra.

Also, our natural hedge to gas prices was evident throughout the year, as prices hit record levels in 2005. But our earnings remained stable. Again, that was one of the themes that we delivered on this year. In summary, we weathered the storms clearly, and I think this highlights the strength of our very unique Midstream business model.

So let me if you will reflect back on 2005 and call your attention to a number of achievements that we had throughout the year. Starting with the efficient integration after the merger, we moved quickly and aggressively to develop new projects across our value chain. Now, many of you we met with and discussed our plans for the merger integration and we clearly highlighted cost savings. But, we're not so clear and certain about the revenue-enhancement opportunities from new project development. I think with the announcements today in which you have seen us announce throughout the year and accomplish in 2005, we were very aggressive in developing new projects through the combined entities. We also maintained a strong balance sheet during the year, while investing substantial organic capital in projects that will drive our future growth. I'm proud of the job that Mike Creel and his team have done in maintaining our position on the balance sheet.

We were very disciplined in 2005. You didn't see us chase after high-cost acquisitions. We focused on developing our core businesses, where our strengths lie. As a result, we delivered solid financial results through the year, including record EBITDA and record distributable cash flow of 1.3 times coverage ratio as well as a 9.4% increase in distributions to our limited partners. So I was very pleased with that.

All-in-all, I think we met our financial goals, and we also built a strong platform for the partnership's future. Now, before Mike provides you with the financial and operating statistics for the fourth quarter and the full year, I want to highlight some of the assets that made major contributions to Enterprise's success in 2005. Starting with our core NGL business -- core natural gas liquids business, the business Mr. Duncan has been building for the last 30 years -- has had a great year in 2005, providing more than 50% of our gross operating margin, which was a substantial increase from 2004 and I think that's a very relevant comparison. Gas processing reflected the positive environment for NGL prices during the year as well as the changes to our contract portfolio as we move towards more fee-based processing and derisking our processing business. We clearly increased the scope of our processing business and access to more natural gas liquids with the addition of plants in Texas and New Mexico from the merger, and we're clearly further extending that business with recently-announced projects in the Rocky Mountain region.

As well, natural gas liquid pipelines and fractionation also had a solid year. The indicators were MAPL, the Mid-America Pipeline system, which ran close to 90% of capacity, were wide grade coming from the Rockies. During the year, we increased our ownership and assumed operatorship of Dixie to better serve our customers in the Southeastern part of the United States. Mont Belvieu fractionation ran near capacity for much of the year, justifying the expansions that we have announced.

Our import/export facility registered a large increase in international activity, and we signed some important long-term contracts with those customers. Importantly, our Gulf Coast area of pipelines and storage played a critical role in helping the industry get back on its feet in the aftermath of the hurricanes.

Turning to our extensive onshore natural gas pipeline business, it was also a significant contributor in '05 with 31% of the gross operating margin. A number of real fundamental highlights there drove the success in this sector, starting with the San Juan Basin. That gathering system saw a record number of new well connects, 386 versus 251 in the prior year. Of course that was driven largely by higher prices and the impact of our system optimization project, which was completed last year. It increased our gathering system capacity by 10%.

We also show a number of record well connects in the Permian Basin region, particularly on the Carlsbad and the Waha systems -- separate gathering systems which combined registered a 17% increase in net volumes in 2005. That was due to robust drilling activity as well as system expansions. We continue to be excited about the future of the Permian Basin, as we've just recently connected our first Barnett Shale well to the Waha system, which indicates a possible geographic extent of that play for North Texas.

Moving back into East to the Texas Intrastate Pipeline system, it had a spectacular year in 2005, transporting on a net basis almost 3.5 Bcf a day, up 11% year over year. That is a huge build on the largest gas system in Texas. We clearly benefited from higher volumes in the Barnett Shale region as well as improved margins, as we read contract for capacity with our major customers, and lower fuel use on the system, which was an important added feature after the merger of this year.

The offshore business was hit hard by the hurricanes; no doubt about it. The financial results reflected the lower volumes due to the shut-ins and delays. Now, having said that, we did not suffer any significant long-term damage to our offshore assets, and we're pleased with that. We also made very good progress in 2005 on our growth projects notwithstanding the evacuations and the delays in the region.

Marco Polo and Cameron Highway are poised for a significant ramp-up in production in '06 and '07. Constitutional and gas lines have been completed with first deliveries expected in February. The Independence Hub and Trail projects are on schedule, on budget and have recently been expanded to 1 Bcf a day to accommodate new large gas discoveries that our producers have completed on dedicated acreage in the Eastern Gulf of Mexico.

With more than $900 million already spent on these offshore projects in '04 and '05, we have largely completed our offshore development program at this point in time with only the remaining capital committed to the Independence projects to be spent in 2006. We're pleased with that position in the low-risk nature of those investments. Now, as I said, they are poised to ramp up in 2006. And we believe these investments will make a material contribution to Enterprise over the next 18 months as that production comes on-stream from those dedicated fields.

Let me turn finally to petrochemical services, which also had an excellent second half of 2005. As we completed the octane enhancement modifications in the first half of the year, we also enjoyed strong demand for butane isomerization and propylene fractionation services and we also expanded our petrochemical pipeline assets in the Gulf Coast region, which should have a positive impact on '06 and beyond.

On the demand side, we're confident that petrochemical demand will continue to track the U.S. economy and be stable to up. We are very excited to have the potential growth from the expansions announced and unannounced in the refining sector, which should make a material increase in demand for our products and services on the heavy end of NGL barrel.

Now the central themes that I've talked about and remain to our future success are clear -- the large geographic footprint, the diverse Midstream assets, the integrated value chain and strong customer relationships. So, looking forward, let's talk about the progress we're making on executing our growth plan. We filed an informative presentation to investors on January 17th; we highlighted that in this press release. I encourage you to go to our Website for those slides. I think you'll find significant information, not only about our overall growth strategy, but the projects that we have announced today along with our fourth-quarter earnings. In the presentation, we emphasize our commitment to organic growth and our balanced approach that we're taking by developing a diverse set of regional growth strategies that leverage off our competitive position in each of those regions. Today's announcement underscore that commitment, particularly through the growth in the prolific Rocky Mountain region.

We're developing, as you know, two new processing projects in the Rockies -- one in the Piceance Basin of Western Colorado, the other to support the expected growth from the Jonah-Pinedale area of Southwestern Wyoming. Each of these regions and these projects offers to Enterprise exposure to long-term, significant resource development plays. As the projects are completed and new NGLs are produced, these projects will feed into the Phase I expansion of our Mid-America Pipeline system, which is expected to be complete around the second quarter of 2007. These new NGL supplies will be fractionated further downstream at our new Hobbs fractionator and can be stored at our new Hutchinson storage facility near Conway, which better positions us to supply the growing market for finished products in this region.

Taken as a whole, our new Western U.S. strategy provides a low-risk and clear industry solution for new natural gas liquid supplies from the Rockies and also balances our capital commitments that we have made and incurred to the deepwater trend in the Gulf of Mexico, which of course remains a significant source of future oil and gas supplies and infrastructure opportunities. Compared to the rest of the MLP sector, no other MLP is as well-positioned for growth in new supplies from the Gulf of Mexico and the Rocky Mountain regions as is Enterprise. As we continue through this major construction cycle, which began in 2004 and 2005, I think we will employ a prudent amount of capital to develop these low-risk expansions, extensions and new build projects, which will leverage off of our competitive position. With a pipeline full of more than $3.5 billion worth of organic growth projects in the completed and ramp-up or under construction or in the final development phase, Enterprise has one of the most visible and secure growth profiles of any partnership in the sector.

Our record 2006 growth capital budget of $1.56 billion dedicated to these projects that have been announced is an indicator of our commitment to this strategy, the well-placed location of our assets and the growing demand for the services that we provide to our customers. In a nutshell, we're in the right place at the right time. We've got a strong balance sheet, and we're executing aggressively on this organic plan.

With that overview, I am pleased to turn it over to Mike Creel, our CFO, who will review the quarter and the year. Mike?

Thanks, Bob. Revenue for the fourth quarter of 2005 was $3.8 billion; that's a 31% increase over the 2.9 billion in the fourth quarter of last year. Gross operating margin increased 9% to $303 million from 279 million in the fourth quarter of last year. This includes a reduction of approximately $21 million from Hurricanes Katrina and Rita, primarily from decreased volumes in our offshore NGL business. That amount was somewhat offset by 4.8 million from the initial recoveries from business interruption insurance related to Hurricane Ivan. So, that $21 million is a net between the actual business interruption losses and the recoveries that we got. We do expect to get additional recoveries in our business insurance in 2006 and 2007 related to all three of the hurricanes.

Turning to our business segments, gross operating margin for NGL pipelines and services increased to 152.3 million for the fourth quarter of this year from 142.5 million in the same quarter of last year. The primary source of this increase was the partnership's NGL pipeline and storage business, which increased $9.6 million or 19% quarter to quarter. Improved results from our NGL storage facilities in Mont Belvieu and increased ownership in our Dixie Pipeline and increased volumes on it as well as an increase in the NGL export activities in our channel pipeline that transports NGLs from the Houston Ship Channel to Mont Belvieu were the primary reasons for the increase. These were partially offset by lower growth gross operating margins for the Mid-America Pipeline due to lower transportation volumes and higher energy costs.

Gross operating margin from our NGL fractionation business increased $1.9 million or 12% quarter over quarter, primarily due to an increase in margins at our Mont Belvieu fractionators. Partially offsetting this was a decrease in gross operating margins as a result of lower volumes available to be fractionated at Norco, Promix and our Baton Rouge fractionators in Louisiana due to Hurricanes Katrina and Rita.

Our natural gas processing and related marketing business generated gross operating margins of 73.7 million in the fourth quarter of 2005, down slightly from 75.4 million in the same quarter of 2004. An overall decrease in volumes processed at our gas plants in Texas and in Louisiana, primarily due to the hurricanes, was the major reason for lower gross operating margin. This was partially offset by higher gross operating margins from our NGL marketing business and from our processing plants in the San Juan and Permian Basins.

Gross operating margin from offshore pipelines and services declined to 15.3 million for the quarter, down from 33.9 million in the fourth quarter of last year. Again, this is primarily due to lower volumes and higher operating expenses as a result of the two hurricanes. Our offshore natural gas pipelines reported gross operating margin of 4.7 million, down from 14.4 million in the fourth quarter of last year. On average, throughput of 1.5 trillion Btus per day and that was down 18% from the same quarter of last year. Our offshore oil pipelines had gross operating margins of 2.7 million for the quarter compared to 5.8 million in 2004, with throughputs to these pipelines averaging 109,000 barrels per day in the fourth quarter of '05 compared to 138,000 barrels a day last year. Our offshore platform services and production business earned 7.9 million in gross operating margin for the quarter compared with 13.6 million last year.

Gross operating margin from onshore gas pipelines and services increased 32% to $95.3 million for the fourth quarter of '05 compared to 72 million in the fourth quarter of last year. Higher gross operating margins from our gathering pipelines in the San Juan and Permian regions as well as our natural gas storage business were the primary drivers of this increase. Our Texas Intrastate Natural Gas Pipeline had a solid performance, increasing transportation by 11% as a result of new developments, such as the Barnett Shale. We also completed a record number of well connects in the San Juan Basin this year due to the substantial completion of our optimization projects. The onshore gas pipelines transported 5.9 trillion Btus per day in the fourth quarter this year, up 5% over the same quarter of last year.

Gross operating margin from petrochemical services increased 9.7 million to $40.5 million in the fourth quarter. That's a 32% increase over the 30.8 million in the fourth quarter of 2004. Approximately 8 million of that increase was from our octane enhancement business, which generated gross operating margin of 4.4 million in the quarter compared with a loss of $3.6 million in the fourth quarter of last year. Increased demand for motor gasoline additives in October of 2005 led to a 47% increase in pricing for octane additives.

Depreciation expense included in operating costs and expenses was $109.4 million in the fourth quarter of 2005 compared with 99.1 million for the fourth quarter of 2004. This increase is primarily attributable to the depreciation and amortization associated with the values assigned to GulfTerra's property, plant, equipment and intangible assets. Approximately 6.3 million of that amount is a true-up for prior period.

General and administrative expense was 15.6 million for the fourth quarter of 2005 compared with 20 million for the fourth quarter of 2004. Our G&A expenses in the fourth quarter last year included some costs associated with the merger. Year to date, G&A expense was $62.3 million, which is in line with our current -- our recent expectations but lower than the $80 million that we had in our budget beginning 2005. Interest expense for the fourth quarter was 59.9 million, which was slightly lower than it was last quarter and slightly higher than the $58.8 million in the fourth quarter of 2004.

Our weighted average debt outstanding was $5 billion for the fourth quarter of 2005, up from 4.4 billion to the fourth quarter of last year. Net income for the fourth quarter of 2005 was $108.4 million compared with 115.4 million for the fourth quarter of 2004. Earnings per unit on a fully adjusted basis for the quarter were $0.23 per unit. After adjusting for the $21 million or $0.06 per unit for the impact of the hurricanes and another $0.01 for the $4.2 million change for the cumulative effect of a change in accounting principles, our adjusted earnings for the quarter were $0.30 per unit. This compares with $0.24 per unit in the fourth quarter of '04 after adjusting for the 15.1 million or $0.04 per unit gain on the sale of our interest in Cameron Highway back in 2003. If you will remember, in 2004, we received an additional payment that hit our net income.

Distributable cash flow totaled 211.7 million for the fourth quarter of '05, resulting in a distribution coverage ratio of 1.1 times for that quarter. Distributable cash flow for the full year of 2005 was 906.1 million and provided 1.3 times coverage of cash distribution. In the five quarters since the GulfTerra merger, we have retained $201 million of distributable cash flow. In since our IPO, we have retained $442 million of distributable cash flow for reinvestment in our business.

The Board of Directors of our general partner increased the quarterly distribution for the fourth quarter of 2005 to $0.4375 per unit. That's an increase from the $0.43 per unit for the third quarter of this year. It also represents a 9.4% increase over the $0.40 per unit rate that was paid with respect to the fourth quarter of 2004. This $1.75 per unit annual distribution rate is also 17.4% higher than the $1.49 that was in effect immediately prior to the GulfTerra merger.

This year, we made capital investments of $1.3 billion for organic growth projects, business combinations, asset purchases and investment in unconsolidated affiliates. As Bob mentioned for 2006, we expect to spend approximately $1.56 billion on organic growth projects and approximately 76% of this targeted for onshore projects, including the Rocky Mountain initiatives that Bob discussed.

At year end, we had $4.8 billion of debt outstanding. Our consolidated net debt-to-total capitalization was 45.4% and we had available liquidity of approximately $770 million. You will recall that we omitted our credit facility in October of 2005 to increase the size to $1.25 billion. We extended the maturity to October of 2010. And we reduced the sum of the applicable margin for the euro dollar rate at a facility fee by about 37.5 basis points.

Our floating interest rate exposure at year end was approximately 32% of our total debt, and that includes our project financings. Our debt had a weighted average life of 10.6 years and a weighted average interest rate of 5.5%.

Our debt-to-EBITDA ratio as calculated under our credit agreement was 4.14 times at year end. If you remember, in the credit agreement, it calls for EBITDA for the last 12 months to be adjusted by subtracting equity earnings from unconsolidated affiliates, adding the actual cash distributions we receive from those affiliates. It's also adjusted to reflect a full year of EBITDA from acquisitions that we've completed within the last 12 months. This EBITDA is not adjusted to reflect the earnings power embedded in our growth capital construction work, nor is it adjusted for the effects of the hurricanes.

With that, we'll now open it up for questions.

Kelly, we are ready to take questions now.

(Operator Instructions). Michael Blum, Wachovia.

I had just a couple of questions on the hurricane and the like. The first one is, of that I guess that net 21 million that you pointed out, how much of that do you think you will ultimately be able to recover and when do you think you'll be able to get those payments?

The amounts that we are showing there are -- those are net of the deductible, Michael. That's not the full impact. It's net of the deductible. So those are really kind of the amount that we would expect to get.

And then I guess the other question is, last quarter, you also were impacted by the hurricane but that was more than offset by some benefits you had as a result I think in like the butane isomerization and some of those petrochem areas. I'm wondering what type of -- if you had any of that in the fourth quarter and if so, if you could quantify that.

It's nothing that we can quantify necessarily. But we did notice obviously that in our NGL pipelines -- the [Luke ex-NGL] Pipeline ran at higher capacities than it had at the pre-hurricane levels. And that was really a function of moving NGLs from the East Texas markets over to Louisiana to compensate for the fact that there were a number of processing plants and fractionators down in Louisiana. So, we had benefits there, and I'm sure there were other benefits across our system. It's just difficult to point to them and quantify them as being solely attributable to the hurricane.

Then just last question is on the debt. Is 32% a good -- is that a rate you're comfortable with in terms of keeping the flowing-to-fixed ratio?

Yes, we're kind of looking in the 30 to 35% range as being a prudent -- we tend to keep more of our debt under fixed rates than a lot of our peers, but we think that's a prudent thing to do.

Paul Tice, Lehman Brothers.

I was wondering if you could walk us through what your funding plan would be for next year's -- well this year's CapEx. And as part of that, your leverage right now on a pro forma basis under the bank covenant is 4.1 times. Where do you see that leverage number going forward, and is 3.5 to 4 times still the target range longer-term?

I'll take the last question first. 3.5 to 4 is where we'd like to be. Obviously, as Bob mentioned, this is a major year for us in terms of construction -- finishing up a number of these big projects that we've got our plate. We think that the debt to EBITDA may bump up slightly. We don't expect it to do that materially. Once these projects come on in '07 and '08 and starting to see the benefits of the cash flows from those projects, we'd expect that ratio to drop quite a bit.

In terms of our funding, we are planning to fund this with a prudent approach mindful of the fact that we want to maintain our investment-grade credit ratings. If you are asking for me to tell you, are we going to go to the equity markets and when? We're not going to discuss that.

Do you have the breakout of cash versus bank availability at the end of December?

It's about $41 million of cash, and the balance of that 770 million of liquidity would be under our revolver.

What's the term on the revolver, Mike?

It goes to October 2010.

2010. Just last question -- still no plans to not keep the two MLPs separate -- sorry for the double negative.

It's fine. I think I got the message. If you look at where Enterprise and TEPPCO are trading relative to each other and the way that we look at it is the way they are trading relative to their distributable cash flow. Clearly, Enterprise is trading at a discount and any kind of a merger would require either the Enterprise unit holders to suffer or the TEPPCO unit holders to have some dilution perhaps at a significant discount to the market price. We just don't think the numbers work given the current environment. Dan and his private company bought the TEPPCO general partner, got a very attractive price -- very happy with the investment. And under the current economics, we don't see any merger in the near-term.

In your discussions with the agencies a year ago when you announced the trade, was there a horizon during which they didn't want to see that merger or integration happen, whereas they would be comfortable maybe over the medium-term if the economics changed?

I don't know what they are thinking. When we met with the agencies after Dan acquired the TEPPCO general partner, we told them we had no plans for a merger and that has not changed.

Robert Lane, Sanders Morris Harris.

Gentleman, I just wanted to do a quick update on some of the projects you all have out on the offshore pipelines. You all had made the rounds last week and also put the presentation on that showed it looks like Cameron Highway tops, you would get up to about 100 barrels per day by -- I'm sorry 100,000 barrels per day by March of '06. I just wanted to see if it still looked like that's what the prognosis was and if you could tell me what they are running today as well?

Robert, I'm looking for the daily volume report and I am going to ask James Lytal to talk specifically about the near-term ramp-up production.

Bob, I will go ahead. I think today, we're doing around 65 to 70,000 barrels a day and we still believe in that ramp-up. It's with the addition of more Holstein and Mad Dog wells and then Constitution and Ticonderoga coming on here in the near-term; that's what's causing that ramp-up.

Does that Marco Polo ramp-up still look to be about the same as you all had in the presentation?

We don't see any changes in that. We did the first cake in North well has come on -- came on last week and is performing well. So, that is on track as we laid it out last week.

John Tysseland, Citigroup.

I was wondering if you could briefly discuss or give us a general idea of the magnitude of the acquisition of natural gas processing plant from TEPPCO kind of mentality behind that and how valuation discussions will be handled.

John, I'm going to suggest to you that because of the nature of the agreement that we reached with TEPPCO regarding this transaction that it is obvious that the nature of the discussions are in their preliminary stage. Otherwise, we would have announced more than a non-binding letter of intent. What that announcement does is indicate that the two companies have gotten together, determined that there is a strategic fit that would support this transaction. But, we have not had the opportunity to reach any conclusions about specifics associated with the trade. But I think that as we had discussions with TEPPCO, the opportunity for Enterprise as a second-largest processing company in the industry to come into that region and install processing equipment that would create more value for their gathering system and make them much more competitive with their investment was very attractive and intriguing to them. And that is the basis upon which we will reach an agreement.

So until we have an agreement, I hesitate to give you any boundaries. I can tell you that you will find if you talk to industry consultants that conditioning plants are fairly small facilities. They really just knock out heavy end liquids. As a result, they are not particularly expensive when compared to a large 650 million a day cryogenic processing plant. So it will be a fairly small capital transaction once we complete the arrangements to acquire both the existing Pioneer silica gel plant as well as the gas processing rights.

Then Enterprise will make a much more substantial capital commitment to that project once those arrangements have been complete. We of course will announce the details on that as soon as we reach that agreement with TEPPCO.

I would remind you that because it's a transaction between the affiliated parties that the audit/conflicts committees of both Enterprise and TEPPCO will have to approve the transaction.

This is Dan Duncan. Let me add just about one line of color to that deal. TEPPCO itself has never marketed these liquids from the silica gel plants at the Pioneer plant, which is located close to Opal. They sold those liquids to Duke Field Services, and Duke Field services has actually been marketing all of the residue from the silica gel plants, which is mostly C5s and heavier, and it kind of goes into the crude oil lines that Duke Field Services has in that area out there. So TEPPCO itself has never marketed heavy ends from this particular plant.

As of January 1 this year, we changed that marketing deal away from Duke Field Services and cut the commission out that we had been giving to Duke Field Services. And so as of January 1 this year, TEPPCO is making the full value from that deal. That economics will be taken in consideration when the audits and conflict people end up with a negotiated settlement that Bob and Mike had mentioned to you all. But it would be a full fledged economic without the commission that they were paying Duke.

[Ted Garner], Raymond James.

Just had a couple of quick housekeeping-type items. Number one, what was the ending units outstanding at the end of December common?

That's 386 million.

386? Okay and just on the G&A line, do you guys think -- which you guys mentioned before that's a pretty good run right going into '06--or?

Yes, I think that's fair. I mean we've been averaging around 15, 16 million a quarter for the last 4 quarters. Fourth quarter of '04 had some additional costs associated with the GulfTerra merger that were kind of one timers.

Just finally, do you have any estimate for the maintenance CapEx in 2006?

I think we have actually might even have it out there on our presentation that we made last week for analysts. I think it's a range of $115 million.

There is one question -- there's a further -- if you go into 2006, we are going forward and Mike and Bob had headed this study up to combine the basic operating people and the basic accounting people into one organization that's held by EPCO as a private company. So, there will be some further savings as we go through some cost effect of trying to move those into it. The actual fading at the end of the deal is probably in the 15 to $20 million deal -- is probably the auditing/conflict committee of both companies is going to have to get involved in that and decide. I'll go ahead and guess that it will probably be in the 50-50 range EPCO will accrue to TEPPCO. And EPCO will accrue into the EPD family. But there is a further potential reduction in mid '06 with that consolidation also.

At this time, I am showing no further questions.

Okay, Kelly, if you would just go ahead and give the replay information.

Okay. If you would like to hear the conference call later, it will be available within the next hour. You may recall the replay number, and the replay number is 1-888-562-6205. (Repeat). The call should be available about an hour after the conference has ended.

Thank you. Thank you for joining us on our call today. Have a good day.