Martin Midstream Partners LP (MMLP) 2011 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Martin fourth quarter 2011 earnings conference call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session with instructions to follow at that time. (Operator Instructions) As a reminder this call is being recorded. I would now like to turn the conference over to your host for today, Mr. Bob Bondurant, CFO.

Thank you. And let everybody know who's on the call today we have Ruben Martin, Chief Executive Officer and Chairman of the Board; and Jim McCreery, Vice President of Finance and head of our investor relations. Before we get started with the financial and operational results for the fourth quarter, I need to make this disclaimer. Certain statements made during this conference call may be forward-looking statements relating to financial forecasts, future performance, and our ability to make distributions to unit holders. The words anticipate, estimate, expect, and other similar expressions are intended to be among the statements that identify forward-looking statements made during the call.

We report our financial results in accordance with generally accepted accounting principles and use certain non-GAAP financial measures within the meanings of the SEC Regulation G, which is distributable cash flow for DCF and earnings before interest taxes depreciation amortization or EBITDA. We use these measures because we believe it provides users of our financial information with meaningful comparisons between current results and prior reported results and can be a meaningful measure of the partnership's ability to pay cash flow -- pay distributions. Distributable cash flow should be considered -- not be considered an alternative to cash flow from operating activities. Furthermore, distributable cash flow is not a measure of financial performance or liquidity under GAAP and should not be considered in isolation as an indicator of our performance. We also included in our press release issued yesterday, a reconciliation of distributable cash flow to the most comparable GAAP financial measure.

Our earnings press release is available at our website, www.martinmidstream.com. Our 10-K will be filed on March 5, 2012, and will be available at our website then. Now, I would like to discuss both our fourth quarter and annual performance. For the fourth quarter of 2011, we had net income of $2.9 million or $0.06 per limited partner unit. In the fourth quarter because of certain commodity in interest rate hedges that did not qualify for hedge accounting, our net earnings were negatively impacted by $100,000. So disregarding this net non-cash impact of financials, our earnings would have been $3 million.

As with other MLPs, we believe the most important measure of our performance is distributable cash flow. Our distribution coverage was 0.97 times for 2011. Our distributable cash flow for the fourth quarter was $16.1 million, a distribution coverage of 0.98 times. Although we had a strong quarter from our sulfur services segment, our fourth quarter coverage was below planned primarily as a result of our natural gas services segment, which I will address in a moment. I would like now to discuss both our fourth quarter performance compared to the third quarter by segment and our year-over-year segment comparisons.

In our Terminalling segment, our cash flow, which is defined as operating income plus depreciation and amortization but excluding any gain or loss on sale of assets was $8.7 million in the fourth quarter compared to $8.6 million in the third quarter. For the year, our Terminalling cash flow was $33.5 million in '11 compared to $32.4 million in '10. Our marine shore based terminals had cash flow of $4.3 million for both the fourth and third quarters. For the year our marine shore bases had cash flow of $15.9 million in '11 compared to $12.9 million in '10. The annual increase in marine shore base cash flow was primarily driven by the acquisition of 13 shore-based terminals we purchased on January 31, 2011. Looking toward 2012, we believe the outlook for marine shore bases will be improved over 2011 as the forecast of Gulf of Mexico NP activity continues to improve.

There were 20 new Deep-water well permits approved in the first 24 days of February, which should bode well for improved Gulf activity. Also, the floating rig count currently is 25 with 11 incremental floating rigs headed for the Gulf in 2012. So we believe there could be over 35 floating rigs in the Gulf by year-end 2012. This forecasted increased rig count should equate to increased cash flow in 2012 for Marine shore bases. Our specialty terminals portion of the Terminalling segment, which includes our cross oil lubricant processing operations had a cash flow of $4.4 million in the fourth quarter compared to $4.3 million in the third quarter.

For 2011, our specialty terminal cash flow was $17.6 million compared to $19.5 million in 2010. The decline year-over-year was primarily due to increased operating expenses in our specialty terminals. These increases were primarily as a result of increased repair and maintenance costs that should come back in line in 2012 and also our third quarter tank fires at Stanolind terminal. This tank fire also caused us and is continuing to cause us to lose storage revenue of $67,000 per month until the tank is restored. The restoration should be complete by the third quarter of 2012.

Looking forward to 2012, we anticipate a significant increase in cash flow year-over-year in our specialty terminal group as we will bring online the vacuum tower at the Cross refinery in May. This investment should total $23 million. Also our new crude terminal at Corpus Christi will come online in mid-March. The crude terminal investment should be $25 million. Both of these investments were supported by long-term fee-based contracts and both investments should be at an approximate six to seven multiple of cash flow.

Now on our natural gas services segment, we had operating income before asset sales of $0.5 million in the fourth quarter compared to 2.2 million in the third quarter. In the fourth quarter we had $100,000 non-cash commodity hedging mark to market loss compared to $0.6 million non-cash mark to market gain in the third quarter. So excluding the non-cash mark to market adjustments, we had an operating profit of $0.6 million in the fourth quarter compared to $1.7 million operating profit in the third quarter. For 2011, our natural gas services segment had operating income before asset sales of $6.1 million compared to $4.8 million in 2010. For 2011, we had a $1.3 million non-cash mark to market gain compared to a 2010 non-cash mark to market gain of $0.3 million. So excluding the non-cash mark to market adjustment, we had an operating profit of $4.8 million in 2011 compared to $4.5 million for 2010.

Now complementing our natural gas services is our cash flow from our unconsolidated entities, which is primarily our 50% owned operating interest in the Waskom gas processing plant and our 40% ownership in Monroe Gas Storage through our Class B ownership in Redbird Gas Storage. For the fourth quarter, our cash flow generated from unconsolidated entities in the form of distributions was $4.5 million compared to $3.8 million in the third quarter. So excluding the impact of non-cash mark to market adjustments and including our distributions from our unconsolidated entities and adding back depreciation and amortization, our natural gas services cash flow for the fourth quarter was $6.5 million compared to $7 million in the third quarter.

Now for the year 2011, our cash flow from unconsolidated entities in the form of distributions was $15.3 million compared to $15.5 million in 2010. Included in the these annual distributions was $1.4 million, which represented four months of activity from our Class B interest we own at Redbird Gas Storage LLC, which owns a 40% interest in Monroe Gas Storage. Based on the current gas storage re-contracting environment and the lack of interruptible revenue opportunities, we believe our distributions from Monroe will be approximately $4.5 million in 2012. So excluding the impact of non-cash mark to market adjustments and including our distributions from unconsolidated entities and adding back D&A, our natural gas services cash flow for 2011 was $26.2 million compared to $25 million in 2010.

Now, Waskom's current processing contract mix is 43% liquids, 36% fee-based, 21% percent of proceeds, and no keep hole. We currently have 34% of our 2012 volumes hedged. For 2012, when factoring in our current hedged volumes, a dollar change in natural gas pricing affects our cash flow $15,000 per month. And a $10.00 change in oil pricing affects our cash flow $140,000 per month. Now even though we completed our Waskom expansion to $320 million a day in the third quarter, we only averaged $260 million of processing volumes in the fourth quarter. This is primarily why our fourth quarter cash flow was below our internal forecast. We lost a producer, which provided approximately $25 million a day to the plan.

We currently expect average processing volumes to be in the 275 million cubic feet per day range through the first two quarters of this year. Based on discussions with area producers and learning of their forecasted drilling programs, we believe our processing volumes should approach full capacity at the Waskom plant by the fourth quarter of 2012. Also during the fourth quarter, we completed our rail loading facility that Waskom, which will allow us to load NGLs into rail cars and allow us to ship product to more lucrative markets. This new asset should help drive a cash flow increase in this segment in 2012.

Now moving to our sulfur services segment, our cash flow was $7 million in the fourth quarter compared to $6 million in the third quarter. For the year, our cash flow in the sulfur services segment was $34.4 million compared to $22.2 million in 2010. Our cash flow on the fertilizer side of the businesses was $3.7 million in the fourth quarter compared to $3.3 million in the third quarter; and for the year, our cash flow on the fertilizer side of the business was $18.7 million compared to $14.8 million in 2010. For the year, fertilizer primarily benefited from a strong agricultural demand market and an also improved operations at our fertilizer production facilities. We anticipate strong agricultural demand markets to continue in 2012. We also believe our operating assets should have improved production rates when compared to 2011, as we had significant turnarounds this past years at our sulfuric acid plant and our ammonium thio sulfate plant.

Now on the pure sulfur side of the sulfur services segment, cash flow for the fourth quarter was $3.3 million compared to $2.7 million in the third quarter. For the year our cash flow on the pure sulfur side of the business was $15.6 million compared to $7.4 million in 2010. For the year, our pure sulfur side of the business primarily benefited from a restructured sales contract with our largest purchaser of molten sulfur. This restructured contract allowed us to remove the commodity risk from our Company and pass it along to this particular customer. We will continue to benefit from this same contract structure in 2012. So overall, we believe our sulfur services segment should have another strong year in 2012 based on current fundamentals.

In our Marine transportation segment, we had cash flow of $4 million in the fourth quarter compared to $3.8 million in the third quarter. For the year 2011, our cash flow for Marine transportation was $14.1 million compared to $22.7 million in 2010. This decrease was primarily driven by our offshore Marine tows as their cash flow was down $5.8 million year-over-year. Our offshore tows benefited from increased utilization in 2010 as a result of the BP oil spill, while 2011, reflected a more normal offshore asset utilization rate of 50%. Looking toward the new year, we believe our fourth quarter cash flow performance in Marine transportation should be indicative of quarterly performance in 2012 based on our current contracts and current market fundamentals in this segment.

For the fourth quarter, our unallocated SG&A costs were $2.3 million compared to $3 million in the third quarter. And for the year, we had unallocated SG&A costs of $8.9 million compared to $6.4 million in 2010. Our fourth quarter SG&A cost of $2.3 million should be a good proxy for forecasting our annual 2012 SG&A cost. So to summarize, MMLP had overall cash flow of $23.9 million in the fourth quarter compared to $22.4 million in the third quarter. And for 2011, MMLP had cash flow of $99.3 million compared to $95.9 million in 2010. Our maintenance CapEx for the fourth quarter were $0.8 million. And for the year, our maintenance capital expenditures were $13.1 million including our annual cost refinery turnaround. And looking forward to 2012, we believe our maintenance capital expenditures should be similar to 2011 and be somewhat ratable throughout the year. Now, I would like to turn the call over to Joe McCreery who will speak about our liquidity and capital resources and other partnership initiatives.

Thanks, Bob. Good morning, everyone. Let's start by walking through the debt components of the partnership's balance sheet. Then I will highlight our recent growth initiatives and capital market's activity for the quarter. At December 31, 2011, the partnership had funded debt of approximately $460 million. This consisted of approximately $198 million of senior unsecured notes, $250 million drawn under our $375 million revolving credit facility, a long-term note payable for marine equipment of $6 million, and approximately $6 million of capitalized lease obligations. Thus, the partnership's available liquidity on December 31st was $125 million.

For the fourth quarter ended December 31st, our bank compliant coverage ratios as defined by total debt to adjusted EBITDA and senior secured debt to adjusted EBITDA were 4.3 and 2.5 times respectively. Additionally, our bank compliant interest coverage ratio as defined by adjusted EBITDA to consolidated interest expense was 4.4 times. Looking specifically at the balance sheet, our total funded debt to total capitalization was 61.7%. This is higher when compared to the third quarter, primarily due to incremental revolver borrowings used specifically for organic growth projects during the quarter. In all, at December 31, 2011, the partnership was in full compliance with all banking covenants, financial or otherwise.

Now I would like to discuss the partnership's growth initiatives that occurred during the fourth quarter. As alluded to in yesterday's press release, we completed or are near completion on several previously announced projects. By order of magnitude, these projects include approximately $25 million crude oil terminal at the Port of Corpus Christi. As announced we have entered into a long-term contract with a major integrated oil company to provide tankage for up to 300,000 barrels in corresponding marine loading. We believe this project will generate approximately $4 million of cash flow this year. Further, this project has significant potential to be upsized. We believe the ban for Eagle Ford shale crude oil production needing to find water borne access similar to our terminal could drive future expansion.

Opportunistically, if expanded, project economics dictate that future tankage can be constructed at advantage cost multiples to the initial 300,000 barrels currently under construction. Also near completion is the vacuum tower project at Cross, our naphthenic lube oil processing facility. I know we've spoken about this in previous calls, however, I wanted to inform listeners that the tower will come online during the second quarter as scheduled. Total capital expenditures for the project are approximately $23 million, and it is being built under the contracted support of a tolling agreement with MRMC. We anticipate the tower will generate approximately $3.5 million of stable fee based cash flows annually.

As announced also late last year, we commenced operations at a new natural gas rail loading terminal adjacent to our Waskom natural gas processing plant. As Bob mentioned, this asset allows us to serve markets well beyond local and regional NGL and petrochemical buyers. While railroads were executed during the fourth quarter, we expect significant more volume and throughput to commence in April. Accordingly, we anticipate cash flow to be approximately $1.5 million for 2012, increasing to $2 million for 2013. Next during the fourth quarter, the partnership continued to make investments into Redbird Gas Storage, our joint venture.

As you may recall during the second quarter of 2011, MMLP and the owner of our general partner MRMC traded a joint venture named Redbird Gas Storage. The purpose of this joint venture is to invest in natural gas storage and storage development and growth our fee based cash flow to the partnership. At that time, MMLP made its first investment into Redbird Gas Storage joint venture through the Cardinal acquisition of the Monroe Gas Storage assets. During the fourth quarter, we made additional investments totaling approximately $5 million into Redbird. Of the $5 million, approximately $1.8 million was invested in our Class B equity interest, which represent the operational Monroe Gas Storage asset; and approximately $3.2 million was invested into Redbird Class A equity, which represents the other Cardinal projects certainly under development.

As of December 31, 2011, MMLP owned approximately 2.1% of the Redbird Class A equity interest, the remaining 97.9% still owned by MRMC. The partnership, as you may recall, from the Monroe acquisition currently owns 100% of the Class B equity interest in Redbird. Going forward, MMLP will continue to have the option to fund ongoing capital development calls. In exchange for this investment, the partnership will receive incremental Class A Redbird equity interest up to investment levels governed by covenants within MMLP's revolving credit facility. We anticipate investing approximately $45 million to $50 million into Redbird and its gas storage projects in 2012. In total, the projects I mentioned plus others that have been identified should help drive our projected EBITDA for 2012 approximately 15% higher when compared to 2011.

Now on to liquidity and capital raises for the fourth quarter. The partnership's only capital raised during the fourth quarter was the partial exercise of the accordion option under our revolving credit agreement. In December of last year, we added a new lender to our banking syndicate and an additional commitment of $25 million. This raises our credit facility commitments to $375 million. Under the accordion provision, we have the ability to add an additional $75 million from newer existing lenders. We continued to view conditions in the bank market as favorable, and a favorable source of liquidity for the partnership. Accordingly, we may elect to exercise some or all of this option going forward.

As of February 29, 2012, we have approximately $156 million of available liquidity under our credit facility. Finally with respect to the recent 2012 capital raise, the partnership successfully placed an additional 2.645 million units in late January. This offering brings the total number of units outstanding to just over 23.1 million. Net proceeds from the partnership after fees and expenses were $91.4 million, which was used to repay indebtedness. Applying these proceeds and giving the pro forma effect to our offering, our total debt to adjusted EBITDA on December 31, 2011, would have been 3.5 times. And our pro forma total funded debt to total capitalization would have been 49.5 times. These leveraged ratios are much more in line with where we typically operate the partnership and correspond to the guidance we give our lenders in the rating agencies.

The timing of our equity offering also corresponds to the normal capital spending and borrowing pattern MMLP has experienced in recent years. As has been our practice, we offset such borrowings with balance sheet restoration in the form of additional equity through follow-on offerings. The January 2012 offering represents the third straight calendar year in which the partnership has gone to the capital markets raising equity during the first quarter. Although dilutive in nature, these issuances are vital to the partnership's continued growth. This concludes our prepared remarks. We'd like to open the lines for question and answers. We thank you for your time.

(Operator Instructions) And our first question today comes from the line of Ethan Bellamy from Robert W. Baird. Your line is open. Please go ahead.

Good morning, gentleman. A few questions for you today. Can we start with the Gulf rig activity? Can you give us some idea and maybe quantify the benefit you expect to see in terms of either BCF or EBITDA from that?

Yes. Generally, we have a throughput contract with MRMC where every gallon of diesel fuel we sell, we collect almost $0.05 a gallon. And so I believe our current run rate is probably -- I will run the math in my head, probably about 240 million gallons a year right now. We think this incremental rate can't depend upon where the rigs end up locating. You can get to a peak of maybe 300 million gallons. So you could get a pick up of 60 million gallons a year at $0.05, so that's roughly $3 million. But then on top of that, you would have incremental lube sales and lube activity, and I would say that could throw another $1 million, $1 million to $2 million on top of it. So that generally won't happen at the first part of the year, but we believe -- and the numbers I gave you are on an annual basis, we believe that as the summertime kicks in April, May; we should start to see that kind of pickup.

Okay. I think that seems like a pretty nice uptick. With respect to the joint venture agreement with Kinder Morgan and the Watco that you announced, could you give us some insight to the economics there, and tell us a little bit about how that agreement came to fruition and why tender?

Yes. Ethan, this is Joe, with respect to that, that joint venture specifically and how we are viewing that, really that is from the Martin perspective a toehold to some of the production activity in that area. I would say by and large it's a Kinder driven joint venture. Our capital invested in that right now is negligible, like less than $0.5 million; however as I mentioned, it's a total to future productions, the expertise that we bring to the equation would be in the processing side. And as you know, we do transloading and other assets or phases of our business. So by and large, Kinder will carry the bulk of the capital commitment, and we are pleased to be with them to the extent so much production comes to fruition, which we think it will, we would probably invest further in the future. But for now as much as anything, there was an announcement to tell the world, so to speak, that this infrastructure is coming, and we anticipate the production will follow.

Okay. That's helpful. One last question,.

Let me just follow-up, we don't have any economics modeled in 2012 as far as initial EBITDA from the project. If that comes, we will provide that guidance in the future.

Okay. That's helpful. With respect to the Waskom customer, I presume you can't disclose who that was, but can you talk about why that customer left and if that's a trend that would impact potentially other customers at that facility?

I think it's just an issue with respect to losing cost and seeking higher liquid content volumes elsewhere. That is a trend that has been plaguing the Haynesville and dryer shale plays. As you know, the liquid seekers are in full bore at this point.

It wasn't that the customer went to another service provider, it was that their volumes fell off?

Yes. I think it was mostly the volumes. There's a combination of the two, and remember a lot of the dry Haynesville is a situation to where our advantage in the gas liquid side, especially with the new rail rack and stuff is not as meaningful as it is with the wetter Cotton Valley stuff. But they are finding wetter Haynesville gas in the area and on up toward the Louisiana border in our area. So we are really looking forward to the fact that in the future, there could be actually some Haynesville gas that has even more NGLs in it than Cotton Valley.

Okay. Good to hear. Thanks.

Thank you. Our next question comes from the line of Ron Londe from Wells Fargo Securities. Your line is now open. Please go ahead.

Yes. One of the trends in the future it looks to be a lot more crude oil flowing into the Gulf coast. Can you give us an idea of your strategy with regard to providing services for the refiners? Because I assume that the refiners are going to be processing that crude oil in the products and moving it either offshore to other markets or to other places either along the Gulf or other markets in domestic US.

Well, of course, with the stuff -- excuse me. With the crude oil that's getting railed in, we are working at our Neches facility, we are served by three railroads. It's probably one of the few terminals in the country that has a sharing arrangement to where we have three railroads coming in there. We have -- working on an agreement that I believe will be finalized in the next few weeks that should give us about another mile or over a mile of availability of track -- rail track to that facility. And of course, we have deep water at that facility. We have barge dock at that facility, and that facility as we are looking at it right now we believe with the tankage, we're also picking up some extra tankage in that area, will be used to unload unit trains of crude oil that come either from the Bakken or from West Texas or whatever.

So, no, we are very cognizant of the fact that is coming in. We are cognizant of the fact that the LLS differential between South Louisiana and Houston is evening up, and so Houston is getting some of the premiums for the crude oil too. So we believe with Neches being right in the middle of a lot of that area over there, it could be a positive. So we are cognizant of it. We are working on it, and we have actually already started increasing the capacity of our rail systems.

You commented on that you expect the sulfur services business to remain strong in 2012. What kind of factors do you think will affect that? I know the growing season is a big influence, but are there other factors that are unusual in 2012 that weren't there in 2011 or '10?

Yes. Some of the factors in '12 that are going to help us, of course, as we have seen a raw material decrease in some of our raw materials that we used to manufacture the product with. And so with the demand being very, very good raw materials coming down and being cheaper, we expect another good year. And with that said, as we have done some major work on both of our plants, both the sulfuric acid plant and our ammonium thiosulfate plant in Houston and the operational efficiencies of those plants over the last 4 or 5 months has gone up dramatically. Our runtime has been excellent compared to the previous year.

We had about a -- in the spring of '11, I think we had about a 6 week or 2 month downtime right in the middle of the season, and it really cost us on the AT plant in Beaumont at that Neches facility that we are talking about. So there are several good things that working there. The other thing is like I said, with this increased rail capacity at Neches, we are going to be able to ship and get better efficiencies on our fertilizer shipments out of that plant. So combined with a raw material decrease and plant efficiencies that we have been able to pick up in the last few months with some money spent, with some downtime, and so forth, we expect that division to continue to be lucrative.

And on a macro basis, I know the South Americas particularly Argentina had a huge drought this year, their summertime growing season. So there is a shortage of primarily corn from that area that is not there this year. So the farmer demand, what we are hearing, the demand to increase production of corn and other AG products will be strong because of that drought and also because of the strong pricing that, that drought and other demand is providing.

Okay. Thank you.

Thank you. Our next question comes from the line of James Vasser from Wells Fargo. Your line is now open. Please go ahead.

Good morning. A couple questions for you. First of all, you mentioned that you were thinking about spending $45 million to $50 million in additional investment in Redbird in 2012. Can you just talk a little bit about what specific projects that's going to go to fund? What economics you expect, and just maybe more generally, why you see storage as a good place to invest money right now?

Good morning James, it's Joe, how are you? With respect to the numbers we provided the guidance on Redbird, and I can give you breakdown kind of by project, but it's roughly $9.5 million in Arcadia, which you know is still under development. There is one working cavern there. Perryville is about $5.5 million. Both of those caverns are still under development, and they come online the latter half of 2013. But the majority of it is about $13.7 million is at Cadeville, and Cadeville is a depleted reservoir that's under a long-term contract -- I'm sorry $23.7 million, thanks, Bob, not $13.7 million. $23.7 million at Cadeville with a depleted reservoir under a long-term contract with a major producer, and that should be -- also be ready by the end of 2013.

And then about $7 million at Monroe, which as you know is the ongoing and operational project. There's visibility to expand some capacity there and do some other things. So in aggregate between $45 million and 50 million. And also kind of going back to what we have from a contract perspective, at least with Perryville and Arcadia, these are contracts that were put in place back in 2008 and start in earnest in 2013. So from our perspective given those contracting levels and the length of the contracts that are already in place, it is a good place to put our capital.

Those contract -- those strong contracts Joe described, one of them does not roll over until 2016 and the other one 2018. So there is strong pricing in those business locations at Arcadia and Perryville that go way out before they have to be re-contracted.

And I think for the models, we use a very, very conservative re-contracting rate when it came to those points in the future and where we can sell any incremental volume for, they're very conservative.

Okay, but -- and it sounds like given that some of these projects aren't coming online until 2013, are you expecting to see -- it doesn't sound like you are expecting to see a real big ramp in distributions from Redbird this year.

That's correct. Kind of the guidance that Bob gave on Monroe is the only cash flow we will see. And it should also be noted with respect to Arcadia and Perryville, and working on with Cadeville, there are project financing's in place at those project levels that sweep cash flow once they're operational.

Okay. Great. Just a question on Waskom, I think you mentioned that you expected to be at about 275 million cubic feet a day over the first half of the year, and that you could potentially reach capacity by the end of the year. Just given the price environment out there and the fact that you had a customer just leave, what gives you confidence that you're going to be able to reach capacity by the end of the year?

Specifically, meetings with two major producers in the area. One is targeting horizontal Cotton Valley. They have told us it's north of 20 wells they plan to drill over the next 12 to 18 months and starting in earnest about April, May-ish. And the other one, Ruben hinted at the wet Haynesville gas, the other one that thinks they have identified an area to drill there as well, that probably won't start until August or September. But the combination of those two are the incremental growth of production in the area. And we have had several meetings with them and our confidence level is high that they're going to execute that plan.

Great. And then I think I got different pieces of it here, but what is the total expansion CapEx budget for 2012?

Approaching 130, just under $130 million has been approved, and I can submit to you I think that number will go up through the course of the year because our projects that have been identified that are not yet approved, but right now we were at $130 million, James.

Okay. That's it. Thank you.

Thank you. (Operator Instructions) Our next question comes from the line of Selman Akyol with Stifel Nicolaus. Your line is now open. Please go ahead.

Thank you. Good morning. Most everything has been asked here. Just one last one. On the $75 million expansion of your credit facility, is there going to be a difference in pricing on that piece? Or would you expect it to just come in line with what you already have?

I would keep it in line; and of course, $75 million is available to us. I think with respect to where we are now, we will just keep it where it is.

All right. Thank you very much.

Thank you. And I am showing no additional questions in the queue. I would like to turn the conference back over to management for any closing remarks.

This is Rubin, our multiple growth initiatives underway approximately $130 million has been approved by the board for 2012. We expect this number will increase throughout the year as demand for our services is very strong. We anticipate our year-over-year cash flow to be approximately 15% higher than 2011, as our projects do come online. And I have seen this partnership as more growth projects underway are identified at any time in our history. We are really excited about all the things that are happening. There's a lot of opportunities out there, and we are really looking forward to the next couple of years on these opportunities. With that, we want to thank everybody for joining us today and thank you.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program and you may all disconnect. Have a great rest of the day.