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Kinder Morgan Energy Partners LP (NYSE:KMP)

Q4 2008 Earnings Call

January 21, 2009 4:30 pm ET

Executives

Rich Kinder - Chairman and CEO

C. Park Shaper - President

Steven Kean - EVP and COO

Kim Dang - CFO and VP, IR

Analysts

Brian za Haren - Barclays Capital

Gabe Moreen - Bank of America/Merrill Lynch

John Edwards - Morgan Keegan

Stephen Maresca - Morgan Stanley

Xin Liu - JPMorgan Chase

Michelle Marvins - Center Coast Capital

Ross Payne - Wachovia

Operator

Welcome and I would like to thank you all for standing-by. And inform you that your lines are in a listen-only during today’s conference until the question-and-answer session. Today’s call is also being recorded, if you have any objections you may disconnect at this time.

I would now like to turn the call over to Rick Kinder. Sir you may begin.

Rich Kinder

Thank you, Ed. And welcome to the Kinder Morgan Energy Partners Analyst Call. As usual we will be making statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. I will give an overview of full-year 2008 fourth quarter results, discuss our outlook for 2009 and give an update on major projects that are on significant capital raise during the last few weeks. Then I will turn it over to Park Shaper, our President, he will go through the financial details and then we will take any and all questions that you might have.

We got a lot of news today. I guess the most important thing since particularly in this environment cash is certainly king is the fact that again we raised our distribution. This time we raised our quarterly cash distribution per unit to $1.05 that’s $4.20 annualized, up from $1.02 or $4.08 annualized. That represents a 14% increase over the fourth quarter of 2007 cash distribution per unit of $0.92 or $3.68 annualized.

Not that anybody is keeping count, but that marks the 35th time that we have increased the distribution since the current management took over Kinder Morgan in February of 1997. If you look on an annual basis in terms of distribution of 2008, our total declared cash distributions were $4.02 that meets our annual published budget and a 16% higher than the declared cash distributions of $3.48 per unit in 2007.

During 2008, we produced distributable cash flow before certain items of $1.07 billion that was up 23% from $865 million for calendar year 2007. More importantly our distributable cash flow per unit before certain items was $4.15 and that’s up 14% from the $3.65 that we produced for 2007.

The fourth quarter distributable cash flow per unit was $0.81 compared to a $1 for the same period last year.

Now if you look at the results, I think when you consider the tumultuous market conditions that we experienced during the past year and particularly during the fourth quarter. I think we have had a great run and I am proud of what we were able to accomplish during 2008. We had total 2008 segment earnings report DD&A of $2.8 billion that’s up 24% from roughly $2.2 billion in 2007.

Our $4.15 per unit in distributable cash flow for the year which I mentioned earlier, that gave us excess coverage of distributable cash flow over distributions of about $33 million and that’s about triple, almost triple our published annual budget. We beat our annual targets despite fourth quarter results that were impacted by a number of things. Some of them were what I would call timing related than unusual items, such as the back-end loading of sustaining CapEx and lost business due to the two hurricanes that hit the Gulf Coast. And then we also had some impact from what I would call general economic factors such as lower crude oil prices and a weakened Canadian dollar.

The total impact of all of those factors on the fourth quarter was about $65 million or about $0.24 per unit. If we strip out the weakened dollar and the crude oil prices, you get to about $0.10 per unit just from the lost business due to hurricanes and the backend loading of the sustaining CapEx.

So those are just some factors to keep in mind when you look at both the full year and the fourth quarter.

Now as I usually do, let me just kind of give you an overview of the business segment by segment, and Park will handle a lot more details on it obviously and I'll just talk in terms of earnings before DD&A at each segment.

If you look at our products pipeline segment, we were above 2007 for the fourth quarter and above 2007 for the full year, if you strip out the North System which was sold at the beginning of the fourth quarter of 2007.

We were below our plan for both the quarter and the year almost totally as a result of lower refined products volumes on our pipeline system. We've detailed that in our earnings release and the attachments, but depending on how you count plantations we were off for the year between 6% and 7% in total volumes on our product systems for refined products.

Although we did see less of the decline in gas throughput in the fourth quarter on a percentage basis versus what we saw in the earlier quarters of the year. In this segment we did complete some pretty extensive modifications to allow handling more ethanol from our product terminals and in our Central Florida pipeline. We completed some new storage facilities for the military in California and we acquired a strategic terminal in Phoenix, Arizona.

In our natural gas pipeline segment they really had an outstanding fourth quarter and full year, they were substantially above 2007 for both the quarter and the year and well above plan for the year slightly below for the fourth quarter.

The performance was really lead of course by Rockies Express-West which began service in January of '08 and reached full operations in May, and by the Texas Intrastate Group, I know I sound like a broken record there because it seems like every quarter and every year the Texas Intrastate has managed to accumulate a really good record.

But we also had good results from both TransColorado and KMIGT. And I might add on the natural gas pipeline segment that our earnings before DD&A would have been even higher if not for lost business in the Texas Intrastate as a result of Hurricane Ike.

What's driving the good performance at the Intrastate for the full year is really increased transportation storage revenue from long term contracts that we've entered into from higher sales margins and we had greater processing volumes and margins during the year.

If you look at the full year, overall segment transport volumes were up 26% compared to 2007, of course that’s primarily due to REX-West being operational.

Turning to our CO2 business, that segment was above plan and 2007 for the fiscal year in fact for the full year, in fact it was up over 40% versus 2007 if you look at it on a full year basis. But that segment was below plan and slightly below the fourth quarter of 2007 if you look just at the fourth quarter.

Turning to that fourth quarter, CO2 had a pretty good quarter operationally but our results there were significantly impacted by two or three factors. The two primary factors were lower oil prices on our un-hedged volumes. And then we lost some business due to Hurricane Ike, which resulted in a decrease in NGO sales due to the third-party fractionation facility being down for a large portion of the quarter.

If you look at the quarter from an operational standpoint, our average oil production at SACROC was 29,200 barrels per day that was up 16% from the same period last year. Our average oil production at Yates was 26,700 barrels per day, down from 27,800 in the fourth quarter of 2007.

We had a very nice increase in CO2 delivery volumes, they were actually up 23% compared to the fourth quarter last year, and that's due of course to our major expansion projects in Southwest Colorado that came online and increased our CO2 production.

If you look at the full year, average oil production was 28,000 barrels a day at SACROC, almost the same 27,600 barrels per day at Yates, and the CO2 delivery volumes were up 15% from full year 2007. Those SACROC and Yates numbers as you can see from the earnings release were slightly above 2007 in both cases.

Turning to our Terminals business, the Terminal segment was well above 2007 for both, the fourth quarter and the full year and slightly below planned for both. If you look a little deeper in what happened there, the Terminals business would have virtually met its annual budget if not for lost business associated with the hurricanes and actually would have exceeded its budget had it not also incurred higher operational costs for much of the year due to higher diesel prices.

It's also important I think that all of this segment’s growth in the fourth quarter came from organic opportunities, and two-thirds of its growth for the full year came from organic opportunities.

Some of the growth drivers in terminals were a nice increase in coal volumes, a nice increase in the throughput of the company's New York Harbor terminals, and the fact that we've measurably increased our capacity at the Houston Ship Channel facilities due to tank expansions that we've done over the last couple of years. In fact if you look at KMP's total leasable capacity on its product side, it's now up 14% from a year ago to 54 million barrels of capacity.

Looking at Kinder Morgan Canada, they were above 2007 for both the fourth quarter and the full year and almost on plan for the full year in Canadian dollars, but fell short of their annual budget targets once you took into account the weakened Canadian exchange rates.

That results in Kinder Morgan Canada really has resulted primarily from the completion of the Anchor Loop expansion of the Trans Mountain pipeline. As you recall that boosted the capacity of that line to 300,000 barrels per day and also resulted in a higher tariff on volumes that moved through it, so Kinder Morgan Canada basically on plan for the year and well above 2007.

Now, let me turn just a little bit to the outlook for 2009, and we are going to go into a lot more detail on this at next week's investor conference. But just to sort of refresh your recollection, we previously announced that we expect to declare a cash distribution of $4.20 per unit for 2009. That would be a 4.5% increase over the $4.02 that we declared in 2008.

We think we are well-positioned for future growth. We expect that our business segments will generate over $3 billion in earnings before DD&A during 2009.

Now the real growth driver here is the continuation of our substantial capital investment program and obviously that program includes both expansions of existing assets along with our new projects. As an example, we have three major natural gas projects scheduled to begin at various points during 2009.

Now let me be very clear that when we put this budget together back in the fall we assume WTI prices of $68 per barrel for the year. As most of you know, the overwhelming majority of cash generated by KMP is fee based and not sensitive to commodity prices.

And even in the CO2 segment we hedge the majority of our oil production, but we do have some exposure there as we’ve always said to unhedge volumes most of which are natural gas liquids. And we previously said that for 2009, every $1 change in the average WTI price is expected to impact the CO2 segment by about $6 million or about two-tenth of 1% of our combined business segments anticipated distributable cash flow. The sensitivity of WTI price I might add is virtually identical, very similar to what we experienced during 2008.

Now, $68 was obviously much closer to the ‘09 forward strip when we did the budget than it is today. And our CO2 operations are now taking steps to further reduce their costs in response to lower prices, and that strip at today’s closes just to shade under $50. Overall KMP should also benefit from lower interest rates than we projected in our plan. So, we have some upside there. And we have some other savings and benefits that we will take you through in much more detail next week at the investor conference.

Now, turning from the outlook to our projects and certainly making progress on our key projects is very key, and actually as I said, completing three of the major projects as well as numerous smaller projects during calendar year 2009.

Now, as we look at those, I think the important thing to share with you as we give you an estimate every quarter on total capital expenditures on our large natural gas projects, and if you compare what we are estimating today with what we estimated a quarter ago, back in October when we put out our third quarter earnings release. Our net share of capital expenditures remains virtually unchanged quarter-to-quarter. We had some modest increases; we had some modest decreases, but if you net them all together, pretty much unchanged.

Now, let me remind you these projects are still being constructed. We are in a winter construction season on some of them, and the game is not over till the fat lady sings, but right now we have not experienced any significant changes from the numbers we shared with you at the end of the third quarter.

We got details on numerous projects in our earning release, but let me just cover some of the most significant. In our products pipeline segment, this past quarter we began transporting ethanol on our Central Florida Pipeline, from Tampa over to Orlando. In addition, we have approved and began to implement over $90 million in ethanol and bio-fuel projects and these are modifications of tanks and truck racks and other infrastructure to allow us to handle more ethanol as our customers want us to do in both the Southeast and Pacific Northwest. We think these will be good return projects for the foreseeable future.

Also on our product segment, as I alluded to earlier, we did close on the purchase of a liquids terminal in Phoenix, Arizona from ConocoPhillips, total price was about $29 million including some upgrades we’re going to do. That facility has a capacity of about 200,000 barrels of storage and equally importantly it is adjacent to our own Phoenix terminal. So, it is a strategic acquisition for us.

Now turning to natural gas pipelines, where the majority of our construction dollars are being spent. Let me just take you through our four major projects there. On REX-East, we are continuing with construction and subject to our last batch of regulatory approvals, almost all of which have already been received, we expect initial service on the pipeline to commence in April, 2009 with capacity of 1.6 billion cubic feet per day.

Service to Lebanon, Ohio is expected to commence in mid-June, 2009 and service of a fully powered REX-East pipeline, in other words, the completion of the project to Clarington, Ohio is expected for November 2009.

Current estimate of total construction cost there has gone from about $6 billion to $6.2 billion. We obviously are 50% owners. But that’s an overall increase of around 3% from the prior period.

If you look at Midcontinent Express, including a fully subscribed expansion that was recently added to the project and that expansion, of course, will increase available pipeline capacity and cash flow. Including all of that, the MEP budget remains at $1.9 billion. Interim service on the first portion of that pipeline which runs to eastern Louisiana is expected to be in service in early April of 2009, and the second phase is expected to be available by August of 2009, and that second phase takes it on over to the Transco interconnect just on the Alabama side of the Alabama Mississippi border. And that pipeline capacity is fully subscribed with long-term binding commitments as is REX of course.

On our Kinder Morgan Louisiana pipeline we continue construction there. The project has been revised downward to approximately $950 million from $1 billion, although that capacity is also fully subscribed and the pipeline is expected to be fully operational during the third quarter of 2009.

Our Fayetteville Express Pipeline project, development of that is also underway. As you recall, that’s a joint venture with Energy Transfer partners and it’s a 42 inch roughly 200 mile pipeline that begins in Conway County Arkansas and ends in Panola County, Mississippi.

We have secured 10 year binding commitments on 1.85 Bcf per day of capacity, that’s out of an initial capacity of 2 billion per day. So, the great bulk of this is already subscribed before we put pipe in the ground.

Pending regulatory approvals, we expect to be in service by the late 2010 or early 2011. And the cost estimate of that project has been reduced by about $50 million, it now rounds down to $1.2 billion from the $1.3 billion that we put forward in the third quarter earnings release.

Moving to the CO2 segment, we are now virtually complete with our approximately $290 million Southwest Colorado expansion that will ultimately increase CO2 supplies by about 300 million cubic feet per day and current deliveries on our Cortez pipeline are at an all time record of 1.26 billion cubic feet per day.

At Kinder Morgan Canada, we have now completed our Anchor Loop project that was our major Canadian expansion that went into service around November 1st of last year. That increased the capacity of that line to 300,000 barrels per day. And the total cost of that project which has now been completed was about $544 million.

So that gives you an update on the more significant projects, let me just conclude my part of the call by addressing a concern that I know a lot of people would express, namely the ability of MLPs to raise capital in this kind of market. And given those concerns I thought it was important that we spend a couple of minutes bringing you up-to-date on where we stand.

During the last five weeks, KMP has raised over $1 billion by issuing debt equity and by unwinding interest rate swaps. With regard to the debt, we issued $500 million in 10 year senior notes with a put in year three which were priced to yield 9%, let me say that today our 10 year paper is trading significantly better than that yield, in other words of lower yield.

We also issued 3.9 million units of KMP equity in a common unit offering in December raising approximately $177 million in net proceeds. And additionally we reversed fixed to floating interest rate swaps and received almost $340 million in cash, including a swap unwound earlier this month. It’s important to note I think that even after those unwinding, KMP’s interest rate swap portfolio is still worth over $600 million as tabulated on January 16th close of business last Friday.

I think all of this demonstrates conclusively that KMP can raise capital even in a difficult market. I would also mention to you and probably most of you noticed it that last Friday we filed for an at-the-market program for KMP and we also filed an S-1 which would allow us to issue KMR equity over the course of 2009. As we have often said, over the long term we expect to fund all of our expansion CapEx at 50% equity, 50% debt. And we expect to put out equity in 2009 even though we don’t have to, and we have other sources of liquidity that will allow us to go through 2009 without accessing the equity markets at all including the commitment, of course of our parent, our general partner Knight to take up the $750 million of KMP equity if necessary.

But we still want to have as many arrows in our queer as we possibly can and I think that’s exactly what we are doing.

So with that I'll turn it over to Park, who'll give you more details on the financial results, Park?

C. Park Shaper

Thanks, rich I'll go to the financial section of the press release. The first page there is the GAAP income statement. At the bottom, I guess right above the bottom section you'll see the declared distribution as Rich mentioned and is laid out in the press release. $1.5 for the fourth quarter that is up 14% from the $0.92 as in the fourth quarter of 2007, that puts us at $4.2 for the year, up 16% from the $3.48 in the full year of 2007.

And consistent with our budget of $4.2. One thing to note there, our distribution to our limited partners will total over $1 billion in 2008. So with that $4 we got north of $1 billion in distribution just from the limited partners in 2008, that’s the cash flow strength of these assets.

Now with that, I will go to the next page where we really layout, we think an easier way to look at the income statement and understand what's going on. I'll start with a couple of lines from the bottom above the footnote. You will see DCF per unit, $0.81 for the quarter versus $1 a year ago, $4.15 year-to-date or for all of 2008, up from $3.55 for 2007.

So for the year, our DCF per unit is up 14%. You may recall our budget was $4.07 of DCF per unit, or $4.15, it’s $0.08 above our budget. We have about $33 million of excess coverage in 2008.

Now as Rich mentioned, the fourth quarter looks a little bit weak. It is impacted by timing on the sustaining CapEx by the impact of the hurricanes and then by the foreign exchange and crude prices.

Moving up from there, you see the net income per unit. Again, we think DCF per unit is a more meaningful measure than that. It's a $0.24 for the year, it's $2.07. Now again while we think DCF per unit is a more meaning measure that is a little bit above our budget, our budget was $2.05, compared to the $2.07.

And additionally in the fourth quarter, it was impacted by an adjustment to reserves which we had to take largely because of GAAP accounting and the way that you account for reserves. When you run your reserve report at the end of the year, you have to use for future prices the actual price on that last date of the year.

And then for future operating cost or production cost, you have to use your average cost over the last 12 months. Well, I think most of you are familiar with commodity market. And what happened in 2008, you had a low price at the end of the year, but you had higher prices during the year, which means that production costs during the year were relatively high. They were especially high relative to the price at the end of the year.

That result in fuel reserves on the book, and then actually even though you do that at the end of the year and shows up in the 10-K, you go back to the fourth quarter of the prior year and you adjust your DD&A as a result. That led to higher DD&A at our CO2 operations again at our oil production.

And so that impacted the net income per units for the quarter. Again we don’t believe that to be overwhelming, but we would focus on DCF per unit as a better representation of the cash that's generated by the asset.

So, DCF per unit before certain items, total dollars there 211, $1,067 billion for the year, for the year we are up 23%. Sustaining capital expenditures, about $61 million for the quarter, $181 million for the year, that’s a little bit under our budget, our budget was $196 million.

As things got pushed back to the fourth quarter, and you can see the fourth quarter as it was with one-third of the total year. As things got pushed back to the fourth quarter, there was something that just didn’t get done in 2008, and will get done in 2009.

Moving up, we have book, cash tax differences, DD&A as you can see, is up $74 million from where it was in '07 for the quarter, it is up $180 million for the year. And then you add your limited partners' net income and the general partner share getting to your total net income.

At the top of that page you have the segments, Rich has already covered a lot of it and it's also covered in the press release. I’ll go over again just briefly.

Product pipeline, up about $15 million, compared to the fourth quarter of '07. Now it appears here like it's down $14 million for the full year '08 versus '07. But as Rich mentioned, the North System generated about $28 million in 2007. If you back that off in product pipeline, it's actually up $14 million in '08 versus '07.

Now, it was about $40 million under our budget, again driven by lower volume, which were a function of high product prices earlier in the year, within a recessionary environment later in the year.

Natural gas pipeline, a very strong year, up about $20 million in the quarter versus '07, up $146 million for the year versus '07, above budget. Now performance versus '07 largely driven by the addition of Rockies Express and the growth at the Intrastate for the relative to budget, it was the Intrastate that were above plan.

CO2, down about $4 million in the quarter, up $223 million for the year, almost 42% growth in the CO2 segment. And the quarter was impacted by the hurricanes, which drove the lower NGL volume, and then by the lower prices.

For the year where we're the beneficiary of higher prices and our volumes were on budget in terms of oil production, the NGL volumes were lower throughout the year as a result of the hurricane and some pipeline curtailment that impeded our ability to sell all of the NGL that we could have produced.

On the terminal side, up about $16 million for the quarter, up almost $97 million for the full year, a little bit shy of its budget. And again as Rich mentioned, impacted by the hurricane and also by higher diesel cost throughout the year. If you back those two impacts, our terminals would have been above their budget.

Kinder Morgan Canada up significantly from last year both as a function of the expansion at Trans Mountain and the addition of Express up for the year of about $84 million. A little bit under this budget in terms of Canadian dollars when you back out Express, but then also hurt a little bit by FX, which took in a little bit more under its budget.

Total segment earnings before DD&A of $670 million in a quarter, up $70 million from the fourth quarter of ‘07. $2.76 billion for the year, up from $2.22 billion or about $535 million increase year-over-year, or 24% growth in segment earnings before DD&A. And dropping down, actually go to G&A which is underneath the segment earnings contribution section, you will see it’s up about $17 million for the quarter, although, it is actually little bit under our quarterly budget by almost $3 million. For the year, it's up about $57 million to $302 million that was about $14 million above our budget driven by higher legal costs and by higher G&A at Kinder Morgan Canada which was a function of higher insurance cost and higher benefit cost.

On the interest line, it’s up about $5 million for the quarter, up about $10 million for the year. Our balance is up significantly, average about $1.4 billion for the quarter and the year but our rate on average is down about 75 to 100 basis points and that’s why you see only a modest increase in interest relative to ‘07.

For the year we were almost over $60 million favorable to our interest budget and similarly for the quarter we were about $17 million favorable to our interest budget.

There are certain items below that I think are fairly self explanatory, a number of them relate to 2007, especially the Trans Mountain amount that related to the period prior to the acquisition of Trans Mountain. Again, Trans Mountain was dropped down in the second quarter of 2007, but accounting required that KMP reflect on its income statement performance prior to the drop down. We backed that out here in certain items.

There is a new item there called Trans Mountain tax rate adjustment and it’s positive for the quarter, that’s the function of deferred tax, slightly lower tax rate going against your deferred cash balance creates that gain. We are not taking credit for we back it out here in certain items. And then various smaller items, including some addition to environmental reserves and some additions to legal reserves and settlement, that the mark-to-market and certain upstream hedges we started talking about this with the second quarter results.

It is a positive in the fourth quarter although again, that’s just a timing issue. All of that will be reflected in the segment at the time that the transaction that these hedges apply to are concluded.

Hurricanes and fires, what shows up here are the actual recovery costs associated with the hurricanes and fires as opposed to the lost business. We talked about the impact and the segments of the lost business. And again that shows up -- lost business shows up in the segments. We only put in the certain items as one-time costs associated we are dealing with and recovering from the hurricane and in others amalgamation of a few smaller items.

So for the quarter certain items are actually a positive $4 million. For the year they are negative almost $15 million. Again that all totaled to our DCF per unit for the year, $4.15 compared to our distribution of $4.02.

With that I am going to move on to the balance sheet, which is the last page there and the financial numbers. I will go through this. Cash and cash equivalence unchanged other current assets unchanged. PP&E is up as a function of capital expenditures. I will talk a little bit more about that in a minute. Offset by accumulated depreciation.

Investments were up largely, that’s the contribution to Rockies Express. Now deferred charges and other assets that changed there is largely related to the hedges which just impacts certain balance sheet line item.

Total assets is about $17.9 billion up from about $15.2 billion at the beginning of the year. Notes payable and other current maturities, we did not have any borrowings on our credit facilities at the end of 2008. This is for the most part current maturities of long-term debt.

Other current liabilities is down about $500 million that’s largely the mark-to-market on the hedges. Now the long-term debt I will discuss that in just a minute.

Value of the interest rates swap shows up here as $962 million, now few things to keep in mind there, this was as of the end of December. We did unwind a swap for $144 million in the month of January. And then the unamortized gain associated with swap unwind will stay in this line item while that gain is being amortized. And so essentially until the maturity of the debt that the swap was on; and so that amount will stay in here as we said in the press release and Rich mentioned if you look at the current economic value or at least the economic value as of close of business last Friday on the remaining interest rate swaps, it was $600 million.

Other debt decline is largely a result of the hedges. In partners’ capital, the accumulated other comprehensive loss has come down significantly because of the hedges, other partners’ capital is up as a result of equity issuance which totaled all of $680 million during 2008.

You get on the total debt, about $8.5 billion that's up from about $7 billion at the end of ’07, it’s also up from the third quarter balance of about $8.3 billion. If you look at debt to EBITDA, it’s essentially flat still right up 3.4 times which is where it was at the beginning of the year and where it was at the end of the third quarter.

I'll run through the change in debt, as I mentioned it was a little over $200 million change for the quarter, it was right about $1.5 billion for the year. Expansion CapEx for the quarter was about $600 million and for the year about $2.4 billion. Acquisitions in the quarter were about $31 million, and year-to-date about $160 million; and in contributions to joint ventures were about $25 million in the quarter and about $340 million year-to-date.

So those were on uses of cash. Sources of cash to offset that; equity issuance in the quarter about $177 million, year-to-date almost $680 million; KMR distributions for which we retained the cash, about $78 million in the quarter, almost $290 million year-to-date. We did get about $63 million back from NAP when we put in place the credit facility there and that was for the year, no impact on the quarter. We also got about $50 million on the sale of Thunder Creek, again that was earlier in the year no impact on the quarter.

Change in margin deposits of about $30 million in the quarter, about $70 million for the year. We did generate from swap reversals or unwinding of interest rate swaps about $194 million in the fourth quarter, and that doesn't include the swap that we unwound. So that’s $194 million in the quarter and year-to-date.

And then Trans Mountain, there was an additional contribution a true up contribution from Knight and then a little bit of cash came over with the Express transaction. Those two totaled about $30 million. And you have about a use of cash of around $30 million for working capital for the quarter and a source of around $20 million year-to-date, which is all associated with ALRP or other current assets or other current liabilities.

Just to give you a little sense of the CapEx, I talked about expansion CapEx of about $600 million for the quarter, about $2.4 billion for the year, approximate about $30 million for the quarter, $150 million to $160 million for the year and those were tanks, a lot out in California, also some of the renewable projects in Florida and a variety of smaller projects.

On the natural gas side, we spend about $290 million in the quarter, a little under $1 billion for the year. The Louisiana pipeline was the biggest piece of about $235 million for the quarter, about $700 million for the year, and then we had another pipelines mentioned like the Goodrich pipeline, the Colorado Lateral and then storage expansions at Markham North Dayton and a variety of other smaller projects.

Now again, those numbers do not include REX and MEP. They don’t include the joint venture pipelines.

Now at REX, CapEx for 2008 was right about $2 billion. That MEP was a little under $800 million.

In the CO2 side, we spent about $165 million expansion CapEx in the fourth quarter, about $560 million for the year. The largest piece of that was in SACROC. We also completed the Southwest Colorado expansion -- potentially completed the Southwest Colorado expansion. And then, a little bit of expansion CapEx at the Yates.

On the terminal side, a little under $90 million in the quarter, over $360 million for the year. We completed the North 40 Terminal in Edmonton, Canada. We spent a fair amount of capital in Pasadena and Galena Park over the course of the year. We built a new terminal in Geismar, Louisiana and had a variety of other smaller projects.

And then at Kinder Morgan Canada, we spent about $28 million expansion capital in the quarter, about $340 million for the year. Anchor Loops, by far, the biggest piece of that, a little bit on Puget Sound system. And then a few tanks and other smaller projects here and there.

And so, that's a eyelevel view on expansion CapEx, we'll clearly be giving you more detail a little bit on ’08, but especially on ’09 at the Investor Conference next week. I'll give it back to Rich.

Rich Kinder

Okay and with that, Ed if you come back on we’ll take any question that you all may have.Question-and-Answer Session

Operator

Thank you very much sir. (Operator Instructions). And one moment please. First question comes from Brian za Haren. Your line is open. State your affiliation please.

Brian za Haren - Barclays Capital

Barclays Capital.

Rich Kinder

Hi, Brian. How are you doing?

Brian za Haren - Barclays Capital

Good. Rich, how are you?

Rich Kinder

Okay.

Brian za Haren - Barclays Capital

Could you comment on how the weak economic conditions may impact your bulk storage business in 2009?

Rich Kinder

Sure. I think it's a mix bag. On our bulk storage, we do have contracts on many of our facilities, for instance, on our coal import and export facilities we have, what I would call, take or pay contracts there, minimum throughput contracts that we get paid regardless of whether the product actually moves to the terminals.

So, we are protected to a large extent. I think we do have some exposure particularly in some of our steel terminals, where we handle for our large steel producers on a requirement basis. In other words, we were entitled to handle everything they bring in or send out. But to the extent they cutback, we do have some exposure there.

I don’t think it will be significant over the course of the year, but that's probably the biggest single headwind that we have on our terminals group if we look forward to 2009. On the liquids terminals side, of course as you all know, storage given the Contango market is in short supply and every bit of the stories that we have is fully contracted, so there we feel very good about the liquid side of the business and we feel good about the petcoke side of the business where we do have some minimum contracts, but a number of requirement contracts, because there again our refinery customers are running and we are getting the petcoke. And in fact as they burn more heavier crudes, we're actually seeing more of volume on the petcoke side.

But we do have the exposure you sort of alluded to on the bulk side. I don’t think its material in the sense of the overall terminals operations, but that is a headwind we will face this year.

Brian za Haren - Barclays Capital

And I guess looking in other potential headwind with lower CapEx spending in Alberta, how would that impact your Canada business?

Rich Kinder

It really doesn't. I think if I were looking at our five business segments, I don’t think there is a much downside exposure, because the way our tariffs are set. As you may recall, on our Trans Mountain pipeline, our agreement with our shippers provides for essentially a 92.5% throughput that we are. Basically the tariff contemplates that we will get reimbursed as if 92.5% goes through.

Now above that, we share the upside with our producers if we go to 94%, 95%. And occasionally we might have two or three months a year, where we would anticipate going above that 92.5%. So, on the margin it would have a little bit of positive impact for us, but not much downside there. And on the Express pipeline, we have take or pay agreements for the overwhelming majority of that throughput which go out, most of them I think through 2013. So we really don't have much exposure on the Canadian pipeline side.

C. Park Shaper

Maybe Rich, only thing I'll add to that, and it's really just a more of a general concept on what you were pointing out, and we will talk about this a little bit next week. We always highlight as a risk, the regulated nature of our assets materially cash in many cases what we can charge, tariffs that we can charge, but it should be recognized especially in times like these, but that also offers protection

And just what Rich was getting at, he is describing not necessarily an overall regulatory construct but rather a settlement that we've entered into with our shippers, which is an agreement on how we are going to operate within that construct. But again, in this environment that regulated asset protection is very valuable.

Brian za Haren - Barclays Capital

And one final question. Can you give us an update on how much availability is on your revolver and what is the remaining CapEx on REX, Midcontinent, Express in the Louisiana pipeline?

Rich Kinder

Sure. Park or Kim?

Kim Dang

Yeah. On the KMP revolver, as of 12/31, we had $1,653 billion available. Now since that time, we've unwound some additional swaps for 144, so there would be 144 of additional capacity available on top of the one-third.

C. Park Shaper

That you are talking about net of cash. It's not all revolver availability, that’s cash on hand plus revolver availability?

Kim Dang

Yeah, offset by any letters of credit that we are outstanding, so I've reduced the four of the letters of credit we have outstanding, so that's our net borrowing capacity on the revolver.

Brian za Haren - Barclays Capital

Okay.

Kim Dang

Since that you asked about MEP, we have a little over $400 million of capacity and REX about the same.

C. Park Shaper

And I think you were asking about CapEx formats and we'll go through that detail next week. All that information will be laid out for you.

Brian za Haren - Barclays Capital

Okay, thank you.

Operator

Next question comes from Gabe Moreen, your line is open. State your affiliation please.

Gabe Moreen - Bank of America/Merrill Lynch

Bank of America Merrill Lynch, how are you guys doing?

Rich Kinder

Hi, Gabe, how are you doing?

Gabe Moreen - Bank of America/Merrill Lynch

Doing alright; a couple of questions for you on the interest rates swaps and the decision to monetize some of those. The change from your approach historically, could you give us some color in terms of your thinking, if you are calling a low in interest rates here certainly does seem like an attractive source of cash given all things considered? And then also how should we think about that $600 million in economic value that is less there, the decision to monetize the rest of it potentially and whether you consider out of source of avoided equity issue or avoided debt issued or some combination thereof?

Rich Kinder

Okay, well, we look very carefully at the interest rate swaps, of course it’s a complicated decision as to whether you do unwind them or not, we thought this was an appropriate time to unwind given the tremendous value. And we looked at it based on what the ongoing cost of higher interest rate is if you just swap back to floating now versus what we have been, I think that’s the right way to look at it. But as a secondary screening process we also looked at the debt and any equity that we would avoid issuing as a result of bringing that cash in.

And to your last question, we actually in our process our budgeting process which we will take you through next week, we applied all of this against debt. So just for planning purposes, but we think it was the right thing given these circumstances. It’s not an easy call we will just make a decision on the other $600 million as we go. Part of it of course depends on there are always some friction cost and getting to the net number and so that’s an important consideration, and just something that we watch on a daily basis. Park anything you want to add to that?

C. Park Shaper

No.

Gabe Moreen - Bank of America/Merrill Lynch

Okay, and second question in terms of reducing cost on the CO2 business whether, are we talking about capital costs there in terms of drilling around this year two segment, and just some more color there I am sure you will give some more next in two weeks, but I am just wondering?

Rich Kinder

Yes, we would be happy to address that and we are talking both from an expense standpoint and from the capital expenditure standpoint. I think an interesting graph, if you were here in front of us, you could see. Is if you chart the cost of various service facilities or various services performed by all services companies over the last few years against the crude oil prices, you see a tremendous run-up in the cost for instance the cost daily rate for drilling rigs for example. And you compare that it tracks the crude oil price up pretty much. Now we are facing crude oil prices where they backed down where they were in 2004, 2005 timeframe. Those prices have not yet come down.

So what we are doing to that extent, what we’re doing is making what I would term a Herculean effort to bring the prices back in-line, the price of these services back in-line with the lower oil costs, oil in price environment that we're in today. I don't know that we get all of the way there and some of these things are under long-term contracts, but our CO2 management has already reported significant reductions on the costs side. I think they will get a lot more and we will have at least some horseshoes and hand grenades number for you next week at the conference and then it will be trued up as we go on further in the year. But this is something that we have already started. I want to add that some of our suppliers have voluntarily recognized the situation. I guess voluntarily is the word. And have come to the table and just offered up reductions. And in many cases we’ve said thank you very much, but that’s not enough.

And if you really look at it in the broader sense, I would argue that not only should those oil fuel service costs come down to a level where they were before, but in some instance giving the fact, for example, that we have a lot more drilling rigs available then we did and these rigs are being weighed down every day. They should actually come down.

Now, in addition to all the savings on the expense side, which we think will be considerable and will offset part of whatever decline we face in revenues from the oil price decline, in addition to that, we’re also looking at, what I would called, a high grading situation at SACROC that will allow us to keep our production about where we expected in the budget, but to prioritize, for example, the thicker pay prospects that we have, which should have a pretty significant reduction which should lead to a pretty significant reduction in our capital expenditures in the CO2 segment. We are not ready to quantify that yet, but again we hope by next week we will have a rough number on that also. So, in other words we would have savings there in the capital expenditure program for the year, which of course would lead to even lower interest costs than we currently expect.

Gabe Moreen - Bank of America/Merrill Lynch

Great. And final one from me is just on the sales and transportation side, the CO2 segment, whether you are seeing any sort of slackening in demand given the falloff in oil prices from your third party customers?

Rich Kinder

Again, all we could say right now, is what I said earlier, that we are every MCF of CO2 that we can move down from Colorado, into the Permian is being used and in fact we have a couple of our customers who are actually increasing their utilization and wanting more CO2. So, we have not seen any impact thus far in terms of utilization of CO2. Now part of that $6 million impact from every $1 in crude oil price changes. Part of that is on the S&P business in term of the price we get because if you recall some of our CO2 contracts with third parties involve -- we have a forward price but we have some adders if crude oil prices go above certain levels as those crude oil prices come down and they are generally determined on a quarterly basis looking forward based on the price for the last quarter. We do have some deterioration in the price per Mcf we get for that CO2, but CO2 volume is running very strong. We are at all time record production in both Southwest Colorado and in throughput on the Cortez Pipeline.

Gabe Moreen - Bank of America/Merrill Lynch

Great.

Rich Kinder

Okay.

Gabe Moreen - Bank of America/Merrill Lynch

I appreciate it. Thanks Rich.

Rich Kinder

Thank you, Gabe.

Operator

Next question comes from John Edwards. Your line is open. State your affiliation please.

John Edwards - Morgan Keegan

Hi, everybody with Morgan Keegan.

Rich Kinder

Hey, John. How are you doing?

John Edwards - Morgan Keegan

Pretty good. Just on the cost decreases that you are seeing now on couple of your pipeline projects, are you seeing that mostly on the labor contractor side?

Rich Kinder

Steve, Steve Kean will handle that.

Steven Kean

Yes, it’s kind of mix of things. If you look at Louisiana project for example that is an improvement in the contract structure with our primary contractor on that project. That’s driving that. The other matter that's driving that is a claim against the vendor for some amounts that they owe us. I think when you look at Fayetteville, really the issue there is that we came into that project I think fully price against the experience we had with some projects with some overrun. And that kind of topped that up some more and as we've gotten into it, gotten our steel ordered or pipe ordered, got an expression lined up, things like that, I think we are seeing that B2B jumped the gun a little bit on where we pop the costs. So we are starting to see a little bit of an improvement from and clearly.

John Edwards - Morgan Keegan

Okay and then on the product volumes in 2009, are you expecting sort of a similar drop off like we’ve seen here this last couple of quarters I think you said you are 6% to 7% for fourth quarter, are you expecting sort of single, mid-single digits in ‘09 as well?

Rich Kinder

No we are not. We are expecting the, to average out to at least the level we had for all of 2008, we think 2008 was a very depressed year. And actually particularly on the gasoline side we see a little bit of that demand coming back is what we are projecting for 2009.

John Edwards - Morgan Keegan

Okay, that’s encouraging. And what’s left to spend now on REX KM Louisiana and MEP?

Kim Dang

On REX we spent $4.5 billion to date. And so the total cost is 6.2, so that gives you remaining spending. On MEP we spent about $840 million to date. And on FEP we spent about $20 million to date. So those are all updated numbers.

John Edwards - Morgan Keegan

Okay and then on Kinder Morgan Louisiana.

Kim Dang

On Kinder Morgan Louisiana we spent about $750 million to 800.

John Edwards - Morgan Keegan

Okay. Also… okay so that’s you are done there, okay great. And then could you talk a little bit about, give a more detail on the direct issuance versus conventional under writing? I take if you would on the direct issuance you have roughly 10% or so because you not exceed 10% of daily volumes that kind of things and you'd be able to do it periodically. Is that the idea or may be you could expand on that also?

C. Park Shaper

So that’s exactly the idea. Let’s not be disruptive to the stock and say. You don’t want to be a large portion of the daily volume and it’s based on our instruction to the under writer. And so it could vary from day-to-day.

John Edwards - Morgan Keegan

Great, okay. Thanks very much.

Rich Kinder

Thank you, John.

Operator

Thank you, Jack. Next question comes from Stephen Maresca. Your line is open, state your affiliation please.

Stephen Maresca - Morgan Stanley

Morgan Stanley.

Rich Kinder

Hey, Steve how you doing?

Stephen Maresca - Morgan Stanley

Good, how are you guys doing?

Rich Kinder

Okay.

Stephen Maresca - Morgan Stanley

So, couple of quick questions? When taking a look at some of your projects like Fayetteville, I mean given the credit markets, weaker economic outlook, lower gas prices, can you just talk to what the possibility is if something like this, doesn’t get completed. I realize you have shipper commitments in place. How iron clad are those and maybe you could just talk to that because it’s certainly some push back we've been getting?

Rich Kinder

Well, we expect all these projects to be completed obviously everything with Fayetteville is just about finished. The other three major projects will be completed in the next few months. We have iron clad agreements on all of them and we expect to complete all of them.

C. Park Shaper

And one thing I woud say, probably difference between when we talk about projects and may be when other people talk about projects I mean, we can not account on a project until we have customer commitments that are pretty much locked in and we won't pursue it ourselves once we feel like we have an adequate return. And so, when we are moving forward with the project, we are moving forward with the project.

Stephen Maresca - Morgan Stanley

Okay, in terms of the equity issuance Kim was just talking about before, is there an exploration date on that? Is that something it needs to be done by certain date in '09 and then it's over, or how does that work?

Kim Dang

There is no exploration date.

Stephen Maresca - Morgan Stanley

Okay, and then last question. You also filed something on KMR, which was I think just as three, but can you talk to the thoughts on using that vehicle again and maybe at what discount level you'd consider using KMR for equity?

C. Park Shaper

Yeah, we would much prefer a smaller discount, truthfully I think there is a reasonable argument that KMR should trade at a premium to KMP given the tax characteristics of the two securities.

As Rich mentioned earlier, we filed the KMR offering really to give it to another arrow in the quiver that is something that we will continue to monitor, because Knight is a registrant in that offering and Knight is now a private entity, it takes more lead time to make a KMR offering happen, meaning we can't just pull it off the shelf.

And so what we are doing here is putting in place what we would need to put in place in case we want to pursue that offer. We will evaluate at the time the market condition and whether or not we want to do one and what size that offering might be if we decided to do one.

Stephen Maresca - Morgan Stanley

Okay, that’s all I have. Thanks for the time.

Rich Kinder

Thanks, Steve.

Operator

Next question comes from Xin Liu. Your line is open, state your affiliation ma’am.

Xin Liu - JPMorgan Chase

JP Morgan. A couple questions on CO2, would you expect negative reserve revision and what percentage of your last year reserve would be revised down?

C. Park Shaper

There will be a negative reserve revision, and the report is still preliminary. At this point, we'll have those final numbers. But there will be a reduction in crude reserves as a result of pricing in the cost that we need to use.

Rich Kinder

Park had mentioned that ironically, of course, the whole mechanism is being changed effective with 2009, and now instead of having this one-time year end pricing mechanism on the price side, but costs over the proceeding 12 months are now beginning in 2009, it will be an average annual price across the board. So, that will change the whole game.

C. Park Shaper

It will match up the oil price with the cost.

Kim Dang

Yeah, and we think it's likely that most of the reserves that we lose this year will be recovered basically as a result of that change.

Xin Liu - JPMorgan Chase

Okay. Would you expect to work any possible and powerful?

Kim Dang

Impairment?

C. Park Shaper

No, she didn’t.

Xin Liu - JPMorgan Chase

Yes.

C. Park Shaper

No, we don’t, expect.

Xin Liu - JPMorgan Chase

Okay. On your SACROC and you have a nice production out in the fourth quarter, and anything going on there, should we expect the growth to continue?

Rich Kinder

We have a number that’s very similar to 2008 numbers for 2009 for production, but we will share all that with you all at the investor conference next week. I think there have been some very good developments on the operational side, and part of that is we have alluded to earlier the fact that we had issues with submersible pumps, we bought in a new contractor there, have really revamped that and we now have our failure rate for submersible pumps.

Over the last several months it has been at an all-time low. That’s very important, because, of course, that’s what really helps force the oil out of the ground. So, that really improves the productivity. And at one time, given the downtime of various submersible pumps, I think we shared this with you all. We had from a 1,000 to 2,000 barrels a day that was off production, because the submersible pumps were being repaired.

And now that we’ve substantially reduced that rate, I don’t know what the average would be today, but it’s a couple of hundred barrels, so it’s a very good improvement. In addition our patterns, we’re targeting about five patterns a month for calendar year '08. We have actually put in to place 52 patterns in SACROC.

And generally speaking not always, but generally speaking, if you keep up to speed on your patterns, that's what drives additional production out, so I think from an operational standpoint, things are going pretty well.

Now it's a complicated situation as always, but we know the oil is there obviously. And it's a question of getting out of the ground. I think the real issue is pricing, and these constraints on the NGL production or the ability to get the NGL production away from the field that we are dealing.

Xin Liu - JPMorgan Chase

Okay, that’s helpful. And last question. Your 4.2 discretion targets for 2009, what's your assumption on equity issuance?

C. Park Shaper

We'll go through that next week, but yeah, there are assumptions in there that we will issue equity. And as we said before, I mean we have capacity such that we don’t have to if we didn’t and that distribution would be higher.

Kim Dang

Let me say one thing on that capacity. I think before you said we should take off the 144, I had already done that, so our capacity is $1.6 billion partly adjusted for that. So you guys should think about our capacity as being $1.6 billion

Xin Liu - JPMorgan Chase

Do you need any equity contribution to REX or MIP?

C. Park Shaper

Yes, we will have contribution to the joint venture during the year.

Kim Dang

And we will go through that next week as well. Our total capital plan and we will go through what our financing expectations are.

Rich Kinder

We will sketch out for you in the presentation basically just a detailed sources and usage slide.

Xin Liu - JPMorgan Chase

Sure. Thank you.

Operator

(Operator Instructions). And I have other question, it comes from [Michelle Marvins]. Your line is open Ma’am. Please state your affiliation.

Michelle Marvins - Center Coast Capital

I am with [Center Coast Capital]. And most of my questions on the offering have been answered but I just wanted to get a little more color on the rationale for doing it kind of via this dribble out mechanism versus a more traditional kind of underwritten placement.

Rich Kinder

Well I think. Go ahead Park.

C. Park Shaper

What I think that we won’t do an underwritten offer. We are saying that this is another option.

Michelle Marvins - Center Coast Capital

Okay.

Rich Kinder

I think the main thing Michelle, is we are huge believers of belts and suspenders or put another way having a lot of arrows in the quiver and that’s what we are simply trying to do so. Again as you see on the sources of usage page we actually have enough firepower that we wouldn’t have to put out equity next year or this year. But in all likelihood it will. And we have various sources including the KMR which is in essence like really a dividend reinvestment program and that should be part of that 350 this year of that alone. We have the commitment from Knight if we chose to use it in the end. Don’t think that will be necessary the way we look at things but we have that commitment. And now we have this [ATM] proposal also. So, I think, we as well as capabilities we showed in December to do an underwritten offering.

So I believe we have plenty of firepower for the year to take care of any and all needs that we have.

Michelle Marvins - Center Coast Capital

And the direct placement, the agreement with [DVS] just for KMP it’s not for KMRs is that correct?

C. Park Shaper

That’s right.

Michelle Marvins - Center Coast Capital

Okay, thanks.

Rich Kinder

You’re welcome.

Operator

Our last question comes from Ross Payne. Your line is open, state your affiliation please.

Ross Payne - Wachovia

Ross Payne with Wachovia.

Rich Kinder

Hey Ross, how are you doing?

Ross Payne - Wachovia

I am doing fine. How are you guys?

Rich Kinder

Fine.

Ross Payne - Wachovia

Quick question here. How much was unhedged for ‘08 and going into ‘09 what does that number look like?

C. Park Shaper

From a oil production?

Ross Payne - Wachovia

Yeah, percentage yeah.

C. Park Shaper

Yeah in terms of BOE which means you include the NGLs in there. Then we were in mid-80s I think was the number in 2008. And it’s mid-70s in 2009.

Rich Kinder

It's very difficult as you recall Ross, the hedge NGLs it’s a pretty dirty hedge. And so that’s where most of our unhedged volumes are.

Ross Payne - Wachovia

Okay and just remind me too. I know you had a nice step up from ‘07 to ‘08 and in realized hedges. What does that look like going from ‘08. What was that first, ‘07 to ‘08 or what does it look like going into ‘09?

Kim Dang

44 in ‘08, 49 in ’09 so far all has become comparable.

Rich Kinder

And if that was about 38?

Ross Payne - Wachovia

Very good, also when you did the Knight transaction didn’t you have some kind of agreement with Goldman on thrusting collateral is that still in place, just refresh my memories so?

Rich Kinder

Yes, it is it's still in place we did have that agreement which does not require post collateral and that’s still in effect.

Ross Payne - Wachovia

Okay, on maintenance CapEx it seems like it’s backend loaded every year, is there a reason for that.

Rich Kinder

I wish I do Roche. What happens I think is that, you put together a budget in the fall of one year and look ahead what you have got to expand? And those numbers have gone up. If you look back, we went from about, these were actual spent numbers from about 124 in ’06 to in the 150s in ’07 to we actually had a budget of 196, it came in the lower 180’s as Park told you, and we have a budge that’s around $200 million for ’09.

I expect that we'll see the same thing again that will backend loaded and when you get towards the end of the year, some of the stuff just physically can't get done. Particularly if you have winter weather in some of the areas so that’s what generally happened. Things generally get pushed backed to the fourth quarter and then generally we have tended to understand our sustaining CapEx budget, not because we intend to understand, it just doesn’t get done within the 12 month period.

Ross Payne - Wachovia

Okay, also in the Intrastate, it’s exceeding almost all the time, I mean is it volumes is it basis differentials what’s really driving the fundamental there.

Rich Kinder

Well, I think several things as we say in the earnings release, first of all I think we are in a very good position in the Texas market. We’ve continued to expand in dribs and drabs both our ability to connect, to supply and the demand and the Goodrich pipeline is one example, allows us to get more natural gas out of East Texas field down in the ship channel area.

And then we’ve also I think done a pretty good job with our customers, we’ve been able to expand and extend contracts with our customers, we’ve been able to provide them with a wide range of balancing services for example. I think we made good use of our storage and we are expanding our storage again in fairly small incremental steps. But the storage again in these kind of market is a pretty viable commodity.

So I think it is just a game of singles and maybe some doubles as opposed to home runs but we continue to do very well in the Texas Intrastate market and think we'll do well again this year.

Ross Payne - Wachovia

Okay, thanks Rich.

Rich Kinder

Okay.

Operator

Mr. Kinder I do have one more question it just came in sir.

Rich Kinder

Okay.

Operator

From, John Edwards. Your line is open state your affiliation please.

John Edwards - Morgan Keegan

Morgan Keegan.

Rich Kinder

Same as last time right?

John Edwards - Morgan Keegan

Same as last time.

Rich Kinder

All right, John go ahead.

John Edwards - Morgan Keegan

I missed, I think Park you gave it the CapEx the growth CapEx for the quarter, what I missed with the number, what was that again?

C. Park Shaper

Some expansion CapEx for the quarter was right at $600 million.

John Edwards - Morgan Keegan

Okay, and the maintenance CapEx for the quarter was?

C. Park Shaper

Maintenance CapEx is 60.

John Edwards - Morgan Keegan

60, Okay, great, told us right. Okay, all right great, thanks that’s all I have. Thanks

C. Park Shaper

You bet.

Rich Kinder

All right, Ed is that it?

Operator

I show no further question sir.

Rich Kinder

Okay, well, thank you all very much, have a good evening. And we hope we’ll see you or you'll listen to us at least at the investor conference next week. Thank you.

Operator

At this time, that would conclude today's conference. You may disconnect and thank you for your attendance.

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Source: Kinder Morgan Energy Partners LP, Q4 2008 Earnings Call Transcript
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