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Enbridge Energy Partners, L.P. (NYSE:EEP)

Q2 2012 Earnings Call

July 31, 2012 9:00 am ET

Executives

Sanjay Lad - IR

Mark Maki - President

Steve Neyland - VP, Finance

Leon Zupan - President Gas Pipelines

Steve Wuori - President Liquids Pipelines

Terry McGill - SVP Natural Gas Operations and Engineering

Dave Wudrick - Treasurer

Bill Ramos - Controller

Analysts

Ted Durbin - Goldman Sachs

T.J. Schultz - RBC Capital Market

Ross Payne - Wells Fargo

Sharon Lui - Wells Fargo

James Jampel - HITE

Operator

Good day, ladies and gentlemen, and welcome to the Q2 2012 Enbridge Energy Partners, L.P. earnings conference call. (Operator Instructions) I would now like to turn the conference over to your host for today, Mr. Sanjay Lad, Director of Investor Relations.

Sanjay Lad

Good morning, and welcome to the 2012 second quarter earnings conference call for Enbridge Energy Partners. This call is being webcast, and a copy of the presentation slides, supplemental slides, condensed unaudited financial statements and news release associated with it can be downloaded from our website at enbridgepartners.com.

A replay will be available later today, and a transcript will be posted to our website shortly thereafter. As a reminder, the Partnership's results are also relevant to Enbridge Energy Management or EEQ. I will be available after the call for any follow-up questions you may have. Our speakers today are Mark Maki, President; and Steve Neyland, Vice President Finance.

Available for the Q&A session, we also have Leon Zupan, President Gas Pipelines, Enbridge Inc.; Steve Wuori, President Liquids Pipelines, Enbridge Inc.; Terry McGill, Senior Vice President Natural Gas Operations and Engineering; Dave Wudrick, Treasurer; and Bill Ramos, Controller.

This presentation will include forward-looking statements. The risks associated with forward-looking statements have been outlined in the earnings release and the Partnership's SEC filings, and we incorporate those by reference for this call. This presentation also contains certain non-GAAP financial measures. The reconciliation schedules for these non-GAAP measures to comparable GAAP measures can be found in the Investor Section of our website.

Please turn to Slide 3. I will now turn the conference over to Mark Maki, President.

Mark Maki

Thank you, Sanjay. Good morning, and welcome to our second quarter 2012 earnings call. As it relates to our agenda this morning, I will discuss our recent pipeline release on Line 14 in Wisconsin, our long-term growth outlook, and then pass it along to Steve Neyland, to present the financial results.

Let me first provide a brief update on the recent pipeline release on our Line 14 in Grand Marsh, Wisconsin. Enbridge continues to make significant clean-up and restoration progress at the site and the cleanup is substantially complete. Enbridge remains committed to the thorough restoration of the site as quickly as possible.

Repairs to the pipeline are well underway. Replacement of the affected section of pipe is expected later on today. And the pipe will be sent to experts, metallurgical examination.

Enbridge's plan to restart will be reviewed and approved by the Pipeline and Hazardous Materials Safety Administration. The pipeline is expected to be operated at a reduced pressure, following start up, while investigation and cause of the instant is complete. We estimate the cause for release of approximate $8 million.

Site restoration and repair will continue to be conducted in compliance with all governmental regulations and the company's stringent safety and environmental standards. The safety of people and the protection of the environment are our highest priorities. We greatly appreciate the support we received from local first responders, community leaders and the cooperation and patience of the affected landowners and the community.

Please turn to Slide 4. Last night we announced a distribution increase of 2.1% compared to the prior quarterly rate, which equates to an annualized cash distribution of $2.17. The distribution increase is in line with our annual distribution growth target of 2% to 5%.

Although, current new distribution coverage is forecast to be short of our long-term target, we are confident that the current slate of growth projects will increase distributable cash flows, once they are placed in service. Our degree of confidence and future cash flows from these secured projects is very high. And for that reason, we feel it is appropriate to demonstrate that confidence in the long-term with an increase in our current distribution. We will touch on our secured organic growth programs in a moment.

Let's move forward to Slide 5. We believe the long-term outlook for the Partnership remain strong as the crude oil supply fundamentals from Western Canada and the Bakken formation in North Dakota, resulting in higher levels of system utilization on our liquids pipeline systems. We provided customers, analysts and investors our crude oil supply forecast for a number of years. We are bullish as ever on the potential this North American resource base.

2012 Canadian Association of Petroleum Producers supply outlook is presented on the chart on the left. Compared to the 2011 outlook, Western Canadian conventional production is higher by almost 400,000 barrels per day by year 2025 and oil sands production is higher by almost 500,000 barrels per day. Advancements in drilling technology accelerated project timeline and the addition of new projects, as propelled the supply growth outlook upward.

Moving to chart on the right. Crude oil supply growth in the Bakken formation is another great story. The supply forecast top a million barrels per day by the end of the current decade. Partnership is well positioned to purse the next round of pipeline expansion to support this production growth and offer safe, secure and an economical corridor for incremental takeaway from the region. The backdrop for Enbridge's liquids market access programs are the strong crude oil supply fundamentals, rising from the unprecedented growth outlook in North American crude oil production.

Please proceed to Slide 6. Partnership is well positioned to grow distributable cash flow based on our previously announced organic growth projects that are targeted to be placed in service in 2013 and 2014. A long-term low-risk commercial underpinnings of these accretive growth projects, complemented by our proven capital project execution track record, provide us with the high level of confidence in our growth story.

Looking beyond these announced organic growth projects, the Lakehead System is ideally positioned to participate Enbridge's market access programs, increased crude oil capacity to the East, the Midwest, and to serve markets as far South as the U.S. Gulf Coast.

Our existing mainline liquids pipeline system has substantial low cost expansion potential and the recently announced Lakehead expansion projects were just half the first layer of that potential mainline expandability, leaving plenty of scope for further extension and meet future shipper needs. The Partnership continues discussion with shippers on potential expansions of our pipeline systems.

Please turn to Slide 7. And I'll now turn the call over to Steve Neyland, to discuss our financial results.

Steve Neyland

Thank you, Mark. Second quarter adjusted net income of $96.8 million was $10.9 million lower than the same period of 2011 and current year-to-date adjusted net income of $206 million was comparable to prior year. The quarter was unfavorably impacted by the recent decline in NGL prices. However, it was partially offset by increased throughput on all our major liquid systems to higher fee-based revenues.

As Mark, mentioned the continued strong throughput on all our major liquid systems underpinned by the solid production growth in the Canadian oil sands and the North Dakota region. The main items eliminated from these adjusted results are unrealized non-cash mark-to-market gains and losses, additional environmental costs, net of insurance recoveries associated with the 6A and 6B incidents, and other items noted in our supplemental slides.

Adjusted earnings per unit for the second quarter was $0.23 compared to $0.32 for the same period 2011. Lower adjusted earnings coupled with the increased weighted average number of units outstanding in 2012 compared to the second quarter of 2011 resulted in lower earnings per unit in the prior year. Our as-declared coverage ratio on a year-to-date basis was 0.85 times.

Please turn to Slide 8. For our Liquid segment, adjusted operating income of $155.5 million for the second quarter was $9.4 million and 6.4% higher than the same period for 2011. Second quarter 2012 operating income was $3.5 million, lower than the first quarter, primarily due to higher operating and administrative expenses.

The higher operating revenues were attributable to increased volume deliveries on all our major systems. Our higher fee-based revenues were partially offset by increased operating and administrative expenses, due to workforce additions, higher property taxes as well as an additional $2.7 million of repair costs related to the tragic third-party vehicle accident that occurred at one of our Lakehead stations in the first quarter.

We are pleased with the strong volume deliveries in all our liquids pipeline systems. Volumes on our Lakehead System were 1.81 million barrels per day during the quarter, as Western Canadian production and refinery utilization in the Midwest region remained strong. The volumes on our North Dakota system remained strong due to the continued production growth in the Bakken region and our Ozark system continues to be oversubscribed.

During the second quarter, cleanup and remediation efforts of the areas affected by Line 6B incident progressed to the point that the Kalamazoo River and Morrow Lake will reopen for public recreational use. Our total cost estimate has been increased by $20 million to $785 million, to reflect continued monitoring and restoration efforts of these affected areas. The increase is inclusive of the $3.7 million civil penalty assessed by the Pipeline and Hazardous Materials Safety Administration.

Total insurance recoveries to date amount to $335 million, which is unchanged from the first quarter of 2012. We are continuing to make progress in the collection of the remaining $315 million and that is covered under our insurance policy.

Please turn to Slide 9. Adjusted operating income of $43.3 million for the second quarter was $13 million lower than the same period from 2011, and was $9.2 million lower than the first quarter of this year. As noted on our July 3 analyst call, second quarter earnings and the near-term outlook for the natural gas business has been unfavorably impacted by the recent decline in NGL price. This was combined with higher operating and administrative expenses pursuant to higher workforce-related costs and increased variable costs associated with additional assets that we placed into service.

Natural gas volumes on our East Texas and North Texas systems were lower than previous quarter, as drilling was moderate in the second quarter due to the weak natural gas price environment. Volumes on our Anadarko System rebounded over the first quarter of this year, as our Allison processing plant was in service, along with the recently available third-party NGL takeaway capacity.

Please turn to Slide 10. We continue to make progress on our $2.1 billion organic growth capital program for 2012. Our capital expenditures forecast for the current year has been updated to incorporate the Eastern Access and Border to Flanagan expansion projects.

Additionally, pursuant to our messaging earlier in the month around prioritization of capital, we have reduced capital investment in the gas business by approximately $200 million in 2012 from our earlier forecast at the beginning of the year. We will continue to consider opportunities in the natural gas business that will elevate the Partnership's long-term fee-based profile. With the addition of the aforementioned large liquids expansion projects, our current year capital expenditure forecast remains unchanged at $2.1 billion.

Our Partnership's liquidity position remained strong, as we had approximately $1.4 billion of available liquidity at the end of the second quarter. In early July, we increased our banks credit facilities by $675 million, thereby enhancing our current liquidity position to just over $2 billion to support our capital program.

Looking forward to the second half of the year, we will continue to exercise prudent financial management, bringing out our 2013 capital projects in service, both on time and on budget and maintain our investment grade credit ratings. For further details on our financial results for the quarter, I encourage you to read our supplemental slides that are posted on our website.

Let's proceed to Slide 11. The Partnership's distributable cash flow profile progressively ramp up over the coming years, as our previously announced growth projects are placed in service starting in early 2013. These accretive growth projects are predominantly secured by long-term low-risk commercial framework that will ultimately drive a distributable cash growth profile through 2015.

The cost of service and shipper pay commercial structures underpinning these liquids project, control key risk elements such as commodity price fluctuations and invariably provide higher certain long relied stable cash flows. Our distribution coverage for 2012 is forecasted to be less than 1 times due to softening NGL prices and financing costs for our significant growth portfolio. Our coverage is expected to strengthen through 2013 and 2014, as a low-risk secured growth projects begin delivering distributable cash flow.

Given the favorable crude oil fundamentals and organic growth projects heavily weighted towards crude oil over the coming years, the substantial growth of this side of our business will shift the Partnership's earnings and cash flow profile to a 75% to 80% liquids and 20% to 25% natural gas mix.

Please turn to Slide 12. And I will now turn it back over to Mark, to address the key takeaways.

Mark Maki

Thank you, Steve. Just a few points of emphasis in closing, before the question-and-answer period. Our long-term outlook for the Partnership remain strong as crude oil supply fundamentals in the Western Canada and the Bakken are resulting a high levels of system utilization on our liquids pipelines systems.

Management is confident that our growth outlook is supported by the long-term low-risk commercial underpinnings of the attractive growth projects to enter service in 2013 and 2014, as Steve noted. These accretive growth projects will deliver stable, long-life cash flows to the Partnership and help us deliver the 2% to 5% targeted annual distribution growth to our unit holders.

I'll now turn the call over to the operator for Q&A.

Question-and-Answer Session

Operator

(Operator Instructions) And your first question comes from the line of Ted Durbin, Goldman Sachs.

Ted Durbin - Goldman Sachs

I guess I'm trying to understand a little bit of the moving pieces here on the liquids budget. It looks like you've taken some capital out of the integrity spending and then some of the growth, and then is that just shifting that really into the Eastern Access? Maybe you're actually going to fully replace 6B and things like that. I'm just trying to understand the moving pieces there.

Steve Neyland

From our big picture standpoint, there has been some shifting of capital. We've reduced some of our discretionary gas capital by approximately $200 million. And then there is a variety of components that have moved around, including integrity as well as timing of cost with some of the major projects on the liquid side of the business in place at the end of day for this year.

Ted Durbin - Goldman Sachs

And then just sticking with the capital budget. I just saw on the footnote there, you're assuming you're going to take 40% of the share and it looks like the Eastern Access spending. Is that still kind of the economics you wanted to target and I hit the option on what you can do with some of the projects. How are you thinking about, how much of that yield you want to take ultimately?

Mark Maki

Based on the current outlook, Ted, we are assuming the 40% as bid continues. We've got a 15% option to put some of the project to the parent by the end of year. And then at a later point we've got to call it, take back 15% of the project after they're in service. So as it stands today, we are still at the 40%.

Ted Durbin - Goldman Sachs

And then, just shifting back to the 6B incident still there. We heard a report come out and had some pretty harsh language. I'm just wondering if you can comment on that and maybe any thoughts on what kind of fines, penalties, things of that nature you might be expecting?

Mark Maki

Maybe I will take the first part, fines and penalties discussion. Ted, it's too early for us to really make a call on that. We did with respect to our $20 million adjustment to Line 6B this quarter, incorporate in the PHMSA fine of $3.7 million, as it relates to other potential fines and penalties from EPA and other agencies. Again at this point it's too early to come to conclusion on that.

With respect to other, I guess content if you will and the order, I guess look to Steve, who will be adding additional color. But certainly the company is responding to and what we saw on the NTSB report. We have been responding to that since the report was issued and we're sort of looking at the NTSB back in 2010. All changes have taken place at the company in terms of how we look at integrity management, the closed centers, and how we manage our pipeline integrity. Steve?

Steve Neyland

Yes, Ted, the only thing I'd add is it will be responding to the PHMSA, who issued their report first in early July by mid-August. And then we are accessing, as Mark said the NTSB report as to whether there isn't a formal response process, but of course you can always respond if you wish to. So we'll be accessing, whether to do that.

Ted Durbin - Goldman Sachs

And then last from me, just switching over to the gas side, the Anadarko System kind of had flat volumes year-over-year, a little bit of a sequential pick up. I guess I just sort of thought you would have had a little bit of better pick up, given the activity levels you're seeing on the drilling side. But maybe just comment on, what kind of activity levels you are seeing? And how you're thinking about the balance of the year and in 2013?

Mark Maki

Well, we do expect as the year unfolds we're going to see an increase in activity levels on the Anadarko System. And I think to some degree, Ted, what we're seeing is we had really across the region constraints on processing capacity. And then the other key thing is it didn't do any good to drilling gas wells with high NGL content, because there is no way to take it away on the NGL pipe.

So I think now we're focusing that there is processing capacity in the area between us and others that are in the area, and you've got the takeaway capacity in place now plus with coming next year with the Texas Express, that activity levels will pick up. We do see folks still very, very active in the area. In our system we see lots of activity. No question that folks still chasing the oily and NGL rich place.

Operator

And your next question comes from the line of T.J. Schultz with RBC Capital Market.

T.J. Schultz - RBC Capital Market

Just on the Line 14 release. I guess with the primary cleanup complete I think you said, what is left there for you all to do from a cleanup standpoint? And maybe what is potential total cost that you all hear is $8 million number, is that a total expected cost there?

Mark Maki

Yes, that's as far as expenses and so forth and kind of big picture, we think its $8 million kind of range. That's repair of the pipe, cleanup at the site and delivery cost that go along with that.

Steve Wuori

T.J., and as far as what's needed at the site, we'll finish the repair of the pipe probably late today and then, some of the soil that we've scraped and excavated will be hold away in the coming days and weeks. But otherwise the scraping and the cleanup, itself is basically complete.

T.J. Schultz - RBC Capital Market

Lakehead volumes, I guess had been turning higher, but dipped a little this quarter from the first quarter, just any color there?

Steve Neyland

Pretty modest decline quarter-over-quarter, so I think just, nothing specifically really that we can point to.

Mark Maki

There is always things' moving around, I think T.J., like refinery turnarounds, upstream plant turnarounds, and things like that. So that's probably the Q-on-Q variability there.

Just generally, though, you look at the trend for the year and the volumes are very strong and both from Western Canada and from North Dakota.

Operator

Your next question comes from the line of Ross Payne with Wells Fargo.

Ross Payne - Wells Fargo

First question is, I know you guys spend a lot of time on hedges, but can you talk about how you specifically try to hedge your NGLs?

Mark Maki

And Steve can add some additional to this. But we typically, Ross, we don't use crude oil to hedge NGLs. That's not what we do. We hedge ethane with ethane, propane with propane, and butanes with butanes, and so forth. We look at basically our commodity positions coming into the year and we tend to hedge very heavily in the near 12 months.

And as we kind of go throughout the year, we'll add additional hedges on. Anytime, we talk about our volume, it includes some element of expected activity around the systems that's considered in some of our hedging plan. So don't necessarily hedge everything. In fact, we don't hedge 100%, because you don't find yourself in a position where you got to hedge on underlying commodity.

We use options in some instances. Lot of times, we use swaps in terms of the types of instruments that we're using. And we will stair step again, Ross, a three-year period. Now, that's up to say, opportunities present themselves for the more hedgeable components, natural gas and condensate. We'll actually go and look further on those.

Ross Payne - Wells Fargo

Given the impact during the quarter, NGL prices really started falling back in April, May timeframe. So help us understand how earnings were moved down, given the NGL situation for this quarter. And maybe speak a little bit as well to Q3 and Q4 with a mindset that you walked in this year with good hedges, knowing that some of that's not hedged 100%. But little surprised that earnings were down, because of NGLs maybe as much as they were?

Mark Maki

I think, what I'd look to, Ross, one of the thing we provide is and have for a number of years in our guidance call, beginning at the year is we give you a chart that shows, that can be our different commodity positions by type. And then what has been hedged, how much has been hedged, and what has been hedged. And then that allows folks to make an assumption about what the price is going to be and what's opened.

And what was open, the prices dropped off 40% plus. And in certain instances you look and say, where you've got a Conway exposure was even more dramatic than you had a drop. And so that very material move and that will see the effect that you saw. I mean it was a very two standard deviation was kind of move, the NGL prices in a very, very short period of time.

Ross Payne - Wells Fargo

So basis differentials, obviously, played a part in this. Do you guys hedged for that at all?

Mark Maki

We have some ability or optionality to move, where we've got Conway exposure to bring the ethane and propane to Belleview, but not all of it. And it is very difficult to hedge the basis difference between Belleview and Conway.

Ross Payne - Wells Fargo

And just two, other quick ones, Can you speak generally about the capacity utilization on Long Lake, is there currently a decent amount of capacity available. I know you guys are in the middle of a lot of expansion programs, but just wanted to kind of see what the upside to capacity was currently? And second of all, you comment that you want to maintain your investment grade ratings. Are you also saying in that that you want to maintain your current ratings?

Mark Maki

In the rating I think we talked about this, Ross, over the year. It's very, very important for us to maintain the investment grade credit rating for the company. And we like the BBB reputation.

Certainly, when you look at your investor mix on the debt side, they are number of holders that, once you hit a BBB- or just above, something that's been great that causes issues for them to have certain things in the portfolio. We don't want to put them in that position. We're maintaining that BBB, flat Baa2 rating as an important thing for the company.

And so we definitely behave to maintain that rating. Always in discussions with our rating agencies, as to what our financing plans are and performance of the company, and so forth. So that's I think the latter part of your question. The first part you're asking about capacity?

Steve Wuori

And you mentioned Long Lake, Ross, all of the forecasted growth in the oil sands we've accommodated and what we're doing with expansions. So Enbridge has the Athabasca pipeline, that cease the mainline and we're expanding that. And we're also looping or twining the lower half of that line because of the production growth up there. So that part is good.

And then on the Lakehead side and the mainline generally, we're making sure that we have enough capacity to feed the upstream and demand, the push, but also the downstream. The things that, like the Flanagan South and Seaway projects that will pull volumes to the Gulf Coast, and also Toledo, Detroit and now Eastern Canada.

So all of that is incorporated into the expansion plans, to make sure that we don't get volumes stuck behind pipe, basically. We're trying to ensure that all of that production growth can move freely to the best market.

Ross Payne - Wells Fargo

And currently you've got a decent of amount of capacity to make that happen before you get into the looping, is that fair to say?

Terry McGill

Yes. We do. I mean we're expanding as we speak the Alberta Clipper and Southern Access systems are being expanded. We have more expansions that are being contemplated. So we're definitely trying to stay ahead of the curve in terms of volume, and to the full extent we can make sure that the system doesn't go into apportionment at any point in the future.

Operator

Your next question comes from the line of Sharon Lui with Wells Fargo.

Sharon Lui - Wells Fargo

Just following up on hedge's question about activity levels in the Granite Wash, have you seen, I guess, producer shift there, activity to the Hog Shooter because it seems like, I guess, the Lynn mentioned that they were moving all of their rigs, and if you could talk about, I guess what's the potential impact on Enbridge?

Mark Maki

Hog Shooter formation is an area that is our system does also touch more on the Elk City side of the system. And so for us, if the rigs relocating from GW to Hog Shooter were not fairly agnostic, I guess on that. Yes, I think the people did see the Hog Shooter as a very good redeveloping area, and I think the Lynn is obviously a very, very successful and important customer to us up there. So certainly Hog Shooter development for us is we think a good thing.

As far as other trends I guess out there, Sharon, you see some efforts more on the oil leak. The oilier you can get, the better. And similarly some rigs are being redirected to that kind of development area, as opposed traditional gas, NGL development. But again, for us associated gas, it goes along with that is an opportunity for us and it's very rich gas.

Sharon Lui - Wells Fargo

I guess, I'm just wondering if the economic are same in terms of handling, I guess gas from the Granite Wash versus your economics for handling productions from Hog Shooter?

Mark Maki

Contractually, I would say it's very similar. Again, it's kind of a producer-by-producer analysis, Sharon, that we would have to go through. I mean, we have contracts from the customer. Anadarko was a little different over Elk City System and has to do with the legacy, the former owners and that kind of thing.

And then when contracts come up for renewal, we'd look to try to make it look similar across the systems. But it's a complicated question that you're asking, but generally speaking the economics are very similar between the systems and Hob Shooter versus the Granite Wash well to us.

Sharon Lui - Wells Fargo

And then just in terms of the slightly lower EBITDA forecast with Ajax, is that just the function of your commodity deck and because of lower volume?

Steve Neyland

Sharon, that's predominantly driven by the lower NGL prices. And we look into first year in service for the plant.

Sharon Lui - Wells Fargo

And then, in terms of potential pipe projects in the Bakken, maybe if you could talk about those type of opportunities and the decisions to perhaps undertake the project like the Sandpiper up at the parent level versus the MLP.

Steve Wuori

I think, Sharon, the preference we have is that the Partnership undertake the project. Even given that the North Dakota system is own by the Partnership.

Now you're seeing some of the between company arrangements that have been made on some of the expansion projects, we may contemplate something like that, if necessary. But generally, we would prefer to see the partnership generally own an operate assets that are basically intertwined with the existing Partnership assets.

So Sandpiper fits into that category, and I think that's what we're going to try. That's our base case going forward, is that partnership we'll do it and you should see more on Sandpipers, we hit through the end of the summer here.

Sharon Lui - Wells Fargo

And has the open season concluded, and are the results available?

Steve Wuori

We haven't run an open season on Sandpiper yet. So we don't have anything rather then to say that there is a tremendous amount of interest just given how much is moving on rail. There is a tremendous amount of interest than more pipe capacity, as long as it goes through the most favorable markets. And so that's what the Sandpiper is designed to do, but we have not conducted an open season Sandpiper.

Sharon Lui - Wells Fargo

Have you guys disclosed the estimated cost of the project?

Mark Maki

No, we haven't because we're still accessing pipe diameters and capacity. So that's going to drive the capital cost to size up this. You can imagine that in the Bakken with the 475,000 barrels a day of production or whatever it is right now, about half or two-thirds of that moving away by pipe and the rest by rail, and a forecast that goes up to 1.2 million barrels per day, in the next two or three years. It's a real moving target.

And we don't want to undersize the pipe, once we put one end, but at the same time we don't want to get caught in any peeking phenomenon. So that's why we're taking sometime, to really assess the right capacity for Sandpiper.

Operator

And the next question comes from the line of James Jampel with HITE.

James Jampel - HITE

With EEQ trading at a near-record premium to EEP, would you see that as your preferred way of raising equity going forward?

Mark Maki

Well, we certainly think EEQ is a attractive part of our capital structure and we've been very careful about its use over the years. Certainly, looking forward that's something we could consider.

James Jampel - HITE

Is there any sort of, structural things that would prevent you from issuing an EEQ equity and increasing liquidity and giving us more chance to buy end?

Mark Maki

Structurally, no. The only thing I guess, with the EEQ shares over time is that the capital that you go to reinvest effectively does grow, but that's really a good thing. And then we've got lots of opportunities in front of us, we can put that capital with work or so.

Structurally, there is no particular issue with it. We've just been very careful about its use overtime. And we would expect to be very careful about it's use in the future, but certainly there is an attractive element of our capital structure that we think, sort of could be access.

James Jampel - HITE

Forgive me, when was the last time EEQ equity was issued?

Mark Maki

We've done some private placement. I think last one was done last year.

James Jampel - HITE

But a public offering of EEQ?

Mark Maki

There hasn't been a public offering since it was IPOed.

Operator

And you have no questions in queue at this time.

Sanjay Lad

Great, thank you. I appreciate everyone joining the call this morning. I will be available after the call to address any questions you may have. Thank you and have a great day.

Operator

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect. Have a great day.

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