Earnings Call: Q4 2012

Mar 6, 2013

Annual report

Good morning, and welcome to the Gibson Energy 2012 fourth quarter and year-end results conference call, in which management will review the results of the company for the three months ended December 31st, 2012. During today's call, forward-looking statements will be made. These statements relate to future events or the company's future performance and will use words such as expect, should, estimate, forecast, believe, or similar terms. Forward-looking statements speak only as of today's date, and undue reliance should not be placed on them as they are subject to risks and uncertainties, which could cause actual results to differ materially from those described in such statements. The company assumes no obligation to update any forward-looking statements made in today's call. Any reference during today's call to non-GAAP financial measures such as adjusted EBITDA, pro forma adjusted EBITDA, or distributable cash flow is a reference to a financial measure excluding the effect of certain items that would impact comparability. For further information on forward-looking statements or non-GAAP financial measures used by Gibson, please refer to the 2012 year-end report, management's discussion and analysis issued yesterday by the company. In particular, the sections entitled Forward-Looking Statements and Non-GAAP Financial Measures. All financial amounts mentioned in today's call are in Canadian dollars unless otherwise stated. I will now turn the call over to Ken Hall, Vice President of Investor Relations and Communications. Thank you, Dave, and thanks, everyone, for joining us this morning. Joining me on the call today are Stewart Hanlon, CEO, and Donald Fowlis, CFO. The format for the call will be that Stu will provide a short overview of our fourth quarter and year-end results, and Don will then provide a brief summary of our financial position. This will be followed by a question and answer session. I will be available after the call to answer analyst modeling questions. With that, I'll turn it over to Stu. Thanks, Ken, and good morning, everyone. In 2012, Gibson's first full calendar year as a public company, Gibson leveraged its integrated service model to deliver a strong performance for investors while continuing to build on a solid foundation for future growth. Our diversified portfolio of businesses continues to provide cash flow stability through various pricing cycles and presents abundant opportunities for growth, which I will now discuss in more detail. I'm extremely pleased with our annual 2012 results and our strong fourth quarter results from both a financial and operational perspective. Adjusted EBITDA for the fourth quarter was approximately CAD 96 million, a 43% increase over the same period in 2011. While annual adjusted EBITDA for 2012 was CAD 302 million, a 31% increase over 2011 and a record for Gibson over its 60-year history. The fourth quarter performance was primarily attributable to the strong performances from our Marketing and Propane and NGL Marketing and Distribution businesses. The acquisition of OMNI on October 31st, 2012, also added a new source of EBITDA in the fourth quarter. Segment profit from the Marketing business increased 110% versus the fourth quarter in 2011, largely due to an increase in volumes and the impact of favorable crude oil price differentials. Segment profit in our Propane and NGL Marketing and Distribution business was CAD 21 million in the fourth quarter, a 44% increase over the same quarter in 2011. This increase was largely due to increased margins from the wholesale and retail propane businesses and the impact of acquisitions completed in 2012. The remaining segments experienced increases ranging from 2%-10%, due primarily to increased volumes through the company's terminals, increased activity levels in the United States truck transportation business, and higher margins on asphalt sales, offset by lower margins on frac fluid and distillate within our processing and wellsite fluids businesses. Looking ahead, we expect historical seasonality to be repeated going forward into the first half of 2013. We would expect, on a quarterly sequential basis, our first quarter of 2013 will remain strong and consistent with prior years. A further decrease may occur in the second quarter of 2013. Our new environmental services business is subject to some degree of seasonality as well, with first and fourth quarters generally being the lowest due to E&P capital spending profiles. Rig counts in the U.S. are slowly recovering from Q4 2012 levels, with the biggest gains occurring in West Texas and Mid-Continent, where the company is well-positioned to profit from a resurgence of activity. With respect to the second quarter, volumes in our truck transportation, Canadian environmental services, and wellsite fluids businesses in Canada and the northern tier of the United States, we are affected by road bans related to spring breakup. Our propane and NGL marketing distribution business segment provides significantly higher profits in the winter months due to colder weather. However, we should note that a continuation of current above normal temperatures in our key Alberta markets could have some impact on volumes in this business in the first quarter of 2013. For approximately three weeks in the second quarter, Moose Jaw Refinery undergoes its annual turnaround in preparation for the road asphalt season sales in summer months. In our marketing segment, we experienced favorable crude oil differentials and volatilities as we exited 2012, and it has continued into the first part of 2013. At this time, we don't see anything in the marketplace to indicate differentials will depart from current favorable levels before the end of the first quarter. We will continue to exploit arbitrage opportunities at our various terminal locations. I'd like now to turn the focus to Gibson's many growth opportunities. The fourth quarter of 2012 saw Gibson spend an additional CAD 34 million on internal growth projects, bringing the 2012 total to CAD 126 million. Expenditures primarily related to a number of key construction and expansion projects included advancing the completion of the 4 300,000-barrel tanks under our Suncor joint venture, and various expansions of facilities within the company's custom treating and terminals business. Additional capital was also invested to meet the continued growth demand requirements in both the truck transportation and the propane and NGL marketing and distribution segments. In addition to internal growth expenditures, Gibson continued its tradition of completing small and relatively easily integrated acquisitions, executing a total of 5 transactions in 2012 between the truck transportation and the propane and NGL marketing and distribution segments for a combined total of CAD 39 million. As announced previously, on October 31st, 2012, we closed the acquisition of the shares of OMNI for CAD 440 million and have substantially advanced the integration process, which included rolling our existing Canadian custom treating and terminals operational unit into the newly created environmental services business segment, effective January 1st, 2013. In the fourth quarter, we spent CAD 3 million for the addition of rolling stock, construction of saltwater disposal facilities, and completion of an office renovation within this business. By the end of the first quarter, we will open the Williston, North Dakota, water disposal facility. This new facility was an in-progress construction project acquired through the OMNI transaction. Within Canada, our first landfill project at Heward, Saskatchewan, opened for business in the fourth quarter of 2012. In addition, a second Plato treating facility was commissioned in the first quarter of 2013, and we are targeting to add another waste management facility at Cynthia, Alberta, before the end of the year. The combination of these assets provides us with the critical mass to be a significant participant in the emulsion treating, water disposal, and oil field waste management space in North America. As well, it provides a pipeline of additional high-quality organic growth opportunities, along with innovative technologies and additional business development and operational expertise to continue our expansion in this space in the attractive United States market. With respect to our capital expenditure program for 2013, we are excited to be proceeding with the construction of three large tanks on our eastern lands at Hardisty, backed by long-term terminal services agreements for a total of 1.1 million barrels of storage to be commissioned by mid-2014. In spite of the delay of the Keystone XL decision, we continue to also have productive discussions, which are in various stages with numerous counterparties for additional large tanks. As well, we continue to advance our previously announced Hardisty unit train loading facility in conjunction with USD Terminals Canada ULC. Our new environmental services business unit brings additional opportunities for investment in treating facilities, rolling stock, and other aspects of their bundled service offering. In truck transportation, requirements exist for more units related to the growth in Canada, and demand continues within the retail propane business for more generators, tanks, and rolling stock. In 2012, we placed five transloaders into service for crude oil transloading, with two in Edmonton and one in Sexsmith, Alberta, and two in Casper, Wyoming. We see additional demand for transload capacity in the North American market and have plans in place to place into service four more crude oil transloaders that are expected to be delivered in Q1 of 2013. Additionally, we have placed one propane transloader into service in Sexsmith, and we are targeting a Q2 2013 startup for two NGL transloaders, which are currently under construction. In the United States, we have discontinued discussions with GT OmniPort on development of a joint venture at their site based upon our market surveillance. We are, however, working to advance other opportunities in that region that have surfaced as a result of our communications with potential local customers. In the absence of a favorable decision on the large-scale expansion of the Moose Jaw Refinery, we continue to make smaller investments for incremental gains in throughput capacity of the existing facilities. The company successfully increased the capacity of the facility by up to 10% during the 2012 turnaround and is investigating possible further increases during the 2013 turnaround. In summary, Gibson continues to benefit from the many and varied growth opportunities afforded by our diversified portfolio. Consistent with past practices, we will release further details into the market as opportunities are solidified. Now, I'll pass it over to Don, who will briefly cover the highlights of our financial position. Thanks, Stu. As a result of a debt repricing and an amendment and expansion of our revolving credit facility last May, combined with the successful equity issue associated with the Omni acquisition, as well as excellent 2012 cash flows, our balance sheet is in fabulous shape. At the end of 2012, our unrestricted cash on hand was CAD 61 million, and we had CAD 251 million available under our revolving credit facility. Our debt to debt plus capital ratio was 30%, which is well below our long-term target of 45%. Our ratio of net debt to trailing 12-month pro forma adjusted EBITDA was 1.7 times, also well below our long-term target of being less than 3.5 times. For the year ended December 31, 2012, our pro forma interest coverage ratio was 11.2 times, well above our target. The company declared dividends in each of the three-month periods ended March 31, June 30, and September 30 in 2012. For the three months ended December 31, we declared a dividend of CAD 0.26 a share, which was paid on January 17th. Thus, total dividends declared in the 2012 year amounted to CAD 106 million. For the year ended December 31, 2012, distributable cash flow was CAD 181 million, resulting in a dividend payout ratio of 58%. Our board-approved dividend policy provides for a review of the dividend after each year-end. The review primarily considers how our estimate of future net operating cash less maintenance capital spending aligns with our medium-term targeted payout ratio of 50%-60%. Based on this year's review, yesterday, our board of directors approved a quarterly dividend of CAD 0.275 per common share. To shareholders of record at the close of business on March 29th, 2013. This represents a 5.8% increase from the existing quarterly rate and results in a new annualized dividend of CAD 1.10 per common share. Our next dividend is payable on April 17th, 2013. Our 2013 capital program is progressing as planned. Significant growth capital was spent during 2013 as construction on capital projects initiated in 2012 are completed and 2013 budgeted capital projects get underway. We believe the company's strong balance sheet will provide us with the financial flexibility to meet our planned capital expenditures, debt service, and working capital needs, including the dividend increase we announced yesterday. That concludes my comments, so I will turn it back to Stu for closing comments. Thanks very much, Don. In closing, the results of our efforts in 2012 can be seen as reflected in the significant 26% appreciation of our stock price from the beginning of the year to December 31, 2012. We believe we have a solid strategy for continued growth, founded on our integrated portfolio approach and a pipeline of projects that will allow us to execute and continue to deliver growing cash flows and meaningful yield to our shareholders in 2013 and beyond. That concludes our prepared comments. Operator, at this time, we would like to open the call up for questions. Thank you. Questions will now be taken from the telephone lines. If you wish to ask a question at this time and you are using a speakerphone, please lift the handset before you make any selections. If you wish to ask a question at this time, please press star one on your telephone keypad. There will be a brief pause while participants register. Thank you for your patience. The first question is from Robert Catellier with Macquarie Capital. Your line is now open. Please go ahead. Yes. Hi, Stu. I wondered if you could give us a little bit of color on what you saw or didn't see causing you to discontinue pursuit of the GT OmniPort opportunity. Certainly, Rob. That opportunity was always sort of prospective, I guess. The site itself is a tremendous facility. It's very large. The unit train facility itself is ready to go. The barge loading facility is ready to go. What causes us to step back is just the amount of capital that was going to be required to connect the facility, particularly by pipelines to the various refineries in the area. When we went and tested the market, we were sort of gauging the excitement, I guess, on the part of counterparties to contractually backstop the capital that was going to be expended. One of the reasons that we did press release that even though it was prospective, was it was, call it frankly, a bit of a marketing ploy as well. We were wanting to get Gibson's name more widely into the marketplace in that region as a possible counterparty with respect to larger scale infrastructure projects, either on a joint venture or on a sole ownership basis. To that extent, that process was successful. We are in discussions now with other counterparties in the area with respect to potential infrastructure build-outs in the U.S. Gulf Coast and elsewhere. Even though the GT OmniPort opportunity didn't come to pass, we're still working hard and we're optimistic that there will be other infrastructure opportunities in the U.S. Gulf Coast as well as elsewhere in the United States. If I understand the message then, the service is needed. It just seems like there's other, less expensive industry solutions available to the customers. That's exactly right. Yeah. Okay. We're working on those. Then when you look at the strong gains in the marketing segment year-over-year, clearly we're in a very good environment for oil differentials as long as you're not a producer. If you're a marketer, it's great. Can you attribute how much of the gains are due to volume increases as opposed to the wide differentials? It's hard to parse the math exactly, Robert, but when you look at it volumetrically, we were approximately 150,000 barrels a day in the marketing segment in 2011. Approximately 225,000 barrels a day in 2012. It's about a 50% volumetric increase. There's as much volumetric impact here as there is differentials. We've talked before that within the Canadian marketplace, which is where the vast majority of our marketing business is centered today, we're not just taking advantage of WCS to WTI type spreads. We are in the marketplace providing solutions to producing customers that have various other grades of crude oil as well. Yes, differentials have been wide and quite volatile. That has benefited us. It is significantly impacted by the volumes that we have been able to achieve and move. We're moving record volumes as we speak through all of the steel that we employ and are actively looking for ways to build additional capacity within that business as well. Okay, great. Finally, I was wondering if you could provide a little bit of color on the OMNI acquisition since you've only had it a couple of months. I'm wondering if you could detail how some of the growth opportunities have played out and maybe give an indication if you see any area for cost reductions or any area where you might invest in additional overhead to build out the business? Excellent question. We're pleased with the acquisition. We're pleased with the way the business is performing. We have cautioned the market that the fourth quarter and first quarter are typically slower quarters for that particular segment of the business, which actually is good for us because it counterbalances some of the seasonality that we have in Canada around the Q2 and Q3. It's performing sort of as expected, I guess. With respect to your question around business development and growth opportunities, I'd mentioned we are commissioning a facility in Williston, saltwater disposal facility. We are looking at least a couple other processing, reclamation, development, and disposal type facilities, very much in line with the way our Canadian business has been constructed and built out. We see a plethora of additional opportunities there. What's particularly pleasing to us is the enthusiasm of the OMNI management team. We've previously indicated that Brian Recatto and his entire team came over with the acquisition, which was extremely important to us. Now that they have the backstopping of a large business like Gibson's, with a balance sheet that allows them to look more constructively at growing their business. We have a very motivated and very growth-oriented team in the United States. We have targeted about $50 million in our growth capital, to the environmental services business in 2013. That capital will be very heavily skewed towards growing the production related part of that business, the processing, reclamation, disposal type business, as we move forward. Expect to see more full service pipeline connected, processing, reclamation, saltwater disposal, potentially, solid landfill sites as we go forward. Okay. Thanks for the color. Thank you. Thank you. The next question is from Robert Kwan with RBC Capital Markets. Please go ahead. Morning. Just to follow up on the Gulf Coast. Stu, you were mentioning around kind of lower capital intensity type projects. Are these completely different projects than what you would have envisioned at the GT OmniPort, or is it just that you've got either better location or better proximity? Yeah. Robert, if I said lower capital intensity, I certainly didn't mean to. We have a number of opportunities that are on our radar screen, that will allow a more efficient utilization of capital, I guess, is probably the best way to put it. We're making tremendous progress at Hardisty with the unit train facility development there. That's gonna be our sort of pitch. We'd love to have a couple of facilities in the United States to catch those types of barrels. We're also cognizant of the fact that you need pipe and tank infrastructure and connectivity at the end market as well. We're looking to build out facilities, either on a joint venture basis, like I said, or on a sole ownership basis, related to that kind of infrastructure. Okay. It sounds like the same type of infrastructure, maybe just a different location. That's what we're targeting, yeah. Okay. Any potential timeline on the Hardisty Rail, as to when that may come together? We continue to make good progress there. We're working with a number of counterparties at the contractual level at this point in time. We're not in a position to announce anything or sanction it at this point in time. We're certainly very hopeful that within the balance of 2013, we've announced we're moving forward in construction. To the extent that we can get to that stage fairly quickly, we'd be looking at an early 2014 in-service day. Okay. Just turning to environmental services. You've mentioned you're pleased with how Omni's performed to date. Are you still then on track for that CAD 80 million-ish of EBITDA? We're certainly still comfortable that we said that, yeah. Okay. Is there any kind of change in the mix of opportunities within their different business lines where you've seen some upside surprises or maybe some headwinds? Really haven't seen any upside surprises. As expected, some of the smaller parts of the business are, I guess, not surprising, but sort of confirming our thesis that we wouldn't want to invest too heavily within them. The seismic business is showing its seasonality. The housing business remains very strong, but it's, again, a very small part of that business and not someplace we'd like to invest. Yeah, I'd mentioned we're targeting about CAD 50 million worth of investment in that space. It'll be processing, reclamation, disposal, to a lesser extent, production services, but really sort of production oriented investment within that space, which is what our intention was when we made the acquisition. Okay. Just the last question is around new Hardisty tankage. I guess without a whole lot of fanfare, you've secured, I guess, 1.1 million barrels of tankage in the last quarter or so. I'm just wondering, as we go forward here and your discussions with customers, what are some of the key things that are driving their demand or holding or creating some uncertainty around whether they want to contract? Is Keystone XL the stop and go there playing a lot into it, or are there some other developments, whether a lot of it's pipeline apportionment and what have you? It's really hard to say, Robert, how much Keystone XL skews a decision as to whether or not a customer wants to go ahead and contract for storage. To the extent that lack of pipeline takeaway capacity within Western Canada doesn't slow down overall development activities, then volumes are going to continue to grow in Western Canada. To the extent that we don't get large-scale West Coast takeaway anytime soon, then every new barrel basically has to come to Hardisty. That's going to continue to drive the need and necessity for additional tankage at Hardisty. We like our position there, in that we are sort of, I've described it before as being at center ice. We are a full-service, terminalling-oriented service provider that can provide the ultimate flexibility in terms of finding an appropriate route out of town, so to speak. With the development of the unit train facility, which we hopefully can bring to pass, I think that just gives the producers another way out of town. We continue, as I said in the scripted comments, to have very constructive discussions with counterparties and would be hopeful that we'd be moving forward on additional infrastructure development at Hardisty as we go forward. You've got the greatest optionality at Hardisty. Just when you're talking to the customers, do you get the sense that either the ones that you have the contracts for or the ones that may look to contract, are they also looking at it from a marketing-type perspective, i.e., the mixing and the blending, or do you see a lot of the demand from operational tankage just given the portion that at least they have somewhere to go? It's a bit of a mix. The majority of the counterparties that we do contract with are producers. This is operational tankage. Now, having said that, one of the flexibilities and one of the services that we can bring to bear is the capability to blend and to mix. To the extent that you're a large oil sands producer and you want to construct a consistent batch of crude over and over again, so that your refinery continues to see exactly the same feedstock, we can do that, and we do that for customers. That's part of the optionality that we provide. Okay. That's great. Thanks, David. Thank you. Thank you. As a reminder, you may queue up for questions at any time by pressing *1 on your telephone keypad. The next question is from David Nosworthy with CIBC. Please go ahead. Morning, gentlemen. Morning, David. Just maybe a quick follow-up on the OMNI services. You mentioned the seasonality. Is what we should expect in, I guess, Q1, going to be very similar to what we saw in Q4, and then we kind of normalize for what- Yeah. We have January under our belt, and are expecting the February numbers to come in fairly quickly. Q4 was only 2 months, and so Q1 should be larger than that. Q1 sort of sequentially should pick up from where Q4 was. Yes, Q4 and Q1 are sort of the slower activity level months and the weakest from a seasonal perspective for that part of the business. Then the annualization should happen to get us back on to plan. Just looking at the unit train development, in terms of the key factor for either Gibson or your customers committing to this development, where are they and what are you looking for to put in place before you say, "Okay. Yeah. Now we're ready for FID? It's a development that is sort of three-way, I guess. There's ourselves, there's U.S. Development Group. To sort of back the truck up and explain exactly how this works again. Gibson will be responsible for all of the terminal and pipeline infrastructure up to the load flange on the unit train loading rack facility itself. USD will be making the investment in the track and the load rack itself. There's agreements that need to be finalized between ourselves and U.S. Development Group. Before either of us are comfortable going ahead and making the investments, we will be seeking a contractual backstop from shippers on a committed basis over a term. That's the third sort of group of counterparties, if you will. We're really, like I said, making good progress. We want to make sure that we've kind of got all those key sort of pieces fleshed out before we put a spade in the ground, so to speak. Fair enough. In terms of gaining comfort, you kind of mentioned the GT OmniPort and looking at other opportunities to catch the barrels. How do you gain comfort that you'll have a place to catch the barrels absent owning such a facility? There are various and sundry ways to contract with counterparties on a person basis. Today, we're marketing roughly 230,000 barrels a day through our Canadian infrastructure, and we don't own any refineries. We don't own any large-scale terminals in the United States. Today we're just working with counterparties on the sales side. We certainly would avail ourselves of that opportunity, moving additional barrels by rail, and remind everyone that we are moving ever more barrels for our own account on rail cars on a manifest basis out of Edmonton, out of Sexsmith and elsewhere today. The catch is not necessary for us to continue to grow the business. It would be a nice addition for us in terms of additional infrastructure in the United States, which has been our long-term goal. Just one last question. Can you give us any color in terms of the refinery margins seen at Moose Jaw in Q1 versus what you had in Q4? Are you capturing this differential? Yeah, I think Q4, the compression in the margin really was the relative slowdown in drilling and completion activities and more of our DA-22 and Clearfrac products being sold as tops. In Q1, we have seen a return to more normal drilling and completion activities in our sales. Our sales of the DA-22 and Clearfrac out of Moose Jaw have been more robust. As well, we have seen a widening of the heavy-to-sour differential, which aids our tops business. We're moving primarily roofing flux asphalt, which is a good margin product for us as well. We're pleased with the performance thus far within the Moose Jaw business. Perfect. Thank you, Arash. Those are my questions. Thank you. Thank you. The next question is from Robert Pope with TD Securities. Please go ahead. Good morning, and congratulations. Good morning. on another good year. Thank you very much, Rob. Most of my questions have been answered, so just a few cleanup ones. Okay. Just regarding the 2 final Hardisty West tanks, when were they completed, and when would they begin earning revenue? They're complete, absent internal coating. We are waiting for warmer weather to provide the internal coating. There is a chance, from an operational perspective, that we would be required to bring those tanks into service earlier than that, which would require us to take them back out of service later on and provide the coating. Mechanical, electrical construction is complete, and we're really just waiting for an opportune time to bring them into service. I think sometime early to mid Q2. Early to mid Q2. Great. Thank you. Maybe just moving over to your trucking business. We've seen you put a significant amount of capital in the business. However, volumes are relatively flat year-over-year, although margins continue to be strong. Can you maybe just comment on where you're seeing, is it a decreased utilization in certain aspects and whether or not you expect margins to continue to hold up? We have no expectation that margins are going to compress on us. We certainly aren't banking on margin expansion at this point in time. I think over the last couple of quarters, we've talked about the trucking business within North America as being in a more supply/demand balanced situation. Accordingly, I think our investment in that business, absent smaller sort of bolt-on acquisition type activities, will be certainly less than it was as we went through 2011 and into the first half of 2012. We continue to see that business perform essentially on plan with margin expectations that we had built into our plan. Volumes are up 2012 over 2011, roughly 7%-8%, something like that. We would expect that that business will continue to grow, albeit at a reasonable clip. We'd expect the trucking business to grow sort of sub 10% this year, absent any kind of activity around acquisitions. Great. One final question, if I may. Just regarding your Canadian environmental service assets that will be moving over to, I guess, the environmental service segment in 2013. Yes. Do you have a contribution that will be moving over? We haven't specifically broken that out in the past. Wouldn't want to try and answer that question today, because I'm almost certain I'd get it wrong. We haven't provided that color. All right. Thank you. Thank you. Thank you. The next question is from Carl Kirst with BMO. Please go ahead. Thanks. Good morning, everybody. Good morning. Yeah, I think most of mine have been hit. Maybe just a couple of cleanup as well. Really maybe the first one just on the back to the transloading terminal and kind of going back to some of the discussion of the gating factors. One of the things I didn't know was with respect to the contractual backstopping you're looking for. As demand for rail has gotten larger and larger, what type of term or duration of contracts are you looking for in order to sanction that? I guess, are customers on the same page with that, or is that term kind of a point of contention? We don't see the term and/or the nature of contract as being really our point of contention. It's more just working through the contracting process itself. I wouldn't want to get too specific with respect to the term, but typically, we'd be looking for something that would be firm service and multi-year. Okay. Okay. Thank you. Maybe just a second question with respect to OMNI, and I don't know if we have these numbers on an apples-to-apples basis, recognizing that it was just November and December of last year. Do we have potentially the same numbers for November and December of 2011, just to put it on an apples-to-apples year-over-year comparison? The information that we have wouldn't really be that meaningful. The nature of the business was different in late 2011. They did do some acquisitions in 2012, which are contributing to performance in 2012. Really, Q4 of 2011 would be indicative of how Q4 of 2012 stacked up relative to performance. Fair enough. Then just lastly, if I could, with respect to propane, we seem to get a good fourth quarter EBITDA move there. I just didn't know if there was a specific driver behind that. If that was something that as we look, again, perhaps fourth quarter of this year, that you think that is sustainable and repeatable. It was a little bit larger than we were expecting. Yeah. We had a good quarter with respect to propane. Not surprising to us. Because the nature of our business, we are well-positioned to take advantage of activity levels. We are well-positioned to take advantage of continued sort of growth in the GDP within Western Canada. Really, Q4 was assisted by a return to more normal weather. We actually had winter in Canada. We have seen that continue into Q1. January was colder. February was seasonally a little bit warmer. As I look out, it's 8 below on the 4th of March, which is good for our business. Understood. No aberration, really. Just kind of weather event. That's the. Yeah. We would've gotten that kind of performance in Q4 of 2011, had we gotten any kind of winter. Excellent. Carl, we also made a few acquisitions, small ones, with propane, so some of that contributes, too. That's correct. Thanks, Ken. We did complete three small acquisitions in Saskatchewan, which have been performing very well with us. Great. Thanks, guys. Thank you. Thank you. The next question is from Steven Paget with FirstEnergy Capital. Please go ahead. Thank you and good morning. Good morning. Terminals and pipelines. It was all about volume growth last year, as volumes are up at 32%, per unit margins flat to down. In the new year, should we expect both unit margin growth and volume growth, or what combination of growth? You probably see, as we go forward into next year, volumetric growth and margin stability. The terminals and pipelines business. No, I was about to talk about custom treating and terminals, but we did change the nature of our reporting there in 2012. That won't impact it, but you will see volumetric growth as we go into 2013. You should see margin stability, would be my way of answering that question. Thank you, Stu. Injection station volumes were below 10 million barrels in the fourth quarter for the first time in six quarters. Is that due to lower seasonal activity levels in the U.S.? It's due to a lot of barrels in the United States moving to train, to be frank. As we look at even the Montana, North Dakota marketplace, and you look at the vast volume of Bakken crude that's moving out of the area on trains. That has left us with the almost bizarre situation where we've got excess pipeline capacity. We've seen that sort of replicated throughout the United States. Some of our injection facilities are being utilized less. That just means that our trucks are going to train loading facilities instead. Trucks are going to train loading facilities. Thank you. Those are my questions. Thanks, Steven. Thank you. Once again, please press star one if you have any further questions or comments. The next question is from Aly Hirji from Royal Alliance. Please go ahead. Good morning, guys. Good morning. I have two questions. The first question is, how is the OMNI integration coming along? It's been a few months, I guess, now. The second question is, in the State Department report on Keystone in the U.S., they talk about using rails to move some of the barrels south. Do you see opportunities there as well? That's a general question, not related to the specifics for this quarter, but I would love to know your thoughts on this as well. Sure. First question, how is the Omni acquisition and integration going? I would say we're exactly where we wanted to be three months into the ownership of Omni. We have a very formal and very fulsome integration team that's working diligently to put together, not only the administrative type stuff, the facilities, and sort of the accounting systems and the financial systems, and the treasury systems, et cetera, which have come together very well. Which is, I think, a testament to the quality of the men and women working on that. We've also, at the operational management level, been working very hard to take advantage of the Omni platform and footprint and to ensure that we get what we paid for with respect to performance out of that business. Our theme for integration is a thousand small wins, and we just want to make sure that we continually can continue to sort of knit the fabric of Omni into the fabric of Gibson's and take advantage of the integration of their business into ours. With respect to the U.S. Department of State report on Keystone and their assertion that barrels will move to the south, regardless of whether there's a pipeline and their specific mention of rail, we already are reasonably active with respect to moving crude oil by rail. We move a fair bit of crude out of our Sexsmith facility. That crude goes south to the United States. We move a fair bit of crude out of our Edmonton facility that is going east to refineries in eastern Canada. A fair bit of that crude also goes south. We see opportunity there, and certainly that is one of the reasons that we are as excited as we are about the unit train loading facility that we are in the process of trying to get sanctioned at Hardisty. We do see the need and necessity for additional capability to move crude oil by rail out of Western Canada to various markets, including the United States. We believe that that's a long-term phenomenon. Thank you. Thank you. Thank you. There are no further questions registered at this time. I'd now like to turn the call back over to Mr. Hall. Thanks again, everyone, for your interest in Gibson Energy. As mentioned earlier, I am available after the call if there are more questions. Have a good day, everyone. Thank you. The conference call has now ended. Please disconnect your lines at this time. Thank you for your participation.