Enterprise

1
Enterprises Operating and Business Environment

• Special Emphasis on the U.S. Ethylene Industry

Peter Fasullo EnVantage, Inc May 26, 2004
2
Topics to be Covered

• Page(s)
• 3
• 4 - 5
• 6
• 7 - 13
• 14 - 33
• 34 - 50
• 51 - 54

• Study Scope ....
• Basic Approach Focus Areas........
• Terminology
• EPDs GTMs Business Profile..
• Industry Overview Supply Demand.
• Short Long Term Market Outlook.
• Sensitivity Cases..

3
Study Scope Study set out to answer

• How sensitive is EPDs profitability to
• the business cycles of the US Ethylene Industry
  and,
• to different price decks for crude oil and
  natural gas?
• Has EPD seen the Ethylene cycle trough and what
  is the outlook for the Industry?
• Will the merger with GulfTerra change EPDs
  sensitivity to Ethylene cycles?
• Do long term market fundamentals favor EPD?

4
Basic Approach Focus Areas (1)

• Examined EPDs business segments and
  interrelationships to assess EPDs sensitivity to
  the US Ethylene Industry.

Business Segment
Business Functions
Natural Gas
Storage
Pipelines
Petrochemical
Terminal Services
NGL

• Profiled each segment
• Earnings Contribution
• Products Handled Markets
• Primary Business Drivers

NGL
Fractionation
Isomerization
Propylene Splitting
Gas Processing
Processing
NGL Marketing
Octane Enhancement
MTBE
5
Basic Approach Focus Areas (2)

• Specifically focused on
• The Effect of High Natural Gas Prices on
• The U.S. Ethylene Industry
• The U.S. Gas Processing Industry
• The Economy and its influence on the U.S.
  Ethylene Industry
• Developed short and long term industry outlooks,
  specifically for ethane.
• Evaluated EPDs operating income sensitivity
  (with and without GTM) to changes in Ethylene
  Operating Environment and Commodity Prices.

6
Terminology

• Y-Grade or Raw NGL Mix - are the raw NGLs
  (ethane, propane, butanes and natural gasoline)
  extracted from natural gas by a gas processing
  plant.
• Refinery Gas Liquids (RGLs) - are light
  hydrocarbons such as ethane, propane, normal and
  iso-butanes that are produced as the result of
  refining crude oil.
• Fractionation - the process by which individual
  NGL components are separated from raw NGL, LPG or
  RGL mixes.
• Frac Spread is the term commonly used to
  express the price differential between the market
  value of the individual NGL component and its
  heating value if left in the natural gas stream.
  Frac Spreads are commonly expressed in cents
  per gallon (cpg) or dollars per million British
  Thermal Units (/MM BTU).
• Propylene Splitting - the process of purifying
  propylene to polymer grade by fractionating out
  propane and other hydrocarbons from the
  propane/propylene mix.
• Isomerization the process of changing normal
  butane to iso-butane..
• Primary Petrochemicals - mainly the production of
  ethylene and other olefin co-products (propylene,
  butylenes) from the cracking of NGLs and
  refinery intermediate products, such as naphtha
  and gas oil commonly referred to as heavy
  liquids. The cracking of hydrocarbon feedstocks
  is the thermal process by which Ethylene plants
  produce primary petrochemicals.

7
Business ProfilesEnterprise GulfTerra
8
EPDs primary operating sector is along the NGL
value chain. GulfTerras is weighted more to
natural gas midstream services.
Downstream
Midstream
Refined Products
NGL (raw mix) Transportation
Purity Product Transportation
Upstream
Primary Petrochem.
Exploration Production
Processing Treating
Product Storage
Fractionation Splitting
Fuel Uses
Industrial Markets
Gas Gathering
Res/Com Markets
Local Gas Distribution
Gas Transportation
Gas Storage
The U.S. Midstream Sector is the logistical link
connecting the EP, Gas, Refining and
Petrochemical Industries.
Power Markets
Power Distribution
Independent Power Generation
9
EPD asset base concentrated on Gulf Coast with
linkage to the Western and Mid-Cont. producing
regions via MAPL/Seminole.
10
Over 90 of EPDs Business is expected to be
generated from NGL and Petrochemical Midstream
Services during 2004.
11
GTM asset base highly concentrated in Texas and
San Juan Basin with positions in the GOM.
15,700 miles gas pipeline (10.3 Bcf/d)
340 miles offshore oil pipeline (635
MBbl
/d)
5 Processing/treating plants (1.5
Bcf
/ 50
MBbl
/d)
San Juan
Basin
4 NGL fractionation plants (120
MBbl
/d)
San Juan
20 Bcf gas storage 25 MMBbl NGL storage
Basin
Black Warrior
Black Warrior
6 offshore hub platforms
Basin
Basin
CARLSBAD
CARLSBAD
PETAL STORAGE
PETAL STORAGE
Permian
Permian
Basin
Basin
Gas pipeline
Gas pipeline
Viosca Knoll
Viosca Knoll
Gas pipeline under construction
Gas pipeline under construction
Poseidon
Poseidon
Cameron
Cameron
Oil pipeline
Oil pipeline
Highway
Highway
HIOS
HIOS
Oil pipeline under construction
Oil pipeline under construction
Medusa
Medusa
NGL pipeline
NGL pipeline
Allegheny
Allegheny
Falcon
Platform
Falcon
Platform
Falcon
Falcon
Platform under construction
Platform under construction
Nest
East
Red
Nest
East
Red
Marco
Marco
Gas processing/treating plant
Gas processing/treating plant
Breaks
Hawk
Breaks
Hawk
TEXAS NGL
TEXAS NGL
Polo
Polo
NGL fractionation plant
FACILITIES
NGL fractionation plant
FACILITIES
Gas storage facility
Gas storage facility
12
During 2004, over 70 of GTMs Business is
expected to be Oil Gas Midstream Services -
only 28 generated from NGL Midstream Services.
(Current Composition of Annualized EBITDA)
GulfTerra Business Breakdown
Processing Plants 20
NGL Midstream
Services 28
NGL Pipelines,
Fractionation
Storage 8
Oil Gas
Midstream Services 72
Includes GulfTerra and 9 Gas Processing Plants
to be Acquired from El Paso Corp.
13
The Merger will diversify EPDs business and
provide more balance in Midstream Services for
Both Companies.
Expected Enterprise GulfTerra Business Breakdown
For 2004
Processing Plants 16
Oil Gas
NGL
Midstream Services
Midstream
37
Services
53
NGL Pipelines,
Fractionation
Storage 37
Propylene Splitting

• Combination provides
• Better balance between NGLs, Oil, and
• Gas Services
• Integration of Facilities
• Business Risk Mitigation

Butane Isomerization 10
Does Not Include the 30 MM Cost Saving
Synergies or Commercial Synergies yet to be
Quantified.
14
Industry OverviewSupply Side
15
To gain an appreciation of the fundamentals
driving NGL supply, demand and pricing, an
overview of the primary supply sources and market
end uses will be provided.
NGL Supply Sources
NGL End Uses
NGLs Produced
NGLs Consumed
Ethane Propane Normal Butane Iso-Butane Natural
Gasoline
Ethane Propane Normal Butane Iso-Butane Natural
Gasoline
Gas Processing Fractionation
Primary Petrochemicals¹
¹ Mainly Ethylene and other primary olefins
produced in an Ethylene Plant
Normal Butane Iso-Butane Natural Gasoline
Motor Gasoline Blendstocks
Ethane Propane Normal Butane Iso-Butane
Crude Oil Refining
Space Heating Other Fuel Uses
Propane
Propane Mixed Butanes
Overland Waterborne Imports
Propane Mixed Butanes
Exports
16
Two thirds of U.S. NGL Supply comes from Gas
Processing Ethylene Production accounts for 54
of NGL Demand.
Primary
17
US NGL Production from Gas Processing corresponds
with the location of the largest natural gas
reserves.
5-Year Average NGL/Ethane Regional Production
from Processing (MBPD )

• 80 of US Gas Production is Processed
• 590 processing plants - 72 BCFD capacity
• 56 of plant capacity is cryogenic
• 70 fractionators - 2.0 million BPD capacity
• 85 of Frac capacity at market centers

Total Processing NGLs 1843 MBPD Total Processing
Ethane 682 MBPD
202/80 11/12
116/9 6/1
54/20 3/3

237/85 13/12
Rocky Mtn.
207/97 11/14
Mid-Continent
318/111 17/16
570/222 31/33
Texas Inland
Texas Gulf Coast
Louisiana Gulf Coast
New Mexico
139/58 8/9
Upper Midwest
of US NGL Production / of US Ethane Production
Other
18
Major Processing Regions are linked to NGL Market
Centers by Specific Transportation Corridors.
NGL Flow Diagram
Edmonton/ Ft. Saskatchewan

WCSB
Transportation corridors set the regional cost to
transport NGLs to market centers.

• Over 90 of U.S. Ethylene Capacity on USGC
• About 50 of U.S. Refining Capacity on USGC

The regional value of gas sets the relative cost
basis for NGLs at each region
Sarnia

Rocky Mountains
Conway


Anadarko
San Juan

Major Processing Regions
Arkoma
NGL Fractionation represents another cost
component for NGLs

River
Permian
NGL Market Centers (Storage, Fractionation,
Pipelines)

Mt. Belvieu
La Gulf Coast Offshore

South Texas
NGL Product Flows
19
NGL production is primarily non-discretionary.
However, ethane extraction from gas processing is
discretionary and the most economically sensitive
NGL component.
NGL/RGL Gas Processing Crude Oil Refining
Ethane Discretionary 1 By-product
Propane Mostly Non- Discretionary 2 By-product
N-Butane Non- Discretionary 2 By-product
I-Butane Non- Discretionary 2,3 By-product/ Discretionary 3
Natural Gasoline Pentanes Non- Discretionary 2 By-product
1 Average U.S. ethane yields can vary from 34 to 46 if economics dictate. If ethane extraction is minimized it only reduces total NGL volumes by 10 to 20. 2 Most propane virtually all butane plus must be recovered to meet gas pipeline specs. 3 Iso-Butane is a refinery by-product, but is also a discretionary product produced by the isomerization of normal butane from gas processing and refining. 1 Average U.S. ethane yields can vary from 34 to 46 if economics dictate. If ethane extraction is minimized it only reduces total NGL volumes by 10 to 20. 2 Most propane virtually all butane plus must be recovered to meet gas pipeline specs. 3 Iso-Butane is a refinery by-product, but is also a discretionary product produced by the isomerization of normal butane from gas processing and refining. 1 Average U.S. ethane yields can vary from 34 to 46 if economics dictate. If ethane extraction is minimized it only reduces total NGL volumes by 10 to 20. 2 Most propane virtually all butane plus must be recovered to meet gas pipeline specs. 3 Iso-Butane is a refinery by-product, but is also a discretionary product produced by the isomerization of normal butane from gas processing and refining.
20
Petrochemical Fuel Markets set U.S. NGL prices
in competition with petroleum derived products.
Natural Gas sets the relative cost for NGLs.
of Demand
of Demand
of Demand
of Demand
¹ Seasonal Market ² Being Phased Out ³ On a
/Bbl basis
21
Therefore, the relative value of gas to crude
plays an important role in driving U.S. NGL
supply/demand, particularly for ethane.

Based on 5.8 MM BTU/Bbl
22
NGL production from Gas Processing is inversely
related to the gas to crude price ratio
23
..because NGL frac spreads are inversely
correlated to the gas to crude price ratio.
24
Frac spread volatility has caused NGL production
swings to be severe but temporary. Volume swings
greatest for Ethane.

• Observations
• Ethane production swings of 100 to 200 MBPD or
  about 15 to 30 of its average annual production
  have occurred due to rising and falling
  extraction economics and its economic
  attractiveness as an ethylene feedstock.
• Propane and Butane Plus production swings have
  not been as severe, but have often coincided with
  severe gas price spikes.
• Average annual production levels closer to
  maximum levels than minimum levels.
• Current estimated maximum NGL production from
  processing Ethane 760 MBPD Propane - 565
  MBPD Butane Plus 670 MBPD Total NGLs 2,000
  MBPD

25
Processing Agreements Are Being Retooled to
Minimize Risks to Independent Processors which
will moderate the effects of Frac Spread
volatility on NGL production.
High
Risk to Processor
Low
Keep Whole Margin Sharing of Liquids (POL) of Proceeds (POP) Processing Fee
Processor keeps extracted NGLs as fee for processing Must purchase and return to producer merchantable gas to replace fuel shrinkage Producer and processor share value delta between NGLs and gas, i.e.. 50/50. Processor paid a of NGLs as processing fee. Producer keep their of NGLs in kind or have processor sell NGLs and receive cash. Could have keep whole provisions Processor paid a of NGLs gas as processing fee Producer keep their of NGLs gas in kind or have processor sell NGLs gas and receive cash. Could have keep whole provisions Producer pays processor a processing or conditioning fee. Fee is market base and could be POL or POP or cash.
Low
Risk to Producer
High
26
.This will have positive implications for
Enterprise

• More stable NGL production at Enterprises gas
  processing plants.
• More stable NGL volumes through Enterprises
  transportation and fractionation systems.
• More emphasis on NGL storage to handle supply and
  demand imbalances.

27
Industry OverviewDemand Side
28
U.S. Ethylene Production Operating Rates are
Rebounding from the mid-year 2003 troughs.
29
Effective U.S. Ethylene Capacity is 61 Billion
Lbs/Yr of which the Top 7 Ethylene Producers
Control 80.
2004 Ethylene Capacity Market Share

• Equistar .............. 17.6
• ExxonMobil1,2.......... 15.5
• Dow1 .................. 13.6
• Chv Phillips1,2.......... 11.5
• Shell1,2..................... 10.7
• Formosa1............... 5.4
• BP1,2...........................5.3
• Huntsman.............. 3.5
• BASF/ATOFINA2 3.4
• Others3..................13.5

80
¹ Own Operate Midstream Assets ² Integrated
with Refining Operations ³ DuPont, Eastman
Chemicals, Sasol NA, Sunoco, Westlake, Williams
30
There are 4 Basic Types of Ethylene Plants that
make-up the U.S. Ethylene Industry.
31
For ethylene plants with feedstock flexibility,
cracking one feedstock over another is dependent
on feedstock cost and on the value of the
co-products produced from each feedstock.
Product Yields for Ethylene Feedstocks (Weight )
32
The flexibility to swing feedstocks is used to
optimize olefin production profits.
33
Ethane extraction closely tracks ethane cracking
influenced, in part, by the gas to crude price
ratio.
34
Short Term Market Outlook
Demand and Supply Side
35
Key Factors driving Ethylene Demand for NGLs,
particularly for Ethane.
Ethylene Demand
Ethylene Production
Feedstock Demand
Ethane Demand
Effective Operating Rate
Composition of Plants
Gas to Crude Price Ratio
GDP Growth
36
Historical Relationship between GDP Ethylene
Demand is Changing. Expect 54 B Lb/yr production
by 4th Qtr 04.
Quarterly U.S. Ethylene Demand VS. GDP
New Trendline at 0.9 to 1.0 times GDP growth
B Lb/yr
Ethylene Demand - Billion Pounds
60
15
CMAI
Forecast
Trendline Growth
56
14
Q185 - Q499
52
13
Ethylene demand grew at 1.25 to 1.4 times GDP
growth rate
48
y 1.99x - 3523.71
Q1
12
Q4
2000
2
R
0.97
2004
44
11
40

• Annual Avg. Growth
• 02 vs 01 3.4
• 03 vs 02 (1.0)
• 04 vs 03 4.5

10

• Trendline broke down due to
• Recession
• High Inventories
• High Energy Costs
• Strong U.S. Dollar
• Loss of Derivative Exports

36
9
32
8
Q1
1991
28
7
Q1
1985
6
5.4
5.9
6.4
6.9
7.4
7.9
8.4
8.9
9.4
9.9
10.4
GDP by Quarter - Trillion (Constant 1996)
Quarterly Ethylene Demand - CMAI
GDP source - U.S. Dept. of Commerce
37
Short Term Fundamentals continue to be positive
for U.S. Ethylene Producers.

• U.S. and other major world ethylene markets
  appear strong.
• Tightening supply/demand balances
• 1st quarter 04 effective utilization rate 90
  for U.S. ethylene producers with annualized
  production averaging over 53.5 billion lbs/yr.
• Despite 6 natural gas prices, rising crude
  prices have made ethane and propane cracking in
  U.S. very competitive on a global basis.
• U.S. exports of ethylene monomer and derivatives
  are starting to reappear.
• Evidence is building that fundamental recovery is
  sustainable.
• Last year, recovery lost momentum. This year,
  U.S. economy appears to be re-entering a period
  of strong growth.
• Major petrochemical companies are seeing
  purchases of their ethylene derivative products
  increasing and expect sustainability in 2004.
• Concerns continued increases in crude prices
  and geopolitical uncertainties derail economic
  growth.

38
As Ethylene production rebounds, analysis
indicates the following implications for ethane
demand which will be demonstrated on the next 2
charts

• 1. The flexibility to crack less ethane
  diminishes as ethylene production increases and a
  
• higher range of ethane volumes are required
  to produce higher levels of ethylene.
• 2. It appears that the U.S. Ethylene Industry
  can not stay at minimum ethane cracking levels
• for more than 1 Quarter without creating a
  surplus of ethylene co-products.
• 3. While the level of ethylene production is the
  primary driver, the gas to crude price ratio is
• another factor influencing ethane cracking
  levels. Lower ratios at or below 90 increase
• the probability of maximizing ethane
  cracking.

Ethylene Production Effective Utilization Ethane Cracking Levels (MBPD) Ethane Cracking Levels (MBPD) Ethane Cracking Levels (MBPD) Ethane Cracking Levels (MBPD)
(B Lb/Yr) () Min. Max. Flex. Range Trendline
49 51 53 55 57 80.3 83.6 86.9 88.5 93.4 510 560 610 660 710 670 690 710 725 740 160 130 100 65 30 615 644 672 700 729
39
As Ethylene Production Increases Past 53 Billion
Lbs/Yr, Flexibility to Switch Off Ethane
Diminishes.
Max. Cracking Level
Q1 04
Trendline 12.7 X Ethyl Prod/Yr
Min.Cracking Level
40
Minimum ethane cracking levels are not sustained
more than 1 quarter without creating a surplus of
ethylene co-products.
Q100 51
Q499 61
Q300 78
Q102 63
Q399 69
Q402 82
Q40096
Q302 65
Q403 94
Q200 69
Q201 97
Q103 112
Q202 75
Q299 71
Q1 04 92
Q199 77
Q303 96
Q101 143
Quarter Gas to Crude Ratio
Q203 108
41
Gas Fundamentals should be weaker in 04 relative
to Crude....
42
..resulting in a lower average Gas to Crude
price ratio in 04
43
See a better environment for ethane cracking in
04 and a paradigm shift could be underway if
crude prices stay high.
Ethane Cracking Swings Between 500 -700 MBPD Are Possible with a Bias to Maximize Ethane Cracking
High Probability of Ethane Cracking Swings Between 500 -700 MBPD with a Bias to Minimize Ethane Cracking as long as Co-Product Production is Not an Inhibitor At 53-55 B Lb/yr, Moderate to Good Probability of Ethane Cracking at or above 650 MBPD. Gas to Crude Ratio Less of a Factor at Production Rates above 55 B Lb/yr
High Probability of Sustainable Ethane Cracking
at or Above 650 MBPD
At or Below 90
Gas to Crude Price Ratio
Above 90
Below 53 B LB/YR
Above 53 B LB/YR
Ethylene Production
44
To support greater ethane cracking levels, the
ethane frac spread increases to encourage more
ethane extraction.
Below the curve ethane cracking occurred at gas
to crude ratios generally above 90
45
Long Term Market Outlook
Demand and Supply Side
46
Ethylene production should track GDP growth rate
at a 0.9 to 1.0 factor. Forecast ethane demand to
be 750 MBPD by 07.
3
²
² Federal Reserve Forecast is 5
3 1999 Production
47
In the Lower-48, growth in Rockies and Deepwater
GOM will offset declines in virtually all other
U.S. mature basins.
NPC Report 9/25/03
48
U.S. NGL production should grow to accommodate
production trends and market demands.
Source DOE, EnVantage
49
La GC and Rockies will be the incremental
producers of ethane in the 05 to 10 time period.
Source DOE, EnVantage
50
Summary of Operating Conditions Outlook

• Market conditions for NGLs should continue to
  improve in 04.
• The 04 demand for ethane from processors is
  expected to be between 650 to 700 MBPD, an
  increase of 40 MBPD to 90 MBPD over 03 levels.
• Ethylene production rising to 54 billion Lbs in
  04 as a result of U.S. GDP growth of 4.5.
• Gas to crude price ratio remaining in the high
  80 to low 90 range.
• NGL Production in 2004 increases from 2003 levels
  by about 8 or 130 MBPD.
• Longer term fundamentals are favorable for EPD.
• Incremental ethane supplies must be extracted
  from La GC and the Rockies to meet future demand
  for ethane.
• Trough conditions for ethane can occur when
  ethylene production levels are low (49 to 51
  Billion Lbs/yr) and gas to crude ratios are well
  above 90.
• During trough conditions ethylene producers
  usually minimize ethane cracking. However,
  minimum ethane cracking levels can not be
  sustained for more than 1 quarter without
  creating a surplus of co-products.
• When ethane extraction is minimized during
  trough conditions, ethane production can
  decrease 25 to 30 or about 200 MBPD from
  historical average extraction levels.
• Total NGL production, however, only drops 10 to
  20 due to need to extract propane and butane
  plus to meet gas pipeline quality specifications.

51
Operating IncomeSensitivity Cases
52
Sensitivity Cases

• Baseline Case assumes Project Miramar price
  deck based on 2004 PIRA forecast and represents
  the recovery phase of the Ethylene Industrys
  business cycle.
• Trough Case annualizes mid-2003 market
  conditions reflecting ethylene cycle bottom, high
  relative price of natural gas, and minimum ethane
  cracking levels.
• Low Price Case uses a low natural gas and crude
  price deck supplied by SP.

53
Combination Reduces EPDs Sensitivity to Higher
Natural Gas Prices in Trough Case.

• Trough conditions for an entire year, negatively
  impacts EPDs operating income approx.
  53MM from its Baseline operating income.
• EPDs Louisiana NGL assets and the MAPL/Seminole
  Pipeline, show the greatest sensitivity to an
  ethylene industry downturn due to reduced ethane
  volumes transported and fractionated. Recent
  changes in processing agreements help offset
  lower processing margins in Louisiana.
• Under Trough Case, GTM benefits from higher
  energy prices and its operating income increases
  by 25MM from its Baseline operating income.
• As a result, the combined operating income of EPD
  and GTM is only reduced by approx. 29MM.

54
Combination Slightly Increases EPDs Sensitivity
to Lower Natural Gas Prices.

• The Low Price Case actually benefits EPDs
  operating income marginally, due to the following
  factors
• Lower energy prices benefit economic growth and
  ethane demand specifically.
• Higher volumes through EPDs NGL systems and the
  amended Shell contract offset lower processing
  margins for EPD.
• GTMs operating income decreases by approximately
  39MM under the Low Price Case due to POP
  contracts (assuming no hedges are in place).
• As a result, the combined operating income of EPD
  and GTM is reduced by approximately 34MM under
  the low price case.

w/o GTM
w/ GTM
55
Forward Looking Statements

• This study contains forward-looking statements
  and information that are based on Enterprises
  beliefs and those of its general partner as
  provided to EnVantage, Inc., as well as
  assumptions made by and information currently
  available to Enterprise and EnVantage, Inc..
  When used in this presentation, words such as
  anticipate, project, expect, plan,
  goal, forecast, intend, could, believe,
  may, and similar expressions and statements
  regarding the contemplated transaction and the
  plans and objectives of Enterprise for future
  operations, are intended to identify
  forward-looking statements. Although Enterprise
  and its general partner believes that such
  expectations reflected in such forward looking
  statements are reasonable, neither it nor its
  general partner can give assurances that such
  expectations will prove to be correct.
• Such statements are subject to a variety of
  risks, uncertainties and assumptions. If one or
  more of these risks or uncertainties materialize,
  or if underlying assumptions prove incorrect,
  actual results may vary materially from those
  Enterprise and EnVantage, Inc. anticipated,
  estimated, projected or expected. Among the key
  risk factors that may have a direct bearing on
  Enterprises results of operations and financial
  condition are

56
Forward Looking Statements (cont.)

• Fluctuations in oil, natural gas and NGL prices
  and production due to weather and other natural
  and economic forces
• A reduction in demand for its products by the
  petrochemical, refining or heating industries
• A decline in the volumes of NGLs delivered by
  its facilities
• The failure of its credit risk management efforts
  to adequately protect it against customer
  non-payment
• Terrorist attacks aimed at its facilities
• The failure to complete the proposed merger
• The failure to successfully integrate the
  respective business operations upon completion of
  the merger or its failure to successfully
  integrate any future acquisitions and
• The failure to realize the anticipated cost
  savings, synergies and other benefits of the
  proposed merger.
• EnVantage has no obligation to publicly update
  or revise any forward looking statement, whether
  as a result of new information, future events or
  otherwise. This presentation also includes
  Non-GAAP financial measures. Please refer to the
  reconciliations of GAAP financial statements to
  Non-GAAP financial measures included at the back
  of Enterprises presentation of May 26, 2004 as
  posted on their website http//www.corporate-ir.ne
  t/ireye/ir_site.zhtml?tickerEPDscript1200