TEXAS GAS TRANSMISSION, LLC

 STATEMENTS OF CASH FLOWS

(Thousands of Dollars)

The accompanying notes are an integral part of these financial statements

TEXAS GAS TRANSMISSION, LLC

  STATEMENTS OF STOCKHOLDER’S AND MEMBER’S EQUITY

  (Thousands of Dollars)

TEXAS GAS TRANSMISSION, LLC

NOTES TO FINANCIAL STATEMENTS

Note 1:  Corporate Structure

Texas Gas Transmission, LLC (Texas Gas) is a wholly-owned subsidiary of Boardwalk Pipelines, LLC, (Boardwalk) (formerly TGT Pipeline LLC). Boardwalk is a wholly-owned subsidiary of Boardwalk Pipelines Holding Corporation (Holding Corp.) (formerly TGT Pipeline Holding Corp.), which is wholly-owned by Loews Corporation (Loews).  Boardwalk was formed in April 2003, with an initial capitalization on May 16, 2003 (Inception), of $804 million, to acquire all of the outstanding capital stock of Texas Gas Transmission Corporation (Acquisition). Texas Gas Transmission Corporation subsequently converted to a limited liability company and is now known as Texas Gas Transmission LLC.  

Basis of Presentation

The accompanying financial statements of Texas Gas were prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).  As a result of the change in control of Texas Gas, the financial statements presented for the period after the Acquisition reflect a new basis of accounting.  Accordingly, the Statements of Operations and Cash Flows have been separated by a bold vertical line into a pre-Acquisition period and a post-Acquisition period.  The Statements of Stockholder’s and Member’s Equity has a bold line separating the pre-Acquisition equity from the post-Acquisition equity.

The accompanying post-Acquisition financial statements reflect the pushdown fo 100% of the purchase price resulting from the Acquisition. An allocation of the purchase price was assigned to the assets and liabilities of Texas Gas, based on their estimated fair values in accordance with GAAP.  As Texas Gas’ rates are regulated by the Federal Energy Regulatory Commission (FERC), and the FERC does not allow recovery in rates of amounts in excess of original cost in accordance with Statement of Financial Accounting Standards (SFAS) No. 71, “Accounting for the Effects of Certain Types of Regulations,” the historical net book value of regulatory related assets and liabilities are considered to be the fair value of those respective assets and liabilities. The excess purchase price above the historical net book value was allocated to goodwill.  The accounting for the effects of the Acquisition included recognizin g unfunded benefit obligations related to postretirement benefits other than pensions and pension benefits with a corresponding offset to costs recoverable from customers, due to the probable future rate recovery of these costs.  During 2004, adjustments were made to finalize the estimated allocation that decreased goodwill approximately $5.8 million and reduced other liabilities related to the resolution of certain revenue refund issues, as well as the related deferred tax impact.  As of December 31, 2004, we had $163.5 million of goodwill recorded as an asset on our Statements of Financial Position.  Texas Gas may make further adjustments to the purchase price allocation pending possible revisions to the tax basis of assets and liabilities assumed in the Acquisition consistent with the provisions of Emerging Issues Task Force No. 93-7, “Uncertainties Related to Income Taxes in a Purchase Business Combination.”

The Acquisition was treated as an acquisition of assets for income tax purposes and, accordingly, we will have tax basis in our net assets approximately equal to the Acquisition price.   In connection with the terms of this election, temporary differences that existed prior to the Acquisition no longer exist and differences between the new allocated purchase price for book and income tax are established as part of the purchase price allocation.  Therefore, deferred tax asset and liability balances existing prior to the Acquisition have been eliminated.  As previously discussed, Texas Gas was converted into a limited liability company immediately following the Acquisition.  The condensed financial statements contained herein reflect a Charge-In-Lieu of Income Taxes subsequent to the Acquisition in recognition of the federal and state income tax liabilities incurred by the company.  For federal and state inco me taxation, Texas Gas is subject to tax as a division of its parent corporation, Holding Corp.

The following unaudited pro forma financial information is presented as if Texas Gas had been acquired as of the beginning of the periods presented.  The pro forma amounts include certain adjustments, including a reduction of depreciation expense based on the allocation of the Acquisition purchase price to property, plant and equipment; adjustment of interest expense to reflect the issuance of post-Acquisition debt by Texas Gas, and the application of a portion of the proceeds of such debt to prepay $132.7 million principal amount of Texas Gas’ existing notes and the related tax effect of these items.  

The pro forma information does not necessarily reflect the actual results that would have occurred had the companies been combined during the periods presented, nor is it necessarily indicative of future results of operations.

Note 2:  Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to revenues subject to refund, bad debts, materials and supplies obsolescence, investments, intangible assets, goodwill, property and equipment and other long-lived assets, charge-in-lieu-of income taxes, workers' compensation insurance, pensions and other post-retirement and employment benefits and contingent liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from such estimates.

Goodwill

As part of the allocation of the purchase price of the Acquisition, the excess purchase price over the fair value of the assets and liabilities was allocated to goodwill.  SFAS No. 142, “Goodwill and Other Intangible Assets” requires the evaluation of goodwill for impairment at least annually or more frequently if events and circumstances indicate that the asset might be impaired.  The annual impairment test is performed on December 31.  An impairment test performed in accordance with SFAS No. 142 requires that a reporting unit’s fair value be estimated.  We used a discounted cash flow model to estimate the fair value of Texas Gas and that estimated fair value was compared to its carrying amount, including goodwill.  The estimated fair value was in excess of the carrying amount in 2004.  Therefore, there have been no impairments recorded in 2004.

Segment Information

We operate in one segment - gas transportation and integrated underground gas storage.  This segment consists of an interstate natural gas pipeline system originating in the Louisiana Gulf Coast area and in East Texas and running north and east through Louisiana, Arkansas, Mississippi, Tennessee, Kentucky, Indiana and into Ohio, with smaller diameter lines extending into Illinois, with 5,900 miles of mainline, storage and branch transmission pipelines.  

Regulatory Accounting

We are regulated by the FERC and are subject to the provisions of SFAS No. 71.  Accordingly, we have recorded assets and liabilities on our Statements of Financial Position resulting from the effects of the ratemaking process, which would not be recorded under GAAP for non-regulated entities.  Regulatory assets represent costs incurred that have been deferred because future recovery in customer rates is probable.  Regulatory liabilities generally represent probable future reductions in revenue or refunds to customers.  Our continued ability to meet the criteria for application of SFAS No. 71 may be affected in the future by competitive forces and restructuring in the natural gas industry.  In the event that SFAS No. 71 no longer applied to all, or a separable portion, of our operations, the related regulatory assets and liabilities would be written off unless an appropriate regulatory recovery mechanism is provi ded.  None of our regulatory assets as of December 31, 2004 and 2003 were earning a return.

The amounts recorded as regulatory assets and liabilities in the Texas Gas Statements of Financial Position as of December 31, 2004 and 2003, are summarized as follows (shown in thousands):

The table above includes amounts related to unamortized debt expense and unamortized discount on long-term debt.  While these amounts are not regulatory assets and liabilities as defined by SFAS No. 71, they are a critical component of our embedded cost of debt financing utilized in our rate proceedings.   Certain amounts in the table are reflected as a negative, or a reduction, to be consistent with the manner in which we record these items in our regulatory books of account.  

Excise Taxes

Texas Gas collects from customers certain excise taxes imposed by state or local governments upon customers.  These amounts do not impact the Statements of Operations and are accumulated as a liability until remitted to the state or local taxing authority.

Cash and Cash Equivalents

Cash equivalents are stated at cost plus accrued interest, which approximates fair value. Cash equivalents are highly liquid investments with an original maturity of three months or less.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are stated at the historical carrying amount net of reserves or write-offs.  We establish an allowance for doubtful accounts receivable on a case-by-case basis when we believe the required payment of specific amounts owed is unlikely to occur.  Uncollectible accounts receivable are written off when a settlement is reached for an amount that is less than the outstanding historical balance.  This allowance was approximately $0.2 million at December 31, 2004 and 2003.  We expensed $0.0 in 2004, $(0.4) million in post-Acquisition 2003 and $0.0 in pre-Acquisition 2003 and $0.0 in 2002 on our Statements of Operations to write off or reserve for doubtful accounts.

Advances to Affiliates

Texas Gas makes advances to Boardwalk.  These advances are represented by demand notes.  Advances are stated at historical carrying amounts.  Interest income and expense is recognized on an accrual basis when collection is reasonably assured.  The advances are classified as noncurrent since Texas Gas does not anticipate demanding these funds during the next twelve months.  The interest rate on intercompany demand notes is the three-month London Interbank Offered Rate (LIBOR) on the first day of each three-month period plus one percent and is compounded monthly.

Inventories

Inventories consisting of materials and supplies are carried at the lower of average cost or market less an allowance for obsolescence.  Such allowance was $0.2 million and $0.6 million at December 31, 2004 and 2003 respectively.  

Property, Plant and Equipment

Depreciation is provided primarily on the straight-line method at FERC prescribed rates, over estimated useful lives ranging from 5 to 56 years.  Reflecting the application of composite depreciation, gains and losses from the ordinary sale and retirement of property, plant and equipment (PP&E) generally do not impact net PP&E.  Other gains and losses are recorded in net income.  Depreciation and amortization expense for the year ended December 31, 2004, was $33.7 million, $16.1 million for pre-Acquisition in 2003 and $20.5 million for post-Acquisition in 2003, and $37.8 million for the year ended December 31, 2002.  

Construction costs and expenditures for major renewals and improvements, which extend the lives of the respective assets, are generally capitalized.

Gas in Storage and Gas Receivables/Payables

Texas Gas has underground gas in storage which is utilized for system management and operational balancing, as well as for certain tariff services including firm, interruptible and no-notice storage services and parking and lending services.  Consistent with the above, certain of these volumes are necessary to provide for storage services which allow third parties to store our own natural gas in our underground facilities.   Additionally, in the course of providing transportation and storage services to customers, Texas Gas may receive different quantities of gas from the shippers than the quantities delivered on behalf of those shippers.  The transactions result in imbalances, which are repaid or recovered in cash or through the receipt or delivery of gas in the future.  Settlement of imbalances requires agreement between the pipeline and shippers as to allocations of volumes to specific transportation contract s and timing of delivery of gas based on operational conditions.

The accompanying financial statements reflect the balance of underground gas in storage, as well as the resulting activity around the services and balancing activity described above.  Gas Stored Underground includes natural gas volumes owned by Texas Gas, reduced by certain operational encroachments upon that gas. These amounts are valued at historical cost, consistent with the purchase price allocation applied to a company that applies the provisions of SFAS No. 71.  

Gas receivables and payables represent certain amounts attributable to balancing and tariff services associated with the storage services.  As discussed above, imbalances arise in the normal course of providing transportation and storage services to customers.  Gas receivables and payables include volumes receivable from or payable to third parties in connection with the imbalance activity.  For Texas Gas, these amounts are valued at the historical value of gas in storage, consistent with the regulatory treatment and the settlement history.  

Gas receivables and payables also reflects certain amounts of customer-owned gas at the Texas Gas facilities.  Consistent with certain regulatory treatment prescribed by the FERC as a result of risk of loss provisions included in its tariff, Texas Gas reflects an equal and offsetting receivable and payable for certain customer-owned gas in its facilities for certain storage and related services.  This amount was valued at the historical cost of gas, consistent with other Texas Gas balances, and was $29.8 million and $31.4 million at December 31, 2004 and 2003, respectively.  

Impairment of Long-Lived Assets

Texas Gas evaluates long-lived assets for impairment when, in management’s judgment, events or changes in circumstances indicate that the carrying value of such assets may not be recoverable.  When such a determination has been made, management’s estimate of undiscounted future cash flows attributable to the assets is compared to the carrying value of the assets to determine whether an impairment has occurred.  If an impairment of the carrying value has occurred, the amount of impairment recognized in the financial statements is determined by estimating the fair value of the assets and recording a loss for the amount that the carrying value exceeds the estimated fair value.   

Revenue Recognition

Revenues from the transportation of gas are recognized in the period the service is provided based on contractual terms and the related transported volumes.  Texas Gas is subject to FERC regulations and, accordingly, certain revenues collected may be subject to possible refunds upon final orders in pending cases. Texas Gas records rate refund liabilities considering Texas Gas and third-party regulatory proceedings, advice of counsel and estimated total exposure, as discounted and risk weighted, as well as collection and other risks.

Repair and Maintenance Costs

Texas Gas accounts for repair and maintenance costs under the guidance of FERC regulations, which is consistent with GAAP.  The FERC identifies installation, construction and replacement costs that are to be capitalized.  All other costs are expensed as incurred.

Income Taxes

As previously discussed, Texas Gas was converted into a limited liability company immediately following the Acquisition.  In connection with the terms of this election, temporary differences that existed prior to the Acquisition no longer exist and differences between the new allocated purchase price for book and income tax are established as part of the purchase price allocation.  Therefore, deferred tax asset and liability balances existing prior to the Acquisition have been eliminated.  The condensed financial statements contained herein reflect a Charge-in-lieu of income taxes subsequent to the Acquisition pursuant to GAAP and in recognition of ratemaking allowed for such costs.  

For federal income tax reporting, we are included in the consolidated federal income tax return of Loews Corporation.  The tax sharing agreement with Loews requires us to remit to Loews on a quarterly basis any charges-in-lieu of federal income tax due as if we were filing a separate return.  Loews will remit to us the value of any federal income tax losses or other benefit at such time that we would be able to utilize the benefit on a separate-return basis.

Deferred income tax is computed using the liability method and is provided on all temporary differences between the book basis and the tax basis of our assets and liabilities.

Prior to the Acquisition, Texas Gas was included in the consolidated federal income tax return of Williams.  It was Williams’ policy to charge or credit Texas Gas with an amount equivalent to its federal income tax expense or benefit as if Texas Gas filed a separate return.

Capitalized Interest

The allowance for funds used during construction represents the cost of funds applicable to the regulated natural gas transmission plant under construction as permitted by FERC regulatory practices.  The allowance for borrowed funds used during construction and capitalized interest for the year ended December 31, 2004, for the pre- and post-Acquisition periods in 2003 and the year ended December 31, 2002, was $ 0.3 million, $0.3 million, $0.0 million, and $0.9 million, respectively.   The allowance for equity funds used during construction for the year ended December 31, 2004, pre- and post-Acquisition periods in 2003 and the year ended December 31, 2002, was $0.8 million, $0.7 million, $0.2 million, and $2.4 million, respectively.  The allowance for borrowed funds used during construction reduces interest expense and the allowance for equity funds is included in miscellaneous other income within the Statements of Op erations.

Employee Stock Based Awards

Subsequent to the Acquisition, stock-based awards were discontinued and all outstanding awards expired on November 17, 2003, no later than six months after the Acquisition.

Prior to the Acquisition, Williams’ employee stock-based awards were accounted for under Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees” and related interpretations.  Williams’ fixed plan common stock options generally did not result in compensation expense because the exercise price of the stock options equaled the market price of the underlying stock on the date of grant.  The plans are described more fully in Note 5.  

The following table illustrates the effect on net income if Texas Gas had applied the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” to stock-based compensation (expressed in thousands):

Pro forma amounts for 2002 include compensation expense from Williams awards made in 2002 and 2001 and compensation expense from certain Williams awards made in 1999.  

The effects of applying SFAS No.123  to compute pro forma net income for the period shown above may not be representative of the effects on reported net income.  The fair value of each award was estimated using the Black-Scholes options pricing model.  See Note 5 for the assumptions used in the calculation of fair value.

Cash flows from operating activities

We use the indirect method to report cash flows from operating activities, which requires adjustments to net income to reconcile to net cash flows provided by operating activities.

Asset Retirement Obligations

Effective January 1, 2003, we adopted SFAS No. 143, "Accounting for Asset Retirement Obligations", which addresses accounting and reporting for legal asset retirement obligations associated with the retirement of long-lived assets.  SFAS No. 143 requires entities to record the fair value of a liability for an asset retirement obligation during the period in which the liability is incurred, if a reasonable estimate of fair value can be made.  We have determined that asset retirement obligations exist for certain of our utility assets; however, the fair value of the obligations cannot be determined because the end of the utility system life is not determinable with the degree of accuracy necessary to currently establish a liability for the obligations.

Depreciation rates for utility plant are approved by the FERC.  The approved depreciation rates are comprised of two types; one based on economic service life (capital recovery) and one based on net costs of removal (negative salvage). Therefore, we accrue estimated net costs of removal of long-lived assets through negative salvage expense.  Accordingly, we have collected a certain amount in rates representing estimated net costs of removal, which do not represent a legal obligation. We have reclassified $29.7 million and $28.0 million as of December 31, 2004 and 2003 in the accompanying Statements of Financial Position as Provision for other asset retirement.

Reclassifications

Certain reclassifications have been made in the 2003 and 2002 financial statements to conform to the 2004 presentation.

Note 3:  Commitments and Contingencies

Regulatory, Rate Matters and Related Litigation

Storage Expansion Project

Recent requests for additional storage capacity have exceeded the physical capabilities of Texas Gas’ system, thereby prompting us to expand our storage facilities.  On February 11, 2005, Texas Gas received FERC approval to begin expanding our western Kentucky storage complex for service to two customers beginning November 1, 2005.  Texas Gas estimates this project will cost approximately $21.7 million and will allow the additional withdrawal of 82,000 MMBtu per day.  Texas Gas was evaluating another storage expansion with an in-service date of November 1, 2006.  However, based upon the bids received during a binding open season that concluded on December 17, 2004, Texas Gas has withdrawn this project.

General Rate Case

At December 31, 2004, we had no pending rate case proceedings and no associated rate refunds. Pursuant to the settlement of its last general rate case in FERC Docket No. RP00-260, Texas Gas is required to file a new general rate case with the FERC with rates to be effective no later than November 1, 2005.

FERC Order No. 2004 (Docket No. RM01-10)

On November 25, 2003, the FERC issued its Final Rule (Order No. 2004) establishing uniform “Standards of Conduct for Transmission Providers.” Order No. 2004 defines transmission providers as interstate natural gas pipelines and public utilities that own, operate, or control electric transmission facilities, adopts the same standards of conduct for all transmission providers, and, subject to certain exemptions, broadly defines energy affiliates to include any affiliate that engages in or is involved in transmission (gas or electric) transactions, or manages or controls transmission capacity, or buys, sells, trades, or administers natural gas or electric energy, or engages in financial transactions relating to the sale or transmission of natural gas or electricity.  It adopts the “no conduit rule” for implementing information disclosure prohibitions, which is more flexible than the “automatic imputation rule& #148;; prohibits Transmission Providers from sharing employees and information with its Energy Affiliates, including affiliated asset managers, and trading and financial affiliates; prohibits the sharing of employees and information across industries; and requires mandatory training for employees and the designation of a Chief Compliance Officer.  Since Texas Gas has no sales function and no energy or marketing affiliates, Texas Gas filed a request for exemption from Order No. 2004 in Docket No. TS04-253. On September 20, 2004, the FERC issued an order granting Texas Gas’ request for an exemption.  A third party requested a late intervention and rehearing of Texas Gas’ exemption request. On December 21, 2004, FERC issued Order No. 2004-C, clarifying its prior orders and denying the intervenor’s request for rehearing of the full exemption granted to Texas Gas.  Texas Gas is thus currently exempt from compliance with Order No. 2004.

FERC Notice of Inquiry (Docket No. RM05-2-000)

On November 22, 2004, the FERC issued a Notice of Inquiry (Docket No. RM05-2-000) seeking comments on its policy regarding selective discounting by natural gas pipeline companies. Specifically, the FERC asked whether the FERC’s practice of permitting pipelines to adjust their ratemaking throughput downward in rate cases to reflect discounts given by pipelines for competitive reasons is appropriate when the discount is given to meet competition from another natural gas pipeline. Potential alternatives appear to include (1) leaving the current discount adjustment policy unchanged, (2) eliminating the discount adjustment for gas-on-gas competition, (3) increasing the burden of proof on pipelines to obtain a discount adjustment by eliminating the presumption applicable to non-affiliate discounts, (4) eliminating the discount adjustment relating to long-term contracts, (5) increasing pipeline reporting requirements or further stiffening the pipeline standards of conduct related to discounting, or (6) prohibiting all affiliate discounts. Comments were due to the FERC by March 3, 2005. Considering the wide array of possible outcomes to this matter, Texas Gas is currently unable to project the impact of this issue on either its financial condition or its results of operations, if any.

Pipeline Integrity

On November 5, 2004, the Chief Accountant of the FERC issued a proposed Accounting Release which provided guidance on accounting for pipeline assessment activities.  If finalized, the Accounting Release would require an entity to recognize costs incurred in performing pipeline assessments that are a part of a pipeline integrity management program as maintenance expense.  Texas Gas feels its current accounting treatment of pipeline integrity management costs follows the FERC’s guidelines and, at this time, doesn’t anticipate any material impact from the adoption of the Accounting Release when issued.

Annual Fuel Filings

Texas Gas submits annual filings to the FERC to adjust its Fuel Retention Percentages, thereby allowing any under- or over-collections to be corrected by an adjustment in fuel rates.  On August 30, 2004, Texas Gas submitted its Fuel Tracker Filing (Docket No. RP04-522) reflecting a slight increase in fuel rates for the annual period November 1, 2004 through October 31, 2005.  On October 18, 2004, the FERC issued an order accepting these rates as filed.

Environmental and Safety Matters

Texas Gas is subject to federal, state, and local environmental laws and regulations in connection with the operation and remediation of various operating sites. We accrue for environmental expenses resulting from existing conditions that relate to past operations when the costs are probable and reasonably estimable.

During 2004, as part of our proactive approach to environmental matters, Texas Gas entered into agreements, or met with various state agencies, to address remediation issues primarily on a voluntary basis.  As a result of these actions, Texas Gas increased the environmental accrual by $3.9 million during the fourth quarter of 2004.  As of December 31, 2004 and 2003 respectively, Texas Gas had an accrued liability of approximately $4.1 million and $1.1 million for estimated probable costs associated with environmental assessment and remediation. This estimate depends upon a number of assumptions concerning the scope of remediation that will be required at certain locations and the cost of remedial measures to be undertaken.  Texas Gas is continuing to conduct environmental assessments and is implementing a variety of remedial measures that may result in increases or decreases in the total estimated costs.

Texas Gas is also subject to the federal Clean Air Act (CAA) and the CAA Amendments of 1990 (Amendments) which added significant provisions to the existing federal CAA.  The Amendments require the Environmental Protection Agency (EPA) to promulgate new regulations pertaining to mobile sources, air toxics, areas of ozone non-attainment, and acid rain.  We operate one facility in an area designated as non-attainment for the current ozone standard (eight-hour standard).  Emission control modifications of compression equipment located at facilities required to comply with current federal CAA provisions, the Amendments, and State Implementation Plans for nitrogen oxide (NOx) reductions are estimated to cost $13.3 million by the end of 2005 and will be recorded as additions to property, plant and equipment as the facilities are added.  If the EPA designates additional new n on-attainment areas which impact our operations, the cost of additions to property, plant and equipment is expected to increase; however, we are unable at this time to estimate with any certainty the cost of additions that may be required.  Additionally, the EPA promulgated new rules regarding hazardous air pollutants in 2004, which will impose controls in addition to the measures described above.  Three facilities will be affected by the new regulations at an estimated cost of $1.3 million.  The effective compliance date for the hazardous air pollutants regulations and installation of associated controls is anticipated to be during 2007.

We consider environmental assessment, remediation costs, and costs associated with compliance with environmental standards to be recoverable through base rates, as they are prudent costs incurred in the ordinary course of business and therefore no regulatory asset has been recorded to defer these costs.  The actual costs incurred will depend on the actual amount and extent of contamination discovered, the final cleanup standards mandated by the EPA or other governmental authorities, and other factors.

 In December 2003, the U.S. Department of Transportation Office of Pipeline Safety issued a final rule incorporating the requirements of the Pipeline Safety Improvement Act of 2002.  The rule requires gas pipeline operators to develop integrity management programs for transmission pipelines that could affect high consequence areas (HCAs) in the event of pipeline failure.  Pursuant to the rule, Texas Gas was required by December 17, 2004 to identify HCAs on its system and develop a written integrity management program providing for a baseline assessment and periodic reassessments to be completed within specified timeframes.  We believe our costs to comply with the rule during the initial ten-year baseline period ending in 2012 will range from $40 to $50 million.  We consider the costs associated with compliance with the rule to be prudent costs incurred in the ordinary course of business and, therefore, recoverable through our rates.

Effective November 1, 1993, Texas Gas restructured its business to implement the provisions of FERC Order 636, which, among other things, required pipelines to unbundled their merchant role from their transportation services.  FERC Order 636 also provided that pipelines should be allowed the opportunity to recover a portion of prudently incurred transition costs which, for Texas Gas, were primarily related to gas supply realignment (GSR) costs and unrecovered purchased gas costs.

In September 1995, Texas Gas received FERC approval of a settlement agreement, which resolved all issues regarding Texas Gas’ recovery of GSR costs.  Texas Gas paid approximately $76 million related to GSR costs and subsequently collected approximately $68 million, plus interest, from its customers.  

GSR collections pursuant to the settlement ended in 2004.  On November 19, 2004, Texas Gas filed a final GSR reconciliation report with the FERC and revised tariff sheets to remove the GSR recovery mechanism from its rates.   On December 10, 2004, the FERC issued a letter order accepting the report.  As a result, Texas Gas recognized $3.3 million of revenue and a $1.8 million expense adjustment related to the settlement during the fourth quarter of 2004.  Texas Gas will also be required to refund approximately $0.4 million to customers during the first half of 2005.

Legal Proceedings

In the Acquisition purchase agreement, Williams agreed to indemnify us for any liabilities or obligations in connection with certain litigation or potential litigation including, among others, these previously disclosed matters:

·

Litigation filed by Jack Grynberg alleging that approximately 300 energy companies, including Texas Gas, had violated the False Claims Act in connection with the measurement, royalty valuation, and purchase of hydrocarbons;

·

A nationwide class action lawsuit against pipeline and gathering companies, including Texas Gas, for alleged mismeasurement techniques resulting in the underpayment of royalties; and

·

A claim by certain parties for back rental associated with their alleged ownership of a partial mineral interest in a tract of land in a gas storage field owned by Texas Gas.  In December 2003, a lawsuit was filed against Texas Gas in Muhlenberg County, Kentucky seeking unspecified damages related to this claim.  Oral arguments on this claim will be heard April 1, 2005.

As a result, Williams is defending these actions on behalf of Texas Gas.  Since Williams has retained responsibility for these claims, they are not expected to have a material effect upon our future financial condition or results of operations.

Other Legal Matters

Texas Gas is party to various legal actions arising in the normal course of business. Management believes that the disposition of outstanding legal actions will not have a material adverse impact on its financial position or results of operations.

Other Commitments

Commitments for Construction

Texas Gas has commitments for construction and acquisition of property, plant and equipment of approximately $34.8 million at December 31, 2004, of which $33.5 million and $1.3 million are expected to be expended in 2005 and 2006, respectively..

Note 4:  Financing

Long-term debt issues were outstanding as follows (expressed in thousands):

Our debentures and notes have restrictive covenants which provide that, with certain exceptions, Texas Gas nor any subsidiary may create, assume or suffer to exist any lien upon any property to secure any indebtedness unless the debentures and notes shall be equally and ratably secured.  All our obligations are unsecured.

On May 16, 2003, Texas Gas borrowed $275 million (TG-Interim Loan) at 2.6% per annum and advanced the proceeds to Boardwalk under an interest bearing promissory note.  On May 28, 2003, Texas Gas sold $250 million principal amount of its 4.60% notes due 2015, at a discount (effective rate of 4.77%).  Concurrently, Boardwalk sold $185 million principal amount of its 5.20% notes due 2018, at a discount (effective rate of 5.40%) and used the proceeds to repay advances to Texas Gas.  Texas Gas used the proceeds from the sale of its 4.60% notes together with the proceeds received from Boardwalk to repay the TG-Interim Loan, to repay $132.7 million principal amount of its outstanding $150 million aggregate principal amount of 8.625% notes due April 2004, plus accrued interest and premium.  In March 2004, Texas Gas repaid the balance of the notes upon final maturity with available cash.

Note 5:  Employee Benefits

Retirement Plan

Substantially all of Texas Gas’ employees are covered under a non-contributory, defined benefit retirement plan (Retirement Plan) offered by Texas Gas.  Texas Gas’ general funding policy is to contribute amounts deductible for federal income tax purposes.  Texas Gas has not been required to fund the Retirement Plan since 1986.  

As a result of the Acquisition, Texas Gas recognized $24.9 million of previously unrecognized market losses and prior service costs reducing our prepaid pension asset and corresponding regulatory liability.   To the extent our pension plan is overfunded, Texas Gas is required to record an offsetting regulatory liability since our ratepayers would be the beneficiaries of any overfunded pension assets if the pension plan were ever terminated.  Texas Gas uses a measurement date of December 31 for its pension plan.  The following table presents the changes in benefit obligations and plan assets for pension benefits for the periods indicated.  It also presents a reconciliation of the funded status of these benefits to the amount recognized in the Statements of Financial Position at December 31 of each year indicated (expressed in thousands).

Amounts recognized in the Statements of Financial Position consist of:

Net pension benefit expense consists of the following:

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid (expressed in thousands):

Texas Gas’ pension plan weighted-average asset allocations at December 31, 2004 and 2003, by asset category are as follows:

We employ a total return approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a prudent level of risk.  The intent of this strategy is to minimize plan expenses by outperforming plan liabilities over the long run. Risk tolerance is established through careful consideration of the plan liabilities, plan funded status and corporate financial conditions. The investment portfolio contains a diversified blend of U.S. and non-U.S. fixed income and equity investments. Alternative investments, including hedge funds, are used judiciously to enhance risk adjusted long-term returns while improving portfolio diversification. Derivatives may be used to gain market exposure in an efficient and timely manner. Investment risk is measured and monitored on an ongoing basis through annual liability measurements, periodic asset/lia bility studies and quarterly investment portfolio reviews.

Weighted-average assumptions used to determine benefit obligations for the periods indicated:

Weighted-average assumptions used to determine net periodic benefit cost for the periods indicated:

Other than Supplemental Retirement Plan (SERP) costs, Texas Gas recognizes expense concurrent with the recovery in rates.  Since Texas Gas’ Retirement Plan is fully funded, Texas Gas is not currently recovering any amounts through rates and does not anticipate contributing to the pension plan during 2005.  SERP expenses recognized by Texas Gas were less than $0.1 million in 2004, $0.1 million post-acquisition 2003, $1.2 million pre-acquisition 2003 and $1.1 million in 2002.  

Postretirement Benefits Other than Pensions

Prior to the Acquisition, Texas Gas’ Postretirement Benefits Other than Pensions was part of a multi-employer plan under Williams; however, for regulatory purposes Texas Gas’ liabilities and plan assets were accounted for separately.  After the Acquisition, Texas Gas’ Postretirement Benefits Other than Pension were segregated from Williams and are no longer considered a multi-employer plan.

We provide life insurance and health care plans which accords postretirement medical benefits to retired employees who were employed full time, hired prior to January 1, 1996, and have met certain other requirements. We made contributions to this plan in the amount of $5.3 million during 2004,  $2.7 million during the post-Acquisition and $2.7 million during the pre-Acquisition periods in 2003 and $5.4 million in 2002.  Texas Gas’ latest settled rate case with the FERC (Docket No. RP00-260) allows recovery of $5.3 million annually, including amortization of previously deferred postretirement benefit costs and as such, Texas Gas anticipates contributing $5.3 million to its other postretirement benefit plan during 2005. Net postretirement benefit expense related to Texas Gas’ participation in the Williams’ plan is $2.6 million for the 2003 pre-Acquistion period and $5.3 million for 2002, including $2.0 mill ion and $3.6 million of amortization of a regulatory asset, respectively.  The regulatory asset represents unrecovered costs from prior years, including the unamortized transition obligation under SFAS No. 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions,” which was recognized at the date of the Williams acquisition in 1995. This asset is being amortized concurrently with the recovery of these costs through rates.   

As a result of the Acquisition, Texas Gas recognized $7.7 million of previously unrecognized market losses and prior service costs during 2003.  This amount was recorded as a regulatory asset for recovery through rates.  

In December 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (Medicare Act) was signed into law.  Texas Gas adopted the guidance issued by the FASB in FASB Staff Position 106-2, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug Improvement and Modernization Act of 2003” in the third quarter of 2004.  FASB Staff Position 106-2 results in recognition of lower postretirement benefits other than pensions costs to reflect prescription drug-related federal subsidies to be received under the Medicare Act.  Texas Gas and its actuarial advisors determined that benefits provided by their plan as of January 1, 2004, were at least actuarially equivalent to Medicare Part D, and, accordingly, Texas Gas will be entitled to the subsidy provided in the Medicare Act.  As a result of the Medicare Act, Texas Gas’ accumulated postretirement benefit oblig ation as of January 1, 2004 was reduced by $8.3 million.  The effect of the subsidy on the measurement of net periodic postretirement benefit costs was not material.   

Texas Gas uses a measurement date of December 31 for its postretirement benefits other than pensions.  Postretirement benefits other than pensions since the date of Acquisition are as follows (expressed in thousands):

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans.  A one-percentage-point change in assumed health care cost trend rates would have the following effects:

Texas Gas’ benefits other than pensions weighted-average asset allocations at December 31, 2004 and 2003, by asset category are as follows:

Texas Gas benefits other than pensions investments employs a total return approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a prudent level of risk.  The intent of this strategy is to minimize plan expenses by outperforming plan liabilities over the long run. Risk tolerance is established through careful consideration of the plan liabilities, plan funded status and corporate financial conditions. The investment portfolio contains a diversified blend of U.S. and non-U.S. fixed income and equity investments. Alternative investments, including hedge funds, are used judiciously to enhance risk adjusted long-term returns while improving portfolio diversification. Derivatives may be used to gain market exposure in an efficient and timely manner. Investment risk is measured and monitored on an ongoing basis through annual liability measurements, periodic asset/liab ility studies and quarterly investment portfolio reviews.

Stock-Based Compensation  

Subsequent to the Acquisition, we had no stock-based compensation.  Prior to the Acquisition, Williams had several plans providing for common-stock-based awards to its employees and employees of its subsidiaries.  The plans permitted the granting of various types of awards including, but not limited to, stock options, stock appreciation rights, restricted stock and deferred stock.  Awards may have been granted for no consideration other than prior and future services or based on certain financial performance targets being achieved.  The purchase price per share for stock options and the grant price for stock appreciation rights could not be less than the market price of the underlying stock on the date of grant.  Stock options generally became exercisable in one-third increments each year from the anniversary of the grant or after three or five years, subject to accelerated vesting if certain future stock prices or if specific financial performance targets were achieved.  Due to the Acquisition, all Williams' stock options outstanding at December 31, 2002, issued to Texas Gas employees expired on November 17, 2003, six months after the Acquisition.

A summary of stock options previously granted to employees of Texas Gas under the plans is shown in the following table (options in thousands):

The estimated fair value at date of grant of stock options granted to employees of Texas Gas for 2002 using the Black-Scholes option-pricing model, is as follows:

Defined Contribution Plan

We maintain various defined contribution plans covering substantially all employees.  Costs related to these plans were $2.6 million in 2004, $1.0 million in 2003 pre-Acquisition, $1.6 million post-Acquisition, and $4.4 million in 2002.

Note 6:  Income Tax

Following is a summary of the provision for income taxes and charge-in-lieu of income taxes for the years ended December 31, 2004, 2003 and 2002 (expressed in thousands):

 Reconciliations from our (charge-in-lieu-of) income tax provision at the statutory rate to the effective rate are as follows (expressed in thousands):

Significant components of deferred income tax assets and liabilities as of December 31, 2004 and 2003 are as follows (expressed in thousands):

As set forth above, the accompanying financial statements reflect a net deferred tax asset resulting from the tax basis allocation and the 338(h)(10) election.  Based on our estimates of future taxable income, we believe that no valuation reserve is required.  Texas Gas also has estimated net operating loss carryforwards at December 31, 2004 and 2003 of $4.8 million and $7.5 million, respectively.  These loss carryforwards will expire in 2023, however, we anticipate the utilization of these carryforwards and have provided for the benefit in the financial statements.

Note 7:  Financial Instruments

The following methods and assumptions were used in estimating our fair-value disclosures for financial instruments:

Cash and Cash Equivalents: For cash and cash equivalents, the carrying amount is a reasonable estimate of fair value due to the short maturity of those instruments.  

Advances to Affiliates:  As discussed in Note 8, advances to affiliates, which are represented by demand notes, earn a variable rate of interest, which is adjusted regularly to reflect current market conditions.  Therefore, the carrying amount is a reasonable estimate of fair value.

Long-Term Debt:  All of our long-term debt is publicly traded; therefore, estimated fair value is based on quoted market prices at December 31, 2004 and 2003.

The carrying amount and estimated fair values of our financial instruments as of December 31, 2004 and 2003, are as follows (expressed in thousands):

Note 8:  Major Customers and Affiliates

Major Customers

Operating revenues received from the two major customers of Texas Gas (expressed in thousands) and their percentage of revenues were:

Related Parties

Texas Gas makes advances to Boardwalk.  At December 31, 2004, the advances due Texas Gas by Boardwalk totaled $166.7 million.  The advances are represented by demand notes.  The interest rate on intercompany demand notes is the LIBOR on the first day of each three-month period plus one percent and is compounded monthly.

In addition to these advances to affiliates, Loews provides certain management and other services to Texas Gas under a Services Agreement. For the year ended December 31, 2004, Texas Gas was charged $6.9 million and for the period after the Acquisition in 2003, we were charged $3.3 million by Loews for management services.  Williams also had a policy of charging its subsidiary companies for management services provided by the parent company and other affiliated companies.  Amounts charged to expense relative to management services by Williams were $5.4 million prior to the Acquisition in 2003 and $12.2 million in 2002. During 2002, Texas Gas leased office space to Southern Star Central Corp. (Central), which was considered an affiliate at that time.  The net amount charged to Central through November 15, 2002, was $9.5 million.

  Amounts applicable to transportation for affiliates included in Texas Gas’ gas transportation revenues are as follows (expressed in thousands):

Note 9:  Selected quarterly financial data (unaudited)

Our operating income may vary by quarter.  Based on the current rate structure, Texas Gas experiences higher income in the first and fourth quarters as compared to the second and third quarters.  The following tables summarize selected quarterly financial data for 2004 and 2003 for Texas Gas (expressed in thousands):

Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None

Item 9A.  Controls and Procedures

Texas Gas maintains a system of disclosure controls and procedures which are designed to ensure that information required to be disclosed by us in reports that we file or submit under the federal securities laws, including this report, is recorded, processed, summarized and reported on a timely basis. These disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by Texas Gas under the federal securities laws is accumulated and communicated to our management on a timely basis to allow decisions regarding required disclosure.

Our principal executive officer and principal financial officer have conducted an evaluation of the disclosure controls and procedures as of the end of the period covered by this report.  Based on this evaluation, the principal executive officer and principal financial officer have each concluded that the disclosure controls and procedures were effective for their intended purpose.

There was no change in our internal control over financial reporting identified in connection with the foregoing evaluation that occurred during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the internal control over our financial reporting.

Item 9B.  Other Information

None

PART III

Item 14.  Principal Accounting Fees and Services  

Audit Fees

The aggregate fees billed for the years ended December 31, 2004 and 2003 for professional services rendered by the principal accountant for the audit of our annual financial statements and review of financial statements included in our Form 10-Q or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years are:

Audit-Related Fees

There were no aggregate fees billed for the years ended December 31, 2004 and 2003 for assurance and related services by the principal accountant that are reasonably related to the performance of the audit or review of our financial statements and not reported under Item 9(e)(1).

Tax Fees

The aggregate fees billed for the years ended December 31, 2004 and 2003 for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning are:

All Other Fees

There were no other fees billed for the years ended December 31, 2004 and 2003 for products and services provided by the principal accountant, other than the services reported in items 9(e)(1) through 9(e)(3).

Audit Committee’s Pre-Approval Policies and Procedures  

In order to assure the continued independence of our independent auditor, currently Deloitte & Touche LLP, the Audit Committee of our parent company, Loews Corporation (Audit Committee), has adopted a policy requiring pre-approval of all audit and non-audit services performed for us by the independent auditor. Under this policy, the Audit Committee annually pre-approves certain limited, specified recurring services which may be provided by Deloitte & Touche LLP, subject to maximum dollar limitations.  All other engagements for services to be performed by Deloitte & Touche LLP must be separately pre-approved by the Audit Committee, or a designated committee member to whom this authority has been delegated.  Since its adoption of this policy in May 2003, the Audit Committee has pre-approved all engagements for services of Deloitte & Touche LLP, including the terms and fee thereof, and concluded that such engageme nts were compatible with the continued independence of Deloitte & Touche LLP in serving as our independent auditor.

PART IV

Item 15.  Exhibits, Financial Statement Schedules.

(a) 1. Financial Statements

Included in Item 8, Part II of this Report

Report of Independent Registered Public Accounting Firm

Statements of Financial Position at December 31, 2004 and 2003

Statements of Operations for the years ended December 31, 2004 and 2002 and for the periods January 1, 2003 through May 16, 2003 and May 17, 2003 through December 31, 2003

Statements Of Stockholder’s and Member’s Equity for the years ended December 31, 2004 and 2002 and for the periods January 1, 2003 through May 16, 2003 and May 16, 2003 through December 31, 2003

Statements of Cash Flows for the years ended December 31, 2004 and 2002 and for the periods January 1, 2003 through May 16, 2003 and May 17, 2003 through December 31, 2003

Notes to Financial Statements

Schedules are omitted because of the absence of conditions under which they are required or because the required information is given in the financial statements or notes thereto.

 (a) 3.  Exhibits

The documents listed below are being filed on behalf of Texas Gas Transmission, LLC and are incorporated herein by reference from the documents indicated and made a part hereof.  Those exhibits below incorporated by reference herein are indicated as such by the information supplied in the parenthetical thereafter.  If no parenthetical appears after an exhibit, copies of the instrument have been included herewith.

* Filed herewith

SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

EXHIBIT 31.1

I, H. Dean Jones II, certify that:

1)

I have reviewed this report on Form 10-K of Texas Gas Transmission, LLC;

2)

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3)

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4)

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5)

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated:  March 18, 2005

/s/ H. Dean Jones II

 H. Dean Jones II, President

EXHIBIT 31.2

I, Jamie L. Buskill, certify that:

1)

I have reviewed this report on Form 10-K of Texas Gas Transmission, LLC;

2)

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3)

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4)

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5)

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated:  March 18, 2005

/s/ Jamie L. Buskill

Jamie L. Buskill

Vice President and Chief Financial Officer

EXHIBIT 32.1

Certification by the Chief Executive Officer

of Texas Gas Transmission, LLC

pursuant to 18 U.S.C. Section 1350

(as adopted by Section 906 of the

Sarbanes-Oxley Act of 2002)

Pursuant to 18 U.S.C. Section 1350, the undersigned chief executive officer of Texas Gas Transmission, LLC (the "Company") hereby certifies, to such officer's knowledge, that the Company's annual report on Form 10-K for the year ended December 31, 2004 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ H. Dean Jones II

H. Dean Jones II

President

(Chief Executive Officer)

Texas Gas Transmission, LLC

March 18, 2005

 EXHIBIT 32.2

Certification by the Chief Financial Officer

of Texas Gas Transmission, LLC

pursuant to 18 U.S.C. Section 1350

 (as adopted by Section 906 of the

Sarbanes-Oxley Act of 2002)

Pursuant to 18 U.S.C. Section 1350, the undersigned chief financial officer of Texas Gas Transmission, LLC (the "Company") hereby certifies, to such officer's knowledge, that the Company's annual report on Form 10-K for the year ended December 31, 2004 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/  Jamie L. Buskill                   

Jamie L. Buskill

Vice President and Chief Financial Officer

(Chief Financial Officer)

Texas Gas Transmission, LLC

March 18, 2005