John Porter Alan S. Armstrong - Chief Executive Officer, President, Director, Chairman of Williams Partners Gp Llc and Chief Executive Officer of Williams Partners Gp Llc Rory Lee Miller - Senior Vice President of Midstream Frank J. Ferazzi - Vice President, Director and Member of Management Committee Donald R. Chappel - Chief Financial Officer and Senior Vice President

Kevin A. Smith - Raymond James & Associates, Inc., Research Division Bradley Olsen - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division Craig Shere - Tuohy Brothers Investment Research, Inc. Carl L. Kirst - BMO Capital Markets U.S. Stephen J. Maresca - Morgan Stanley, Research Division Theodore Durbin - Goldman Sachs Group Inc., Research Division Holly Stewart - Howard Weil Incorporated, Research Division Sharon Lui - Wells Fargo Securities, LLC, Research Division Rebecca Followill - U.S. Capital Advisors LLC, Research Division

Good day, everyone, and welcome to the Williams Company Second Quarter 2012 Earnings Release Conference Call. Today's call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Mr. John Porter, Head of Investor Relations. Please go ahead, sir.

Thank you. Good morning, and welcome. As always, we thank you for your interest in Williams. As you know, yesterday afternoon we released our financial results and posted several important items on our website, williams.com. These items include the press release of our results with related schedules and our analyst package; a presentation on our results and growth opportunities with related audio commentary from our President and CEO, Alan Armstrong; and an update to our quarterly data book, which contains detailed information regarding various aspects of our business. This morning, Alan will make a few brief comments and then we will open the discussion for Q&A. Rory Miller is here from our Midstream business; Randy Barnard is here from our Gas Pipeline business; and our CFO, Don Chappel, is also available to respond to any questions. In yesterday's presentation and also in the quarterly data book, you will find an important disclaimer related to forward-looking statements. This disclaimer is important and integral to all of our remarks and you should review it. Also included in our presentation materials are various non-GAAP measures that have been reconciled back to generally excepted accounting principles. Those reconciliation schedules appear at the back of the presentation materials. So with that, I'll turn it over to Alan. Alan S. Armstrong: Great. Thanks, John, and good morning. Thanks for joining us and it's a busy time right now, and so we appreciate you being able to take the time out for us. Well certainly, despite a very disappointing financial performance in the second quarter and significantly lower margin forecast for the balance of '12 and '13, we're very pleased that despite that, we're able to continue to remain confident in our very well-supported dividend growth, which is still at 55% here in 2012 and 20% both in '13 and '14. So a lot of our confidence on that continues to come from the degree of coverage that we've had built into our model, as well as the extraordinary maintenance costs or maintenance capital we have built into PZ right now, and as well a lot of continued strong growth coming from our fee-based business. Our second quarter performance was certainly impacted by a rapid decline in NGL prices, but a few things as well. There’s one thing, I think, that isn't always obvious in the way we report is that we also have a pretty significant amount of product that's in transit that is held in pipelines. And of course, that gets remarked each quarter based on the pricing decline. So in fact in this period, we had about $22 million impact on that over and above what you would see in your typical pricing model. So whenever we see prices move down, that gets somewhat accelerated. And when we see it move back the other way, it comes back to us. But there were certainly were other factors as well beyond pricing. Some growing pains, the Boreal Pipeline line fill. The high start-up O&M cost associated with the Caiman pipeline -- or sorry, the Caiman acquisition that we now refer to as Ohio Valley and as well, quite a bit of depreciation expense going on with that as well. But we also had higher maintenance costs, which we accelerated some of our work on a lot of our Western plants as we had a third-party fractionator being out during the second quarter that required us to take some of our plants down, so we took advantage of that and accelerated things like a lot of turbine overhauls, embezzled maintenance during the period. The good news for the quarter, a 19% increase in our fee-based businesses within our midstream portion of WPZ. And we certainly had great progress on our major project execution going on during the quarter as well. So we remain very confident in the way our model is growing, particularly on the fee-based business side. Just commenting quickly on prices. Certainly the second quarter drop that we had from the first and second quarter was over 20% on our NGL margins, and the balance of the year is forecasted to be approximately 30% lower than what we recognized in the first quarter of '12. So we certainly have, in this model we have taken it down to what we're seeing and certainly we expect for prices, particularly on the light-end products, ethane and propane, to be very choppy as we see a lot of new infrastructure and supply coming on of the NGL side, but a bit ahead of a lot of the Petrochemical build out and some of the export build out on the propane side. The NGL crude ratios are really what drove us. A lot of folks have thought about this from a crude standpoint, but really the crude price had very little to do with this. And we've got in our forecast, we've got NGL to crude ratio is running at about 40% here through the balance of the year versus historical average of 60% and the almost 57% that we realized in 2011. So certainly that disconnect that we saw on the ethane and propane side is what really damaged the second quarter from a pricing standpoint, and we expect that to continue as the market needs to be balanced on the supply side on both ethane and propane. The good news, of course, for Williams is with the Geismar facility. As we're expanding that, we moved away from a lot of the risk on the ethane choppiness. We're not all buried long term on NGLs as much as we are realizing that there's going to be a lot of infrastructure changes going on as this market tries to build out and we think there will be quite a bit of volatility associated with that. On the project news, a lot of great efforts going on around the company right now in terms of building out our $9 billion that's in our guidance for CapEx through 2014. The Boreal Pipeline we brought on, this certainly in the second quarter and that was brought on below budget -- below our planned budget, excuse me. And as well, brought in a little ahead of schedule. Our ethane extraction project in Canada is also going very well and that project has been very well executed. So this will really be the third project, the ethane extraction project that we've managed up there, the first being the BB splitter, the Boreal Pipeline and now the ethane extraction project. And our Canadian team continues to do a great job of executing on those projects. Likewise in the Deepwater Gulf of Mexico, our GulfStar project is going ahead very nicely, the Keathley Canyon project is doing very well. And I'll tell you, we remain very bullish on the Deepwater Gulf of Mexico as an oil province and we really think that we're very well positioned to provide a lot of the service as the Deepwater comes back. The Caiman or Ohio Valley efforts, a lot of effort going on in the build out, people from really all over our systems up there trying to assist with getting that business built out and the tremendous amount of activity going on, a lot of promise. And we're very excited about the way things are going so far on that acquisition. The Laurel Mountain Midstream build out, we're getting to the point where we're almost, I can say that we're not constraining production there with the infrastructure. We have, for sometime, a lot of that volume’s been limited by our infrastructure up there as Chevron continues to drill out that acreage. And we're about to get to the point where we'll be out in front of them a little bit with the expansion, so we're excited about that. And then of course, the Geismar expansion continues to go very well and it's well contracted at this point. And the gas pipeline space, the Northeast Supply Link project continues ahead, and as well our Rockway lateral. We are hopeful that we can get a positive response. That is waiting on a bill in front of Congress, and so we're looking forward to that. In addition, we also have a lot of new projects that have been recently announced, the Canadian propane dehydrogenation project, which would be there at our Redwater facility. We think we're extremely well positioned for that project and it's a very nice compliment to our propylene production that we have there today in Canada already. And then the Utica JV that we announced, we're excited about the promise of that, a little early to comment too much on that today, but that JV is completed and we're excited about the promises there. And you'll see in our capital guidance, you'll see that we've added in capital for that JV in terms of our expectation for that. We just announced Leidy expansion and really excited about the way that's gone. That project winds up being a very nice project for us in terms of being able to expand along our Leidy system and we think that’ll be both a lower-risk project for us in the immediate term but also provides, we think, a great value to producers and to our markets in giving them great access to the supplies up there. So we're very excited about that. And we certainly haven't shut the door in any way, shape or form on the Atlantic access, but we're not about to go ahead with a very risky build like that without very strong support from the producer community and in terms of contracts that make sense for the kind of return that's allowed in the pipeline basis. Finally, the Dalton lateral Mobile Bay South are also projects that are gaining steam here in the second quarter and into the third quarter. And so our backlog continues to mount as does our confidence in our strategy, in our growth, in our dividend. And so with that, I'll turn it over for questions.

[Operator Instructions] We will go first to Kevin Smith with Raymond James. Kevin A. Smith - Raymond James & Associates, Inc., Research Division: Can you speak on the Boreal Pipeline, how much that lowered your NGL volumes by this quarter when you started up and to fill it?

Yes. That was about a $9 million hit to us with the fill. Kevin A. Smith - Raymond James & Associates, Inc., Research Division: Got you. No reason that any of that should impact 3Q, right? It's all behind?

I'm sorry, I didn't catch that. Could you repeat that question. Kevin A. Smith - Raymond James & Associates, Inc., Research Division: He ask if it would effect third quarter at all.

I don't think so. The line is full now and so we'll be gearing that, but there shouldn't be any additional hit after that. Kevin A. Smith - Raymond James & Associates, Inc., Research Division: Okay. And then my second question on the Geismar plant, can you kind of talk a little bit about how much EBITDA and cash flow that’s generating right now? And I guess where you are in your CapEx plans for it?

We typically haven't released individual numbers for Geismar. The second part of your question on the CapEx plans. We've got a couple of capital projects going on there right now. We're upgrading some of our furnaces. I think we've got -- that project is partially completed, but is ongoing. And then of course, we've got our major expansion, the plant being serviced in the third quarter of '13. Those are the main CapEx plans for Geismar at this point.

And Bradley Olson with Tudor, Pickering has our next question. Bradley Olsen - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: Couple of questions on the Atlantic Access and Leidy announcements. I assume it's safe to say that given that Leidy is kind of running along the existing lateral, that's going to be a higher return project than building out the new laterals to Butler and Natrium would have been. Frank J. Ferazzi: Alan, is that something you’d like me to take? Alan S. Armstrong: Yes, Frank, please. Frank J. Ferazzi: Yes. I think as Alan said, the fact that we have existing Leidy Line already there, that the execution risk associated with the new build would be less than a greenfield project. The economics of each of the pieces are going to be a function of the kind of shipper commitments that you get. And so as Alan also said, we're going to continue to monitor the interest along that new greenfield build, and we will proceed with that when we get enough interest from producers to support an economic project. We're just not there for in-service day of 2015, but based on the projections that we've seen on the production in the area, we think at sometime that will make economic sense. Bradley Olsen - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: And as far as the Natrium lateral that was canceled, so that moves -- that was kind of designed to move gas out of Southwest PA and Northern West Virginia. Should we view the cancellation or at least the delay of Natrium as having any read throughs for your production forecasts in the part of the Marcellus, where the Ohio Valley assets are also operating? Alan S. Armstrong: Yes, I'll take that. No, that is not in any way, shape or form the case. We're very confident in the volumes there and the drilling activity that continues there. I think the producers are fairly confident in the area and are happy to take the prices that they can get on some of the systems that are further to the east over there. And so time will tell if that will hold up in terms of those net backs. But today, I think they are confident that there's adequate takeaway there today. And again, that becomes crowded. Once it becomes crowded, the price will decline. But I think today, as evidenced by the interest, they're pretty comfortable with the current gas markets coming out of that space today. Bradley Olsen - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: That's really helpful. Another one on Transco operations. Looking at -- and I understand that most Transco revenue is firm, but there is a variable component that can move around quarter-to-quarter. And I know that this is a seasonally weaker quarter historically for Transco, but it looks as though there's -- that revenue or EBITDA per Mcf on Transco this quarter was kind of lower than it had been on a year-over-year and a quarter-over-quarter basis. Is that just because the nature of the volumes are just increasingly short haul? And so on a kind of per unit basis, you're seeing revenues decline or was there something operationally with Transco this quarter that made the results a little bit softer there? Frank J. Ferazzi: This is Frank Ferrazi. As you indicated, we do have some costs allocated interruptible transportation and we tend to -- if that can be impacted by changes in seasons. Obviously we're going to do better in the winter there than we're going to do in the summer. There really were no operational issues that occurred in the second quarter that would have resulted in lower earnings. Bradley Olsen - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: Okay, great. And then just one last one. I guess from an accounting perspective, why was it that the accelerated maintenance that you talked about in the Rockies, why did that show up in higher midstream OpEx as opposed to capital? And as a result of that accelerated maintenance, would it be reasonable to expect that maybe the run rate OpEx for the remainder of 2012 would be lower in the midstream segment?

Yes. That wasn't maintenance capital, it was just O&M that was accelerated. And mainly, we were moving forward from what would otherwise be spent in the third and fourth quarter. So we should see some moderation forward-looking for the rest of the year based on that work that we did.

Moving next to Craig Shere with Tuohy Brothers. Craig Shere - Tuohy Brothers Investment Research, Inc.: A couple of questions here. First, a follow-on to Kevin's Boreal question. Was that $9 million hit all expected just for packing the new line or was that inclusive of some impact from the Suncor plant being done? Alan S. Armstrong: No. That was just from the line pack. Craig Shere - Tuohy Brothers Investment Research, Inc.: And what was the impact from the Suncor plant? Alan S. Armstrong: Hang on just a second, let me pull that up. Craig Shere - Tuohy Brothers Investment Research, Inc.: While that's being looked for, on the prepared comments or the recorded comments, I was a little unclear on what the time frame was, the duration for the underwater ethylene supply contracts that kind of have margins at Geismar versus what the market opportunities really were in the first half? Alan S. Armstrong: Those basically timeout pretty well at the end of this year, a little bit of run into '13. But by the end of '13, there's not any residual impact from that. So mostly by the end of '12, most of those contracts runout. Craig Shere - Tuohy Brothers Investment Research, Inc.: Great. And then if you're still looking up that Boreal question from Suncor, I had one last follow up here.

Craig, I do have that if you want me to interject that there. Craig Shere - Tuohy Brothers Investment Research, Inc.: Sure, go ahead.

Yes. It looks like it's a little over $4 million for Q2 that was related that Suncor outage. Craig Shere - Tuohy Brothers Investment Research, Inc.: Okay. So the $9 million was naturally expected because you knew you had to finish the pipeline to fill it. The $4 million is the unexpected, is that a fair statement?

Yes, that is. And a part of that lapped into Q1 and then part into Q2. Craig Shere - Tuohy Brothers Investment Research, Inc.: Are now you're talking about the line packing?

I'm talking about the Suncor outage. They had 1 unit for about 15 days and another unit was operating about 75% load. So the $4 million is related just strictly to the Q2 outage and then the $9 million is isolated to just the impact the Boreal Pipeline. Craig Shere - Tuohy Brothers Investment Research, Inc.: Got you. And the last question, Alan, how do you avoid the issues regarding nonqualified income at PZ with a potential drop-down of Geismar. Because that seemed to be the logical thing all along, somehow that a contractor dropped down to make a true internal operating hedge rather than just a consolidated accounting hedge. But there's always this question of nonqualified income at the MLP. Did you find a way around that? Alan S. Armstrong: Well, I would just say that -- I would say we took it head-on and I would say that we're very confident in how we're handling that and time will tell in terms of what gets exposed there about what supports that confidence. Craig Shere - Tuohy Brothers Investment Research, Inc.: As far as details on any drop-down, I mean, how eminent do you think that could be? Donald R. Chappel: Craig, this is Don. I think we'd be working through the process with the WPZ complex committee and their advisers, probably expect the closing in the fourth quarter.

Moving on to Carl Kirst with BMO. Carl L. Kirst - BMO Capital Markets U.S.: This is actually just a follow-on to Craig's about the qualifying income and recognizing was only limited, maybe you can say. But I guess regardless of how this is approached, just since this is somewhat of a precedent. Will there be some type of private letter ruling or some clarification from the IRS that kind of sets it in stone? Alan S. Armstrong: Again, I would just say that we are very confident in how that's going to be treated and that's really all we want to say about it at this point. Donald R. Chappel: This is Don. I'd just add that again, we think that it's some information that provides a competitive advantage for us, so that's the reason that we're not more clear in terms of the basis for our confidence. Carl L. Kirst - BMO Capital Markets U.S.: Okay. That latter statement is very helpful, so I appreciate that. And maybe just a couple of follow-ups, one, going back to the accelerated maintenance that was done on the midstream side. Did that actually, in the third-party fractionator outage, did that have an impact on the equity sales volumes for the quarter? And if so, by how much?

Yes. It did. We had a total production related kind of directly to the bush and frac outage was about 25 million gallons. And of that, about 15 million was related to our own equity account. Carl L. Kirst - BMO Capital Markets U.S.: Okay. Then one other question just on Geismar, this just goes to the utilization, the 74% utilization kind of on par with second quarter last year, but down sequentially. Was that just normal maintenance for this time of year or was something else going on there?

Yes. We did in Q2 have a determined issue there that had us down, I believe it was 7 days. One of those days was actually in Q1, and then the remaining 6 days was in Q2. And we were, I think that was related to about 28 million pounds total being down about $24 a day. Carl L. Kirst - BMO Capital Markets U.S.: Okay. Yes, that would explain the difference. Great. And then last question, and this really is just Caiman, Ohio Valley, I guess, just trying to set the baseline for where we are today. Is it possible to break out what the volumes were for the second quarter?

Let me see, I've got the right-hand man looking that up right now. But I will say in general, Alan mentioned a little bit about what's going on there from a producer input standpoint. In general, I would say the volume situation has been very positive and we've got producers waiting on pipeline, waiting on infrastructure, results are looking very favorable. I think all of the movement that we've heard on volumes from producers has been to the upside, if anything. So the area and the quality of the reserves was fantastic it. Let's see, yes, for second quarter we're right around 182 Bbtu, and about 20 million gallons of NGL production. Carl L. Kirst - BMO Capital Markets U.S.: I apologize, can you repeat those numbers.

182 Bbtu per day. Carl L. Kirst - BMO Capital Markets U.S.: And you said 20 million gallons?

20 million gallons, yes. Alan S. Armstrong: And that's just 2 months of production.

Moving on to Steve Maresca with Morgan Stanley. Stephen J. Maresca - Morgan Stanley, Research Division: Just some follow-ups on the Geismar proposed drop-down you mentioned in the release of taking units back. Is the idea that this would potentially be solely WPZ units going up the WMB to fund this? Donald R. Chappel: Steve, this is Don. Yes, and that's really tax-driven. If we take cash, we'll pay taxes. And tax basis is fairly modest, so we're inclined to take the units to be tax efficient and have as little value loss to taxes as possible. Stephen J. Maresca - Morgan Stanley, Research Division: Okay. I appreciate that you haven't released individual numbers on Geismar's cash generating ability, but did you put a chart in there that shows ethylene produced and the margin. Is there something else to it other than that arithmetic for us to figure out? Alan S. Armstrong: Well, I would say that's the bulk of it. You also have propylene production and butadiene production as well. And so that and the operating costs are the other elements you'd have to get to, to see an [indiscernible] Stephen J. Maresca - Morgan Stanley, Research Division: Okay. Final thing on the Geismar. Is there a thought as to what -- right now you're forecasting 1.03 coverage next year at WPZ. Is there an idea of what this would take PZs coverage to where you'd like to see it after this? Donald R. Chappel: Steve, I don't think we want to put any numbers out. We're in discussions with the complex committee at this point. So I think as we reach that agreement with the complex committee, we'll announce the transaction and provide updated guidance for both WPZ and Williams at that time. Alan S. Armstrong: I would say, obviously we recognize that business is not a fee-based business. And so our coverage needs to be higher than, certainly higher than normal in terms of how that would impact. Stephen J. Maresca - Morgan Stanley, Research Division: Okay. And then you talked about, I think, an ethylene margin rebound is part of the '14 earnings going up. Can you talk just a little bit about what the thoughts are behind the drivers for that? Alan S. Armstrong: Sure. We certainly feel like that the U.S. continues to be the advantage in North America. In general, I would say, it continues to be the advantaged place to produce ethylene. And we see that demand continuing to come up on a global basis through the period. And so pretty confident in the general fundamentals around ethylene. And if you think about somebody trying to build ethylene capacity somewhere else in the face of this very low-cost natural gas, I think that drives our confidence and certainty we have a pretty good picture of what's going on in the ethylene capacity here in the U.S. Very fortunate to have Geismar on the front end of any these capacity expansions, but there's really not very much other coming on in the near term -- or sorry, in the near term to 2014. So we see a great promise coming on, a lot of NGL supplies coming on, but it just takes a while to build that cracking capacity to meet that increased demand that's coming on. And so that builds our confidence there. Stephen J. Maresca - Morgan Stanley, Research Division: Okay. Finally, on the proposed PDH facility. A couple of things, you talked about, I guess transporting, I think, the propylene to the U.S. Gulf Coast. How would that happen? And then is that going to be funded with -- is there enough cash on hand to fund all that?

Yes. That will be railed, is the plan. And I think our belief is that with our current international funds offshore accounts and the cash flow from the existing business, that is growing along with our ethylene project that, that should be fairly well self-contained. Alan S. Armstrong: We do rail, today, a tremendous amount of propylene out of Redwater already today. And so this would be just additive which is, again, a nice feature that a lot of the infrastructure in terms the storage of propylene and railing and loading of propylene, we already got all that in place. So this is just additive and I think that's why we feel very confident about us being the right builder of that PDH facility in Canada.

We've also got the BB splitter up there, which is going to help us with the products. We've also got a very unique situation with our sale to NOVA of the ethane/ethylene mix. And so those are advantages that we think we uniquely hold. And so it appears to be kind of an advantaged opportunity for us.

Moving on to Ted Durbin with Goldman Sachs. Theodore Durbin - Goldman Sachs Group Inc., Research Division: Sticking with the PDH unit here. Have you given any thought to actually contracting up the propylene volumes or do you want to kind of keep that price risk on the propylene side as well? Alan S. Armstrong: We're looking at kind of all of our options right now. I would say right now, our main focus is on scoping, getting some of the initial engineering work done and we're looking at all the options and certainly, this decision of the propylene is one of the big decisions that we'll be making before we sanction the project. But that's an ongoing exercise. Theodore Durbin - Goldman Sachs Group Inc., Research Division: Okay. And then I appreciate the slides on ethylene crack. It looks like you're forecasting in 2014 that you won't quite get to the industry benchmark. I'm just wondering what would cause you to be short of that, plus or minus to hit it or try to be short of it? Alan S. Armstrong: When you say industry benchmark, are you talking about the spot with the crack spread? Theodore Durbin - Goldman Sachs Group Inc., Research Division: Yes. That ethylene spread that you show in 2014, it looks like you realized margin might be short of that. I'm just wondering is there something with Geismar that you wouldn't hit the industry margin or is there just a difference in the definition there? Alan S. Armstrong: There are couple of things that work there. And one is that even though I think we flagged earlier that in early '13 we'll have an opportunity to re-contract almost our entire portfolio, we still have a legacy contract out there that won't be fully exposed to the spot market. So that's one piece of the story. I think the other piece of the story is just a little bit of conservatism that's built into how we're able to execute in terms of putting those spot contracts into place. And at times, there is some give-and-take between a true spot market deal and a term deal that's tied in the spot market. Theodore Durbin - Goldman Sachs Group Inc., Research Division: But your intention is to pretty much be spot, in other words, to not do term deals with Geismar? Alan S. Armstrong: Yes. Theodore Durbin - Goldman Sachs Group Inc., Research Division: And then just coming back a little bit to the questions on the ethylene margin. Do you care to share what your actual ethane price forecasts are that gets to that ethylene margin in 2014? Alan S. Armstrong: Yes. $0.55 a gallon.

Moving on to Holly Stewart with Howard Weil. Holly Stewart - Howard Weil Incorporated, Research Division: Lots of questions on Geismar this morning, so just maybe trying to tie the bow there. In the slides, you point out the shift in mix to spot pricing. Previously, we had talked about kind of a half based on fee, half based on exposure to the spread. I'm assuming kind of addressing Craig's question earlier by the end of 2012, we'll be all based on the spread. Is that how to think about? Alan S. Armstrong: Yes. I think that's accurate. Of course, a lot can happen between now and then. But certainly, our goal there will be balanced against our ethane exposure. Holly Stewart - Howard Weil Incorporated, Research Division: Okay. And then you kind of give the chart here. Can you just tell us what your margin was that you realized on the spread in 2Q?

Stand by, Holly. Alan S. Armstrong: That's $0.20. Holly Stewart - Howard Weil Incorporated, Research Division: Say that again, I'm sorry.

$0.20 balance. Holly Stewart - Howard Weil Incorporated, Research Division: $0.20, okay. Alan S. Armstrong: And that was down from $0.40 in the first quarter of '12. Holly Stewart - Howard Weil Incorporated, Research Division: $0.40 in 1Q, that's perfect. And then lastly...

Thinking about the portfolio mix, like Alan's referencing, the crack spread out there as opposed to our realized margins. So Q1 was $0.18 and 2Q was $0.20. That $0.40 which was first half '12, that's really what the broad market crack spread was. And so that's basically what we got built into our 2014 pricing is at that $0.40 level. Holly Stewart - Howard Weil Incorporated, Research Division: Okay. Perfect. And then last quarter, you gave some nice commentary on kind of the different rig counts that you were seeing across each of your areas. Is anything on the rig count side changed since last call that might impact things here moving throughout the year?

This is Rory. I think in general, that kind of step down in activity out West that we flag for you is still pretty consistent. I don't think there are any material changes to that level of activity. Holly Stewart - Howard Weil Incorporated, Research Division: Okay. Great. And then finally, just one kind of follow-up on the macro side of things. You're hearing commentary that most of those ethylene plants that were down for maintenance in the first half of the year are back up and running. Is there anything else that's kind of still weighing on that?

Yes. Right now, if you think about ethane supply and that's always a challenge to measure that accurately, but about 1 million barrels a day right now on the supply side, this is where we think it's at. All of the crackers are up and running now. Thank goodness. And that's about 1 million barrels a day of demand. So we see supply and demand very much in balance. I think in Q4, there are 2 crackers that are scheduled to go down temporarily. So that's all we see for the remainder of the year. So the situation should be a little more stable than what we saw in the first half.

Moving on to Sharon Lui with Wells Fargo. Sharon Lui - Wells Fargo Securities, LLC, Research Division: It looks like for your MC&O business, the guidance refers to a coverage of 1.3x. I guess Geismar is dropped down to WPZ level. Do you think that type of coverage on the cash flow is appropriate or are you comfortable with something a bit lower given the natural hedge? Donald R. Chappel: Sharon, I think you have to stay tuned for that, but clearly yes, it does sharply reduce ethane exposure or eliminates the long ethane position after the expansion of WPZ. So we certainly reduce that, but we'll have ethylene exposure and we'll need to make sure that coverage is sufficient to account for that. Again, if ethylene prices are very high, it is expected to have relatively high coverage on that part of the business. And that if ethylene prices are lower, we would expect less coverage just like our NGLs today. If you look at Slide #83, I think we tried to indicate that somewhat, but we'll be tuning that up as we go through discussions with the complex committee, as well as continue to look at our view of the forward market. Sharon Lui - Wells Fargo Securities, LLC, Research Division: Okay. And I guess also related to the Geismar drop-down, should we just assume that it would be structured so that WPZ would not be paying, I guess, taxes on that cash flow? Donald R. Chappel: Yes. Sharon Lui - Wells Fargo Securities, LLC, Research Division: Okay. And then, I guess on the PDH potential project, do you have like a potential in-service timing of that facility, the 2015 project? Alan S. Armstrong: Yes. I don't think we've released anything on that yet. And it is, as we noted, kind of in the scoping phase right now. So that's probably something we'll be able to give a little more color on in the coming quarters. But I think right now it's a little preliminary to drive a stake in the ground. Sharon Lui - Wells Fargo Securities, LLC, Research Division: Okay. And then I guess in terms of feeling comfortable to proceed with that comp -- with that project, would you be looking to secure minimum volume commitments or like a fixed propylene margin? Alan S. Armstrong: Yes. I think that kind of gets back to the earlier answer that I gave around disposition of propylene and we're looking at all the options. Of course, if you do lock something in fixed, you're probably giving away some upside. And those are decisions that we'll be making as the projects get fully bedded and pulled together. So we should have a good line of sight on that by the time that project is sanctioned. Sharon Lui - Wells Fargo Securities, LLC, Research Division: Okay. Great. And then I guess the last question, in terms of the Leidy announcement, has that CapEx been included in your budget yet? Donald R. Chappel: Sharon, it has not. So when we come forward again with guidance, we'll update to include that, assuming that the open season is concluded. And we've got all the contracts tied down so we know the size of that.

And moving on to the Becca Followill with U.S. Capital Advisers. Rebecca Followill - U.S. Capital Advisors LLC, Research Division: Sorry, still one more question on Geismar. I respect your desire for the competitive advantage but when you do the drop since it is very significant, will you provide investors the basis for why you think that you will not pay taxes on the income. Donald R. Chappel: Becca, I think you have to stay tuned for that. I think we'll have to see if that's something that is required or we feel is something that we need to author. Again, I think we believe that we have something that is unique at this point and we want to make sure we take full advantage of it without necessarily offering the roadmap for others. Rebecca Followill - U.S. Capital Advisors LLC, Research Division: Okay. And then on the PDH facility, as I understand that you'll need about 20,000 barrels a day or 20 million barrels a day of propane, is that correct? And you would have 7,000. So where will the incremental come from to source that PDH facility? Alan S. Armstrong: Well, as you're probably aware from previous calls, we do have other projects we’re working on out there. So over time we do expect our equity propane to increase. But there are plenty of places between now and then to buy propane in Canada. So we don't see the supply side as any particular challenge for us right now, and we're very comfortable with that. Whether we're going out on the open market and buying it or whether we’re just building it over time with our internal equity barrels. Rebecca Followill - U.S. Capital Advisors LLC, Research Division: And then the rail cost to get it down to the Gulf Coast, what kind of delta in propane prices do you need relative to the Gulf Coast in order to make up for that $0.05 a pound rail cost. Alan S. Armstrong: I don’t think we want to get into, probably, that level of detail yet. We've got ongoing analysis on that. And I would say let's leave that for future call, but we do think the situation is very favorable and are supportive of that project. But we have some continued analysis that is ongoing on that. Rebecca Followill - U.S. Capital Advisors LLC, Research Division: And then finally on Marcellus. If my memory serves me well, you guys were expecting gathered volumes from the Susquehanna Hub of about 1 Bcf a day this year and Laurel Mountain about 250 million a day. Is that still the case? Alan S. Armstrong: Those are generally in the neighborhood. I think on Laurel Mountain, we're probably already over that. I think we're over at 280, if I'm not mistaken, on Laurel Mountain. And I think our target on Susquehanna Hub is just shy of 1 Bcf a day by the end of the year. Rebecca Followill - U.S. Capital Advisors LLC, Research Division: And where are you guys now on Susquehanna? Alan S. Armstrong: Let's see. Hang on just a second, Becca, let me just track that down.

I can get it offline if you want. I'll just follow-up offline to get that one. Alan S. Armstrong: All right.

And next we'll hear from Nathan Copicar [ph] from Viking Global Investors.

Actually, Igan [ph]. I had a similar question about the Geismar cracker, so we can move on.

And there are no further questions at this time. I'd like to turn things back over to Mr. Armstrong for closing remarks. Alan S. Armstrong: Great. Well, thank you again for joining us. And we look forward to continuing to share our growth with you in the future. Thanks for your interest.

And this does conclude our conference call for today. We'd like to thank you for your participation.