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Williams Companies (NYSE:WMB)

Q4 2012 Earnings Call

February 21, 2013 9:30 am ET

Executives

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

Donald R. Chappel - Chief Financial Officer and Senior Vice President

Randall L. Barnard - Senior Vice President of Gas Pipeline

Francis E. Billings - Senior Vice President of Northeastern G&P Operations

Randy M. Newcomer - Acting Senior Vice President of Ngl and Petchem Services

Frank J. Ferazzi - Vice President, Director and Member of Management Committee

Analysts

Christine Cho - Barclays Capital, Research Division

Holly Stewart - Howard Weil Incorporated, Research Division

Faisel Khan - Citigroup Inc, Research Division

Gary Stromberg - Barclays Capital, Research Division

Bradley Olsen - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division

Theodore Durbin - Goldman Sachs Group Inc., Research Division

Carl L. Kirst - BMO Capital Markets U.S.

Craig Shere - Tuohy Brothers Investment Research, Inc.

Sharon Lui - Wells Fargo Securities, LLC, Research Division

TJ Schultz - RBC Capital Markets, LLC, Research Division

Rebecca Followill - U.S. Capital Advisors LLC, Research Division

Selman Akyol - Stifel, Nicolaus & Co., Inc., Research Division

Operator

Good day, everyone, and welcome to the Williams and Williams Partners Fourth Quarter 2012 Earnings Conference Call. Today's conference 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.

John Porter

Thank you, Glynne. Good morning, and welcome. As always, we thank you for your interest in Williams and Williams Partners.

Yesterday afternoon, we released our financial results and posted several important items on our websites, williams.com and williamslp.com. These items include yesterday's press releases with related schedules and the accompanying Analyst Packages; a presentation discussing these results, guidance updates and growth opportunities with related audio commentary from our President and CEO, Alan Armstrong; and an update to our data books, which contain detailed information regarding various aspects of our business.

This morning, Alan will make a few comments, and then we will open the discussion up for Q&A. Rory Miller is here from our Midstream business; Frank Ferazzi 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 our data books, 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's been reconciled back to Generally Accepted Accounting Principles. Those reconciliation schedules appear at the back of the presentation materials.

So with that, I'll turn it over to Alan Armstrong.

Alan S. Armstrong

Great. Thank you, John, and thanks to all of you on the phone and webcast, who have joined us this morning. I'm certainly looking forward to your questions. Before we open up the phone lines, I want to take the opportunity to briefly touch on a few key themes for the Williams and Williams Partners investment story. In short, we are rewarding investors now with strong dividend and cash distribution growth through the guidance period and we are expanding our business to create continuing value growth in a very resilient future dividend and distribution growth.

First, let's take a look at our fourth quarter performance. We turned in solid results in line with our third quarter guidance, despite a natural gas liquids margin environment that dropped even faster than we expected. To give some scale to that drop and to the headwinds we were facing, it's important to understand that our fourth quarter NGL margins were down 46% from the prior year, margins took another 8% hit from what we thought were low third quarter levels; and from a financial perspective, our fourth quarter NGL margins were off about $75 million compared just to the midpoint of the forecast that we shared at the third quarter results.

Much of this didn't show up in the unit margin because we didn't produce ethane when it was in the negative margin territory. So what you saw there is a little bit higher unit margin than you might have expected but lower volumes as a result of that ethane rejection. We provide some detail in our slides regarding the positions that allowed us to overcome these very low NGL margins but here are some of the highlights there. First, we're successfully growing our fee-based revenues in this business for Williams Partners. In the Midstream segment, we generated fourth quarter fee-based revenues 18% higher than a year ago. For both the Midstream and gas pipeline business, we generated fee-based revenues that were up 5% from the third quarter to the fourth quarter. And second, we continue to benefit from the natural hedge against ethane exposure that our Olefins business creates. Williams Partners benefited in the last 2 months of 2012 with the acquisition of the Olefins business and there is even greater benefit for WPZ ahead with the well-timed expansion of the Geismar facility expected in service later this year.

This combination supports our ability to reward investors with strong growth in cash dividends and cash distributions. We are reaffirming our guidance at midpoint to grow Williams' cash dividend by some 20% with this year and -- for both this year and next year. And for Williams Partners, we are reaffirming our guidance at midpoint to increase the cash distributions we pay unitholders by approximately 9% in both '13 and '14.

When we add our large platform of growth capital projects and the rapid growth in cash distributions we're expecting from a recent investment in Access Midstream, what you'll have is a value-creation engine that is powerful, durable and resilient and will continue to grow for many years to come.

In our earnings announcements yesterday afternoon, you also saw that we are lowering our 2013 and '14 earnings and cash flow guidance. We expect the growth in our fee-based business will partially offset the effect of sharply lower ethane and propane prices and ethylene prices in '14. And we will see Williams Partners benefiting from the late 2012 acquisition of Williams' Olefins business and a significant expansion of our Geismar facility in the fourth quarter. And I also would remind you that we have quite a bit of collared contracts that are expiring here in the first quarter of '13 and of course, those allow us to get even better exposed to the weak ethane price and continue our short position at Geismar there on ethane.

Our coverage at WPZ is certainly being impacted by the heavy load of investing about $12 billion in growth capital during the 3-year period from '12 through '14. But we're deploying that capital towards a vast array of great growth projects across our operating areas from the Marcellus and Utica Shales in Canada to the Eastern Seaboard and the Deepwater Gulf of Mexico. These are projects that we know and understand, many are well into the construction phase and the essential ingredient in these value-creating projects is largely within our reach, it's our execution.

If I can direct you, for future reference, to Slide 13 in the quarterly presentation materials that are posted on our websites, you'll see here exactly where we are spending that $12 billion and when exactly it begins to contribute to our cash flows. I think you'll agree that these projects are very strategic, they are large scale and they move us even more significantly toward a business mix dominated by a revenue stream that can support strong continued growth in dividends and distributions, and these growth investments largely start contributing in meaningful value in 2015 and beyond. So there is much good yet to come with these major strategic investments that we continue to invest heavily into.

This natural gas infrastructure super cycle is creating tremendous opportunities for North America, our industry and importantly, for Williams and Williams Partners. We are aggressively pursuing and executing on these opportunities to deliver shareholder value for years to come and we remain committed to the idea that there is a lot of value associated with this large-scale infrastructure.

Now let's open the phone lines and I'll let others on our executive leadership team help answer your questions this morning.

Question-and-Answer Session

Operator

[Operator Instructions] And we'll take our first question from Christine Cho with Barclays.

Christine Cho - Barclays Capital, Research Division

How are you guys planning to fund the coverage shortfall at WPZ in '13? Is it going to be with debt or are you going to do IDR waivers? And can you just remind me what has been disclosed to date for IDR waivers, is it $105 million in '13 and $16 million in '14?

Donald R. Chappel

Christine, this is Don Chappel. In terms of the exact funding plan, we've not disclosed that but we do have a lot of flexibility around that. It will be a combination of debt and equity. Certainly, Williams is well positioned to support WPZ in many ways. But we have no additional IDR waivers contemplated at this time. The IDR waivers that are currently have been granted are very modest and I think you mentioned those numbers and they just go out for 2 years.

Christine Cho - Barclays Capital, Research Division

Okay. Can you just talk about what your plans are for the extra cash at WMB otherwise? Especially with the...

Donald R. Chappel

We have a number of investment opportunities in the NGL pipeline, Petchem pipeline space, where Alan has laid out our strategy earlier about building that business and Alan can speak to that again. So that's an opportunity. And the balance, we have some flexibility. And so we'll look at the facts and circumstances to determine what the best use of that excess cash is.

Christine Cho - Barclays Capital, Research Division

Okay. Can you give a little more detail about how the investment in ACMP brought your cash taxes to 0 in '13 and 10% in '14?

Donald R. Chappel

Sure. Our investment -- again, there is an allocation for tax purposes. The inside basis at ACMP did not change. Our investment was allocated between hard assets and intangibles. In terms of the hard assets, they enjoy accelerated depreciation. And the intangibles enjoy straight line depreciation. But it's really the depreciation of that investment that's creating a very large tax deduction for us, which, over the next few years, will significantly lower our tax rate. In addition, the January '13 fiscal cliff legislation included an extension of bonus depreciation. And given the large amount of capital that we continue to invest, that's pretty significant as well.

Christine Cho - Barclays Capital, Research Division

Okay. And then, I noticed that your Geismar expansion, the start date was pushed back by a quarter. Can you talk about what's going on there?

Alan S. Armstrong

I'll address that now and I'll ask, maybe Rory, to hit a little harder on that. We really didn't push it back as much as -- that's not really the cause of the drop in volumes there. But we are giving ourselves some room for the tie-ins and some expanded tie-in work on there. So I would just say, we're being fairly conservative and knowing that when you go to start up a facility like that, often, there is bobbles and interruptions as you try to do that, and we're planning for that rather than explaining that later. So that's really the purpose for that, but really, the startup is still scheduled right into the October time frame.

Christine Cho - Barclays Capital, Research Division

Okay. And then, you talked about how you started to recently see ethane rejection during the fourth quarter. How much did you reject in 4Q? And then, also, you've talked about how you're assuming that all your equity volumes are going to be rejected in the first quarter of '13, what does your guidance assume for the rest of the year?

Alan S. Armstrong

Yes, let me take a look at that on fourth quarter. I know in the first quarter of '13, we've got rejection planned for the entire period. But if you can hang on just a second here. The fourth quarter, yes, looks like we had about 2 to 3 weeks in December of ethane rejection.

Donald R. Chappel

This is Don Chappel, just related to that, I'd just refer you to Slide #8 in our deck that illustrates the declining ethane margin with lower frac spreads but the widening crack margin at Geismar. And I'd note there that at our assumed about $0.06 of margin there, that equates to about -- I think, it's $27 million of remaining ethane margins. So we have very little ethane exposure left. And in fact, as ethane prices go lower, that $27 million does not include the benefit of Geismar's margins expanding. So if you look at the sensitivities in our data book, you can get some sense of the combined effect. But again, there is only $27 million of total ethane margin assumed in 2013. In our data book, we have the same slide for 2014, and you'll see with the Geismar expansion, while the ethane margin is assumed to be a bit wider, the Geismar expansion completely mitigates that. And I think I've mentioned to some investors before, if ethane prices go to the point that we are in full rejection and go even lower, then, we've taken all the pain on the ethane margin and then, Geismar starts to see even greater gains as its costs go down.

Christine Cho - Barclays Capital, Research Division

Right. And then, the last question for me. This is more of an accounting question. But how are you calculating the adjusted segment profit for Access Midstream Partners? Is that just net income that you expect at ACMP and multiply it by your ownership? It just seems a little light. I'm just trying to figure out, do the Class C units participate in earnings but not the Class B, is that how that works?

Donald R. Chappel

Our proportionate share of their equity earnings and then, again, our purchase price was allocated, in part, to intangibles. Some of the intangibles are contracts and we have depreciation or amortization of that. That totaled about $65 million in both '13 and '14. So [indiscernible] earnings are reduced by that amortization expense and you can see from a cash flow standpoint if you add that back, you get to a segment profit plus DD&A or an EBITDA number. Our pro rata share, it's $65 million higher than the earnings. So I think we are on, in terms of our share from more of a cash flow perspective, segment profit plus DD&A, so that's not actually the distribution, but is $103 million in '13, $160 million in '14.

Operator

We'll take our next question from Holly Stewart with Howard Weil.

Holly Stewart - Howard Weil Incorporated, Research Division

Just a couple of quick questions. First, maybe, start with the macro. Can you just give us a little color on what you're seeing right now in the ethane and propane markets? And anything maybe nearer term that could drive pricing? You probably know better than most that most of the E&Ps right now are forecasting ethane rejection for most of 2013.

Alan S. Armstrong

Yes, I think the market on the ethane side continues to struggle to balance itself with a lot of new projects coming on, continuing to come on, major NGL pipelines, major fractionators continuing to come on that will continue to provide plenty of supply into a market that is going to be slow to grow. I think, obviously, with our expansion and other expansions, we'll see a little bit of growth this year. But in -- it's probably a couple years out before we really see the market try to catch up with all that supply on the ethane side. So we really don't see a lot of upside. For us, the best thing that can happen for us is probably volatility here in '13. And then, a weak -- a very weak ethane price in '14. And if that happens, then, we'll have some upside to what we have forecasted here for '13 and '14. On the propane side, I would say the fundamentals are a little more positive there. Certainly, a lot of cracking going on right now. Propane is at a price that is encouraging. A lot of cracking of propane and our crackers running rich and probably any other light-end crackers running rich and running propane in it right now as much as they can because propylene prices are so high that, that's making that a favored feedstock. So that, combined with hopefully some larger export facilities coming on later this year, I think that will start to balance the fundamentals a little better on propane. So I would say a little bit of upside to propane, but still that market has a lot of supply still available in it. I would say this, that there is a lot of propane that is on the market that can be trucked and railed and so forth, that is already in the market supply versus ethane that is being rejected and not on the supply scene. Said another way, when a lot of these big NGL pipelines come online, they're going to have the capacity for ethane but a lot of that propane is already getting captured in local fractionators and being trucked and railed. So it won't be as large of an incremental supply into the market when that infrastructure comes online.

Holly Stewart - Howard Weil Incorporated, Research Division

Okay. And then, maybe just sticking with propane. What's the latest on the PDH project?

Alan S. Armstrong

We're very excited about that project. A lot of things coming together quickly on it. And we've been -- we've contracted with an engineering firm to do a feed study on it. And I would say, we look forward to accelerating the decision on that project with continued strong fundamentals for low propane prices in Canada, with very little outlet for the propane out of Canada and as well, a lot of interest in the propylene supplies that we already have. As you recall, from our Redwater fractionator and splitter, we already have a pretty large propylene supply there, this would add to that and starts to get to a level that it could attract derivative investment downstream, which would really be a homerun for us because it would take that rail -- some of that rail cost out that we're investing in today into the Gulf Coast.

Holly Stewart - Howard Weil Incorporated, Research Division

So maybe a decision by year-end?

Alan S. Armstrong

Oh, I would say, it would be quite a bit sooner than that.

Holly Stewart - Howard Weil Incorporated, Research Division

Okay, great. And then, I appreciate the additional Marcellus-related detail on your systems and expansion plans. I guess, bigger picture, what are the production bottlenecks today?

Alan S. Armstrong

Yes. I would say that for the most part, it is around liquids, particularly, for instance, in the wet Marcellus and in the West Virginia area. That production has a lot more condensate and is a lot richer than really anybody, I think, expected -- certainly, we expected it, anyway, speaking for ourselves and I think for the producers as well. And so a lot of the facilities there really haven't been designed to be able to handle all those liquids. So there's a lot of redo work going on up there and there is a lot of production that is sitting, waiting behind infrastructure, on both our facilities and other people's facilities as well. And so we're working hard to overcome that. But I can tell you that we have a lot of frustrated producers sitting behind our production. And obviously, we're anxious to get things remedied and bring it online as well. But there is a significant amount of production that is curtailed, either by a lack of connection or in some cases, just unreliable operations where the pipelines continue to fill up with liquids and shut in the gas production.

Holly Stewart - Howard Weil Incorporated, Research Division

And is there more volume on a particular system of yours that's backed up?

Alan S. Armstrong

Yes. The Ohio Valley Midstream is really the one that's curtailed, the other systems are running fairly well. We have had a few struggles in getting the Laser pipeline up and running. And so we've had a little bit of curtailed volume in the Northeast. But as you can see, it's not curtailing it a lot because you can see how fast the volumes have come up, 80% year-on-year there. So hard to say it's heavily curtailed, but there is some curtailment there on the north end of the Laser system.

Holly Stewart - Howard Weil Incorporated, Research Division

Okay. And then, one last one, I promise. Just a cleanup. What was your 4Q ethylene cracker spread? And then, the full year as well, that you realized?

Alan S. Armstrong

Randy, you want to take that?

Randall L. Barnard

Just a moment, I'll look that up so we can come back with a...

Alan S. Armstrong

Holly, was the question, what our ethylene crack spread was at Geismar?

Holly Stewart - Howard Weil Incorporated, Research Division

Yes, for 4Q and then full year, if you have got it. And that's it for me, so you can pass it on.

Randall L. Barnard

Full year was $0.40. I don't know what -- just the quarter was, but I think the full year spread was $0.40.

Operator

We'll take our next question from Faisel Khan with Citi.

Faisel Khan - Citigroup Inc, Research Division

I understand all the issues surrounding lower commodity prices and I appreciate the comments last night in your podcast on the constraints you're having in the Marcellus. I was wondering if you could quantify some of those constraints. It seems like if I -- if we look at your presentations in the past versus the presentation you put out last night, that your volume assumptions for 2013 out of the Marcellus and Utica, are lower than what you guys had anticipated previously when you looked at these assets last year. Can you quantify for us exactly what's going on? And then, I have a follow-up question to that.

Alan S. Armstrong

Sure. I'll ask Frank Billings to take that question.

Francis E. Billings

Yes, this is Frank Billings. I'd say, if we were going to quantify today the volume, kind of, curtailment issues that we're having in the Ohio Valley, I could put that at about 100 million to 150 million a day of volume that we have, that the producers could be producing into our gathering systems. For the forecast period, we're moving our volumes back to address kind of both the operating issues that were experienced in OVM and then, certain producers drilling investment to better align their drilling dollars with getting the best net backs for commodities produced. So I think that's the things driving our volume forecast today in that part of the Northeast.

Faisel Khan - Citigroup Inc, Research Division

If I'm looking at your own '13 and '14 guidance for volumes, you'd say that those numbers have been curtailed by about 150 a day?

Francis E. Billings

Well, I think that's what's hitting us today. Our expectation is that we would be getting those volumes back online. But we have some operational things we need to solve and some asset modifications that we have to make at some of the central receipt points in the field so that we can get that volume flowing. But that volume's available to us today, we just have to get some of our assets better situated to handle the condensate volumes and get the -- so that we can get the production flowing consistently.

Alan S. Armstrong

Yes. I would say in general there, we are very encouraged with the resource and the value it can deliver to the producers. But there are a lot of infrastructure constraints, including both the upstream side and as well, the downstream market side. So us continuing to develop infrastructure for the NGL market outlets and the condensate outlets, is critical to the success of the producers. And so I think, even though there's already this amount of production sitting and waiting, I don't think they'll continue to drill so robustly if we don't start to provide the market outlets up there in an unconstrained way, and we're certainly working very rapidly on that. So a lot of great opportunity. The good news is, it's a great resource. And I would just say, it's even better than most people thought and therefore, it is requiring some -- pretty rapid expansions on the market outlets and the upstream infrastructure.

Faisel Khan - Citigroup Inc, Research Division

Okay. And Alan, do you worry about basis kind of narrowing in the Marcellus and Columbia pool area? It seems like we've basically gotten close to parity to Hub and in some situations, it looks like we actually moved into a negative basis in that region? Do you worry about that and that kind of crimping production volume growth?

Alan S. Armstrong

Well, I think what you'll see -- I think it will be hard to see what the actual basis differential. But the answer to your question is yes, we've got to continue to open up market outlets for both the gas and the liquids. But I would tell you right now probably, the liquids is the bigger driver on that. But I think what you really are going to see are kind of inter-regional spikes. And so it's not just what you could see as a East Dominion price or a Columbia price. It's really going to boil down to inter-regional prices and what pipes people are actually getting paid. Now if they have firm transport out of the area and they get into Zone 6 on Transco, that's a beautiful thing right now for somebody, but obviously, that capacity is limited. And so I would just say, I think it's very, very spotty up there. And I don't think those basis differentials really tell us the whole story for what producers are getting for their gas right now.

Faisel Khan - Citigroup Inc, Research Division

Okay. And then, on the Western volumes. Is anything changed in your guidance or expectations in the West for this year versus what you had expected previously?

Alan S. Armstrong

Yes, pretty limited change on that, I believe, and continued -- I would say the one thing that I'm aware of that's changed is -- and certainly embedded in our guidance at this point though -- is we did have a lot of production froze off in the first quarter, not from our facilities, for the most part, but certainly producer freeze off in the San Juan Basin and some in the Wamsutter area and so we certainly saw some impact here in the first quarter on fee-based volumes there.

Faisel Khan - Citigroup Inc, Research Division

Okay. And then, last question for me. On the quarterly comments that you have in your press release, you talked about earnings being impacted by increased cost and lower NGL margins. Can you just give us an idea of what you're talking about, what you mean by increased costs?

Alan S. Armstrong

Well, certainly, getting all these businesses started up is a heavy load, developing a lot of these projects is a heavy load. So for instance, you'll see a little spike in cost in Canada, for instance, and a lot of that of course, is in developing a project like a PDH project. And so we've got a lot of upfront development expenses. You'll notice that we're pretty conservative how we book that. You'll notice in the fourth quarter, in the gas pipeline segment, we took a $19 million reduction in expense that basically was expenses that we had on capital projects earlier that we don't capitalize until we know that project's going to come through. And so in other words, we expensed those and hold them in an account until we're sure the project's approved and permitted. And so that's where some of that kind of expense is from. So when we've got a big, heavy capital budget like we have right now, a lot of the expenses in developing those projects weigh heavy against our expense line until those projects are capitalized.

Gary Stromberg - Barclays Capital, Research Division

And would you say that those higher expenses are running through your numbers right now are higher than what you guys had previously envisioned in your last guidance?

Alan S. Armstrong

I don't think there's too much more than what was in the last guidance, maybe, on the PDH project. But again, if we approve that this year, then that expense gets capitalized moving forward, so...

Donald R. Chappel

Just to be clear, the phenomenon that Alan mentioned in the fourth quarter is unique to our regulated gas pipeline business where, in that business, you expense it until you have a probable asset. And then, once it becomes probable, you can actually capitalize previously expensed projects. In the nonregulated business, you expense it and then, when you have a probable project, you expense going forward. But you can't go back and, call it, reclaim what you previously expensed.

Operator

We'll go next to Bradley Olsen with Tudor, Pickering.

Bradley Olsen - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division

Quick question on -- and I realize that it's a similar question to one that's been asked already. But when you talk about the volume impacts, the limited volume impacts between the guidance provided on the third quarter call and the guidance provided for the fourth quarter. Can you quantify, in terms of either segment profit or EBITDA, the expected impact from volumetric declines, either in the Western or the Eastern portions of the Midstream business on segment profit or EBITDA in '13 and '14?

Alan S. Armstrong

Yes. I think in the -- I think the 150 or so that Frank talked about along with some other small things, I think it's about $85 million, maybe $80 million to $120 million in total there is about what's in there.

Bradley Olsen - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division

Okay, great. And one of the, I guess, notes in the presentation when you announced the Access transaction and mentioned again in your fourth quarter materials is the potential NGL pipeline project out of the Marcellus. And I guess, I'd be interested in your thoughts about how a heavy NGL pipeline out of the Northeast might potentially impact demand for local fractionation? And to the extent that a pipeline might reduce the demand for local, kind of, Northeast-sided fractionation, how a potential pipeline project maybe underwritten by Chesapeake volumes, would impact your plans for the development of the Caiman or the Ohio Valley Midstream assets?

Alan S. Armstrong

Yes, that is an excellent question. And I'll tell you, we have a very good vantage point, as you can imagine, given our investment in ACMP and our investment in Blue Racer. We have a very good vantage point up there right now around the degree of fractionation and the degree of liquids that's available from this area. And I would just tell you, I don't think that local fractionation is the answer up here. It is certainly going to overwhelm these markets and something large-scale is going to need to be built. And even, frankly, as it supports an ethylene cracker that Shell has announced and others have talked about, that also -- having a big Raw Make line provides a lot of flexibility in terms of ethane access back and forth between those markets. And so we think that something definitely needs to be done there, and we're working very hard on that. You heard Don mention earlier when asked about what we were going to do with all the extra cash at WMB, and based on both continued cash distributions as well as -- I think, when you do the math on it, you'll see there's quite a bit of extra cash distribution there, particularly in '13 and '14 given the tax rate and the performance in Canada. And so that is a very interesting place for us right now and I'll tell you, we have teams working that very hard and it's not as simple as just building a Raw Make pipeline into the Gulf Coast. There's a tremendous amount of issues about where you land that product and having the distribution network to distribute that product into the market and into big market outlets as we go forward. And so I think, if it was just as simple as just a Raw Make pipeline, we'd probably be past that at this point. But there's quite a bit of work we're doing on the distribution and storage end.

Bradley Olsen - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division

Got it. And given your comments that fractionation will likely overwhelm local demand in the Northeast, does that make your Ohio Valley development more biased to focusing on just de-ethanization opportunities or maybe less focused on the fractionation and more focused on the gathering and processing side of things?

Francis E. Billings

This is Frank Billings. I'd say, it's a very good question. I think what we see relative to your fractionation investment is that Williams will still have the opportunity to make those fractionation investments. I think what we're really evaluating is the market location for those fractionation investments. The producers that we have behind our OVM assets are going to be looking for a portfolio of markets to get into. And I think we are well-positioned to provide local market opportunities for those producers that want to have access to those markets but then, I think we're also going to be able to provide Gulf Coast markets and Gulf Coast access. So we're trying to position the producers such that they can maximize the value of their net back, and we feel like we'll still be able to make those investments, it may just be in different markets. We are looking at -- behind OVM, and we think in this market place in the Northeast, we think there's opportunities to have some customized solutions or customized infrastructure investments that allow Shell and others that are looking at chemical expansions to have the ethane that they need and give them ethane supplies certainty so they can make their investments. And then we're looking at producers in Canada that want to have the condensates. So we're looking at ways to consolidate our commodities such that they can have access to those. And then, obviously, the local market, we'll look at -- to propanize our investments to the extent that the propanization option makes sense. But with access to the Gulf Coast, you're going to see -- you're going to start to see those different commodities being sold into those markets based on the best net back at that time. And I think what we're doing with the NGL infrastructure is providing the best opportunities for our producers. And we think that's advantageous for them long-term, but it also, I think, it allows for us to place some pretty strategic investments in that area, as well as the Gulf Coast.

Bradley Olsen - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division

Great. And just one last question for me. Given the fact that you guys have made moves in, say, Western Canada to take an area that's long propane and create your own solution to that with the PDH facility. When you look at the Northeast, really, Williams is pretty uniquely positioned in the sense that you are probably the only operator, either midstream or upstream up there, who's got the know-how, who's got the access to liquids volumes on the upstream side, as well as the know-how to execute an olefins or petrochemical project. Given the fact that, I'd say, the noises out of Shell, it sounds like they're probably a little bit more slow-moving and conservative than folks who are long ethane producers, who are long ethane in the Northeast would like. Isn't there an opportunity for Williams to get involved on the petrochemical side, and maybe preempt a third-party petrochemical project by building your own or JV-ing with one of those companies?

Alan S. Armstrong

Yes. I would just say, first of all, our focus on the petchem side is to continue to provide market outlet for both our product and for our producers' product and not to go headlong into the petrochemical business. And so I think it's always important to remember that, that we see that as a great hedge to our business, and we think it's important -- an important part of a midstream company's role today with all the independent producers that we have, to develop the infrastructure and the market outlets. And so while 20 years ago, you would've seen the majors developing all of that infrastructure and all of that market outlet ahead -- or in concert with developing a big resource, we think it's the role today of the major midstream players to do that. And so it's not out of the question, but I would just tell you that we have looked at it and looked at it, and we think all of the investment required in storage, particularly underground storage -- which as you can imagine, is a challenge in the Northeast -- and all of the derivative market for all the product that's already interconnected in the Gulf Coast, is quite a bit to overcome. And so we certainly aren't the chemical players that Shell Chemical is and certainly, wouldn't doubt their understanding of that market. But from our standpoint, we'd have to get way into a lot of other derivative markets and so forth to overcome that. And so for us, we think the simplest way is to get some of that product into markets that are expanding. And frankly, we look forward to working with Shell to help provide supplies -- as that is another market outlet as well, and we certainly intend to be connected with that if they go forward with that project.

Operator

And we'll go next to Ted Durbin with Goldman Sachs.

Theodore Durbin - Goldman Sachs Group Inc., Research Division

I want to come back to this question on the use of cash at WMB. And if you look at, I guess, Page 83 of the data book, you've got about $2.32 of cash flow you're going to generate even before the Canadian operations, but paying out $1.75. If I just kind of play back what I've heard, it sounds like your preference is to reinvest that excess cash flow into infrastructure rather than paying it out, maybe even, say, a special dividend or whatnot? Maybe you can just walk us through how you're thinking about that excess cash flow?

Donald R. Chappel

Ted, this is Don. Yes, I think we would prefer to reinvest it. We think that it's certainly, in terms of a dividend -- to increase the dividend on the back of accelerated depreciation with knowledge that the rate's going to go up in a couple of years, is really not that sustainable. Obviously, we expect to have much higher cash flows in a couple of years but nonetheless, just with the opportunity set that we see in front of us, I think we've talked a lot about -- Alan just put a voice to the opportunities we see around the NGL side of the business. We think that, that capital is -- could be strategically invested at very attractive rates of return. And we think that will really provide greater value for investors long-term.

Theodore Durbin - Goldman Sachs Group Inc., Research Division

Okay, great. Next question was just on the WPZ and the cash distribution. I mean, we are forecasting sort of just over 1x in 2014 and you made, I think, a comment in the press release about getting back to normal levels. I mean, how are you seeing where you want normal levels for coverage to be, understanding that we've got sort of weaker propane prices and NGL margins and whatnot, but I'm just trying to figure out where we ought to think about as a normalized coverage ratio target?

Donald R. Chappel

I would comment that we would like to see the coverage at or above 1 over an extended period of time. I'll remind you over 2010, 2011, we were operating at kind of 1.3x, 1.4x coverage. So if you take the 2 very strong years and then, if you take '12 and our current guidance on '13, you still end way above 1. So again, I think there will be ups and downs in coverage. As you'll recall, when we had coverage up in the 1.3x, 1.4x range, a lot of investors and analysts were suggesting that we should raise the distribution and we said it's high because margins are high and we want to be in a position that when margins roll back -- and they will, because they always do and then they'll go back up -- that we're not under too much stress or strain. So we really look at it on a longer-term basis. So I think longer-term, we'd like to be 1 or better. And if we are better than 1, we're pretty happy about that.

Alan S. Armstrong

And I would add to that. It's certainly -- if we saw this as a business that wasn't growing and we had that kind of coverage, that would be one thing. But we certainly see it transitory in nature, and we certainly put a lot of equity into this business and funding a lot of this cash flow that's very -- that's yet to come on in terms of driving our distribution. And so I think we feel very good about where we are and as Don said, we're -- we really look to the long-term. But I think to answer your question, we certainly, if we were in a steady state kind of environment, we would want to be in the 1x to 1.10x range if we were in a steady state environment.

Donald R. Chappel

And certainly, our business mix will be a factor of that. As you know, we are moving more and more to a fee-based portfolio and as well, access is entirely fee-based, and as the cash distributions back to Williams grow off Access, that will further shift us toward fee. And then it's a question of what kind of margins we enjoy. If we're in a low-margin cycle, the coverage will be tighter and if we're in a high-margin cycle, it'll be more robust. But I think the business mix and you have to think about Access as a contributor to that as well.

Theodore Durbin - Goldman Sachs Group Inc., Research Division

Great. And then, last one, just small one for me. You talked about the attractive economics of running propane versus ethane. Just how much can you run through Geismar, sort of, an ethane-propane mix, if we think about that?

Alan S. Armstrong

Yes. We can run about 30% on a inlet volume basis in propane.

Operator

We'll go next to Carl Kirst with BMO Capital Markets.

Carl L. Kirst - BMO Capital Markets U.S.

At this point, I just have a few clarifying questions, if I could. And maybe the first is just on Ohio Valley and the 150 million a day that was referenced of delay. I didn't catch -- is that something that we'll sort of see kind of a consistent delay through 2013 and 2014? Or by 2014, for instance, should the challenges of getting the right equipment in place be surpassed where we don't have any of those curtailments in that $80 million to $120 million of EBITDA, Alan, I believe you referenced, won't be dragging anymore. Can I just get a little bit of clarification on that?

Francis E. Billings

Sure, this is Frank again. That 100 -- that volume that I referenced, that's volume that we know is available to us today. It's actually produced volume that's just behind our system and we feel we're going to get the majority of those operational issues resolved in the second quarter. So we're hoping that we have that volume flowing freely to our Fort Beeler facility and through our fractionation assets in 2013. So really, it's really on us to make certain that we get through the operating and asset issues that we've been dealing with over the last few months and we get the assets stabilized and when we do that, we'll have a nice base business for 2013 and we will be able to grow forward from there, per the guidance.

Carl L. Kirst - BMO Capital Markets U.S.

Great. So we actually have the -- or in the guidance, the volume is actually coming back, call it, by midyear then?

Francis E. Billings

Midyear to the end of the year. And I think the challenge is, all the time we're doing that, of course, there's new volumes being drilled. And so we constantly will be in a catch-up mode for some time. I think it's important to note, though, if you look at Laurel Mountain, we've been at that for a while now and we are now ahead of Chevron, finally, out there in terms of capacity. We're getting close to being there while, I would say, we're going to be on a treadmill for a long time in the Northeast with Cabot and some of the other produces there. I would say, we're pretty well at pace with those producers right now and we just -- things have moved faster in OVM particularly, again, from a liquids production standpoint, both in terms of richer gas and higher degrees of condensates. So I think we're very confident in our ability to catch up, but I would just say, given the productivity of those reserves, we're going to be on a treadmill there for a long, long time to come. And likely, we'll be having some lagging excess capacity or excess production held behind our infrastructure for quite a while.

Carl L. Kirst - BMO Capital Markets U.S.

And Alan, if I could, just as a follow-up on that -- I guess, the producer frustration, is all of this, in effect, call it, industry rich gas related? Has there been any execution-type of issues where Williams has stubbed its toe? I just want to make sure there's no risk of brand franchise bruising for instance?

Alan S. Armstrong

I'll let Frank take that, but I'll just tell you, we're not the only one struggling up there. I think about anybody, if they're honest with you, would tell you that what's going on up there is a lot of this. And as well, the producers are having their own issues, upstream of our facilities as well. And Frank, I don't know if you want to add some color to that?

Francis E. Billings

Sure. I would say, the issues that we've had have been mostly around our field receipt points and obviously, those are vital to getting the production into our gathering systems and ultimately, into our processing assets. We've not completed those installations as timely as we would've liked and then, we have experienced inconsistent operations and reliability as production has come back up to those facilities. Again for 2013, I think our key operating issue for us is going to be to optimize and stabilize the current assets that we have in place and have the facilities better matched to the gas quality of the production. No one really knows with certainty the composition until it's actually produced and I think we've experienced some mismatched facilities to the production and the -- and what we're seeing out there. So the reserves are there, obviously, I think the producers would be producing more. But we have to reliably handle the production and move the production for these producers.

Carl L. Kirst - BMO Capital Markets U.S.

Understood. And maybe just last question, Don, just a clarification on the cash tax guidance, and understanding what's happened has been a benefit both of ACMP, as well as legislation on bonus depreciation. Is it possible to attribute that in any way, 90% to ACMP, 10% to the legislation? I mean, if we were trying to basically ascribe a benefit, if you will, even prior to legislation from the purchase price, for instance, of ACMP -- this is real value you guys are getting. Is there any way to do that?

Donald R. Chappel

I'd say both are significant. I couldn't give you the number -- the exact number off hand, but if you're interested in trying to learn more about that I encourage you to call John and Sharna and they can try to help you estimate the number. But they're both pretty significant.

Operator

And we'll go next to Craig Shere with Tuohy Brothers.

Craig Shere - Tuohy Brothers Investment Research, Inc.

I had a couple of questions. If we could kind of dig a little deeper into the Petchem Services at the MB level, it's got the distinction of being kind of a growth opportunity that if you had 7x investments EBITDA, maybe having $100 million of EBITDA in a couple of years and can be dropped down because it's in the States. Can you discuss kind of the long-term vision of that, and at what point in parts or in whole, a drop-down might make sense?

Alan S. Armstrong

Certainly, that would make a lot of sense, I don't think there would be really any prohibition to the majority of the investments that we're making there from being qualified income. And certainly, we feel like WPZ is pretty full on capital opportunity right now. And so WPZ is well-positioned to do a lot of that development. And certainly, it centers around the kind of things we've talked about in the past, tremendous amount of liquids coming into the area and a lot of changes going on in the petchem space there where parties are trying to crack lighter products. And that changes a lot of things, it changed butane movements, changes propylene movements. A lot of things that change as a result of the feedstock coming into those plants changing. And we have been thinking for some time, there'll be quite a shift in logistics requirements for the business and that you can't build all this new cracking capacity in the Gulf Coast and not have a lot of new logistics issues. And so we've been working to get ahead of that, both in terms of getting our supplies and our producers' supplies access to better markets, but as well, helping serve the petchem market in an open access manner, which heretofore has been pretty much not the way business has been done in the Gulf Coast in terms of having open access pipelines for all these products in between the facilities. And so we think there has been a huge opportunity left to us there to be that open access provider for services. And so we continue to see a lot of opportunities. We've picked up pipelines from BP that were underutilized, we picked up pipelines from Exxon that were underutilized and we picked up a pipeline from Explorer that were underutilized and we have quite a bit of similar activity going on to continue to have distribution networks that move with an expanding market there.

Craig Shere - Tuohy Brothers Investment Research, Inc.

Alan, do I understand what you're saying, is that there's not just obvious opportunities for the organic CapEx that you already laid out on the acquired pipes, but that there's incremental M&A opportunities in that segment?

Alan S. Armstrong

I would say it's pretty -- they're pretty modest relative to what we normally -- what you'd normally hear from us in terms of M&A. And so those acquisitions that we've made over the last couple of years, in total are, I think, $400 million or somewhere in that ballpark. And so I would say -- those combined. And so, I would say, it's those kind of pickups that we'll continue to assemble smaller investments like that and piece them together into a smart network.

Craig Shere - Tuohy Brothers Investment Research, Inc.

Understood. A couple of other quick follow-ups. I noticed the CapEx cost on the Canadian offgas ethane project were up from 3Q guidance. Is this just incremental accretive CapEx on an expanding offtake or is it simply inflation?

Randy M. Newcomer

This is Randy Newcomer. The Canadian ethane project -- recovery project at Redwater is currently in construction and slated to be completed in May of this year. And so what that represents is additional or better cost estimation basically for completion of the project. So it's inflation in the cost of the project.

Craig Shere - Tuohy Brothers Investment Research, Inc.

Okay. And last question for me. I noticed that the ethylene price deck had some changes. We went up a little in '13, which is benefiting Geismar margins there. But then, we kind of flatlined into '14 versus what was previously assumed to be a steep contango into the following year. Can you discuss kind of what's driving the long term expectations there?

Alan S. Armstrong

Sure. We continue to really follow CMAI's forecast there and so you'll say that's right in line with CMAI's forecast. And that earlier, I think, $0.62 that we had in there was also right in line with CMAI. So a lot of moving parts in that space, and we think those guys did a pretty good job of providing that guidance. And so we take a look and certainly, are influenced heavily by their perspective, and that's actually what drove that.

Craig Shere - Tuohy Brothers Investment Research, Inc.

I got you. So this can easily jump around quarter to quarter in terms of long term guidance. It's not something you're trying to kind of neutralize by flatlining it?

Alan S. Armstrong

That's correct. And I would say, certainly this year, right now that forecast is conservative relative to what we're seeing on the ethylene and certainly, conservative -- our forecast is conservative compared to what we're seeing right now on propylene. But certainly, it'll be some volumes continuing, new ethylene production coming on as some of these new facilities get back online. So I don't think it's going to be really big, frankly, in '13 and maybe, not even in '14, but beyond that we'll probably see ethylene production pick up.

Operator

And we'll take our next question from Sharon Lui with Wells Fargo.

Sharon Lui - Wells Fargo Securities, LLC, Research Division

Looking at, I guess, your guidance for the Geismar volumes? Is the difference really just related to the timing of the expansion?

Randy M. Newcomer

This is Randy Newcomer. You're referring to the volume estimate of 125 million?

Sharon Lui - Wells Fargo Securities, LLC, Research Division

Yes.

Randy M. Newcomer

Basically, it's several different factors, but the primary factors are related to the timing of the -- timing of the turnaround where we were running longer, moving the turnaround from the spring to the fall between turnaround cycles. And at the end of -- at the tail-end of the turnaround, you end up having a little bit of natural degradation in your production capacity over the course of the run. So that's impacting it a little bit. The second thing is, as we're planning this turnaround, obviously, it's a combination of both maintenance activities and tie-ins related to the expansion. And so as you might expect, there's a lot of complexity to that and the need for a lot of good planning effort. We're not quite finished with the final plan for the activity during that time frame, but we've injected a little bit of additional -- as Alan spoke to before -- a little bit more conservatism into the volume forecast, understanding that there will probably be a few bobbles as we come up from the expansion -- we're going to come up after the turnaround in full expansion mode. Whereas before, we were going to come up at the current rate and then bring expansion on later in the year. With moving the timing of the turnaround to the fall, we will be coming up off the turnaround in full expansion mode. So a combination of factors there. Additionally, when you crack heavy with propane versus ethylene, you make a little bit less ethylene and more propylene, and so we really have to look at total olefins production rather than just ethylene and 125 million pounds per year is related just to ethylene. If you'd net it with the other olefins that you produce, that certainly are valuable as well, like propylene, it's about 100 million pounds a year.

Sharon Lui - Wells Fargo Securities, LLC, Research Division

Okay. And do you anticipate, I guess, cracking propane at that 30% max or close to it this year?

Randy M. Newcomer

It just depends on the relative price at any given point in time. We tune that up each month.

Alan S. Armstrong

So basically, if you took our assumptions on the ethane to ethylene spread, anytime we are cracking propane to propylene, it's an upgrade to those economics. That's the only reason we would be doing that, is that if we see better economics. And obviously, right now we're seeing better economics cracking the propane. And so that's always kind of an upside to the basic ethane to ethylene spread.

Sharon Lui - Wells Fargo Securities, LLC, Research Division

Okay, okay. And then, maybe if you could talk about Williams' competitive position in bidding for the new pipeline project in Florida?

Frank J. Ferazzi

This is Frank Ferazzi. We, like much of the rest of the market, have received the documents for FP&L's RFP and so -- it's complicated set -- it's a complicated RFP, it's 200 pages or more. And so we're in the process of evaluating both the commercial aspects of the RFP, as well as our financial planning people looking at the route and coming up with an estimate of capital. And so we have a lot of work to do between now and early April when responses to the RFP are due, and have not yet decided whether we're going to bid or not. I would say that I think Gulfstream is in a good position, currently, in the marketplace -- strong assets, strong relationships with the market. And so I think that will give us an advantage in the end.

Sharon Lui - Wells Fargo Securities, LLC, Research Division

Okay. And I guess, if you do decide to bid, would this be a project you're pursuing with Spectra, like a JV, 50-50 JV?

Randall L. Barnard

It would be a project that -- a bid that would come from Gulfstream, which of course, is owned by Williams and Spectra jointly.

Operator

We'll take our next question from TJ Schultz with RBC Capital Markets.

TJ Schultz - RBC Capital Markets, LLC, Research Division

Just following up on the NGL projects in the Marcellus and Utica, I guess, as the liquid takeaway options evolve and options for ethane take-away come along, what is the status or interest level of your proposed Confluence rich gas project there?

Alan S. Armstrong

Well, I would say Confluence has merged into a lot of different things, but we are in really good shape there. I would say, and have made good progress on contracting with parties in the area. A little different than what we've originally laid out, but in terms of investment opportunity, it'll look very much the same. And so we are excited about that and it's helping -- as well, it's helping to support our confidence in a large Raw Make system being built in the Gulf Coast as well. And so things are coming together there very nicely.

Operator

We'll go next to Becca Followill with U.S. Capital Advisors.

Rebecca Followill - U.S. Capital Advisors LLC, Research Division

Back to the question on the use of cash at WMB. The coverage ratio at PZ was 0.95x in '12 and we have talked about where it is for '13 and '14, it's 1x with some nice increases in ethane and propane. I guess, I'm looking for more on -- at what point does MB support PZ given that need to do equity and forego some RDRs [ph] with some of that use of cash given that it's a fairly weak outlook for the next couple of years?

Donald R. Chappel

Becca, this is Don. I'd say, it's a fairly hypothetical question right now. I mean, I appreciate the question but I would say, it would depend on the facts and circumstances that develop. I would say if, again, the plan that we laid out, we execute on the plan, we don't believe there is a need for support. And we'll see how things play out. And if the situation were to be more difficult, that'd be something we'd have to consider. But I think it's hard to be formulaic about it. Again, we look at -- and in terms of coverage, we looked at '10, '11, '12, '13, '14, so if you really look at kind of the 5-year average -- again, the 5 years is well above 1. Yes, we expect 2013 to be below 1 but again, we are also investing a tremendous amount of capital in fee-based growth projects that we expect to come into service in '14 and '15 and really boost the fee based cash flows and boost the coverage at the same time that we're raising distributions. And 2013 is burdened by the carrying costs of those projects, both in terms of equity and debt that have been issued to fund that growth. So it's not just about the commodity price but it's about the tremendous growth that's occurring in the carrying cost of that. So again, we think this is still just a near-term challenge. And again, with the business plan that we've laid out and assuming effective execution, we think we'll be through this in relatively short order.

Operator

And we'll take our next question from Selman Akyol with Stifel.

Selman Akyol - Stifel, Nicolaus & Co., Inc., Research Division

Just going back to Geismar for a minute or 2. First of all, can you just remind us of the contract structure, or are you just selling all into the spot market?

Randy M. Newcomer

Well -- this is Randy Newcomer. We have a number of contracts and our contract mix, as Alan alluded to earlier, is changing. A lot of our ethane plus kind of contracts and collared ethylene sales have rolled off. And in fact, as of now, we really only have one that is on -- sale on ethane plus basis. The rest of them are all contracts that are priced at market, basically. Some of them are spot, some of them are yearly contracts. But the pricing is based on more spot kind of pricing. And we purposely have done that because we believe in the fundamentals of that, that ethylene is going to continue to be in good demand and we'll have a great ethylene crack going forward. So we've positioned ourselves to be exposed to the full crack for the present and including our expanded volumes as they come on later in the year.

Selman Akyol - Stifel, Nicolaus & Co., Inc., Research Division

Okay. And then, given your ability to, I guess, to crack propane into propylene, given margins have been extremely robust for propylene this first quarter, we could expect high margins, then, going into Q1?

Randy M. Newcomer

Yes, we do.

Selman Akyol - Stifel, Nicolaus & Co., Inc., Research Division

Okay. And then, if you look out into 2014, it looks like your capacity utilization assumptions are pretty high then going into that as well, and you're seeing that, I guess, reflected by your customers too?

Alan S. Armstrong

Are you talking about on the volumes at Geismar?

Selman Akyol - Stifel, Nicolaus & Co., Inc., Research Division

Yes.

Alan S. Armstrong

Well, yes, that's obviously a full year of the expansion coming up and naturally what's driving that. Even in the fourth quarter of this year, because of what we said, we've built in some conservatism. We normally -- you normally see us putting in a, depending on how many -- how much downtime we expect for the year, but normally, you'd see us running around 98% to 99% uptime on a facility like that. And I think we've got somewhere in the 92% range built in just following the startup there in the fourth quarter. Again, just trying to be conservative relative to the kind of bobbles we might experience as we bring that new facility up. So it's a combination of those 2 things that is driving -- but obviously, the big driver is the new expansion that will be online full year in 2014.

Selman Akyol - Stifel, Nicolaus & Co., Inc., Research Division

Great. And then, just going back to your guidance. You have about $2 billion forecasted for distributions in 2013. Can you say how many units that's based on?

Alan S. Armstrong

Asking how many units.

Donald R. Chappel

That's a good question. We haven't disclosed the number of units, but it would be -- obviously, the current units outstanding in some plan for -- or some assumption on new units and we're not prepared to provide guidance on that at this point.

Selman Akyol - Stifel, Nicolaus & Co., Inc., Research Division

All right. And one very small last question for me. The Mid-Atlantic Connector, when do you have that coming online in 2013?

Donald R. Chappel

Hold on just 1 second. Yes, Mid-Atlantic Connector actually went in service last week. So it was originally scheduled to be in service in November, but we had a 2-month delay.

Operator

And there are no other questions at this time. I'd like to turn the conference back to our speakers for any closing remarks.

Alan S. Armstrong

Okay, great. Well, thank you very much. On behalf of myself, our executive leadership team and our Investor Relations staff, I want to thank you for your time and attention this morning. A lot of moving parts that you all are all right on top of and I appreciate the opportunity to give you better explanation around that. We certainly look forward to sharing a more detailed, deep dive into all of our businesses with all of you at our upcoming Analyst Day that is scheduled for May 21, and we look forward to seeing you then.

Operator

Thank you, everyone. That does conclude today's conference. We thank you for your participation.

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