威廉斯 (WMB) 2014 Q3 法說會逐字稿

Good day, everyone, and welcome to the Williams Partners and Access Midstream's third quarter earnings release 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 John Porter, Head of Investor Relations. Please go ahead, sir

Thank you, Tina. Good morning, and thank you for your interest in Williams, Williams Partners, and Access Midstream Partners. Yesterday afternoon, we released our financial results, and posted several important items on each of these three Company's websites. These items include yesterday's press releases and related investor materials, including the slide deck that our President and CEO, Alan Armstrong will speak to you momentarily. Our CFO, Don Chappel is available to respond to questions, and we also have the four leaders of Williams operating areas with us. Jim Scheel leads our northeast area, Allison Bridges leads our west area, Rory Miller leads our Atlantic Gulf area, and John Dearborn leads NGL & Petchem services. We also have Mike Stice, Dave Shields, and Bob Ferguson joining us from Access Midstream Partners.

In our presentation materials 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 we have reconciled to Generally Accepted Accounting Principles. Those reconciliation schedules appear at the back of the presentation materials. So with that, I will turn it over to Alan Armstrong.

Great. Good morning and thank you, John. Thanks, everybody, for joining us today. As usual, we have got a lot going on, as we continue to pursue this tremendous growth that our strategy continues to deliver. We are coming off a quarter here that was in line with our expectations, but much lower at WPZ due to Geismar's extended outage, and a continued heavy capital investing period, all as was expected. But certainly, we are looking forward to a much better quarter coming here in the fourth quarter, as some of our major projects start to come online, and we see some dramatic improvements in volumes in the northeast.

A major change is afoot as we combine both WPZ and Access into the large-scale natural gas infrastructure MLP. The team here at WPZ is very energized right now as we are on the verge of a major $1 billion boost in our annual cash flows, that we expect to come from three major projects, Geismar, Gulfstar and the Keathley Canyon Connector, all which have reached the commissioning stage here in the fourth quarter. We also are very excited to see volumes and profits beginning to rapidly escalate in the northeast operating area, as many projects have been commissioned here in October, and provide a little more detail on that later.

The Access team continues its great performance, as we have all come to appreciate this team's ability to steadily grow its volumes and cash flows, as it connects gas supplies in some of the most prolific basins in the US. And we also are continuing to see major potential Transco projects coming our way, as a result of Transco's competitive advantages. These new prospective projects include the Appalachian Connector and the Diamond East projects. Both are major new projects that connect the burgeoning supplies from the Marcellus and Utica, directly to growing demand on Transco that is anxious to see the supplies coming their way, as those markets strive to grow as well.

And of course, we continue to have a long stream of projects that are under construction that will keep this well-identified fee-based cash flows continuing to grow throughout our guidance period and beyond. The major changes that will be occurring within the new merged partnership are exciting in many ways. First, we will have the highest forecast distribution growth rate of any of the major MLPs. Second, our coverage will be above average for the same peer group, with an expected $1.1 billion of excess cash flow coverage through 2017. And the Access cash flows, along with our major new fee-based projects continue to dramatically reduce exposure to commodity prices.

The Access LP holders are about to see a 50% step-up in distributions to $3.65 in 2015, versus the forecasted $2.42 per LP in 2014. So truly a very exciting time here as we merge these MLPs, and really turn this into the MLP in the major integrated group, and particularly one that is well-positioned as we have talked about before, with its strategy that is so focused on natural gas. So there are many changes occurring, as these major tailwinds form, and this first big tranche of capital finally begins to bear fruit in a very game-changing manner against the traditional WPZ assets.

But what has not changed is our commitment to a strategy that we strongly believe will be the most enduring growth model amongst the infrastructure MLPs. We have worked in a very disciplined manner to have this strategy of connecting the very best natural gas supplies, to the very best natural gas markets, at the center of all of our portfolio and capital allocation decisions. So we continue to stick with the strategy that we are very proud of, and we think has positioned us for great long-term growth.

The strong and undeniable fundamentals of low-cost clean energy and the cheapest petrochemical feedstocks in the world will prevail we believe, and we are seeing the demand pool beginning. We have continued to position ourselves in a way that will catch this very sustainable and fundamentally supported wave of volume growth. And at the same time, help our customer base achieve their lofty goals of growth as well. We appreciate all the support and patience from our investor base, as we have had some bumps and bruises along the way getting to this, as we have pursued this very ambitious plan. And we are thrilled that many of you are well-positioned to catch this next big wave of valuation growth, at both WMB and at the partnership level.

So now let me quickly point out a few things in the prepared slide deck here, beginning on page 2. You can see here just an overview of what we will hit on today most of which I have touched on already, so let's move on to slide 3. On slide 3, as I mentioned in the opening, WPZ's DCF was low, but was in line with our expectations. Major drivers of the lower DCF was a missed opportunity on Geismar of over $200 million. So that's the number if we would have been up and running, that we predict here in the third quarter. And higher maintenance capital as expected and was forecasted for the quarter.

So this is really the time of year that a lot of our maintenance capital gets done. As you know, we had lower than expected maintenance capital for the first half of the year, and we started to catch up with that as we usually do during the third quarter. Also we had some outages in Canada, particularly from some Suncor outages, and we also had a planned turnaround at our Redwater facility where we made a lot of the significant tie-ins for our CNRL Horizon project which lowered volumes there in our Canadian assets as well.

Also we had slightly lower than last year adjusted segment profit plus DD&A was just off of last year. This was driven by lower NGL margins. And this was really driven as the result of a loss of the keep-whole processing contract up at our Opal facility. And thankfully though, this was largely offset by about $36 million in higher fee-based revenues in the quarter on our consolidated assets and operated assets.

And at the same -- we got the same kind of very positive move in our equity investments, in both Discovery and Laurel Mountain Midstream. You should really continue to expect a lot of great things coming from these equity investments across the board really, as you here in the fourth quarter, Blue Racer Midstream is continuing to see great Utica volume growth, our Discovery system gets the Keathley Canyon Connector started up, and the Laurel Mountain Midstream benefits from our increased ownership, which has now moved up to 69% versus 51% in the third quarter.

Also as you can see on this slide, ACMP's adjusted DCF was up by an impressive 42%, driven by 20% higher fee-based revenues. And so this all combined for WMB, these Partnership holdings now produced a segment profit plus DD&A of $838 million, which was 36% higher than the third quarter of 2013. So really starting to see some great distributions out of PZ as always, and now an increasing amount coming from Access.

Moving on to slide 4, you can see some of the operational highlights here for ACMP. And starting with a big milestone of 6 Bcf a day of gross gathering volumes which the team hit in September, and also ACMP's 49% interest ownership in UEO continues to increase in importance. This really well-placed infrastructure that is referred to as UEO is serving the rich Utica volumes, and the volumes continue to expand rapidly up there, and now two new trains planned. One planned to start up later this year, and one planned to start up at the end of next year. And also great work by our Access teams, getting the Bucking Horse plant started up in Niobrara. That is planned for later this year, and I am really proud to see the way our Williams and Access teams are working together. As you know, we have very substantial processing operations at Williams in Wyoming, and then very thankful to see our teams working so well together to help bring up the Bucking Horse plant up there to serve the Niobrara.

So overall net volumes on ACMP are up 9%. And as you can see, where the high performers are in this list that drove that growth with, of course, the Utica being the star of that. Moving on to slide 5, looking forward a little more now. And we expect to see the fruits of Williams' major capital projects really starting to kick in here in the fourth quarter of 2014, and in a very powerful way in 2015. In fact, these three projects alone are expected to produce nearly $1 billion in 2015 cash flows. And to put this in perspective, these three projects should drive a 33% improvement over WPZ's expected segment profit plus DD&A for 2014, and during 2015. So huge driver coming from these three big projects.

And we will also have an even larger impact on DCF, because a lot of the financing, of course, the financing costs have been carried for a large portion of 2014 on these projects, as these have been very long-dated capital projects, and these assets have had really very little -- they have had very little planned maintenance capital for 2015. So a huge driver of DCF in 2015 as well.

We also have several other recent milestones and achievements listed. All of these would normally be big deals, but we have so many developments, it really is getting hard to give them all their due bandwidth. But just to provide some details on a few of these items. The Geismar rebuild and expansion project is complete, and we have begun to bring hydrocarbons into the plant this week, and start-up operations including the final dry-outs of the primary systems. And then once those dry-outs are completed, the actual cracking processes will be initiated later.

I certainly want to just take a moment, and thank our team there at Geismar for their intense focus on doing this project safely. It has been a very large and complex project, and they have remained very focused on no matter how much the pressure is to remain safe, and keep that first and foremost. And I am thankful for both their leadership and management there at Geismar for keeping that front and center.

On Gulfstar, we are complete with our work, and Hess is now running the spar. They announced yesterday that they plan to have first oil within the week, and this project team also achieved first quartile safety performance on that project. Tremendous effort, to bring so many different skill sets and capabilities together to get that project delivered, and we are very thankful to be getting to work with Hess and Chevron on delivery of this major asset as well. And then the Keathley Canyon connector has been fully hydro-tested, and is now in the dewatering mode. Anadarko will control the timing of this first production, which they and we still expect later this quarter.

Our Constitution project reached a major milestone last week, and this was the receipt of the final environmental impact statement for this project from the FERC. And this gives the Commission the green light to approve the project as designed, and we are pushing for a November order from the Commission. And, of course, they certainly understand how important it is to get this project up and moving, so that we can reduce some of the bottlenecks and constraints of getting gas supplies up into the New England states for the winter of 2015 and 2016.

Our Transco team has just continued to knock it out of the park in the areas of business development. And we had two very successful open seasons in the period, and we continue to string together both important base hits, which we just continue to have a number of laterals and expansions off the systems, and the occasional grand slam, like the Atlantic Connector project that is significantly larger than even the massive Atlantic Sunrise project. And I will hit on that a little bit more in a minute.

On slide 6, you can see the continuing list of projects that we continue to click off on the left. And on the right, potential projects are being added so quickly, it is really getting hard to keep this slide up to date. You will note that we had to move the Rockaway lateral into the first quarter of 2015, due to some construction environment difficulties that we face there. However, even more offsetting this, we expect to place portions of the Leidy Southeast and the Virginia Southside project into service earlier than planned. So great job there of the team, continuing to be innovative in ways to bring some of those projects on earlier, where the environment allows us to do so.

We also expect to be able to move our Canadian PDH project into the firm category later this month. We will still have a few contingencies related to third-parties on that, but we will have our feed study completed for PDH 1, and we will be going for final Board approval here in November. So great progress being made on moving those projects along as well.

On slide 7, we are going to provide some detail now here on the really exciting Appalachian Connector project. And we are not disclosing the actual capital on this project at this point, but we do expect this to be at least 50% larger than our Atlantic Sunrise project, so very large scale project. It involves a major greenfield line that you can see coming out of the panhandle of West Virginia, the northern panhandle of West Virginia, down into a connection there in Virginia, and then a major expansion along the system to be able to move those supplies into the various markets, both to the north and to the south.

Actually, all the way to station 65 which is zone 3 on Transco. And of course, from station 65 you have access to both growing industrial markets, as well as access to many of the expanding LNG facilities in the area. So really that is coming together. And that really helps us be the supplier for the LNG projects that are being developed along the coast as well on Transco.

So the support from these shippers has really been tremendous, as this is one of the few projects that delivers gas to the actual markets. And so, this really gives an ability to a producer or supplier to really go get the highest price because they have so many options of where they can sell their gas, and they can really go to the highest bidder for their gas, by having so many multiple market options along the Transco system. Really this is a tremendous value proposition to have all these -- the direct access to all these growing markets on Transco, not just existing, but really growing markets. And we also are excited to see the confidence that the producers behind our Ohio Valley Midstream system, and our Blue -- our investment in Blue Racer, the great confidence we are seeing from producers there in growing their volumes out on the system as well.

And so, that connection that we like to really stress about being able to connect the very best supplies, to the very best market outlets, this is just another great example of that. Of course, you saw that with Atlantic Sunrise coming out of the Susquehanna County area. And now we are able to basically do that in the same way, coming out of the southwestern Pennsylvania, West Virginia, and southeastern Ohio areas. So our gathering business really benefits from this, because it would have the best market outlets out of the area. And of course, our market end customers get access to these great prolific upstream supplies. So really a win-win-win, and really shows the strength of our strategy.

Moving on to slide 8 here, really exciting drivers for getting the merged MLP into the very, very strong and offensive posture, and getting our 2015 adjusted EBITDA of approximately $5 billion. As I mentioned earlier, a 50% move-up in the distribution for ACMP unit holders from the 2014 guidance, and a 30% increase over the 2015 distribution guidance. So we will have the best-in-class distribution growth at 10% to 12% through 2017, and with a very strong coverage ratio at or above 1.1, and about $1.1 billion of excess cash flow through 2017 that we expect to generate off of this strong business growth. We also will enjoy strong investment grade credit ratings, and very limited equity needs up against this current business plan, because our cash flows continue to grow, continue to expand our debt capacity very rapidly.

So really excited about how we have got this merged MLP positioned. It is strong from a strategy standpoint. It is very strong from a capability standpoint, and now financially extremely well-positioned for the environment that we are in.

Just to talk very quickly about a few of the synergies that we are seeing. One of the things we are really excited about is really looking for the very best capabilities exist between the two companies. One of the areas that we are really seizing on very quickly is Access' well-honed, modular compression design, and so we are looking at that to be a major savings for Williams here, as we look to see the cost and the scale, frankly, that we gain by having all of the compression installation that both parties do, and being able to really be the low-cost provider of getting in that the field, in a very quick way that serves our customers. So great capabilities there by Access, that Williams is very rapidly adopting.

Likewise, up at the Bucking Horse plant, as I mentioned earlier Williams, of course, has great strength in the operations of processing facilities, and we are very rapidly bringing those alongside Access, and helping them get that plant up in a safe and reliable manner. And then one other area that I think is really impressive for us is the Access North Victory system, that lies just to the north and east of our OVM system is going to be the beneficiary of -- provided that the transaction goes through, of Southwestern Energy's acquisition of Marcellus acreage in that area. And we think that bodes very well in terms of having a new buyer in the area that is very excited about that acreage, and who has got the capital to bring to that. And of course, that system ties into our OVM system, and ultimately then would have access into the great Appalachian Connector project. So great example of how we are stringing together the synergies of our assets up there.

Moving on to slide 9, this is really impressive picture of valuation here at the new merged MLP. And so, what you have here is regression analysis between the distribution growth rate. And so, we have got the merged MLP here marked at 11%, and then on the Y axis you see the current yield. And of course, this shows that on a regression analysis basis, that the merged MLP should ultimately trade out at a sub 4% yield. Even at that yield, then you would see a -- on this line, you would see a $94 unit price for the merged MLP.

And frankly, we think given the coverage ratio which is just above the average for this group, the strong credit rating that we have, and the tremendous strategy and clear line of growth, we think we actually ought to be trading below this line on the regression analysis. So really excited to see this valuation coming through, and we think the market is waiting to see some of these things like Geismar and Gulfstar get done, and those start to cash flow. And so, we think we are just on the verge of realizing this kind of value at our MLP.

Moving on to slide 10, a tremendous opportunity with Williams. We just couldn't be better positioned right now. Very excited to have delivered a 32% raise in our WMB dividend, and following that with a 15% dividend growth rate through 2017. So tremendous value that we are able to deliver for our shareholders. And I think -- I don't think anybody doubts the amount of growth that we have out in front of us.

And I do think obviously, there has been concerns over our ability to execute and bring some of these major projects on-line, and we are just on the verge of passing that stage. And then we continue to have a number of very large-scale projects going forward. Also very excited to see the very strong capabilities of Access and Williams coming together from a leadership perspective, and from an operating capability standpoint. Very solid alignment, I would tell you, between the values of both of these companies. And I want to take a moment, and thank Mike Stice for his tremendous leadership at building such a great organization with great values. And we are just very thrilled to be able to working up alongside Access, and taking some of the best ideas that they have to offer and bringing those in to Williams. And as well, excited to have the new team there at Access all pulling on the same rope. So with that, we will turn it over to questions. Thank you.

Thank you.

(Operator Instructions)

We will go to our first question, Schneur Gershuni with UBS.

Good to see the progress that you have made with respect to coming to an end, and putting forward the Geismar project and closing up the merger. I was wondering if we can sort of transition on some questions more on a go forward basis? With the merged ACMP/WPZ combination, the -- you have sort of mentioned in the past about a high percentage of EBITDA coming from fee-based source of revenues. When you think about the 2015 guidance, can you share with us some of the sensitivities around NGLs and lean margins you have baked in, in terms of the low and the high end of guidance, in terms of how we should be thinking about the commodity environment that we are currently in?

Shneur, this is Don, good morning. The combined MLP will be more than 80% fee based, since all of the Access business is in fact, fee based, and much of it under the cost of service or MVCs. There is really no direct commodity exposure there. So I think you can look solely at the Williams. And if you look in our data back on slide 85, you can see the sensitivity of to price changes on commodities. And again, I think we are fairly diversified on the commodity front. And again, it will represent less than 20% in 2015. And that percentage will likely continue to decrease, as we grow the fee-based business much more rapidly than the commodity side of the business.

Great. And as a follow-up, I recognize the fact that you are expecting about $1 billion of cash flow coming in with some of the new projects slated to come on-line late this year. How do you think of your leverage and funding needs for the next several years, as you sort of think about the big capital projects and so forth? Is the expectation to fund it kind of on a 50/50 debt equity basis? I was just wondering if you could give us a little bit of color on just how you think of your current leverage (inaudible)?

Schneur, we would expect the merged partnership to maintain its kind of mid BBB investment. And to do that we will typically be somewhere around 4 times debt to EBITDA on a rating agency adjusted basis. So I think that will be the guide post. We think the business plan that we put forth, with the $5 billion of EBITDA and the 10% to 12% growth rate through our guidance period that ends in 2017, can be financed with a very modest amount of equity. Obviously, we have many more opportunities in front of us. Alan highlighted a couple of major ones. I would point out that those are fairly long lead time items. So something like the pipelines that Alan mentioned, with the kind of in-service dates, the financing for those is really out principally in 2017 and 2018.

Great. Finally on the Constitution Pipeline, if I saw correctly you have requested to get the final sign-off within the next 30 days or so. If it takes longer than 30 days, does that delay the project due to weather issues and tests and so forth? And also I was wondering if you can comment about whether the -- you think the length of pipeline itself will deviate much from the current plan?

Rory, would you please take that?

Yes, sure. Well, the timeline right now as it sits is very tight. We are hoping to get the FERC certificate on for Constitution in November. If that happens, then we will be looking for notice of completion from the New York DEC along that same timeline. And it is a very tight schedule, but if we get the kind of responses that we are hoping for and we think are possible, then we can still make the heating season of 2015/2016.

If we do have some major delays. If we have multi-month delays, then that heating season won't be possible. So there is a chance that we could get pushed beyond that. But we are trying to be very clear with everyone involved. I think the need for the gas is definitely there. We saw that with the Polar Vortex last heating season. And I think we are just trying to get the message out to let people know what is at stake. And it is going to take some cooperation, but we think we have got a good shot at it.

Great. Thank you very much, guys.

Thank you.

And we will now go to Christine Cho with Barclays Capital.

Good morning, everyone. Regarding the Southwestern purchase of Chesapeake's acreage, with Southwestern, it is going to 11 rigs compared to Chesapeake's 1. I know it is early days, and the deal is not even done yet, and we don't know where the rigs are going to go, but can you give us an idea of how much undedicated acreage is -- that is up for grabs -- that is up for grabs overlaps with your footprint? And then you kind of mentioned this in your prepared remarks, but given ACMP at one point was Chesapeake's MLP, are there opportunities for you guys to process the gas that ACMP has the dedication for on the gathering side? Or is that already committed to other players? Can you just give some more color on your synergies there?

Sure, Christine. We can't provide you the detail you are looking for there today. I would just tell you that there is a very substantial amount of gas that is available for processing from Chesapeake, and potentially now Southwestern. And so, I would just tell you there is a lot of acreage there that needs processing, some gathering and processing services. And I would just say that we are very well-positioned for both of those.

Okay. With the recent correction in the market, we saw a number of deals get announced, and obviously access to capital markets is pretty key in this space. And we just had brief scare that maybe non-investment grade MLPs might have trouble raising capital. And if we see some more of these big companies spinning out MLPs with multi-billion dollar backlogs of drop-downs they could do, I would think some of these private equity players that were hoping to monetize their midstream investments maybe a IPO, might have trouble competing with something like that? Has sentiment of potential sellers changed from where you sit? Can you kind of give us an idea of what you are seeing on the M&A front?

I would say that it has varied. Obviously, some of the smart money, I would call it decided to take some risk off the table of that early, and get out while the getting was good. And I would say that sentiment is probably becoming more pronounced. I agree with your -- the concern you raise. And I do think that we will see some movement in that direction, because I don't think anybody wants to be left, being the guy that was too greedy waiting for any more increase. I think people appreciate the market is pretty hot. And so, I do think we will continue to see a lot of assets coming out of the private equity sector into the market. And I think they will start to appreciate how much quality IPO there is, that has some pretty major advantages over less substantial offerings.

Okay. And then I guess kind of piggybacking off your response for that, I think you guys are now sitting on an option to enter into the Permian. Deal size isn't too big, multiple looks attractive, although you probably have to spend a couple hundred million to get there. You have the parent of a potential partner as a producer behind this system. However, you have previously said that you would like to be number one or number two in a basin. Are there any initial thoughts you can provide us? And is this an area that you would be interested in growing into?

Yes, Christine, thanks for the question. We are not going to respond on exactly our position on that, and we are just not at liberty right now to discuss that. However, I would say that we have been looking at the Permian from a business development standpoint, particularly the Delaware basin for quite some time.

And I would say we have a lot of -- from a Williams side, we have had a lot of producing customers that are customers elsewhere, that have been interested in us providing services in the area where there is not much infrastructure. And certainly, we are not interested in going into areas that are already well served, but I would tell you there is a lot of that basin that is not well-served. And we have been looking at it that, and I would say we would like to enter it in a way that, one, it is well-supported from a financial perspective.

And two, that ultimately we get to a scale position that has competitive advantages. And provided that we can accomplish both of those tasks then, yes, we would be interested in entering the basin. But both -- those are two pretty lofty goals, in terms of making sure that the cash flows are well-supported, and that we have a clear line of sight on gaining the scale and competitive advantage the way we usually enjoy in a basin.

Okay. And then, last question for me. Appreciate all the color. One of the competing pipes for your Appalachian Connector project recently announced it was moving forward at least to station 165. Is there room for both projects, or do you think your's is different enough, because it provides a clear route to station 65? And then when you also say it's 50% more than Atlantic Sunrise, do you mean 50% of what the CapEx is for the 100% interest, or just your interest?

The -- on a gross basis, it is 50% more as well.

Okay.

So you can use either number, because we said more than, but even more than a gross amount. On the -- in terms of the advantages of that project, I think it is almost two different projects frankly, because I will tell you the strength of the Appalachian Connector project is that it does not just get you to station 65, it allows you to go directly to those LDC interconnects, directly to the town borders, directly to those markets.

So rather than sitting at a pooling point and being stuck with gas that you have already paid a rate to get there, you don't really have any options but to sell it. At that point, you can go to multiple markets, and you can go cut deals with people who want to have growing supplies on their system. So I would just tell that you that is the distinction. It is a very major distinction. And as to whether there is room for both, I would just say that I think our shippers are speaking for themselves -- can't really speak for the other project. But I would just say given the way, the response we have gotten from the shippers that are interested in our project, that would tell me there is room for two, I guess, if the other project has economic support as well.

Is the shippers for you guys mostly producers?

It is a mix, a pretty substantial mix, just like we have seen in our other big projects like this.

Okay. Thank you so much for your time.

Thanks, Christine.

And we will now go to Abhi Rajendran with Credit Suisse.

Hello, good morning guys.

Good morning, Abhi.

Couple quick questions. In the northeast segment, segment EBITDA was actually down sequentially in the third quarter. I believe there were some one-offs included in the 2Q result, but could you help us think about some of the factors preventing maybe a quicker ramp-up in the profits in the segment? And then, how we should think about that trajectory looking ahead, from 4Q and then into next year?

Sure. Jim, you got that?

Sure. Thanks, Abhi. That's a great question. As we look at the third quarter of this year just, let's take a step back and talk a little bit about volumes. During the last earnings call, we talked about the number of wells coming on line. We actually had eight wells delayed during the third quarter coming into the OVM system. That was obviously a disappointing issue for us, some producer issues.

But we see those coming on-line pretty quickly, and we have line of site to 35 more wells coming on line over the course of this quarter, two of which are dry Utica wells. So as we look at our exit rate for the year for OVM, we are very excited about the opportunity to continue to see a very robust fourth quarter. That would be combined with some additional fee-based revenue coming from all of the new assets that have come on-line.

Obviously I have been disappointed by, and the delay in bringing on the stabilization facilities as well as TXP-1, but we have had a lot of assets coming on-line. And just getting that all put together has been a pretty big issue, keeping that as safe and as efficient as possible has been our high priority. So those are coming on line really as we speak. We have got commissioning activities coming on today that will also improve earnings coming into the fourth quarter.

We have also seen pretty much the completion of a major expansion around the Susquehanna supply hub, so volumes there have increased since the close of the third quarter by about 200 million a day. And we are excited about the continued increase there. So we have got a great trajectory for future growth. And then when you combine that, one of the things you wanted to reconcile to, was the third quarter.

As we think about that, we had some kind of -- I won't call them extraordinary, but we had some income came in associated with the Natrium fire that came in. And then one of the other changes that we have to be aware is with Laurel Mountain Midstream, we have a percentage of gas. Gas prices have been down for the third quarter so we have seen a hit from that as well. So if we really look at earnings growth going forward, with taking out those two things, we still see a nice improvement as we look forward to the fourth quarter and into 2015.

Great. That's very helpful. Shifting gears to Geismar, could you give us some color on the ramp-up there over the next couple of months? When do you guys expect to kind of get up to commercial levels of production? And then when could we potentially see operating rates up in the 90%s like the rest of the industry?

Don, will you take that please?

Thanks very much for the question. From where we stand today, as you saw in our announcement, we have announced that construction is complete, and we are fully into the commissioning and start-up activities. These activities are largely focused on getting the plant dried out and oxygen-freed, and leak tested, and rotating the our major equipment in the plant in preparation for the start-up. Sitting here today I would say, November 15, plus or minus a few days is where we should be for making first ethylene, as is signaled by our announcement.

And then as we look forward beyond that, we are expecting a ramp-up first to -- I would say what was the base plant rates in order to make certain that we get the entire machine lined out, and make certain that we have got a good stable operating system at that point of operation. And then shortly after that, ramping it on up to the expanded capacity.

The overall time frame for getting that done, from the day we start making first ethylene is going to be notionally around a month. It is going to be about four weeks. But again we are going to want to do this in a very disciplined way. We have brought some unbelievable operational discipline to the plant there in Geismar, and the team is going about this start-up in a very deliberate way, and a very deliberate disciplined way. So but I think that brings all the color you need, to give a sense of how we are going to bring the plant back into operation.

Great. That is, yes, that's very helpful. And then last one from me, coming back to the merger between the MLPs. So based on the previous iteration of the terms, I think you guys have put out figures expecting about a 1.2 times dividend coverage for MB in 2015 and 2016? And then on the revised terms, I think cash available after dividends comes in slightly lower. So if could you just give us some color on how to think about maybe the new excess coverage over the next couple of years, and any other puts and takes there?

Abhi, this is Don. In terms of the 1.2 times, we boosted the initial distribution I think before we said at least $3.49. We decided to go with $3.65, so quite a bit higher initial distribution. That reduced the coverage a bit, but the coverage is still well north of 1.1 times.

And in terms of the transaction, we shifted coverage from Williams to the merged partnership. We thought that was the right thing to do, to create the kind of valuation and the partnership to make it the lead entity to move Williams to a pure play GP holdco. Again, so we shifted the coverage to PZ again, the more than $1.1 billion of coverage over that three-year period. Took the coverage down at Williams, but nonetheless we still have over $300 million in cash coverage just in 2015 and 2016, really with no real need for that capital.

It is nice to have, and I am sure we will find a value adding use for it. But nonetheless, rather than run 1.2 times coverage of Williams without a clear need for the excess coverage, or having double coverage, in fact, with the partnership having coverage and Williams having coverage, we didn't see that adding value. So again, really shifted coverage to be very substantial at the partnership, with again the industry-leading growth rate for large cap MLPs, and taking the coverage down at Williams to a level that we think is appropriate.

Okay, great. Thanks, Don.

We will now go to Brad Olsen with TPH.

Hey, good morning, everyone.

Good morning, Brad.

I would like to focus on the macro, and maybe follow on some of the questions that Christine had about the pipe projects out of the northeast. Obviously, you guys are in a pretty unique position having multiple large-scale projects currently out in the market for producers in the northeast. And when you look at all of the different markets that Transco serves, do you have a feel, is there a specific market where either producers feel that they don't have enough access to or the consumers in that market don't feel as though they have enough access to northeast production growth? Just trying to get a feel for, as you fill the pipe with all this gas, where is it actually going to head, and where is there economically the most pull for that gas?

Sure. Great question. I would just tell you that the amount of new gas-fired power generation obviously in the southeast is a major issue, as that area converts off of coal. If you follow some of the commentary from folks like Southern company, I think one of their big concerns has been whether there would be adequate infrastructure built out in time, and reliable infrastructure to serve their power generation loads.

And so, I think this project helps answer some of that frankly. As well the, we are continuing to see obviously a lot it of folks wanting to get to spots where they can deliver to LNG contracts. And by getting all the way to station 65 with this gas, that option becomes available as well. And then, of course, we also have like the large methanol project that Transco has contracted to serve, just out south of station 65 as well.

And as well, all of the southeast, from just a general load standpoint continues to grow, and so we see that continuing in those regions as well. So many projects like the Dalton lateral for instance, are projects that need supply and demonstrate the growing markets, the Hillabee expansion to serve Sable Trails.

So I will just tell you Transco is winding up being the big high-pressure header that is right in the muddle of all the market growth, and people realize that. And they want to be there, not just to serve any one particular market, but to have the options of going to where that market growth is. And so, it is really a network value if you will, where you have all the best supplies in the country trying to get in to places where the best markets are, and that mutually attracts each other to being connected to that big header.

That's great color, Alan. I appreciate it. And even further south of 65, I know you guys have talked about potentially working with PEMEX on the deep water projects that they are starting to pursue. But is there an opportunity maybe for Transco, even in south Texas, where you have some existing infrastructure to participate in any of the tenders that either PEMEX or CFE have out to import Eagle Ford and other US gas supplies into northern Mexico?

We have a relatively unique project, I would tell you that we have been working on, and we are not positioned to describe that just yet. But we are pretty excited about it, and we think it's a very low-risk way of serving that growth in the market. And we are continuing on a nice trajectory to develop that project. But, yes, we do have opportunities and yes, we are pursuing those.

Okay, great. And just if we could flip to the ethane side of things, we have recently seen Sasol receive FID for their world-scale cracker, and I think that rounds out six or seven crackers which are set to proceed. Interestingly, we have seen kind of ethane exports come out of nowhere, and gain quite a bit of steam as well. So in light of these recent announcements, how does your view of ethane as feedstock change? And I guess, asked more directly, does potential tightening in the ethane market later this decade, cause to you rethink what you might use for a feedstock on a second Geismar project? Or does it give you pause about a second Geismar world-scale cracker in general?

Yes, I would just say that we think there's a lot of ethane available with these growing gas supplies. However, what is not getting invested in adequately right now, is the infrastructure to be able to recover all that ethane, and get it into all these points of consumption. And obviously that's a business that we like, and one that we continue to have an eye towards, in terms of how we play a critical role in distributing -- recovering and distributing all of that ethane.

So I think it's a very good question. And it's at a time like this when the market seems to be awash in ethane, people are unwilling to invest in the infrastructure that it takes to get it recovered, and into those markets. But we believe that -- just like what we are seeing on the gas side now, where the demand is on the verge of really starting to grow pretty rapidly, we think the same thing will happen on the ethane side. But it is going to take quite a bit of infrastructure, and we are certainly working hard to plan that.

We are in the process of commissioning our Bayou ethane project which extends ethane from Mont Belvieu over into Lake Charles area in Louisiana, and ultimately connects into our system that gets ethane all the way over to the river. And so that is just an example of how we are positioning ourselves to be a solution to the problem that you describe, which is going to eventually catch up with us.

Got it. And you mention the ethane solution. Are there opportunities as we see the ethylene market potentially growing 30 or 40% with all these new crackers and brownfield projects, do you see opportunities on the olefin transportation and storage side, as well as on the ethane transportation and storage?

Yes, let me have John who has been quite a student of that issue, take that question.

Absolutely we do, in that we continue to promote our projects on the Gulf Coast around the transport of both propylene, which today will be made from new sources like propane dehydro units, at what is now Flynn Hills and Dow to new markets, as well as some additional propylene splitters that will put new supplies on to that system. So that is one pipeline system that we are promoting.

And then the second is, what we call our [Four Mesa] project, which is an ethylene pipeline which is intended to connect some of the major players on the ethylene side, in order to bring some of the -- really more about reliability there but as well give the opportunity to get ethylene into the hub, where ethylene will be able to traded well in that hub, in order to be able to do some good price discovery of ethylene, which is to service that Williams brought to the market in the last couple of years.

Great. Thanks so much for that color, everyone.

Thanks.

We will now go to Ted Durbin with Goldman Sachs.

Thanks. Just some clean up stuff here. The Canadian PDH, it sounds like you are going to -- you are close to FID there. Any sort of zip code on the capital involved there? Can you confirm that will be 100% fee based, and then the kind of return you would be looking for?

Until we take that to the board, Ted, and we have got an outside party involved in there, as the customer. And so I think until we get all that wrapped up, we are not -- we don't really want to be announcing any of those details just yet. But as you know we have continued to try to work that project in a way that it reduces our commodity exposure in that space, and we think we have found a nice way, and a nice partner to accomplish that with.

Okay. I wonder if you can just talk a little bit, looking out west here, the implications of Veresen buying that, the 50% interest in Ruby. Do you think that helps at all your Pacific Connector project, or should we really just look to sort of Jordan Cove going to FID?

Well, I just think it just demonstrates their confidence in the project, and certainly they are the ones that have the very best seat at the table there. We certainly have worked alongside them, and have our own internal perspective. But I would say anybody that's putting their money where their mouth, is something you ought to pay attention to, and they certainly have stepped up and done that.

Yes. And then last one from me, is just as you look at the deep water, any thoughts? We have seen some of the majors kind of continue with the activity out there, of another Gulfstar, maybe more like a Keathley Canyon type project, how is the outlook there?

Rory, could you take that please?

Sure. Ted, as you know, the timeline on making deep water infrastructure investments, and I guess, development of deepwater prospects is pretty long. Usually it's a four to six-year cycle to get that started, so current oil price is not really too instructive about those decisions. There is a lot of what I would call pent-up discoveries in the mill, if you will. A lot of discoveries have been made, and they are slow going to sanctioning right now, and that is predominantly, I think, because producers are waiting on that 20K technology to be made available.

I think the target is maybe sometime in the 2019, 2020 time frame, that the technology and the equipment will be ready. And that is slowing things down I think, a little bit more than the price of oil. But we do think we are going to have an opportunity in the next 12 to 24 months to deploy another Gulfstar. And as those project get broken loose, we think we will be well-positioned to transact on something. So we haven't lost any interest in that. It's kind of the ebb and the flow of the deepwater. But most producers are looking out, I think six years or so, in terms of what they think oil price is going to be at that time.

Okay, thanks. I will leave it at that.

Thanks, Ted.

And our next question from Craig Shere with Tuohy brothers.

Picking up on Ted's question about Geismar 2, have you all given any more thought with Geismar 1 ramping up over the next couple of months, about possibly neutralizing the commodity risks there over the next year or two?

Yes. Craig, we continue to look at that, and obviously what we are trading off there, is the high margin and the benefit we get from that versus the stability of fee-based structure. And as well, I would tell you we really would like to do a transaction that pulls all the way through our infrastructure. In other words, takes advantage of the ethane supplies and the ethane link that we have via our upstream business, and pulls that all the way through our own infrastructure.

And so, that would be our preference on how we would do that. And provided we could make enough margin in the fee-based side to help offset a large portion of that commodity margin, we would do that. And so I would just tell you, we are always weighing that balance internally. But it is a hard margin, especially given how strong the fundamentals are right now, it is a hard margin to give up. But we do continue to look at that. And I would say it would probably come in the way of a fairly large structured transaction for us to get that, because it would as I have mentioned, it would it involve trying to get the value chain all the way back through our assets.

Sounds like that is not anything imminent. Maybe more like 2016 or beyond?

It might come with contracting on Geismar 2 perhaps, and perhaps a portion of that. So it could come ahead of that.

Okay, great. And picking up on Christine's questioning, with the MLP set to finalize the merger in just the next couple of months, have you had any formal discussions with customers about amending ACMP's cost of service arrangements to dovetail with WPZ's infrastructure in kind of a win-win manner?

I would just say -- to answer to your question directly is no, but I would say that we see a lot of opportunity. We have had some very encouraging meetings with the Chesapeake team. And really honestly, pretty impressed frankly, by the attitude that Doug Lawler is bringing to that, and kind of a high trust relationship that we are used to working in, and one that we can really drive win-win solutions for each other in. And so, while we don't have anything specific there, I would tell you I see a lot of opportunity between our companies to continue to expand our relationship in a way that is beneficial for both parties.

Great. And there ha been some kind of strange trading between WPZ and ACMP, since you announced your finalized merger agreement. Can you discuss anything that would logically push this past the fourth quarter distribution record date, so that PZ would get the higher February payment versus the combined one?

It's just a typical SEC process, so we will file the S-4 within the next couple of weeks. And then, it's just a question of how quickly we get through the SEC It could move very quickly, or it could be a bit longer.

So that's really the wild card, it is just really the SEC clearance process for the S-4. And as we indicated in our documents, Williams has sufficient votes to ensure that the vote is in favor of the merger. And, in fact, we have already committed to vote in favor of the merger. So there is no doubt as to the outcome. So it is really just the SEC S-4 clearance process.

Understood. And last question, on the --I think you have $275 million of outstanding unpaid insurance claims. Can you kind of give some more color about what the primary questioning is around this? And to the degree you don't recover, what you had anticipated, does the MLP just kind of chock that up to history, or does MB help out in any way?

Craig, we are vigorously pursuing the claim, and we think we have a very strong claim. Obviously, the insurers would like to pay less, so there is some level of debate. I don't think we want to go into the details, but certainly we are actively engaged in the process. We and our insurers have now agreed to a non-binding mediation in an effort to resolve differences, and we are going to begin that later in the month of November.

As to what happens if WPZ falls short, it will just be a shortfall in the collection. It will be kind of a one-time item, that I think, and that's the way we look at it. Really no other action that would be related to that. But again, we are vigorously pursuing the claim, and we will begin the mediation process in late November.

Understood. I appreciate the feedback.

Thanks, Craig.

We will go to Carl Kirst with BMO Capital.

Good morning, everybody, and very much appreciate the time here. Just maybe two quick areas of cleanup. Alan, if could I first go back to Appalachian connector, and I am just sort of curious with some of the competition that you are seeing there, do you see any potential for either this project to move into -- or to have partners in the structure? And similarly, do you expect any erosion or change perhaps in the economics from what you saw in Atlantic Sunrise as far as return on capital?

Yes, great questions. I would answer the second one first. I think, very similar kind of the targets. Of course a larger portion of this project is green field in terms of the capital amount, so we have a little less leverage if you will off the existing system. So potentially, depending on the ultimate size, potentially could be a little bit lower than what we enjoyed on Atlantic Sunrise, just because that was pretty extraordinary, but still very attractive returns on the project.

Secondly, I would say that the -- as to the partnership and arrangements there, we think we have got a good project going ahead. And while there may be some partners that bring some strategic value to it that we would entertain right now, I would tell you we have a project that we think stands pretty well on its own at this point.

Excellent. If I had just one quick follow-up on that -- and I guess, I ask this in the sense that, all large infrastructure seems to be taking longer than expected to kind of get done these days. So I am just curious when you all work backwards from a potential late 2018 in service, when do you feel like you need to basically have shippers locked up, I mean as far as whether you are getting through the present agreements, or following it with a binding open season? When do you kind of have to have that in hand do you think?

Yes, I would just tell you we are in the stage of negotiating those agreements, and making great progress on that. And obviously the quicker we get them done, the less risk we have on the timing. But I would tell you we have got a very sober viewpoint out there these days, on what it takes to get these projects built. And we have got that built into our perspective. But having said that, we can't spend six months, so getting the agreements negotiated, so I would say it's more a couple months to get this done that is within our expectations. Again, I think, given the appetite that we are seeing, I think that is very doable at this point.

Fair enough. Appreciate that. And then last quick question, just maybe turning to Canada, and this is really more on the base, off gas and the processing, and I think you actually mentioned some of the coker outages at Suncor, and it looked like there was maybe has been maintenance at Redwater. I think you said, [entirely] at CNRL And I guess maybe my question is, do you have a sense of what the missed opportunity cost was in the quarter from those outages, from the lower equity NGLs? I think you mentioned Geismar, for instance, being $200 million. I didn't know if you had sort of a similar analog for the Canadian side?

John, would you take that, please?

Yes, if I could just make a few comments though about how things are going up in Canada. First of all, we have invested mightily over the last year in reliability up in Canada, so we are poised to take as much gas as our partner is ready to deliver to us at that facility. In fact, we have made some improvement projects that perhaps might allow it to be higher than our earlier expectations.

Secondly, in terms of operational discipline in this last turnaround, we actually got through this turnaround in slightly less time than we originally planned. We accomplished 100% of the tie-ins that we wanted to accomplish during the turnaround, and came in slightly under budget. So now that the answer to your question is, probably about $20 million in missed opportunity in Canada this quarter, against what would be operations at full capacity, receiving all the gas that we could from our partner.

Excellent. Thank you so much for the color, guys.

Our next question is from Sharon Lui with Wells Fargo.

Hello, good morning. Just following up on your previous comments, have you tried to quantify some of the commercial opportunities you expect to realize, and what type of upside that represents to maybe 2015 guidance for the merged MLP?

The only thing that we have put out there, Sharon, obviously, is that the merged MLP of $50 million savings. And I would tell you we think that is very achievable at this point. And we really haven't though put a number to the commercial side, and I would tell you some of it will be pretty hard to characterize. For instance, if we are able to pick up volumes and develop a project like Atlantic Connector, based on some of those synergies, that is a longer term value proposition, but nevertheless valuable.

And so, we haven't really put any kind of numbers to the commercial side of that yet. And as I said, it is such a fluid situation in terms of customer responses and so forth, that is going to be pretty hard for us to quantify. But we are certainly excited what we are seeing, and Jim Scheel, and John Seldenrust, who John runs that area for ACMP, are working very closely together to capture a lot of those. And I think both of them are pretty impressed with the amount of opportunities that we are seeing.

Okay, that's helpful. And just one last one from me. For the drop down of the remaining Canadian assets, is there a specific reason why the drop would occur to WPZ versus the merged entity in 2015?

Sharon, this is Don, it could go either way. It is our expectation we will likely drop it to the WPZ. It will likely happen just prior to the merger, but it could happen concurrent with the merger. But it is something that we've got some flexibility on, but it is likely to be first of the year.

Okay. Thank you.

And we will go to Timm Schneider with ISI Group.

Hey, good morning, guys. Just a quick one from me. So I think it was two weeks ago or so, Sunday night, a report hits Bloomberg, Williams amongst bidders for a competitors Rockies gathering processing system. Obviously, not expecting you guys to comment on that transaction. What I do -- what I am interested in, is what is your appetite for acquisitions at this point? What are you guys kind of seeing? And then, specifically how do you balance that with kind of working through, what you already have on your plate? And then follow-up on that, is how do you guys look at your securities as currency in this environment?

Yes, great questions. I would just tell you, Timm, as we have said all along, we are always interested in acquisitions that are right down our alley terms of being strategic, and in areas that further strengthen our hand. But we are not interested in just doing long drawn acquisitions that aren't additive to our strategy. And so, I would just say we are going to be very selective. But given the large footprint that we have there are a number of project that would add a lot of synergies. I would even suggest something like QEP.

Not surprising to me that somebody assumed we would be the buyer, because I would tell you we would be a pretty good buyer for those assets, just given the synergies that we have in the area. And so, we will certainly be keeping our eyes open. As to the equity value, I would tell you obviously we have demonstrated. We think we are really undervalued substantially right now. But we think that will correct itself in the not too distant future. And so, we are going to be pretty stingy with our equity obviously, when it is valued like it is right now. But we do have our eyes open, and we do have other financing means, given the strong step-up in cash flows that we have got coming our way.

All right. Thank you.

And we'll go to [Chris Sighinolfi] with Jefferies.

Hey, thanks, guys. Just want to follow up on some callers' questions on Canada. John, curious if you talked about, or if Alan talked about the Redwater outage, the Suncor downtime, you gave some color on sort of the impacts for the quarter. Just wondering where we stand right now. Are there any outages of that nature we ought to be thinking about on a go forward, that would be sort of profiling over the next four or five quarters? And then as you sort of assessed the operations up there, given some of these disruptions, do you still feel comfortable about the segment profit target that you had previously given for next year? I think it was kind of [$170 million] to [$210 million] range.

Yes, great question. You have asked a lot in that question, so let's take it piece by piece. Looking forward into next year, in the fourth quarter, late third quarter, fourth quarter, obviously we have got to finish up the tie-ins for the Horizon project which will be coming on-line, so we can expect there will be some outage during that time.

We try and minimize the impact of these outages by continuing -- we keep our wells as dry as possible ahead of the outages. So that we keep the gas, or the liquids flowing out of the LEP unit up at Fort McMurray for as long as practical, and we minimize the impact. So that is I think where we are there.

And then to the second point, as to how do we increase? And perhaps I would ask the question a little differently, how do we increase the reliability of the gas flow? We are spending an enormous amount of effort and time in collaboration with Suncor to help both -- solve some of their problems which they have some real problems that need to be solved at their plant, as well as to obviously assist them in getting more gas to our plant.

Until we have multiple sources of gas getting to our plants, multiple sources of liquids, I think we are always going to be beholden to the reliability of our single supplier there. So I guess -- I don't want to give the excuse, it is out of our control, because we want to work with Suncor in maximizing our opportunity set at this stage. But until we have the multiple sources. I think we are going to have the risk of the single source of supply in front of us.

Okay, great. That's helpful. I think sticking with Canada for a moment maybe, but shifting to Don, wondering about the pending drop-down of the project up there, given I guess, the fact that they are in-progress opportunities largely. Wondering if you could help us think about the potential multiple we might expect there? Obviously nothing specific, but we have seen in-progress opportunities be dropped at book value. Some companies talk about sort of flywheel effects that are generated from those in-progress opportunities, and sort of expand them up. So I am just wondering your thinking now, the Board's thinking about the Canadian opportunities, in light of some of the challenges we have seen up there as of late?

Chris, what we are thinking is that the, aggregate portfolio of assets, both the project we mentioned, as well as a variety of other prospective projects which includes the Syncrude prospect, the Canadian PDH, Geismar 2. and the Gulf Coast pipelines, they are all held by Williams NGL & Petchem Services, would be dropped together. And we would drop those at about invested capital, so book value if you will. And that was part of our, I will say, negotiations as part of our merger.

Okay. Great. One more question from me real quickly. You have had some questions obviously in this call, and I think Timm hit on it with acquisitions and whatnot. But Alan, just curious, how do you think about the IG rating, the surplus cash you are projecting over next couple of years? It does appear you have retained a lot of financial flexibility, if the execution matches the plan. Your slides indicate -- you have stated on the call, you don't think you are sort of being paid for the distribution, and due in growth that you are projecting right now. So I am just wondering given that, are you likely to accelerate any of those growth projections? Or is there -- if more head room comes available, or would you rather sort of pad coverage, keep optionality sort of on the table, as you think about potential acquisitions that might come, additional project that might come? Any color on that would be helpful, in regarding your priorities?

Sure. Great question. I would just say that, we do think we are not being valued for the growth at either the MLP or parent level right now. And frankly, I think that has to be understood, given the outage at Geismar, and some of the risks around that and some of these major projects that we are bringing on-line. And so, I think now as those issues are cured, I think we could see pretty big step-up on that.

So I would just tell you, I --we are pretty energized about how our strategy is playing out. We think there is a lot of acquisition opportunities that would be dead in line with our strategy, and continuing to strengthen that. And certainly, with the major footprint that we have now, with the combination of Access and WPZ, there is just more opportunities out in front of us, that we can -- that we are the right buyer for. And so, I just would tell you, I think we are in a pretty offensive posture.

But we also -- I would say two things, tamp that a little bit. One, of course, is that we do need to see our equities valued properly. And two, when you have got such a tremendous growth in your cash flows built into your model, and you are running accretion analysis, you have got a big step to climb there, to be accretive against such a terrific growth pattern that we already have. So it is a great problem to have, when your base business growing so strong, to look at these acquisitions. But at the end of the day, we are very focused on our vision of being the player in this natural gas space on the infrastructure side. And we are going to stay committed to that vision, but do it in a financially prudent manner.

Great. Thanks so much for taking my questions. Thanks so much for the added color.

We'll take our last question from Jeremy Tonet with JPMorgan.

Thanks for taking my question. Just one small question to follow-up here at the end. I was just wondering, if you look back towards the end of the data book, and you have segment profit guidance reported to adjusted on slide 103, just looking at the 2015 guidance it seems like there is an item in the Northeast G&P of $136 million. And I apologize if I missed it, but could you just provide some color on what the item is?

I am going to turn that to John Porter, because I think he is taking some of these questions. And he can probably best explain it.

Yes, that was an item that we had in the fourth quarter of 2014, that we discussed on our second quarter call, that has now been moved into 2015. We haven't given specific details around that. But it was an item that we were expecting to come through our GAAP earnings, and felt like it should be adjusted out. It's contingent type item.

Okay. Fair enough. Thanks for your help.

This concludes today's question and answer session. Mr. Alan Armstrong, at this time I would like to turn the conference back to you for any additional or closing remarks.

Great. Thank you very much. Well, as you can see, this growth is right on the verge of here at WPZ. ACMP continues to perform extremely well, and the combination of these two great organizations is something to be very excited about.

However, as we think about all this growth, I think one thing I want to recognize to our investor base here, is the tremendous amount of toil and effort that goes on by these teams that are bringing these big projects in. It is not an easy job these days to work these projects, and do it in a safe manner. And there is all kinds of hurdles that are constantly facing these big projects, and these teams have stayed with it, and done their work in a safe and reliable manner. And I just want to say a big thanks, because of all these great rewards that we are able to offer back to our shareholders, are really coming through the efforts of our great operating teams, and our project management teams.

So I want to recognize the great effort that is going on there. So with that, thank you all very much for joining. Appreciate, as always the great questions, and we are really looking forward to really seeing this major powerhouse really starting to take off. Thank you very much.

This does conclude today's conference. Thank you for your participation.