John D. Porter - Head-Investor Relations Alan S.

Armstrong - President, Chief Executive Officer & Director Robert S. Purgason - Senior Vice President, Access Operating Area James E.

Scheel - Senior Vice President, Northeast Gathering & Processing John R. Dearborn - Senior Vice President, Natural Gas Liquids & Petchem Services, Williams Donald R.

Chappel - Chief Financial Officer & Senior Vice President

Brandon Blossman - Tudor, Pickering, Holt & Co. Securities, Inc.

Shneur Z. Gershuni - UBS Securities LLC Jeremy B.

Tonet - JPMorgan Securities LLC Craig K. Shere - Tuohy Brothers Investment Research, Inc.

Ross Payne - Wells Fargo Securities LLC Timm Schneider - Evercore ISI Sharon Lui - Wells Fargo Securities LLC Christopher Paul Sighinolfi - Jefferies LLC

Thank you, Julia. Good morning and thank you for your interest in Williams and Williams Partners.

Yesterday afternoon, we released our financial results and posted several important items on our website, williams.com. 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 five leaders of Williams' operating areas with us.

Walter Bennett leads the West; John Dearborn leads NGL and Petchem Services; Rory Miller leads Atlantic-Gulf; Bob Purgason leads Access Midstream; and Jim Scheel leads Northeast G&P. 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 reconciled to General 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.

Great. Thank you, John and thanks everybody for being on the call this morning.

We've got a lot of things to cover today, but before we discussed the second quarter results, I'd like to briefly comment on the WMB Board Strategic Alternatives process that's underway. And as you'll recall, Williams announced on June 21 that it planned to explore a range of strategic alternatives that could include among other things, a merger, a sales of Williams or continuing to pursue the company's existing operating and growth plan.

A robust competitive process, we believe, is the best way to get the best options on the table and to maximize shareholder value and the board's review is meant to accomplish just that. The process is underway and we're pleased with the progress to-date.

As I'm sure you'll understand we do not intend to comment further on this thorough review of these alternatives before the WPZ transaction today and we won't be commenting further on that until the process is completed and a more definitive course of action is determined by the board. In the meantime and I can assure you that our focus remains on maximizing value and we continue to act in the best interests of our shareholders as we through this process.

And so, with that, let's move on to the first slide and talk about the tremendous growth that we enjoyed in the second quarter and a strong trajectory of growth in front of us. So look here on slide two, the package, here in the second quarter, certainly, demonstrates the benefits from our clearly defined strategy of capitalizing on the significant natural gas market growth by connecting the very best supplies to the best markets.

We've been on this strategy for quite some time and is really starting to deliver a lot of significant growth, particularly in our fee-based revenues. For this quarter, WMB's adjusted EBITDA was $1.02 billion, up 32% versus second quarter of 2014 and at WPZ, we had a record distributable cash flow of $701 million and delivered an adjusted EBITDA of $1.01 billion, which was driven by fee-based revenue growth.

Overall, we had solid performance from four of our five segments, and the performance was delivered despite the fact that volumes were lower in some areas, as a result of price related shut-ins and also because we are operating in a historically low commodity price environment. So when we say lower, just we mean lower than they could have been.

We actually had very significant growth in lot of those areas, but certainly, significant impact from volumes being shut in from gas prices. So let me walk through some of the numbers here.

First of all, in the Atlantic-Gulf, really the strong performance from Atlantic-Gulf, $389 million in adjusted EBITDA and this was up 44% on fee-based revenues from new projects. And this group really is managing a tremendous amount of growth, and just keeps on delivering this growth in a very safe and reliable manner, so couldn't be prouder of all the great work going on there.

At Access, $345 million, up 25% on fee-based revenue growth, and I have to say that certainly we're pleased with the contributions being made from this acquisition, and it's not just the predictable growing cash flows that we all expected, but I would tell you, probably, the piece that's been most impressive from my perspective is the great injection of new talent and ideas that are coming from our new fellow Williams' employees that came from this acquisition. So integration and the synergies are going even a little better than expected there and we continue to see great opportunities out in front of us, as we take in a lot of the ideas and we merge the entities, particularly seeing a lot of opportunity up in the Northeast and we're really starting to get into some of the synergies within our operational excellence and E&C areas as well.

In the Northeast G&P, this is $92 million, up 21% and impressively on 54% higher Ohio Valley Midstream gathering volumes, so really starting to see that come through and noted that the team had a record volume there just this week, and really pushing out some big numbers there, as those volumes start to come in and I'll let Jim Scheel address that later. In the Northeast, in general, I would say that as the face of the energy in the U.S.

has changed over the past years and where it's coming from, we have certainly worked very hard to get ourselves into a position to unlock the tremendous value of the Marcellus and the Utica areas like never before. And we have put ourselves in a position and we are the leading gathering systems in the Northeast.

And we believe our shareholders are going to see great long term value from this tremendous position that we've been able to accumulate in the Marcellus and Utica position. On to the West, EBITDA was $150 million, and this was down 27%.

But as we mentioned, this really was driven by lower NGL margins and so that really was the big story out there. But I will tell you, from an operational standpoint, continuing to see great performance there on both reliability of our operations out there and the safety of our operations out there.

And in fact, in the quarter, our gathering volumes were flat really as compared to the prior quarter and as the year-over-year quarterly comparison and our equity gallons, so the gallons that we take for our account, and our plant inlet volumes were both higher on a year-over-year comparison. So West continues to hold its own, but certainly impacted by lower prices there in the second quarter.

And then in the NGL and Petchem space, the adjusted EBITDA was just $33 million and that number is certainly lower than last year due to the absence of the business interruption proceeds that we reported in the second quarter of 2014. And the near zero prices for propane that we saw in the Edmonton spot prices from our Canadian operations.

But this, of course, was a little bit offset by the Geismar, as Geismar began to ramp up here in the second quarter. But really that was probably the disappointment from my perspective, for the quarter, was not getting Geismar up as soon as we would have liked to, and we did have some very serious electrical power problems on the feed into the plant and we've gotten that behind us now, but it has certainly hampered our operations there in the second quarter.

So once again, I want to reiterate the overall growth our teams are delivering, and we've begun to enjoy the fruits of our labor as we manage the tremendous growth that we really have thought very hard to win on our Transco system in the deepwater, and certainly, in the Northeast G&P, and we expect big improvement now in our NGL and Petchem services group for the balance of 2015, with Geismar now online and Horizon coming on towards the very end of 2015. Moving on to the next slide here – sorry I'm going back to – stay back on the slide sorry.

When you look at our results this quarter, you'll see that our fee-based revenue growth really is coming through in a big way and pretty powerful the way it overpowered lower commodity prices in the quarter. And I think that's really important that we are executing on that strategy in a big way of shifting our business to fee-based revenues and this quarter is an example of where that really pushed through what was some really strong headwinds on the commodity price this quarter.

And in fact, at WPZ, our fee-based revenues were up $537 million or 72%, and while a lot of that was driven by the Access acquisition, a lot of this came through our major projects that we're ramping up. And so, if you look at just the WPZ historic assets, our fee-based revenues were up 17%.

And this doesn't include fee-based revenues from things like our proportional JVs. So for assets like Discovery, which of course got a big boost from the Keathley Canyon project coming on and our UEO investment in the Utica, big improvements in fee-based revenues there, but given the way we account for that, that does not show up in that $130 million of incremental fee-based revenues.

On the NGL margin side, we certainly experienced some serious headwinds and our NGL margins were down $56 million here for the second quarter of 2015. In fact, we only recorded $38 million of NGL margins for the quarter, and it's been a long, long time since we had that low a report for NGL margins.

The Geismar plant, just to mention what's going on there, did ramp up in the second quarter. And albeit that was slower than we expected, but it is now online and consistently operating at or near its full production capacity and we expect significant contributions from the plant here in the second half of the year, as I mentioned earlier.

On a personal note, I'd just like to recognize that that leadership team there at Geismar has been through a lot. And I want to recognize the fact they have really kept their eyes on getting that plant back up in a safe manner, and they continue to hit some really impressive safety records there, despite a tremendous amount of activity going on at the plant there.

And I can't tell you how hard that team has worked to get the plant back up and running safely and I'm very appreciative of their efforts. And so, let's move on to guidance.

First of all, we are reaffirming our Williams dividend guidance for 2015 through 2020. And I would point out that the guidance that we've provided is based on an assumption of the completion of the acquisition of the Williams Partners public units by Williams.

We are also reaffirming our adjusted EBITDA guidance for 2016 through 2018, although we are lowering the 2015 adjusted EBITDA midpoint guidance that we issued in February by about 6%. And of course, this reflects the lower commodity prices that are showing in the market right now for the balance of the year, and as well the problems that we had at Geismar and the ramp-up in the second quarter.

So the Geismar impact of that is really already in our second quarter, and the balance of that lowering is coming through commodity prices for the balance of the year. We also are reaffirming our dividend of $0.64 per share in third quarter of 2015, or $2.56 annualized, and also our dividend of $2.85 in 2016 with 10% to 15% annual dividend growth coming through 2020.

And so, on to the last point on this slide, certainly, a tremendous amount of growth continues to come at us. And I want to say that we're very excited about how the major projects that are now contributing on the fee-based revenue side are really starting to drive our business and also a lot of projects that are on our list right now that will continue to build the stream of growing cash flows for years to come.

Now, moving on to the next slide here and this is slide four. First of all, the projects that are beginning to contribute.

We said back in the first quarter at our Analyst Day in May that the demand side of the natural gas market is driving our project list and we are really reinforcing that here again today. And as we look at some of the significant projects that we put into service here in the second quarter, it's easy to see that we've really been executing and delivering on these projects.

And here, as you look at the second quarter, for example, on our Transco system, you can see here we delivered three very important projects in the quarter: the Rockaway Lateral and the Northeast Connector project that goes with the Rockaway Lateral, so – but two independent projects there. The Mobile Bay South 3 project, we brought into service in April of 2015, and that was on time and on budget.

And our CPV Woodbridge project, which was brought into service on schedule and below budget. And our New York Bay expansion project, just one more example, we did make our FERC application in July here just recently as well.

So a lot of hits just keep coming on the Transco side. Gulfstar One, these big projects that we put on into service at the end of the first quarter really provided a lot of strong contribution here in the second quarter.

And the production volumes from the Tubular Bells prospect there does continue to grow. And in fact, the fourth well was just brought on recently there by the operator.

Our Discovery Keathley Canyon Connector, certainly drove our proportional JV EBITDA in the quarter. And again, these are fee-based revenues that are coming from Exxon's Hadrian facility and Anadarko's Lucius facility.

Our Discovery system is running completely full now, and we are really liking the prospects that sit around the Keathley Canyon system and the kind of high margin business that will continue to flow in on this system that is so well-positioned now in the Keathley Canyon. We also completed an acquisition of the Fox Creek gathering and treating system.

And this expands Access's Eagle Ford footprint. And as we said in the last call, we expected to see producer systems come into the M&A space and this acquisition is a really good example of that.

So this is a bolt-on to our business there in the Eagle Ford and a very nice addition of predictable fee-based cash flows coming in there. We also acquired some additional interest in UEO and that interest is now up to 62% and this area is really enjoying tremendous volume growth here in the Utica.

On Geismar, as I said earlier, Geismar is now producing near its full expanded capacity. And in fact, our production here on Tuesday was about 5.27 million pounds a day of both ethylene and propylene, and so, doing very well there and we'll continue to optimize between our ethylene and propylene production depending on margins.

Coming soon, as we look forward, there's a lot of exciting projects left to come on for the year. Our Virginia Southside project is expected to come in-service in the third quarter of 2015.

And our Leidy Southeast project is expected to come on in-service in fourth quarter 2015. And so, we're making good progress on those items.

Our Canadian off-gas processing, we're making great progress towards bringing our CNRL Horizon project startup in 2015; and our Kodiak tieback, which is a tieback to our Devils Tower platform, is expected to come on in the fourth quarter of 2015. And these tiebacks that we're getting to experience out here are really powerful tools in terms of driving a return on our business, as they require very little capital and large amounts of fee-based revenues.

In fact, our Devils Tower field is now nearly 12 years old and this is the fifth field to be produced from this platform now. And Gunflint will be the first tieback to our Gulfstar platform and that is expected to come on in 2016.

And I would tell you that is well ahead of our original expectations that we had for that investment thesis in Gulfstar. So really enjoying the benefits of really learning to aggregate and tieback production in these big deepwater spars.

Once again, this list is certainly very extensive, and I'm very proud of our team's progress, as they really are delivering the growth that's out in front of us now. Moving on to slide five, we've said many times that Williams is uniquely positioned to connect the best natural gas supplies to the very best markets.

And we've certainly focused our strategy on natural gas and are positioned to take advantage of the demand growth that's both here today and is coming in the next few years. We have bought and built our way into being the largest gas gatherer in the largest and fastest growing gas supply basin.

And we've built Transco into the largest and fastest growing natural gas pipeline. Our second quarter results are certainly a reflection of the fact that our efforts are driving tremendous cash flow growth, despite stark commodity price headwinds and our large scale fee-based projects are meeting or exceeding our expectations as they begin to contribute in a big way.

So the revenues from big projects like Keathley Canyon and Gulfstar are really doing very well, and in many cases, as I said, going beyond our expectations. Our focus on the fee-based growth means that we're expecting about 89% of WMB's 2015 through 2017 gross margin to come from fee-based revenues.

And we have $9.8 billion of the total 2015 through 2017 in-guidance growth CapEx and 96% of that is focused on fee-based projects. We have committed and potential growth capital through 2020 of over $30 billion.

And I'll tell you that is very rapidly growing. We really haven't updated that guidance in quite a while.

But I'll tell you that book of business is rapidly expanding. It also – when we put that out, we do not include things like our M&A bolt-ons.

And so, we've got a lot of M&A bolt-ons that are coming at us and are very – we're very well positioned for and those are not included in that opportunity list as well. So our backlog of projects does continue to grow and we just have not updated that just because it is so large to start with, but we do continue to see great opportunities in our business, both in terms of the known projects and the potential projects both continue to expand.

So I'd like to just sum things up like this, with over $1 billion of adjusted EBITDA for the quarter and the record quarterly DCF, both of these are driven by strong fee-based revenue growth and we're very pleased with our second quarter results, as the headwinds of lower commodity prices are certainly being overwhelmed by the tremendous growth in fee-based revenues that will continue for years to come. So some pretty serious headwinds that have been out there, but well, it's really impressive now to see all these projects starting to take hold and really starting to make our NGL margin rather insignificant up against the growth of our business.

And certainly, the growth that we're seeing demonstrates the performance of our premier asset footprint in the natural gas infrastructure space. And this includes the fastest-growing pipeline in the U.S.

and the largest and fastest-growing positions in the tremendous Marcellus and Utica basins. So with that, as we move into the Q&A session, I'd just like to remind everyone that the purpose of today's call is to discuss our operational and financial results for the second quarter of 2015.

And I ask that you please limit your questions to these topics. We won't be taking questions on the Strategic Alternatives process or the WPZ transaction.

And once again, I can assure you that the focus of our strategic alternatives review remains on maximizing value and that the board and management team will continue to act in the best interests of our shareholders. And we're excited about doing that.

And so, with that, let's move on to the second quarter Q&A.

Good morning, everyone.

Good morning.

Good morning.

Actually, a big picture question first up. Alan, you suggested that the backlog is actually growing, no change to the official guidance.

What – just kind of qualitatively, when would we or should we expect some updates there and is it just as things come to fruition or is it more of a quarterly type event?

Yeah. I would say there's really two things you should see moving there.

One is that many of the projects that are in our potential backlog so that are in that $30-plus billion, some of those projects will start to be moving in to guidance as we close deals there. So a lot of big opportunity right now, particularly in the Northeast, and as well as Transco continues to be very successful in contracting for new business along its system.

And so, you'll start to see some business migrate from that $30-plus billion into the guidance numbers. So in terms of timing, we'll just update that in that particular case, as those deals are closed.

Secondly, on the potential bucket, I would just tell you we just – the demand side of our business is really picking up in a big way and we're extremely well-positioned to capture a lot of that. And so, we are seeing a lot of additional interest in that, and we just obviously don't update that every single quarter.

On the potential side, for one reason, it's so large already, it's not going to drive all that much, but as we see significant projects move in there, we're beginning to expand that. But I think the first thing you should expect to see in the near-term is projects in the guidance side starting to build.

Okay. That's actually very helpful.

And then, somewhat related, you mentioned Access operational synergies kind of showing up here recently. Is there anything – any detail that you can provide around that or any specific synergies that you want to highlight?

Sure. Thank you for that question.

We had identified that we would have 25 last year upon the acquisition and then 50 on the merger. And right now, we have in our sights a number that's better than 50 here for 2015.

And because some of that is being – even though it will show up in 2015, some of that will be full run rate; next year, we'll actually see a larger number than that next year. So a lot of those things are on some of the support services side, but we also are in the process.

We've reorganized our leadership in the Northeast under Jim Scheel there and so we're starting to look at that the synergies that are available to us in the Northeast gathering area as well, and those really will be 2016 kind of improvements in synergies, and we're just really starting to identify what that really looks like.

So stay tuned for the 2016 guidance number on synergies?

Yes.

Okay. Thank you.

That's good for me for right now. I'll hand it over.

Okay.

Thank you.

Hi, good morning guys. Couple of questions on my front here.

I was wondering, first, if we can sort of talk about the MVC exposures at the old Access assets. There's been a lot of discussion about it lately.

When you look at your exposures relative to your producer customers, I was wondering if you think of it on a basin-by-basin basis and if there are any regions where it's possible the producer customer has, I guess low to negative IRRs. And I guess that likely is in the case in Northeast, but I was wondering if you could comment if there's any regions where you see some weaknesses where producers are likely to be at or below the MVC should the commodity prices continue to be at the current levels, or possibly get worse?

Yeah. Let me try to take that and then look a little bit to Bob here.

If you are speaking of MVCs outside of the Chesapeake business, for instance, we do have some shut-ins in the Marcellus area. And those contracts are under cost of service.

And so that value proposition of that would come back to us when that rate gets adjusted on an annual basis. And so that's I think the best way to think about that relative to the Chesapeake business.

The MVCs that exist in the other Northeast, I would say, we're well above those – even at current shut-in production levels, we're well above those. I think the way you should think about that is that the volume support that we really have with that will come when the big pipeline projects come into service and there is known obligations to volumes into those downstream pipelines.

So Constitution, Atlantic Sunrise and Leidy Southeast obligations into those projects will drive some support for volumes just because we know what the obligations are into those take or pay obligations on those pipelines.

Let me...

So...

Yeah, I was just going to add the two areas where we've got through MVCs, the Barnett and the Haynesville, obviously, were below the MVC in the Barnett. We do look at them on a basin-by-basin basis.

And our view is that drilling in the Haynesville will come under the MVC that's growing in that area. And you're seeing that in the volumes that are showing up.

But the Barnett is just not attracting the drill bit right now, and we don't think will be for a while, but it still is producing good cash flow in terms of its lifting cost compared to the current netbacks.

So just to confirm, the Barnett is not attracting the drill bit, likely negative returns for your producer customers and is that the case also in the Haynesville? And that's why you're saying it's going to probably come under the MVCs at some point?

Well, I wouldn't speculate as to Chesapeake's returns in that area in total. I'll just note that the Barnett's producing good free cash flow in almost any environment and that that Haynesville is attracting drill bit currently.

Okay. My follow-up questions, there was a big pickup in ethane volume sales in the Northeast.

I was wondering if you can sort of talk about the big shift. Is it something that you did, is rejection suddenly not happening?

I was just wondering if you can sort of give us a little bit of color on that.

Yeah. Sure.

One thing we didn't mention was that towards the end of the second quarter, we brought our ethane pipeline up there into service. And so, we now are running our de-ethanizer and that ethane pipeline feeds in to the – some of the contracts where producers have to sell their ethane.

And so that is what's driving that. So now, we're getting incremental fees for those ethane services that we wouldn't have been getting until that pipeline and the de-ethanizer replacement service.

Okay. Final question.

I realize you can't talk about the strategic review process and so forth. I was just wondering if you'd confirm whether a data room is currently open or not.

We're not going to talk about that, Shneur. We're just going to have to hold a very, very firm line on this (32:42) answer your questions on.

Okay. No problem.

Thank you very much, guys. I appreciate the color.

Thanks.

Good morning.

Good morning.

Just for the strategic process, I appreciate you might not be able to say anything here, but I wanted to bounce a couple of thoughts. Is there anything you can share with us as far as what the timeline might be there?

And also, you talked about some smaller bolt-on acquisitions. Does this process interfere with any larger M&A aspirations you might have?

I'll take the second question just to say that it is business, as usual, in terms of our bolt-on M&A efforts. And so, we continue to execute on our plan and our strategy in that regard.

Okay, great. Thanks for that.

And then, in the Northeast, it looks like gathering volumes were down a little bit quarter-over-quarter, but processing was up. I was just wondering if you could share a bit more with us in terms of what you hear with regard to producer customer activity there in the back half of the year, and how you guys are thinking about volumes at this point?

Yeah. Sure.

I'll just take that real quickly and then if you've got some more detail, Jim Scheel can chime in. Really, the only impact, the gathering volumes and production available is actually growing pretty rapidly.

And as you saw, the big increase we had in OVM volumes with a 54% increase in gathering volumes in the Ohio Valley area. But the real impact was from shut-ins, particularly from producers up in the Susquehanna County area and some very substantial shut-ins that are due to lack of infrastructure availability.

So we hear the term gas price there, but in fact, it really – the problem isn't the gas prices. They were enjoying $270 gas price up there.

They would be pulling everything they could, but in fact, with all the constraints and lack of takeaway infrastructure right now, they're not getting that kind of pricing level and so some of those big producers start to bid against themselves as they put additional supplies into the market and so they're taking actions to curtail that production and so – but in fact continue to develop the reserves, and are making ready for when these big pipeline projects like Leidy Southeast, Constitution and Atlantic Sunrise come on up there. And so there are some big volumes and big gas purchase contracts that will stand behind those, and so they're readying their availability to deliver against those obligations.

And so it's just about that simple. The rest of the business, the Northeast volumes are, in particular, like I said, OVM volumes are doing well and the Utica volumes are doing well as well on the joint venture operations that we have there.

Great. Thanks for that.

And...

No, I'm sorry. I think Alan got it, thanks.

Just a follow-up on the Northeast. You'd outlined some of the cost savings that the Access merger had brought into the fold.

I was wondering if you might be able to talk a little bit more about the commercial synergies that you might see. And I think during the Analyst Day, you talked about specific hubs there and opportunities related to that.

So are there any further thoughts as far as what joint commercial opportunities could occur after the combination?

Yeah. Sure.

A lot happening there. Probably, the most obvious and the easiest to talk about is in the OVM, in the Ohio Valley Midstream area, where Access's North Victory system sits just to the north of our OVM system and extends the reach there.

And as well, the ACMP team's capabilities on building out the gathering systems and the modular compression to attract those volumes is well-known by producers in the area. And so we have a really big list of producers that we're working with right now that leverage off of the combination of those existing ACMP systems feeding into OVM, as well as the expansion of those systems into new acreage that's been taken up there.

So a lot happening on that front, and it really just boils down there – within OVM, it boils down to the expansion and the reach of our system just got a lot bigger into the OVM processing and fractionation complex. In addition to that, though, I would mention two other things.

First of all, the Utica dry is really starting to hit some – people – far exceed especially our expectations, I would say, in terms of the potential of those reserves in production. And we're extremely well-positioned there on capturing the Utica dry business.

And so, again, the reach of the Access system that's in the area along with the OVM system is powerful in that regard. And then, finally, the joint ventures between the Blue Racer Midstream business and the UEO system, both are very well-positioned on the Utica, and are enjoying growth there.

And of course, we're looking to find ways to combine those systems in a way that really provides a super system for the area. And we think we're extremely well-positioned to bring that about.

So a lot happening there that really is the combination of the historic Access assets and the historic Williams assets. And I think when we back up couple of years from now and look at this very impressive coverage of the area, in terms of being able to offer producer services on both Utica dry, the Utica wet, and the Marcellus wet, and particularly where those things cross over.

So a lot happening there and we couldn't be more excited about the number of opportunities that are coming at us right now in Jim Scheel's area.

And do you see more opportunities to kind of take advantage of that liquids production, extending your footprint further downstream?

You know, there's a lot of great projects out there. We are certainly working with our producers who control those liquids to try to find the right opportunities and certainly, are encouraging that infrastructure to get built on the downstream side.

And so, I think from our vantage point, we're looking to try to encourage the development of that infrastructure, but it's really our producers' volumes and they'll be the ones that need to speak for the support of those projects.

Great. Thanks.

And then just one last one if I could. With regard to Geismar, how close will 3Q 2015 be to a complete full quarter?

And is the O&M run rate in 2Q, is that a good run rate for the segment?

Let me have John Dearborn take that.

As Alan mentioned, we made about 5.27 million pounds per day on Tuesday. I think that would be a pretty reasonable rate to expect, because we've been able to demonstrate that for reasonably long periods of time, in excess of a week through this past several weeks as we brought the plant into full operation.

So we're very encouraged with where we are today. So I think that's a fair way to look going forward.

I think the one thing to take into consideration on the O&M numbers is we did face a rather substitute power failure, during the second quarter, which would have seen some higher O&M costs. I'm going to venture to say somewhere in the range of about $6 million to repair furnaces, which were unexpected.

Those furnaces – it's a pretty normal thing when you face a significant power outage that you've to go in and repair the furnaces. That's what takes time, and it took some money in the second quarter.

Great. Thanks for all the color.

Thanks.

Good morning, guys.

Good morning, Craig.

So I got one follow-up on Brandon and Jeremy's question in the Northeast and then a couple on commodities. So picking up on the Northeast opportunities, there's been a couple absolutely monster Utica dry gas wells.

I think one was just reported this morning, but in the last week a couple really big ones. Is there any way to give a rough range of the potential size of midstream service opportunities in the dry gas area out there?

Yeah. Great question.

And I will tell you that I think the challenge for everybody up there right now is getting the takeaway capacity out of the area. And so, there's no doubt that the potential was there at this point.

I don't think anybody that's involved or engaged in the business up there doubts the potential. And especially, in areas where you already have pads established for the Marcellus wet and even some of the Marcellus dry, the underlying Utica under that and the ability to take advantage of the existing pads and existing infrastructure to bring that production on is where we think a lot of that big production will come on when there's an adequate call for it by the market.

But as we sit today, the market – the supply side is desperate to see those expansion projects come online on the gas takeaway side to be able to alleviate that. So I think that's really the curtailment, if you will, right now, that will stop that from being – going gangbusters, but it is impressive.

In terms of the opportunity for us, we've got a multi-billion dollar opportunities right now that we're looking at in terms of expansion of our systems up there, a lot of which is driven by both the Utica dry and where it overlays with the Marcellus wet. And so, we've got very – we're very far along in negotiations.

And as I mentioned earlier, that's really where you ought to start to see our growth come from in terms of our potential projects. Besides the Transco demand side, you also should start to expect some of that business that was in the potential start to move into the guidance, as we start to close up on some of that business that's out there in front of us.

Great. That's helpful.

And then, on the commodities side, a couple of related questions. First, on the $150 million of EBITDA guidance change relating to commodity price deck, can you roughly split that between Geismar olefins and all other and elaborate on what you're seeing as drivers right now for olefins crack spreads into 2016?

And are you still seeing or expecting at least a couple cent premium to Belvieu there? And then the final thing on new projects relating to commodity issues, any updates on PDH or Geismar 2?

Okay. Boy, that was a lot of questions, Craig.

I'm sorry.

Trying to digest them all here.

I can take the – of the $150 million change in commodities since our February – we issued that guidance on February based on the price outlook at that time, I'd say something under $60 million was olefins, and the balance was NGL margins and related curtailments.

I got you.

Yeah, I'd say that's certainly the big numbers was on the NGL piece and then the Geismar piece, which is really behind us now. The PDH and Geismar 2 – great progress, really, on both of those projects and both in terms of putting the finishing touches on the contract for the polypropylene at PDH, and we do expect to be bringing that forward here in August before the board for further consideration on that project.

But things are actually improving on that project in terms of – as we've started to getting quotes for a lot of the big equipment for that project. So we're really excited about the way that's going right now.

On Geismar 2, very strong interest from two parties that we had narrowed that down to. And I would say we're into some pretty serious diligence now, with one party, in particular, at this point and I think very serious interest on their part and our part in terms of going ahead with the Geismar 2 project.

So really great progress on both fronts there.

Great. And I'm sorry for the barrage at you.

The one additional item, I just noticed that with 2015 that coming down, but 2016 unchanged, I think there was over a 30% increase in expected crack spreads, and I was wondering if you could give some additional color around drivers that you're seeing in the 2016 at Geismar.

Yeah, I think there are a couple of things. Let me take that one third in line.

First, I'd like to just add to the earlier answer that I gave that that power outage that we faced was related to a utility power failure to our plant so that was not inside our plant. It was rather the supply to the plant that took the plant down, totally unexpectedly, in a very significant severe manner.

Second, you had asked about premium to Belvieu, I believe. And now, with Evangeline running, with us running, that premium has essentially fallen back to more normal levels in the $0.01 or $0.02 range, though remember that Louisiana is a thinly traded market, and so, you don't get every day visibility into what that premium is.

Also, remember that our customers have a call on about 80% of our production. So we have only available to us about 20% sell into the spot market, and coming through the second quarter, certainly, through June and in July, we have been satisfying our full contract requirements to our customers, so selling essentially all of our volume in that contract.

There've been some de minimis volumes that we have sold into the spot market only when there were some discontinuities between what our customers needed and what we were able to produce. And now that I've gotten through those two, somehow I've lost track of what the third question was.

It was the 30% increase in crack spread.

The 30% increase in crack spread. Thanks.

Well, looking at this year, I think earlier in the year, we were saying that we saw inventories rather low in ethylene and that we could expect some demand growth and we could expect perhaps some disruptions in supply that might drive to a tightness in ethylene that would help improve that situation. We haven't seen that materialize quite as yet in this year, but certainly, as time passes into next year and subsequent years, up until the time when the new crackers come on, you would expect that continued demand growth, and of course, recoveries of international markets and the like that might be hampering volumes these days would result in some strengthening opportunities for margin growth.

And I think that's what we see behind the future there.

Great, thank you very much.

How are you doing gentlemen?

Good morning.

Good morning. Couple of quick questions.

Could we get a rough debt number or debt number for WMB or WPZ? And secondarily, thanks for the guidance on the fee-based from 2005 (sic) [2015] to 2017.

Can you give us a rough estimate of what fee-based is currently for the company? And then third, I was going through your press release.

Can you talk about the profits that the Geismar is currently generating or what it was maybe in the second quarter? Thanks.

Hey, Ross. This is Don Chappel.

The debt numbers are in the 10-Q that we filed this morning. I'll try to grab something real quick here for you.

But again, we filed the Williams and Williams Partners 10-Q this morning. All that detail is out there.

Great.

Long term debt, this is at Williams, $21.285 billion.

Okay, great. I'll check the Q on that.

Yeah, great. Thank you.

And on the fee-based?

The fee-based percentage, I think, for this quarter and for 2015 is going to be in excess of 90%. I think somewhere in the 92% range given that Geismar was down for a portion of the year and kind of where commodities are.

We're estimating or forecasting the fee-based percentage to be just a little below that over the three-year period, 2015 through 2017 is about 89%.

Okay. And the Geismar profits?

I don't think we've disclosed the specific Geismar profits, but we did indicate that there was $50 million of gross margin for the quarter.

Okay. All right.

When I'm looking at the press release and it goes over the Geismar incident adjustment of the negative $126 million, how do I think about that?

That was business interruption and insurance proceeds. Again, a year ago, the plant was down, but we had business interruption insurance.

And we estimated that during the second quarter of last year that we had a right to about $122 million. Since that date, we've collected -- we have a $500 million policy.

We had losses, property losses approaching $70 million with just a little over $430 million, I believe, of BI. We've collected more than $420 million.

We have a claim for $20 million that's open that's still being negotiated with an insurer, but again, the vast majority of our insurance claim has now been paid.

Okay. Looking at this, I mean it looked like it was $96 million in the second quarter 2014 and then it swung to a negative $126 million for the second quarter of 2015, so.

Again, there's a difference between GAAP and adjusted. So for GAAP, for financial statement purposes, we record the cash, the insurance proceeds when we have a signed settlement agreement with the insurers or we actually receive the cash.

For adjusted earnings, we in effect accrued it based on our expectation of collection. John Dearborn from Investor Relations can walk you through the...

John Porter.

John Porter.

John Porter, excuse me. John Porter in our IR shop can walk you through the GAAP to non-GAAP numbers.

Okay. Thanks.

And just one more, do you guys know the timing of when your strategic review will be complete? Thanks.

There is no timing announced.

All right. Great.

Thanks, guys.

Okay, thanks very much, Ross.

Hey, good morning, guys. Hey, Alan, when we spoke in April, I think you were saying this was the earliest time you guys had locked up all of your Conway storage and rail racks for some of the Northeast NGLs.

Obviously, if you look at some of the E&P numbers, realizations were pretty awful. I was just wondering how you guys see that shake out as we get into the shoulder season of 2016, right, Q2, Q3 without really any incremental export capacity slated to come on until the end of that year and what impact that's going to have?

Yeah, Timm, great question and certainly one that a lot of people should be paying attention to, obviously. I do think that even though the export capacity, not any new export capacity coming on, there is, as you know, that hasn't been fully utilized.

And I think the limitation there has been on ships having the capacity to carry that out. So I think that's kind of the next bottleneck, if you will, for the industry to face.

And so, I think keeping a close eye on the availability of the shipping capacity to get out of the exports is probably the next thing to keep our eye on in terms of opening the markets up. But other than that, I don't really see much changing here domestically in terms of either storage capacity or rail loading capacity.

I would say everything that can move and store NGLs right now is in full utilization, and building up behind the next bottleneck, which, as I mentioned, in this case is the export capacity getting the shipping capacity available to them. So I think that's the next thing to keep our eyes on here in the shoulder month.

But certainly we don't see any near-term big relief here. I think we're probably three to four months out before we start to seize a lot of that capacity out there (56:35).

Okay. And then my follow-up is, you obviously saw a large proposed merger transaction up in the Northeast with two of your competitors.

From your standpoint, how does that change the competitive landscape in the Northeast in terms of competing for projects and whatnot, how do you guys see that from your perspective?

Yeah, I don't really expect a whole lot of change. I think from our perspective, we're pretty excited to see Marathon bringing their business and they've always had an interest and are very well positioned to take care of lot of the heavies and the condensate in the area.

And so, we're really excited to have them engaged in bringing takeaway solutions to the area. So I would say that's kind of the net positive out of it.

In terms of competition, I think we've got such major acreage dedications already to us and it's a matter of getting the takeaway capacity coming online for the Northeast and now, even for the Marcellus and the dry Utica. And I think that will be really the drivers there is that capacity coming online and then we will be in a position to provide a lot of supply infrastructure to handle that, as those markets open up in the future.

So I really see that as really the determinant up there more than the competitive landscape.

Okay, got it. Thank you.

Thank you.

Hi, good morning. Just a quick question for John.

Perhaps maybe you can just talk about your outlook for NGL pricing up in Canada and how maybe the recent weakness could impact I guess the returns of some projects coming on in the back half of this year?

Yeah, it's a great question. And perhaps I can take it on by giving a little bit of background on how we make money there.

And I think it's important for us all to remember that we make money on the spreads between gas and what is substantially an olefin stream. So we make money between gas and propylene and gas and uplift.

And of course, we're protected on core price on our ethylene production up there in Canada. And so, really the substantive exposure that we face that I think – and certainly causes us concern is on the NGL portion or the (59:20) portion of that production.

And certainly, today, propane is not returning a cheap value. And so, therefore, it's the one product that is not making money for us up in the Canadian pocket right now.

And so we're just looking for opportunities where we might be able to mitigate that situation. We haven't found it yet.

So I don't have a clear solution for you yet, but we have found a way to deal with the heavier part of the barrel. It's making money now and all the rest of the parts of the barrel are making money.

And so, if you think about the pocket in that way, I think you'll understand that we're still contributing income in Canada despite the NGL difficulty. One last point, though, and that is the stranded (1:00:13) nature of that propane up in Alberta does substantiate our thesis on why we think the PDH and the creation of a demand center (1:00:22) in Canada creates a value-added project and a sustainably advantage project into the future.

Do you see any potential catalyst that would decrease that propane oversupply in Canada?

Well, if you mean by catalyst a process that uses a catalyst to convert the propane into something else? I'm sorry.

Or maybe a project that would alleviate the oversupply situation up in Canada, like any drivers?

The only thing that we occasionally seek through is whether (1:01:05) would ever reverse but right now, the (1:01:07) is needed up in Canada, and so, in the absence of another large pipeline that traverses rather long distances to move the propane to the Midwest or somewhere else in the United States, I think it's very hard to imagine something that's going to alleviate the situation on propane.

Okay.

I would just say, Sharon, and certainly, we've got our eyes on that, and as John mentioned, there are ways that we're looking to help mitigate that. And part of that is to getting the propane back into the fuel markets.

So if you think about that, where there are big straddle plants that are extracting propane, our facility extracting propane, the simple way is to get those propane barrels back into the gas stream where they came from in the first place in the most part and I think you'll see moves on people's parts to start to get a lot of that propane back into those streams.

Okay. And I guess just a follow-up, how should we think about the near-term returns on the Horizon investment?

Well, in the near-term while NGL prices are still where they are, I'd suspect they're probably going to fall a little bit short of where we would expect long-term returns to be. I think on a volume perspective, think of Horizon as being about a third of what we're doing (1:02:37) today.

So I think that gives you a view on both the margin and the kind of volume.

So just to remind you though on that, Sharon, the bulk of the income on that asset really comes off the propylene and the butylene and then the ethane, which has the fee-based contract or the floor (1:02:59) contract for the ethane already embedded, which gives us a margin on the ethane and ethylene. So that's really where the bulk of the value comes from and the propane stream, even though it's very depressed right now, certainly has not been and isn't expected to be a big contributor to value in the future.

Okay. That's very helpful.

Thank you.

Thank you.

Hey. Good morning, Alan.

Thanks for the color this morning.

Good morning.

I have a few questions. I promise to be quick.

First, following on Shneur's inquiry about the relationship with Chesapeake, I'm just wondering – you were speaking specifically or inquiring specifically about the MVCs. I'm just curious sort of more broadly about the counterparty exposure you had to them.

There's obviously been some visible setbacks for them over the last couple of months. So I guess within the context of that, have you tempered at all your expectations for the cost of service growth in the Northeast?

I know your guidance in aggregate remained unchanged 2016 to 2018, but wondering if there was any movement within that on cost of service efforts, given CapEx headwinds potentially? And then, related, any recent conversations with them about the midstream contracts you have with them, any effort to renegotiate, do you see that as a risk?

Yeah. I'll take a stab at the broad relationship and the contract discussions, and I'll ask Bob Purgason to speak to the cost of service expectations in the Northeast and broadly.

First of all, on a broad level, I'll just tell you we continue to enjoy very good relationship with Chesapeake. We're very impressed with their responsiveness to the situation that they're in.

And I can tell you that they continue to work hard. Obviously, they announced an asset sale in the quarter.

And they continue to look for opportunities, and we continue to be constructive in working with them where we can on that. And I would just tell you, again, I remain very impressed and very confident in their actions to put themselves in a position to have the right capital focused on the right assets.

And I'm confident that they're going to be able to do that. And in terms of restructuring, certainly, they take the lead on that, and we try to provide support and find win-win ways where they can add volumes that help offset some of those obligations and that's the kind of things that we're looking at.

And I'm not going to get ahead of them on that, but I would just tell you we're very excited about some of the new opportunities that we can help with where they can bring on new volumes up against existing obligations. And with that, I'll have Bob try to take the cost of service question.

Yeah. Just in terms of our cost of service growth, there in the Northeast, it's really in our Marcellus north area where we're adding some compression to continue to support the development there.

I'd note that's an area where the cost of service contracts are delivering, we'll call it, great market fees. You noticed we had a fee reduction in the first quarter, and it was related some – a part of it was the fee reduction in that north area due to the high volumes that drive that fee lower.

So we continue to see that. And then our Utica area, which is cost of services well continuing to expand compression there to support really great wet Utica results that you're also seeing show up in our UEO OVM volumes.

So, no, we still see particularly those Northeast contracts as good strong pieces of our portfolio and also look to be good in Chesapeake's activity as well.

Okay, great. Thanks a lot for that color.

I guess, sticking on the Northeast and this is sort of a follow-up to Craig's question about the monster dry gas Utica wells we've seen recently. From a gathering perspective, can you address those types of wells or pads with the same type of infrastructure you've been using?

Or is it a concentrated magnitude of production from those wells is going to alter how you have to service them and does that have any ramifications on either the type of return or the profile of return you might see gathering for such well?

I would just say that certainly already having the right-of-way and the infrastructure in the area, as you know, in a lot of our OVM area, we have a loop system, so we have one line that we can dedicate to rich service and one line that we can dedicate to lean service. Having said that, the kind of size of some of these wells that are being hit are obviously going to require some massive expansion of those systems.

And I will just tell you that having the right-of-way established and having the interconnect into multiple takeaway pipelines is going to be what is valuable. And that's exactly how we're positioning ourselves out there.

But I would just – if you think about it, an existing pad up there is almost like – and sometimes I think it's even more so the case, it's almost like an offshore platform, because the real estate up there, getting a flat spot, and having a road into it, and having pipelines into it in that very difficult terrain up there is really a precious piece of real estate. And so that's where you'll see the development of a lot of that Utica drive, particularly in the northern part of West Virginia there.

And so we have the pipelines into those locations and the right-of-way into those locations. And I think we'll be very successful in continuing to pick up those volumes as they come on there.

But you're right, the existing infrastructure – to the degree that we get takeaway capacity established out of the area, and by that I mean long haul pipeline, long-haul interstate pipelines established in the area, the existing infrastructure would be overwhelmed if the producers started going after drilling plan in those areas, because there is so much productivity available from those areas. Obviously, though the productivity is going to have to stay in check with demand in the market.

Yeah. I think it's a great example of where Access legacy and The Williams fit together, right, because this initial wave of development is going to be used in existing plumbing, to the extent that we've got proximal pipelines and/or rights-of-way we can give near-term service.

And then we can wait for this big takeaway opportunity which is going to create a whole new wave of large infrastructure investment to meet these big wells. So I think we're positioned well to capture that business and give near-term service to those who want to produce dry wells given their economics.

I think one of the interesting elements of all this big Utica dry gas that may or may not be obvious at this point, is that it really is going to provide a lot of blending capacity into the gas pipelines. And so, if you think about this concern about the ethane recoveries and ethane takeaway, all of this big dry gas really provides a lot more capacity to put ethane into the long haul pipeline and still meet gas specs.

And ultimately, what that means is it somewhat it helps solve the storage problem or ethane feed into some of the big crackers that are being developed there, because in effect, the gas pipelines become that storage element, and if there's a problem with the cracker, the ethane just goes into the gas stream, but still stays on spec. So that's actually one of the really interesting developments from our perspective coming out of this big Utica dry volumes that we're seeing show up.

That's a great point, Alan. I guess my final question.

You mentioned takeaway from the basin, and so I just wanted to follow-up with you quickly on Constitution. I think at the time of your Analyst Day, you were waiting or hopeful for a New York DEC permit in June.

I know that didn't happen, but I'm just curious for an update on where the regulatory process for that project stands? I realize it's not a huge CapEx item for you in the greater context, but when we think about the effect on the basin takeaway, just curious for an update.

Yeah. I'd just tell you we've been working very closely with the DEC and are excited and very optimistic about where we stand and would hope to see a permit very soon.

Is there a point, at which – does it have a cascade? Is there a point at which it has a cascading effect on the timeline that you've put forth for in-service, or are we anywhere near that in your mind?

I think right now, we feel good about the date that we put out there for getting that finished by the end of 2016, and so, I think right now, we feel pretty confident in that and feel like we've got a good path to get that done. So there're certainly some tight windows that will be pushing through here and we hope in the very near future.

But we remain confident as we see here today in that.

Great. I appreciate your time.

Thanks again for taking my question.

Thank you.

Okay. Well, thank you all very much for joining us today.

Really tremendous amount of fee-based revenue growth that's coming on, excited to have the Geismar expansion behind us and having that up and running and really excited about the way the execution is going on these major projects that are out in front of us and we're just going to continue to march our fee-based revenue growth up 17% in the first quarter growth, 17% here in the second-quarter growth, and we're just going to continue to see a big march as these projects come on. So I appreciate your involvement in the company and we look forward to updating you on our shareholder value propositions as that becomes available.

Thank you.