Gale E. Klappa - Chairman, Chief Executive Officer, President, Chairman of Executive Committee, Chairman of Wisconsin Electric Power Company, Chairman of Wisconsin Gas LLC, Chief Executive Officer of Wisconsin Electric Power Company, Chief Executive Officer of Wisconsin Gas LLC, President of Wisconsin Electric Power Company and President of Wisconsin Gas LLC James Patrick Keyes - Chief Financial Officer, Executive Vice President and Treasurer Allen L. Leverett - Executive Vice President, Executive Vice President - Wisconsin Electric Power Company, Chief Executive Officer of WE Generation Operations and President of WE Generation Operations Scott J. Lauber - Assistant Treasurer Stephen P. Dickson - Principal Accounting Officer, Vice President and Controller

James D. von Riesemann - UBS Investment Bank, Research Division Greg Gordon - ISI Group Inc., Research Division Brian J. Russo - Ladenburg Thalmann & Co. Inc., Research Division Paul Patterson - Glenrock Associates LLC Michael J. Lapides - Goldman Sachs Group Inc., Research Division Andrew Bischof - Morningstar Inc., Research Division Paul T. Ridzon - KeyBanc Capital Markets Inc., Research Division Dan Jenkins

Good afternoon, ladies and gentlemen. Thank you for waiting and welcome to Wisconsin Energy's conference call to review 2012 year-end results. This conference call is being recorded for rebroadcast. [Operator Instructions] Before the conference call begins, I will read the forward-looking language. All statements in this presentation other than historical facts are forward-looking statements that involve risks and uncertainties which are subject to change at any time. Such statements are based on management's expectations at the time they are made. In addition to the assumptions and other factors referred to in connection with the statements, factors described in the company's latest Form 10-K and subsequent reports filed with the Securities and Exchange Commission could cause actual results to differ materially from those contemplated. During the discussions, reference earnings-per-share will be based on diluted earnings per share unless otherwise noted. After the presentation, the conference will be open to analysts for questions and answers. In conjunction with this call, Wisconsin Energy has posted on its website a package of detailed financial information at www.wisconsinenergy.com. A replay of our remarks will be available approximately 2 hours after the conclusion of this call. And now, it's my pleasure to introduce Mr. Gale Klappa, Chairman of the Board, President and Chief Executive Officer of Wisconsin Energy Corporation.

Elaine, thank you very much. Good afternoon, everyone, and thank you for joining us as we review the company's 2012 year-end results. Let me begin, as always, by introducing the members of the Wisconsin Energy management team who are here with me today. We have Allen Leverett, President and Chief Executive of We Generation; Pat Keyes, our Chief Financial Officer; Susan Martin, General Counsel; Steve Dickson, Controller; and Scott Lauber our Assistant Treasurer. Pat will review our financial results in detail in just a moment, but as you saw from our news release this morning, we reported earnings from continuing operations of $2.35 a share for 2012. This compares with earnings from continuing operations of $2.18 a share for 2011. And I'm pleased to report that by virtually every meaningful measure, 2012 was an exceptional year for Wisconsin Energy. From an operations standpoint, we achieved milestones in customer satisfaction, employee safety and network reliability. In fact, we attained our highest customer satisfaction ratings in the past decade, and likely, the best ever. We also achieved the best safety record in the history of the company, and we were named the most reliable utility in the Midwest for the eighth time in the past 11 years. I'm also pleased that we were able to dispatch only 1/3 of our employee and contract crews to the New York City area to help restore power in the aftermath of Superstorm Sandy. We were honored to receive an Edison Electric Institute Emergency Assistance Award in recognition of our response. From a financial standpoint, we delivered solid earnings growth, generated strong cash flow and made significant progress toward a dividend payout that is more competitive with our peers. A number of factors contributed to our record financial performance in 2012. The weather, of course, had…

Thank you, Gale. As Gale mentioned, for 2012, our earnings from continuing operations rose to $2.35 a share. This compared with $2.18 a share for 2011. Consistent with past practice, I will discuss operating income for our 2 business segments and then discuss other income, interest expense and income taxes. Our consolidated operating income for the full year 2012 was right at $1 billion and is compared to $887 million in 2011. That's an increase of $113 million. The largest increase was in our utility segment. But we also saw an increase in our nonutility segment, which consists primarily of our Power the Future units. As we look at our utility operating income in 2012 as compared to 2011, you will see that operating income totaled $648 million for 2012, an increase of $103 million from 2011. As we discussed in our quarterly calls, the biggest driver in utility operating income was the impact of a 2011 rate agreement with our Wisconsin regulators. As background, going into 2012, we knew we needed a return on $1.3 billion of new plant that was being place into service with the Glacier Hills Wind Park and the air quality control system at our older Oak Creek units. Our agreement with the Wisconsin Commission froze base electric rates for customers in 2012, and it allowed us to recover depreciation expense and earn a return on the $1.3 billion of investment by suspending $148 million of regulatory amortizations that were part of our O&M expense. Our 2012 utility operating income, therefore, was favorably impacted by this $148 million amortization holiday. In addition, we estimate that the hot 2012 weather boosted our electric margins by approximately $19 million. Other factors, including lower fuel expense and lower O&M expense in our gas distribution business, accounted for the…

Pat, thank you very much. Overall, we're on track and focused on delivering value for our customers and our stockholders.

[Operator Instructions] Your first question comes from the line of Jim von Riesemann with UBS.

A question for you, actually 2 questions. One is a minutia question and one's a big picture. First, on the minutia. Did you say you expect to complete the buyback program this year? And then the second is really the big picture one. And so in light of the board's second approved dividend policy in less than a year, I mean a major revision, the question is how do you think about the balance between earnings growth and dividend growth over the longer term? So I guess said differently, how do you view your value proposition and differentiate yourself prospectively?

Okay, very good questions, Jim. On the minutia question, the answer is no, I did not say we would complete the buyback program in 2013. I did say the board had authorized the program to run through 2013. But as you know, we're being opportunistic. There is no definite timeframe where the board has said we must finish the program for 2013. We will take a look each opportunity we have and go from there. And on the larger question, actually, I think there are 3 pieces to the answer. And the first piece, basically, I heard you asked how do we expect to differentiate ourselves as a quality investment going forward. And I really think it starts with the fact that we have today, we're in a fortunate position that we have greater financial flexibility today than certainly any time in the recent history of this company. And I think we have greater financial flexibility than virtually any other company in the industry. You'll see when we release our new investor deck tomorrow that we're projecting to have over $500 million of free cash flow in the period through 2017. We have, I think, so, number one, terrific financial flexibility. The second piece is even post Power the Future, we have significant growth. The growth is different, as I pointed out in the script, but we have significant growth that is needed in terms of the upgrade and the renewal of our distribution networks. So we're projecting 4% to 6% annual earnings-per-share growth, and given the financial flexibility we have, we think we have best-in-class dividend growth story. So when you put that altogether, I can see us delivering and believe we can deliver 8% to 10% total shareholder returns. And when your risk-adjust that for the type of projects that we have in front of us and the demonstrated ability of the management to deliver projects on time and on budget, I personally think that, that equates to a superior return story.

Can I just follow up with one question or two?

Sure.

On the dividend policy, when the board talks about dividend policy and upping the payout ratio, how do you balance what that rate payout policy is supposed to be? So if we're entering an environment where utility growth is slower prospectively because in a 5% to 6% rate base growth environment, and underlying demand of 0% to 1%, it's going to be pretty tough to match that going forward. How do you think about modulating between dividends and the other considerations?

Well, I think essentially -- again, a very good question, Jim. Essentially, what we do, and I think many do this, we step back and say what is legitimate capital spending need this business has. And we've identified that, for example, going forward in our new 5-year plan at $3.2 billion to $3.5 billion, okay? So how do we finance the $3.2 billion to $3.5 billion? In our case, that can be done with internally generated cash and also keeping our debt to total capital where it needs to be. So then, once you've identified that, what does your dividend policy evolve to from that situation, because in our case, we don't believe we need to issue additional equity. So in essence, we piece the puzzle together, starting with what is our growth opportunity, what is the investment need in the business, how do we finance that and then what can we do to stay at the efficient frontier for a company like ours on dividend policy.

Okay. And then I have one last one and I'll let it -- turn it over. But on going back to my final minutia question, your earnings guidance for 2013, does that assume some level of buyback for the balance of the year?

It does assume some level of buyback for the balance of the year, that is correct.

Your next question comes from the line of Greg Gordon with ISI Group.

So can you give us an update on where the debate in the Statehouse stands on the government potentially deciding to divest its state-owned power plants given their inability to find the funds to upgrade the emissions controls, and whether or not you might be in a position to help the government meet its emission controls and generation needs?

Well, we're not from the government, but we are here to help you, Greg. The truth of the matter is I think we will know a great deal more by July. The legislature now in Wisconsin is just back into session and the governor will be presenting his new biannual budget to the legislature sometime in the next few weeks. So there are a couple of different opportunities if a bill to authorize the sale of state power plants and other state assets, if that -- a bill like that is to move forward, there are a number of opportunities certainly in the first half of this year. So I believe we'll have much a clearer view of whether a sale of the state-owned power plants is imminent by the time the budget passes in July.

But the capital budget that you just laid out for us, since it's not at this point clear that there'll be an opportunity for you there, that would be accretive to that budget if that came about?

You are correct, that would be accretive to that budget.

Your next question comes from the line of Brian Russo with Ladenburg Thalmann. Brian J. Russo - Ladenburg Thalmann & Co. Inc., Research Division: You mentioned sales growth in your '13 guidance, and I was just curious if you could just comment on O&M expense trends?

Sure, I'd be happy to. Now, one of the things that you will see and that may confuse some folks, as you look at our O&M reports over the next 4 quarters, just remember, we had an amortization holiday under our previous rate order that, in essence, put up on our balance sheet or kept on our balance sheet a $148 million of regulatory assets that did not amortize through O&M in 2012. That stopped as of January 1 of this year. So you're going to see $148 million increase in essence in O&M over the course of 2013 compared to 2012, but that's because of the regulatory amortization holiday ending. Essentially, there will be a very modest other increase in normal O&M. There'll be some increase related to some of the capital projects that we have on the distribution side of the business, are 80% capital, 20% O&M under the rate formulas. So you may see some very modest increase in overall O&M, but day-to-day O&M other than that associated with supporting capital projects will be flat. Brian J. Russo - Ladenburg Thalmann & Co. Inc., Research Division: Okay, great. And then also, I think in the previous calls, you mentioned some gas infrastructure growth in some of the regions where there's attractive sand for frac-ing.

That is correct. Brian J. Russo - Ladenburg Thalmann & Co. Inc., Research Division: Is that associated with the gas distribution investment of over $100 million you referenced earlier?

Yes. The $150 million project that we said, roughly $150 million capital project for western Wisconsin that I mentioned earlier in the call is directly associated with a major project for that part of the state. And it's related to 2 things. One, yes, we're seeing substantial increase in frac sand mining, but we also have customer growth there as customers convert from propane. So our projections are showing a dwindling amount of reserve capacity in the western part of the state. So we think there's a very solid and important case to make to the Public Service Commission for construction authority for that project, and we'll be making that case this year. Brian J. Russo - Ladenburg Thalmann & Co. Inc., Research Division: Okay. And lastly, on the potential state divestitures, can you remind us? I know there are small -- there are several small units. I'm just curious if -- I'd like to kind of gauge what type of investment size this could potentially lead to.

Well, we'd be happy to do that. First of all, there are -- and we're not certain if the state would put all of these plants up for bid or just some of them. All of that is yet to be determined. But if all of them were put up for sale, there are 37 of them, 3 or 4 are reasonable size. 3 or 4 are actually power plants that produce electricity for the grid and steam for a particular type of state customer. The remainder other than those 3 or 4, which are of reasonable size, the remainder are smaller steam plants that produce steam heat for specific state facilities. For example, the University of Wisconsin Milwaukee has a relatively new steam heat plant. It doesn't produce electricity for the grid but does produce district heat for a particular part of that campus. In terms of investment opportunity, we have a placeholder. We have not been allowed, no one has been because this hasn't been finally decided by the state. No one has been able to really do any due diligence on a particular project for these 37 different facilities. There's a state --as just a placeholder, we're thinking $200 million to $250 million. Brian J. Russo - Ladenburg Thalmann & Co. Inc., Research Division: Okay. And just reasonable size, what is that, 25 to 50 megawatts per unit?

Some of them are even smaller.

Your next question comes from the line of Paul Patterson with Glenrock Associates.

You guys went through, and I apologize for being slow on the projected sales growth, I think for 2013, with or without the mines and stuff, could you -- I apologize. Could you redo those for me?

We will be happy to ask Pat to redo those for you.

Sure, I'll be glad to. So we projected overall, a decrease in weather normalized sales of 0.7%. However, if you exclude the mines, it's really an increase of 0.2%.

Okay. And this is retail, right?

Yes. And then if you flip quickly through the segments. Residential is basically flat. Small C&I, a slight increase of 0.3% and then large C&I, we projected a decrease of 2.4%. But if you exclude the mines, again, the large C&I is actually going to be an increase of 0.2%.

Other way to look at that is weather normalized, basically, we're expecting to hit the earnings targets we've given you with essentially no sales growth. 0.2%, weather-normalized, excluding the mines.

Does this take into account leap year?

Leap year, yes.

Yes, it does. Oh, yes.

Okay. So leap year, obviously -- okay. So that basically is -- that's been normalized for that, correct?

It's been normalized for leap year. Were you in our forecast meeting?

No, I'm afraid not. I hope you benefited from my absence. But I guess I wanted to get your thoughts. I mean 2/10 of -- this is not exactly blockbuster growth. Just your thoughts about going forward, just policies for energy efficiency, renewables, what have you. I mean just sort of trying to get a sense as to how -- is there -- what do you think longer-term here or things that are driving this and how, as you guys are obviously very forward thinking, what have you, how do you position yourselves in terms of dealing with what appears to be, let's face it, not exactly superb growth? I mean, is that just an abnormality for this year or how do you look going forward longer-term?

Well, very good question. And I think, as you know, this is a question that is really beginning to be asked all over the industry. The first thing I would say is lots of companies will give you earnings growth projections and then when you dig deeper and say, well, what's behind that in terms of sales growth, 1%, 2% or 3%, we have never based our earnings growth projections on what we think are anything but appropriately conservative and rational sales ACs, but input from our customers. So let me take it segment by segment because I think there's a different story to answer your question in each one of the 3 segments. First, the large industrial, strictly tied to the economy. We -- if you normalize our 2012 numbers, I think we were up 1.1% in industrial, nothing to write home about but -- I mean just intuitively to me, given what we're seeing in the economy in Wisconsin, that felt about right. Commercial, we are up weather-normalized. It seems to me like we're seeing modest but continuing, predictable growth in the commercial segment of our customer group. The real puzzling one is residential. And there, I have a theory and I could be wrong. But it does not make a lot of sense to me when I see our weather-normalized residential sales. And I was talking with Scott Lauber the other day and he was saying, we had to weather-normalize 4% of our sales, closer to 5% of our sales, just because of the abnormal weather in 2011 and 2012. That's a huge number of megawatt hours. And we were 4, 5 standard -- well, 3 or 4 standard deviations away from norm in terms of the weather over the last couple of years. So my view is that we really need another year to update on residential before we really understand what's happening in terms of residential customer demand. I just am not seeing, and I don't think any of us are seeing, a major change in lifestyle in terms of our residential customers. We are seeing a change in the appliances and tools that are available to our customers to live their lifestyles. They're getting more efficient support from appliances, from TVs and everything else. But I still think our residential growth is underlying stronger than the numbers are showing because at this kind of deviation from norm, the weather normalization techniques just are not that accurate. So we really -- we're cautious. We're not going to promise you sales growth that we can't deliver. And I think the key going forward, if we don't see a rebound in growth, particularly in residential, the key going forward is going to be cost discipline. We have to continue to drive cost and productivity in our business. I hope that helps, Paul.

It does. But then, I guess it's too early for any rate design or any thoughts about sort of a different construct with regulators or what have you, or it's just too early to say? Is that how we should think about it?

Well, actually, I mean we have a construct with our regulators in Wisconsin that I think is quite beneficial to everyone, and that is the commission has asked each of the Wisconsin utilities to file a case every 2 years with a 2-year forward-looking test period. So to me, the 2-year forward-looking test period, taking into account reasonable assumptions of sales demand -- sales and demand growth really is among the best protection you can get anywhere.

I got you. So decoupling, it doesn't -- I mean, since you're coming in so frequently and since you have the forward-look, it sort of negates the potential need for decoupling or something like that?

That would certainly be my view.

Your next question comes from the line of Michael Lapides with Goldman Sachs.

I wanted to make sure, first of all, capital spending. Do you see -- if I remember correctly, '13 was higher outlook than '14. Do you still see that or do you see capital spending more kind of like levelized if I just took $3.2 billion, $3.3 billion and divide it by the 5 years? That's the first question. The second is free cash flow. Can you repeat the comment you made about how much total free cash flow after dividends you expect over the next few years?

Well, first of all, and you will see this on our investor deck that we're going to release tomorrow, the new breakdown of the 5-year capital spend, I will give you 5 numbers. For 2013, we're estimating $656 million of capital; for 2014, $589 million; and for 2015, $741 million.

And that's at the utility, Michael.

Yes, that's at the utility, exactly. That's coming off of by comparison $697 million of the utility for 2012. And we have that further broken down of the slide in the investor deck, the generation, electric delivery, gas delivery, renewables, et cetera. So you'll see a pretty granular breakdown tomorrow. But those are the essential numbers going forward. And then your other question about cash flow. What we're showing in our projections is a little better than $500 million of free cash for the 5-year period 2013 through 2017 after capital spending and after our dividend policy that we've announced is implemented.

And does that include or exclude the buyback program you've authorized?

Well, that would include.

Got it. So it's not incremental for the buyback? It is...

Michael, this is Pat. Let me clarify. The $500 million over the 5 years is before we start the buyback. So in other words, we would use the $500 million as cash to help fund the buyback.

Exactly, yes.

Got it. Okay. It just strikes me as given some of the stuff you put out in the public domain regarding various tax-related items, that your free cash flow would actually even be a little bit above that level. Am I -- I may be overstating something, but it just -- the $500 million at first glance over the next 5 years strikes me as a little bit on the shy side. Not that, that's a problem. Most other companies don't have that problem.

Michael, we appreciate it. I guess the only thing I could say is you know how that cash was generated, certainly from operations, also from bonus depreciation. That bonus depreciation kind of falls off over time. If you're running like next year's model and you're saying, boy, you're sure generating a lot of that cash next year, that wouldn't surprise me if that's what your model said. Certainly, we expect more of the cash flow over the 5 years to be in the upfront years than in the back-end.

It's more front-end loaded.

Got it. And are there things, whether it's working capital, whether it's pension contributions or something else, that are significant cash outflows that may not show up -- that aren't necessarily net income D&A, CapEx, dividends, kind of the big 4?

No. In fact -- the short answer is no. But we've had very good control of our working capital over the course of the last several years. In addition to that, from a pension fund standpoint, we're almost 100% funded, which many companies cannot say. So we don't see anything else like that lurking that would show a deviation in the numbers.

Your next question comes from the line of Andy Bischof with MorningStar.

I was wondering if you could just provide a little clarity on the timing for decision regarding air permit application for the western, eastern coal blend in Oak Creek? And then clarify question, you said you were 100% funded for the pension funds?

99-point-something.

Yes, we're over 99, Andy.

And we'll ask Allen Leverett to comment on the timing for the air permit for the fuel blending at Oak Creek.

Yes, we expect to have that resolved in the first quarter of the year. So I certainly see it as being in the first part of this year. But we'll have to work with not only the U.S. EPA, but we're also working with the Wisconsin DNR. So we have to work with both agencies, get their concurrence and then the DNR is the one that will actually issue the permit. So we hope to have all of that wrapped up in the first quarter so that we can begin the testing, say, in the second quarter of this year.

Your next question comes from the line of Paul Ridzon with KeyBanc.

Just your O&M commentary, so we should take 12, add 148 for the holiday and then gross that up by 1% or 2%? Is that fair?

I would -- actually, I don't think I'd even add 1% to 2%. I'd keep it flat.

And can you just review the language around the grant and how that's impacting timing?

We sure can. I'll frame it and will let Pat fill in the detail. Essentially, in the Wisconsin Commission rate order, for rates that went into effect here in January of '13, we agreed -- in fact we proposed and the commission agreed that we would prefund, if you will, the grant. So customers are receiving, starting with their January bills, a portion of the federal tax grant that we expect to receive upon completion of the biomass plant. So in essence, because we're giving customer credits in advance of receiving the cash, our revenues are going to go down and they will have a slight impact each quarter for the first 3 quarters on earnings. And then we do a big catch-up according to the accounting rules in Q4. Pat?

Exactly, Gale. So I would look at it this way. If first quarter was a $0.03, you can expect to see something similar, same zip code, second quarter and third quarter, and then a $0.09 pickup in Q4 so it all comes clean.

Is there a cost of money issue?

Oh, a minor one, yes. But, I mean, it's factored into the rate case.

Your next question comes from the line of Dan Jenkins with State of Wisconsin Investment Board.

I was wondering, you mentioned -- update us a little bit on the CapEx program and apparently, there'll be more details tomorrow.

Correct.

Do you have -- could you give us an update for what you're planning for financing needs in 2013?

Sure. Pat and Scott have that right in front of them.

Yes, glad to, Dan. We have got debt retiring, I believe it's in May at Wisconsin Electric of about $300 million. So you can expect us to be out for a bond over roughly that amount, roughly Q2, Q3. And then at Wisconsin Gas, we have got $45 million of debt retiring in Q4. I would expect we'll be doing a new issue of Q3, Q4 at Wisconsin Gas in the $100 million, $150 million neighborhood.

Okay. Then I was also wondering, I'm trying to get a better idea of what's going on in the large commercial, industrial. You had fairly large decline mostly related to the mines and those 2 self-generation customers in 2012.

Correct.

But then you mentioned in the release that the mine return to normal operation in September, but yet you expect a big decline again in 2013, mostly related to the mine. So, I guess, is the mine just becoming a lot smaller and smaller operation or what's going on?

No, I don't think the mine is becoming a much smaller and smaller operation, but they are -- they're very good about informing us of their plan in terms of when they see demand and how they expect to run their mine operations throughout the course of the year. And clearly, what we did when we put together our industrial forecast for 2014 was take the input from the mines on when they might, in essence, have a slowdown in their operations in 2013. So what you're seeing is basically the mines having more variable operation than perhaps the past couple of years.

Right. It sounds like -- so how much of the 2.8% decline in '12 was related to the mine? Do you know that?

Looking at Scott. I would say the lion's share of it -- now, we did have 2 customers, but they were smaller in 2012 go to self-generation. But the lion's share of it, Scott, would be the mines.

Right. If you exclude the mines, they're relatively flat.

Yes, exactly. Just exclude the mines, relatively flat.

Okay. So they're going to be even lower than they were though in '12 again? And so that's what I would...

No, no. I don't believe so.

Just a little bit lower in '12. They announced that they're going to idle the plant in the second and third quarter a little bit.

Yes, they're bringing their operations down some of the second and third quarters.

Extended summer outage.

Okay. And then you mentioned that you're nearly fully funded on the pension. Will you need to make any more contributions in 2013 or will that...

None planned in 2013.

Okay. And then if you could just expand a little bit on the fairly sizable benefit of '12 over '11 and the working capital. Is a lot of that related to the deferral?

Actually, no. The deferral -- it would not relate to deferral. Steve Dickson has the details in front of him. Steve?

Yes, and I assume you're referring to the earnings package, and I'm looking at Page 11 and we've separately broken out the regulatory amortization. So you can see the $148 million change year-to-year. In the working capital and other, it declined. It was a negative $230 million last year, this year, it's a negative $56 million. So actually, that's a favorable improvement of about $174 million. The biggest item in there relates to income taxes that we got back, and it relates to the bonus depreciation that we talked and we were able to generate a net operating loss carry back. So we went back to where we've paid taxes in prior years. So there's $128 million and then the difference was $20 million in inventory, working capital. Gas prices are lower so we benefited from that. Does that make sense?

Yes, yes.

Your next question comes from the line of Michael Lapides with Goldman Sachs.

And this may be one for Mr. Leverett. Just curious. You've given out for ATC, a 10-year capital spending projection. I think it was like $3.9 billion and above roughly. Can you just talk about the scope and scale, meaning is that very front-end loaded, is that very back-end loaded? I think if I remember correctly, ATC's CapEx had been around in the $250 million range or so for the last few years. Where is that heading in the next couple of years?

It's somewhat back-end loaded, Michael. And we sound like a broken record talking about this package that's coming out tomorrow, but in the package that comes out tomorrow, you'll see kind of a 3-year path for the capital spending at ATC. So in 2013, we expect the spending to be roughly $291 million and then $255 million in '14 and then it jumps. It's projected to jump to $362 million in 2015. So it's somewhat back-end loaded, and in fact, some of the really large projects that are in their forecast during the -- are out, say, in year 7, 8, 9 because those are projects that are associated with transmission fixes for the Upper Peninsula of Michigan. So those are pretty far out in the forecast. So in general, pretty back-end loaded, and the package tomorrow will show you the year-by-year detail, at least for the next 3 years at ATC.

Got it, Allen. And just refresh, how does that compare to 2012 CapEx at ATC?

I want to say that the 2012 CapEx -- I thought it was around the $250 million number that you mentioned, actually, Michael, but let me get, Pat, maybe if you could check that number.

Well, it was $310 million. So a little over $300 million.

Okay. And your owner -- and am I right, your ownership percentage, mid-20 like 26%, 28%?

26.2%.

And the same ROE and authorized equity layer metrics, no changes there?

Nothing has changed in their tariff. So it's still 12 to ROE, roughly 50% equity deemed capital structure.

Your next question comes from the line of Paul Ridzon with KeyBanc.

Just on the mining customers, is that a material earnings impact? I mean, isn't a lot of their -- a lot of that demand charges or how does that work?

They are on an interruptible rate by and large because it's not a very significant movement in terms of just looking at, say, 2013 versus 2012. No significant difference in earnings impact.

Who are the big customers?

Who are the -- theirs or -- who are the mines?

Yes.

They are owned by Cleveland-Cliffs.

So they're 2 major mines, Paul. There's the Empire Mine and the Tilden Mine. And the one that's been doing the extended shutdowns, I believe, is the Empire Mine.

Empire and what was the other one?

Tilden.

Tilden. All right. Well, ladies and gentlemen, I believe that concludes our conference call for today. Thank you so much for participating. If you have any other questions, Colleen Henderson will be available in our Investor Relations office and her direct line, (414) 221-2592. Thanks again. Have a good afternoon, everybody.