Good day, and welcome to the Aqua America Incorporated Full Year 2012 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Brian Dingerdissen, Director of Investor Relations. Please go ahead, sir.

Thank you, Angela. Good morning, everyone. Thank you for joining us for Aqua America's Fourth Quarter and Full Year 2012 Earnings Conference Call. If you did not receive a copy of the press release, you can find it by visiting the Investor Relations section of our website at www.aquaamerica.com or call Emily Herman at (610) 645-4271. There will also be a webcast of this event available on our site. Presenting today is Nick DeBenedictis, Chairman and President of Aqua America; along with David Smeltzer, the company's Chief Financial Officer. As a reminder, some of the matters discussed during this call may include forward-looking statements that involve risks, uncertainties and other factors that may cause the actual results to be materially different from any future results expressed or implied by such forward-looking statements. Please refer to our most recent 10-Q, 10-K and other SEC filings for a description of such risks and uncertainties. During the course of this call, reference may be made to certain non-GAAP financial measures. Reconciliation of these non-GAAP to GAAP financial measures are posted in the Investor Relations section of the company's website. At this time, I would like to turn the call over to Nick for his formal remarks. After which, we will open the call up for questions

Thank you, Brian. Good morning, everyone, and thank you for joining us for our conference call this morning to announce record-breaking earnings for Aqua. I'd like to also start by congratulating Jennifer Lawrence who won the Academies last night, thanks to all the water she drank during the making of Silver Lining Playbook, which was filmed less than a mile from our headquarters. Maybe someday, she'll be our company spokesman, but we can't afford that. To put 2012 results in perspective, it took 125 years for Aqua to break the $100 million net income mark, and that was in 2009. And I'm pleased to report today that in just 3 years, in 2012, we earned $197 million or $1.40 a share, up 37% for the year. Aqua expects to go over the $200 million mark in '13, achieving a new milestone in the company's long history. 2012 marked the 13th straight year of record net income and the 20th year in my 21 years as CEO of increasing earnings. Since 2008, when we began to profitably assimilate the rapid growth we experienced in the mid-2000s and we started our successful pruning program, our CAGR on net income has grown 15% compounded between '08 and '12. This is well in excess of the 10% expected by the street. And as a matter of fact, we hit the 10% CAGR goal, which would have occurred in '15, 3 years early in 2012. And I'd say the key ingredients for this strong net income showing in '12 was a solid year of operations, complemented by the adoption of repair tax accounting change permitted in our 2012 Pennsylvania rate case. Our CFO, Dave Smeltzer, will explain in detail this win-win tax and regulatory policy later in the call. Let me spend some time now…

Thanks, Nick. Yes, first, maybe we should talk a little bit of history. This issue of deducting certain kinds of costs that had typically been capitalized really was solidified in a Federal Express case a number of years ago. They had expensed on their tax return a jet engine replacement on one of their planes. The IRS determined that, in fact, the jet engine was a unit of property and therefore the replacement of that unit of property should be capitalized. So the -- it went to court. And ultimately, the court determined that the plane indeed was a unit of property and actually couldn't fly without the key component of the engine. And so, therefore, since the plane was a unit of property, the replacement of the engine on that plane was a proper expense. And that case really opened the door for a number of other interpretation in terms of expensing costs that had previously been capitalized for tax purposes. Now we've studied this potential for some time now and didn't elect to change our tax policy earlier due in part to the fact that sufficient guidance wasn't readily available. This issue was not addressed in any of our prior rate cases before the 2011 PA filing. However, many companies, including utilities, have been utilizing this tax accounting change since the mid-2000s. Most typically, companies who've made this change, accelerating tax deductions, account for it using deferred tax accounting where the accelerated tax deduction benefit resides on the balance sheet as its deferred tax liability. And yes, as you know, in these instances, it doesn't flow through to reduce the income tax expense. As the deduction and the related benefits to customers became more utilized with much greater clarity in the tax implications, we were asked by the…

Thanks, Dave, for an understandable explanation of a very detailed subject, and Chris will be available after this call for specific questions on this very difficult -- detailed but unique process, which I deemed as a win-win for both from a regulated standpoint and from a company standpoint. I'd like to wrap up the call with a general outlook regarding '13. We're confident that we've reached a new base in earnings from which we can grow as we continue to invest needed capital in our water systems and wastewater systems. We intend to continue to grow both the regulated and now, the new unregulated businesses through acquisitions or capital development. And we continue to have one of the strongest balance sheets in utility industry, which we intend to capitalize on and maintain our standing as the country's most efficient utility from both an operating cost and a EBITDA standpoint. Obviously, with the large but sustainable jump in earnings in 2012, even though we just raised our dividend, 6% in December, our payout ratio has now dropped to 50%, which is below our normal range that our shareholders have been accustomed to. Our board will review this in 2013 -- our dividend policy for 2013. Now clearly, this is a board decision involving many difficult choices as to alternate uses of cash. However, our projections show that our 2013 earnings and cash increases will exceed the normal $0.04 a share increase of recent years. And so, we have plenty of room for looking at the dividend. Also I'd like to give some guidance regarding the first quarter of 2013 as there was a lot of moving parts in the first quarter of '12's earnings. First quarter of '12 was $0.27, but that was enhanced by $0.08 from the profitable sale of our Maine properties. So if you take an operational standpoint, it would be obviously lower than the $0.27. We expect on that basis, the operational basis, to take the gain from operations that we experienced in 2012. And in addition, you should impute a quarterly portion of the 2013 tax repair benefit, which in 2012, was all taken in its entirety, $0.22 in the fourth quarter. So clearly, that should be spread among your quarters this year and would be additive to the base amount less Maine in the first quarter of '12 as you project '13. Sorry for the length of this conference call but we'll take any questions now.

[Operator Instructions] And we will take our first question from Leslie Rich with JPMorgan.

So you expect the tax repair benefit in 2013 to be at a similar level as it was in 2012?

Yes.

And then as you amalgamate all the factors that you said would go into 2013, for example, postponing your rate case, forgoing the DISC, continuing to spend but then getting the benefit of the tax repair accounting, is it -- does that all sort of wash? I mean, as you think about the pluses and minuses for Pennsylvania as sort of a wash?

Yes. It does, and I mean, I'm going to give you a very simplistic nonlawyer, non-accounting answer. Simply, we're replacing what we would have gotten through rate increases and the DISC to give us fair return on the capital through the repair tax method and letting the taxes that we're collecting right now to be flowed through even though we're not paying them, which we don't have to pay because of this new guidance from the IRS. I mean, that's a very unofficial way of saying it but, yes, it's comparable and that's what I think your basic question is from an earnings point.

Yes. So as you think about 2014 and beyond, this tax repair benefit continues in perpetuity or does it need to be reviewed for renewal or sort of how does that work?

It does continue in perpetuity. Sooner or later, we will have build up so much new capital additions that there could be lag, and we don't know when that will be. We're analyzing it right now. It all depends on what projects should do that are tax eligible. Not everything is eligible for this plan. So if you have to build a new water plant, that may or may not be eligible to the same percentage as a pipe. And therefore, the amount of the tax repair may or may not cover a significant portion of '14, '15 and '16's capital. At which point, we would again go in for a rate case and go back to the normal process but we will not have been hurt during that time period is really the issue.

And we'll now go to Angie Storozynski with Macquarie.

I have 2 questions. The first one is could you tell us what was the average rate base for 2012 and also, what's the projected rate base for '13?

For the whole company?

Yes.

I think it's $2.7 billion, but -- do you have that?

Can we get to you right after the call? It's in there. We'll get right to you, I mean, I just...

Okay. Now how about your long-term earnings growth expectations given that there was just a step-up in earnings in 2012? How should we think of the 10% EPS CAGR? Is it still sustainable off the 2012 level of earnings?

Well, it's difficult for me to project that. We'll be up, in my mind, we're projecting an up year in '13 over '12 even though we've really hit our 10% CAGR 3 years early. As I said, earlier in the case. I would not project a 37% increase next year because it's now -- the repair tax is now accumulated in but we don't see our operational programs slowing down. So it was on a bigger base now and part of that is a stayed amount, which is the tax repair.

Okay. And also, on the unregulated earnings, you said they contributed $0.02 this year. And I'm assuming -- so we're assuming $0.04 in 2013. And based on the projects already announced, how much would you expect in 2014?

Divide the unregulated revenues or I should say net income because revenues only come in through one, that's the resources. That's the one that's septic tanks and services to the people's homes for the pipeline insurance and things of that sort. I would not say that would double each year because it's more of a stable state business. On the other hand, the start-up business, which already earned $0.01 in '12 even though it's a startup, most startups don't make money for years, that one, we, just looking at our projections on contracts we have, we think that one will double in, let's see, '13 and double again in '14 because it's a huge investment we've made that now more and more drillers are asking for water supply. If you want to call, we'll get you that rate base.

[Operator Instructions] And we will now go to Leon Dubov with Luminus Management.

Just to follow up on Leslie's question. So you expect to benefit from the repair tax to be about the same in '13 as it was in '12? And then on top of that, there's another step up from the new 10-year amortization of those taxes that's coming in? Is that the right way to understand it?

That the 10-year -- remember, it's a 10-year amortization, so it's not all in 1 year like the '12 and '13. So it's a smaller amount, but yes, we would expect that to increase and we can give you the -- how much we -- it's actually in the balance sheet, it was, yes, 25% to 30%, I think, is what we said in the release [indiscernible] the total perspective but what we can do for you is give you how much we've asked for in the balance sheet. you can divide by 10 and figure it out.

Okay. But effectively, the way to think about that is the total benefit from this policy in '13 is going to be about 125% of what it was in '12?

Yes. I think that's a fair...

125% to 130%?

Yes, right. And we can give you exact numbers and you could fill it out yourself. The variation, I don't want to make it sound like it's just you put a dot on the wall and that's the number. It all depends on what type of projects we do during '13. If we did all water plants and no pipe, we wouldn't do as well as we did in '12. If we do more pipe and less water plants, we do probably better than we did in '12 but I can't predict that until we get all our permits and know where our capital is all being spent to the penny. But I am giving you clear -- clarity that we were not going to cut back on capital because of this tax thing. We're actually going to stay right at the same levels of in excess of $325 million a year, which basically is 3x depreciation.

Perfect. And you think the board will take up the dividend discussion kind of at the next meeting here?

You asked me that a couple of weeks ago, I think.

I did. I just want to know if there's either any movement or any movement the other way?

Our board meeting isn't for a couple days so I can't say what they'll say. But I think it's something that is Board level review and the fact that we have normally a 60% payout. Most utilities are in that range, some are much higher now, but we've been always healthy keeping our balance sheet intact by staying around 60%. And, of course, we've dropped now because of the big jump in earnings, which although some people think it's onetime, it's not, it's sustainable. So that's how the Board is looking at its-- what should be the dividend policy on a company that's earning $1.40.

We will now go to Jonathan Reeder with Wells Fargo.

Nick, could you please clarify your comment you said about no new debt. Is that just for 2013 or what was the time horizon around that?

If we stay at the $325 million and look at our cash from operations and obviously the cash from not paying the taxes, which in my mind, Jonathan, is nothing more than if we'd gone in for rates, it would have been for operations. This means we don't get rate but so the rate payers are happy, the customers are happy but we're still getting just through the tax line. If that holds plus the increasing depreciation this year, each year, which obviously helps cash but hurts earnings because we're putting a lot of capital, 3x depreciation in, that the cash generated from -- let's call it operations, give me the luxury of calling the tax benefit operations, exceeds both the amount we spend on our small acquisitions each year and exceeds the amount of capital that we're spending even at these elevated levels. Therefore, for operational purposes, we wouldn't have to borrow any debt. Now, obviously, the dividend has to be paid and so on but at this point in time, we see very little need for new debt other than refinancing the debt that we have that comes due each year, which is a positive because of the fact that we're probably going to get it at lower rates at least, currently than what it's on the books for.

Right. So for the next few years, you kind of see interest expense pretty much staying flat, maybe even decreasing I guess, once you kind of roll that $60 million of short-term debt in the long-term for Ohio?

Exactly. I think this year, you'll see it actually went down on a continuing basis. That's because we did a lot of short-term debt usage. We saw plenty of room on our lines but, Dave, I think we're borrowing short at 1%?

Right.

1% or less, so obviously we're using that as much as we can to cut down lag in between cases. And we have to -- we're going in for a case in Ohio, so obviously, we're capitalizing that with long-term debt, which is the proper way to do it, so that will add to the overall interest because it's going to be I think, higher than 1% if we go 30 years but not so much that it's not -- still looks flat. I mean, the days of our 10%, 12% increases in interest because of the ramp-up in our capital seem to be behind us. It's much, much lower numbers. Depreciation will stay up there, which obviously is non-cash in the earnings but because we're doing so much capital.

Okay. And then I know you're not going to file the Pennsylvania rate case this year. Do you anticipate a filing in 2014 or when do you think that next one might come?

Well, when we have all kinds of models, and again, depending on the amount of pipe versus plant we have to do to keep in compliance and everything else, there's a point where it crosses, that the lag starts exceeding the benefits of the tax repair. And at that point, the first thing we'd probably do would be to file a DSIC versus filing a base rate case. And we don't see that in '13, and we're analyzing '14, and '14 is still up in the air.

So I mean, I guess in '14, if you do anything, it sounds like you'd probably file for DSIC stuff and then you wouldn't see an actual full-blown rate case until maybe at earliest, kind of end of the year with new rates some time in '15, is that kind of fair that, that would be kind of I guess, the earliest you might see that?

I think that's a reasonable assumption.

Okay. And then I mean just overall conceptually ...

I mean, why I'm hedging is if inflation starts roaring and it comes back at 5%, all bets are off right? But if inflation stays down because our operating cost are key parts of the rates too, but we've been really holding operating cost down, which is so we can stay out of rates. And, of course, the regulators and the customers like that.

Right. So is it fair to say then that essentially, I guess Pennsylvania's earnings contribution is essentially going to be flat until I guess, the next DSIC filing or whatever? The DSIC, the repairs tax reduction essentially just pulls kind of earnings forward. Is that the right way to kind of think of it?

Well, I mean, look at it this year, a huge part of $1.40, percentage wise, is Pennsylvania because of the onetime infusion of the repair. I don't think Pennsylvania can -- we could expect that to maintain going forward as the other ones catch up. But I wouldn't call it flat because we have the repair coming in, we have the remainder of the 2012 rate case, we have cost-cutting that we're looking at. And maybe rather than take everybody's time, recall Dave and I, we can explain to you how much more the tax has benefited this year but obviously can't keep growing, it has to -- but it's still faster than probably, your model showed without it.

And then just bigger picture, I mean, where do you see I guess, the growth initiatives going forward? I mean, are you still looking at further pipeline opportunities around shale? Are you seeing an increased activity on the M&A front? Can you just kind of talk bigger picture?

Yes, sure. This is one of hopefully, many pipelines. We're looking at couple opportunities in Ohio, another 1 or 2 in Pennsylvania. Obviously, the drilling, with gas prices where it is, has not -- has slowed down. That probably is good for the industry, in my mind, so they can catch their breath, still steady but especially in Pennsylvania where we have dry gas. But this is not a flash-in-the-pan industry, this is going to be around a long time and the administration needs to acknowledge that during the state of the union speech by the President. So this is the first of hopefully, more that we'll be doing in the broad water, I guess you could call it, area. We're also, capital ventures, is also looking at other type pipeline projects where we may team it up, we call it regulatory light, where we team it up with our regulated side. They sell the water at a retail rate but we build the pipeline so that cities could get the water and have a joint venture with us, public/private partnerships, things of that sort. I do think, although you've heard this before from every water company, that privatization will become a little bit more of rule versus an exception going forward but it's just inevitable, I just can't predict the timeframe on it. And of course, the core of the earnings will still be built by the capital infusion of the needed capital in all these states that basically, we have to fix the water system's infrastructure and hopefully get fair returns and that's what generates a lot of our future growth. And then the small acquisitions, you saw a little bit of an uptick this year and housing came back a little bit this year. Now who knows how to project what's going to happen with interest rates. If they do go up, go up but at this point, we're at least stable, we're not dropping anymore and it came back in '11 -- I'm sorry, started to come back from '11 to '12 and everybody's optimistic at least with homebuilders in '13.

And I guess as far as the 1.9% customer growth you cited, is that including I guess, the benefits for Ohio or is that just the smaller tuck-ins and organic?

No, no. It's Ohio. Probably if you took the Ohio out, it's still less 1% but healthier than almost 0 it was in '10 and '11.

We will now take our next question from Tim Winter with Gabelli & Company. Timothy M. Winter - Gabelli & Company, Inc.: Nick, I was wondering if you could clarify your comments about the base year earnings for '12? I think you said $1.40. Now I guess that includes the $0.09 of discontinued and are there any other gains in there? And then what you expect as far as growth in '13 or were you expecting growth from the $1.40 level, is that correct?

Yes. If you want to do the -- the $1.40 include -- I mean we've been doing pruning for 5 years so I felt GAAP is the best way to measure this because how do you take 1 year versus another year? It's been steady GAAP for the last 5 years. And now next year, we'll have Florida, hopefully. So having -- if you want to go off GAAP, yes, we are going to grow, I believe, from the $1.40. And I'm not going to give guidance. We never gave guidance but we've been predictable in the past. And part of it will come from the repair, part of it will come from maybe the sale of Florida part, part of it will come from organic and I'm sort of saying clearly, we're not going to stop or go backward. Some people thought this was a onetime, it's not a onetime. And additionally, it's not flat because there are some issues that will allow it to grow. And it will, in my mind, definitely grow faster than the need for dividend which is normally the $0.04, $0.05 dividend. For '12, if you want to go to and take Maine out, Bob, I think -- or Dave, I thought it was $1.33 was continuing ops.

Continuing ops is $1.32.

$1.32. So if you want to take that out, we'll grow from that if you don't want to count Florida. Timothy M. Winter - Gabelli & Company, Inc.: Okay. And then if you could talk a little bit about the regulatory treatment of this as far as rate base growth in Pennsylvania. Will there be rate base growth? How would they look at returns and what have you? [indiscernible] follow-up on...

That's the beauty of the flow-through. We're getting paid for it, it will be in rate base. We're getting paid for it until we go in for our next rate case through the tax flow-through method. And when we go in for our next rate case, all that capital we've done and been paid for through the taxes will be on the table for fair return but we won't probably get the flow-through anymore. That's why I said this is a real win-win regulatory wise for the customers but also for the company because we don't want to stop our needed capital program. But in addition, we couldn't afford just not to go in for rates. Timothy M. Winter - Gabelli & Company, Inc.: Will there be a onetime rate shock as a result?

No. Our projections are that it will not be. Obviously, the DSIC, you have not figure the DSIC in there. We'd probably start with the DSIC. But after DSIC, it would probably be in line with our case that we just got, which was 4%, Dave?

Right.

Around 4%, but it not rate shock. Timothy M. Winter - Gabelli & Company, Inc.: Okay. So than one more question on that. So the Pennsylvania regulators will likely change the way they treat this in the next case?

I don't know. I can't say for sure because everybody likes the idea of us putting all this capital in and not raising rates. So I don't know how they'll treat it but I gave you, in my example, a DSIC followed by a single-digit rate case, the worst case from a rate standpoint. Now again, barring no rapid inflation too. I think it was this was a very unique agreement, hard to understand and it took us weeks of negotiation but I think it was creative on our part and creative on the OCA's part as a win-win for the customers but also letting the company get paid back for all the capital we're putting in. And then obviously, not filing rate cases which cost money and therefore saves everybody time and money.

And we'll take our next question from Stewart Scharf with S&P Capital IQ. Stewart Scharf - S&P Equity Research: Could you expand a little more on the M&A and is there any -- the environment and any direction of what types of deals you're looking at, the municipal systems, there were just a few out of the 18. Is there any trends or what you're targeting or it just depends on the market?

Well, obviously we're concentrating first and initially in the 9 states we're in, except for Florida. Well, obviously, we're not expanding in Florida. And we're looking at small, medium privates. There aren't many large privates other than the 8 or 10 that you know about that are publicly traded and then the municipals. And last year, we saw a little uptick in municipal activity. We got I think 3 of our deals were municipal deals. And that's good because there were a couple of years in a row that we didn't. I think the growth -- there's only, as I mentioned, 8 of us so you can calculate as well as I could, the chance of an M&A with those. But I think the cities are the biggest question mark and opportunities stored from it going forward. Many of them have come with unique ideas on never selling and leasing and you get so much money. And we're not going to get into a situation where you can get into a negative ARMS [ph] possibility. Our goal is obviously build and own. In some cases, we're looking at like a -- maybe we don't want the whole system but just a piece of it that they want to sell off or maybe a water plant or wastewater plant where they -- we know how much it will cost to fix it and they give us a set amount, it's like a contract. So we're looking at all those different things and we have now a department at one of our senior executives, Karl Kyriss who used to run Pennsylvania, is in charge of that. And I think we owe you a visit or you were going to come down here. We'll get you with him so he can give you an idea of some of his plans. Stewart Scharf - S&P Equity Research: Okay. And on the efficiency ratio, is there a way to quantify the improvement based on solar farms [ph] or reduced purchase order through expenses, could you break that down?

You were are fading out but you said the O&M ratio and how to quantify it? Stewart Scharf - S&P Equity Research: Yes. The improvement was like 150 basis points, is there a way to break down the percentage of where that's coming from, the electricity and fuel expense saving, the reduced purchase order?

That's interesting. We will break it down because it's across the board. A lot of it was in employee benefits, which we are still very fair with our employees but we've changed some of the long-term legacy programs, and that helped us. But we'll break it down in employees, benefits, electric and give you that. I just don't have it right here, but it's across the board. Stewart Scharf - S&P Equity Research: Okay. And just again on the tax repair, just to clarify, is that -- that continues to be non-GAAP or going forward are you including it in your guidance or you're -- what you're looking at when you're comparing it to the $1.33 or $1.40. Is it just consistently looked at as you're referring to it as GAAP earning?

Well, it's in books and it's both in the GAAP from continuing and it's also in the GAAP. It's in both and it will continue. And whether you want to take the continuing which is $1.32, I think you said, Bob, and -- or the $1.40, it will be in those numbers next year. And I would anticipate either of those numbers being higher next year. They'll move parallel, I guess, is the best way to describe it.

[Operator Instructions] And we will take our next question from Spencer Joyce with Hilliard Lyons.

Nice year, nice quarter, I'll try to keep it pretty short here for you. First question, I know it’s still several months removed but did Sandy wind up having any kind of impact for you guys? I guess from a top lines standpoint, not necessarily damage or capital spend?

Yes. I'd say less than $0.01. We had some overtime, we had a lot of diesel fuel we used to run generators to keep everything going but I don't have an exact number, is it $0.005 or...

350 in Pennsylvania alone.

Okay. So that would be less than $0.005. Not significant but it was noticeable but I wouldn't say it was significant.

Okay. Got you. And also just to clarify, you said most of the capital spend not in Pennsylvania will be focused in the Ohio, Illinois and New Jersey which all are now have a DSIC or DSIC-eligible, is that correct?

Absolutely.

Okay. And as far as a breakout there, I think I picked up you guys are mentioning around 2 30 spend in PA and then if I'm kind of back of the napkin calculating here, that should be about $100 million in capital spend between those 3 states, is that right?

Not far off. Yes, only get all the other states would be $100 million, right because 230 and we're going to spend 325. And I'm going to say 10, 20, probably about 70 in those states. We'll get the exact numbers. We have 5 years of expected spending in each of those states, we'll give you the projections in those states.

Okay. Yes, that would be great. And then one, I guess, more bigger picture question, and you touched on it a little bit pertaining to Aqua Capital Ventures. I know you mentioned that the current program or project is one of hopefully many. I'm assuming there hasn't been any kind of structural decline in the attractiveness of those projects either based on low gases which are probably always going to be a bit of an issue but also maybe any sort of increased competition from other firms or companies trying to be creative in that line of business? It still is attractive there, is that a safe assumption?

Yes. There's still drilling even with gas prices where they are but you see what happens as soon as you get a little cold weather, New England, gas price has shot up 2 weeks ago when they had their storm, electric prices followed suit. I know you follow the electric industry, Spencer. So I would anticipate it's not going any lower and they're still drilling but I think if it goes higher, you may see a little bit more intensity in the drilling programs. Either way, we're told now, I mean, rumor was 3 years ago was a 1-, 2-year industry they were going to get a lot of gas immediately and then it would all be over. They're talking now that could be around for 50 years. So I mean, I don't know which geologist you want to believe but we're betting on -- we're betting it’s going to be around for at least 5 years.

Yes. I think we're in the same camp there.

And we will take a follow-up question from Angie Storozynski with Macquarie.

I have actually a 1 question and 1 request. So for the question, if I look at the $1.42 in earnings, $1.40 in earnings for last year, was there any gain in those discontinued operation portion for the $0.08 differential between ongoing earnings and GAAP? Is there a gain from asset sales there?

Yes, yes. That was the Maine properties which we sold in the first quarter and amounted to $0.08.

But is that a gain or is this earnings on those properties?

Well, no, no, no. Oh, I'm sorry, yes, it was a gain. The predominant $0.08 was from the gain on the sale in January of 2013 -- in '12 and that's why I wanted to make sure that when you look at the '12's first quarter earnings of $0.27, that you understand that $0.08 of that was a onetime gain. Now it still was profitable. A lot of companies say oh, we have discontinued operations and then you'll see all kinds of losses. In our case, a discontinued operation is part of our pruning strategy which we only sell if it's profitable. So I think GAAP for us is probably a better measurement but from a -- we'd give you both. The continuing is $1.32, the GAAP is $1.40 and the difference is the asset sale of Maine in 2012, which hopefully when you do your quarterly looks, you'll all remember that the $0.08 was in there and not in there this year.

Yes but I'm trying to figure out because you mentioned that you expect growth from either of the numbers in 2013 assuming inclusive of the Florida sale, does it mean that the gain from the sale of assets would be the comparable number while the earnings plus the gain on asset sales in Florida would be compared to $1.40 EPS?

Yes. I think the gain from Florida would be comparable to the $1.40, which included the gain in Maine. Does that help? And we anticipate in addition to the gain in Florida, operationally, we're going to have input to that $1.40 that will help it increase.

Okay. But Florida on its own is EPS positive without the gain?

Yes. Florida will be EPS -- assuming the sales go through, we don't have deals signed up yet, but assuming they go through, we would anticipate that we'll sell them for a bit more than rate base. And by the way, rate base is $2.7 billion.

Okay. And now, so I mean, this is pretty sour request, could we going forward, have actually, rate base and CapEx schedules, maybe not state-by-state but at least for the next say 3 or 5 years? It would be so much easier for us to go through the numbers and actually project your earnings power because I feel like we're going through our notes and now trying to match the numbers with our model. And a couple of slides would make a big difference for us.

And we will take our next question from Heike Doerr with Baird. Heike M. Doerr - Robert W. Baird & Co. Incorporated, Research Division: Two quick questions. On the Marcellus opportunity, I believe we had been expecting Phase 2 to be completed at the end of the year, maybe I'm mixing up my Phase 2, Phase 3. Can you give us a quick update? Is that project going as planned? I thought that there was talk of an additional phase to that project. Where are we in all of that?

Phase 2 is done and water is pumping through it. Phase 3 will be done by March and that was the third phase we had talked about, which extended another 20 miles north. Heike M. Doerr - Robert W. Baird & Co. Incorporated, Research Division: And is there a Phase 4?

We're looking at maybe a Phase 4. Heike M. Doerr - Robert W. Baird & Co. Incorporated, Research Division: Okay. But nothing that...

Yes, Phase 3 is a Board-approved, PVR is Board-approved. It's under construction and the recipient of most of the water for Phase 3 will be Shell. The earlier Phases, 1 and 2, 2 is to get to the river which is now working and everything is permitted and it's pumping water. And Phase 1 and 2 combined served range resources and EXCO I think, is the other company's name, and Southwest. I mean, all of these companies, Heike, have different areas where they're drilling so that's why we call the pipeline phases but it's just where is it going next and who's drilling there. Heike M. Doerr - Robert W. Baird & Co. Incorporated, Research Division: Got it. And on the Florida divestiture, I believe I saw something that FGUA wasn't interested in buying all of the assets. Can you share with us if you're planning on some of piecemealing some of this or if we're going to see it as 1 single transaction to a single buyer?

No, I think you're going to see multiple transactions. FGUA is the furthest along. They have a signed agreement with us to purchase 56% of the assets and the deal is for $49.2 million. Heike M. Doerr - Robert W. Baird & Co. Incorporated, Research Division: So as we think about how we'll see this on the income statement, we'll see this piece announced as a sale but then we'll continue to see the earnings stream from the other 44% until buyers can be identified for those systems?

Yes. And I would anticipate late first quarter, early second quarter close for FGUA, and all the rest in the second or third quarter.

That concludes today's question-and-answer session. Mr. DeBenedictis, at this time, I will turn the conference back over to you for any additional or closing remarks.

No, nothing more. I think we've covered everything. I thank everybody for all their time.

Ladies and gentlemen, this concludes today's conference. We thank you for your participation.