We reported second quarter net income per unit of $1.22 this morning. Normalizing for mark-to-market commodity adjustments, which we generally exclude from our guidance, we generated net income per unit of $1.01, per unit. Our quarterly results significantly exceeded the $0.83 guidance we gave back in early May, due to 2 primary factors. First, transportation volumes were higher than expected, with gasoline shipments improving with lower gasoline pricing during the start of the higher-demand summer driving season. Crude oil volumes were also significantly higher, as shippers increased their utilization of our Houston-area distribution network.The second factor contributing to our improved performance in the quarter was an increase in product sales from our commodity activities. Our quarterly distributable cash flow increased to a record $134 million, resulting in a 1.3x coverage ratio for both the quarter and year-to-date, even with our latest quarterly distribution payout of $0.945 per unit. I know a number of you were pleasantly surprised with the significant increase to our distribution that was announced last week, and I think these very strong coverage ratios clearly demonstrate why our management team believe now is the time for a step change, in Magellan's distribution, to provide additional value back to our investors. Even though we had a strong second quarter, this was not the only reason for the decision to raise the distribution beyond guidance.
Magellan Midstream Partners LP Management Discusses Q2 2012 Results - Earnings Call Transcript
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