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Sunoco Management Discusses Q2 2012 Results - Earnings Call Transcript

Our retail business also delivered strong results, as margins expanded related to declining wholesale gasoline prices during the quarter. As we have said before, this business does see quarter-to-quarter volatility, as evidenced in the first half of 2012 performance. But as our trend shows, the business tends to deliver consistent and stable earnings and cash flows year after year.

Lastly, Refining and Supply delivered strong results this quarter. I want to commend our refinery employees for achieving excellent operating results and capitalizing on strong market conditions during what was a time of considerable uncertainty for everyone at the Philadelphia refinery. As long we are the operator, we continue to work hard to realize the potential market opportunities through a continued strong operations and sharp focus on optimization of the product supply.

At this time, I'm going to turn the call over to Mike Hennigan, who will provide an update on Sunoco Logistics Partners strong business results.

Michael J. Hennigan

Thank you, Brian. Sunoco Logistics continues its momentum with another strong performance in the second quarter of 2012. We had record distributable cash flow of $166 million compared to $106 million in 2011. All of the areas that are part of our strategic focus are delivering results.

The main driver of results continues to be our crude oil business. Demand for West Texas crude continues to be at a very high level, translating into tremendous demand for our transportation services, including our proprietary pipelines, our West Texas Gulf and Mid-Valley Pipeline joint ventures and our trucking services.

The expansion of our West Texas system continues on track to meet the market needs and is expected to start up in the first quarter of 2013. We've completed 3 successful open seasons, which will deliver 110,000 barrels to the market. We also announced our fourth West Texas open season called Permian Express, a new project to transport West Texas crude oil to Gulf Coast markets.

Phase 1 of the project will have a capacity of approximately 150,000 barrels per day. Permian Express could be expanded to at least 350,000 barrels per day.

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