First, we had not yet determined if we would keep our ammonia pipeline system, which is expected to generate close to $20 million of DCF this year. In addition, although we knew we were moving ahead with our Crane-to-Houston crude oil pipeline at the beginning of this year, the project's scope was still at its initial size of 135,000 barrels per day. Even though this project doesn't begin contributing until 2013, we do look out a few years in making distribution decisions, so we can be confident in the long-term sustainability to our investors.

Now that we have decided to retain the ammonia pipeline system and have increased the size of our Crane-to-Houston project to 225,000 barrels per day, of fully committed capacity, we see our base business and growth projects generating enough cash flow to comfortably increase our distribution to a higher level. We have now increased our growth expectation accordingly, and are targeting distributions for full year 2012 that are 18% higher than 2011, with the goal of raising distributions, an additional 10% for 2013, as our growth projects are expected to come online and benefit future periods.

With that being said, we also did see an improvement in our base business in the second quarter, which further strengthened our decision that this was the right time to step up the distribution. And with the increased DCF guidance of $520 million for 2012, that we provided in our earnings announcement this morning, we are even more confident in our new distribution level, and now expect to generate a still very healthy coverage ratio of 1.2x for the full year, generating almost $100 million of excess cash, giving us plenty of cushion this year.

Now that we've discussed our thoughts around the recent distribution step-change in detail, I'll turn the call over to our CFO, John Chandler, to discuss our second quarter results versus the comparable 2011 period. Then I'll be back to discuss our forecast for the rest of 2012 and the status of some of our larger growth capital projects.

Read the rest of this transcript for free on seekingalpha.com

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