Gregory J. Goff

Thank you, Louie. Good morning, everyone and thanks for taking the time to join us on the call today. You have our earnings release, and Scott will go over some of the details of the results in a moment. But I'm going to start with an overview of some recent highlights.

Despite significant turnaround activity during the quarter, we delivered solid operating performance with refinery utilization of 87%. This allowed us to capture strong crack spreads and advantaged discounts on crude oil supply. We continued to reduce operating expenses with adjusted manufacturing costs of $4.69 per barrel. The combined result is reflected in our adjusted second quarter earnings of $2.87 per diluted share, and our quarter-end cash balance of over $1.3 billion.

We also made significant progress on several strategic fronts during the quarter. We completed our North Dakota refinery expansion. And today, that refinery is running full at 68,000 barrels per day. That $35 million project is expected to generate over $80 million of annual EBITDA using an average 2011 price environment. If we look at margin so far this year, the annual EBITDA potential increases to about $100 million. And we expect to begin loading the first unit train of price and quality advantage Bakken crude oil destined for our Anacortes, Washington refinery later this month. Our rail and unloading facility with permitted capacity of 50,000 barrels per day is nearing the estimated early September completion.

We continue to expect the new vacuum tower at our Wilmington, California refinery to be operational in the fourth quarter of this year, shifting just under 1 percentage point yield from low valued petroleum coke to light product production. These high return capital projects allow us to expand our advantage position in the Bakken and drive improvements in product yields. The end result is an enhanced competitive position for our refineries and the potential for significant growth in earnings and cash flow.

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