In addition, today’s discussion include certain non-GAAP financial measures as defined by SEC Regulation G. Our reconciliation of those measures to the most directly comparable GAAP measures is available on our Investor Relations website at spectraenergypartners.com.With that, I will turn the call over to Laura. Laura Buss Sayavedra Thanks, Derick. Good morning, everyone and thank you for joining us today. I’m pleased to report that Spectra Energy Partners had a solid second quarter, thanks to the benefits of our portfolio, with revenues driven by capacity charges and an average contract life of 11 years. Net income increased from around $38 million in the prior year quarter to $47 million in the second quarter 2012. And cash available for distribution was $53 million, up $8 million over the second quarter of 2011. Now, let me walk through the performance at each of our individual businesses. Let’s start with Gas Transportation and Storage, which includes East Tennessee, (inaudible), Ozark and Big Sandy. Revenues were up from the prior year quarter, reflecting the Big Sandy acquisition that’s closed at the beginning of the third quarter 2011 and East Tennessee’s net project that went into service last fall. This was partially offset by lower revenues at Ozark Gas Transmission. Expenses in the second quarter 2012 increased from the prior year quarter, reflecting O&M and depreciation for the Big Sandy and net assets that were brought on line last year. Also keep in mind that our operating expenses for the segment are typically a bit higher in the second half of the year and we would expect this to be the case again in 2012. Overall, this brings EBIT up to $33 million for the second quarter, around $14 million over the prior year quarter. Next, let’s turn to Gulfstream, Gulfstream’s revenues were in line with the second quarter of last year. Operating expenses were higher compared to the prior year quarter, mainly reflecting pipeline integrity work completed within the second quarter of 2012. As a result, equity earnings of $14.5 million dollars were down slightly compared to the prior year quarter. We continue to expect Call Streets four year results to be consistent with our outlook. As expected at MHP, turning to the next slide. MHP revenues were lower in the second quarter compared to the prior year quarter, reflecting and re-contracting that was completed this spring. Expenses were higher in this year’s second quarter compared to last year, due mainly to higher maintenance costs. Altogether, this resulted in equity earnings of $9 million in line with our expectations.
Next, let’s take a look at the SEP Earnings summary. With the primary drivers have just review any additional information on this slide, you can see how you arrived at around $47 million of net income, driven by growth in our gas transportation and storage segment. Now let’s see how this translates to cash available for distribution for the quarter.Adjusted EBITDA of more than $40 million for the second quarter 2012 was up around $18 million from the prior year quarter. This reflected the benefit to the Big Sandy acquisition and East Tennessee’s net project. Cash available for distribution for caution in MHP, decrease from the prior year quarter, but still in line with our expectations. In addition, you’ll see that interest expense increased $2 million of the prior year quarter, reflecting the net impact of the debt that SEP issued in mid-June of 2011. Maintenance CapEx for the second quarter 2012 was just over $9 million compared to about $4.5 million in the prior year quarter. Good weather this spring provided an opportunity for us to start our planned work earlier this year, which resulted in the larger share costs in the first half of 2012. That being said, we continue to expect around $19 million in maintenance CapEx for the full year, in line with our outlook. We continue to track toward the annual target to each of our business areas that we share with the early on year and toward our full year outlook of $222 million for cash available for distribution. Let me close by saying that our financial position remains strong with solid credit metrics and liquidity of about $630 million at the end of the second quarter, positioning us well to move quickly on any new investment opportunities. Reflecting that strength SEPs investment grade ratings were also recently affirmed by all three major rating agencies. Read the rest of this transcript for free on seekingalpha.com