Good day, ladies and gentlemen, and welcome to the Second Quarter 2012 Energy Transfer Earnings Conference Call. [Operator Instructions] As a reminder, today's conference is being recorded for replay purposes. And I would now like to turn the conference over to your host for today, Mr. Martin Salinas, Energy Transfer's Chief Financial Officer. Please go ahead, sir.

Thanks, operator, and good morning, everyone. Welcome to Energy Transfer's Second Quarter 2012 Earnings Call. With me today are Kelcy, Mackie, Tom Mason and John McReynolds, along with other members of our management team, who will be available to help answer your questions after our prepared remarks. Today, I'll start with a brief update on the pending Sunoco acquisition and recently announced drop-down of Southern Union into an ETP-controlled entity, as well as other growth initiatives that we're pursuing. We'll also discuss the second quarter financial and operating results for ETP, ETE and Southern Union before going and taking your questions. Our earnings releases, which were released yesterday after the market closed, are available on our website. And we intend to file our quarterly reports on Form 10-Q today. I'll also remind you that during the call, I'll be making forward-looking statements within the meaning of Section 21E of the SEC Act of 1934 based on our beliefs, as well as certain assumptions and financial information available to us today. Before going into second quarter results, I'd like to give you a quick update on where we stand with our pending acquisition of Sunoco and the subsequent announcement of the ETP HoldCo transaction. We recently filed [indiscernible] Proxy statement for the Sunoco transaction and expect to receive clearance soon. Once we receive clearance, the next steps will be to set the Sunoco shareholder record and meeting dates. Assuming a favorable vote at the shareholder meeting, we expect that we will be able to close the Sunoco acquisition sometime in early to mid-October. And we couldn't be more excited to get our hands on these assets and deliver on the unitholder value that we believe these assets will bring to them. Also, as announced in June, contemporary with the Sunoco acquisition,…

[Operator Instructions] And our first question is coming from the line of Gabe Moreen, Bank of America.

A couple of questions, Martin, on the ETE results I'm just thinking about, I guess, cash taxes, cash interest expense, whether the second quarter numbers were a good run rate to use going forward for those items. And then also, in terms of where -- how you guys feel you are in terms of synergies with the legacy Southern Union assets and how much of that showed up in the quarter, and how much you think still has to show up or still will show up?

Yes. I guess on ETE, are you referring to just the stand-alone results for ETE or on a consolidated basis?

Stand-alone.

Stand-alone. Yes, I think the -- for cash interest expense this quarter, probably represents a good quarter going forward, where we picked up the entire period on the term loan. And obviously, you have the existing senior notes in place. I think it's a good number. From a tax perspective, we really don't see a lot of taxes being paid at the ETE level, but really, it should be minimal going forward. With respect to synergies, we're going to continue to see those as we integrate those assets. As we said before, I think it's going to take a good 18 to 24 months to get that into our system and start seeing those results.

Got it. And then if I can ask maybe on kind of the Holdco -- first Holdco transaction, the level of leverage you're contemplating at the Holdco, when that's ultimately formed, and then also I guess, a bit more maybe about the strategic rationale, just kind of hopefully minimizing cash taxes for taxable subs, does it possibly effectuate asset sale is a little bit easier, if you could maybe touch on some of those?

Yes, you bet. With respect to leverage at Holdco, when you drop in the Sunoco assets, the debt comes with that. When you drop in the Southern Union assets, the debt drops in with that. We are operating on some internal leverage at Holdco to allow for some additional synergies to be had there, I need to go back and look and see where that, ultimately, would end up. But what I can say is that if all that gets consolidated up into ETP, so whatever intercompany financing we're doing at the Holdco level, when we reported it out to The Street, it will be on a consolidated basis. So it -- you may not see it -- we don't intend to put any additional external leverage at the Holdco level. So all that you'd see there, what's existing today is the SUN debt. Once they get consummated, that transaction gets consummated, and then SUN debt following down into Holdco. With respect to strategy, and I guess kind of the rationale behind Holdco, there are a number of things that are focusing here on. I think it's -- it was clear when we were attempting to acquire Southern Union, we would prefer it to be at the ETP level principal than Southern Union, saw it a little bit differently. And in order to get a transaction done, we ultimately agreed on ETE being the currency to acquire that acquisition, with the thought that down the road, we would move MLP assets into the operating MLPs, whether it be ETP or Regency. The Holdco transaction really pushes the control of those assets down into ETP, which we're pretty excited about. That gives our commercial teams the ability to go out and talk to our customers and really provide a very exceptional and robust suite of Midstream services across many geographic basins, which is key in this competitive environment. So that was a key strategy. We also, from a investment grade perspective, with Holdco being consolidated to ETP. I guess from a credit perspective, ETP, increased size, scale, but also the diversification that the rating agency certainly would look at. Based on the feedback we've from the agency, it was very favorable. And then there are also additional synergies within the Holdco structure that we think we'll be able to take advantage of, although some of those are going to be taxes.

Okay. That's helpful. And the last one for me is just latest thinking in terms of asset divestitures, whether legacy Southern Union assets or, prospectively, any of the Sunoco assets.

Dave, this is Kelcy. Sure. I think there's been speculation that the Missouri and Massachusetts LDCs, at some point, might be part of the divestiture. And I would say that, that's a very reasonable possibility, very reasonable. So we are considering that. Also, we believe that it would be -- it would be more distributable cash flow generated if, in fact, the [indiscernible] assets, they're probably Southern Union gas services. If those assets were to find their way into our MLP structure, we believe that, that makes more sense. There's just more operating synergies that can't be taken advantage of with those assets remaining where they are. So I do believe that those are 2 obvious ones that I would not be surprised to see us move on something with those 2 assets in the near future. And quite possibly, others as well.

At this time, I'm showing no further questions in queue. I would like to turn the call back over to Mr. Martin Salinas for any closing remarks.

Great. Thanks, everyone for being on today's call, and we'll talk to you at the conference here in the not too distant [ph] future. Thank you.

Ladies and gentlemen, that concludes today's conference. We thank you for your participation. You may now disconnect. Have a great day.