Magellan Midstream profits fall due to hedging positions
BY ROD WALTON World Staff Writer
Wednesday, October 31, 2012
Tulsa-based petroleum storage and transport firm Magellan Midstream Partners reported Wednesday that its third-quarter profits decreased more than 50 percent year over year due to accounting markdowns on hedging positions.
Net income totaled $50.5 million for the three months ending Sept. 30, compared to $110.1 million during the same period of 2011. The profits actually would have increased $600,000 if not for mark-to-market adjustments in New York Mercantile Exchange positions in hedged commodity activities, the partnership reported.
“During third quarter 2012, Magellan’s core fee-based transportation and terminals assets generated improved financial results due to increased demand for our pipeline and storage services, and cutting through the implications of mark-to-market accounting on our commodity hedges, the cash impact of our commodity-related activities was comparable to the year-ago period,” CEO Michael Mears said in a statement.
“Magellan’s assets continue to produce solid results, and we remain on track for a record year from both an operational and financial standpoint.”