Magellan Midstream profit takes 50 percent tumble
BY ROD WALTON World Staff Writer
Thursday, November 01, 2012
11/01/12 at 3:14 AM
Tulsa-based petroleum storage and transport company Magellan Midstream Partners reported Wednesday that its third-quarter profit fell more than 50 percent from a year ago because of accounting markdowns on hedging positions.
Net income totaled $50.5 million, compared to $110.1 million during the same period of 2011. The profit would have increased $600,000 if not for mark-to-market adjustments in New York Mercantile Exchange positions for 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," he added.
Transportation volumes jumped 19 percent, Magellan said, citing increases in crude oil and gasoline shipments.
The pipeline operating margin, however, fell $51.4 million to $97.7 million. Magellan blamed the drop exclusively on the timing of mark-to-mark adjustments on commodity prices.
The operating margin for terminals fell $4.2 million to $36.1 million, while it increased to $4 million for the ammonia pipeline system compared to last year's third quarter. Magellan added new crude oil storage at its Cushing terminal, which helped generate new revenues.
Distributable cash flow, the amount generated to pay distributions by master limited partnerships such as Magellan, rose 7 percent to $100.7 million. Magellan recently announced quarterly cash distributions of 48.5 cents per limited partner unit.
The partnership reported that it had $2.1 billion in debt outstanding and $100 million cash on hand as of Sept. 30.
Magellan Midstream Partners LP Earnings
|
2012 3Q |
2011 3Q |
2012 9 months |
2011 9 months |
Pct. Change |
| Revenue |
$325.9M |
$435.5M |
$1.27B |
$1.26B |
0.8% |
| Net income |
$50.5M |
$110.2M |
$281.9M |
$303.3M |
-7.1 % |
| Net per unit |
$0.22 |
$0.49 |
$1.25 |
$1.34 |
-6.7 % |
Original Print Headline: Magellan's 3Q profit takes 50 percent tumble
Rod Walton 918-581-8457
rod.walton@tulsaworld.com
