Magellan Midstream Partners Q2 Profit Down - Quick Facts

(RTTNews) - Magellan Midstream Partners L.P. (MMP) reported that its net income for second quarter 2014 declined to $146.3 million from $153.6 million in second quarter 2013. The 2014 results included a $9.4 million non-cash impairment charge related to a non-strategic pipeline terminal that may be sold in the future. Net income per limited partner unit was $0.64 down from $0.68 last year.

Net income per unit excluding mark-to-market or MTM commodity-related pricing adjustments, of 70 cents for second quarter 2014 was lower than the 72-cent guidance provided by management in May 2014 primarily due to the 4-cent unfavorable impact of the non-cash impairment charge. Otherwise, the partnership's assets generated better financial results than expected due to continued strong demand for refined products transportation and higher crude oil shipments during the quarter.

Total revenue for the quarter rose to $496.45 million from the previous year's $443.91 million.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.71 per share and revenues of $503.27 million for the second-quarter. Analysts' estimates typically exclude special items.

Further, the partnership has announced plans to reactivate an idle 135-mile segment of pipeline in southern Oklahoma to deliver crude oil and condensate from Healdton to Cushing beginning in the third quarter of 2015.

Te partnership currently plans to spend approximately $775 million in 2014 with additional spending of $350 million in 2015 and $75 million in 2016 to complete its current slate of construction projects. The partnership now estimates that its share of spending for the BridgeTex pipeline will be approximately $625 million.

In addition, Magellan continues to evaluate well in excess of $500 million of potential growth projects in earlier stages of development as well as possible acquisitions, both of which have been excluded from the partnership's spending estimates.

For the third-quarter, the company expects net income per limited partner unit of $0.62. Analysts project third-quarter earnings of $0.67 per share for the third-quarter.

The company raised its 2014 Distributable cash flow or DCF guidance by $30 million to $840 million and remains committed to its goal of increasing annual cash distributions by 20% for 2014 and 15% for 2015.

For DCF purposes, operating results of the BridgeTex pipeline will not impact 2014, with the initial DCF benefit expected to occur in 2015 due to the timing of the pipeline's start-up and cash distribution payments from the joint venture to Magellan, which will be paid in arrears on a quarterly basis.

Net income per limited partner unit is now estimated to be $3.30 for 2014. Analysts project annual earnings per share of $3.30. The company said in May that it expected net income per limited partner unit of $3.25 for 2014.

Guidance excludes future MTM adjustments on the partnership's commodity-related activities.