Magellan Midstream Partners L.P. (MMLP) reports that its anhydrous ammonia pipeline had operating margins of $4.9 million for the fourth quarter ending Dec. 31, 2009, which was a quarterly record. This was an increase of $3 million over year-ago margins.
MMLP said revenues increased because of higher tariffs and increased volumes due to favorable farm conditions in the quarter. Pipeline shipments were up about 13 percent, to 223,000 st versus the year-ago 198,000 st. Fourth-quarter pipeline revenues were $7.4 million, up from the year-ago $6.2 million.
Expenses were lower because of environmental accruals – fines and settlements related to previous ammonia releases on the system that negatively impacted the company during the year-ago quarter. They were only $2.46 million in the recent quarter, versus the year-ago $4.2 million.
Full-year results for the segment were not as rosy. Operating margins dropped to $3.7 million on sales of $19.9 million, compared to 2008’s $8.7 million and $22.7 million. Expenses were up, at $16.2 million from the year-ago $14 million. Tons shipped were off 22 percent, to 643,000 st from 2008’s 822,000 st.
Company-wide, MMLP fourth-quarter net income barely exceeded year-ago numbers, at $81.9 million ($.77 per unit) versus $81.1 million ($.51 per unit). Sales were up, at $353.2 million from the year-ago $301.6 million. Full-year net income was off 33.4 percent, to $226.5 million ($2.22 per unit) on sales of $1 billion, versus 2008’s $330.1 million ($2.21 per unit) and $1.21 billion. MMLP said excluding extremely high product margin and a one-time gain in 2008, net income actually increased in 2009, to $172.3 million from the year-ago $166.1 million.
Guidance for 2010 is $2.66 per unit, with the first quarter at $.65 per unit.