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Crude, marine storage segments drive Magellan Midstream net income up in Q4'16

Magellan Midstream Partners LP on Feb. 2 reported net income of $213.3 million, or 93 cents per unit, for the fourth quarter of 2016, up from $207.1 million, or 91 cents per unit, for the same period of 2015.

The partnership said these results were largely driven by record quarterly performance in Magellan's crude oil and marine storage segments. Net income excluding mark-to-market commodity-related pricing adjustments was $1.04 per unit for the fourth quarter of 2016.

The S&P Capital IQ consensus normalized EPS estimate for the fourth quarter of 2016 was 96 cents.

Magellan Midstream reported adjusted EBITDA for the quarter of $338.8 million, up from adjusted EBITDA of $315.3 million for the fourth quarter of 2015.

The partnership's distributable cash flow was $277.2 million for the three months that ended Dec. 31, 2016, compared with $256.9 million during the last three months of the previous year.

"Magellan finished 2016 on a strong note, generating record quarterly and annual distributable cash flow, increasing annual cash distributions to our investors by 10% and maintaining our solid, investment-grade balance sheet," Michael Mears, Magellan Midstream's CEO, said in a Feb. 2 statement. "We expect the favorable momentum of 2016 to continue with another record year projected for 2017 as we benefit from recent expansion projects and continued strong demand within all of our business segments."

The partnership reported $802.8 million in net income for full-year 2016, compared to $819.1 million in 2015. The company attributed the lower net income to mark-to-market adjustments and lower margins for Magellan Midstream's commodity-related activities.

Full-year 2016 net income per limited partner unit was $3.52 in 2016, down from $3.59 in 2015.

The S&P Capital IQ consensus normalized EPS estimate for 2016 was $3.51.

The year's distributed cash flow was $947.5 million in 2016, which the partnership said was a record. This compared to $942.9 million in distributed cash flow for 2015. The partnership reported full-year 2016 adjusted EBITDA of $1.21 billion, up from 2015's adjusted EBITDA of $1.17 billion.