MMP - Earnings call transcript Q3 2017 | Magellan Midstream Partners, L.P.

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Operator

Good day, everyone, and welcome to the Magellan Midstream Partners Third Quarter 2017 Earnings Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mike Mears, President and Chief Executive Officer. Please go ahead, sir.

Michael N. Mears

Good afternoon and thank you for joining us today to discuss Magellan's third quarter financial results.

I'll as that defined started, making will get statements forward-looking by we remind management you be Before the SEC. based impact of are factors statements on judgments current Such regarding that could the Magellan. performance future our the

You opinions in SEC filings discussed other our future Magellan's the performance. should your with own risk review forming and information factors in about the

Moving one for to our Magellan. results, the third quarter was an eventful

and for impacted service made overall the and that dedicated negatively third cases, Harvey work $XX half a future limited affected it work. with as the we this very impact impact hardships possible. personal financial million the Hurricane and with remainder our the hard repair we dealing related diligence to estimate their point, At number hit to as were time Although facilities, restore employees of own. be thankful soon well through of the storm operations in the as many safely due hurricane We're a of period their DCF, about of clean-up and for to with our of who, quarter to in our to operations of

the impacted tanks repair. now, of of majority operations a are at being our the in back with Galena As Park under exception few facilities still

that, I'll even general of under considerable are has new projects review pleased and discuss the with We've earnings. time in a discussing a construction. for call call third conceptual final on addresses now to our third been terms the more to announced quarter projects year contracts our results. before Milford, take you to Aaron each that your reached. three have CFO, our expansion With after few quarter new projects Magellan's while the We be mentioned, guidance new to are I'll back also and to as it terms been minutes questions. we've agreement hand in the large-scale prepare projects now. discuss during specifics these to over can the financial But, Then, quarterly Aaron you I'll opening these negotiate after with for

Aaron L. Milford

would diluted or financial morning, net to operating evaluating distributable metrics included I earnings for these million, are diluted believe this in including of to or exhibits these we audience we've margin making non-GAAP nearest higher of which cash the quarter $XXX.X than reconcile basis, certain million Mike. like quarter useful that remind for a references our metrics, XXXX. slightly flow. income be and and measure. we'll to their our third Thanks, We third the to $X.XX unit $XXX.X release that GAAP metrics Earlier was on the performance, reported unit reported per per $X.XX investors

equated to earnings commodity activity provided of diluted $X.XX an adjusted impact August Excluding the an the Chicago about area, mark-to-market unit the current in But back terminal sale of year. of our third on per from inactive in quarter per $X.XX the exceeded which the benefited in gain million $XX.X this unit. quarter, of $X.XX guidance of

current million million $XXX.X third cash about quarter $X of of considering lower income especially benefit to the than XXXX. our of with Harvey negatively reported flow quarter is XXXX quarterly the line fact diluted If Hurricane Distributable was quarter's $XXX.X $X.XX this estimated net basically in of from $X.XX impacted in net the approximately you the income guidance, third exclude results, that was in million per unit. adjusted have $X.XX by the

part was $XX get were line no virtually As quarter deliver guidance, back the DCF Mike able employees. with results of million, we estimate in earlier, the mentioned quickly impacted to and on into about our that Hurricane in facilities which we Harvey our negatively service small by task but

would we see total repairs to to Harvey facilities, additional As or as of million. $XX estimated which related million $XX impact to proceeds, about estimated spending our we complete forward, the look Harvey, of bring net insurance we an so of

of To While XXXX, impact believe some be the the there majority a we to by about $X additional segment we oil carry-over of you benefited into crude impacted give $X Texas while million this to refined respectively. from impact, higher as products and could negatively vast opportunities, marine expect million segment sense well $XX volumes were by and moving as south segments million, blending our XXXX.

the move segment impacted performance $XX be repair as million discussion to quarter. segment for in we I'll will marine forward, Looking continue of a almost now the to all assets. our to remaining spent be our incurred of

third third maintenance related decreased higher the quarter customer XXXX, to Our the year ago well lower segment partly a result result quarter third work, dispute refined favorable expenses products the quarter higher in with million the was XXXX. of less of and product were as historical asset which integrity a a million terminals of million our payment in operating $XX million out of the settlement environmental hedging Operating over to revenues than related margin timing revenues. than higher of Transportation as to Product increased from as $X.X same $XX.X to compared as XXXX, Both $XX related on ancillary generated pipeline. contributions West our period million losses $XXX.X and Rock and accruals by volumes to X% notable remediation as to systems, higher of from XXXX the Revenues refined spending continued Little Little in products a higher from Rock being sites. quarter unrealized benefited excluding as storage also demand one-time overages, associated were the with a as strong program. distillate volumes Texas. pipeline higher well distillate of gasoline compared transportation particularly period margin well with of due as

butane Our blending these to goods lower physically fractionation to margins product sell unrealized account of we losses, related normalizes our periods, higher takes which into between declined cost and cash activities. margin, due and also when sold for

primarily margin third and XXXX XXX,XXX contributions generated volumes segment operations splitter, in Transportation million XXX,XXX barrels Longhorn increased day million, of was operating the compared the terminals per a current record $XX a third oil of year quarterly this in barrels This of of segment. quarter. began from $XXX.X and XXXX. to a which June higher condensate quarter represents quarter and in day the to for revenue $XX.X the as result of crude this million compared of increase in Our quarter the the per XXXX

last requirements began recall to is of throughput to operating impacted maintenance This approximately volumes for shipments during last the quarter. or the crude segment day per resulting a expire of our negatively by third transportation which volume day oil day million of as we of downtime by in earned the full same their of ventures had than by year was quarter expect Current increase for average throughput of volumes million barrels $X.X credits expenses the as million XXX,XXX for commitment the per $X.X XXXX as during You in the higher were struck barrels estimate in per per of results were believe utilizing our negative BridgeTex's averaged consistent are $X.X operating of related second negatively we barrels of XX,XXX in day during that margin our XXXX. were spot from which a third year period XX,XXX XXXX, BridgeTex finish condensate barrels paying expenses our the was This historical and we higher increase operations spot and tariff, and approximately of about Saddlehorn XXX,XXX third approximately market repairs shift compared quarter Segment XX,XXX by that of Hurricane to Eaglebine resulted third the quarter associated BridgeTex quarter our averaged XXXX becoming year. splitter lower oil the the margin volumes that earnings in power stepped on volumes joint XX,XXX related the Currently a This the day period classify to Product ventures. up in sales. continue shippers reasonable set may that to increased as about BridgeTex of primarily well they more result than joint negative strong the that minimum of result volume basis. daily after that XXXX which to operational product supportive additional was a spot $XX.X September. spot year. price impacted product differentials year. BridgeTex But XXXX, from result still barrels on July. one earnings contractors XXX,XXX per the September well Harvey quarter cost is origin our from well from than is million volumes barrels shipment volumes. crude as and the Saddlehorn per with as as day barrels costs. in quarter day with shipping primarily as from pipeline higher increased Equity per as shipping

million while response in whole, lower is quarter have somewhat movements of Hurricane capacity performance, $X.X related margin marine Harvey from the Harvey. is negative, account, the million my discussion quarter environmental $X.X were as we to our earnings million generated our while our offset the Expenses our a in were would value up taken when unused. from higher $XX.X by $XX.X as XXXX. Taken commodity into Hurricane product from these third result share gains. of primarily accruals, margin that resulted compared to to were flow a also positive of these cash movements in of related primarily Finishing impacts related current our BridgeTex operating gone of and equity otherwise Revenues segment segment million

related to and lower, margin was sales mostly product commodity Finally, sales due $X.X lower million prices. to volumes

by projects. million up quarter result compared as as placed income quarter, capitalized variances to as various to balance year's of to the million last and amortization to interest overall G&A quarter by XXXX continue into XXXX growth to the of increased service. Depreciation Net being moving the in average expense as period. net to assets debt $X.X lower $X.X a higher quarter was well other compared million due Now, were current last expense than second fund a expenses year's higher $X.X interest our our we

X.X% year's fell XXXX. that rate close. conjunction pension in to a higher in quarter benefiting well quarter, not with $X.X interest a million break-up of received third potential acquisition as fee higher average than weighted due Other quarter expense from the the was X.X% cost current XXXX as in did Our to the quarter from last

been has in as past calculation also an detailed my terminal. of income an sale the We in excluded on flow reconciliation Of distributable practice, distributable our comments, net gain with from income, in this the flow cash as mentioned net million recognized gain exhibit. our inactive consistent earlier $XX.X cash attached note, of

onto of of balance was liquidity balance included debt a billion outstanding XX $XXX paper. of our position, this Moving September and discussion sheet $X.X million year, our as which regarding commercial

October, the expenditures. In Our X.X% million X.X XX.X% leverage of ratio XXXX we approximately as par times due as quarter. outstanding issued growth end in paper at $XXX was commercial of future to the at notes well repay fund of

We our extended XXXX. of billion $X term facility also October credit to recently the of

also our Our for facility billion paper matured we facility. commercial our to Currently and $X support October XXX-day facility and credit totals credit renew $XXX million elected in program. this not provides

program issue any the equity place year. not have in not we program the units this million quarter units in during $XXX program and since any at-the-market also putting a place We this have earlier did under issued and

stated a stated we our in manage X our to use ratio, we've tool plan limit. is this As leverage the should past, we times approach to

in discuss XXXX about planned it significantly will a growth totals $X.XX have billion the our Mike period. XXXX As increased now spending for we moment, and to

leaves far which have already over be to billion funded. $X.X just million over so spent We $XXX in XXXX,

stay current Mike and to X to cash EBITDA as we investments turn equity times believe our estimates, over well stated result the retained need Given could guidance issue economic to our within debt a year, call with fund now significant any to updated I will our discuss of the not these financing flow we for our as projects. to balance the growth debt limit. back as and

Michael N. Mears

this us results and the Magellan. remains our our hurricane continue for our Even though reaffirming Based we the billion Thank financial XXXX, our for negatively services operations to-date a financial of guidance record our are impacted to which and comfort solid reaffirm $X.XX DCF previous generate represents Aaron. for outlook annual for year remainder year, results you, returns, on year, of the demand to expectations. our guidance strong providing our

We while committed X.X growing distribution to coverage X% cash XXXX, times. stated for also XXXX maintaining remain distributions our of by both goal of and

increase, $X.XXX asking of is compared growth has fourth of indication us mathematical another quarter achieve about not latest lowered. stated growth the have rate quarter-cent per to increments. X% which distribution our an quarterly to growth in our to This land year. $X.XXXX rate this Some right This our you is distribution distribution been board quarter at X%, while to our recommend, result distribution which year. been would earlier annual was required distribution We keeping subject for $X.XXX increase distribution, approval, for the plan amounts that

projects, expansion new three to excited to we're the quarter. large-scale announced Moving third in have projects

each growth and to time consistently asked coming are see we our attractive segments. new for in see future growth from indicate time we that we We from where of our opportunities

that our emphasize project point one segments. new projects each Our business with announced of for three

project system in Hearne Due between products East our to developed. incremental to our now is and refined shippers. Texas support other strong growth expansion by day to backed and our and project commitments per been and add first industry region infrastructure long-term capacity will of barrels additional the in are lays mention and customers, of volume. has making by XXX expansion to XX,XXX the market that existing that this for miles pipeline constrained to products demand, foundation the is capacity pipeline customer refined Texas from the historically terminal Houston This handle creditworthy needs enhancements the strong opportunities being of the building The of pipe and our has meet

We on mid-XXXX. this which in project, EBITDA expect generate an to X times become to expected multiple operational is

terminal. Pasadena We also announced our marine of an expansion in joint venture

up recently have in total, had marketing You storage may footprint capacity. launched of recall of this XX in phase this incremental land The allows X acquired docks, dock project at million so a actively initially site. million storage we we barrels to for this X in barrels to that of construct five been

marine We pleased Pasadena a venture now this are terminal. with to have joint formed Valero for

in with In are storage Valero's barrels X X to million addition building in constructed owned in million to the by XX%/XX% Aframax-capable joint assets refineries to Houston initial connectivity the of the we be of an and dock City, storage, all incremental now new barrels venture. Texas

be wholly-owned. multiple. XXXX was million, generating million asset customer these phase first the phases XXXX. we operational is two supported be when construction which All $XX early is to-date facility initially is long-term X than by expected alone expected of with share X Phase contracts, a about in for will early X for $XXX to X to EBITDA Our capital phase higher still be projected the operational in times

an could pipeline to barrels this associated expandable be reach cost mid-XXXX oil to we remaining operational strong addition, further, pipeline $XXX process. Texas interest future directly Delaware earning a which project open This an million season XX is at pipeline And, initial Longhorn believe that Basin, Midland. In and Longhorn Texas, than the capacity we terminal million routing crude up in through building continue forward volumes Basin EBITDA commitments total X extends barrels in day, times essentially mile into to the Delaware XXX,XXX seek a to space which the with available the is sourcing launched of to continue if that, the the We're rather in construct a This system. and have in plan to are our successful facility market to to and out by day. Wink, of multiple. moving about investment an $XXX XXX,XXX volumes project expected finally, this Magellan's from and from is Basin driven XX-inch, Crane, a we is customer time Delaware through be new

currently Permian million offerings options growth supply the pipeline, is first in $XXX last which estimates our million with our in broader Basin underway, $XXX strengthening XXXX the are complete new is capital discussed expand strategy to XXXX $XXX in this addition XXXX, in pipeline latest service the $XXX spending forecast new to quarter. a the you construction In and expansion the these projects, million projects to million we to step our now Longhorn from increase in Including a Basin. another Delaware

include spending by projects the In Christi, we number and including of customer supported also of projects, crude just at addition commitments. constructed to new reviewed, a Cushing estimates being oil condensate Corpus other the and new million barrels X.X storage all

large-scale on East still of distribution East Houston. other increase Holland system new capacity will significantly of our are line will Avenue be operational oil XXXX, schedule. Houston Our the out XX-inch early A projects in which to Houston crude from

phase be be Park mid-XXXX commenced in is the operational completed, and Little of that greater Saddlehorn customers products third option the second to area, is pipeline marine the our in oil to which refined providing now to and late a new new Seabrook market crude Rock some the terminal transport projected a the XXXX. projects supply. Galena early The in for shippers Logistics operational Updating Mid-Continent connection operations operational just our ultimately expected Memphis pipeline extension our pipeline is is of the October Cheyenne to at our new dock to to smaller of Magellan

new continue opportunities on make As for you expansion and completing see, we can to future progress projects launching growth.

of opportunities under significant terminal, refined opportunities also expansion our attractive our to These continue Basin. number assets the existing have potential include million. in well of of evaluation further oil We in infrastructure excess totaling and complement Pasadena other additional crude pipeline to out products expansion $XXX opportunities build a opportunities Permian

but, approach our includes That analyzing acquisition to evaluating be call in for Magellan the a opportunities intends potential opportunities. consideration. its always, active of now We'll disciplined when On acquisitions, the prepared our remain available comments. space will now open key maintain questions. up the price topic as we in

Operator

Justin We'll Raymond you. Thank to James. go Jenkins,

Justin S. Jenkins

maybe looks I'm and start like guidance and looking Great. maybe basically volumes impact a so big unchanged. figure. here we're I Seems going sense Thanks. offset ramp Good the keeping with of like between seasonality products know but in XQ. guess in refined really That bridge better BridgeTex also afternoon, XQ everybody. big I with for here. XXXX hurricane just XQ, in jump implies positive a XQ outlook quarter got quarter-over-quarter the to this we've the a pretty

Michael N. Mears

I'd all, so blending our I and or say. of in first month strongest Well, – quarter typically should say that's fourth the quarter, commodity that

So, of blending that there's quarter, – there's significant then and there blending place if you third the very are all think fourth quarter. little at the place that in takes takes

hurricane the material in that due our difference the higher operating So, splitter fourth the BridgeTex little We there's volumes over if of down built that's more have it I I will to a in third that's don't there. quarter. month a and there's know for third quarter, quarter we're and fourth the through significant there. in – in significant was expectation quarter contributor. the anything be a expecting a say do significantly entire on to

of So, the components some fourth those biggest are quarter quarter probably between bridge. the third and

Justin S. Jenkins

No, lots spread. Okay. And days and questions on around you on a these differentials BridgeTex wider the maybe of here your I confusion guess, the gears Brent/WTI in shifting maybe, that's thinking then of certainly crude Aaron, market. bit and helpful. a mentioned the comments

we spreads you on a those out time. fundamental if play and view curious that with Just how over have

Michael N. Mears

had three its expect the since started considerably in over happened. strengthened clearly, it would utilization after maintained months. would spreads I but the – right asset it's those even I we've hit recovery And full the hurricane Well, hurricane strength after last have

stay start affect expectations to that Permian. differentials it's to could basin indicator our And here of production going Obviously, the up grow strong. going a remain So, the the in that in in to are differential continues an while. expectation as I that's Enterprise pipeline but for the shortly that's short-term, production strong of just pretty are to going those growth a our has is the think

Justin S. Jenkins

this think you capacity? takeaway to differential has that conversations additional here Mike, some started on accelerate maybe do

Michael N. Mears

but happening yet. any certainly a to And actively Those puts need there's Well, to those need know we I conversations. for anything continue can for are It to the accelerate quite that to have you don't report time. been that engaged provide if some infrastructure. with tell we on on be solution, have discussions spotlight don't additional that conversations I

Justin S. Jenkins

it I'll Thanks, there. Perfect. guys. leave

Michael N. Mears

Thanks.

Operator

next go Tonet, JPMorgan. Jeremy We'll to

Unknown Speaker

(XX:XX) provide in product Bill on the Can you color refined accrual is Jeremy. more This OpEX? increase and products overages, remediation Hi. the for on integrity drivers million for spending $XX the

Michael N. Mears

Sure.

adjust individually. remediation through year on doing sites. touch active slightly liabilities to the and And standpoint, our XX-year environmental what every what our in that larger accrual re-estimate of past. typically went we do And through go those an than for and in cost quarter when that, the to then forecast we accruals we the a is accrual accordingly. process Just we've process seen From was third that we're a

that's work bit And system obviously component spending complete that place, is hurricane a of quite pipeline to year. now some on the one so money quarter it. relation also, for considerable We've in we work and ammonia spending integrity were had our but of that in the took

saw and to those we shouldn't quite quarter. in that And overages, with difficult So, associated then a I regards And bit really how it recurring fluctuate the we've we mean quarter, measurement, number accuracies are tends product that's predict. to the of measure of shortages. typically with to it seen. recurring think are and those the seasonal. overages fourth see third lower part a but be in cyclical instance nature a than We don't that and can product we just it's

Unknown Speaker

Okay. there attractive? the you transactions, any Thanks. had on Permian have or And there asset projects interest then is organic more recent

Michael N. Mears

takeaway pipes. transacted weren't the the interest of that specifically to for in been at marketed an that that now we project have in systems systems the number gathering gathering didn't in a That We've and our But said, more they able execute. the in so haven't enhancement Typically, that to to have organic the interested developing simply Permian. get assets interest to so said projects had are being we and we as value regards are attractive quarters organically. Permian we diminished we transacted, in as our with an have

Unknown Speaker

one Okay. more. then, Thanks. just And

Now Corpus Christi the that entered multiple expected impacts? your performing service, the hurricane is versus how it splitters excluding Thanks.

Michael N. Mears

a expected. as just we performing service. It's fee-based It's

then we as going don't can keep it so, And aren't running we've And that any of to a to expectations. to it's short and threshold, the our long reason continue meet going we do going see forward. that above to as throughput been minimum do we able why hurricane,

Unknown Speaker

much. very Thanks Great.

Michael N. Mears

Thank you.

Operator

And our take we'll next question from Shneur Gershuni, UBS.

Shneur Z. Gershuni

Good afternoon, everyone.

of couple here. quick a Just questions

First JVs, capital be you've really years previously at to net a off, the given on you've that tool, resort. like approvals are time your you just through might announced coming almost as amount this ATM (XX:XX) tapped of should big the that on had expected ATM? or would thought as said process is of new last it the same assume but build-out? a in as use you they changed the all these increased be go this that's basis, you of spent a something a Has just-in-case actually that any Is it we

Aaron L. Milford

not our to ATM. No, the this Aaron. using we're We're approach is – changing

truly As times it. self-imposed to within have we we table debt-to-EBITDA using we've what the limit. right without fund now tool And for can is consistently on the a X manage us said, it

of program. intentions of within to changing So, nothing is use the our terms how

Shneur Z. Gershuni

categories into but new from assets, ramp? project can harvesting, number, times maybe say of blending bigger bucket existing of if bit you're Okay. guess, on too? What's three XXXX. looking could and X.X X% year leverage XXXX makes what and coverage versus coming What maintain given ratio, of then, sort perfect as a percentage. for potential of of, versus but sort the that to I – I part if guidance in And when well, you you're nonetheless know put there's drivers growth exact you an as with of ramps operating are that of expecting coverage next X.XX little smaller a wondering butane expecting you and That the kind growth you're some didn't was grow I expectation by you an sense. then that give

Michael N. Mears

call prepared Well, the today. we we're at update typically that and do fourth not provide that quarter to

the defer next detail great questions. provide to till those of all and going we're on call So, going we're to

Shneur Z. Gershuni

type you've And respect any lot developing these JVs sort or one question, it just economics to refunding Did far? to and respect time them of enough. capital you with is with of you've that obviously, that of promote type announced, projects. spent Fair the spent the so final a you'd they're of receive money

Michael N. Mears

Well, that we've large did we remember incremental to a the not just to with commitments facility, regards at you have promote. did also significant Pasadena, JV the receive But also. we received to

So, the return promote. profile we cash didn't receive but any on the capital improved dramatically,

Shneur Z. Gershuni

Is it? multiple, a way kind that's the so, to of times to X I because think multiple from were – And the incremental why you've guess? times gone that about XX a additions sub-XX times or times, sub-X

Michael N. Mears

is, phase so project times multiple. a now, entire that the the first a is significant X And was tell there's improvement. multiple, you but I'd That XX times

Shneur Z. Gershuni

Great. Perfect. Thank much. the today. Appreciate very color you

Michael N. Mears

Sure.

Operator

Mirek next Zak, Citigroup. to go We'll

Mirek Zak

Hi. Good afternoon, everyone.

me. from Just a quick one

Eaglebine could maybe out a BridgeTex what had your from little split volume quarter. amongst that a You volume business. if versus and decent wondering the growth saw was bit I you origin you this just ramp marketing on organic

Michael N. Mears

that Colorado we huge the a so Well, origins. vast been coming of majority has volumes see fairly increase Eaglebine. didn't from the in is City Eaglebine stable,

more what is tell spot barrels. our was disclose the of I think actual comment of on the out that portion can we're Permian. that I percentage percentage marketing probably marketing what prepared our won't majority is of that it to it barrels So, a of wasn't marketing was XXX% you don't our barrels. but the There barrels, was.

Mirek Zak

to last least, you was, flat relatively quarter, if say like similar relatively versus say remained at you last Would that or quarter that? can that

Michael N. Mears

was more slightly third quarter. in the It

Mirek Zak

Okay.

I'll Thanks. it leave Okay. there.

Operator

to Abrams, next go Stanley. Tom We'll Morgan

Tom Abrams

since Good House afternoon. about out Hey. put the suggestions. code tax hour been an It's some

you a had if yet them through to MLPs? chance wondered are see to there Just go if impact on any

Michael N. Mears

have can reviewed don't in did regard seen them for We've with yet. a not level come MLPs. note our been any a disturbing than terribly and have this call. it that information high more to I preparing anything haven't Well, say from But they I I've there that. honestly I through staff at have

Tom Abrams

on markets and really close all where that imagining was and a and That's tongue-in-cheek year will, such little it's get more if there as and there true be as in kind will the it that And really will the belief much off the storage there's some good. not however. pricing And pricing out be needed during also where go terminalling does demand. backup, will on competitive. a Venezuela-oriented. you hurricane-driven of storage around a think a export pulled think open storage that, asking for terminalling We're question I needed away ourselves really which the question. and when is I was The in exports the coast will down, But system maybe be in on I quarters you particularly could but the if coast. I'm times system backup, could get then much, about

– the could just actually to into introduced wondering but not storage help the pricing of only it amount that So it. is be that volatility going I'm if also more dynamic system the

Michael N. Mears

affect fixed change our would (XX:XX) we question. to that oil see and and to prefer I that things to crude occasion. with tendering components products, of long-term that in price lot we a I storage market mean you to refined can contracts. pricing is there there's on clearly both Well, that regards tell business, the

those of have past. contracts the not on majority fixed storage seen pricing vast in going recent under price the so, down the our we contracts is and longer-term And

basis lease our do our we you fluctuations market portion portion a Now, we and that's storage see off that the export do a conditions on and of pricing but that storage crude markets, short-term on do in business. based auction oil have and a small of

Tom Abrams

for that. thanks Well, Great.

Operator

to next go We'll Jefferies. Chris Sighinolfi,

Christopher Paul Sighinolfi

afternoon, Good Hey. Mike.

Just -

Michael N. Mears

Good afternoon.

Christopher Paul Sighinolfi

in – hoping guidance in things. guess, a at that always by was correctly, spread now? of the to first, inclusion I XXXX heard driven that clarify was few in I ramp ramp driving volumes. included differentials was curious, BridgeTex XQ performance the I recent was that if activity part just a the implied by guidance is whereas in I always part you least

Michael N. Mears

started the we the when guidance year our in basis that but strengthened. have didn't We differential recent. It's

this And so that's our quarter, expectation yes. for

Christopher Paul Sighinolfi

we did That's you it out edification want you and at if And there's the was. the I it's apologize just on if color for – if could to then it how and just so own it possible I to addressed was, that one-time MMP quantify this from, Great. at customer there? similar thought else But – two I if and stemmed questions just other our what all that covering beginning, one clarify. payment, already. wanted additional I I anything weren't any Okay. what

Michael N. Mears

And it. not agreement it. we're which done is why confidentiality quantified amount, a We we the to under disclose haven't haven't

Christopher Paul Sighinolfi

the Okay. or live Are settlement other there to disputes, in year of end the I the may come XXXX? that at before guess, bear moment

Michael N. Mears

considered an was This best no. would as This one-off. a be We No, unusual this. circumstance. typically have don't

Christopher Paul Sighinolfi

in butane association I guess, finally, bifurcate blending capability was know – of if you just following Harvey, but a question. it several Understood. And can was sort really additional spreads. with sense of of calibration and I the The weeks - third curiosity don't get just I to wondering wondering any have for I future going just this change on had might had thinking We're that impact about in if quarter periods. that future. I'm year, you it,

Michael N. Mears

benefit we that's Yeah. incremental you. the We we did factored mean but did I into quarter benefit. the blending, net Well, third gave from in impact

the already benefit of the to So, the there. third quarter nets blending $XX DCF the income million in net impact

third So, the but lost the bring items the other net was higher by million. in damage and quarter million, blending additional actual than revenue from offset was it to $XX income $XX

Christopher Paul Sighinolfi

I Understood. time. appreciate Thanks. the Okay.

Operator

Goldman We'll next go Jerren Sachs. to Holder,

Jerren Holder

Thanks. afternoon. Good

have exports crude least that beyond the also at you of crude any Seabrook's have, you're expand to your some of type And are picking benefit seeing U.S. up, the sort looking asset you other that through opportunities been JV recently, that realm? base? at of exports Given into

Michael N. Mears

Yes, to of all questions. those

of don't oil facility benefited. We we water. And we marine get Longhorn we're water Obviously, Seabrook yet, opportunities. And the but through to have facility to haven't are actively put operational its on the and terminals expansion other anxious so making it we our next ourselves, BridgeTex Seabrook. throughput is way at that put evaluating operational the our the crude have on can and

Jerren Holder

me. you. from That's it Okay. Thank

Operator

question-and-answer additional Mike Mears That call or turn back I'd to for over like will the to conclude session. any remarks. closing the

Michael N. Mears

nice we and of Magellan, your support a day. appreciate Well, thank our have On you behalf And today. thank your of time for continued you company.

Operator

today's conclude call. will your for Thank you participation. That

Magellan Midstream Partners (MMP) 2 Nov 172017 Q3 Earnings call transcript