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MMP Reports Q2-19

|About: Magellan Midstream Partners, L.P. (MMP)

My spreadsheet:

Magellan Midstream Partners (MMP) metrics

Q2-2019 Q1-2019 Q4-2018 Q3-2018 Q2-2018 Q1-2018 Q4-2017 Q3-2017 Q2-2017 Q1-2017 Q4-2016 Q3-2016 Q2-2016 Q1-2016 Q4-2015 Q3-2015 Q2-2015 Q1-2015 Q4-2014 Q3-2014 Q2-2014 Q1-2014
Revenues 701,699 628,935 865,683 638,020 644,091 678,779 673,299 572,848 619.440 642,074 614,915 551,782 518,897 519,816 573,048 577,232 487,543 522,090 667,070 521,601 496,446 618,606
Costs 436,718 422,985 555,111 396,242 420,433 441,323 426,039 374,298 383,558 392,047 383,490 336,409 307,709 321,466 343,502 289,670 304,322 311,869 387,331 297,409 320,183 343,983
EBITDA 378,303 386,372 374,089 358,657 338,621 324,388 377,413 313,290 323,909 288,326 338,841 331,750 292,520 270,132 315,529 292,017 281,613 284,934 303,559 231,438 247,989 297,894
DCF dollars 314,794 317,999 302,437 281,773 266,593 258,942 308,258 235,150 250,364 227,600 277,215 243,922 221,011 205,337 256,897 230,004 222,829 233,124 248,055 183,386 195,846 253,182
Units 228,688 228,558 229,052 228,449 228,425 228,320 228,203 228,260 228,192 228,109 228,385 227,999 227,983 227,849 227,781 227,427 227,631 227,525 227,426 227,068 227,288 227,141
DCF/unit 1.3765 1.3913 $1.3204 $1.2334 $1.1671 $1.1341 $1.3508 $1.0302 $1.0972 $0.9978 $1.2138 $1.0698 $0.9694 $0.9012 $1.1278 $1.0113 $0.9789 $1.0246 $1.0907 $0.8076 $0.8617 $1.1146
Upcoming Distrib. $1.0125 $1.0050 $0.9975 $0.9775 $0.9575 $0.9375 $0.9200 $0.9020 $0.8900 $0.8725 $0.8550 $0.8375 $0.8200 $0.8025 $0.7850 $0.7625 $0.7400 $0.7175 $0.695 $0.6675 $0.6400 $0.6125
Coverage 1.36x 1.38x 1.32x 1.26x 1.22x 1.21x 1.47x 1.14x 1.23x 1.14x 1.42x 1.28x 1.18x 1.12x 1.44x 1.33x 1.32x 1.43x 1.57x 1.21x 1.35x 1.82x
2019 Guidance: DCF of $1.14 billion - raised to $1.22 billion after Q2.
2018 Guidance: DCF of $1.05 to $1.08 billion - raised to $1.08 afer Q2 - raised to $1.12 billion after Q3. Actual DCF was $1.110 billion.
2017 Guidance: EBITDA of $1.000 billion. Q2-17 DCF was increased to $1.02 billion from $1.0 billion & EBITDA to $1.307 billion. 2017 Actual EBITDA was $1.303 billion and DCF was $1.021 billion.
2016 Guidance: EBITDA of $1.166 billion and DCF of $910 million. Actual EBITDA was $1.213 billion and DCF was $947.5 million.
LTM EBITDA 1,497,421 1,457,739 1,395,755 1,399,079 1,353,712 1,339,000 1,303,000 1,264,366 1,332,826 1,251,437 1,213,243 1,209,931 1,170,198 1,159,291 1,172,003 1,106,619 1,101,544 1,067,920 1,080.880 1,067,112 1,027,725 997,078
Long Term Debt 4,407,793 4,300,000 4,300,000 4,300,000 4,272,747 4,600,000 4,600,000 4,051,411 4,087,192 4,200,000 4,100,000 4,073,502 3,574,898 3,800,000 3,400,000 3,407,114 3,326,936 3,183,750 2,982,895 3,303,707 2,910,496 2,435,316
Debt/EBITDA 2.94x 2.95x 3.08x 3.07x 3.16x 3.44x 3.53x 3.20x 3.07x 3.36x 3.38x 3.37x 3.05x 3.28x 2.90x 3.08x 3.08x 2.98x 2.76x 3.10x 2.83x 2.44x
For MMP, even the credit facility expense is included in the long term debt numbers
Cash 3,070 13,496 218,300 217,423 74,197 74,200 176,100 1,381 14,701 7,100 14,700 291,097 34,263 210,000 28,700 9,007 29,030 52,813 17,063 14,853 731 196,630
Net Debt 4,404,723 4,286,504 4,081,700 4,082,577 4,260,091 4,525,800 4,423,900 4,050,030 4,072,491 4,192,900 4,085,300 3,782,405 3,540,635 3,590,000 3,371,300 3,398,107 3,297,906 3,130,937 2,965,832 3,288,854 2,909,765 2,238,686
Net Debt/EBITDA 2.94x 2.95x 2.92x 2.92x 3.15x 3.38x 3.39x 3.20x 3.06x 3.35x 3.37x 3.13x 3.03x 3.06x 2.85x 3.07x 2.99x 2.93x 2.74x 3.08x 2.83x 2.24x
Interest Expense 51,406 60,166 46,793 55,133 47,403 56,750 56,652 56,045 51,895 51,290 51,212 51,614 50,163 40.345 34.151 35,421 34,993 37,265 34,100 34,855 39,779 39,756
Interest Coverage 7.36x 6.42x 7.99x 6.51x 5.97x 5.73x 6.73x 6.04x 6.31x 5.32x 6.56x 6.61x 7.25x 8.31x 8.91x 8.35x 7.56x 8.36x 8.71x 5.82x 6.24x 8.18x
In January of 2019 MMP issued $500 million of 4.85% notes due 2049
In September of 2016 MMP issued $500 million of 4.25% notes due 2046
In March of 2015 MMP issued $250 million of 3.20% notes due 2025 and $250 million of 4.20% notes due 2045
In March of 2014 MMP issued $250 million 5.15% notes due 2043
In October of 2013 MMP issued $300 million of 5.15% notes due 2043
Broker one DCF/unit 1.21 1.07 0.97 0.90 $1.13 $1.01 $0.98 $1.02 $1.09 $0.81 $0.86 $1.12
Broker two DCF/unit 1.098 0.998 1.216 1.071 0.970 $0.901 $1.128 $1.01 $0.980 $1.025 $1.091 $0.808 $0.862 $1.115
Broker three DCF/unit 1.47 1.21 1.36 1.24 1.22 1.16 1.35 1.03 1.10 1.00 1.22 1.07 0.97 $0.90 $1.13 $1.01 $0.98 $1.02 $1.09 $0.81 $0.86 $1.12

With no IDRs - the DCF should be a case of simple division. Thus I have no idea why my DCFs differ from the one brokerage. My theory - I am failing to catch some one time events that should cause some adjustments in my numbers.

Q2-19 DCF = $314,794 or $1.3765/unit

Q1-19 DCF = $317,999 or $1.3913/unit

Q4-18 DCF = $302,437 or $1.3204/unit

Q3-18 DCF = $281,773 or $1.2334/unit

Q2-18 DCF = $266,593 or $1.1671/unit

The good news I see - older debt and higher yielding notes are maturing while new debt can be had at smaller yields. This gives a strong tailwind to yearnings. The debt/LTM EBITDA = 2.94x while the Q2-19 interest coverage ratio was 7.36x. Those atypically strong (for a MLP) credit metrics support the theory that forward yields on new (and replacing) debt should be low. MMP along with Enterprise (EPD) are the only two MMPs with BBB+ credit ratings

Q2-19 interest expense was $51.406 million while Q1-19 was $60.116. Q2-18 interest expense was only $47.403 million - but most of the quarters in 2018 and 2017 had expenses in the mid 50s.

2019 Guidance: DCF of $1.14 billion - raised to $1.22 billion after Q2.

2018 Guidance: DCF of $1.05 to $1.08 billion - raised to $1.08 after Q2 - raised to $1.12 billion after Q3. Actual DCF was $1.110 billion.

2017 Guidance: EBITDA of $1.000 billion. Q2-17 DCF was increased to $1.02 billion from $1.0 billion & EBITDA to $1.307 billion. 2017 Actual EBITDA was $1.303 billion and DCF was $1.021 billion.

2016 Guidance: EBITDA of $1.166 billion and DCF of $910 million. Actual EBITDA was $1.213 billion and DCF was $947.5 million.

9.91% DCF growth projected for 2019

8.71% DCF growth in 2018

7.70% DCF growth in 2017

Disclosure: I am/we are long MMP, EPD.