Magellan Midstream Partners LP (NYSE:MMP) Q2 2020 Earnings Conference Call - Final Transcript
Jul 30, 2020 • 01:30 pm ET
Greetings, everyone, and welcome to the Magellan Midstream Partners Second Quarter Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded today Thursday, July 30, 2020.
I would now like to turn the call over to Mike Mears, Chief Executive Officer. Please go ahead.
Michael N. Mears
Hello, and thank you for joining us today to discuss Magellan's second quarter financial results as well as our latest outlook for the full year. Before we get started, I must remind you that management will be making forward-looking statements as defined by the SEC. Such statements are based on our current judgments regarding the factors that could impact the future performance of Magellan but actual outcomes could be materially different. You should review the risk factors and other information discussed in our filings with the SEC and form your own opinions about Magellan's future performance. As you know the year 2020 has been challenging, not only for our industry, but the nation as a whole. Magellan has continued to competently manage through the current challenges while remaining focused on executing our long-term strategy to maximize value for our investors. We continue to focus on the health and safety of our employees as we operate through the pandemic.
And I'm happy to report that we have had no material COVID related disruptions to date, and all of our facilities are operating normally. As you probably saw this morning, our second quarter results exceeded our expectations due to a number of favorable items, including additional product overages, higher than expected commodity prices and lower operating expenses. Our overall refined products and crude oil pipeline shipments during the quarter trended very similar to the updated projections on our first quarter call.
Our CFO, Jeff Holman, will now review our second quarter financial results versus the year ago period in more detail. Then I'll be back to discuss our latest outlook for 2020 before opening the call for your questions.
Jeff L. Holman
Thanks, Mike. As usual, I will be making references to certain non-GAAP financial metrics, including operating margin and distributable cash flow, or DCF. We have included exhibits to our earnings release that reconcile these metrics to their nearest GAAP measures. Earlier this morning, we reported second quarter net income of $133.8 million or $0.59 per unit on a diluted basis compared to $253.7 million or $1.11 per unit in second quarter of 2019. Excluding the impact of mark-to-market activity in the current quarter, adjusted diluted earnings per unit was $0.65, which exceeded the expected range of between $0.35 and $0.50, which we provided with our first quarter earnings release. Distributable cash flow for the quarter was $209.5 million, $105.3 million lower than the $314.8 million reported in second quarter 2019, primarily due to a combination of lower refined products transportation volumes, lower crude oil spot shipments, and lower commodity margins in the current quarter.
I'll know, as a reminder that following the sale of three marine terminals in the first quarter of this year, we now report our