Magellan Midstream Partners (MMP) 8-K Magellan Midstream Partners Announces Record Quarterly Earnings

Exhibit 99.1

NYSE: MMP

Date:	July 31, 2007
Contact:	Paula Farrell
	(918) 574-7650
	paula.farrell@magellanlp.com

Magellan Midstream Partners Announces Record Quarterly Earnings

Increases 2007 Guidance

TULSA, Okla. – Magellan Midstream Partners, L.P. (NYSE: MMP) today reported record quarterly operating profit, net income and net income per limited partner unit.

Second-quarter 2007 operating profit was $79.2 million compared to $71.5 million for second quarter 2006, representing an 11% increase. Net income grew to $61.5 million during second quarter 2007 from $57.4 million in the corresponding 2006 period, for a 7% increase.

“Strong demand for our terminals services during the quarter, combined with favorable product margins and higher transportation rates, produced record financial results for Magellan,” said Don Wellendorf, chief executive officer. “Cash flows for the quarter were also increased by contributions from recently-completed expansion projects.”

An analysis of variances by segment comparing second quarter 2007 to second quarter 2006 is provided below based on operating margin, a financial measure that reflects operating profit before affiliate general and administrative (G&A) expense and depreciation and amortization:

Petroleum products pipeline system. Pipeline operating margin was $92.9 million, an increase of $9.9 million and a quarterly record for this segment. Transportation revenues increased between periods primarily due to higher transportation rates per barrel shipped resulting from the partnership’s 2006 mid-year tariff increase, partially offset by slightly lower transportation shipments due to temporary reductions in production during 2007 at refineries connected to the partnership’s pipeline system. The current quarter also benefited from higher fees for leased storage and increased demand for the partnership’s terminal, additive and renewable fuels services. Product margin increased during second quarter 2007 due to the higher commodity pricing environment, and operating expenses increased slightly between periods principally due to higher environmental accruals and power costs during the 2007 period, partially offset by more favorable product overages, which reduce operating expenses.

Petroleum products terminals. Terminals operating margin was $20.5 million, an increase of $2.3 million. The current period benefited from increased revenues due to expansion projects at the partnership’s marine terminals, record throughput volumes for its inland terminals and higher additive fees. Operating expenses were higher due to timing of maintenance projects.

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Page 2 /3 Magellan Midstream Partners Announces Record Quarterly Earnings; Increases 2007

Guidance

Ammonia pipeline system. Ammonia operating margin was a loss of $1.5 million, a decrease of $1.9 million. Although revenues increased between periods due to higher shipments, second quarter 2007 was negatively impacted by increased environmental accruals for a 2004 pipeline release and additional integrity spending.

G&A expense increased primarily due to higher personnel costs and expense timing during the current quarter.

During second quarter 2007, the partnership refinanced debt, originally due in Oct. 2007, with borrowings at a lower interest rate. The early retirement resulted in $3.5 million of refinancing costs in the 2007 period.

Basic and diluted net income per limited partner unit was 66 cents for second quarter 2007 compared to 62 cents for second quarter 2006.

Distributable cash flow, which represents the amount of cash generated during the period that is available to pay distributions, was $77.2 million during second quarter 2007 compared to $70.8 million during the corresponding 2006 quarter.

Reflecting financial results to date and expectations for the remainder of 2007, management is increasing its 2007 net income per unit guidance to approximately $2.53, with a third-quarter 2007 estimate of 58 cents.

Management remains focused on developing growth opportunities for the partnership and is raising its expansion capital spending estimate to approximately $160 million for 2007, with an additional $90 million of spending needed in 2008 to complete these projects. These estimates include spending expectations for the partnership’s Texas expansion plans that were announced yesterday. The estimates exclude potential spending on acquisitions currently under negotiations or spending on more than $500 million of potential additional expansion projects currently under review.

An analyst call with management regarding second-quarter earnings and 2007 outlook is scheduled today at 1:30 p.m. Eastern. To participate, dial (800) 289-0544 and provide code 4958985. Investors also may listen to the call via the partnership’s web site athttp://www.magellanlp.com/investors/calendar.asp.

Audio replays of the conference call will be available from 4:30 p.m. Eastern today through midnight on Aug. 6. To access the replay, dial (888) 203-1112 and provide code 4958985. The replay also will be available athttp://www.magellanlp.com.

Management believes that investors benefit from having access to the same financial measures utilized by the partnership. As a result, this news release and supporting schedules include the non-generally accepted accounting principles measures of operating margin and distributable cash flow, which are important performance measures used by management to evaluate the economic success of the partnership’s operations. Operating margin reflects operating profit before G&A expense and depreciation and amortization, and distributable cash flow is an indicator of the cash available to pay distributions. Reconciliations of operating margin to operating profit and distributable cash flow to net income accompany this news release.

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Page 3 /3 Magellan Midstream Partners Announces Record Quarterly Earnings; Increases 2007

Guidance

About Magellan Midstream Partners, L.P.

Magellan Midstream Partners, L.P. is a publicly traded partnership formed to own, operate and acquire a diversified portfolio of energy assets. The partnership primarily transports, stores and distributes refined petroleum products. More information is available athttp://www.magellanlp.com.

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Portions of this document may constitute forward-looking statements as defined by federal law. Although management believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. Additional information about issues that could lead to material changes in performance is contained in the partnership’s filings with the Securities and Exchange Commission.

MAGELLAN MIDSTREAM PARTNERS, L.P.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per unit amounts)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2006			2007			2006			2007
Transportation and terminals revenues	$	138,555		$	150,070		$	268,746		$	293,221
Product sales revenues		172,806			177,902			321,702			326,565
Affiliate management fee revenue		172			183			345			356
Total revenues		311,533			328,155			590,793			620,142
Costs and expenses:
Operating		55,045			60,027			108,430			121,002
Product purchases		154,857			156,588			288,452			290,568
Depreciation and amortization		15,356			15,695			30,557			31,135
Affiliate general and administrative		15,737			17,741			30,764			35,426
Total costs and expenses		240,995			250,051			458,203			478,131
Equity earnings		946			1,106			1,665			1,869
Operating profit		71,484			79,210			134,255			143,880
Interest expense		14,466			15,072			28,757			29,939
Interest income		(601	)		(746	)		(1,247	)		(1,117	)
Interest capitalized		(429	)		(1,205	)		(632	)		(2,102	)
Debt placement fee amortization		678			1,154			1,355			1,799
Debt prepayment premium		—			1,984			—			1,984
Other expense		—			699			339			699
Income before income taxes		57,370			62,252			105,683			112,678
Provision for income taxes		—			800			—			1,524
Net income	$	57,370		$	61,452		$	105,683		$	111,154
Allocation of net income:
Limited partners’ interest	$	41,143		$	43,790		$	77,828		$	80,641
General partner’s interest		16,227			17,662			27,855			30,513
Net income	$	57,370		$	61,452		$	105,683		$	111,154
Basic net income per limited partner unit	$	0.62		$	0.66		$	1.17		$	1.21
Weighted average number of limited partner units outstanding used for basic net income per unit calculation		66,361			66,549			66,361			66,543
Diluted net income per limited partner unit	$	0.62		$	0.66		$	1.17		$	1.21
Weighted average number of limited partner units outstanding used for diluted net income per unit calculation		66,482			66,549			66,482			66,547

MAGELLAN MIDSTREAM PARTNERS, L.P.

OPERATING STATISTICS

	Three Months Ended June 30,				Six Months Ended June 30,
	2006		2007		2006		2007
Petroleum products pipeline system:
Transportation revenue per barrel shipped	$	1.077	$	1.146	$	1.053	$	1.149
Volume shipped (million barrels)		78.2		76.9		147.4		148.2
Petroleum products terminals:
Marine terminal average storage utilized per month (million barrels)		20.4		21.3		20.5		21.5
Inland terminal throughput (million barrels)		27.2		29.3		52.4		57.5
Ammonia pipeline system:
Volume shipped (thousand tons)		162		186		378		400

MAGELLAN MIDSTREAM PARTNERS, L.P.

OPERATING MARGIN RECONCILIATION TO OPERATING PROFIT

(Unaudited, in thousands)

	Three Months Ended June 30,					Six Months Ended June 30,
	2006		2007			2006		2007
Petroleum products pipeline system:
Transportation and terminals revenues	$	107,321	$	114,385		$	199,174	$	221,696
Less: Operating expenses		41,544		42,314			82,573		85,256
Transportation and terminals margin		65,777		72,071			116,601		136,440
Product sales revenues		169,975		174,471			315,439		318,736
Less: Product purchases		153,863		154,933			285,439		286,359
Product margin		16,112		19,538			30,000		32,377
Add: Affiliate management fee revenue		172		183			345		356
Equity earnings		946		1,106			1,665		1,869
Operating margin	$	83,007	$	92,898		$	148,611	$	171,042
Petroleum products terminals:
Transportation and terminals revenues	$	28,771	$	32,014		$	63,142	$	63,763
Less: Operating expenses		12,244		13,145			23,859		27,106
Transportation and terminals margin		16,527		18,869			39,283		36,657
Product sales revenues		2,831		3,431			6,263		7,829
Less: Product purchases		1,124		1,786			3,270		4,468
Product margin		1,707		1,645			2,993		3,361
Operating margin	$	18,234	$	20,514		$	42,276	$	40,018
Ammonia pipeline system:
Transportation and terminals revenues	$	3,428	$	4,498		$	8,149	$	9,413
Less: Operating expenses		2,986		5,981			5,233		11,520
Operating margin	$	442	$	(1,483	)	$	2,916	$	(2,107	)
Segment operating margin	$	101,683	$	111,929		$	193,803	$	208,953
Add: Allocated corporate depreciation costs		894		717			1,773		1,488
Total operating margin		102,577		112,646			195,576		210,441
Less: Depreciation and amortization		15,356		15,695			30,557		31,135
Affiliate general and administrative		15,737		17,741			30,764		35,426
Total operating profit	$	71,484	$	79,210		$	134,255	$	143,880

Note: Amounts may not sum to figures shown on the consolidated statement of income due to intersegment eliminations and allocated corporate depreciation costs.

MAGELLAN MIDSTREAM PARTNERS, L.P.

ALLOCATION OF NET INCOME

(In thousands, unless otherwise noted)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2006			2007			2006			2007
Net income	$	57,370		$	61,452		$	105,683		$	111,154
Direct charges to the general partner:
Reimbursable general and administrative costs(a)		553			1,604			965			1,880
Previously indemnified environmental charges		(542	)		622			58			2,872
Total direct charges to general partner		11			2,226			1,023			4,752
Income before direct charges to general partner		57,381			63,678			106,706			115,906
General partner’s share of income(b)		28.30	%		31.23	%		27.06	%		30.43	%
General partner’s allocated share of net income before direct charges		16,238			19,888			28,878			35,265
Direct charges to general partner		11			2,226			1,023			4,752
Net income allocated to general partner	$	16,227		$	17,662		$	27,855		$	30,513
Net income	$	57,370		$	61,452		$	105,683		$	111,154
Less: net income allocated to general partner		16,227			17,662			27,855			30,513
Net income allocated to limited partners	$	41,143		$	43,790		$	77,828		$	80,641

(a) Reimbursable G&A costs for the current quarter include a $1.3 million unusual non-cash expense related to a payment by MGG Midstream Holdings, L.P., an affiliate indirectly owning a portion of the partnership’s general partner. This item does not impact cash available for the partnership to pay cash distributions.

(b) Under the “two class” method of computing earnings per unit, as prescribed by Statement of Financial Accounting Standards No. 128, “Earnings Per Share”, earnings are allocated to participating securities as if all of the earnings for the period had been distributed. Therefore, for periods when the distributions the partnership pays exceed its net income, the general partner’s percentage share of income is its proportion of cash distributions paid for the period and for periods when net income exceeds the cash distributions paid, the general partner’s percentage share of income is its proportion of theoretical cash distributions that equal net income. For the second quarter of 2006 and 2007, a per unit theoretical cash distribution of $0.612 and $0.658, respectively, would have resulted in total distributions equal to net income for each period. At these distribution levels, the general partner’s share of distributions would have been 28.30% and 31.23% for the second quarter of 2006 and 2007, respectively. The general partner’s share of net income for the six months ended June 30, 2006 and 2007 is based on its share of actual distributions paid for the first quarter of each respective year and the theoretical distributions for the second quarter of each respective year.

MAGELLAN MIDSTREAM PARTNERS, L.P.

DISTRIBUTABLE CASH FLOW

(Unaudited, in millions)

	Three Months Ended June 30,				Six Months Ended June 30,
	2006		2007		2006		2007
Net income	$	57.4	$	61.5	$	105.7	$	111.2
Add: Depreciation and amortization(1)		16.0		16.8		31.9		32.9
Equity-based incentive compensation		2.3		2.2		3.8		5.9
Direct charges to general partner		—		2.2		1.0		4.7
Asset retirements and impairments		4.2		3.5		4.6		4.4
Less: Maintenance capital (net of indemnified spending)		7.8		8.6		10.7		13.9
Other		1.3		0.4		2.2		1.9
Distributable cash flow(2)	$	70.8	$	77.2	$	134.1	$	143.3

⁽¹⁾ Depreciation and amortization includes debt placement fee amortization.

⁽²⁾ Distributable cash flow does not include fluctuations related to working capital or spending for which the partnership has received, or expects to receive, reimbursement through third party indemnifications. Through June 30, 2007, the partnership has either paid or accrued liabilities totaling $82.5 million that are covered by an indemnification settlement for which the partnership has received the full amount of $117.5 million.