Magellan Midstream Partners (MMP) 8-K Magellan Midstream Partners Announces 94% Increase in Quarterly Net Income

Exhibit 99.1

NYSE: MMP

Date:	Nov. 6, 2007
Contact:	Paula Farrell
	(918) 574-7650
	paula.farrell@magellanlp.com

Magellan Midstream Partners Announces 94% Increase in Quarterly Net Income

TULSA, Okla. – Magellan Midstream Partners, L.P. (NYSE: MMP) today reported third-quarter 2007 operating profit of $71.5 million compared to $44.4 million for third quarter 2006, representing a 61% increase. Net income grew to $59.4 million during third quarter 2007, which is a 94% increase over the $30.6 million reported for the corresponding 2006 period.

“Overall, we are pleased with our third-quarter results despite outages at several refineries served by our pipeline system, which reduced throughput volumes,” said Don Wellendorf, chief executive officer. “We benefited from higher pipeline rates, favorable commodity margins, lower pipeline operating expenses and profits from recent expansion projects.”

An analysis of variances by segment comparing third quarter 2007 to third 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 $83.5 million, an increase of $28.3 million. Transportation revenues increased between periods primarily due to higher average pipeline tariffs resulting in part from the partnership’s 2007 mid-year tariff increase, partially offset by 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 and renewable fuels services.

The 2007 quarter also benefited from higher product margin because the 2006 period was negatively impacted by rapidly declining commodity prices, resulting in a lower-of-cost-or-market adjustment in third quarter 2006 for inventory held by the partnership for its third-party supply agreement and transmix fractionation activity. Comparatively, petroleum prices were essentially unchanged during the 2007 quarter so no similar negative cost adjustment was required.

Operating expenses declined between periods principally due to more favorable product overages, which reduce operating expenses, lower maintenance expense due to project timing and reduced environmental accruals during the current period. Third quarter 2006 included environmental costs related to a risk mitigation agreement that transferred certain historical environmental risks to a third party to minimize the partnership’s future financial exposure to potential cost increases for remediation work at these sites.

Petroleum products terminals. Terminals operating margin was $22.7 million, an increase of $1.5 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 primarily due to timing of maintenance projects and additional personnel costs.

Ammonia pipeline system. Ammonia operating margin was a loss of $2.3 million, a decrease of $1.6 million. Although revenues increased slightly between periods due to higher average tariff rates, third quarter 2007 was negatively impacted by higher expenses for maintenance work necessary to comply with federal regulatory testing of high consequence areas.

Basic and diluted net income per limited partner unit was 65 cents for third quarter 2007 compared to 43 cents for third quarter 2006.

Distributable cash flow, which represents the amount of cash generated during the period that is available to pay distributions, was $72.8 million during third quarter 2007 compared to $52.3 million during the corresponding 2006 quarter.

Management currently expects net income per limited partner unit for the full year 2007 of approximately $2.57, which results in a fourth-quarter 2007 estimate of approximately 71 cents per unit. Management’s goal for 2007 cash distribution growth remains 8% to 10%.

Management expects volumes on its refined petroleum products pipeline to return to more normal levels as refinery outages are anticipated to end during late fourth quarter. While the partnership continues to project that the large majority of its operating margin will be generated by its fee-based operations, management estimates that commodity margin will produce approximately 15% of total operating margin during 2007 based on its assumption that gasoline and diesel fuel prices will follow the current commodities futures market for the remainder of the year. Further, management continues to develop distribution growth targets based on the expectation that product-margin related activities will generate 10% or less of the partnership’s annual operating margin in the future.

Management has increased its total expansion capital spending forecast and currently estimates $160 million for 2007, with an additional $190 million of spending in 2008 and $15 million in 2009 to complete projects underway at this time. These expansion capital estimates exclude potential acquisitions or spending on more than $500 million of other potential growth projects in earlier stages of development.

Consistent with past practice, management intends to provide 2008 guidance for net income per limited partner unit, capital spending and distribution growth targets in early 2008.

An analyst call with management regarding third-quarter earnings and fourth-quarter outlook is scheduled today at 1:30 p.m. Eastern. To participate, dial (800) 289-0741 and provide code 1431090. 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 Nov. 13. To access the replay, dial (888) 203-1112 and provide code 1431090. 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.

About Magellan Midstream Partners, L.P.

Magellan Midstream Partners, L.P. (NYSE: MMP) 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 September 30,						Nine Months Ended September 30,
	2006			2007			2006			2007
Transportation and terminals revenues	$	144,702		$	154,492		$	413,448		$	447,713
Product sales revenues		171,762			167,287			493,464			493,852
Affiliate management fee revenue		173			178			518			534
Total revenues		316,637			321,957			907,430			942,099
Costs and expenses:
Operating		71,051			64,442			179,481			185,444
Product purchases		169,741			153,926			458,193			444,494
Depreciation and amortization		15,182			15,914			45,739			47,049
Affiliate general and administrative		17,042			17,219			47,806			52,645
Total costs and expenses		273,016			251,501			731,219			729,632
Equity earnings		814			1,091			2,479			2,960
Operating profit		44,435			71,547			178,690			215,427
Interest expense		14,359			13,698			43,116			43,637
Interest income		(482	)		(332	)		(1,729	)		(1,449	)
Interest capitalized		(714	)		(1,091	)		(1,346	)		(3,193	)
Debt placement fee amortization		679			174			2,034			1,973
Debt prepayment premium		—			—			—			1,984
Other expense		—			29			339			728
Income before income taxes		30,593			59,069			136,276			171,747
Provision (benefit) for income taxes		—			(375	)		—			1,149
Net income	$	30,593		$	59,444		$	136,276		$	170,598
Allocation of net income:
Limited partners’ interest	$	28,335		$	43,049		$	106,163		$	123,690
General partner’s interest		2,258			16,395			30,113			46,908
Net income	$	30,593		$	59,444		$	136,276		$	170,598
Basic net income per limited partner unit	$	0.43		$	0.65		$	1.60		$	1.86
Weighted average number of limited partner units outstanding used for basic net income per unit calculation		66,361			66,550			66,361			66,546
Diluted net income per limited partner unit	$	0.43		$	0.65		$	1.60		$	1.86
Weighted average number of limited partner units outstanding used for diluted net income per unit calculation		66,644			66,550			66,537			66,549

MAGELLAN MIDSTREAM PARTNERS, L.P.

OPERATING STATISTICS

	Three Months Ended September 30,				Nine Months Ended September 30,
	2006		2007		2006		2007
Petroleum products pipeline system:
Transportation revenue per barrel shipped	$	1.051	$	1.164	$	1.052	$	1.154
Volume shipped (million barrels)		84.7		78.6		232.1		226.8
Petroleum products terminals:
Marine terminal average storage utilized per month (million barrels)		20.5		21.8		20.6		21.6
Inland terminal throughput (million barrels)		28.7		30.9		81.1		88.4
Ammonia pipeline system:
Volume shipped (thousand tons)		159		133		537		533

MAGELLAN MIDSTREAM PARTNERS, L.P.

OPERATING MARGIN RECONCILIATION TO OPERATING PROFIT

(Unaudited, in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2006			2007			2006		2007
Petroleum products pipeline system:
Transportation and terminals revenues	$	112,667		$	118,862		$	311,841	$	340,558
Less: Operating expenses		57,623			46,432			140,196		131,688
Transportation and terminals margin		55,044			72,430			171,645		208,870
Product sales revenues		167,537			161,993			482,976		480,729
Less: Product purchases		168,374			152,189			453,813		438,548
Product margin		(837	)		9,804			29,163		42,181
Add: Affiliate management fee revenue		173			178			518		534
Equity earnings		814			1,091			2,479		2,960
Operating margin	$	55,194		$	83,503		$	203,805	$	254,545
Petroleum products terminals:
Transportation and terminals revenues	$	29,372		$	32,786		$	92,514	$	96,549
Less: Operating expenses		10,885			13,521			34,744		40,627
Transportation and terminals margin		18,487			19,265			57,770		55,922
Product sales revenues		4,225			5,294			10,488		13,123
Less: Product purchases		1,496			1,867			4,766		6,335
Product margin		2,729			3,427			5,722		6,788
Operating margin	$	21,216		$	22,692		$	63,492	$	62,710
Ammonia pipeline system:
Transportation and terminals revenues	$	3,517		$	3,672		$	11,666	$	13,085
Less: Operating expenses		4,163			5,950			9,396		17,470
Operating margin	$	(646	)	$	(2,278	)	$	2,270	$	(4,385	)
Segment operating margin	$	75,764		$	103,917		$	269,567	$	312,870
Add: Allocated corporate depreciation costs		895			763			2,668		2,251
Total operating margin		76,659			104,680			272,235		315,121
Less: Depreciation and amortization		15,182			15,914			45,739		47,049
Affiliate general and administrative		17,042			17,219			47,806		52,645
Total operating profit	$	44,435		$	71,547		$	178,690	$	215,427

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 September 30,						Nine Months Ended September 30,
	2006			2007			2006			2007
Net income	$	30,593		$	59,444		$	136,276		$	170,598
Direct charges to the general partner:
Reimbursable general and administrative costs		(31	)		1,869			934			3,749
Previously indemnified environmental charges		8,323			885			8,381			3,757
Total direct charges to general partner		8,292			2,754			9,315			7,506
Income before direct charges to general partner		38,885			62,198			145,591			178,104
General partner’s share of income(a)		27.13	%		30.79	%		27.08	%		30.55	%
General partner’s allocated share of net income before direct charges		10,550			19,149			39,428			54,414
Direct charges to general partner		8,292			2,754			9,315			7,506
Net income allocated to general partner	$	2,258		$	16,395		$	30,113		$	46,908
Net income	$	30,593		$	59,444		$	136,276		$	170,598
Less: net income allocated to general partner		2,258			16,395			30,113			46,908
Net income allocated to limited partners	$	28,335		$	43,049		$	106,163		$	123,690

(a) 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. For periods when net income exceeds the cash distributions the partnership pays, the general partner’s percentage share of income is its proportion of theoretical cash distributions that equal net income. The cash distributions the partnership paid for the three months ended September 30, 2006 exceeded its net income for that period; therefore, the general partner’s share of income was its proportion of cash distributions paid for that quarter. For the three months ended September 30, 2007, the partnership’s net income exceeds the cash distributions it will pay for that period; therefore, the general partner’s share of income was allocated based on a theoretical cash distribution of $0.6469 per limited partner unit. The general partner’s share of distributions for the nine months ended September 30, 2006 was equal to its share of actual first and third quarter 2006 distributions plus its share of theoretical distributions for second quarter 2006. During 2007, the general partner’s share of distributions for the nine months ended September 30, 2007 was equal to its share of actual distributions paid for the first quarter and theoretical distributions for the second and third quarters.

MAGELLAN MIDSTREAM PARTNERS, L.P.

DISTRIBUTABLE CASH FLOW

(Unaudited, in millions)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2006		2007		2006		2007
Net income	$	30.6	$	59.4	$	136.3	$	170.6
Add: Depreciation and amortization(1)		15.9		16.1		47.8		49.0
Equity-based incentive compensation		4.4		1.2		8.2		7.1
Direct charges to general partner		8.3		2.8		9.3		7.5
Asset retirements and impairments		1.4		1.4		6.0		5.8
Less: Maintenance capital (net of indemnified spending)		6.8		7.0		17.5		20.9
Other		1.5		1.1		3.7		3.0
Distributable cash flow(2)	$	52.3	$	72.8	$	186.4	$	216.1

(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. Related to its indemnification settlement, the partnership has collected the entire amount due of $117.5 million. Through September 30, 2007, the partnership has either paid or accrued liabilities totaling $85.2 million that are covered by this indemnification settlement.