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Magellan Midstream Partners LP Owner Earnings per Share (TTM)

: 2.97 (As of Jun. 2022)
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In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:

"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."

Magellan Midstream Partners LP's Owner Earnings per Share (TTM) ended in Jun. 2022 was $2.97. It's Price-to-Owner-Earnings ratio for today is 16.79.


The historical rank and industry rank for Magellan Midstream Partners LP's Owner Earnings per Share (TTM) or its related term are showing as below:

MMP' s Price-to-Owner-Earnings Range Over the Past 10 Years
Min: 7.91   Med: 23.76   Max: 34.8
Current: 16.77


During the past 13 years, the highest Price-to-Owner-Earnings ratio of Magellan Midstream Partners LP was 34.80. The lowest was 7.91. And the median was 23.76.


MMP's Price-to-Owner-Earnings is ranked worse than
75.49% of 457 companies
in the Oil & Gas industry
Industry Median: 8.22 vs MMP: 16.77

Magellan Midstream Partners LP's Earnings per Share (Diluted) for the three months ended in Jun. 2022 was $1.67. Its Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Jun. 2022 was $4.67. It's PE Ratio ratio for today is 10.68.

Magellan Midstream Partners LP's EPS without NRI for the three months ended in Jun. 2022 was $0.86. Its EPS without NRI for the trailing twelve months (TTM) ended in Jun. 2022 was $3.72. It's PE Ratio without NRI ratio for today is 13.41.


Magellan Midstream Partners LP Owner Earnings per Share (TTM) Historical Data

The historical data trend for Magellan Midstream Partners LP's Owner Earnings per Share (TTM) can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Magellan Midstream Partners LP Annual Data
Trend Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21
Owner Earnings per Share (TTM)
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2.74 4.96 2.97 2.19 3.39

Magellan Midstream Partners LP Quarterly Data
Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22
Owner Earnings per Share (TTM) Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2.88 3.09 3.39 2.78 2.97

Competitive Comparison

For the Oil & Gas Midstream subindustry, Magellan Midstream Partners LP's Owner Earnings per Share (TTM), along with its competitors' market caps and Owner Earnings per Share (TTM) data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Magellan Midstream Partners LP Owner Earnings per Share (TTM) Distribution

For the Oil & Gas industry and Energy sector, Magellan Midstream Partners LP's Owner Earnings per Share (TTM) distribution charts can be found below:

* The bar in red indicates where Magellan Midstream Partners LP's Owner Earnings per Share (TTM) falls into.



Magellan Midstream Partners LP Owner Earnings per Share (TTM) Calculation

In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:

"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume. (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."

To make it simple, then you will have:

Owner Earnings per Share (TTM) = (Net Income + Depreciation, Depletion and Amortization + Change In Deferred Tax - 5Y Average of Maintenance Capital Expenditure + Change In Working Capital) / Shares Outstanding (Diluted Average)

Magellan Midstream Partners LP's Owner Earnings per Share (TTM) Calculation:

TTM / Last Quarter Average of Last 20 Quarters
Net Income 1,000
Depreciation, Depletion and Amortization 238
Change In Deferred Tax 0
5Y Average of Maintenance Capital Expenditure 448
Change In Working Capital -160
Shares Outstanding (Diluted Average) 212

1. Start with "Net Income" from income statement. Magellan Midstream Partners LP's Net Income for the trailing twelve months (TTM) ended in Jun. 2022 was $1,000 Mil.

2. "Depreciation, Depletion and Amortization" is from cashflow statement. Magellan Midstream Partners LP's Depreciation, Depletion and Amortization for the trailing twelve months (TTM) ended in Jun. 2022 was $238 Mil. This needs to be added back because company does not actually need to pay cash for it. It is a non-cash item.

3. Other non-cash charges usually include "Stock Based Compensation" and "Change In Deferred Tax":
However, to be conservative, GuruFocus will not add Stock Based Compensation back to net income. Magellan Midstream Partners LP's Change In Deferred Tax for the trailing twelve months (TTM) ended in Jun. 2022 was $0 Mil.

4. Average maintenance capital expenditure over a business/industry cycle: 5-Year Average Maintenance Capital Expenditure = $448 Mil

It is usually best to take a long-term average of maintenance capital expenditure. Ideally this would be as long as 10 years and include at least one economic downturn. However, since many companies do not have as long as 10-year history, here GuruFocus uses the latest 5 years data to do the calculation. To smooth out unusual years but reflect recent developments, we take an average of the 5 year maintenance capital expenditure.

The following shows how to get maintenance capital expenditure.

First, calculate the revenue change regarding to the previous year. If the revenue decreased from the previous year, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
Second, if the revenue increased from the previous year, then calculate the percentage of Net PPE as of corresponding Revenue.
Growth Capital Expenditure = Percentage of Property, Plant and Equipment as of corresponding Revenue * Revenue Increase
Third, calculate Capital Expenditure (positive) - Growth Capital Expenditure.
If [Capital Expenditure (positive) - Growth Capital Expenditure] was negative, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
If [Capital Expenditure (positive) - Growth Capital Expenditure] was positive, then the Maintenance Capital Expenditure = Capital Expenditure (positive) - Growth Capital Expenditure.
Fourth, get the average of the 5 years maintenance capital expenditure.

Magellan Midstream Partners LP's 5-Year Average Maintenance Capital Expenditure = $448 Mil

5. "Change In Working Capital" is from cashflow statement. Magellan Midstream Partners LP's Change In Working Capital for the trailing twelve months (TTM) ended in Jun. 2022 was $-160 Mil.
Note: GuruFocus' Change in Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And sometimes it includes non-current parts of assets and liabilities.

6. Magellan Midstream Partners LP's Shares Outstanding (Diluted Average) for the months ended in Jun. 2022 was 211.700 Mil.

Magellan Midstream Partners LP's Onwer Earnings Per Share for Jun. 2022 is calculated as:

Owner Earnings per Share (TTM)
=( Net Income+Depreciation, Depletion and Amortization+Change In Deferred Tax
=( 999.665 +237.5+0
-5Y Avg of Maintenance CAPEX+Change In Working Capital )/Shares Outstanding (Diluted Average)
-447.73979557124+-159.8)/211.700
=2.97

Price-to-Owner-Earnings=Current Price/Owner Earnings per Share (TTM)
=49.88/2.97
=16.79

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Assumption: Companies usually do not report maintenance capital expenditures and growth capital expenditures separately. Here we use estimated numbers and average them over 5 years. The method to estimate maintenance capital expenditures can be found in above part 4.

Note: GuruFocus' Change In Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And it includes non-current parts of assets and liabilities.


Magellan Midstream Partners LP Owner Earnings per Share (TTM) Related Terms

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Magellan Midstream Partners LP Business Description

Magellan Midstream Partners LP logo
Traded in Other Exchanges
N/A
Address
One Williams Center, P.O. Box 22186, Tulsa, OK, USA, 74121-2186
Magellan Midstream Partners is a master limited partnership that operates pipelines and storage terminals in the Central and Eastern United States. Its assets transport, store, and distribute refined petroleum products and crude and earn a fee-based stream of cash flows. Assets include the country's longest petroleum pipeline network and several crude oil pipelines. Refined products make about 70% of operating margin, with the remainder mainly crude-oil pipelines.
Executives
Somasundaram Sivasankaran director C/O APERGY CORPORATION 2445 TECHNOLOGY FOREST BLVD, BLD 4, FL 9 THE WOODLANDS TX 77381
Roles Mark B officer: Senior Vice President ONE WILLIAMS CENTER SUITE 2800 TULSA OK 74172
Pearson Michael C officer: Senior Vice President ONE WILLIAMS CENTER SUITE 2800 TULSA OK 74172
Joung Chansoo director C/O WARBURG PINCUS LLC 450 LEXINGTON AVENUE NEW YORK NY 10017
Holman Jeffrey L officer: Senior Vice President & CFO ONE WILLIAMS CENTER TULSA OK 74172
Little Melanie A officer: Senior Vice President ONE WILLIAMS CENTER, SUITE 2800 TULSA OK 74172
Guay Edward J director ONE WILLIAMS CENTER, SUITE 2800 TULSA OK 74172
Gobillot Lori director 5103 CITY WEST BLVD. 4TH FLOOR HOUSTON TX 77042
Aaronson Michael officer: Senior Vice President 16666 NORTHCHASE DRIVE HOUSTON TX 77060
Milford Aaron L officer: Senior Vice President & CFO ONE WILLIAMS CENTER TULSA OK 74172
Methvin Stacy P. director 777 HIDDEN RIDGE IRVING TX 75038
Barnes Robert L officer: Senior Vice President ONE WILLIAMS CENTER SUITE 2800 TULSA OK 74172
Osborne Michael P officer: Senior VP & CFO ONE WILLIAMS CENTER SUITE 2800 TULSA OK 74172
May Douglas J officer: Senior Vice President ONE WILLIAMS CENTER, SUITE 4100 TULSA OK 74172
Davied Larry J officer: Senior Vice President ONE WILLIAMS CENTER SUITE 2800 TULSA OK 74172

Magellan Midstream Partners LP Headlines

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