Supplemental Analyst Day Material

SupplementalAnalyst Day Material

March 26, 2020

NYSE: MMP

2www.magellanlp.com | NYSE: MMP

Forward-looking statementsExcept for statements of historical fact, this document constitutes forward-looking statements as defined by federal law. Although management believes such statements are based on reasonable assumptions, such statements necessarily involve known and unknown risks and uncertainties that may cause actual outcomes to be materially different. Among the key risk factors that may have a direct impact on the partnership’s results of operations and financial condition are: (1) changes in price or demand for refined petroleum products, crude oil and natural gas liquids, or for transportation, storage, blending or processing of those commodities through its facilities; (2) impacts of the coronavirus and similar epidemics on its workforce, customers and vendors; (3) its ability to identify and secure growth projects with acceptable expected returns and to complete those projects on time and at expected costs; (4) changes in the partnership’s tariff rates or other terms as required by regulatory authorities; (5) shut-downs or cutbacks at refineries, of hydrocarbon production or at other businesses that use or supply the partnership’s services; (6) changes in the throughput or interruption in service on pipelines or other facilities owned and operated by third parties and connected to the partnership’s terminals, pipelines or other facilities; (7) the occurrence of operational hazards or unforeseen interruptions; (8) the treatment of the partnership as a corporation for federal or state income tax purposes or the partnership becoming subject to significant forms of other taxation; (9) disruption in the debt and equity markets that negatively impacts the partnership’s ability to finance its capital spending; (10) its capital needs, cash flows and availability of cash to fund unit repurchases or distributions; and (11) failure of customers to meet or continue contractual obligations to the partnership. This list is not exhaustive. Additional factors are described in the partnership's filings with the Securities and Exchange Commission, including the partnership’s Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2019. You are urged to carefully review and consider the cautionary statements and other disclosures made in the partnership’s filings, especially under the headings “Risk Factors” and “Forward-Looking Statements.” Forward-looking statements made in this presentation are based only on information currently known, and the partnership undertakes no obligation to update or revise its forward-looking statements.


Magellan’s asset portfolio


• Investment grade MLP with no incentive distribution rights• Primarily focused on transportation, storage and distribution of refined

petroleum products, such as gasoline and diesel fuel

Refined Products63%*

100%LP

Crude Oil37%*

Magellan Midstream Partners, L.P. (NYSE: MMP)

Public

* Percentage of 2019 annual operating margin. Due to recent sale of 3 marine terminals, plan to re-segment in 2020,with ‘19 financial results of historical Marine Storage segment combined into our Refined Products segment

Straight-forward business model

Refined Products


Refined products segment overview• Extensive network serving end-use demand for refined petroleum products, such as

gasoline, diesel and aviation fuel, primarily in the central region of the United States‒ Beginning in ‘20, we plan to also include results from our Galena Park and Pasadena

JV marine storage facilities within the Refined segment


Sources of fee-based refined products revenue• Refined products pipeline tariff revenue was $830mm+ during 2019

– Accounted for 70% of transportation and terminals revenue for the segment

• Remaining 30% is derived from other fee-based ancillary services‒ Demand for contract storage along our pipeline system remains strong and

provides customers flexibility‒ Throughput fees earned at 22 of our 53 pipeline terminals, included as part of

tariff at other 31 terminals‒ Our 25 independent terminals are located in the Southeast and earn revenue

from throughput and ethanol / additive blending ‒ Also blend renewable fuels such as ethanol and inject additives at our terminals

Refined products tariff70%

Other fee-based30%

Ppl terminal throughput

14%Independent Terminals

16%

Storage25%

Additives13%

Renewables10%

Capacity 4%Tenders 6%

Other 12%


Refined products pipeline system• Longest refined petroleum products

pipeline system in the U.S. at 9,800 miles with 53 terminals and 46mm barrels of storage

• Demand-driven system with multiple supply options

‒ Access to nearly 50% of refinery capacity in the U.S., including Midcontinent, Northern tier and Gulf Coast refineries

• Competitive advantages include:

‒ Extensive breadth of footprint and supply capabilities

‒ Open stock system, allowing customers to inject product into pipeline and simultaneously pull from another location along our network

‒ Independent service provider model


Critical U.S. infrastructure

• Our refined products pipeline system is an essential component of the U.S. petroleum infrastructure to meet demand for refined products in the markets we serve

Source: EIA and Magellan deliveries

IL 4% NE 4% AR 5%KS 6%

CO 6%

MO 7%

OK 8%

IA 9%MN 9%

All other states11%

TX 31%

2019 Magellan Refined Products Pipeline Deliveries by State

45%46%47%50%

56%58%

81%

0% 50% 100%

OklahomaKansas

NebraskaArkansas

South DakotaMinnesota

Iowa

% of Total State Demand Supplied byMagellan Refined Products Pipeline in 2019

• During 2019, we transported 45% or more of the gasoline / distillate consumed in 7 of the 15 states we serve


Market share17% Take-or-pay

57%

Volume incentive26%

• Volume driven by stable demand in the markets served by our pipeline system, with published tariffs generally serving as contracts with volume nominated up to a month in advance

• 40% of ‘19 shipments were subject to supplemental agreements with an average remaining contract life of approx. 3 years

– Committed volume expected to increase as our new Texas pipeline expansions become fully operational due to contracted nature of those projects

Refined products pipeline commitments

Spot shipments60% Contracted

volume40%


Competitive vs. less competitive markets

• 60% of our refined products pipeline tariff revenue is generated from markets deemed workably competitive by the FERC or subject to state regulations

• The remaining 40% is deemed less competitive and therefore subject to the indexation methodology approved by the FERC

• We have followed the mid-year FERC index since its inception for our indexed markets and annually determine the appropriate rate change for our competitive markets

• Market-based designation provides flexibility, especially when the FERC index is negative or considered to be too low

Refined Products Pipeline System


-0.4%

0.9%1.7%

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-1.8%

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2.0%

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3.2%3.6%

6.2%

4.3%

5.2%

7.6%

-1.3%

6.9%

8.6%

4.6% 3.9%4.6%

-2.0%

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4.4% 4.3%

~ 2.0%

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0%

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6%

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10%

1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019

Index Market-based

Refined products pipeline rates• Our average rate / bbl impacted by combination of the FERC index, market

environment and distribution pattern of shipments

• Based on preliminary PPI results for 2019, will increase rates in our indexed markets by ~2% on July 1, 2020

• Intend to increase our competitive and intrastate rates by 3-4% in mid-year ’20, depending on market conditions

• Average rate in ‘20 expected to be similar to $1.62 / bbl reported for ‘19 primarily as a result of full year of East Houston-to-Hearne volumes, which move at a lower rate

Since inception, the cumulative FERC index increase has been approx. 71% while market-based rates have increased closer to 91%

History of Annual Refined Products Tariff Changes Index Formula: • 1995 to 2000: PPI – 1.0%• 2001 to 2005: PPI• 2006 to 2010: PPI + 1.3%• 2011 to 2015: PPI + 2.65%• 2016 to 2020: PPI + 1.23%


Upcoming FERC index review process• Index intended to allow pipelines to raise rates to recover actual cost increases while

earning a reasonable return without a complicated cost-of-service filing– FERC has utilized index methodology since 1995, reviewing every 5 years – 2020 represents the final year of the current FERC index formula equal to the

change in PPI + 1.23%

• Expected next steps of FERC review for new index methodology:– April 2020: Pipelines file 2019 FERC Form 6s, allowing data compilation and

analysis to begin, comparing cost changes from ’15 base year to ‘19– Summer 2020: FERC reviews summarized cost data and comments submitted by

the industry through Association of Oil Pipelines (AOPL) as well as shippers– End of 2020: FERC finalizes new methodology to be effective July ’21

• FERC must determine the best approach to implement its mid-cycle ‘18 policy change that no longer allows income taxes in rate structures for interstate pipelines structured as partnerships (included in ‘15 cost data, excluded in ‘19 data)

– Hypothetical calculations of the most adverse treatment of the income tax change would lower the index adder by approx. 1% (i.e. from +3% to +2%)


Refined products pipeline volumes• Base volumes generally trend with overall demand for refined products in the

markets served by our assets

• 2019 reported volumes 1% higher than ’18‒ Excluding growth volumes, base business volumes were roughly 1% lower

overall

• 2020 guidance originally assumed base refined products shipments flat– Including growth volumes primarily related to our East Houston-to-Hearne

and west Texas expansion projects, we expected all-in refined products volume growth of 10% in ’20

• Based on developing challenges associated with the virus pandemic, assessing short-term implications to our markets due to reduced travel in the near term

• Primary products handled are gasoline and distillate, with aviation and LPGs combined only 10% of ‘19 shipments

Gasoline54%

Distillate36%

Aviation, LPG10%

2019 Transportation Volumes by Product


Expansion of Texas refined products pipeline system• Largest expansion of our refined products pipeline system in Magellan’s history

• Phase 1: New East Houston-to-Hearne pipe became operational Sept. ‘19, adding 85k bpd capacity

– $425mm capital spend with 8x EBITDA multiple expected on committed volume

• Phase 2: New Hearne-to-Alexander pipeline and increasing diameter of existing pipe on western leg of Texas system, adding 75k bpd capacity

– $500mm capital spend with 7x EBITDA multiple expected on committed volume

– Expected completion mid-’20– Meaningful upside, including

potential incremental volume fromnew market-share agreement(volume is not guaranteed)

• Adding new Midland refined productsterminal as well

• Projects supported by long-termcommitments from investment-gradecompanies with average contract lifeof 9 years


Longer-term refined products volume expectations• Longer term, we generally look to the EIA’s refined products demand projections

for the markets we serve, which are expected to remain relatively stable– Gasoline: slight decline – fuel efficiency vs vehicle miles driven

Electric vehicles not expected to have material impact in the markets served by Magellan for foreseeable future

– Distillate: generally flat based on expected economic conditions• EIA projections do not include developing implications from the current virus

pandemic, which is primarily expected to impact ’20 demand

-5%

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-3%

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-1%

0%

1%

2%

3%

4%

5%

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

EIA projected refined products demand growth in MMP's markets

Gasoline Distillate Total Refined Products

NOTE: MMP Market is based on 44% west north central region, 43% west south central and 13% otherSOURCE: EIA's Annual Energy Outlook 2020, February 2020


Renewable fuels• Continued expansion of renewables brings challenges and opportunities• Ethanol: Ability to blend E10, E15 and E85 at our terminals, with demand to date

heavily favoring E10 option– Blending and storage fees earned essentially offset lost tariff revenue

• Biodiesel: Limited system-wide demand so far, primarily located in Minnesota but other states are considering mandates as well

– Magellan is evaluating the transportation of biodiesel blends via pipe along portions of our refined products pipeline system

• Working with federal and state legislative and regulatory agencies to decrease cost of required infrastructure through cost-sharing programs


Refined products storage • Magellan has significant refined products storage along our pipeline system that is

used for contract storage– Comprised of a combination of fungible system storage throughout our pipeline

network as well as site-specific storage at selected locations • Beginning in ‘20, our Galena Park, TX marine terminal will be included in the Refined

segment with 14mm bbls of aggregate storage and 750k bpd of dock capacity– Highly utilized facility with exceptional connectivity to local refineries and

pipelines, attractive dock positioning and depth– Added 5th dock in mid-2019, improving flexibility and export capabilities– Also recently reactivated connection to rail rack for diesel service to Mexico


Pasadena marine terminal joint venture• Beginning in ‘20, our recently-constructed marine terminal in Pasadena, TX will also be

included in the Refined segment• 50/50 joint venture with Valero Energy with 300k bpd of dock capacity currently

– Phase 1: 1mm bbls of storage and Panamax-capable dock; began operations early ’19– Phase 2: 4mm bbls of storage, 3-bay truck rack, Aframax-capable dock and

connectivity to Valero’s refineries in Houston and TX City; began operations early ’20• $410mm for MMP’s share of capital spend for initial 2 phases, fully committed by long-

term customer contracts (avg contract life of 10 years) with a 9x EBITDA multiple expected• Facility has space for another 5mm bbls of storage and 3 additional docks, could handle

other products including NGLs or chemicals– Additional expansions contingent on receiving sufficient customer commitments


Commodity-related activities

*Product margin of $183mm for the Refined Products segment calculated as $700mm product sales - $583mm cost of product sales + $66mm commodity-related adjustments for DCF purposes; Other primarily includes final price adjustments on sale of product overages

• During 2019, the Refined Products segment generated $183mm* of product margin

– Primarily related to our gas liquids blending activities

Gas liquids blending

89%Fractionator

14%

Other-3%


Gas liquids blending overview• Magellan transported 280mm barrels of gasoline during 2019

– Quality margin associated with our fungible pipeline system typically creates opportunities for gas liquids blending

• Vast majority of our gas liquids blending is related to butane– Butane is a common gasoline blending component, with butane prices

generally lower than gasoline– Regulated gasoline specifications require gasoline to transition from low

vapor pressure in the summer to high vapor pressure during the winter, then back down in the spring

– Butane blending involves capturing these seasonal vapor pressure changes that allow blending butane into gasoline

• Additional opportunities involve blending to capture other quality margins, including octane levels of gasoline within pipeline network

• Volumes limited by quality margin availableand total volume shipped

– Gas liquids blending volumes historicallyequal ~2% of the annual gasoline wetransport, with blending sales heavilyweighted toward 1Q and 4Q


Gas liquids blending margins• Blending margins more dependent on the spread between the price of gasoline and

gas liquids than the overall price level of crude oil– Gas liquids prices have typically been low due to increased domestic supply– Blending is opportunistic, will not blend if margins not favorable

• Projected margins are primarily based on the NYMEX forward curves for RBOB gasoline and Belvieu butane‒ Mid-Con gasoline typically trades at a discount to NYMEX RBOB (basis

differential)

• In addition, we incur logistical costs associated with storing and transporting gas liquids and buying RINs

Example of Spot Margin Calculation (per gallon)

Gasoline price (avg NYMEX RBOB for Jan '20) 1.67$ Butane price (avg NYMEX Belvieu for Jan '20) 0.69Imputed gross spot margin 0.98$ Basis differential: RBOB to Mid-Con gasoline ('19 avg) (0.05) Estimated logistics costs (0.25) Imputed net spot margin 0.68$

Note: calculation for example purposes only and does not represent actual marginsexpected.


Gas liquids blending risk mitigation• Our realized margin will not precisely track spot margins throughout the year as it

is affected by:‒ Timing of gas liquids purchasing activities and related futures contracts‒ Pool costing of gas liquids inventory‒ Basis differentials

• Magellan does not typically speculate on the price of commodities and mitigates risk as much as possible related to our gas liquids blending activities‒ Purchase much of our blendstocks in the spring and summer when pricing is

lower to cover up to 90% of expected blending volumes‒ When purchase blendstock, hedge gasoline sales with futures contracts;

entering ‘20, we had 50% of our blending margins hedged, and generally use the forward curve to estimate margins for the remainder of the year

‒ Purchase necessary RINs at the time blendstock is purchased or in advance if market conditions are favorable (~90% of ‘20 RINs purchased already)

‒ Lock-in basis differentials when reasonable to do so


Current key focus areas – Refined Products

• Provide access to new markets in response to growing Midcontinent supply length

• Maintain market share while seeking to maximize revenue

• Leverage technology to create new services and new revenue opportunities

• Adapt to the growing penetration of biofuels in our market area

• Capture growth opportunities to serve increasing demand in Texas and northern Mexico

• Enhance marine terminal offerings through new pipeline connections and ongoing development of Pasadena JV

• Continue buildout and optimization of gas liquids blending activities

Crude Oil


Crude oil segment overview• 2,200 miles of crude oil pipelines, substantially backed by long-term throughput

commitments• 35mm barrels of total crude oil storage, including 23mm barrels used for contract

storage, with largest locations in strategic Houston and Cushing storage hubs• Independent, customer-focused service provider

– Focus on quality and transparency as well as significant Houston connectivity provide competitive advantage


Sources of fee-based crude oil revenue• Crude oil transportation and terminals revenue exceeded $600mm during 2019, with

pipeline tariffs comprising nearly 50% of these fee-based revenues‒ Joint venture contributions appear as earnings of non-controlled entities in financial

results instead of revenue‒ Including MMP’s share of JV revenue in analysis, tariffs would have comprised nearly

60% of 2019 fee-based revenues‒ Due to lower rates and volumes for Permian pipes in 2020, tariff revenue expected

to be 50%+ of transportation and terminals revenue including JV contributions in ‘20

• Storage revenues contributed almost 20% of ’19 revenues, primarily from Cushing and East Houston contract storage

• Remaining revenues primarily related to fee-based activities such as pipeline capacity leases (mainly line space leased to BridgeTex) and splitter tolling fees

Longhorn tariffs36%

Houston distribution tariffs 12%

Contract storage 17%

Other fees 7%

Ppl capacity leases9%

Tenders 6%

Splitter 11%

Mgmt fees 2%

2019 Crude Oil Revenue by Type(incl. MMP-share of JV revenue)2019 Crude Oil Revenue by Type

Longhorn tariffs 26%

Houston distribution tariffs 8%

BridgeTex tariffs 14%

Saddlehorn tariffs 7%

Double Eagle tariffs 3%

Contract storage 12%

Other fees 8%

Ppl capacity leases 6%

Tenders 5%Splitter 8%

Mgmt fees 2%


Crude oil differential, marketing affiliate activity• Pricing differential between the Permian Basin and Houston drives demand for uncommitted

shipments on Longhorn and BridgeTex pipelines

• Favorable differential during ‘18 and ’19 resulted in significant spot shipments

• Due to newly-constructed Permian take-away capacity, no third-party spot shipments are expected during ’20, as evidenced by the forward curve

• To the extent our crude oil pipes are not full, we are utilizing marketing activities to facilitate intrastate shipments on our Texas assets

– Accomplished through basic back-to-back transactions wherein we purchase at the origin and sell at the destination

• Due to the affiliate nature of the transactions, marketing activities on Longhorn appear as commodity margin on our consolidated financials

– We include affiliate shipments in operatingstatistics to provide complete picture oftotal volume moved, but exclude theseaffiliate volumes in the average tariff rate

Source: Argus 3/16/20

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2018 2019 2020

Pric

e/ba

rrel

Midland to Houston Diff Longhorn Spot BridgeTex Spot


Longhorn pipeline• 275k bpd pipeline handling various grades of crude oil from the Permian Basin• Primarily receives product through strategic interconnects with Centurion,

Medallion, Noble, Oryx and Plains’ pipelines• Proven track record of operational stability to deliver crude oil to the Houston

Gulf Coast region


Longhorn volume• Entering 2020, ~130k bpd committed under long-term commitments with remaining

~130k bpd set to expire Sept. 30, 2020– In Jan. 2020, executed 10-year agreement to fill significant portion of expiring

space, with volume ramp over next few years– At same time, marketing affiliate secured multi-year, fixed differential agreements

with third parties to bridge the gap during ramp-up period Accomplished by marketing affiliate taking assignment of customer contract

set to expire 9/30; began March ‘20 and expected to average 40k bpd this year– Resulting total volume commitments (incl. our marketing affiliate commitments)

average ~240k bpd in ’20 and ~200k bpd from 2020 to 2024; our marketing affiliate intends to move additional volume as differential economics allow

– ~70% of capacity currently contracted long term, continue to negotiate with additional parties to fill remainder of space

• Average remaining contract life of ~7 years

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2018 2019 2020E 2021E 2022E 2023E 2024E

Longhorn Total Volumes (000 bpd)

3rd party committed Spot Mktg committed Mktg uncommitted


Longhorn rates • Committed tariff for third-party shipments expected to average $1.95 / bbl in ‘20

– Committed rate expected to decline due to full-year impact of late ‘20 contract expiration and ramp of new significant commitment

– Spot tariff is ~$4.25 / bbl, depending on origin-destination mix– Based on current pricing environment, no third-party spot shipments expected

to move in ‘20

• Contracted rates adjusted by FERC index, subject to certain modifications

Note: Average rate above from 3rd party commitments only, does not include margin on Mktg committedvolume; all-in average rate including spot shipments was approx. $2.40 in ‘18 and $2.25 in ‘19

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2018 2019 2020E 2021E 2022E 2023E 2024E

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bpd

Longhorn Committed Volumes & Avg 3rd Party Tariff

3rd party committed Mktg committed 3rd party avg tariff


BridgeTex pipeline• 440k bpd pipeline handling various grades of crude oil from the Permian

Basin and Eaglebine• Primarily receives product through interconnects with Centurion, Medallion,

NuStar and Plains’ pipelines• Ownership structure: OMERS 50%, Magellan 30%, Plains 20%; MMP serves

as operator


BridgeTex volume and rates• Expect ‘20 shipments to average 360k bpd at average rate of ~$2.40 / bbl

‒ BridgeTex 1: 80% of 300k bpd pipeline capacity committed with take-or-pay contracts at average rate of ~$2.90 / bbl (incl. commitment from pipeline affiliate in connection with our basis derivative agreement), guidance assumes lower ‘20 volume due to customer use of credits earned from excess historical shipments

‒ BridgeTex 2: 80% of 140k bpd capacity also committed with take-or-pay contracts at average rate of ~$1.80 / bbl (incl. lower Eaglebine rate)

‒ Contracted rates adjusted by FERC index, subject to certain modifications

• No shipments assumed for ’20 at spot tariff of ~$4.10 / bbl; volumes above committed levels assumed to move in ’20 as shippers take advantage of current incentive rates and joint tariffs

• Average remaining contract life of more than 4 years

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2017 2018 2019 2020E

BridgeTex Volumes (000 bpd)

Incentive Tariff / Joint Tariff

Spot

BridgeTex 2 Commitment

BridgeTex 1 Commitment


• Currently 9mm bbls of crude oil storage at East Houston, with 5mm bbls available for contract storage

– Space to build another 2mm bbls of storage– Considering additional grade segregation to meet customer needs

• Magellan’s East Houston terminal is a critical trading hub on the U.S. Gulf Coast‒ Price assessment for WTI via Argus (MEH)‒ ICE HOU futures contract‒ Platts’ price assessment

• MEH has developed as the premiere trade point due to consistent quality, liquidity and transparency

• With recent commodity price volatility and resulting contango curve, significant increase in demand for contractstorage at this time, with 2mm bblsrecently leased for ’20-21

East Houston crude oil storage


Houston crude oil connectivity• Magellan’s Houston distribution system is a network of crude oil pipelines with the

capacity, connectivity and quality segregations to provide our shippers extensive access to the refineries and export terminals on the Gulf Coast


Houston distribution system• During 2019, we transported >200mm bbls under the Houston distribution tariff

that averaged ~ 25 cents

• Volume primarily driven by shipments on Longhorn and BridgeTex, which travel to final destination using our Houston distribution system

• BridgeTex also leases space on our Houston distribution system

– BridgeTex customers can elect to move under this capacity lease for seamless delivery to ultimate destination without paying a separate tariff to us

• Delivery capabilities to all Houston and Texas City refineries, third-party storage facilities and our Seabrook JV export terminal

• New agreements that include terminal transfer fees allow customers to access Seabrook; revenue neutral but expected to result in lower reported transportation volumes

45%

20%

35%

2019 Product Origins

BridgeTex Longhorn Other

70%

30%

2019 Product Destinations

Refineries Seabrook


• 50/50 joint venture with LBC Tank Terminals– Currently operational: 3.2mm bbls of crude oil storage, Aframax dock with 300k

bpd capacity + connectivity to MMP’s Houston crude oil distribution system– Under construction: Suezmax dock with 400k bpd capacity to be operational mid

2020, and 750k bbls of crude oil storage expected to be operational early 2021– Magellan has a long-term lease agreement with Seabrook to provide our

customers with storage capacity and dock access for crude oil imports and exports– Opportunity for up to 1.5mm bbls of additional storage and second pipeline

connection to MMP’s Houston crude oil pipeline system

Seabrook Logistics offers crude export solution


• Magellan has a significant presence in Corpus Christi– 6mm bbls of aggregate storage (all shown in crude oil segment going forward)

– Landing spot for Eagle Ford condensate from our 50%-owned Double Eagle JV pipeline

– 50k bpd condensate splitter fully committed under take-or-pay customer contract

– 100k bpd dock capacity via shared docks owned by the Port of Corpus Christi– 100 acres of undeveloped land with waterfront access

• Assessing connectivity options to new long-haul pipes delivering crude oil and condensate to the Corpus Christi market,including potential opportunities to utilizeour undeveloped land

Corpus Christi


• Joint venture pipeline primarily delivering crude oil from the DJ and Powder River Basins to Cushing‒ 600-mile pipeline with initial

capacity of 190k bpd‒ Currently in process of expanding to

290k bpd by late 2020‒ Effective Feb. 2020, ownership

structure: Magellan 30%, Plains 30%, WES 20%, Black Diamond 20% (an affiliate of Noble)

• Continue to improve connectivity and optionality of system

– Various joint tariffs in place to attract incremental volume, including recently-constructed DJ South Matador pipeline to begin April ’20

– Recent connection to Pony Express, with others under review

Saddlehorn pipeline


Saddlehorn volume and rates• Expect ‘20 shipments to average more than 180k bpd (155k bpd in ‘19) at average rate

of ~$2.75 / bbl

• New agreements result in ~75% of capacity committed with take-or-pay commitments when fully-expanded capacity available late ‘20

• New commitments ramp over time, essentially replacing original commitments set to expire in ’21, but resulting in a lower average rate consistent with more current market pricing

• Uncommitted volumes expected as well due to various joint tariff movements, with more than 30k bpd of uncommitted volume assumed in ‘20 guidance

• Contracted rates increase annually by nominal fixed amount

• Average remaining contract life of ~7 years

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Saddlehorn Committed Volumes & Average Committed Tariff

Initial Commitments Expansion Commitments Avg Committed Rate


Cushing crude oil storage• Cushing continues to be an important crude oil hub, providing traders

flexibility to deliver crude oil to the highest margin market at any given time

• With 13mm bbls of total storage, Magellan is one of the largest owners of crude oil storage in Cushing

• Continue to enhance connectivity of our facility, with new Glass Mountain and Ozark pipeline connections added in early ‘20

• Magellan’s independent storage model also increases the attractiveness of our tankage compared to many of our competitors

– Maintaining consistency and predictability of quality within our system remains a top priority

• With recent commodity price volatilityand resulting contango curve,demand for storage at Cushing remains strong


Current key focus areas – Crude Oil

• Maximize re-contracting of long-haul pipelines

• Optimize use of uncommitted space on long-haul pipelines, including utilization of marketing activities

• Enhance connectivity of Permian pipelines and Houston distribution system

• Further explore crude oil export capabilities, utilizing Magellan’s consistent disciplined approach

• Continued focus on consistent and predictable quality of crude oil available through our pipelines and terminals

Additional Information


MMP does not rely on equity markets• Magellan has avoided relying on equity issuances to finance growth

– Despite $6.3 billion of expansion capital spending over last 10 years, have issued only $260mm of equity in one deal in 2010

• Reinvested ~$2.2 billion of retained cash flow over the last 10 years • Also reinvested BridgeTex sale proceeds into additional fee-based assets

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2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

$ m

illio

ns

MMP financing mix since 2010

Debt New equity Retained cash


Financial policy • Target maximum leverage ratio remains unchanged at 4x debt-to-EBITDA

– Potential share repurchases and special distributions designed to supplement regular distribution will be subject to this long-standing financial policy

• Remain committed to solid investment grade rating• Issued equity when needed to defend credit (e.g. ‘10)• Significant liquidity with $1 billion credit facility• Strong distribution coverage (targeting at least 1.2x once beyond current virus

challenges)


Minimal near-term debt maturities, limited interest rate exposure

• Average maturity of debt is nearly 20 years

• No debt maturity in ’20, with $550mm due Feb ‘21

• Low all-in realized coupon, averaging 4.5% (4.6% withhedges and premiums)

• Currently 100% fixed with no floating rate exposure

$in millions

Amount CouponCP -$ 0.0% 0.0%

2021 550 4.3% 4.0%2025 250 3.2% 3.2%2026 650 5.0% 5.0%2037 250 6.4% 6.4%2042 250 4.2% 4.2%2043 550 5.2% 5.2%2045 250 4.2% 5.4%2046 500 4.3% 4.3%2047 500 4.2% 4.2%2049 500 4.9% 4.7%2050 500 3.9% 4.3%

4,750$ 4.5% 4.6%* Includes impact of hedges/premiums/discounts

Effective Rate*


Best-in-class returns

ROIC defined as trailing 12 month net operating profit after tax / average invested capitalSource: Bloomberg

• Magellan has proven track record of delivering superior returns• Reflects disciplined management style, high quality asset base and strong

business position


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Organic Growth Acquisitions

Disciplined growth• Over the last 10 years, Magellan has invested $6.3 billion in expansion projects

– Historically made a few strategic acquisitions that served as platforms for future organic growth and continuously evaluate opportunities

– Organic growth projects remain our primary focus

• Expect to spend $400mm in ‘20 on construction projects currently underway, primarily related to the transportation & storage of refined petroleum products

• Targeting 6-8x EBITDA multiple on projects

BP (Houston distribution,

Cushing)

~75% of organic spending on crude oil

Plains (Rocky Mtn, NM)

~75% of organic spending on refined products


* Operating margin represents operating profit before depreciation, amortization & impairment expense and general & administrative costs;excludes unrealized mark-to-market and other commodity-related adjustments

• Magellan’s business model primarily focused on fee-based transportation, storage and distribution of petroleum products

• 2019 transportation results benefited from spot revenue and marketing activities on our crude oil pipelines due to the favorable pricing differential between the Permian Basin and Houston that is not expected to continue in ‘20

Limited direct commodity exposure

Expect Future Fee-Based, Low Risk Activitiesto Comprise 85%+ of Operating Margin

2019 Annual Results*


Customer credit update

* Based on forecasted 2020 revenues (ratings updated as of 3/20/20). Includes MMP’s share of JV revenues.

• Crude oil revenues (1/3 of total) largely contract dependent− Mostly long-haul

transportation take-or-pay contracts, 61% from investment grade (IG) customers, 35% split-rated, 2% non-IG, 2% unrated*

− Storage, terminalling and lease revenues 44% from IG customers, 31% split rated, 5% non-IG, 20% unrated*

− Splitter revenue entirely from Trafigura (unrated)

• Refined products revenues (2/3 of total) primarily demand-driven, customer credit not usually relevant − If one customer lowers

utilization, others step in to meet demand

− Mostly transportation, also storage and terminalling

− Customers primarily refiners, also marketers and end users

− We do require contracts on new projects, e.g. Houston-to-Hearne and west Texas expansions (~90% of committed volumes on those projects are backed by IG refiners / majors)

2020 Forecasted Revenue Breakdown*


• Joint ventures have contributed increasingly more value to our company, especially related to our crude oil business

• Risk-mitigation tool for new construction projects, aligning Magellan with other industry players who intend to utilize the new assets over the long term

• During 2019, MMP received cash distributions of $204mm from joint ventures, expected to grow to $210mm in 2020

– Increased Pasadena contributions primarily offset by lack of spot shipments and lower commodity environment in ‘20

Significant contribution from joint ventures

BridgeTex35%

Saddlehorn24%

Seabrook11%

Pasadena15%

Double Eagle8%

Powder Springs6% Other

1%

2020E Cash Distributions from Joint Ventures

BridgeTex43%

Saddlehorn24%

Seabrook13%

Pasadena3%

Double Eagle7%

Powder Springs8%

Other 2%

2019 Cash Distributions from Joint Ventures


Commitment to corporate responsibility• Magellan has always been committed to running our business sustainably

– Our operations prioritize safety, pursuant to an extensive system integrity program designed to minimize the impact to air and water quality and ensure compliance with all local, state and federal regulations Spending of $200mm+ each year to maintain integrity of assets over

the past 5 years Our incident response is based on a “60-minute assault” whereby we

mobilize aggressively to reduce potential impacts of any releases– Our annual incentive program for all employees has always incorporated our

performance on key safety and operational metrics– Industry leader in corporate governance– One of first MLPs to eliminate incentive distribution rights in 2009– All members of our board of directors elected by the public, and

8 of 9 members are independent– Disciplined management team as evidenced by acquisition restraint,

opportunistic asset sales, low leverage and industry-leading ROIC• Hired new employee in January 2020 to drive our ESG initiative, targeting

issuance of inaugural corporate responsibility report by the end of the year


Investor relations contact information

• Paula Farrell – Associate vice president, investor relations‒ [email protected]‒ (918) 574-7650

• Heather Livingston – Investor relations specialist‒ [email protected]‒ (918) 574-7160

Supplemental Analyst Day Material

Documents

Transcript of Supplemental Analyst Day Material