Intrinsic value of Magellan Midstream Partners L.P. - MMP

Previous Close

$65.42

  Intrinsic Value

$77.87

stock screener

  Rating & Target

hold

+19%

Previous close

$65.42

 
Intrinsic value

$77.87

 
Up/down potential

+19%

 
Rating

hold

We calculate the intrinsic value of MMP stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 14.9

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  28.60
  26.24
  24.12
  22.20
  20.48
  18.94
  17.54
  16.29
  15.16
  14.14
  13.23
  12.41
  11.67
  11.00
  10.40
  9.86
  9.37
  8.94
  8.54
  8.19
  7.87
  7.58
  7.32
  7.09
  6.88
  6.69
  6.52
  6.37
  6.24
  6.11
Revenue, $m
  3,636
  4,589
  5,696
  6,961
  8,387
  9,975
  11,725
  13,635
  15,702
  17,922
  20,293
  22,811
  25,472
  28,273
  31,213
  34,291
  37,505
  40,856
  44,346
  47,977
  51,753
  55,677
  59,755
  63,992
  68,397
  72,975
  77,737
  82,690
  87,846
  93,215
Variable operating expenses, $m
  2,255
  2,844
  3,527
  4,308
  5,188
  6,168
  7,248
  8,427
  9,703
  11,074
  12,527
  14,082
  15,724
  17,454
  19,269
  21,168
  23,153
  25,221
  27,376
  29,617
  31,948
  34,371
  36,888
  39,504
  42,223
  45,049
  47,989
  51,047
  54,229
  57,544
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  2,255
  2,844
  3,527
  4,308
  5,188
  6,168
  7,248
  8,427
  9,703
  11,074
  12,527
  14,082
  15,724
  17,454
  19,269
  21,168
  23,153
  25,221
  27,376
  29,617
  31,948
  34,371
  36,888
  39,504
  42,223
  45,049
  47,989
  51,047
  54,229
  57,544
Operating income, $m
  1,381
  1,746
  2,169
  2,653
  3,199
  3,807
  4,477
  5,207
  5,998
  6,848
  7,766
  8,729
  9,748
  10,820
  11,945
  13,122
  14,352
  15,635
  16,970
  18,360
  19,805
  21,306
  22,867
  24,489
  26,174
  27,926
  29,748
  31,644
  33,617
  35,671
EBITDA, $m
  1,729
  2,183
  2,709
  3,311
  3,989
  4,744
  5,577
  6,485
  7,468
  8,524
  9,652
  10,849
  12,115
  13,447
  14,846
  16,309
  17,838
  19,432
  21,092
  22,819
  24,614
  26,481
  28,420
  30,436
  32,530
  34,708
  36,973
  39,329
  41,781
  44,334
Interest expense (income), $m
  0
  231
  333
  455
  596
  757
  939
  1,141
  1,364
  1,607
  1,870
  2,153
  2,455
  2,776
  3,115
  3,472
  3,846
  4,238
  4,648
  5,075
  5,519
  5,982
  6,463
  6,963
  7,482
  8,022
  8,583
  9,166
  9,773
  10,404
  11,060
Earnings before tax, $m
  1,150
  1,412
  1,714
  2,057
  2,442
  2,868
  3,335
  3,843
  4,391
  4,978
  5,612
  6,274
  6,971
  7,705
  8,473
  9,276
  10,114
  10,987
  11,896
  12,841
  13,823
  14,844
  15,904
  17,007
  18,152
  19,343
  20,582
  21,871
  23,213
  24,611
Tax expense, $m
  311
  381
  463
  556
  659
  774
  901
  1,038
  1,186
  1,344
  1,515
  1,694
  1,882
  2,080
  2,288
  2,505
  2,731
  2,967
  3,212
  3,467
  3,732
  4,008
  4,294
  4,592
  4,901
  5,223
  5,557
  5,905
  6,268
  6,645
Net income, $m
  840
  1,031
  1,252
  1,502
  1,783
  2,094
  2,435
  2,806
  3,205
  3,634
  4,097
  4,580
  5,089
  5,624
  6,185
  6,771
  7,383
  8,021
  8,684
  9,374
  10,091
  10,836
  11,610
  12,415
  13,251
  14,121
  15,025
  15,966
  16,946
  17,966

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  9,960
  12,574
  15,606
  19,072
  22,978
  27,329
  32,123
  37,355
  43,018
  49,102
  55,598
  62,495
  69,786
  77,461
  85,516
  93,947
  102,753
  111,935
  121,497
  131,445
  141,789
  152,540
  163,712
  175,321
  187,388
  199,932
  212,977
  226,549
  240,675
  255,384
Adjusted assets (=assets-cash), $m
  9,960
  12,574
  15,606
  19,072
  22,978
  27,329
  32,123
  37,355
  43,018
  49,102
  55,598
  62,495
  69,786
  77,461
  85,516
  93,947
  102,753
  111,935
  121,497
  131,445
  141,789
  152,540
  163,712
  175,321
  187,388
  199,932
  212,977
  226,549
  240,675
  255,384
Revenue / Adjusted assets
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
Average production assets, $m
  7,366
  9,298
  11,541
  14,103
  16,992
  20,210
  23,755
  27,624
  31,811
  36,311
  41,114
  46,215
  51,606
  57,282
  63,238
  69,473
  75,985
  82,775
  89,846
  97,202
  104,851
  112,801
  121,063
  129,648
  138,572
  147,848
  157,495
  167,531
  177,976
  188,854
Working capital, $m
  -360
  -454
  -564
  -689
  -830
  -988
  -1,161
  -1,350
  -1,554
  -1,774
  -2,009
  -2,258
  -2,522
  -2,799
  -3,090
  -3,395
  -3,713
  -4,045
  -4,390
  -4,750
  -5,124
  -5,512
  -5,916
  -6,335
  -6,771
  -7,225
  -7,696
  -8,186
  -8,697
  -9,228
Total debt, $m
  6,175
  8,426
  11,037
  14,020
  17,384
  21,130
  25,258
  29,763
  34,638
  39,877
  45,469
  51,408
  57,685
  64,294
  71,229
  78,488
  86,070
  93,976
  102,208
  110,774
  119,680
  128,936
  138,555
  148,551
  158,941
  169,741
  180,973
  192,658
  204,820
  217,485
Total liabilities, $m
  8,576
  10,826
  13,437
  16,421
  19,784
  23,530
  27,658
  32,163
  37,039
  42,277
  47,870
  53,808
  60,085
  66,694
  73,630
  80,889
  88,471
  96,376
  104,609
  113,174
  122,080
  131,337
  140,956
  150,952
  161,341
  172,142
  183,374
  195,059
  207,221
  219,885
Total equity, $m
  1,384
  1,748
  2,169
  2,651
  3,194
  3,799
  4,465
  5,192
  5,980
  6,825
  7,728
  8,687
  9,700
  10,767
  11,887
  13,059
  14,283
  15,559
  16,888
  18,271
  19,709
  21,203
  22,756
  24,370
  26,047
  27,791
  29,604
  31,490
  33,454
  35,498
Total liabilities and equity, $m
  9,960
  12,574
  15,606
  19,072
  22,978
  27,329
  32,123
  37,355
  43,019
  49,102
  55,598
  62,495
  69,785
  77,461
  85,517
  93,948
  102,754
  111,935
  121,497
  131,445
  141,789
  152,540
  163,712
  175,322
  187,388
  199,933
  212,978
  226,549
  240,675
  255,383
Debt-to-equity ratio
  4.460
  4.820
  5.090
  5.290
  5.440
  5.560
  5.660
  5.730
  5.790
  5.840
  5.880
  5.920
  5.950
  5.970
  5.990
  6.010
  6.030
  6.040
  6.050
  6.060
  6.070
  6.080
  6.090
  6.100
  6.100
  6.110
  6.110
  6.120
  6.120
  6.130
Adjusted equity ratio
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139
  0.139

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  840
  1,031
  1,252
  1,502
  1,783
  2,094
  2,435
  2,806
  3,205
  3,634
  4,097
  4,580
  5,089
  5,624
  6,185
  6,771
  7,383
  8,021
  8,684
  9,374
  10,091
  10,836
  11,610
  12,415
  13,251
  14,121
  15,025
  15,966
  16,946
  17,966
Depreciation, amort., depletion, $m
  348
  437
  540
  657
  790
  937
  1,100
  1,278
  1,470
  1,676
  1,886
  2,120
  2,367
  2,628
  2,901
  3,187
  3,486
  3,797
  4,121
  4,459
  4,810
  5,174
  5,553
  5,947
  6,356
  6,782
  7,225
  7,685
  8,164
  8,663
Funds from operations, $m
  1,188
  1,468
  1,791
  2,159
  2,573
  3,031
  3,535
  4,083
  4,675
  5,310
  5,983
  6,700
  7,456
  8,252
  9,086
  9,958
  10,869
  11,818
  12,805
  13,833
  14,900
  16,010
  17,164
  18,362
  19,608
  20,903
  22,250
  23,651
  25,110
  26,629
Change in working capital, $m
  -80
  -94
  -110
  -125
  -141
  -157
  -173
  -189
  -205
  -220
  -235
  -249
  -263
  -277
  -291
  -305
  -318
  -332
  -346
  -359
  -374
  -388
  -404
  -420
  -436
  -453
  -471
  -490
  -510
  -532
Cash from operations, $m
  1,268
  1,562
  1,901
  2,285
  2,714
  3,188
  3,708
  4,272
  4,880
  5,530
  6,218
  6,949
  7,720
  8,529
  9,377
  10,263
  11,187
  12,149
  13,151
  14,192
  15,274
  16,399
  17,567
  18,781
  20,044
  21,356
  22,721
  24,141
  25,620
  27,161
Maintenance CAPEX, $m
  -263
  -338
  -427
  -529
  -647
  -779
  -927
  -1,090
  -1,267
  -1,459
  -1,666
  -1,886
  -2,120
  -2,367
  -2,628
  -2,901
  -3,187
  -3,486
  -3,797
  -4,121
  -4,459
  -4,810
  -5,174
  -5,553
  -5,947
  -6,356
  -6,782
  -7,225
  -7,685
  -8,164
New CAPEX, $m
  -1,637
  -1,933
  -2,242
  -2,563
  -2,889
  -3,218
  -3,545
  -3,869
  -4,188
  -4,499
  -4,803
  -5,101
  -5,391
  -5,676
  -5,957
  -6,235
  -6,512
  -6,790
  -7,071
  -7,357
  -7,649
  -7,950
  -8,262
  -8,585
  -8,923
  -9,276
  -9,647
  -10,036
  -10,446
  -10,877
Cash from investing activities, $m
  -1,900
  -2,271
  -2,669
  -3,092
  -3,536
  -3,997
  -4,472
  -4,959
  -5,455
  -5,958
  -6,469
  -6,987
  -7,511
  -8,043
  -8,585
  -9,136
  -9,699
  -10,276
  -10,868
  -11,478
  -12,108
  -12,760
  -13,436
  -14,138
  -14,870
  -15,632
  -16,429
  -17,261
  -18,131
  -19,041
Free cash flow, $m
  -632
  -708
  -768
  -807
  -822
  -809
  -764
  -687
  -575
  -429
  -251
  -37
  209
  486
  793
  1,127
  1,488
  1,874
  2,283
  2,714
  3,166
  3,639
  4,131
  4,643
  5,173
  5,723
  6,292
  6,881
  7,490
  8,119
Issuance/(repayment) of debt, $m
  1,905
  2,250
  2,611
  2,984
  3,364
  3,746
  4,128
  4,505
  4,876
  5,238
  5,593
  5,939
  6,277
  6,609
  6,935
  7,259
  7,582
  7,906
  8,233
  8,565
  8,906
  9,256
  9,619
  9,996
  10,389
  10,801
  11,232
  11,685
  12,162
  12,664
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  1,905
  2,250
  2,611
  2,984
  3,364
  3,746
  4,128
  4,505
  4,876
  5,238
  5,593
  5,939
  6,277
  6,609
  6,935
  7,259
  7,582
  7,906
  8,233
  8,565
  8,906
  9,256
  9,619
  9,996
  10,389
  10,801
  11,232
  11,685
  12,162
  12,664
Total cash flow (excl. dividends), $m
  1,272
  1,542
  1,843
  2,176
  2,541
  2,938
  3,364
  3,818
  4,301
  4,810
  5,341
  5,901
  6,486
  7,095
  7,728
  8,387
  9,070
  9,779
  10,516
  11,279
  12,072
  12,895
  13,750
  14,639
  15,563
  16,524
  17,524
  18,566
  19,652
  20,784
Retained Cash Flow (-), $m
  -308
  -363
  -421
  -482
  -543
  -605
  -666
  -727
  -787
  -846
  -903
  -959
  -1,013
  -1,067
  -1,120
  -1,172
  -1,224
  -1,276
  -1,329
  -1,383
  -1,438
  -1,494
  -1,553
  -1,614
  -1,677
  -1,744
  -1,813
  -1,886
  -1,963
  -2,045
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  964
  1,179
  1,421
  1,695
  1,998
  2,333
  2,697
  3,091
  3,514
  3,964
  4,439
  4,942
  5,472
  6,028
  6,609
  7,215
  7,846
  8,503
  9,187
  9,897
  10,634
  11,401
  12,197
  13,025
  13,885
  14,780
  15,711
  16,679
  17,688
  18,739
Discount rate, %
  8.60
  9.03
  9.48
  9.96
  10.45
  10.98
  11.52
  12.10
  12.71
  13.34
  14.01
  14.71
  15.44
  16.22
  17.03
  17.88
  18.77
  19.71
  20.70
  21.73
  22.82
  23.96
  25.16
  26.42
  27.74
  29.12
  30.58
  32.11
  33.71
  35.40
PV of cash for distribution, $m
  888
  992
  1,083
  1,159
  1,216
  1,249
  1,257
  1,239
  1,197
  1,133
  1,049
  952
  846
  735
  625
  519
  421
  334
  258
  194
  142
  101
  70
  47
  31
  19
  12
  7
  4
  2
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Magellan Midstream Partners, L.P. is principally engaged in the transportation, storage and distribution of refined petroleum products and crude oil. The Company operates through three segments: refined products, crude oil and marine storage. As of December 31, 2016, its asset portfolio, including the assets of its joint ventures, consisted of its refined products segment, consisting 9,700-mile refined products pipeline system with 53 terminals, as well as 26 independent terminals not connected to its pipeline system and its 1,100-mile ammonia pipeline system; its crude oil segment, consisted of approximately 2,200 miles of crude oil pipelines and storage facilities with an aggregate storage capacity of approximately 26 million barrels, of which 16 million are used for contract storage, and its marine storage segment, consisted of five marine terminals located along coastal waterways with an aggregate storage capacity of approximately 26 million barrels.

FINANCIAL RATIOS  of  Magellan Midstream Partners L.P. (MMP)

Valuation Ratios
P/E Ratio 18.6
Price to Sales 6.8
Price to Book 7.1
Price to Tangible Book
Price to Cash Flow 15.5
Price to Free Cash Flow 51.4
Growth Rates
Sales Growth Rate 0.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 8.5%
Cap. Spend. - 3 Yr. Gr. Rate 10.7%
Financial Strength
Quick Ratio NaN
Current Ratio 0.2
LT Debt to Equity 195.4%
Total Debt to Equity 195.4%
Interest Coverage 0
Management Effectiveness
Return On Assets 12.5%
Ret/ On Assets - 3 Yr. Avg. 14.3%
Return On Total Capital 13.8%
Ret/ On T. Cap. - 3 Yr. Avg. 16%
Return On Equity 39%
Return On Equity - 3 Yr. Avg. 43%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 55.2%
Gross Margin - 3 Yr. Avg. 54.7%
EBITDA Margin 44.6%
EBITDA Margin - 3 Yr. Avg. 44.1%
Operating Margin 42.4%
Oper. Margin - 3 Yr. Avg. 42.6%
Pre-Tax Margin 36.6%
Pre-Tax Margin - 3 Yr. Avg. 36.6%
Net Profit Margin 36.4%
Net Profit Margin - 3 Yr. Avg. 36.5%
Effective Tax Rate 0.4%
Eff/ Tax Rate - 3 Yr. Avg. 0.4%
Payout Ratio 92%

MMP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MMP stock intrinsic value calculation we used $2827 million for the last fiscal year's total revenue generated by Magellan Midstream Partners L.P.. The default revenue input number comes from 0001 income statement of Magellan Midstream Partners L.P.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our MMP stock valuation model: a) initial revenue growth rate of 28.6% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 8.6%, whose default value for MMP is calculated based on our internal credit rating of Magellan Midstream Partners L.P., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Magellan Midstream Partners L.P..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of MMP stock the variable cost ratio is equal to 62.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for MMP stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Magellan Midstream Partners L.P..

Corporate tax rate of 27% is the nominal tax rate for Magellan Midstream Partners L.P.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the MMP stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for MMP are equal to 202.6%.

Life of production assets of 21.8 years is the average useful life of capital assets used in Magellan Midstream Partners L.P. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for MMP is equal to -9.9%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1076.306 million for Magellan Midstream Partners L.P. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 228.357 million for Magellan Midstream Partners L.P. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Magellan Midstream Partners L.P. at the current share price and the inputted number of shares is $14.9 billion.

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