Acquisitions

6 Months Ended

Jun. 30, 2011

3.	Acquisitions

Acquisitions of Assets

In January 2011, we acquired the remaining undivided interest in our Southlake, Texas terminal. We accounted for this purchase as an acquisition of assets. The operating results of the Southlake terminal are reported in our petroleum pipeline system segment.

In April 2011, we acquired an approximate 38-mile petroleum products pipeline segment connected to our petroleum pipeline system at Reagan, Texas. We accounted for this purchase as an acquisition of assets. The operating results of these assets have been included in our petroleum pipeline system segment from the acquisition date.

In May 2011, we acquired petroleum products storage tanks in Riverside, Missouri. We accounted for this purchase as an acquisition of assets. The operating results of these assets have been included in our petroleum pipeline system segment from the acquisition date.

Collectively, the costs for the above-noted asset acquisitions were $17.8 million.

Acquisition of Non-Controlling Owners' Interest

In February 2011, we acquired a private investment group's common equity in Magellan Crude Oil, LLC ("MCO") for $40.5 million, which represented all of the non-controlling owners' interest in subsidiaries on our consolidated balance sheet (see Note 2 - Owners' Equity). The operating results of MCO continue to be reported in our petroleum terminals segment.

Business Combination

In September 2010, we acquired certain assets from BP Pipelines (North America), Inc. ("BP") and accounted for this purchase as a business combination. We have not adjusted the preliminary purchase price and fair value of the assets acquired and liabilities assumed as reported in our Annual Report on Form 10-K for the year ended December 31, 2010 as we are still in the process of determining the fair value of the assets acquired and liabilities assumed. The final allocation of the purchase price will be made when that process is complete.

The following summarized pro forma consolidated income statement information assumes that the business acquired from BP referred to above occurred as of January 1, 2010. These pro forma results are for comparative purposes only and may not be indicative of the results that would have occurred had this acquisition been completed on January 1, 2010 or the results that will be attained in the future. The amounts presented below are in thousands:




	Three Months Ended June 30,
	2010						2011
	As Reported		Pro Forma Adjustments		Pro Forma		As Reported
Revenues	$	423,060	$	13,820	$	436,880	$	383,327
Net income	$	102,452	$	4,645	$	107,097	$	102,999




	Six Months Ended June 30,
	2010						2011
	As Reported		Pro Forma Adjustments		Pro Forma		As Reported
Revenues	$	752,755	$	27,456	$	780,211	$	826,224
Net income	$	166,986	$	10,950	$	177,936	$	193,064

Significant pro forma adjustments include historical results of the acquired assets and our calculation of general and administrative ("G&A") costs, depreciation expense and interest expense on borrowings necessary to finance the acquisition.