MGG Magellan Midstream Hldgs Lp

TULSA, Okla., Jan. 31 /PRNewswire-FirstCall/ -- Magellan Midstream Holdings, L.P. (NYSE:MGG) today reported fourth-quarter 2006 operating profit of $69.3 million compared to $47.5 million for fourth quarter 2005. For the year ended Dec. 31, 2006, operating profit grew to $236 million from $195.8 million in the comparable 2005 period. Net income was $12.9 million during fourth quarter 2006 versus $0.8 million in fourth quarter 2005. For the year ended Dec. 31, 2006, net income grew to $37.5 million from $11.5 million in the corresponding 2005 timeframe. MGG owns the general partner interest and incentive distribution rights of Magellan Midstream Partners, L.P. (NYSE:MMP) and reports its financial results on a consolidated basis with the financial results of MMP. The partnership currently has no separate operating activities apart from those conducted by MMP, and its cash flow is derived from cash distributions received from MMP. "MMP's assets, which generate our cash flows, produced record financial and operational results during 2006 which in turn delivered excellent distribution growth for MGG unitholders," said Don Wellendorf, chief executive officer. "We remain focused on continuing to grow cash distributions during 2007 and the years to come." From its MMP ownership interest, MGG will receive distributions of $16.2 million related to fourth quarter 2006, almost all of which is available for distribution to MGG unitholders. For the year 2006, including the fourth- quarter distribution, MGG received $59.7 million of distributions. Operating profit increased between quarters primarily due to MMP's increased transportation revenues and higher product margin related to MMP's petroleum products blending activities. Interest expense declined from fourth quarter 2005 to fourth quarter 2006 principally as a result of MGG retiring its debt in Dec. 2005, which also resulted in a write-off of unamortized debt placement fees in the 2005 period. Minority interest expense, which represents limited partner interests in MMP that the partnership does not own, increased between the quarters due to higher net income generated by MMP in fourth quarter 2006. An analyst call with management regarding fourth-quarter 2006 financial results and 2007 outlook for the partnership and MMP is scheduled today at 1:30 p.m. Eastern. To participate, dial (800) 500-0311 and provide code 6674832. Investors also may listen to the call via the partnership's web site at http://www.mgglp.com/investors/calendar.asp . Audio replays of the conference call will be available from 4:30 p.m. Eastern today through midnight on Feb. 7. To access the replay, dial (888) 203-1112 and provide code 6674832. The replay also will be available at http://www.mgglp.com/ . About Magellan Midstream Holdings, L.P. Magellan Midstream Holdings, L.P. is a publicly traded partnership formed to own the general partner interest and 100% of the incentive distribution rights in Magellan Midstream Partners, L.P., which primarily transports, stores and distributes refined petroleum products. More information is available at http://www.mgglp.com/ . 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 HOLDINGS, L.P. CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per unit amounts) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2005 2006 2005 2006 Transportation and terminals revenues $130,206 $145,109 $501,324 $559,321 Product sales revenues 179,120 171,105 636,209 664,569 Affiliate management fee revenue 166 172 667 690 Total revenues 309,492 316,386 1,138,200 1,224,580 Costs and expenses: Operating 58,088 63,732 217,713 231,452 Environmental 2,093 1,147 12,007 12,408 Product purchases 168,472 147,148 582,631 605,341 Depreciation and amortization 18,745 18,950 71,655 76,200 Affiliate general and administrative 15,466 16,942 61,506 66,503 Total costs and expenses 262,864 247,919 945,512 991,904 Equity earnings 873 845 3,104 3,324 Operating profit 47,501 69,312 195,792 236,000 Interest expense 16,779 13,715 62,368 54,786 Interest income (2,074) (906) (9,278) (4,791) Interest capitalized (138) (1,025) (817) (2,371) Minority interest expense 29,110 43,862 124,623 148,292 Write-off of unamortized debt placement fees 3,005 --- 6,413 --- Debt placement fee amortization 443 458 2,247 1,925 Other (income) / expense (440) 295 (1,312) 653 Net income $816 $12,913 $11,548 $37,506 Allocation of net income: Portion applicable to ownership interests for the period before completion of initial public offering on February 15, 2006 $--- $5,886 Portion applicable to partners' interest for the period after initial public offering 12,913 31,620 Net income $12,913 $37,506 Allocation of net income (loss) applicable to partners' interest for the period after initial public offering: Limited partners' interest $13,643 $33,071 General partner's interest (730) (1,451) Net income applicable to partners' interest for the period after initial public offering $12,913 $31,620 Basic and diluted net income per limited partner unit $0.22 $0.53 Weighted average number of limited partner units outstanding used for basic and diluted net income per unit calculation 62,647 62,647 MAGELLAN MIDSTREAM HOLDINGS, L.P. ALLOCATION OF NET INCOME (In thousands, unless otherwise noted) (Unaudited) Three Twelve Months Months Ended Ended Dec. 31, Dec. 31, 2006 2006 Net income $12,913 $37,506 Portion of net income applicable to partners' interest for the period before initial public offering --- 5,886 Portion of net income applicable to partners' interest for the period after initial public offering 12,913 31,620 Direct charges to the general partner: Reimbursable general and administrative costs 731 1,454 Income before direct charges to general partner 13,644 33,074 General partner's share of income 0.01% 0.01% General partner's allocated share of net income before direct charges 1 3 Direct charges to general partner 731 1,454 Net loss allocated to general partner $(730) $(1,451) Portion of net income applicable to partners' interest for the period after initial public offering $12,913 $31,620 Less: net loss allocated to general partner (730) (1,451) Net income allocated to limited partners $13,643 $33,071 Contact: Paula Farrell (918) 574-7650 http://www.newscom.com/cgi-bin/prnh/20060201/DAW022LOGO http://photoarchive.ap.org/ DATASOURCE: Magellan Midstream Holdings, L.P. CONTACT: Paula Farrell of Magellan Midstream Partners, L.P., +1-918-574-7650, or Web site: http://www.mgglp.com/ http://www.mgglp.com/investors/calendar.asp

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