MGG Magellan Midstream Hldgs Lp

TULSA, Okla., July 31 /PRNewswire-FirstCall/ -- Magellan Midstream Holdings, L.P. (NYSE:MGG) today reported second-quarter 2007 operating profit of $75.2 million compared to $67.5 million for second quarter 2006. Net income was $14.9 million during second quarter 2007 versus $12.9 million in second quarter 2006. 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 distributable cash flow is derived from cash distributions received from MMP. Related to second quarter 2007, MGG will receive distributions of $18.0 million from its ownership interest in MMP, almost all of which is available for distribution to MGG unitholders. "MMP's assets produced record quarterly financial results and higher cash distributions during second quarter 2007, allowing us to provide an attractive 6% increase in the MGG cash distribution again this quarter, for 12% distribution growth so far this year," said Don Wellendorf, chief executive officer. Operating profit increased between quarters primarily due to MMP's increased transportation revenues, contributions from expansion projects and higher product margin in the 2007 period. Non-controlling owners' interest in income of consolidated subsidiaries, which represents limited partner interests in MMP that the partnership does not own, increased between quarters due to higher net income generated by MMP in second quarter 2007. Second quarter 2007 was negatively impacted by debt refinancing costs related to MMP's early retirement of debt, originally due in Oct. 2007. Basic and diluted net income per limited partner unit was 26 cents in second quarter 2007 and 21 cents in second quarter 2006. An analyst call with management regarding second-quarter 2007 financial results and 2007 outlook for the partnership and MMP is scheduled today at 1:30 p.m. Eastern. To participate, dial (800) 289-0544 and provide code 4958985. 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 Aug. 6. To access the replay, dial (888) 203-1112 and provide code 4958985. 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. (NYSE:MMP), 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. Contact: Paula Farrell (918) 574-7650 MAGELLAN MIDSTREAM HOLDINGS, L.P. CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per unit amounts) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2006 2007 2006 2007 Transportation and terminals revenues $138,810 $150,304 $269,256 $293,689 Product sales revenues 172,806 177,902 321,702 326,565 Affiliate management fee revenue 172 183 345 356 Total revenues 311,788 328,389 591,303 620,610 Costs and expenses: Operating 54,778 59,860 107,897 120,669 Product purchases 154,857 156,588 288,452 290,568 Depreciation and amortization 19,193 19,532 38,231 38,809 Affiliate general and administrative 16,405 18,363 31,908 36,592 Total costs and expenses 245,233 254,343 466,488 486,638 Equity earnings 946 1,106 1,665 1,869 Operating profit 67,501 75,152 126,480 135,841 Interest expense 13,782 13,884 27,383 28,106 Interest income (1,425) (1,290) (2,881) (2,201) Interest capitalized (429) (1,205) (632) (2,102) Non-controlling owners' interest in income of consolidated subsidiaries 42,183 44,653 77,597 80,215 Debt placement fee amortization 489 753 977 1,209 Debt prepayment premium -- 1,984 -- 1,984 Other expense 3 699 358 699 Income before income taxes 12,898 15,674 23,678 27,931 Provision for income taxes -- 800 -- 1,524 Net income $12,898 $14,874 $23,678 $26,407 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 12,898 14,874 17,792 26,407 Net income $12,898 $14,874 $23,678 $26,407 Allocation of net income (loss) applicable to partners' interest for the period after initial public offering: Limited partners' interest $13,450 $16,476 $18,544 $28,283 General partner's interest (552) (1,602) (752) (1,876) Net income applicable to partners' interest for the period after initial public offering $12,898 $14,874 $17,792 $26,407 Basic and diluted net income per limited partner unit $0.21 $0.26 $0.30 $0.45 Weighted average number of limited partner units outstanding used for basic and diluted net income per unit calculation 62,647 62,649 62,647 62,649 MAGELLAN MIDSTREAM HOLDINGS, L.P. ALLOCATION OF NET INCOME (In thousands, unless otherwise noted) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2006 2007 2006 2007 Net income $12,898 $14,874 $23,678 $26,407 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 12,898 14,874 17,792 26,407 Direct charges to the general partner: Reimbursable general and administrative costs (a) 553 1,604 754 1,880 Income before direct charges to general partner 13,451 16,478 18,546 28,287 General partner's share of income 0.0141% 0.0141% 0.0141% 0.0141% General partner's allocated share of net income before direct charges 1 2 2 4 Direct charges to general partner 553 1,604 754 1,880 Net loss allocated to general partner $(552) $(1,602) $(752) $(1,876) Portion of net income applicable to partners' interest for the period after initial public offering $12,898 $14,874 $17,792 $26,407 Less: net loss allocated to general partner (552) (1,602) (752) (1,876) Net income allocated to limited partners $13,450 $16,476 $18,544 $28,283 (a) Reimbursable G&A costs for the current quarter include a $1.3 million unusual non-cash expense related to a payment by MGG Midstream Holdings, L.P., an affiliate owning the partnership's general partner. This item does not impact cash available for the partnership to pay cash distributions. 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 Holdings, L.P., +1-918-574- 7650, Web site: http://www.mgglp.com/ http://www.mgglp.com/investors/calendar.asp

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