MGG Magellan Midstream Hldgs Lp

TULSA, Okla., Feb. 5 /PRNewswire-FirstCall/ -- Magellan Midstream Holdings, L.P. (NYSE:MGG) today reported fourth-quarter 2007 operating profit of $80.9 million compared to $66.3 million for fourth quarter 2006. Net income was $14.9 million during fourth quarter 2007 versus $9.9 million in fourth 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 fourth quarter 2007, MGG will receive distributions of $19.9 million from its ownership interest in MMP, almost all of which is available for distribution to MGG unitholders. "MMP's record quarterly and annual financial results enabled us to grow MGG's distribution by 25% in 2007," said Don Wellendorf, chief executive officer. "Further, MMP's continued focus on future growth and stated intention for 2008 distribution increases should produce a healthy distribution increase to MGG unitholders in 2008 as well." Operating profit increased between quarters primarily due to MMP's higher petroleum products pipeline rates and shipments, favorable commodity margins and additional profits from expansion projects. Non-controlling owners' interest in income of consolidated subsidiaries, which represents limited partner interests in MMP that MGG does not own, increased between quarters due to higher net income generated by MMP in fourth quarter 2007. Basic and diluted net income per limited partner unit was 28 cents in fourth quarter 2007 and 22 cents in fourth quarter 2006. An analyst call with management regarding fourth-quarter 2007 financial results and 2008 outlook for the partnership and MMP is scheduled today at 1:30 p.m. Eastern. To participate, dial (888) 801-6506 and provide code 1583456. Investors also may listen to the call via the partnership's web site at http://www.mgglp.com/webcasts.asp. Audio replays of the conference call will be available from 4:30 p.m. Eastern today through midnight on Feb. 11. To access the replay, dial (888) 203-1112 and provide code 1583456. The replay also will be available at http://www.mgglp.com/. About Magellan Midstream Holdings, L.P. Magellan Midstream Holdings, L.P. (NYSE:MGG) 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. MAGELLAN MIDSTREAM HOLDINGS, L.P. CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per unit amounts) (Unaudited) Three Months Twelve Months Ended Ended December 31, December 31, 2006 2007 2006 2007 Transportation and terminals revenues $145,109 $160,366 $559,321 $608,781 Product sales revenues 171,105 215,712 664,569 709,564 Affiliate management fee revenue 172 178 690 712 Total revenues 316,386 376,256 1,224,580 1,319,057 Costs and expenses: Operating 64,879 65,991 243,860 250,935 Product purchases 147,148 189,415 605,341 633,909 Depreciation and amortization 18,950 20,580 76,200 79,140 Affiliate general and administrative 19,942 20,483 69,503 74,859 Total costs and expenses 250,919 296,469 994,904 1,038,843 Equity earnings 845 1,067 3,324 4,027 Operating profit 66,312 80,854 233,000 284,241 Interest expense 13,715 13,630 54,786 54,956 Interest income (906) (320) (4,791) (2,851) Interest capitalized (1,025) (1,259) (2,371) (4,452) Non-controlling owners' interest in income of consolidated subsidiaries 43,862 53,335 148,292 175,356 Debt placement fee amortization 458 171 1,925 1,554 Debt prepayment premium - - - 1,984 Other expense 295 - 653 728 Income before provision for income taxes 9,913 15,297 34,506 56,966 Provision for income taxes - 419 - 1,568 Net income $9,913 $14,878 $34,506 $55,398 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 9,913 14,878 28,620 55,398 Net income $9,913 $14,878 $34,506 $55,398 Allocation of net income (loss) applicable to partners' interest for the period after initial public offering: Limited partners' interest $13,642 $17,317 $33,069 $61,580 General partner's interest (3,729) (2,439) (4,449) (6,182) Net income applicable to partners' interest for the period after initial public offering $9,913 $14,878 $28,620 $55,398 Basic and diluted net income per limited partner unit $0.22 $0.28 $0.53 $0.98 Weighted average number of limited partner units outstanding used for basic and diluted net income per unit calculation 62,647 62,651 62,647 62,650 MAGELLAN MIDSTREAM HOLDINGS, L.P. ALLOCATION OF NET INCOME (In thousands, unless otherwise noted) (Unaudited) Three Months Twelve Months Ended Ended December 31, December 31, 2006 2007 2006 2007 Net income $9,913 $14,878 $34,506 $55,398 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 9,913 14,878 28,620 55,398 Direct charges to the general partner: Reimbursable general and administrative costs (a) 3,731 2,442 4,454 6,191 Income before direct charges to general partner 13,644 17,320 33,074 61,589 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 2 3 5 9 Direct charges to general partner 3,731 2,442 4,454 6,191 Net loss allocated to general partner $(3,729)$(2,439) $(4,449)$(6,182) Portion of net income applicable to partners' interest for the period after initial public offering $9,913 $14,878 $28,620 $55,398 Less: net loss allocated to general (3,729) (2,439) (4,449) (6,182) partner Net income allocated to limited partners $13,642 $17,317 $33,069 $61,580 (a) Reimbursable general and administrative costs include non-cash expenses related to payments made by MGG Midstream Holdings, L.P., an affiliate owning the partnership's general partner, of $0.8 million and $2.1 million for the three and twelve months ended December 31, 2007, respectively, and $3.0 million for the three and twelve months ended December 31, 2006. These items did not impact cash available for the partnership to pay cash distributions. 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 Holdings, L.P., +1-918-574-7650, Web site: http://www.mgglp.com/

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