MGG Magellan Midstream Hldgs Lp

TULSA, Okla., Nov. 3 /PRNewswire-FirstCall/ -- Magellan Midstream Holdings, L.P. (NYSE:MGG) today reported third-quarter 2008 operating profit of $83.4 million compared to $67.5 million for third quarter 2007. Net income was $17.6 million during third quarter 2008 versus $14.1 million in third quarter 2007. (Logo: http://www.newscom.com/cgi-bin/prnh/20060201/DAW022LOGO) 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 third quarter 2008, MGG will receive distributions of $22.9 million from its ownership interest in MMP, almost all of which is available for distribution to MGG unitholders. "MMP's historically stable fee-based businesses, along with the benefits we have seen from its commodity-related activities and exceptional liquidity to fund growth projects, continue to facilitate attractive distribution growth for MGG's unitholders," said Don Wellendorf, chief executive officer. "MGG's quarterly cash distribution amount has grown 82% since its initial public offering in early 2006 and 22% since its third-quarter 2007 distribution." Operating profit increased between quarters due to higher commodity margins, including a $12.2 million gain related to MMP's New York Mercantile Exchange contracts at the end of third quarter 2008, and more revenues from each of MMP's business segments, partially offset by additional petroleum products pipeline system expenses primarily due to maintenance project timing. 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 2008. Basic and diluted net income per limited partner unit was 29 cents in third quarter 2008 and 26 cents in third quarter 2007. An analyst call with management regarding third-quarter 2008 financial results and outlook for the remainder of 2008 for the partnership and MMP is scheduled today at 1:30 p.m. Eastern. To participate, dial (888) 778-9058 and provide code 2504671. 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 Nov. 9. To access the replay, dial (888) 203-1112 and provide code 2504671. 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. 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 Nine Months Ended September 30, September 30, 2007 2008 2007 2008 Transportation and terminals revenues $154,726 $164,470 $448,415 $471,855 Product sales revenues 167,287 127,540 493,852 439,622 Affiliate management fee revenue 178 183 534 549 Total revenues 322,191 292,193 942,801 912,026 Costs and expenses: Operating 64,275 81,626 184,944 193,845 Product purchases 153,926 89,523 444,494 342,383 Depreciation and amortization 19,751 21,563 58,560 63,847 Affiliate general and administrative 17,784 17,754 54,376 55,104 Total costs and expenses 255,736 210,466 742,374 655,179 Gain on assignment of supply agreement -- -- -- 26,492 Equity earnings 1,091 1,722 2,960 3,504 Operating profit 67,546 83,449 203,387 286,843 Interest expense 13,220 15,033 41,326 40,726 Interest income (330) (351) (2,531) (950) Interest capitalized (1,091) (1,322) (3,193) (3,734) Non-controlling owners' interest in income of consolidated subsidiaries 41,806 51,707 122,021 182,868 Debt placement fee amortization 174 211 1,383 548 Debt prepayment premium -- -- 1,984 -- Other (income) expense 29 -- 728 (254) Income before provision (benefit) for income taxes 13,738 18,171 41,669 67,639 Provision (benefit) for income taxes (375) 524 1,149 1,469 Net income $14,113 $17,647 $40,520 $66,170 Allocation of net income: Limited partners' interest $15,980 $18,052 $44,263 $67,384 General partner's interest (1,867) (405) (3,743) (1,214) Net income $14,113 $17,647 $40,520 $66,170 Basic and diluted net income per limited partner unit $0.26 $0.29 $0.71 $1.08 Weighted average number of limited partner units outstanding used for basic and diluted net income per unit calculation 62,651 62,658 62,651 62,655 MAGELLAN MIDSTREAM HOLDINGS, L.P. ALLOCATION OF NET INCOME (In thousands, unless otherwise noted) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2007 2008 2007 2008 Net income $14,113 $17,647 $40,520 $66,170 Direct charges to the general partner: Reimbursable general and administrative costs(a) 1,869 408 3,749 1,224 Income before direct charges to general partner 15,982 18,055 44,269 67,394 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 6 10 Direct charges to general partner 1,869 408 3,749 1,224 Net loss allocated to general partner $(1,867) $(405) $(3,743) $(1,214) Net income $14,113 $17,647 $40,520 $66,170 Less: net loss allocated to general partner (1,867) (405) (3,743) (1,214) Net income allocated to limited partners $15,980 $18,052 $44,263 $67,384 (a) Reimbursable G&A costs for the nine months ended September 30, 2007 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 did not impact cash available for distribution. http://www.newscom.com/cgi-bin/prnh/20060201/DAW022LOGO http://photoarchive.ap.org/ DATASOURCE: Midstream Holdings, L.P. CONTACT: Paula Farrell of Midstream Holdings, L.P., +1-918-574-7650, Web site: http://www.mgglp.com/

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