MGG Magellan Midstream Hldgs Lp

TULSA, Okla., Feb. 3 /PRNewswire-FirstCall/ -- Magellan Midstream Holdings, L.P. (NYSE:MGG) today reported fourth-quarter 2008 operating profit of $96.1 million compared to $80.9 million for fourth quarter 2007. Net income was $19.5 million during fourth quarter 2008 versus $14.9 million in fourth quarter 2007. 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 2008, MGG will receive distributions of $23.5 million from its ownership interest in MMP, almost all of which is available for distribution to MGG unitholders. "MGG benefited from MMP's strong performance in the quarter despite a weak economy and the impact of Hurricane Ike on Oct. throughput volumes," said Don Wellendorf, chief executive officer. "In fact, MGG's quarterly cash distribution has increased each quarter since its early 2006 initial public offering, for total distribution growth of 84% since that time." Operating profit increased between quarters primarily due to contributions from MMP's growth projects, rate increases and higher commodity margin, more than offsetting reduced petroleum products volumes resulting from adverse economic conditions and hurricanes during the 2008 period. 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 32 cents in fourth quarter 2008 and 28 cents in fourth quarter 2007. An analyst call with management regarding fourth-quarter 2008 financial results for the partnership and MMP is scheduled today at 1:30 p.m. Eastern. To participate, dial (888) 596-2581 and provide code 2344675. 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. 9. To access the replay, dial (888) 203-1112 and provide code 2344675. 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 Twelve Months Ended Ended December 31, December 31, 2007 2008 2007 2008 Transportation and terminals revenues $160,366 $166,955 $608,781 $638,810 Product sales revenues 215,712 134,473 709,564 574,095 Affiliate management fee revenue 178 184 712 733 Total revenues 376,256 301,612 1,319,057 1,213,638 Costs and expenses: Operating 65,991 71,026 250,935 264,871 Product purchases 189,415 94,184 633,909 436,567 Depreciation and amortization 20,580 22,654 79,140 86,501 Affiliate general and administrative 20,483 18,198 74,859 73,302 Total costs and expenses 296,469 206,062 1,038,843 861,241 Gain on assignment of supply agreement - - - 26,492 Equity earnings 1,067 563 4,027 4,067 Operating profit 80,854 96,113 284,241 382,956 Interest expense 13,630 16,038 54,956 56,764 Interest income (320) (532) (2,851) (1,482) Interest capitalized (1,259) (1,069) (4,452) (4,803) Non-controlling owners' interest in income of consolidated subsidiaries 53,335 61,562 175,356 244,430 Debt placement fee amortization 171 219 1,554 767 Debt prepayment premium - - 1,984 - Other (income) expense - (126) 728 (380) Income before provision for income taxes 15,297 20,021 56,966 87,660 Provision for income taxes 419 518 1,568 1,987 Net income $14,878 $19,503 $55,398 $85,673 Allocation of net income: Limited partners' interest $17,317 $20,349 $61,580 $87,733 General partner's interest (2,439) (846) (6,182) (2,060) Net income $14,878 $19,503 $55,398 $85,673 Basic and diluted net income per limited partner unit $0.28 $0.32 $0.98 $1.40 Weighted average number of limited partner units outstanding used for basic and diluted net income per unit calculation 62,651 62,659 62,650 62,656 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, 2007 2008 2007 2008 Net income $14,878 $19,503 $55,398 $85,673 Direct charges to the general partner: Reimbursable general and administrative costs (a) 2,442 848 6,191 2,072 Income before direct charges to general partner 17,320 20,351 61,589 87,745 General partner's share of income (b) 0.0141% 0.0097% 0.0141% 0.0130% General partner's allocated share of net income before direct charges 3 2 9 12 Direct charges to general partner 2,442 848 6,191 2,072 Net loss allocated to general partner $(2,439) $(846) $(6,182) $(2,060) Net income $14,878 $19,503 $55,398 $85,673 Less: net loss allocated to general partner (2,439) (846) (6,182) (2,060) Net income allocated to limited partners $17,317 $20,349 $61,580 $87,733 (a) Reimbursable G&A costs for the twelve months ended December 31, 2007 and for both the three and twelve months ended December 31, 2008, include a $1.3 million and $0.4 million, respectively, unusual non-cash expense related to a payment by MGG Midstream Holdings, L.P., an affiliate that, until December 2, 2008, indirectly owned a portion of the partnership's general partner. These payments did not impact our cash available for distributions. (b) The partnership acquired its general partner from MGG Midstream Holdings, L.P., an affiliate, on December 2, 2008. The general partner's share of income for the three and twelve months ended December 31, 2008 has been adjusted to reflect MGG Midstream Holdings, L.P.'s proportional ownership during the periods presented. 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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