TULSA, Okla. – 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. (NYSE: MMP), which primarily transports, stores and distributes refined petroleum products. More information is available at http://www.mgglp.com.
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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 Information:
| Paula Farrell | Magellan Midstream Holdings, L.P. Investor Relations | 918-574-7650 | paula.farrell@magellanlp.com |
