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TULSA, Okla., Aug. 5 /PRNewswire-FirstCall/ -- Magellan Midstream Holdings, L.P. (NYSE:MGG) today reported second-quarter 2008 operating profit of $102.1 million compared to $75.2 million for second quarter 2007. Net income was $30.9 million during second quarter 2008 versus $14.9 million in second 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 second quarter 2008, MGG will receive distributions of $21.9 million from its ownership interest in MMP, almost all of which is available for distribution to MGG unitholders.
"MMP continues to generate solid financial results and grow its quarterly cash distribution, which in turn has allowed us to increase MGG's distributions by 22% compared to second quarter 2007," said Don Wellendorf, chief executive officer.
Operating profit increased between quarters due to higher commodity margins, higher revenues from each of MMP's business segments and lower expenses, including a $12.1 million favorable impact from the settlement of a previously accrued environmental liability for MMP's petroleum products pipeline system.
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.
The 2007 period was negatively impacted by refinancing costs related to MMP's early retirement of debt during second quarter 2007.
Basic and diluted net income per limited partner unit was 50 cents in second quarter 2008 and 26 cents in second quarter 2007. The favorable environmental settlement resulted in a 19 cent increase to 2008 net income per unit.
An analyst call with management regarding second-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 (800) 478-6251 and provide code 4897703. 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 Aug. 11. To access the replay, dial (888) 203-1112 and provide code 4897703. 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 Six Months Ended
June 30, June 30,
2007 2008 2007 2008
Transportation and
terminals revenues $150,304 $162,580 $293,689 $307,385
Product sales revenues 177,902 110,364 326,565 312,082
Affiliate management fee
revenue 183 183 356 366
Total revenues 328,389 273,127 620,610 619,833
Costs and expenses:
Operating 59,860 56,794 120,669 112,219
Product purchases 156,588 75,292 290,568 252,860
Depreciation and
amortization 19,532 21,271 38,809 42,284
Affiliate general and
administrative 18,363 19,060 36,592 37,350
Total costs and
expenses 254,343 172,417 486,638 444,713
Gain on assignment of
supply agreement - - -[ 26,492
Equity earnings 1,106 1,377 1,869 1,782
Operating profit 75,152 102,087 135,841 203,394
Interest expense 13,884 12,754 28,106 25,693
Interest income (1,290) (303) (2,201) (599)
Interest capitalized (1,205) (1,110) (2,102) (2,412)
Non-controlling owners'
interest in income of
consolidated subsidiaries 44,653 59,425 80,215 131,161
Debt placement fee
amortization 753 169 1,209 337
Debt prepayment premium 1,984 - 1,984 -
Other (income) expense 699 (254) 699 (254)
Income before provision
for income taxes 15,674 31,406 27,931 49,468
Provision for income taxes 800 502 1,524 945
Net income $14,874 $30,904 $26,407 $48,523
Allocation of net income:
Limited partners' interest $16,476 $31,308 $28,283 $49,332
General partner's interest (1,602) (404) (1,876) (809)
Net income $14,874 $30,904 $26,407 $48,523
Basic and diluted net
income per limited partner
unit $0.26 $0.50 $0.45 $0.79
Weighted average number of
limited partner units
outstanding used for
basic and diluted net
income per unit
calculation 62,649 62,654 62,649 62,654
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,
2007 2008 2007 2008
Net income $14,874 $30,904 $26,407 $48,523
Direct charges to the general
partner:
Reimbursable general and
administrative costs (a) 1,604 408 1,880 816
Income before direct charges
to general partner 16,478 31,312 28,287 49,339
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 4 4 7
Direct charges to general
partner 1,604 408 1,880 816
Net loss allocated to general
partner $(1,602) $(404) $(1,876) $(809)
Net income $14,874 $30,904 $26,407 $48,523
Less: net loss allocated to
general partner (1,602) (404) (1,876) (809)
Net income allocated to
limited partners $16,476 $31,308 $28,283 $49,332
(a) Reimbursable G&A costs for the three and six months ended June 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 the
partnership to pay cash distributions.
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DATASOURCE: Magellan Midstream Holdings, L.P.
CONTACT: Paula Farrell of Magellan Midstream Partners, L.P.,
+1-918-574-7650,
Web site: http://www.magellanlp.com/