MWP Markwest Hydrocarbon,

DENVER, March 6 /PRNewswire-FirstCall/ -- MarkWest Hydrocarbon, Inc. (AMEX:MWP) (the "Company") today reported net income of $9.5 million for the twelve months ended December 31, 2006, or $0.79 per diluted share, compared to a net loss of $6.8 million, or $0.57 per diluted share, for the same period in 2005. The Company also reported a net loss of $1.2 million for the three months ended December 31, 2006, or $0.10 per diluted share, compared to a net loss of $1.0 million, or $0.09 per diluted share, for the fourth quarter of 2005. The full year and fourth quarter results for the Standalone segment, as defined below, include $4.9 million and $9.5 million, respectively, of non-cash, pre-tax costs associated with the mark-to-market of derivative instruments, the revaluation of long-term shrink obligation, and non-cash compensation expense. "We are extremely pleased with our overall financial performance and the resultant growth in dividends and shareholder value," said Frank Semple, President and Chief Executive Officer. "Our strong financial performance in 2006 was a direct result of MarkWest Energy Partners' distribution growth and continued strong operating cash flow performance from our natural gas liquid marketing business. The partnership increased distributable cash flow by 168 percent in 2006 and is well positioned for future growth. Our share of distributions from our investment in the partnership was $20.1 million in 2006, representing a 63 percent increase from 2005." "Our marketing business experienced strong margins as a result of the favorable frac spread environment and we have extended our hedge program through the first quarter of 2010, which has allowed us to lock in historically high margins." The Company declared a quarterly cash dividend of $0.30 per share of its common stock for an implied annual rate of $1.20 per share, which was paid on February 21, 2007 to shareholders of record as of February 9, 2007. This quarterly cash dividend represents an increase of $0.02 per share, or 7 percent, over the cash dividend in the third quarter of 2006. The Company reports its operations under two business segments, MarkWest Hydrocarbon Standalone ("Standalone") and MarkWest Energy Partners (the "Partnership"). The Standalone business segment consists of the Company's natural gas liquid ("NGL") marketing activities for NGL's extracted primarily at MarkWest Energy Partners' Siloam facility and the management of keep-whole contracts in Appalachia. FULL YEAR 2006 HIGHLIGHTS For the year ended December 31, 2006, the Standalone segment reported net income of $9.5 million, an increase of $16.3 million when compared to a net loss of $6.8 million for the year ended December 31, 2005. The increase was primarily attributable to: * The realized frac spread improved significantly to $0.30 per gallon in 2006 versus $0.19 per gallon in 2005, resulting in a positive impact of $11.7 million on segment net income. * The Company had a net unrealized gain of $4.0 million for the mark-to- market of derivative instruments and the revaluation of the long-term shrink obligation, both of which are non-cash items. This compares to a net unrealized loss of $5.3 million for the same items in 2005 resulting in a positive year over year variance of $9.3 million. * The above items were offset, in part, by a $7.1 million year over year increase in selling, general and administrative expense attributable to higher non-cash compensation expense. * In addition, the Company reported income tax expense of $5.1 million in 2006 compared to an income tax benefit of $1.8 million in the prior year for a negative year over year variance of $6.9 million. For the Partnership segment, the Company's share of net income attributable to the Partnership, net of the eliminating entry for non-controlling interest in net income of a consolidated subsidiary, was $10.4 million for the twelve months ended December 31, 2006, up from $2.2 million for the same period in 2005. A key component of the Company's business activities is the cash distributions it receives for its ownership interest in the Partnership, which consists of approximately 4.9 million limited partner units, as adjusted for the two-for-one unit split effective on February 28, 2007; a two percent general partner interest; and incentive distribution rights. The Company received $20.1 million of distributions in 2006, which represents a 63 percent increase over the $12.3 million received in 2005. FOURTH QUARTER 2006 HIGHLIGHTS For the three months ended December 31, 2006, the Standalone segment reported a net loss of $1.2 million, comparable to a net loss of $1.0 million for the same period in 2005. The decrease was primarily attributable to: * The realized frac spread improved significantly to $0.36 per gallon in the fourth quarter of 2006 versus $0.09 per gallon in the same period in 2005, resulting in a positive impact of $9.5 million on segment net income. * The Company had an income tax benefit of $0.6 million in the fourth quarter of 2006 compared to income tax expense of $1.1 million in the prior year quarter for a positive quarter over quarter variance of $1.7 million. * The above two items were offset by a net unrealized loss of $6.1 million for the mark-to-market of derivative instruments and the revaluation of the long-term shrink obligation, both of which are non-cash items. This compares to a net unrealized gain of $3.0 million for the same items in the fourth quarter of 2005 resulting in a negative quarter over quarter variance of $9.1 million. * In addition, selling, general and administrative expense increased quarter over quarter by $2.6 million attributable to higher non-cash compensation expense. For the Partnership segment, the Company's share of net income attributable to the Partnership, net of the eliminating entry for non-controlling interest in net income of a consolidated subsidiary, was $0.7 million in the fourth quarter of 2006, up from $0.4 million in the fourth quarter of 2005. The Company received $6.5 million of distributions in the fourth quarter of 2006, which represents a 97 percent increase over the $3.3 million received in the fourth quarter of 2005. The Company will host a conference call Tuesday, March 6, 2007, at 4:00 P.M. EST to review its 2006 fourth quarter and full year earnings. Interested parties can participate in the call by dialing (800) 218-0713 approximately ten minutes prior to the scheduled start time. A replay of the call will be available through Tuesday, March 13, 2007 by dialing (800) 405-2236 and entering the following passcode: 11084450#. To access the webcast, please visit our website at http://www.markwest.com/. MarkWest Hydrocarbon, Inc. (AMEX:MWP) controls and operates MarkWest Energy Partners, L.P. (AMEX:MWE), a publicly traded limited partnership engaged in the gathering, processing and transmission of natural gas; the transportation, fractionation and storage of natural gas liquids; and the gathering and transportation of crude oil. We also market natural gas and NGLs. This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Actual results could vary significantly from those expressed or implied in such statements and are subject to a number of risks and uncertainties. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. The forward-looking statements involve risks and uncertainties that affect our operations, financial performance and other factors as discussed in our filings with the Securities and Exchange Commission. Among the factors that could cause results to differ materially are those risks discussed in our Form 10-K for the year ended December 31, 2005 as filed with the SEC. You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading "Risk Factors." MarkWest Hydrocarbon, Inc. Statement of Operations (in thousands, except per share amounts) Three months ended Year ended December 31, December 31, 2006 2005 2006 2005 Revenues: Revenue $164,354 $265,596 $775,339 $717,375 Derivative gain (loss) 1,977 (1,437) 10,383 (3,198) Total revenue 166,331 264,159 785,722 714,177 Operating expenses: Purchased product costs 106,082 220,155 512,327 583,084 Facility expenses 14,826 13,250 57,403 45,577 Selling, general and administrative expenses 19,532 8,210 63,038 33,350 Depreciation 7,728 6,068 31,010 20,829 Amortization of intangible assets 3,975 3,368 16,047 9,656 Accretion of asset retirement obligations 27 23 102 160 Total operating expenses 152,170 251,074 679,927 692,656 Income from operations 14,161 13,085 105,795 21,521 Other income (expense): Earnings (losses) from unconsolidated affiliates 2,076 (2,144) 5,316 (2,153) Interest income 468 219 1,574 1,060 Interest expense (9,517) (9,349) (40,942) (22,622) Amortization of deferred financing costs and original issue discount (a component of interest expense) (1,424) (5,328) (9,229) (6,979) Dividend income 120 103 447 392 Miscellaneous income (expense) 3,800 (34) 11,537 266 Income (loss) before non-controlling interest in net income of consolidated subsidiary and income taxes 9,684 (3,448) 74,498 (8,515) Income tax (expense) benefit: Current 3,033 (554) 179 (554) Deferred (2,430) (542) (5,431) 2,358 Income tax (expense) benefit 603 (1,096) (5,252) 1,804 Non-controlling interest in net (income) loss of consolidated subsidiary (11,454) 3,500 (59,709) (91) Net income (loss) $(1,167) $(1,044) $9,537 $(6,802) Net income (loss) per share: Basic $(0.10) $(0.09) $0.80 $(0.57) Diluted $(0.10) $(0.09) $0.79 $(0.57) Weighted average number of outstanding shares of common stock (December 31, 2005 adjusted to reflect May 23, 2006 Stock Dividend): Basic 11,958 11,880 11,939 11,864 Diluted 11,958 11,880 12,033 11,864 MarkWest Hydrocarbon, Inc. Segment Income (Loss) (in thousands) MarkWest MarkWest Hydrocarbon Energy Consolidating Standalone Partners Entries Total Year ended December 31, 2006: Revenue $278,655 $570,320 $(73,636) $775,339 Derivative gain 4,751 5,632 -- 10,383 Total revenue 283,406 575,952 (73,636) 785,722 Purchased product costs 239,359 322,278 (49,310) 512,327 Facility expenses 21,617 60,112 (24,326) 57,403 Selling, general and administrative expenses 18,853 44,185 -- 63,038 Depreciation, Amortization and Accretion 1,017 46,142 -- 47,159 Income (loss) from operations 2,560 103,235 -- 105,795 Earnings from unconsolidated affiliates -- 5,316 -- 5,316 Interest income (expense), net 336 (39,704) -- (39,368) Amortization of deferred financing costs and original issue discount (a component of interest expense) (135) (9,094) -- (9,229) Dividend income 447 -- -- 447 Miscellaneous income 437 11,100 -- 11,537 Income before non-controlling interest in net income of consolidated subsidiary and income taxes 3,645 70,853 -- 74,498 Income tax (expense) benefit (5,124) (769) 641 (5,252) Non-controlling interest in net income of consolidated subsidiary -- -- (59,709) (59,709) Interest in net income of consolidated subsidiary 11,016 -- (11,016) -- Net income (loss) $9,537 $70,084 $(70,084) $9,537 MarkWest MarkWest Hydrocarbon Energy Consolidating Standalone Partners Entries Total Year ended December 31, 2005: Revenue $281,362 $500,935 $(64,922) $717,375 Derivative loss (1,347) (1,851) -- (3,198) Total revenue 280,015 499,084 (64,922) 714,177 Purchased product costs 258,188 366,878 (41,982) 583,084 Facility expenses 20,545 47,972 (22,940) 45,577 Selling, general and administrative expenses 11,777 21,573 -- 33,350 Depreciation, Amortization and Accretion 1,296 29,349 -- 30,645 Income (loss) from operations (11,791) 33,312 -- 21,521 Losses from unconsolidated affiliates -- (2,153) -- (2,153) Interest income (expense), net 540 (22,102) -- (21,562) Amortization of deferred financing costs and original issue discount (a component of interest expense) (199) (6,780) -- (6,979) Dividend income 392 -- -- 392 Miscellaneous income 215 51 -- 266 Income (loss) before non-controlling interest in net income of consolidated subsidiary and income taxes (10,843) 2,328 -- (8,515) Income tax benefit 1,804 -- -- 1,804 Non-controlling interest in net income of consolidated subsidiary -- 27 (118) (91) Interest in net income of consolidated subsidiary 2,237 -- (2,237) Net income (loss) $(6,802) $2,355 $(2,355) $(6,802) MarkWest Hydrocarbon, Inc. Segment Income (Loss) (in thousands) MarkWest MarkWest Hydrocarbon Energy Consolidating Standalone Partners Entries Total Three months ended December 31, 2006: Revenue $61,152 $121,550 $(18,348) $164,354 Derivative gain (loss) 2,354 (377) -- 1,977 Total revenue 63,506 121,173 (18,348) 166,331 Purchased product costs 54,578 63,487 (11,983) 106,082 Facility expenses 6,043 15,148 (6,365) 14,826 Selling, general and administrative expenses 5,751 13,781 -- 19,532 Depreciation, Amortization and Accretion 197 11,533 -- 11,730 Income (loss) from operations (3,063) 17,224 -- 14,161 Earnings from unconsolidated affiliates -- 2,076 -- 2,076 Interest income (expense), net 151 (9,200) -- (9,049) Amortization of deferred financing costs and original issue discount (a component of interest expense) (30) (1,394) -- (1,424) Dividend income 120 -- -- 120 Miscellaneous income 277 3,523 -- 3,800 Income before non-controlling interest in net income of consolidated subsidiary and income taxes (2,545) 12,229 -- 9,684 Income tax (expense) benefit 595 (90) 98 603 Non-controlling interest in net income of consolidated subsidiary -- -- (11,454) (11,454) Interest in net income of consolidated subsidiary 783 -- (783) -- Net income (loss) $(1,167) $12,139 $(12,139) $(1,167) MarkWest MarkWest Hydrocarbon Energy Consolidating Standalone Partners Entries Total Three months ended December 31, 2005: Revenue $106,629 $177,356 $(18,389) $265,596 Derivative gain (loss) -- (1,437) -- (1,437) Total revenue 106,629 175,919 (18,389) 264,159 Purchased product costs 98,848 133,357 (12,050) 220,155 Facility expenses 4,822 14,767 (6,339) 13,250 Selling, general and administrative expenses 3,124 5,086 -- 8,210 Depreciation, Amortization and Accretion 207 9,252 -- 9,459 Income (loss) from operations (372) 13,457 -- 13,085 Earnings from unconsolidated affiliates -- (2,144) -- (2,144) Interest income (expense), net -- (9,130) -- (9,130) Amortization of deferred financing costs and original issue discount (a component of interest expense) (16) (5,312) -- (5,328) Dividend income 103 -- -- 103 Miscellaneous income (expense) (29) (5) -- (34) Income before non-controlling interest in net income of consolidated subsidiary and income taxes (314) (3,134) -- (3,448) Income tax expense (1,096) -- -- (1,096) Non-controlling interest in net (income) loss of consolidated subsidiary -- (49) 3,549 3,500 Interest in net income of consolidated subsidiary 366 -- (366) -- Net income (loss) $(1,044) $(3,183) $3,183 $(1,044) MarkWest Hydrocarbon, Inc. Segment Balance Sheet (in thousands) MarkWest MarkWest Hydrocarbon Energy Consolidating December 31, 2006 Standalone Partners Entries Consolidated ASSETS Current assets: Cash and cash equivalents $14,442 $34,402 $-- $48,844 Marketable securities 7,713 -- -- 7,713 Receivables 16,940 90,780 (6,604) 101,116 Inventories 31,668 3,593 -- 35,261 Fair value of derivative instruments 5,727 4,211 -- 9,938 Other current assets 12,217 3,047 -- 15,264 Total current assets 88,707 136,033 (6,604) 218,136 Property, plant and equipment, net 3,449 550,886 -- 554,335 Investment in and advances to other equity investee 12,683 -- (12,683) -- Fair value of derivative instruments 35 2,759 -- 2,794 Other long term assets 2,874 425,102 -- 427,976 Total assets $107,748 $1,114,780 $(19,287) $1,203,241 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $19,370 $131,684 $(6,604) $144,450 Fair value of derivative instruments 7,385 91 -- 7,476 Deferred income taxes 180 -- -- 180 Current portion of long term debt -- -- -- -- Total current liabilities 26,935 131,775 (6,604) 152,106 Long-term debt -- 526,865 -- 526,865 Deferred income taxes 9,425 769 (641) 9,553 Non-controlling interest in consolidated subsidiary 965 -- 440,607 441,572 Fair value of derivative instruments 98 1,362 -- 1,460 Other long-term liabilities 28,836 1,360 -- 30,196 Total stockholders' equity 41,489 452,649 (452,649) 41,489 Total liabilities and stockholders' equity $107,748 $1,114,780 $(19,287) $1,203,241 MarkWest Hydrocarbon, Inc. Segment Balance Sheet (in thousands) MarkWest MarkWest Hydrocarbon Energy Consolidating December 31, 2005 Standalone Partners Entries Consolidated ASSETS Current assets: Cash and cash equivalents $863 $20,105 $-- $20,968 Marketable securities 6,070 -- -- 6,070 Receivables 38,922 117,978 (11,361) 145,539 Inventories 37,513 3,554 -- 41,067 Other current assets 9,453 6,861 -- 16,314 Total current assets 92,821 148,498 (11,361) 229,958 Property, plant and equipment, net 1,737 492,961 -- 494,698 Investment in and advances to other equity investee 6,668 182 (6,668) 182 Other long term assets 3,014 404,452 -- 407,466 Total assets $104,240 $1,046,093 $(18,029) $1,132,304 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $43,247 $133,088 $(11,361) $164,974 Fair value of derivative instruments -- 728 -- 728 Deferred income taxes 362 -- -- 362 Current portion of long term debt -- 2,738 -- 2,738 Total current liabilities 43,609 136,554 (11,361) 168,802 Long-term debt 7,500 601,262 -- 608,762 Non-controlling interest in consolidated subsidiary 508 -- 300,507 301,015 Other long-term liabilities 12,641 1,102 -- 13,743 Total stockholders' equity 39,982 307,175 (307,175) 39,982 Total liabilities and stockholders' equity $104,240 $1,046,093 $(18,029) $1,132,304 MarkWest Hydrocarbon, Inc. Operating Statistics Three months ended Year ended December 31, December 31, 2006 2005 2006 2005 MarkWest Hydrocarbon Standalone: Marketing Hydrocarbon frac spread sales (gallons) 37,966,000 34,867,000 118,581,000 120,300,000 Maytown sales (gallons) 11,045,000 10,649,000 43,271,000 41,700,000 Total NGL product sales (gallons) 49,011,000 45,516,000 161,852,000 162,000,000 Wholesale NGL product sales (gallons) 7,440,000 27,305,000 46,555,000 68,879,000 MarkWest Energy Partners: East Texas: Gathering systems throughput (Mcf/d) 398,000 342,300 378,100 321,000 NGL product sales (gallons) 43,525,000 37,518,000 161,437,000 126,476,000 Oklahoma: Foss Lake gathering systems throughput (Mcf/d) 92,200 84,500 87,500 75,800 Woodford Shale gathering systems throughput (Mcf/d) (1) 34,000 NA 34,000 NA Arapaho NGL product sales (gallons) 21,508,000 14,723,000 79,093,000 60,903,000 Other Southwest: Appleby gathering systems throughput (Mcf/d) 35,800 35,600 34,200 33,400 Other gathering systems throughput (Mcf/d) 13,800 17,000 18,300 16,500 Lateral throughput volumes (Mcf/d) 85,100 52,300 84,200 81,000 Appalachia: Natural gas processed for a fee (Mcf/d) 212,200 200,700 203,000 197,000 NGLs fractionated for a fee (Gal/d) 467,200 441,600 454,800 430,000 NGL product sales (gallons) 11,045,000 10,649,000 43,271,000 41,700,000 Michigan: Natural gas processed for a fee (Mcf/d) 6,700 6,100 6,500 6,600 NGL product sales (gallons) 1,299,000 1,250,000 5,643,000 5,697,000 Crude oil transported for a fee (Bbl/d) 14,200 14,260 14,500 14,200 Javelina: Natural gas processed for a fee (Mcf/d) 121,600 115,000 124,300 115,000 NGLs fractionated for a fee (Bbl/d) 26,800 19,400 26,200 19,400 (1) Represents throughput for the month of December 2006 only. DATASOURCE: MarkWest Hydrocarbon, Inc. CONTACT: Frank Semple, President and CEO, or Nancy K. Buese, CFO, or Andy Schroeder, VP Finance & Treasurer, all of MarkWest Hydrocarbon, Inc., +1-866-858-0482, or fax, +1-303-290-8769, Web site: http://www.markwest.com/

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