Markwest Hydrocarbon (MWP) 11-K Annual report of employee stock purchases

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 11-K

ANNUAL REPORT
PURSUANT TO SECTION 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2004

Commission File Number 001-14841

A.Full title of the plan and the address of the plan, if different from that of the issuer name below:

MarkWest Hydrocarbon, Inc. 401(k) Savings and Profit Sharing Plan

B.Name of the issuer of the securities held pursuant to the plan and the address of its principal executive office:

MarkWest Hydrocarbon, Inc.

155 Inverness Drive West, Suite 200
Englewood, CO 80112-5000

MarkWest Hydrocarbon, Inc. 401(k) Savings and Profit Sharing Plan

Index to Financial Statements and Supplemental Schedule

Report of Independent Registered Public Accounting Firm
Audited Financial Statements:
Statements of Net Assets Available for Benefits at December 31, 2004 and 2003
Statements of Changes in Net Assets Available for Benefits for the years ended December 31, 2004 and 2003
Notes to Financial Statements
Supplemental Schedule:
Schedule H, Line 4i, Schedule of Assets (Held at End of Year) at December 31, 2004
Signature
EXHIBITS:
23.1	Consent of KPMG LLP for the MarkWest Hydrocarbon, Inc. 401(k) Savings and Profit Sharing Plan

NOTE:  Certain supplemental schedules have been omitted because they are not applicable.

Report of Independent Registered Public Accounting Firm

The Plan Administrator

MarkWest Hydrocarbon, Inc. 401(k) Savings and Profit Sharing Plan:

We have audited the accompanying statements of net assets available for benefits of the MarkWest Hydrocarbon, Inc. 401(k) Savings and Profit Sharing Plan (the Plan) as of December 31, 2004 and 2003, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the MarkWest Hydrocarbon, Inc. 401(k) Savings and Profit Sharing Plan as of December 31, 2004 and 2003 and the changes in net assets available for benefits for the years then ended in conformity with U.S. generally accepted accounting principles.

Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole.  The supplementary Schedule H, Line 4i-Schedule of Assets (Held at End of Year) as of December 31, 2004, is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974.  This supplemental schedule is the responsibility of the Plan’s management and has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

/s/ KPMG LLP

Denver, Colorado

June 17, 2005

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MarkWest Hydrocarbon, Inc. 401(k) Savings and Profit Sharing Plan

Statements of Net Assets Available for Benefits

December 31, 2004 and 2003

	2004		2003
Assets
Investments, at fair value:
Common collective trust fund	$	1,257,447	$	1,117,927
Mutual funds	6,022,157		5,672,769
MarkWest Hydrocarbon, Inc. common stock	4,294,375		3,302,165
Participant loans	207,835		203,907
	11,781,814		10,296,768
Receivables:
Employee contributions	27,141		25,826
Employer match	9,274		7,948
Employer profit sharing	424,785		356,765
Loan interest receivable	2,619		1,856
Net assets available for benefits	$	12,245,633	$	10,689,163

See accompanying notes to financial statements.

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MarkWest Hydrocarbon, Inc. 401(k) Savings and Profit Sharing Plan

Statements of Changes in Net Assets Available for Benefits

For the years ended December 31, 2004 and 2003

		2004			2003
Additions	��
Contributions:
Participants:
Deferral		$	760,648		$	651,742
Rollover		—			467
Employer, net of forfeitures applied:
Match		187,386			210,765
Discretionary		400,836			350,370
Investment income:
Net appreciation of investments:
Mutual funds		367,653			996,656
MarkWest Hydrocarbon, Inc. common stock		1,799,612			1,850,135
Interest, dividends and other income		333,317			141,810
Deductions
Benefits paid directly to participants		(2,291,870		)	(852,251		)
Loan administration fees and other		(1,112		)	(1,240		)
Net increase		1,556,470			3,348,454
Net assets available for benefits at beginning of year		10,689,163			7,340,709
Net assets available for benefits at end of year		$	12,245,633		$	10,689,163

See accompanying notes to financial statements.

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MarkWest Hydrocarbon, Inc. 401(k) Savings and Profit Sharing Plan

Notes to Financial Statements

1.Description of Plan

The MarkWest Hydrocarbon, Inc. 401(k) Savings and Profit Sharing Plan (the “Plan”) is a defined contribution plan established on August 1, 1993 under the rules of Internal Revenue Code (the “Code”) Section 401(k).  Participants should refer to the Plan Agreement for more complete information.

Participation

All full-time, permanent employees of MarkWest Hydrocarbon, Inc. (the “Company”) are eligible to participate in the Plan.  Eligibility to participate begins with the first day of the month following employment.

Employee Contributions

The Plan allows eligible participants to contribute a portion of their salaries or wages to the Plan on a before-tax basis within limits defined by the Plan.  The maximum contribution for a participant may not exceed the annual maximum limits established under Code Section 402(g) (generally, $13,000 and $12,000 for 2004 and 2003 respectively).  All income earned from invested contributions accumulates tax deferred until withdrawal.

Participants may change the level of their contribution or suspend contributions entirely to the Plan at any time during the Plan year.  Notice of suspension must be made in writing at least 30 days in advance.  Rollovers represent funds that new participants bring into the Plan from previous employer-qualified plans.

Company Matching Contributions

The Company provides a matching contribution of 50% of each participant’s contributions up to a maximum of 6% of compensation.  Company contributions are invested in accordance with Participant elections.  Additionally, a discretionary contribution may be made based on the profitability of the Company.

Vesting

Employee contributions are fully vested upon contribution while Company contributions vest at 25% per year of service.  Participants are fully vested in the Company contributions after four years of service.  Forfeitures of $73,268 and $19,653 were utilized during 2004 and 2003, respectively, by the Company to offset Company matching and discretionary contributions funded during 2004.  As of December 31, 2004 and 2003, there were $2 and $9,249, respectively, in the unvested forfeiture account.

Distribution of Benefits

Distributions to employees are normally made upon termination of employment upon submission of a written request in accordance with Plan provisions. Benefits paid to participants are recorded upon distribution.

At any time, but not more frequently than once a year, a participant with an immediate and critical need may request a hardship withdrawal in an amount no greater than is necessary to satisfy such financial hardship.  Such request must receive approval of the Company’s benefit administrator.

Participant Loans

Loans are interest bearing at 1% above the published prime rate and are limited to the lesser of $50,000 or 50% of a participant’s vested account balance.

Participant Accounts

Each participant’s account is credited with the participant’s contributions, matching contributions made by the Company and an allocation of discretionary contributions made by the Company, if any, and plan earnings or losses and expenses which are allocated based on the participant account balance.

2.Summary of Accounting Policies

Basis of Presentation

The financial statements of the Plan have been prepared on the accrual basis of accounting.  Certain prior year amounts have been reclassified to conform with current year presentation.

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Investments

Mutual funds and the Company’s common stock are stated at fair value based on the quoted market price on the last business day of the Plan year.

The Plan also invests in an common collective trust fund (the Fidelity Managed Income Portfolio), which is stated at fair value based on the quoted market prices, if available, of the underlying securities.

The Plan presents in the statement of changes in net assets available for benefits the net appreciation in fair value of its investments, which consists of realized gains and losses, and the unrealized appreciation (depreciation) on those investments.

Participant loans are shown at cost, which approximates fair value.  Interest income is recorded as earned on an accrual basis.  Transactions are recorded on a trade-date basis.  Dividends are recorded on the ex-dividend date.

Administrative Expenses

Certain costs and expenses incurred in establishing, amending and administering the Plan, including the fees and expenses of the trustees, are paid by the Company.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Plan’s management to use estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosures of contingent assets and liabilities.  Actual results could differ from those estimates.

Concentrations, Risks and Uncertainties

The Plan has a concentration of investments in the Company’s stock. A change in the value of the Company’s stock could cause the value of the Plan’s net assets available for plan benefits to change due to this concentration.

The Plan provides for various investment options in stocks and other investment securities.  Investment securities are exposed to various risks, such as significant world events, interest rate, credit and overall market volatility.  Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the Statements of Net Assets Available for Benefits and the Statements of Changes in Net Assets Available for Benefits.

3.Plan Termination

Although the Company has not expressed any intent to discontinue the Plan, it may do so at any time.  In the event of termination of the Plan, participants would become fully vested in all accounts and the assets of the Plan shall be distributed to the participants in proportion to their respective account balances.

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4.Investments

All funds are managed by Fidelity Management Trustee Company, the Trustee.  The assets are maintained under the Employee Retirement Income Security Act of 1974 (“ERISA”) guidelines provided by the Company. The fair values of investments that represent 5% or more of the Plan’s net assets are as follows:

	December 31,
	2004			2003
Fidelity Blue Chip Growth Fund	$	1,145,804		$	1,171,378
Fidelity Dividend Growth Fund	705,551			1,148,208
Fidelity Managed Income Portfolio	1,257,447			1,117,927
Spartan US Equity Index Fund			*	773,448
MarkWest Hydrocarbon, Inc. common stock	4,294,375			3,302,165
Fidelity US Bond Index Fund	767,905			606,058

* less than 5% at year end.

In addition to the Company’s common stock, participating employees are offered various investment options in mutual funds and a common collective trust fund.

5.Income Tax Status

The Internal Revenue Service has determined and informed the Company in a letter dated September 24, 1994 that the Plan is qualified and the trust established under the Plan is tax exempt, under Section 401(k) of the Code.  The Company believes that the Plan has been administered in accordance with the changes to the Code effective after the date of such letter, and the Plan has been timely amended to incorporate such changes. Accordingly, the Company believes the Plan and related trust is tax-exempt as of December 31, 2004 and 2003.

6.Related Party Transactions

Certain Plan investments represent shares of registered investment companies and a common collective trust managed by Fidelity Management Trust Company as of December 31, 2004 and 2003.  Fidelity Management Trust Company is the trustee as defined by the Plan and, therefore, these investments and investment transactions qualify as party-in-interest transactions.

Certain Plan investments represent shares of common stock of the Company as of December 31, 2004 and 2003.  The Company is the plan sponsor as defined by the Plan and, therefore, these investments and investment transactions qualify as party-in-interest transactions.

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MarkWest Hydrocarbon, Inc. 401(k) Savings and Profit Sharing Plan

Schedule H, Line 4i-Schedule of Assets (Held at End of Year)

December 31, 2004

(a)	(b) Identity of Issue, Borrower, Lessor, or Similar Party	Shares		(e) Current Value
	AIM Dynamics	31,755	shares	$	523,970
	AIM Small Co. Growth	9,780	shares	122,931
	Oakmark Equity & Income	20,448	shares	480,541
*	MarkWest Hydrocarbon, Inc. common stock	248,949	shares	4,294,375
*	Fidelity Blue Chip Growth Fund	27,472	shares	1,145,804
*	Fidelity Diversified International Fund	19,863	shares	568,866
*	Fidelity Dividend Growth Fund	24,765	shares	705,551
*	Fidelity Freedom Income Fund	525	shares	5,914
*	Fidelity Freedom 2000 Fund	7,185	shares	86,798
*	Fidelity Freedom 2005 Fund	43	shares	467
*	Fidelity Freedom 2010 Fund	35,329	shares	481,183
*	Fidelity Freedom 2015 Fund	142	shares	1,564
*	Fidelity Freedom 2020 Fund	31,358	shares	437,761
*	Fidelity Freedom 2025 Fund	534	shares	6,027
*	Fidelity Freedom 2030 Fund	12,013	shares	169,138
*	Fidelity Freedom 2035 Fund	436	shares	4,993
*	Fidelity Managed Income Portfolio	1,257,447	shares	1,257,447
*	Fidelity US Bond Index Fund	68,932	shares	767,905
*	Spartan US Equity Index Fund	11,963	shares	512,744
*	Participant loans (interest rates ranging from 5.0% to 10.5%)			207,835
	Total			$	11,781,814

*      Represents a party-in-interest.

See accompanying report of independent registered public accounting firm.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Administrator of the Plan has duly caused this annual report to be signed on its behalf by the undersigned, hereunto duly authorized.

		MARKWEST HYDROCARBON, INC.
		401(k) Savings and Profit Sharing Plan
DATE: June 28, 2005	BY:	/s/ James G. Ivey
		James G. Ivey
		Chief Financial Officer
	(On Behalf of the Administrator and Principal Financial and Accounting Officer)

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EXHIBIT INDEX

Exhibit Number	Exhibit
23.1	Consent of KPMG LLP for the MarkWest Hydrocarbon, Inc. 401(k) Savings and Profit Sharing Plan

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