KILGORE, Texas, Nov. 5, 2012 (GLOBE NEWSWIRE) -- Martin Midstream Partners L.P. MMLP (the "Partnership") announced today its financial results for the third quarter ended September 30, 2012.
The Partnership reported net income for the third quarter of 2012 of $72.4 million, or $3.07 per limited partner unit. This compared to net income for the third quarter of 2011 of $5.4 million, or $0.20 per limited partner unit. The Partnership reported net income for the nine months ended September 30, 2012 of $90.1 million, or $3.73 per limited partner unit. This compared to net income for the nine months ended September 30, 2011 of $21.5 million, or $0.87 per limited partner unit.
The Partnership reported income from continuing operations for the third quarter of 2012 of $8.8 million, or $0.44 per limited partner unit. This compared to income from continuing operations for the third quarter of 2011 of $3.1 million, or $0.11 per limited partner unit. The Partnership reported income from discontinued operations for the third quarter of 2012 of $63.6 million, or $2.63 per limited partner unit. This compared to income from discontinued operations for the third quarter of 2011 of $2.3 million, or $0.09 per limited partner unit. Income from discontinued operations was positively impacted by a gain on the sale of the Prism Assets of $62.3 million during the third quarter of 2012. Revenues for the third quarter of 2012 were $317.9 million compared to $287.6 million for the third quarter of 2011.
The Partnership reported income from continuing operations for the nine months ended September 30, 2012 of $22.8 million, or $0.94 per limited partner unit. This compared to the income from continuing operations for the nine months ended September 30, 2011 of $13.8 million, or $0.56 per limited partner unit. The Partnership reported income from discontinued operations for the nine months ended September 30, 2012 of $67.3 million, or $2.79 per limited partner unit. This compared to income from discontinued operations for the nine months ended September 30, 2011 of $7.7 million, or $0.31 per limited partner unit. Income from discontinued operations was positively impacted by a gain on the sale of the Prism Assets of $61.4 million during the nine months ended September 30, 2012. Revenues for the nine months ended September 30, 2012 were $920.2 million compared to $800.6 million for the nine months ended September 30, 2011.
The Partnership's distributable cash flow for the third quarter of 2012 was $17.4 million. The Partnership's distributable cash flow for the nine months ended September 30, 2012 was $62.2 million. Distributable cash flow is a non-GAAP financial measure which is explained in greater detail below under "Use of Non-GAAP Financial Information." The Partnership has also included below a table entitled "Distributable Cash Flow" in order to show the components of this non-GAAP financial measure and its reconciliation to the most comparable GAAP measurement.
The Partnership has previously reported the completion of the sale of its East Texas and Northwest Louisiana gas gathering and processing assets (collectively "Prism Assets") on July 31, 2012 for net cash proceeds of $273.3 million. The Partnership has retrospectively adjusted its prior period consolidated financial statements to comparably classify the amounts related to the net assets and operations and cash flows of the Prism Assets as assets held for sale and discontinued operations, respectively. The Partnership has classified the Prism Assets, including related liabilities as held for sale at December 31, 2011, and has presented the results of operations and cash flows as discontinued operations for the three and nine month periods ended September 30, 2012 and 2011, respectively.
Included with this press release are the Partnership's consolidated financial statements as of and for the three and nine months ended September 30, 2012 and certain prior periods. These financial statements should be read in conjunction with the information contained in the Partnership's Quarterly Report on Form 10-Q, to be filed with the Securities and Exchange Commission on November 5, 2012.
Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of Martin Midstream Partners, said, "The Partnership had a very productive third quarter. Our existing core assets performed at or above plan across all segments. Further, operations were positively impacted by new infrastructure at our Corpus Christi crude oil terminal and our vacuum tower unit at our Cross facility. Both of these assets came on line in the second quarter and have exceeded our initial cash flow run-rate expectations. For the quarter, our distribution coverage ratio was 0.96 times from continuing operations. This is ahead of forecast for our third quarter, which typically experiences seasonality from the fertilizer side of our Sulfur Services segment.
"During the third quarter we successfully completed the divestiture of our natural gas gathering and processing assets which provided for balance sheet improvement targeted for future growth. As we demonstrated in October, we used some of this capacity to continue to grow our assets through two drop down transactions we executed with Martin Resource Management (MRMC). The purchase of the Cross Oil lubricant packaging plant will have an immediate positive impact on our distributable cash flow. Likewise, we believe the acquisition of the remaining equity interests in Redbird Gas Storage LLC will provide long-term fee-based value enhancement for our unit holders. Our Partnership will further benefit from MRMC agreeing to support and enhance the accretion of these acquisitions by suspending their incentive distribution rights in an amount totaling $18 million commencing in the fourth quarter of 2012.
"Lastly, as previously announced, we are pleased that all of the shareholder litigation at Martin Resource Management Corporation has been fully settled. Management is very excited about this development, and we are looking forward to growing with our partners as we move into the future."
Investors' Conference Call
An investors' conference call to review the third quarter results will be held on Tuesday, November 6, 2012, at 8:00 a.m. Central Time. The conference call can be accessed by calling (877) 878-2695. An audio replay of the conference call will be available by calling (855) 859-2056 from 11:00 a.m. Central Time on November 6, 2012 through 10:59 p.m. Central Time on November 13, 2012. The access code for the conference call and the audio replay is Conference ID No. 58754380. The audio replay of the conference call will also be archived on Martin Midstream Partners' website at www.martinmidstream.com.
Quarterly Cash Distribution
The quarterly cash distribution of $0.77 per common units which was announced on October 25, 2012 is payable on November 14, 2012 to common unitholders of record as of the close of business on November 7, 2012. The ex-dividend date for the cash distribution is November 5, 2012. This distribution reflects an annualized distribution rate of $3.08 per unit and is based on Martin Midstream Partners' current operating performance and the current general economic, industry, and market conditions affecting it.
About Martin Midstream Partners
Martin Midstream Partners is a publicly traded limited partnership with a diverse set of operations focused primarily in the United States Gulf Coast region. The Partnership's primary business lines include: terminalling and storage services for petroleum products and by-products; NGL distribution services; sulfur and sulfur-based products processing, manufacturing, and distribution; and marine transportation services for petroleum products and by-products.
The Martin Midstream Partners L.P. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=14989
Forward-Looking Statements
Statements about Martin Midstream Partners' outlook and all other statements in this release other than historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements and all references to financial estimates rely on a number of assumptions concerning future events and are subject to a number of uncertainties and other factors, many of which are outside its control, which could cause actual results to differ materially from such statements. While MMLP believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in anticipating or predicting certain important factors. A discussion of these factors, including risks and uncertainties, is set forth in the Partnership's annual and quarterly reports filed from time to time with the Securities and Exchange Commission. Martin Midstream Partners disclaims any intention or obligation to revise any forward-looking statements, including financial estimates, whether as a result of new information, future events, or otherwise.
Use of Non-GAAP Financial Information
The Partnership reports its financial results in accordance with United States generally accepted accounting principles (GAAP). However, from time to time, the Partnership uses certain non-GAAP financial measures such as distributable cash flow because the Partnership's management believes that this measure may provide users of this financial information with meaningful comparisons between current results and prior reported results and a meaningful measure of Partnership's cash available to pay distributions. Distributable cash flow should not be considered an alternative to cash flow from operating activities or any other measure of financial performance in accordance with GAAP. Distributable cash flow is not intended to represent cash flows for the period, nor is it presented as an alternative to income from continuing operations. Furthermore, it should not be seen as a measure of liquidity or a substitute for comparable metrics prepared in accordance with GAAP. This information may constitute non-GAAP financial measures within the meaning of Regulation G adopted by the Securities and Exchange Commission. Accordingly, the Partnership has presented herein, and will present in other information it publishes that contains this non-GAAP financial measure, a reconciliation of this measure to the most directly comparable GAAP financial measure.
The Partnership has included below a table entitled "Distributable Cash Flow" in order to show the components of this non-GAAP financial measure and its reconciliation to the most comparable GAAP measure. The Partnership calculates distributable cash flow as follows:
(1) net income from continuing operations (as reported in statements of operations); plus depreciation and amortization; plus loss on sale of property, plant and equipment; plus amortization of debt discount and amortization of deferred debt issuance costs (all as reported in statements of cash flows); less payments of installment notes payable and capital lease obligations expenditures (as described below); plus distribution equivalents from unconsolidated entities (as described below); less Mont Belvieu indemnity escrow payment (as described below); plus debt prepayment premium (as described below); less gain on sale of equity method investment; plus equity in losses of unconsolidated entities (as reported in statements of operations); less payments for plant turnaround costs (as reported in statements of cash flows); less maintenance capital expenditures (as reported under the caption "Liquidity and Capital Resources" in the Partnership's Quarterly Report on Form 10-Q to be filed with the SEC on November 5, 2012); plus unit-based compensation (as reported in statements of changes in capital); plus invested cash in unconsolidated entities (as described below); and
(2) net income from discontinued operations (as reported in statements of operations); plus depreciation and amortization; less gain on sale of property, plant and equipment; less gain on sale of discontinued operations; less equity in earnings of unconsolidated entities (all as reported in Note 4 under the caption "Notes to the Consolidated and Condensed Financial Statements" in the Partnership's Quarterly Report on Form 10-Q to be filed with the SEC on November 5, 2012); less non-cash deferred tax benefit (as described below); less non-cash mark-to-market on derivatives (as reported in statements of cash flows); less maintenance capital expenditures (as reported under the caption "Liquidity and Capital Resources" in the Partnership's Quarterly Report on Form 10-Q to be filed with the SEC on November 5, 2012); plus distribution equivalents from unconsolidated entities and invested cash in unconsolidated entities (both as described below).
The Partnership's payments of installment notes payable and capital lease obligations is calculated as payments of notes payable and capital lease obligations (as reported in the statement of cash flows), less the early extinguishment of notes payable of $6.3 million.
For the nine months ended September 30, 2012, the Partnership incurred a debt prepayment premium of $2.2 million related to the early redemption of $25.0 million of Senior Notes and $0.3 million related to the early retirement of a note payable on certain marine transportation assets.
The Partnership's distribution equivalents from unconsolidated entities from continuing operations is calculated as return of investments from unconsolidated entities (calculated as the amount reported in statements of cash flows less a $2.0 million purchase price adjustment recorded as a return of investment by the Partnership in the statement of cash flows for the period ended September 30, 2012).
The Partnership's distribution equivalents from unconsolidated entities from discontinued operations is calculated as return of investments from unconsolidated entities, plus distributions in-kind from unconsolidated entities (all as reported under the caption "Liquidity and Capital Resources" in the Partnership's Quarterly Report on Form 10-Q to be filed with the SEC on November 5, 2012).
For the quarter ended September 30, 2012, the Partnership's distributions from unconsolidated entities, return of investments from unconsolidated entities, and distributions in-kind from equity investments (from both continuing and discontinued operations) were $0.0 million, $0.9 million and $0.8 million, respectively. For the nine months ended September 30, 2012, the Partnership's distributions from unconsolidated entities, return of investments from unconsolidated entities, and distributions in-kind from equity investments (from both continuing and discontinued operations) were $0.0 million, $3.5 million and $6.4 million, respectively.
The Partnership's invested cash in unconsolidated entities from continuing operations is calculated as distributions from (contributions to) unconsolidated entities for operations (as reported in statements of cash flows), plus expansion capital expenditures in unconsolidated entities (as reported under the caption "Liquidity and Capital Resources" in the Partnership's Quarterly Report on Form 10-Q to be filed with the SEC on November 5, 2012).
The Partnership's invested cash in unconsolidated entities from discontinued operations is calculated as distributions from (contributions to) unconsolidated entities for operations, plus expansion capital expenditures in unconsolidated entities (all as reported under the caption "Liquidity and Capital Resources" in the Partnership's Quarterly Report on Form 10-Q to be filed with the SEC on November 5, 2012).
For the quarter ended September 30, 2012, the Partnership's distributions from (contributions to) unconsolidated entities for operations and expansion capital expenditures in unconsolidated entities were (from both continuing and discontinued operations) ($7.2) million and $5.6 million, respectively. For the nine months ended September 30, 2012, the Partnership's distributions from (contributions to) unconsolidated entities for operations and expansion capital expenditures in unconsolidated entities were (from both continuing and discontinued operations) ($25.8) million and $25.9 million, respectively.
The Partnership's non-cash deferred tax benefit of $1.6 million and $1.9 million is included in income from discontinued operations, net of tax for the three and nine months ended September 30, 2012, respectively.
The Partnership's Mont Belvieu indemnity escrow payment represents the final proceeds from the 2009 sale of certain assets comprising the Mont Belvieu railcar unloading facility.
Additional information concerning the Partnership is available on the Partnership's website at www.martinmidstream.com, or
Joe McCreery
Vice President - Finance and Head of Investor Relations,
Martin Midstream Partners L.P.
Phone (903) 988-6425
joe.mccreery@martinmlp.com
| MARTIN MIDSTREAM PARTNERS L.P. | ||
| CONSOLIDATED AND CONDENSED BALANCE SHEETS | ||
| (Dollars in thousands) | ||
| September 30, 2012 | December 31, 2011 | |
| (Unaudited) | (Audited) | |
| Assets | ||
| Cash | $ 27 | $ 266 |
| Accounts and other receivables, less allowance for doubtful accounts of $3,264 and $3,021, respectively | 121,020 | 126,461 |
| Product exchange receivables | 5,455 | 17,646 |
| Inventories | 116,260 | 77,677 |
| Due from affiliates | 21,139 | 5,968 |
| Fair value of derivatives | — | 622 |
| Other current assets | 1,511 | 1,978 |
| Assets held for sale | — | 212,787 |
| Total current assets | 265,412 | 443,405 |
| Property, plant and equipment, at cost | 695,662 | 632,728 |
| Accumulated depreciation | (243,780) | (215,272) |
| Property, plant and equipment, net | 451,882 | 417,456 |
| Goodwill | 8,337 | 8,337 |
| Investment in unconsolidated entities | 80,799 | 62,948 |
| Debt issuance costs, net | 10,924 | 13,330 |
| Other assets, net | 6,442 | 3,633 |
| $ 823,796 | $ 949,109 | |
| Liabilities and Partners' Capital | ||
| Current installments of long-term debt and capital lease obligations | $ 217 | $ 1,261 |
| Trade and other accounts payable | 104,779 | 125,970 |
| Product exchange payables | 27,908 | 37,313 |
| Due to affiliates | 4,669 | 18,485 |
| Income taxes payable | 7,174 | 893 |
| Fair value of derivatives | — | 362 |
| Other accrued liabilities | 11,764 | 11,022 |
| Liabilities held for sale | — | 501 |
| Total current liabilities | 156,511 | 195,807 |
| Long-term debt and capital leases, less current maturities | 255,966 | 458,941 |
| Deferred income taxes | — | 7,657 |
| Other long-term obligations | 1,069 | 1,088 |
| Total liabilities | 413,546 | 663,493 |
| Partners' capital | 410,250 | 284,990 |
| Accumulated other comprehensive income | — | 626 |
| Total partners' capital | 410,250 | 285,616 |
| Commitments and contingencies | ||
| $ 823,796 | $ 949,109 | |
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on November 5, 2012.
| MARTIN MIDSTREAM PARTNERS L.P. | ||||
| CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS | ||||
| (Unaudited) | ||||
| (Dollars in thousands, except per unit amounts) | ||||
| Three Months Ended | Nine Months Ended | |||
| September 30, | September 30, | |||
| 2012 | 2011 | 2012 | 2011 | |
| Revenues: | ||||
| Terminalling and storage * | $ 23,875 | $ 19,381 | $ 65,107 | $ 56,831 |
| Marine transportation * | 22,102 | 20,773 | 63,678 | 57,548 |
| Sulfur services | 2,926 | 2,850 | 8,777 | 8,550 |
| Product sales: * | ||||
| Natural gas services | 190,738 | 159,748 | 527,666 | 423,953 |
| Sulfur services | 57,670 | 67,319 | 193,464 | 198,310 |
| Terminalling and storage | 20,601 | 17,525 | 61,482 | 55,441 |
| 269,009 | 244,592 | 782,612 | 677,704 | |
| Total revenues | 317,912 | 287,596 | 920,174 | 800,633 |
| Costs and expenses: | ||||
| Cost of products sold: (excluding depreciation and amortization) | ||||
| Natural gas services * | 185,686 | 156,236 | 515,928 | 414,162 |
| Sulfur services * | 47,272 | 59,808 | 149,582 | 164,142 |
| Terminalling and storage | 18,767 | 15,676 | 56,154 | 49,631 |
| 251,725 | 231,720 | 721,664 | 627,935 | |
| Expenses: | ||||
| Operating expenses * | 36,655 | 34,354 | 108,109 | 100,676 |
| Selling, general and administrative * | 4,680 | 5,538 | 13,687 | 13,015 |
| Depreciation and amortization | 9,966 | 10,025 | 29,457 | 29,523 |
| Total costs and expenses | 303,026 | 281,637 | 872,917 | 771,149 |
| Other operating income (loss) | (5) | 1,720 | 368 | 1,818 |
| Operating income | 14,881 | 7,679 | 47,625 | 31,302 |
| Other income (expense): | ||||
| Equity in earnings (loss) of unconsolidated entities | (169) | (54) | (532) | 100 |
| Interest expense | (6,263) | (4,297) | (21,735) | (17,102) |
| Debt prepayment premium | — | — | (2,470) | — |
| Other, net | 587 | 24 | 732 | 125 |
| Total other expense | (5,845) | (4,327) | (24,005) | (16,877) |
| Income from continuing operations before taxes | 9,036 | 3,352 | 23,620 | 14,425 |
| Income tax expense | (238) | (218) | (810) | (662) |
| Income from continuing operations | 8,798 | 3,134 | 22,810 | 13,763 |
| Income from discontinued operations, net of income taxes | 63,603 | 2,265 | 67,312 | 7,728 |
| Net income | $ 72,401 | $ 5,399 | $ 90,122 | $ 21,491 |
| MARTIN MIDSTREAM PARTNERS L.P. | ||||
| CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS | ||||
| (Unaudited) | ||||
| (Dollars in thousands, except per unit amounts) | ||||
| *Related Party Transactions Included Above | ||||
| Three Months Ended | Nine Months Ended | |||
| September 30, | September 30, | |||
| 2012 | 2011 | 2012 | 2011 | |
| Revenues: | ||||
| Terminalling and storage | $ 18,531 | $ 14,210 | $ 48,611 | $ 40,045 |
| Marine transportation | 3,979 | 6,352 | 13,282 | 19,223 |
| Product Sales | 1,636 | 1,628 | 5,783 | 7,197 |
| Costs and expenses: | ||||
| Cost of products sold: (excluding depreciation and amortization) | ||||
| Natural gas services | 6,761 | 9,257 | 18,783 | 13,679 |
| Sulfur services | 4,111 | 4,762 | 12,512 | 13,407 |
| Expenses: | ||||
| Operating expenses | 14,100 | 16,905 | 42,308 | 42,170 |
| Selling, general and administrative | 2,764 | 2,373 | 8,258 | 6,344 |
| MARTIN MIDSTREAM PARTNERS L.P. | ||||
| CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS | ||||
| (Unaudited) | ||||
| (Dollars and units in thousands, except per unit amounts) | ||||
| Three Months Ended | Nine Months Ended | |||
| September 30, | September 30, | |||
| 2012 | 2011 | 2012 | 2011 | |
| Allocation of net income attributable to: | ||||
| Limited partner interest: | ||||
| Continuing operations | $ 10,128 | $ 2,157 | $ 21,645 | $ 10,674 |
| Discontinued operations | 60,825 | 1,617 | 63,874 | 5,994 |
| 70,953 | 3,774 | 85,519 | 16,668 | |
| General partner interest: | ||||
| Continuing operations | (1,330) | 811 | 1,165 | 2,557 |
| Discontinued operations | 2,778 | 537 | 3,438 | 1,435 |
| 1,448 | 1,348 | 4,603 | 3,992 | |
| Net income attributable to: | ||||
| Continuing operations | 8,798 | 3,134 | 22,810 | 13,763 |
| Discontinued operations | 63,603 | 2,265 | 67,312 | 7,728 |
| $ 72,401 | $ 5,399 | $ 90,122 | $ 21,491 | |
| Net income attributable to limited partners: | ||||
| Basic: | ||||
| Continuing operations | $ 0.44 | $ 0.11 | $ 0.94 | $ 0.56 |
| Discontinued operations | 2.63 | 0.09 | 2.79 | 0.31 |
| $ 3.07 | $ 0.20 | $ 3.73 | $ 0.87 | |
| Weighted average limited partner units - basic | 23,101 | 19,158 | 22,929 | 19,161 |
| Diluted: | ||||
| Continuing operations | $ 0.44 | $ 0.11 | $ 0.94 | $ 0.56 |
| Discontinued operations | 2.63 | 0.09 | 2.79 | 0.31 |
| $ 3.07 | $ 0.20 | $ 3.73 | $ 0.87 | |
| Weighted average limited partner units - diluted | 23,105 | 19,163 | 22,932 | 19,163 |
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on November 5, 2012.
| MARTIN MIDSTREAM PARTNERS L.P. | |||||||
| CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL | |||||||
| (Unaudited) | |||||||
| (Dollars in thousands) | |||||||
| Partners' Capital | |||||||
| Accumulated | |||||||
| Other | |||||||
| General | Comprehensive | ||||||
| Common Limited | Subordinated Limited | Partner | Income | ||||
| Units | Amount | Units | Amount | Amount | (Loss) | Total | |
| Balances - January 1, 2011 | 17,707,832 | $ 250,785 | 889,444 | $ 17,721 | $ 4,881 | $ 1,419 | $ 274,806 |
| Net income | — | 17,499 | — | — | 3,992 | — | 21,491 |
| Recognition of beneficial conversion feature | — | (831) | — | 831 | — | — | — |
| Follow-on public offering | 1,874,500 | 70,330 | — | — | — | — | 70,330 |
| General partner contribution | — | — | — | — | 1,505 | — | 1,505 |
| Cash distributions | — | (43,321) | — | — | (4,635) | — | (47,956) |
| Excess purchase price over carrying value of acquired assets | — | (19,685) | — | — | — | — | (19,685) |
| Unit-based compensation | 15,530 | 131 | — | — | — | — | 131 |
| Purchase of treasury units | (14,850) | (582) | — | — | — | — | (582) |
| Unit-based compensation grant forfeitures | (500) | — | — | — | — | — | — |
| Adjustment in fair value of derivatives | — | — | — | — | — | (42) | (42) |
| Balances - September 30, 2011 | 19,582,512 | $ 274,326 | 889,444 | $ 18,552 | $ 5,743 | $ 1,377 | $ 299,998 |
| Balances - January 1, 2012 | 20,471,776 | $ 279,562 | — | $ — | $ 5,428 | $ 626 | $ 285,616 |
| Net income | — | 85,519 | — | — | 4,603 | — | 90,122 |
| Follow-on public offering | 2,645,000 | 91,361 | — | — | — | — | 91,361 |
| General partner contribution | — | — | — | — | 1,951 | — | 1,951 |
| Cash distributions | — | (52,880) | — | — | (5,452) | — | (58,332) |
| Unit-based compensation | 6,250 | 379 | — | — | — | — | 379 |
| Purchase of treasury units | (6,250) | (221) | — | — | — | — | (221) |
| Adjustment in fair value of derivatives | — | — | — | — | — | (626) | (626) |
| Balances - September 30, 2012 | 23,116,776 | $ 403,720 | — | $ — | $ 6,530 | $ — | $ 410,250 |
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on November 5, 2012.
| MARTIN MIDSTREAM PARTNERS L.P. | ||
| CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS | ||
| (Unaudited) | ||
| (Dollars in thousands) | ||
| Nine Months Ended | ||
| September 30, | ||
| 2012 | 2011 | |
| Cash flows from operating activities: | ||
| Net income | $ 90,122 | $ 21,491 |
| Less: Income from discontinued operations | (67,312) | (7,728) |
| Net income from continuing operations | 22,810 | 13,763 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization | 29,457 | 29,523 |
| Amortization of deferred debt issuance costs | 2,611 | 3,071 |
| Amortization of debt discount | 504 | 262 |
| Loss on sale of property, plant and equipment | 7 | 405 |
| Gain on sale of equity method investment | (486) | — |
| Equity in earnings (loss) of unconsolidated entities | 532 | (100) |
| Other | 379 | 131 |
| Change in current assets and liabilities, excluding effects of acquisitions and dispositions: | ||
| Accounts and other receivables | (6,328) | (4,788) |
| Product exchange receivables | 12,190 | (16,552) |
| Inventories | (38,583) | (28,057) |
| Due from affiliates | (27,795) | 221 |
| Other current assets | 431 | 1,874 |
| Trade and other accounts payable | (8,533) | 11,733 |
| Product exchange payables | (9,405) | 27,350 |
| Due to affiliates | 4,469 | 3,430 |
| Income taxes payable | (96) | (799) |
| Other accrued liabilities | 840 | 4,218 |
| Change in other non-current assets and liabilities | (1,126) | (123) |
| Net cash provided by (used in) continuing operating activities | (18,122) | 45,562 |
| Net cash provided by discontinued operating activities | 120 | 12,272 |
| Net cash provided by (used in) operating activities | (18,002) | 57,834 |
| Cash flows from investing activities: | ||
| Payments for property, plant and equipment | (63,009) | (48,769) |
| Acquisitions | — | (16,815) |
| Payments for plant turnaround costs | (2,578) | (2,103) |
| Proceeds from sale of property, plant and equipment | 33 | 530 |
| Proceeds from sale of equity method investment | 531 | — |
| Investment in unconsolidated subsidiaries | (775) | (59,319) |
| Return of investments from unconsolidated entities | 5,133 | 383 |
| Distributions from (contributions to) unconsolidated entities for operations | (22,786) | (929) |
| Net cash used in continuing investing activities | (83,451) | (127,022) |
| Net cash provided by (used in) discontinued investing activities | 271,181 | (8,253) |
| Net cash provided by (used in) investing activities | 187,730 | (135,275) |
| Cash flows from financing activities: | ||
| Payments of long-term debt | (547,000) | (389,000) |
| Payments of notes payable and capital lease obligations | (6,522) | (831) |
| Proceeds from long-term debt | 349,000 | 456,000 |
| Net proceeds from follow on offering | 91,361 | 70,330 |
| General partner contribution | 1,951 | 1,505 |
| Treasury units purchased | (221) | (582) |
| Payment of debt issuance costs | (204) | (3,424) |
| Excess purchase price over carrying value of acquired assets | — | (19,685) |
| Cash distributions paid | (58,332) | (47,956) |
| Net cash provided by (used in) financing activities | (169,967) | 66,357 |
| Net decrease in cash | (239) | (11,084) |
| Cash at beginning of period | 266 | 11,380 |
| Cash at end of period | $ 27 | $ 296 |
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on November 5, 2012.
| MARTIN MIDSTREAM PARTNERS L.P. | ||
| SEGMENT OPERATING INCOME | ||
| (Unaudited) | ||
| (Dollars in thousands) | ||
| Three Months Ended | ||
| Terminalling and Storage Segment | September 30, | |
| 2012 | 2011 | |
| (In thousands) | ||
| Revenues: | ||
| Services | $ 25,066 | $ 20,555 |
| Products | 20,601 | 17,525 |
| Total revenues | 45,667 | 38,080 |
| Cost of products sold | 19,303 | 16,497 |
| Operating expenses | 14,373 | 12,891 |
| Selling, general and administrative expenses | 340 | 53 |
| Depreciation and amortization | 5,503 | 4,829 |
| Operating income | $ 6,148 | $ 3,810 |
| Three Months Ended | ||
| Natural Gas Services Segment | September 30, | |
| 2012 | 2011 | |
| (In thousands) | ||
| Revenues | $ 190,738 | $ 159,748 |
| Cost of products sold | 186,080 | 156,607 |
| Operating expenses | 847 | 762 |
| Selling, general and administrative expenses | 786 | 438 |
| Depreciation and amortization | 149 | 148 |
| Operating income | $ 2,876 | $ 1,793 |
| NGLs Volumes (Bbls) | 3,092 | 2,068 |
The Natural Gas Services segment information shown above excludes the discontinued operations of the Prism Assets for both periods.
| MARTIN MIDSTREAM PARTNERS L.P. | ||
| SEGMENT OPERATING INCOME | ||
| (Unaudited) | ||
| (Dollars in thousands) | ||
| Three Months Ended | ||
| Sulfur Services Segment | September 30, | |
| 2012 | 2011 | |
| (In thousands) | ||
| Revenues: | ||
| Services | $ 2,926 | $ 2,850 |
| Products | 57,670 | 67,319 |
| Total revenues | 60,596 | 70,169 |
| Cost of products sold | 47,362 | 59,899 |
| Operating expenses | 4,357 | 4,930 |
| Selling, general and administrative expenses | 1,008 | 774 |
| Depreciation and amortization | 1,750 | 1,676 |
| 6,119 | 2,890 | |
| Other operating income (loss) | (5) | 1,411 |
| Operating income | $ 6,114 | $ 4,301 |
| Sulfur (long tons) | 225.6 | 310.2 |
| Fertilizer (long tons) | 61.2 | 54.2 |
| Sulfur services volumes (long tons) | 286.8 | 364.4 |
| Three Months Ended | ||
| Marine Transportation Segment | September 30, | |
| 2012 | 2011 | |
| (In thousands) | ||
| Revenues | $ 22,879 | $ 22,411 |
| Operating expenses | 18,026 | 17,300 |
| Selling, general and administrative expenses | 580 | 1,306 |
| Depreciation and amortization | 2,564 | 3,372 |
| 1,709 | 433 | |
| Other operating income | — | 309 |
| Operating income | $ 1,709 | $ 742 |
| MARTIN MIDSTREAM PARTNERS L.P. | ||
| SEGMENT OPERATING INCOME | ||
| (Unaudited) | ||
| (Dollars in thousands) | ||
| Nine Months Ended | ||
| Terminalling and Storage Segment | September 30, | |
| 2012 | 2011 | |
| (In thousands) | ||
| Revenues: | ||
| Services | $ 68,649 | $ 60,031 |
| Products | 61,482 | 55,461 |
| Total revenues | 130,131 | 115,492 |
| Cost of products sold | 57,733 | 52,277 |
| Operating expenses | 42,340 | 38,145 |
| Selling, general and administrative expenses | 401 | 229 |
| Depreciation and amortization | 15,170 | 14,114 |
| 14,487 | 10,727 | |
| Other operating income (loss) | 395 | (577) |
| Operating income | $ 14,882 | $ 10,150 |
| Nine Months Ended | ||
| Natural Gas Services Segment | September 30, | |
| 2012 | 2011 | |
| (In thousands) | ||
| Revenues | $ 527,666 | $ 423,953 |
| Cost of products sold | 517,083 | 414,981 |
| Operating expenses | 2,603 | 2,249 |
| Selling, general and administrative expenses | 2,242 | 1,509 |
| Depreciation and amortization | 436 | 435 |
| Operating income | $ 5,302 | $ 4,779 |
| NGLs Volumes (Bbls) | 7,825 | 5,444 |
The Natural Gas Services segment information shown above excludes the discontinued operations of the Prism Assets for both periods.
| MARTIN MIDSTREAM PARTNERS L.P. | ||
| SEGMENT OPERATING INCOME | ||
| (Unaudited) | ||
| (Dollars in thousands) | ||
| Nine Months Ended | ||
| Sulfur Services Segment | September 30, | |
| 2012 | 2011 | |
| (In thousands) | ||
| Revenues: | ||
| Services | $ 8,777 | $ 8,550 |
| Products | 193,464 | 198,310 |
| Total revenues | 202,241 | 206,860 |
| Cost of products sold | 149,853 | 164,414 |
| Operating expenses | 13,164 | 14,587 |
| Selling, general and administrative expenses | 2,945 | 2,517 |
| Depreciation and amortization | 5,325 | 4,998 |
| 30,954 | 20,344 | |
| Other operating income (loss) | (27) | 2,086 |
| Operating income | $ 30,927 | $ 22,430 |
| Sulfur (long tons) | 861.8 | 998.7 |
| Fertilizer (long tons) | 238.7 | 201.2 |
| Sulfur services volumes (long tons) | 1,100.5 | 1,199.9 |
| Nine Months Ended | ||
| Marine Transportation Segment | September 30, | |
| 2012 | 2011 | |
| (In thousands) | ||
| Revenues | $ 65,912 | $ 63,201 |
| Operating expenses | 52,773 | 50,831 |
| Selling, general and administrative expenses | 1,366 | 2,213 |
| Depreciation and amortization | 8,526 | 9,976 |
| 3,247 | 181 | |
| Other operating income | — | 309 |
| Operating income | $ 3,247 | $ 490 |
| MARTIN MIDSTREAM PARTNERS L.P. | ||
| DISTRIBUTABLE CASH FLOW | ||
| Unaudited Non-GAAP Financial Measure | ||
| (Dollars in thousands) | ||
| Three Months Ended | Nine Months Ended | |
| September 30, 2012 | September 30, 2012 | |
| Net income | $ 72,401 | $ 90,122 |
| Less: Income from discontinued operations | (63,603) | (67,312) |
| Net income from continuing operations | 8,798 | 22,810 |
| Adjustments to reconcile net income to distributable cash flow: | ||
| Continuing operations: | ||
| Depreciation and amortization | 9,966 | 29,457 |
| Loss on sale of property, plant and equipment | 4 | 7 |
| Amortization of debt discount | 77 | 504 |
| Amortization of deferred debt issuance costs | 680 | 2,611 |
| Payments of installment notes payable and capital lease obligations | (81) | (256) |
| Distribution equivalents from unconsolidated entities1 | 836 | 3,114 |
| Mont Belvieu indemnity escrow payment | — | (375) |
| Debt prepayment premium | — | 2,470 |
| Gain on sale of equity method investment | (486) | (486) |
| Equity in loss of unconsolidated entities | 169 | 532 |
| Payments for plant turnaround costs | (175) | (2,578) |
| Maintenance capital expenditures | (1,325) | (3,603) |
| Unit-based compensation | 261 | 379 |
| Invested cash in unconsolidated entities from discontinued operations3 | — | — |
| Distributable cash flow from continuing operations | 18,724 | 54,586 |
| Discontinued operations: | ||
| Income from discontinued operations, net of tax | 63,603 | 67,312 |
| Depreciation and amortization | — | 2,320 |
| Gain on sale of property, plant and equipment | — | (10) |
| Gain on sale of discontinued operations | (62,251) | (61,411) |
| Equity in earnings of unconsolidated entities | (377) | (4,611) |
| Non-cash deferred tax benefit | (1,570) | (1,888) |
| Non-cash mark-to-market on derivatives | (22) | (366) |
| Maintenance capital expenditures | — | (537) |
| Distribution equivalents from unconsolidated entities from discontinued operations2 | 872 | 6,792 |
| Invested cash in unconsolidated entities from discontinued operations4 | (1,548) | 51 |
| Distributable cash flow from discontinued operations | (1,293) | 7,652 |
| Distributable cash flow | $ 17,431 | $ 62,238 |
| Three Months Ended | Nine Months Ended | |
| September 30, 2012 | September 30, 2012 | |
| 1 Distribution equivalents from unconsolidated entities from continuing operations: | ||
| Distributions from unconsolidated entities | $ — | $ — |
| Return of investments from unconsolidated entities | 836 | 3,114 |
| Distributions in-kind from equity investments | — | — |
| Distribution equivalents from unconsolidated entities | $ 836 | $ 3,114 |
| 2 Distribution equivalents from unconsolidated entities from discontinued operations: | ||
| Distributions from unconsolidated entities | $ — | $ — |
| Return of investments from unconsolidated entities | 105 | 400 |
| Distributions in-kind from equity investments | 767 | 6,392 |
| Distribution equivalents from unconsolidated entities | $ 872 | $ 6,792 |
| 3 Invested cash in unconsolidated entities from continuing operations: | ||
| Distributions from (contributions to) unconsolidated entities for operations | $ (5,438) | $ (22,786) |
| Expansion capital expenditures in unconsolidated entities | 5,438 | 22,786 |
| Invested cash in unconsolidated entities | $ — | $ — |
| 4 Invested cash in unconsolidated entities from discontinued operations: | ||
| Distributions from (contributions to) unconsolidated entities for operations | $ (1,716) | $ (3,051) |
| Expansion capital expenditures in unconsolidated entities | 168 | 3,102 |
| Invested cash in unconsolidated entities | $ (1,548) | $ 51 |
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