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| 8-K - 8-K - MARTIN MIDSTREAM PARTNERS L.P. | form8-kearningsrelease02x2.htm |
EXHIBIT 99.1
MARTIN MIDSTREAM PARTNERS REPORTS
2012 FOURTH QUARTER AND FISCAL YEAR FINANCIAL RESULTS
KILGORE, Texas, February 27, 2013/GlobeNewswire/ -- Martin Midstream Partners L.P. (NASDAQ: MMLP) (the “Partnership”) announced today its financial results for the fourth quarter and year ended December 31, 2012.
The Partnership reported net income for the fourth quarter of 2012 of $6.7 million, or $0.27 per limited partner unit. This compared to net income for the fourth quarter of 2011 of $3.0 million, or $0.06 per limited partner unit. The Partnership reported net income for the year ended December 31, 2012 of $102.0 million, or $3.96 per limited partner unit. This compared to net income for the year ended December 31, 2011 of $22.8 million, or $0.92 per limited partner unit.
The Partnership reported income from continuing operations for the fourth quarter of 2012 of $9.2 million, or $0.36 per limited partner unit. This compared to income from continuing operations for the fourth quarter of 2011 of $1.4 million, or $0.03 per limited partner unit. The Partnership reported a loss from discontinued operations for the fourth quarter of 2012 of $2.4 million, or $0.09 per limited partner unit. This compared to income from discontinued operations for the fourth quarter of 2011 of $1.7 million, or $0.03 per limited partner unit. Revenues for the fourth quarter of 2012 were $454.1 million compared to $347.2 million for the fourth quarter of 2011.
The Partnership reported income from continuing operations for the year ended December 31, 2012 of $37.1 million, or $1.32 per limited partner unit. This compared to income from continuing operations for the year ended December 31, 2011 of $13.4 million, or $0.57 per limited partner unit. The Partnership reported income from discontinued operations for the year ended December 31, 2012 of $64.9 million, or $2.64 per limited partner unit. This compared to income from discontinued operations for the year ended December 31, 2011 of $9.4 million, or $0.35 per limited partner unit. Income from discontinued operations was positively impacted by a gain on the sale of the Prism Assets of $61.8 million for the year ended December 31, 2012. Revenues for the year ended December 31, 2012 were $1.5 billion compared to $1.2 billion for the year ended December 31, 2011.
The Partnership's distributable cash flow for the three months ended December 31, 2012 was $20.1 million and for the year ended December 31, 2012 was $83.8 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.
Ruben Martin, President and Chief Executive Officer of Martin Midstream GP, LLC, the general partner of the Partnership, said “We can best summarize our fourth quarter 2012 as a period of strong growth for the Partnership. During the quarter, we successfully closed three acquisitions- a new high water mark for the Partnership. These acquisitions have created even more growth platforms; and we have positioned ourselves well for cash flows commencing over the next two years as associated projects are completed.
"Our distributable cash flow (DCF) coverage ratio was 1.06 times based on our fourth quarter distribution. Similarly, our DCF was 1.10 times for the year ended 2012. DCF for the fourth quarter was slightly lower than we projected primarily due to an increased level of administrative expenses associated with the acquisitions and higher than expected maintenance capital expenditures. However, given the growth capital spending associated with several key organic growth projects completed during the year, I am pleased with this level of performance.
"By segment, we saw strong performance in our Terminalling and Storage segment associated with our new Corpus Christi crude oil terminal. This facility has performed very well during its first full quarter of operation- well exceeding our forecasted throughput. Given the growth of Eagle Ford Shale crude oil production, we see likely expansion on the horizon at this facility. In 2013, this segment will also benefit from the October 2012 drop down of our Cross Oil lubricant packaging facility and the growth of that business. Finally, the acquisition of Talen's Marine & Fuel, L.L.C. at the end of 2012 gives our Partnership a strong market position in the marine fuel and lubricant terminalling business. While we expect this acquisition to generate $6-$7 million of cash flow annually, the outlook for increased levels of activity in the Gulf of Mexico oil and gas exploration and production bode well for our enhanced marine terminal system.
"In our Natural Gas Services segment, we benefited from better than projected seasonal sales quantities and margins. On the natural gas storage side, softness continues in the marketplace which has negatively impacted the distributions we are receiving from Monroe Gas Storage LLC. However, to enhance the Partnership's long-term growth, we purchased all of the equity interests in Red Bird Gas Storage LLC which were previously owned by Martin Resource Management Corporation during the fourth quarter 2012. We expect these strategically located natural gas storage assets to generate distributable cash flow for the Partnership commencing in 2015.
"Our Sulfur Services segment posted another strong quarter on the continued strength in demand for agricultural products. Further, we achieved record utilization levels on our sulfur-related assets in 2012. While we expect the market to remain relatively strong in 2013, our forecasted performance reflects some level of normalization. In our pure sulfur and prilling side of the business, we were ahead of plan for 2012, but have chosen to take a normalized view of 2013.
"Finally, our Marine Transportation segment continued to benefit from the full employment of our offshore vessels in the spot market during the fourth quarter. We finished the year with a very strong quarter as our assets have become more desirable given the need for oil and liquids transport due to increased shale production. Our inland division of the segment performed as forecasted and our asset utilization was more than 95% as anticipated. For 2013, we again anticipate our offshore assets being employed as South Texas demand continues to be strong."
Included with this press release are the Partnership's consolidated financial statements as of and for the quarter and year ended December 31, 2012 and certain prior periods. These financial statements should be read in conjunction with the information contained in the Partnership's Annual Report on Form 10-K, to be filed with the SEC on March 4, 2013.
Investors' Conference Call
An investors' conference call to review the fourth quarter and fiscal year results will be held on Thursday, February 28, 2013, 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 February 28, 2013 through 10:59 p.m. Central Time on March 7, 2013. The access code for the conference call and the audio replay is Conference ID No. 93672427. The audio replay of the conference call will also be archived on Martin Midstream Partners' website at www.martinmidstream.com.
About Martin Midstream Partners
Martin Midstream Partners L.P. 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, storage, processing and packaging services for petroleum products and by-products; natural gas liquids storage, marketing and distribution services and natural gas storage; sulfur and sulfur-based products processing, manufacturing, marketing and distribution; and marine transportation services for petroleum products and by-products.
Forward-Looking Statements
Statements about the Partnership's 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 the Partnership 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 SEC. The Partnership 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 the 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 SEC. 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 statement of cash flows); less payments of installment notes payable and capital lease obligations (as described below); plus deferred income taxes (as reported in statement of cash flows); 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 loss 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 Annual Report on Form 10-K to be filed with the SEC on March 4, 2013); plus unit-based compensation (as reported in the statements of changes in capital); plus distribution equivalents from unconsolidated entities (as described below).
(2) net income (loss) 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; plus income tax expense on sale from sale of discontinued operations; less equity in earnings of unconsolidated entities (all as reported in Note 5 under the caption "Notes to Consolidated Financial Statements" in the Partnership's Annual Report on Form 10-K to be filed
with the SEC on March 4, 2013); less maintenance capital expenditures (as reported under the caption "Liquidity and Capital Resources" in the Partnership's Annual Report on Form 10-K to be filed with the SEC on March 4, 2013); 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.
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.
For the year ended December 31, 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 distributions from unconsolidated entities (as reported in statements of cash flows); plus return of investments from unconsolidated entities (calculated as 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 year ended December 31, 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 Annual Report on Form 10-K to be filed with the SEC on March 4, 2013).
The Partnership's invested cash in unconsolidated entities from discontinued operations is calculated as (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 Annual Report on Form 10-K to be filed with the SEC on March 4, 2013).
The Partnership's distributable cash flow attributable to Packaging Assets is calculated as net income attributable to the Packaging Assets prior to the acquisition by the Partnership, plus depreciation and amortization, plus deferred income taxes.
Additional information concerning the Partnership is available on the Partnership's website at www.martinmidstream.com.
Contact: Robert D. Bondurant, Executive Vice President and Chief Financial Officer of Martin Midstream GP LLC, the Partnership's general partner at (903) 983-6200.
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
December 31, 2012 | |||||||
2012 | 20111 | ||||||
Assets | |||||||
Cash | $ | 5,162 | $ | 266 | |||
Accounts and other receivables, less allowance for doubtful accounts of $2,805 and $3,384, respectively | 190,652 | 143,036 | |||||
Product exchange receivables | 3,416 | 17,646 | |||||
Inventories | 95,987 | 93,254 | |||||
Due from affiliates | 13,343 | 5,968 | |||||
Fair value of derivatives | — | 622 | |||||
Other current assets | 2,777 | 4,366 | |||||
Assets held for sale | 3,578 | 212,787 | |||||
Total current assets | 314,915 | 477,945 | |||||
Property, plant and equipment, at cost | 767,344 | 651,460 | |||||
Accumulated depreciation | (256,963 | ) | (218,202 | ) | |||
Property, plant and equipment, net | 510,381 | 433,258 | |||||
Goodwill | 19,616 | 8,337 | |||||
Investment in unconsolidated entities | 154,309 | 132,605 | |||||
Debt issuance costs, net | 10,244 | 13,330 | |||||
Other assets, net | 3,531 | 3,633 | |||||
$ | 1,012,996 | $ | 1,069,108 | ||||
Liabilities and Partners’ Capital | |||||||
Current portion of long-term debt and capital lease obligations | $ | 3,206 | $ | 1,261 | |||
Trade and other accounts payable | 140,045 | 136,124 | |||||
Product exchange payables | 12,187 | 37,313 | |||||
Due to affiliates | 3,316 | 74,654 | |||||
Income taxes payable | 10,239 | 926 | |||||
Fair value of derivatives | — | 362 | |||||
Other accrued liabilities | 9,489 | 11,054 | |||||
Liabilities held for sale | — | 501 | |||||
Total current liabilities | 178,482 | 262,195 | |||||
Long-term debt and capital leases, less current maturities | 474,992 | 458,941 | |||||
Deferred income taxes | — | 9,697 | |||||
Other long-term obligations | 1,560 | 1,088 | |||||
Total liabilities | 655,034 | 731,921 | |||||
Partners’ capital | 357,962 | 336,561 | |||||
Accumulated other comprehensive income | — | 626 | |||||
Total partners’ capital | 357,962 | 337,187 | |||||
Commitments and contingencies | |||||||
$ | 1,012,996 | $ | 1,069,108 | ||||
1Financial information has been revised to include balances attributable to Redbird Class A interests and the Cross Packaging Assets. See Note 2(a) – Principles of Presentation and Consolidation.
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on March 4, 2013.
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
Year Ended December 31, | |||||||||||
2012¹ | 2011¹ | 2010¹ | |||||||||
Revenues: | |||||||||||
Terminalling and storage * | $ | 90,243 | $ | 77,283 | $ | 67,117 | |||||
Marine transportation * | 85,748 | 76,936 | 77,642 | ||||||||
Sulfur services * | 11,702 | 11,400 | — | ||||||||
Product sales: * | |||||||||||
Natural gas services | 825,506 | 611,749 | 442,005 | ||||||||
Sulfur services | 249,882 | 263,644 | 165,078 | ||||||||
Terminalling and storage | 227,280 | 201,478 | 128,273 | ||||||||
1,302,668 | 1,076,871 | 735,356 | |||||||||
Total revenues | 1,490,361 | 1,242,490 | 880,115 | ||||||||
Costs and expenses: | |||||||||||
Cost of products sold: (excluding depreciation and amortization) | |||||||||||
Natural gas services * | 801,724 | 598,814 | 427,657 | ||||||||
Sulfur services * | 194,952 | 219,697 | 122,121 | ||||||||
Terminalling and storage | 200,855 | 179,461 | 115,308 | ||||||||
1,197,531 | 997,972 | 665,086 | |||||||||
Expenses: | |||||||||||
Operating expenses * | 151,020 | 137,685 | 113,426 | ||||||||
Selling, general and administrative * | 25,494 | 20,531 | 16,865 | ||||||||
Depreciation and amortization | 42,063 | 40,276 | 36,884 | ||||||||
Total costs and expenses | 1,416,108 | 1,196,464 | 832,261 | ||||||||
Other operating income (loss) | (418 | ) | 1,326 | 228 | |||||||
Operating income | 73,835 | 47,352 | 48,082 | ||||||||
Other income (expense): | |||||||||||
Equity in earnings (loss) of unconsolidated entities | (1,113 | ) | (4,752 | ) | 2,536 | ||||||
Gain from ownership change in unconsolidated entity | — | — | 6,413 | ||||||||
Debt prepayment premium | (2,470 | ) | — | — | |||||||
Interest expense | (30,665 | ) | (26,781 | ) | (35,322 | ) | |||||
Other, net | 1,092 | 420 | 385 | ||||||||
Total other income (expense) | (33,156 | ) | (31,113 | ) | (25,988 | ) | |||||
Net income before taxes | 40,679 | 16,239 | 22,094 | ||||||||
Income tax expense | (3,557 | ) | (2,872 | ) | (2,622 | ) | |||||
Income from continuing operations | 37,122 | 13,367 | 19,472 | ||||||||
Income from discontinued operations, net of income taxes | 64,865 | 9,392 | 8,061 | ||||||||
Net income | 101,987 | 22,759 | 27,533 | ||||||||
Less general partner's interest in net income | (4,748 | ) | (5,289 | ) | (3,869 | ) | |||||
Less pre-acquisition (income) loss allocated to Parent | (4,622 | ) | 1,583 | (11,511 | ) | ||||||
Less beneficial conversion feature | — | (1,108 | ) | (1,108 | ) | ||||||
Limited partner's interest in net income | $ | 92,617 | $ | 17,945 | $ | 11,045 | |||||
¹ Financial information for 2012, 2011 and 2010 has been revised to include results attributable to the Redbird Class A interests and the Packaging Assets acquired from Cross prior to October 2, 2012. See Note 2(a) – Principles of Presentation and Consolidation.
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on March 4, 2013.
*Related Party Transactions Shown Below
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
*Related Party Transactions Included Above
Year Ended December 31, | |||||||||||
2012¹ | 2011¹ | 2010¹ | |||||||||
Revenues: | |||||||||||
Terminalling and storage | $ | 64,669 | $ | 54,211 | $ | 46,823 | |||||
Marine transportation | 17,494 | 23,478 | 28,194 | ||||||||
Product Sales | 7,201 | 9,081 | 7,903 | ||||||||
Costs and expenses: | |||||||||||
Cost of products sold: (excluding depreciation and amortization) | |||||||||||
Natural gas services | 27,512 | 16,749 | 7,517 | ||||||||
Sulfur services | 16,968 | 18,314 | 16,061 | ||||||||
Terminalling and Storage | 48,375 | 45,089 | 32,489 | ||||||||
Expenses: | |||||||||||
Operating expenses | 58,834 | 58,051 | 48,390 | ||||||||
Selling, general and administrative | 13,678 | 8,610 | 7,237 | ||||||||
¹ Financial information for 2012, 2011, and 2010 has been revised to include results attributable to the Redbird Class A interests and the Packaging Assets acquired from Cross prior to October 2, 2012. See Note 2(a) – Principles of Presentation and Consolidation.
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on March 4, 2013.
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars and units in thousands, except per unit amounts)
Year Ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Allocation of net income attributable to: | |||||||||||
Limited partner interest: | |||||||||||
Continuing operations | $ | 30,915 | $ | 11,193 | $ | 4,441 | |||||
Discontinued operations | 61,702 | 6,752 | 6,604 | ||||||||
92,617 | 17,945 | 11,045 | |||||||||
General partner interest: | |||||||||||
Continuing operations | 1,585 | 3,106 | 2,736 | ||||||||
Discontinued operations | 3,163 | 2,183 | 1,133 | ||||||||
4,748 | 5,289 | 3,869 | |||||||||
Net income attributable to: | |||||||||||
Continuing operations | 32,500 | 14,299 | 7,177 | ||||||||
Discontinued operations | 64,865 | 8,935 | 7,737 | ||||||||
$ | 97,365 | $ | 23,234 | $ | 14,914 | ||||||
Net income attributable to limited partners: | |||||||||||
Basic: | |||||||||||
Continuing operations | $ | 1.32 | $ | 0.57 | $ | 0.25 | |||||
Discontinued operations | 2.64 | 0.35 | 0.38 | ||||||||
$ | 3.96 | $ | 0.92 | $ | 0.63 | ||||||
Weighted average limited partner units - basic | 23,362 | 19,545 | 17,525 | ||||||||
Diluted: | |||||||||||
Continuing operations | $ | 1.32 | $ | 0.57 | $ | 0.25 | |||||
Discontinued operations | 2.64 | 0.35 | 0.38 | ||||||||
$ | 3.96 | $ | 0.92 | $ | 0.63 | ||||||
Weighted average limited partner units - diluted | 23,365 | 19,547 | 17,526 | ||||||||
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on March 4, 2013.
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL
(Dollars in thousands)
Partners’ Capital | ||||||||||||||||||||||||||||||
Parent Net Investment1 | Common | Subordinated | General Partner | Accumulated Comprehensive Income | ||||||||||||||||||||||||||
Units | Amount | Units | Amount | Amount | Amount | Total | ||||||||||||||||||||||||
Balances – December 31, 2009 | $ | 41,643 | 16,057,832 | $ | 245,683 | 889,444 | $ | 16,613 | $ | 4,731 | $ | (2,076 | ) | $ | 306,594 | |||||||||||||||
Net Income | 11,511 | — | 12,153 | — | — | 3,869 | — | 27,533 | ||||||||||||||||||||||
Recognition of beneficial conversion feature | — | — | (1,108 | ) | — | 1,108 | — | — | — | |||||||||||||||||||||
Follow-on public offerings | — | 2,650,000 | 78,600 | — | — | — | — | 78,600 | ||||||||||||||||||||||
Redemption of common units | — | (1,000,000 | ) | (28,070 | ) | — | — | — | — | (28,070 | ) | |||||||||||||||||||
General partner contribution | — | — | — | — | — | 1,089 | — | 1,089 | ||||||||||||||||||||||
Excess purchase price over carrying value of acquired assets | — | — | (4,590 | ) | — | — | — | — | (4,590 | ) | ||||||||||||||||||||
Cash distributions ($3.00 per unit) | — | — | (51,886 | ) | — | — | (4,810 | ) | — | (56,696 | ) | |||||||||||||||||||
Unit-based compensation | — | 3,500 | 113 | — | — | — | — | 113 | ||||||||||||||||||||||
Purchase of treasury units | — | (3,500 | ) | (108 | ) | — | — | — | — | (108 | ) | |||||||||||||||||||
Adjustment in fair value of derivatives | — | — | — | — | — | — | 3,495 | 3,495 | ||||||||||||||||||||||
Balances – December 31, 2010 | 53,154 | 17,707,832 | 250,787 | 889,444 | 17,721 | 4,879 | 1,419 | 327,960 | ||||||||||||||||||||||
Net income (loss) | (1,583 | ) | — | 19,053 | — | — | 5,289 | — | 22,759 | |||||||||||||||||||||
Recognition of beneficial conversion feature | — | — | (1,108 | ) | — | 1,108 | — | — | — | |||||||||||||||||||||
Follow-on public offering | — | 1,874,500 | 70,330 | — | — | — | — | 70,330 | ||||||||||||||||||||||
General partner contribution | — | — | — | — | — | 1,505 | — | 1,505 | ||||||||||||||||||||||
Conversion of subordinated units to common units | — | 889,444 | 18,829 | (889,444 | ) | (18,829 | ) | — | — | — | ||||||||||||||||||||
Cash distributions ($3.05 per unit) | — | — | (58,252 | ) | — | — | (6,245 | ) | — | (64,497 | ) | |||||||||||||||||||
Excess purchase price over carrying value of acquired assets | — | — | (19,685 | ) | — | — | — | — | (19,685 | ) | ||||||||||||||||||||
Unit-based compensation | — | 14,850 | 190 | — | — | — | — | 190 | ||||||||||||||||||||||
Purchase of treasury units | — | (14,850 | ) | (582 | ) | — | — | — | — | (582 | ) | |||||||||||||||||||
Adjustment in fair value of derivatives | — | — | — | — | — | — | (793 | ) | (793 | ) | ||||||||||||||||||||
Balances – December 31, 2011 | 51,571 | 20,471,776 | 279,562 | — | — | 5,428 | 626 | 337,187 | ||||||||||||||||||||||
Net income (loss) | 4,622 | — | 92,617 | — | — | 4,748 | — | 101,987 | ||||||||||||||||||||||
Follow-on public offering | — | 6,095,000 | 194,170 | — | — | — | — | 194,170 | ||||||||||||||||||||||
General partner contribution | — | — | — | — | — | 4,145 | — | 4,145 | ||||||||||||||||||||||
Cash distributions ($3.06 per unit) | — | — | (70,679 | ) | — | — | (5,849 | ) | — | (76,528 | ) | |||||||||||||||||||
Excess purchase price over carrying value of acquired assets | — | — | (142,075 | ) | — | — | — | — | (142,075 | ) | ||||||||||||||||||||
Excess carrying value of assets over the purchase price paid by Martin Resource Management | — | — | (4,268 | ) | — | — | — | — | (4,268 | ) | ||||||||||||||||||||
Unit-based compensation | — | — | 385 | — | — | — | — | 385 | ||||||||||||||||||||||
Purchase of treasury units | — | — | (222 | ) | — | — | — | — | (222 | ) | ||||||||||||||||||||
Contributions to parent | (56,193 | ) | — | — | — | — | — | — | (56,193 | ) | ||||||||||||||||||||
Adjustment in fair value of derivatives | — | — | — | — | — | — | (626 | ) | (626 | ) | ||||||||||||||||||||
Balances – December 31, 2012 | $ | — | 26,566,776 | $ | 349,490 | $ | — | $ | — | $ | 8,472 | $ | — | $ | 357,962 | |||||||||||||||
1Financial information for 2012, 2011 and 2010 has been revised to include results attributable to the Redbird Class A interests and the Packaging Assets acquired from Cross prior to October 2, 2012. See Note 2(a) – Principles of Presentation and Consolidation.
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on March 4, 2013.
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Year Ended December 31, | |||||||||||
2012¹ | 2011¹ | 2010¹ | |||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 101,987 | $ | 22,759 | $ | 27,533 | |||||
Less: Income from discontinued operations | (64,865 | ) | (9,392 | ) | (8,061 | ) | |||||
Net income from continuing operations | 37,122 | 13,367 | 19,472 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 42,063 | 40,276 | 36,884 | ||||||||
Amortization of deferred debt issue costs | 3,290 | 3,755 | 4,814 | ||||||||
Amortization of discount on notes payable | 581 | 351 | 269 | ||||||||
Deferred income taxes | 402 | 622 | 452 | ||||||||
(Gain) loss on disposition or sale of property, plant, and equipment | 795 | 898 | (229 | ) | |||||||
Gain on sale of equity method investment | (486 | ) | — | — | |||||||
Equity in (earnings) loss of unconsolidated entities | 1,113 | 4,752 | (2,536 | ) | |||||||
Gain on ownership change in unconsolidated entity | — | — | (6,413 | ) | |||||||
Other | 385 | 190 | 113 | ||||||||
Change in current assets and liabilities, excluding effects of acquisitions and dispositions: | |||||||||||
Accounts and other receivables | (56,703 | ) | (34,626 | ) | (20,009 | ) | |||||
Product exchange receivables | 14,230 | (8,547 | ) | (4,967 | ) | ||||||
Inventories | (2,733 | ) | (28,714 | ) | (20,815 | ) | |||||
Due from affiliates | (19,999 | ) | 5,551 | (175 | ) | ||||||
Other current assets | 3,046 | (1,996 | ) | (1,455 | ) | ||||||
Trade and other accounts payable | 16,186 | 50,904 | 14,116 | ||||||||
Product exchange payables | (25,126 | ) | 14,961 | 14,366 | |||||||
Due to affiliates | 18,601 | 11,874 | (5,714 | ) | |||||||
Income taxes payable | 367 | (943 | ) | (8 | ) | ||||||
Other accrued liabilities | (1,467 | ) | 1,063 | 5,185 | |||||||
Change in other non-current assets and liabilities | 872 | 3,500 | (4,307 | ) | |||||||
Net cash provided by continuing operating activities | 32,539 | 77,238 | 29,043 | ||||||||
Net cash provided by discontinued operating activities | 139 | 14,124 | 10,135 | ||||||||
Net cash provided by operating activities | 32,678 | 91,362 | 39,178 | ||||||||
Cash flows from investing activities: | |||||||||||
Payments for property, plant, and equipment | (93,640 | ) | (77,202 | ) | (18,179 | ) | |||||
Acquisitions, net of cash acquired | (224,603 | ) | (16,815 | ) | (16,747 | ) | |||||
Proceeds from sale of acquired assets | 56,000 | — | — | ||||||||
Payments for plant turnaround costs | (2,107 | ) | (2,103 | ) | (1,090 | ) | |||||
Proceeds from sale of property, plant, and equipment | 44 | 1,025 | 994 | ||||||||
Proceeds from sale of equity method investment | 531 | — | — | ||||||||
Investments in unconsolidated entities | (775 | ) | (59,319 | ) | — | ||||||
Milestone distributions from ECP | 2,208 | — | 6,625 | ||||||||
Return of investments from unconsolidated entities | 5,980 | 1,432 | — | ||||||||
(Contributions to) unconsolidated entities for operations | (30,279 | ) | (35,765 | ) | (19,253 | ) | |||||
Net cash (used in) continuing investing activities | (286,641 | ) | (188,747 | ) | (47,650 | ) | |||||
Net cash provided by (used in) discontinued investing activities | 271,605 | (13,908 | ) | (43,366 | ) | ||||||
Net cash (used in) investing activities | (15,036 | ) | (202,655 | ) | (91,016 | ) | |||||
Cash flows from financing activities: | |||||||||||
Payments of long-term debt | (706,000 | ) | (442,000 | ) | (441,868 | ) | |||||
Payments of notes payable and capital lease obligations | (6,556 | ) | (1,132 | ) | (111 | ) | |||||
Proceeds from long-term debt | 727,000 | 529,000 | 503,856 | ||||||||
Net proceeds from follow on public offerings | 194,170 | 70,330 | 78,600 | ||||||||
General partner contributions | 4,145 | 1,505 | 1,089 | ||||||||
Redemption of common units | — | — | (28,070 | ) | |||||||
Excess purchase price over carrying value of acquired assets | (142,075 | ) | (19,685 | ) | (4,590 | ) | |||||
Excess carrying value of assets over the purchase price paid by Martin Resource Management | (4,268 | ) | — | — | |||||||
Purchase of treasury units | (222 | ) | (582 | ) | (108 | ) | |||||
Increase (decrease) in affiliate funding of investments in unconsolidated entities | (2,208 | ) | 30,828 | 12,628 | |||||||
Payments of debt issuance costs | (204 | ) | (3,588 | ) | (7,468 | ) | |||||
Cash distributions paid | (76,528 | ) | (64,497 | ) | (56,696 | ) | |||||
Net cash provided by (used in) financing activities | (12,746 | ) | 100,179 | 57,262 | |||||||
Net increase (decrease) in cash | 4,896 | (11,114 | ) | 5,424 | |||||||
Cash at beginning of period | 266 | 11,380 | 5,956 | ||||||||
Cash at end of period | $ | 5,162 | $ | 266 | $ | 11,380 | |||||
Supplemental schedule of non-cash investing and financing activities: | |||||||||||
Purchase of assets under note payable | $ | — | $ | — | $ | 7,354 | |||||
1Financial information for 2012, 2011 and 2010 has been revised to include results attributable to the Redbird Class A interests and the Packaging Assets acquired from Cross prior to October 2, 2012. See Note 2(a) – Principles of Presentation and Consolidation.
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on March 4, 2013.
MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Dollars in thousands)
Terminalling and Storage Segment | Years Ended December 31, | ||||||||||
2012¹ | 2011¹ | 2010¹ | |||||||||
(In thousands) | |||||||||||
Revenues: | |||||||||||
Services | $ | 94,895 | $ | 81,697 | $ | 71,471 | |||||
Products | 227,280 | 201,478 | 128,273 | ||||||||
Total revenues | 322,175 | 283,175 | 199,744 | ||||||||
Cost of products sold | 202,966 | 182,928 | 115,308 | ||||||||
Operating expenses | 63,499 | 54,992 | 43,360 | ||||||||
Selling, general and administrative expenses | 4,671 | 3,343 | 2,180 | ||||||||
Depreciation and amortization | 22,976 | 19,814 | 17,330 | ||||||||
28,063 | 22,098 | 21,566 | |||||||||
Other operating loss | (119 | ) | (531 | ) | 244 | ||||||
Operating income | $ | 27,944 | $ | 21,567 | $ | 21,810 | |||||
Natural Gas Services Segment | Years Ended December 31, | ||||||||||
2012¹ | 2011¹ | 2010¹ | |||||||||
(In thousands) | |||||||||||
Revenues | $ | 825,506 | $ | 611,749 | $ | 442,005 | |||||
Cost of products sold | 803,195 | 600,034 | 428,843 | ||||||||
Operating expenses | 3,550 | 2,994 | 3,210 | ||||||||
Selling, general and administrative expenses | 4,236 | 1,876 | 2,581 | ||||||||
Depreciation and amortization | 601 | 578 | 571 | ||||||||
13,924 | 6,267 | 6,800 | |||||||||
Other operating income (loss) | — | — | (20 | ) | |||||||
Operating income | $ | 13,924 | $ | 6,267 | $ | 6,780 | |||||
NGLs Volumes (Bbls) | 12,080 | 7,866 | 6,997 | ||||||||
The Natural Gas Services segment information shown above excludes the discontinued operations of the Prism Assets for all periods presented.
1Financial information for 2012, 2011 and 2010 has been revised to include results attributable to the Redbird Class A interests and the Packaging Assets acquired from Cross prior to October 2, 2012. See Note 2(a) – Principles of Presentation and Consolidation.
MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Dollars in thousands)
Sulfur Services Segment | Years Ended December 31, | ||||||||||
2012¹ | 2011¹ | 2010¹ | |||||||||
(In thousands) | |||||||||||
Revenues: | |||||||||||
Services | $ | 11,702 | $ | 11,400 | $ | — | |||||
Products | 249,882 | 263,644 | 165,078 | ||||||||
Total revenues | 261,584 | 275,044 | 165,078 | ||||||||
Cost of products sold | 195,314 | 220,059 | 122,483 | ||||||||
Operating expenses | 17,404 | 19,328 | 17,013 | ||||||||
Selling, general and administrative expenses | 3,975 | 3,361 | 3,422 | ||||||||
Depreciation and amortization | 7,371 | 6,725 | 6,262 | ||||||||
37,520 | 25,571 | 15,898 | |||||||||
Other operating income (loss) | (258 | ) | 2,080 | (12 | ) | ||||||
Operating income | $ | 37,262 | $ | 27,651 | $ | 15,886 | |||||
Sulfur (long tons) | 1,066.1 | 1,314.5 | 1,129.2 | ||||||||
Fertilizer (long tons) | 306.1 | 271.8 | 274.9 | ||||||||
Sulfur services volumes (long tons) | 1,372.2 | 1,586.3 | 1,404.1 | ||||||||
Marine Transportation Segment | Years Ended December 31, | ||||||||||
2012¹ | 2011¹ | 2010¹ | |||||||||
(In thousands) | |||||||||||
Revenues | $ | 88,815 | $ | 83,971 | $ | 82,635 | |||||
Operating expenses | 70,342 | 66,771 | 57,642 | ||||||||
Selling, general and administrative expenses | 566 | 3,087 | 2,296 | ||||||||
Depreciation and amortization | 11,115 | 13,159 | 12,721 | ||||||||
6,792 | 954 | 9,976 | |||||||||
Other operating (loss) | (41 | ) | (223 | ) | 16 | ||||||
Operating income | $ | 6,751 | $ | 731 | $ | 9,992 | |||||
1Financial information for 2012, 2011 and 2010 has been revised to include results attributable to the Redbird Class A interests and the Packaging Assets acquired from Cross prior to October 2, 2012. See Note 2(a) – Principles of Presentation and Consolidation.
MARTIN MIDSTREAM PARTNERS L.P.
DISTRIBUTABLE CASH FLOW
Unaudited Non-GAAP Financial Measure
(Dollars in thousands)
Three Months Ended December 31, 2012 | Years Ended December 31, 2012 | ||||||
(In thousands) | |||||||
Net income | $ | 6,729 | $ | 101,987 | |||
Less: (Income) loss from discontinued operations | 2,447 | (64,865 | ) | ||||
Net income from continuing operations | 9,176 | 37,122 | |||||
Adjustments to reconcile net income to distributable cash flow: | |||||||
Continuing operations: | |||||||
Depreciation and amortization | 11,748 | 42,063 | |||||
Loss on sale of property, plant and equipment | 788 | 795 | |||||
Amortization of debt discount | 77 | 581 | |||||
Amortization of deferred debt issuance costs | 679 | 3,290 | |||||
Payments of installment notes payable and capital lease obligations | (23 | ) | (279 | ) | |||
Deferred income taxes | — | 402 | |||||
Mont Belvieu indemnity escrow payment | — | (375 | ) | ||||
Debt prepayment premium | — | 2,470 | |||||
Gain on sale of equity method investment | — | (486 | ) | ||||
Equity in loss of unconsolidated entities | 1,368 | 1,113 | |||||
Payments for plant turnaround costs | 471 | (2,107 | ) | ||||
Maintenance capital expenditures | (5,055 | ) | (8,658 | ) | |||
Unit-based compensation | 6 | 385 | |||||
Distribution equivalents from unconsolidated entities from continuing operations1 | 847 | 3,961 | |||||
Distributable cash flow from continuing operations | 20,082 | 80,277 | |||||
Discontinued operations: | |||||||
Income (loss) from discontinued operations, net of tax | 64,865 | ||||||
Depreciation and amortization | 2,320 | ||||||
Gain on sale of property, plant and equipment | (10 | ) | |||||
Gain on sale of discontinued operations | (61,848 | ) | |||||
Income tax expense from sale of discontinued operations | 1,598 | ||||||
Equity in earnings of unconsolidated entities | (4,611 | ) | |||||
Maintenance capital expenditures | (537 | ) | |||||
Distribution equivalents from unconsolidated entities from discontinued operations2 | 6,792 | ||||||
Invested cash in unconsolidated entities from discontinued operations3 | 51 | ||||||
Distributable cash flow from discontinued operations | 8,620 | ||||||
Distributable cash flow | $ | 88,897 | |||||
Distributable cash flow attributable to Packaging Assets4 | (5,094 | ) | |||||
Net Distributable cash flow | $ | 83,803 | |||||
Three Months Ended December 31, 2012 | Years Ended December 31, 2012 | ||||||
(In thousands) | |||||||
1 Distribution equivalents from unconsolidated entities from continuing operations: | |||||||
Distributions from unconsolidated entities | $ | — | $ | — | |||
Return of investments from unconsolidated entities | 847 | 3,961 | |||||
Distribution equivalents from unconsolidated entities | $ | 847 | $ | 3,961 | |||
2 Distribution equivalents from unconsolidated entities from discontinued operations: | |||||||
Return of investments from unconsolidated entities | $ | — | $ | 400 | |||
Distributions in-kind from equity investments | — | 6,392 | |||||
Distribution equivalents from unconsolidated entities | $ | — | $ | 6,792 | |||
3 Invested cash in unconsolidated entities from discontinued operations: | |||||||
(Contributions to) unconsolidated entities for operations | $ | — | $ | (3,051 | ) | ||
Expansion capital expenditures in unconsolidated entities | — | 3,102 | |||||
Invested cash in unconsolidated entities | $ | — | $ | 51 | |||
4 Distributable cash flow attributable to Packaging Assets: | |||||||
Net Income | $ | — | $ | 3,834 | |||
Depreciation and amortization | — | 858 | |||||
Deferred income taxes | — | 402 | |||||
Distributable cash flow attributable to Packaging Assets | $ | — | $ | 5,094 | |||