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| 8-K - 8-K - MARTIN MIDSTREAM PARTNERS L.P. | form8-kearningsrelease02x2.htm |
EXHIBIT 99.1
MARTIN MIDSTREAM PARTNERS REPORTS
2013 FOURTH QUARTER AND FISCAL YEAR FINANCIAL RESULTS
KILGORE, Texas, February 26, 2014/GlobeNewswire/ -- Martin Midstream Partners L.P. (NASDAQ: MMLP) (the “Partnership”) announced today its financial results for the fourth quarter and year ended December 31, 2013.
The Partnership's adjusted EBITDA for the fourth quarter of 2013 was $38.6 million. This compared to adjusted EBITDA for the fourth quarter of 2012 of $32.0 million. The Partnership's adjusted EBITDA for the year ended December 31, 2013 was $138.0 million. This compared to adjusted EBITDA for the year ended December 31, 2012 of $121.3 million. EBITDA and adjusted EBITDA are non-GAAP financial measures which are explained in greater detail below under the heading "Use of Non-GAAP Financial Information." The Partnership has also included below a table entitled "Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow" in order to show the components of these non-GAAP financial measures and their reconciliation to the most comparable GAAP measurement.
The Partnership's distributable cash flow for the fourth quarter of 2013 was $24.2 million. This compared to distributable cash flow for the fourth quarter of 2012 of $20.6 million. The Partnership's distributable cash flow for the year ended December 31, 2013 was $87.0 million. This compared to distributable cash flow for the year ended December 31, 2012 of $80.3 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 "Reconciliation of EBITDA, Adjusted EBITDA, and 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 reported a loss for the fourth quarter of 2013 of $39.3 million, or $1.44 per limited partner unit. This compared to net income for the fourth quarter of 2012 of $7.2 million, or $0.29 per limited partner unit. Results for the fourth quarter of 2013 were negatively impacted by the $54.1 million non-cash charge related to the Partnership’s share of an impairment of the Monroe Gas Storage Company LLC ("Monroe") assets at Cardinal Gas Storage Partners, LLC (“Cardinal”), an equity method investment of the Partnership. Net income from continuing operations for the fourth quarter of 2012 was $9.7 million, $0.38 per limited partner unit. The Partnership reported a net loss from discontinued operations for the fourth quarter of 2012 of $2.5 million, or $0.09 per limited partner unit. The Partnership reported no income from discontinued operations for the fourth quarter of 2013. Revenues for the fourth quarter of 2013 were $482.0 million compared to $454.1 million for the fourth quarter of 2012.
The Partnership reported a loss from continuing operations for the year ended December 31, 2013 of $13.4 million, or $0.49 per limited partner unit. Results for the year ended December 31, 2013 were negatively impacted by the $54.1 million non-cash charge related to the Partnership's share of an impairment of the Monroe assets at Cardinal. Net income from continuing operations for the year ended December 31, 2012 was $37.1 million, or $1.32 per limited partner unit. The Partnership reported no income from discontinued operations for the year ended December 31, 2013. This compared to net income from discontinued operations for the year ended December 31, 2012 of $64.9 million, or $2.64 per limited partner unit. Income from discontinued operations was positively impacted by a gain on the sale of certain gas gathering and processing assets of $61.8 million for the year ended December 31, 2012. Revenues for the year ended December 31, 2013 were $1.6 billion compared to $1.5 billion for the year ended December 31, 2012.
Included with this press release are the Partnership's consolidated financial statements as of and for the quarter and year ended December 31, 2013 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 3, 2014.
Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership, said “I am pleased with our performance in the fourth quarter of 2013 and the Partnership’s recovery from our seasonally weak third quarter. For the quarter, our distributable cash flow (DCF) coverage ratio was 1.14 times the distribution paid to our unitholders. Likewise, our DCF coverage ratio was 1.03 times for the year ended 2013. Our overall business and asset performance was strong during the quarter, however, DCF was offset by due diligence expenses associated with unsuccessful acquisition opportunities of approximately $1.9 million and increased maintenance capital expenditures. That being said, based on our strong performance and coverage during the fourth quarter we were again able to increase our quarterly distribution. This marks the fifth consecutive quarter we have provided increased distributions to our unitholders.
"Looking at our fourth quarter by segment, and starting with Terminalling and Storage, in late November 2013, we put in service a newly constructed dock facility dedicated solely to our Corpus Christi Crude Terminal and its customer. With the addition of our second docking system and related infrastructure, all of which was completed ahead of schedule, we more than doubled our crude loading capacity. Additionally, as increased Eagle Ford Shale crude oil production drives terminal through-put increases, we are well-positioned with additional tankage under construction. Once fully completed in the second quarter of this year, we expect year over year cash flow from the terminal to increase by over 25%. Partially offsetting the strong results surrounding our Corpus Christi assets were lower than forecasted through-put at the Smackover refinery and weaker than forecasted lubricant sales within our Martin Lubricants platform. However, we continue to view Martin Lubricants as a solid growth platform for the Partnership and are currently exploring several growth initiatives.
"In the Natural Gas Services segment, our wholesale propane and butane distribution services had a strong fourth quarter. Improved market conditions allowed us to capture greater than forecasted volume and margins in our legacy businesses. Additionally, in our refinery grade butane service we again successfully benefited by capturing seasonal margin differentials from butane inventories we placed in storage during the second and third quarters. As fuel blending continues today, butane sales will continue through the end the first quarter, thus completing the seasonal cycle. To date, margins have remained favorable mid-way through the first quarter.
"On the natural gas storage side, prolonged weakness in demand for storage capacity and financing covenants that restrict cash flow have negatively impacted the distributions we have received from our Cardinal investment. Specific to the Monroe facility, our cash flow available for distributions from that asset was $1.7 million in 2013. Based on this weakness, and the unlikelihood of near-term cash flow improvement, Cardinal recorded an impairment charge specific to the Monroe Gas Storage facility of $129.4 million. The Partnership’s share of this charge was $54.1 million recorded in “Equity in Earnings in Unconsolidated Entities” in the Consolidated Statements of Operations in the year end results. Looking ahead, this non-cash asset impairment will have minimal impact on our DCF and our ability to pay distributions to unitholders at the current level as projected cash flow from Monroe is approximately $0.2 million for 2014.
"Lastly, I note that our Partnership’s Redbird ownership interests in the other Cardinal projects at Arcadia, Cadeville and Perryville, Louisiana are operating and generating cash flow at projected levels.
Because of current contracted levels of cash flow and operational performance, no asset write-downs are contemplated with any of these three projects. However, because each of those projects has an asset level project financing in place, upstream distributions are prohibited until certain leverage metrics are achieved.
"Our Sulfur Services segment rebounded from our seasonally weaker third quarter and posted stronger than forecasted performance. Fertilizer volume returned from seasonal lows sooner than we anticipated. Historically, the fourth quarter typically shows improvement as production volume begins delivery and deployment toward the field. Likewise, our pure sulfur businesses showed a recovery from the third quarter and exceeded planned performance. Our fee-based prilling and formed sulfur businesses met expectations for the fourth quarter and full year target performance.
"Finally, our Marine Transportation segment posted solid performance during the fourth quarter and finished the year ahead of the forecasted plan. Both our inland and offshore fleets had near full utilization. The inland fleet in particular had one of its best quarters since 2010. As we forecasted, the incremental demand for liquids transportation connected to shale play off-take was strong during 2013. Accordingly, the Partnership has been able to rely on the stability of cash flow from the Marine Transportation. For 2014, however, we are forecasting a slight reduction in cash flow compared to 2013 for this segment. This is primarily attributed to a disproportionate amount of regulatory dry-docking that will include our entire offshore marine fleet.
"Looking ahead, we have multiple organic growth platforms and projects across our business segments that should render continued near-term and long-term distribution growth. Additionally, we continue to pursue accretive acquisitions."
Investors' Conference Call
An investors’ conference call to review the fourth quarter results will be held on Thursday, February 27, 2014, 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 27, 2014 through 10:59 p.m. Central Time on March 6, 2014. The access code for the conference call and the audio replay is Conference ID No. 44678069. The audio replay of the conference call will also be archived on Martin Midstream Partners’ website at www.martinmidstream.com.
About Martin Midstream Partners L.P.
The Partnership 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: (1) terminalling, storage and packaging services for petroleum products and by-products; (2) natural gas services, including liquids distribution services and natural gas storage; (3) sulfur and sulfur-based products processing, manufacturing, marketing and distribution; and (4) 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 Securities and Exchange Commission. 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's management uses a variety of financial and operational measurements other than its financial statements prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) to analyze its performance. These include: (1) net income before interest expense, income tax expense, and depreciation and amortization (“EBITDA”), (2) adjusted EBITDA and (3) distributable cash flow. The Partnership's management views these measures as important performance measures of core profitability for its operations and the ability to generate and distribute cash flow, and as key components of its internal financial reporting. The Partnership's management believes investors benefit from having access to the same financial measures that management uses.
EBITDA and Adjusted EBITDA. Certain items excluded from EBITDA and adjusted EBITDA are significant components in understanding and assessing an entity's financial performance, such as cost of capital and historic costs of depreciable assets. The Partnership has included information concerning EBITDA and adjusted EBITDA because it provides investors and management with additional information to better understand the following: financial performance of the Partnership's assets without regard to financing methods, capital structure or historical cost basis; the Partnership's operating performance and return on capital as compared to those of other similarly situated entities; and the viability of acquisitions and capital expenditure projects. The Partnership's method of computing adjusted EBITDA may not be the same method used to compute similar measures reported by other entities. The economic substance behind the Partnership's use of adjusted EBITDA is to measure the ability of the Partnership's assets to generate cash sufficient to pay interest costs, support its indebtedness and make distributions to its unit holders.
Distributable Cash Flow. Distributable cash flow is a significant performance measure used by the Partnership's management and by external users of its financial statements, such as investors, commercial banks and research analysts, to compare basic cash flows generated by the Partnership to the cash distributions it expects to pay unitholders. Distributable cash flow is also an important financial measure for the Partnership's unitholders since it serves as an indicator of the Partnership's success in providing a cash return on investment. Specifically, this financial measure indicates to investors whether or not the Partnership is generating cash flow at a level that can sustain or support an increase in its quarterly distribution rates. Distributable cash flow is also a quantitative standard used throughout the investment community with respect to publicly-traded partnerships because the value of a unit of such an entity is generally determined by the unit's yield, which in turn is based on the amount of cash distributions the entity pays to a unitholder.
EBITDA, adjusted EBITDA and distributable cash flow should not be considered alternatives to, or more meaningful than, net income, cash flows from operating activities, or any other measure presented in accordance with GAAP. The Partnership's method of computing these measures may not be the same method used to compute similar measures reported by other entities.
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 AND CONDENSED BALANCE SHEETS
(Dollars in thousands)
December 31, | |||||||
2013 | 2012 | ||||||
Assets | |||||||
Cash | $ | 16,542 | $ | 5,162 | |||
Accounts and other receivables, less allowance for doubtful accounts of $2,492 and $2,805, respectively | 163,855 | 190,652 | |||||
Product exchange receivables | 2,727 | 3,416 | |||||
Inventories | 94,902 | 95,987 | |||||
Due from affiliates | 12,099 | 13,343 | |||||
Other current assets | 7,353 | 2,777 | |||||
Assets held for sale | — | 3,578 | |||||
Total current assets | 297,478 | 314,915 | |||||
Property, plant and equipment, at cost | 929,183 | 767,344 | |||||
Accumulated depreciation | (304,808 | ) | (256,963 | ) | |||
Property, plant and equipment, net | 624,375 | 510,381 | |||||
Goodwill | 23,802 | 19,616 | |||||
Investment in unconsolidated entities | 128,662 | 154,309 | |||||
Debt issuance costs, net | 15,659 | 10,244 | |||||
Other assets, net | 7,943 | 3,531 | |||||
$ | 1,097,919 | $ | 1,012,996 | ||||
Liabilities and Partners’ Capital | |||||||
Current portion of long-term debt and capital lease obligations | $ | — | $ | 3,206 | |||
Trade and other accounts payable | 142,951 | 140,045 | |||||
Product exchange payables | 9,595 | 12,187 | |||||
Due to affiliates | 2,596 | 3,316 | |||||
Income taxes payable | 1,204 | 10,239 | |||||
Other accrued liabilities | 20,242 | 9,489 | |||||
Total current liabilities | 176,588 | 178,482 | |||||
Long-term debt and capital leases, less current maturities | 658,695 | 474,992 | |||||
Other long-term obligations | 2,219 | 1,560 | |||||
Total liabilities | 837,502 | 655,034 | |||||
Commitments and contingencies | |||||||
Partners’ capital | 260,417 | 357,962 | |||||
$ | 1,097,919 | $ | 1,012,996 | ||||
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Revenues: | |||||||||||
Terminalling and storage * | $ | 115,965 | $ | 90,243 | $ | 77,283 | |||||
Marine transportation * | 98,523 | 85,748 | 76,936 | ||||||||
Sulfur services * | 12,004 | 11,702 | 11,400 | ||||||||
Product sales: | |||||||||||
Natural gas services* | 984,653 | 825,506 | 611,749 | ||||||||
Sulfur services* | 201,120 | 249,882 | 263,644 | ||||||||
Terminalling and storage* | 221,245 | 227,280 | 201,478 | ||||||||
1,407,018 | 1,302,668 | 1,076,871 | |||||||||
Total revenues | 1,633,510 | 1,490,361 | 1,242,490 | ||||||||
Costs and expenses: | |||||||||||
Cost of products sold: (excluding depreciation and amortization) | |||||||||||
Natural gas services * | 944,961 | 801,724 | 598,814 | ||||||||
Sulfur services * | 157,723 | 194,952 | 219,697 | ||||||||
Terminalling and storage * | 195,640 | 205,588 | 182,412 | ||||||||
1,298,324 | 1,202,264 | 1,000,923 | |||||||||
Expenses: | |||||||||||
Operating expenses * | 172,043 | 146,287 | 134,734 | ||||||||
Selling, general and administrative * | 29,397 | 25,494 | 20,531 | ||||||||
Depreciation and amortization | 52,240 | 42,063 | 40,276 | ||||||||
Total costs and expenses | 1,552,004 | 1,416,108 | 1,196,464 | ||||||||
Other operating income (loss) | 1,166 | (418 | ) | 1,326 | |||||||
Operating income | 82,672 | 73,835 | 47,352 | ||||||||
Other income (expense): | |||||||||||
Equity in loss of unconsolidated entities | (53,048 | ) | (1,113 | ) | (4,752 | ) | |||||
Debt prepayment premium | (272 | ) | (2,470 | ) | — | ||||||
Interest expense | (42,495 | ) | (30,665 | ) | (26,781 | ) | |||||
Other, net | 542 | 1,092 | 420 | ||||||||
Total other income (expense) | (95,273 | ) | (33,156 | ) | (31,113 | ) | |||||
Net income (loss) before taxes | (12,601 | ) | 40,679 | 16,239 | |||||||
Income tax expense | (753 | ) | (3,557 | ) | (2,872 | ) | |||||
Income (loss) from continuing operations | (13,354 | ) | 37,122 | 13,367 | |||||||
Income from discontinued operations, net of income taxes | — | 64,865 | 9,392 | ||||||||
Net income (loss) | (13,354 | ) | 101,987 | 22,759 | |||||||
Less general partner's interest in net (income) loss | 267 | (4,748 | ) | (5,289 | ) | ||||||
Less pre-acquisition (income) loss allocated to Parent | — | (4,622 | ) | 1,583 | |||||||
Less (income) loss allocable to unvested restricted units | 40 | — | — | ||||||||
Less beneficial conversion feature | — | — | (1,108 | ) | |||||||
Limited partner's interest in net income | $ | (13,047 | ) | $ | 92,617 | $ | 17,945 | ||||
*Related Party Transactions Shown Below
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
*Related Party Transactions Included Above
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Revenues: | |||||||||||
Terminalling and storage | $ | 71,517 | $ | 64,669 | $ | 54,211 | |||||
Marine transportation | 24,654 | 17,494 | 23,478 | ||||||||
Product sales | 4,698 | 7,201 | 9,081 | ||||||||
Costs and expenses: | |||||||||||
Cost of products sold: (excluding depreciation and amortization) | |||||||||||
Natural gas services | 32,639 | 27,512 | 16,749 | ||||||||
Sulfur services | 18,161 | 16,968 | 18,314 | ||||||||
Terminalling and storage | 48,868 | 48,375 | 45,089 | ||||||||
Expenses: | |||||||||||
Operating expenses | 70,333 | 58,834 | 58,051 | ||||||||
Selling, general and administrative | 17,733 | 13,678 | 8,610 | ||||||||
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Allocation of net income (loss) attributable to: | |||||||||||
Limited partner interest: | |||||||||||
Continuing operations | $ | (13,047 | ) | $ | 30,915 | $ | 11,193 | ||||
Discontinued operations | — | 61,702 | 6,752 | ||||||||
(13,047 | ) | 92,617 | 17,945 | ||||||||
General partner interest: | |||||||||||
Continuing operations | (267 | ) | 1,585 | 3,106 | |||||||
Discontinued operations | — | 3,163 | 2,183 | ||||||||
(267 | ) | 4,748 | 5,289 | ||||||||
Net income (loss) per unit attributable to limited partners: | |||||||||||
Basic: | |||||||||||
Continuing operations | $ | (0.49 | ) | $ | 1.32 | $ | 0.57 | ||||
Discontinued operations | — | 2.64 | 0.35 | ||||||||
$ | (0.49 | ) | $ | 3.96 | $ | 0.92 | |||||
Weighted average limited partner units - basic | 26,558 | 23,362 | 19,545 | ||||||||
Diluted: | |||||||||||
Continuing operations | $ | (0.49 | ) | $ | 1.32 | $ | 0.57 | ||||
Discontinued operations | — | 2.64 | 0.35 | ||||||||
$ | (0.49 | ) | $ | 3.96 | $ | 0.92 | |||||
Weighted average limited partner units - diluted | 26,558 | 23,365 | 19,547 | ||||||||
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands)
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Net income | $ | (13,354 | ) | $ | 101,987 | $ | 22,759 | ||||
Other comprehensive income adjustments: | |||||||||||
Changes in fair values of commodity cash flow hedges | — | 126 | 1,011 | ||||||||
Commodity cash flow hedging gains reclassified to earnings | — | (752 | ) | (1,822 | ) | ||||||
Interest rate cash flow hedging losses reclassified to earnings | — | — | 18 | ||||||||
Other comprehensive income (loss) | — | (626 | ) | (793 | ) | ||||||
Comprehensive income | $ | (13,354 | ) | $ | 101,361 | $ | 21,966 | ||||
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL
(Dollars in thousands)
Partners’ Capital | |||||||||||||||||||||||||||||
Parent Net Investment | Common | Subordinated | General Partner | Accumulated Comprehensive Income | |||||||||||||||||||||||||
Units | Amount | Units | Amount | Amount | Amount | Total | |||||||||||||||||||||||
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 | |||||||||||||||||||||
Issuance of restricted units | — | 14,850 | — | — | — | — | — | — | |||||||||||||||||||||
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 | — | — | 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 | 4,622 | 92,617 | 4,748 | 101,987 | |||||||||||||||||||||||||
Follow-on public offering | — | 6,095,000 | 194,170 | — | — | — | — | 194,170 | |||||||||||||||||||||
Issuance of restricted units | — | 6,250 | — | — | — | — | — | — | |||||||||||||||||||||
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 | — | (6,250 | ) | (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 | |||||||||||||||||||||
Net loss | — | — | (13,087 | ) | — | — | (267 | ) | — | (13,354 | ) | ||||||||||||||||||
Issuance of restricted units | — | 64,500 | — | — | — | — | — | — | |||||||||||||||||||||
Forfeiture of restricted units | — | (250 | ) | — | — | — | — | — | — | ||||||||||||||||||||
General partner contribution | — | — | — | — | — | 37 | — | 37 | |||||||||||||||||||||
Purchase of treasury units | — | (6,000 | ) | (250 | ) | — | — | — | — | (250 | ) | ||||||||||||||||||
Cash distributions ($3.11 per unit) | — | — | (82,735 | ) | — | — | (1,853 | ) | — | (84,588 | ) | ||||||||||||||||||
Excess purchase price over carrying value of acquired assets | — | — | (301 | ) | — | — | — | — | (301 | ) | |||||||||||||||||||
Unit-based compensation | — | — | 911 | — | — | — | — | 911 | |||||||||||||||||||||
Balances – December 31, 2013 | $ | — | 26,625,026 | $ | 254,028 | — | $ | — | $ | 6,389 | $ | — | $ | 260,417 | |||||||||||||||
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ | (13,354 | ) | $ | 101,987 | $ | 22,759 | ||||
Less: Income from discontinued operations | — | (64,865 | ) | (9,392 | ) | ||||||
Net income (loss) from continuing operations | (13,354 | ) | 37,122 | 13,367 | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 52,240 | 42,063 | 40,276 | ||||||||
Amortization of deferred debt issue costs | 3,700 | 3,290 | 3,755 | ||||||||
Amortization of discount on notes payable | 306 | 581 | 351 | ||||||||
Deferred income taxes | — | 402 | 622 | ||||||||
(Gain) loss on disposition or sale of property, plant, and equipment | (217 | ) | 795 | 898 | |||||||
Gain on sale of equity method investment | (750 | ) | (486 | ) | — | ||||||
Equity in loss of unconsolidated entities | 53,048 | 1,113 | 4,752 | ||||||||
Unit-based compensation | 911 | 385 | 190 | ||||||||
Preferred dividends on Martin Energy Trading | 1,738 | — | — | ||||||||
Other | 6 | — | — | ||||||||
Change in current assets and liabilities, excluding effects of acquisitions and dispositions: | |||||||||||
Accounts and other receivables | 23,847 | (56,856 | ) | (34,626 | ) | ||||||
Product exchange receivables | 689 | 14,230 | (8,547 | ) | |||||||
Inventories | 3,762 | (2,733 | ) | (28,714 | ) | ||||||
Due from affiliates | 1,244 | (20,135 | ) | 5,551 | |||||||
Other current assets | (5,432 | ) | 3,046 | (1,996 | ) | ||||||
Trade and other accounts payable | (6,019 | ) | 17,595 | 50,904 | |||||||
Product exchange payables | (2,592 | ) | (25,126 | ) | 14,961 | ||||||
Due to affiliates | (1,203 | ) | 18,976 | 11,874 | |||||||
Income taxes payable | (357 | ) | 367 | (943 | ) | ||||||
Other accrued liabilities | 10,753 | (1,463 | ) | 1,063 | |||||||
Change in other non-current assets and liabilities | (1,459 | ) | 872 | 3,500 | |||||||
Net cash provided by continuing operating activities | 120,861 | 34,038 | 77,238 | ||||||||
Net cash provided by (used in) discontinued operating activities | (8,678 | ) | (1,360 | ) | 14,124 | ||||||
Net cash provided by operating activities | 112,183 | 32,678 | 91,362 | ||||||||
Cash flows from investing activities: | |||||||||||
Payments for property, plant, and equipment | (92,243 | ) | (93,640 | ) | (77,202 | ) | |||||
Acquisitions, net of cash acquired | (73,921 | ) | (224,603 | ) | (16,815 | ) | |||||
Proceeds from sale of acquired assets | — | 56,000 | — | ||||||||
Payments for plant turnaround costs | — | (2,107 | ) | (2,103 | ) | ||||||
Proceeds from sale of property, plant, and equipment | 5,576 | 44 | 1,025 | ||||||||
Proceeds from sale of equity method investment | 750 | 531 | — | ||||||||
Proceeds from involuntary conversion of property, plant and equipment | 2,200 | — | — | ||||||||
Investments in unconsolidated entities | — | (775 | ) | (59,319 | ) | ||||||
Milestone distributions from ECP | — | 2,208 | — | ||||||||
Return of investments from unconsolidated entities | 1,738 | 5,980 | 1,432 | ||||||||
Contributions to unconsolidated entities for operations | (30,877 | ) | (30,279 | ) | (35,765 | ) | |||||
Net cash used in continuing investing activities | (186,777 | ) | (286,641 | ) | (188,747 | ) | |||||
Net cash provided by (used in) discontinued investing activities | — | 271,605 | (13,908 | ) | |||||||
Net cash used in investing activities | (186,777 | ) | (15,036 | ) | (202,655 | ) | |||||
Cash flows from financing activities: | |||||||||||
Payments of long-term debt | (650,000 | ) | (706,000 | ) | (442,000 | ) | |||||
Payments of notes payable and capital lease obligations | (8,809 | ) | (6,556 | ) | (1,132 | ) | |||||
Proceeds from long-term debt | 839,000 | 727,000 | 529,000 | ||||||||
Net proceeds from follow on public offerings | — | 194,170 | 70,330 | ||||||||
General partner contributions | 37 | 4,145 | 1,505 | ||||||||
Excess purchase price over carrying value of acquired assets | (301 | ) | (142,075 | ) | (19,685 | ) | |||||
Excess carrying value of assets over the purchase price paid by Martin Resource Management | — | (4,268 | ) | — | |||||||
Purchase of treasury units | (250 | ) | (222 | ) | (582 | ) | |||||
Increase (decrease) in affiliate funding of investments in unconsolidated entities | — | (2,208 | ) | 30,828 | |||||||
Payments of debt issuance costs | (9,115 | ) | (204 | ) | (3,588 | ) | |||||
Cash distributions paid | (84,588 | ) | (76,528 | ) | (64,497 | ) | |||||
Net cash provided by (used in) financing activities | 85,974 | (12,746 | ) | 100,179 | |||||||
Net increase (decrease) in cash | 11,380 | 4,896 | (11,114 | ) | |||||||
Cash at beginning of period | 5,162 | 266 | 11,380 | ||||||||
Cash at end of period | $ | 16,542 | $ | 5,162 | $ | 266 | |||||
MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Dollars and volumes in thousands, except BBL per day)
Terminalling and Storage Segment
Comparative Results of Operations for the Twelve Months Ended December 31, 2013 and 2012
Year Ended December 31, | Variance | Percent Change | |||||||||||
2013 | 2012 | ||||||||||||
(In thousands) | |||||||||||||
Revenues: | |||||||||||||
Services | $ | 120,717 | $ | 94,895 | $ | 25,822 | 27% | ||||||
Products | 221,249 | 227,280 | (6,031 | ) | (3)% | ||||||||
Total revenues | 341,966 | 322,175 | 19,791 | 6% | |||||||||
Cost of products sold | 197,974 | 207,699 | (9,725 | ) | (5)% | ||||||||
Operating expenses | 74,441 | 58,766 | 15,675 | 27% | |||||||||
Selling, general and administrative expenses | 3,238 | 4,671 | (1,433 | ) | (31)% | ||||||||
Depreciation and amortization | 31,823 | 22,976 | 8,847 | 39% | |||||||||
34,490 | 28,063 | 6,427 | 23% | ||||||||||
Other operating income (loss) | 792 | (119 | ) | 911 | 766% | ||||||||
Operating income | $ | 35,282 | $ | 27,944 | $ | 7,338 | 26% | ||||||
Lubricant sales volumes (gallons) | 39,342 | 38,107 | 1,235 | 3% | |||||||||
Shore-based throughput volumes (gallons) | 270,522 | 218,494 | 52,028 | 24% | |||||||||
Smackover refinery throughput volumes (BBL per day) | 6,912 | 5,994 | 918 | 15% | |||||||||
Corpus Christi crude terminal (BBL per day) | 108,652 | 55,529 | 53,123 | 96% | |||||||||
Comparative Results of Operations for the Twelve Months Ended December 31, 2012 and 2011
Year Ended December 31, | Variance | Percent Change | |||||||||||
2012 | 2011 | ||||||||||||
(In thousands) | |||||||||||||
Revenues: | |||||||||||||
Services | $ | 94,895 | $ | 81,697 | $ | 13,198 | 16% | ||||||
Products | 227,280 | 201,478 | 25,802 | 13% | |||||||||
Total revenues | 322,175 | 283,175 | 39,000 | 14% | |||||||||
Cost of products sold | 207,699 | 185,879 | 21,820 | 12% | |||||||||
Operating expenses | 58,766 | 52,041 | 6,725 | 13% | |||||||||
Selling, general and administrative expenses | 4,671 | 3,343 | 1,328 | 40% | |||||||||
Depreciation and amortization | 22,976 | 19,814 | 3,162 | 16% | |||||||||
28,063 | 22,098 | 5,965 | 27% | ||||||||||
Other operating loss | (119 | ) | (531 | ) | 412 | 78% | |||||||
Operating income | $ | 27,944 | $ | 21,567 | $ | 6,377 | 30% | ||||||
Lubricant sales volumes (gallons) | 38,107 | 36,189 | 1,918 | 5% | |||||||||
Shore-based throughput volumes (gallons) | 218,494 | 216,410 | 2,084 | 1% | |||||||||
Smackover refinery throughput volumes (BBL per day) | 5,994 | 6,820 | (826 | ) | (12)% | ||||||||
Corpus Christi crude terminal (BBL per day) | 55,529 | — | 55,529 | ||||||||||
MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Dollars and volumes in thousands, except BBL per day)
Natural Gas Services Segment
Comparative Results of Operations for the Twelve Months Ended December 31, 2013 and 2012
Year Ended December 31, | Variance | Percent Change | ||||||||||||
2013 | 2012 | |||||||||||||
(In thousands) | ||||||||||||||
Revenues: | ||||||||||||||
Marine transportation | $ | 3,028 | $ | — | $ | 3,028 | ||||||||
Products | 984,653 | 825,506 | 159,147 | 19% | ||||||||||
Total revenues | 987,681 | 825,506 | 162,175 | — | ||||||||||
Cost of products sold | 946,551 | 803,195 | 143,356 | 18% | ||||||||||
Operating expenses | 5,806 | 3,550 | 2,256 | 64% | ||||||||||
Selling, general and administrative expenses | 3,892 | 4,236 | (344 | ) | (8)% | |||||||||
Depreciation and amortization | 2,240 | 601 | 1,639 | 273% | ||||||||||
29,192 | 13,924 | 15,268 | 110% | |||||||||||
Other operating income | 20 | — | 20 | |||||||||||
Operating income | $ | 29,212 | $ | 13,924 | $ | 15,288 | 110% | |||||||
NGLs Volumes (Bbls) | 15,168 | 12,080 | 3,088 | 26% | ||||||||||
Comparative Results of Operations for the Twelve Months Ended December 31, 2012 and 2011
Year Ended December 31, | Variance | Percent Change | |||||||||||
2012 | 2011 | ||||||||||||
(In thousands) | |||||||||||||
Revenues | $ | 825,506 | $ | 611,749 | 213,757 | 35% | |||||||
Cost of products sold | 803,195 | 600,034 | 203,161 | 34% | |||||||||
Operating expenses | 3,550 | 2,994 | 556 | 19% | |||||||||
Selling, general and administrative expenses | 4,236 | 1,876 | 2,360 | 126% | |||||||||
Depreciation and amortization | 601 | 578 | 23 | 4% | |||||||||
Operating income | $ | 13,924 | $ | 6,267 | $ | 7,657 | 122% | ||||||
NGLs Volumes (Bbls) | 12,080 | 7,866 | 4,214 | 54% | |||||||||
MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Dollars and volumes in thousands, except BBL per day)
Sulfur Services Segment
Comparative Results of Operations for the Twelve Months Ended December 31, 2013 and 2012
Year Ended December 31, | Variance | Percent Change | |||||||||||
2013 | 2012 | ||||||||||||
(In thousands) | |||||||||||||
Revenues: | |||||||||||||
Services | $ | 12,004 | $ | 11,702 | $ | 302 | 3% | ||||||
Products | 201,120 | 249,882 | (48,762 | ) | (20)% | ||||||||
Total revenues | 213,124 | 261,584 | (48,460 | ) | (19)% | ||||||||
Cost of products sold | 158,085 | 195,314 | (37,229 | ) | (19)% | ||||||||
Operating expenses | 16,975 | 17,404 | (429 | ) | (2)% | ||||||||
Selling, general and administrative expenses | 4,083 | 3,975 | 108 | 3% | |||||||||
Depreciation and amortization | 7,979 | 7,371 | 608 | 8% | |||||||||
26,002 | 37,520 | (11,518 | ) | (31)% | |||||||||
Other operating loss | — | (258 | ) | 258 | 100% | ||||||||
Operating income | $ | 26,002 | $ | 37,262 | $ | (11,260 | ) | (30)% | |||||
Sulfur (long tons) | 836.6 | 959.9 | (123.3 | ) | (13)% | ||||||||
Fertilizer (long tons) | 273.0 | 306.1 | (33.1 | ) | (11)% | ||||||||
Sulfur services volumes (long tons) | 1,109.6 | 1,266.0 | (156.4 | ) | (12)% | ||||||||
Comparative Results of Operations for the Twelve Months Ended December 31, 2012 and 2011
Year Ended December 31, | Variance | Percent Change | |||||||||||
2012 | 2011 | ||||||||||||
(In thousands) | |||||||||||||
Revenues: | |||||||||||||
Services | $ | 11,702 | $ | 11,400 | $ | 302 | 3% | ||||||
Products | 249,882 | 263,644 | (13,762 | ) | (5)% | ||||||||
Total revenues | 261,584 | 275,044 | (13,460 | ) | (5)% | ||||||||
Cost of products sold | 195,314 | 220,059 | (24,745 | ) | (11)% | ||||||||
Operating expenses | 17,404 | 19,328 | (1,924 | ) | (10)% | ||||||||
Selling, general and administrative expenses | 3,975 | 3,361 | 614 | 18% | |||||||||
Depreciation and amortization | 7,371 | 6,725 | 646 | 10% | |||||||||
37,520 | 25,571 | 11,949 | 47% | ||||||||||
Other operating income (loss) | (258 | ) | 2,080 | (2,338 | ) | (112)% | |||||||
Operating income | $ | 37,262 | $ | 27,651 | $ | 9,611 | 35% | ||||||
Sulfur (long tons) | 959.9 | 1,217.0 | (257.1 | ) | (21)% | ||||||||
Fertilizer (long tons) | 306.1 | 271.8 | 34.3 | 13% | |||||||||
Sulfur services volumes (long tons) | 1,266.0 | 1,488.8 | (222.8 | ) | (15)% | ||||||||
MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Dollars and volumes in thousands, except BBL per day)
Marine Transportation Segment
Comparative Results of Operations for the Twelve Months Ended December 31, 2013 and 2012
Year Ended December 31, | Variance | Percent Change | |||||||||||
2013 | 2012 | ||||||||||||
(In thousands) | |||||||||||||
Revenues | $ | 99,510 | $ | 88,815 | $ | 10,695 | 12% | ||||||
Operating expenses | 79,306 | 70,342 | 8,964 | 13% | |||||||||
Selling, general and administrative expenses | 1,347 | 566 | 781 | 138% | |||||||||
Depreciation and amortization | 10,198 | 11,115 | (917 | ) | (8)% | ||||||||
8,659 | 6,792 | 1,867 | 27% | ||||||||||
Other operating income (loss) | 354 | (41 | ) | 395 | 963% | ||||||||
Operating income | $ | 9,013 | $ | 6,751 | $ | 2,262 | 34% | ||||||
Comparative Results of Operations for the Twelve Months Ended December 31, 2012 and 2011
Year Ended December 31, | Variance | Percent Change | |||||||||||
2012 | 2011 | ||||||||||||
(In thousands) | |||||||||||||
Revenues | $ | 88,815 | $ | 83,971 | $ | 4,844 | 6% | ||||||
Operating expenses | 70,342 | 66,771 | 3,571 | 5% | |||||||||
Selling, general and administrative expenses | 566 | 3,087 | (2,521 | ) | (82)% | ||||||||
Depreciation and amortization | 11,115 | 13,159 | (2,044 | ) | (16)% | ||||||||
6,792 | 954 | 5,838 | 612% | ||||||||||
Other operating loss | (41 | ) | (223 | ) | 182 | 82% | |||||||
Operating income | $ | 6,751 | $ | 731 | $ | 6,020 | 824% | ||||||
Non-GAAP Financial Measures
The following table reconciles the non-GAAP financial measurements used by management to our most directly comparable GAAP measures for the three and twelve months ended December 31, 2013 and 2012, which represents EBITDA, Adjusted EBITDA and Distributable Cash Flow from continuing operations.
Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Net income (loss) | $ | (39,261 | ) | $ | 7,243 | $ | (13,354 | ) | $ | 101,987 | |||||
Less: (Income) loss from discontinued operations, net of income taxes | — | 2,447 | — | (64,865 | ) | ||||||||||
Income from continuing operations | (39,261 | ) | 9,690 | (13,354 | ) | 37,122 | |||||||||
Adjustments: | |||||||||||||||
Interest expense | 11,437 | 7,381 | 42,495 | 30,665 | |||||||||||
Income tax benefit (expense) | (157 | ) | 191 | 753 | 3,557 | ||||||||||
Depreciation and amortization | 14,296 | 11,748 | 52,240 | 42,063 | |||||||||||
EBITDA | (13,685 | ) | 29,010 | 82,134 | 113,407 | ||||||||||
Adjustments: | |||||||||||||||
Equity in loss of unconsolidated entities | 52,170 | 1,369 | 53,048 | 1,113 | |||||||||||
(Gain) loss on sale of property, plant and equipment | 579 | 788 | (217 | ) | 795 | ||||||||||
Gain on sale of equity method investment | (750 | ) | — | (750 | ) | (486 | ) | ||||||||
Gain on involuntary conversion of property, plant and equipment | (909 | ) | — | (909 | ) | — | |||||||||
Debt prepayment premium | 272 | — | 272 | 2,470 | |||||||||||
Distributions from unconsolidated entities | 754 | 847 | 3,476 | 3,961 | |||||||||||
Mont Belvieu indemnity escrow payment | — | — | — | (375 | ) | ||||||||||
Unit-based compensation | 174 | 6 | 911 | 385 | |||||||||||
Adjusted EBITDA | 38,605 | 32,020 | 137,965 | 121,270 | |||||||||||
Adjustments: | |||||||||||||||
Interest expense | (11,437 | ) | (7,381 | ) | (42,495 | ) | (30,665 | ) | |||||||
Income tax benefit (expense) | 157 | (191 | ) | (753 | ) | (3,557 | ) | ||||||||
Amortization of deferred debt issuance costs | 810 | 679 | 3,700 | 3,290 | |||||||||||
Amortization of debt discount | 76 | 77 | 306 | 581 | |||||||||||
Payments of installment notes payable and capital lease obligations | (56 | ) | (23 | ) | (307 | ) | (279 | ) | |||||||
Deferred income taxes | — | — | — | 402 | |||||||||||
Payments for plant turnaround costs | — | 471 | — | (2,107 | ) | ||||||||||
Maintenance capital expenditures | (3,972 | ) | (5,055 | ) | (11,445 | ) | (8,658 | ) | |||||||
Distributable Cash Flow | $ | 24,183 | $ | 20,597 | $ | 86,971 | $ | 80,277 | |||||||