Form 8-K/A MARTIN MIDSTREAM PARTNER For: Oct 29
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E-mailUNITED STATES
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A
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CURRENT REPORT
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Pursuant to Section�13 or 15(d)
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of the Securities Exchange Act of 1934
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Date of report (date of earliest event reported): October 29, 2014
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MARTIN MIDSTREAM PARTNERS L.P.
(Exact name of Registrant as specified in its charter)
DELAWARE (State of incorporation or organization) | � | 000-50056 (Commission file number) | � | 05-0527861 (I.R.S. employer identification number) |
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4200 STONE ROAD | � | |||
KILGORE, TEXAS (Address of principal executive offices) | � | 75662 (Zip code) | ||
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Registrant's telephone number, including area code: (903)�983-6200
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(Former name or former address, if changed since last report)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
o | � | Written communications pursuant to Rule�425 under the Securities Act (17 CFR 230.425) |
o | � | Soliciting material pursuant to Rule�14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | � | Pre-commencement communications pursuant to Rule�14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | � | Pre-commencement communications pursuant to Rule�13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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EXPLANATORY NOTE
This Current Report on Form 8-K/A is being filed due to an inadvertent omission of the press release as Exhibit 99.1 in the prior Current Report on Form 8-K filed on October 29, 2014.
Item�2.02 | � | Results of Operations and Financial Condition. |
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����� ����On October 29, 2014, Martin Midstream Partners L.P. (the Partnership ) issued a press release reporting its financial results for the quarter�ended September 30, 2014. ��A copy of the press release is furnished as Exhibit�99.1 to this Current Report and will be published on the Partnership's website at www.martinmidstream.com. In accordance with General Instruction B.2 of Form 8-K, the information set forth herein and in the press release is deemed to be furnished and shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act ).�
Item 5.02 | � | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
(b) ����Departure of Directors
On October 29, 2014, Charles H. Still and Joe N. Averett, Jr. resigned from their positions as members of the board of directors ( Board ) of Martin Midstream GP LLC, the general partner (the General Partner ) of Martin Midstream Partners L.P. (the Partnership ). Neither Mr. Stills nor Mr. Averetts resignation was the result of any disagreements with the General Partner or the Partnership on any matters relating to the General Partner or the Partnership. The Partnership would like to thank Mr. Still and Mr. Averett for their years of dedicated service.
(d) ����Appointment of Directors
Appointment of J.M. Jim Collingsworth as a Director
On October 29, 2014, the Partnership announced in its earnings release the appointment J.M. Jim Collingsworth to the Board, effective October 29, 2014. Pursuant to the Amended and Restated Limited Liability Company Agreement of the General Partner dated August 30, 2013 (the Amended and Restated Company Agreement ) filed with the Partnerships Current Report on Form 8-K on September 3, 2013, certain affiliated funds managed by Alinda Capital Partners (the Alinda Parties ) had the right, after the expiration of the initial one-year period following the execution and delivery of the Amended and Restated Company Agreement, to appoint one additional member to the Board, totaling three appointees to the Board. The Alinda Parties appointed Jim Collingsworth, effective October 29, 2014. Mr. Collingsworth has spent 41 years in all facets of the mid-stream and petrochemical industry. In 2013, Mr. Collingsworth retired from Enterprise Products Company as a Sr. Vice President of Regulated NGL Pipelines & Natural Gas Storage. Mr. Collingsworth has served on the board of directors of Texaco Canada, Dixie Pipeline Company, Seminole Pipeline Company and the Petrochemical Feedstock Association of America. Mr. Collingsworth received a bachelors degree in Finance and Marketing from Northeastern State University.
The Board has determined that Mr. Collingsworth is an independent director within the meaning of the Nasdaq listing standards and the Securities Exchange Act of 1934 and the regulations promulgated thereunder. Mr. Collingsworth will serve as the Chairman of the Compensation Committee and the Chairman of the Nominating Committee. There are no transactions in which Mr. Collingsworth has an interest requiring disclosure under Item 404(a) of Regulation S-K.
Mr. Collingsworth will receive the same compensation for his service on the Board as the other non-employee directors of the General Partner in accordance with the General Partners policies for compensating non-employee directors, including any applicable stock awards. Directors of our General Partner are entitled to receive total quarterly retainer fees of $16,250 each which are paid by the General Partner.
Appointment of Robert D. Bondurant as a Director
On October 29, 2014, the Partnership announced in its earnings release the appointment Robert D. Bondurant to the Board, effective October 29, 2014. Mr. Bondurant joined Martin Resource Management as Controller in 1983, has since served in various capacities and currently serves as Executive Vice President, Treasurer, Chief Financial Officer and Principal
Accounting Officer. Mr. Bondurant holds a Bachelor of Business Administration degree in accounting from Texas A&M University and is a Certified Public Accountant, licensed in the state of Texas.
Mr. Bondurant, as an employee of Martin Resource Management, will not receive any additional compensation for serving on the Board. There are no other transactions in which Mr. Bondurant has an interest requiring disclosure under Item 404(a) of Regulation S-K.
All directors of our General Partner are entitled to reimbursement for their reasonable out-of-pocket expenses in connection with their travel to and from, and attendance at, meetings of the Board or committees thereof. Each director will be fully indemnified by us for actions associated with being a director to the extent permitted under Delaware law.
Item�9.01 | � | Financial Statements and Exhibits. |
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(d)� ����Exhibits
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����� ����In accordance with General Instruction B.2 of Form 8-K, the information set forth in the attached Exhibit�99.1 is deemed to be furnished and shall not be deemed to be filed for purposes of Section 18 of the Exchange Act.
Exhibit Number | Description | |
99.1 | Press release dated October 29, 2014 | |
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�SIGNATURES
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�����Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
� | MARTIN MIDSTREAM PARTNERS L.P. � By: Martin Midstream GP LLC, Its General Partner � | |||
Date: October 29, 2014 | � | By: /s/ Robert D. Bondurant � | ||
� | Robert D. Bondurant | |||
� | � | Executive Vice President, Treasurer, Principal Accounting Officer and Chief Financial Officer� | ||
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�INDEX TO EXHIBITS
Exhibit | � | � | |||
Number | � | Description | |||
� | 99.1 | � | � | Press release dated October 29, 2014. | |
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EXHIBIT 99.1
MARTIN MIDSTREAM PARTNERS REPORTS
INCREASED DISTRIBUTABLE CASH FLOW AND ADJUSTED EBITDA
IN 2014 THIRD QUARTER RESULTS
" | Distribution increase of $0.02 per unit compared to previous quarter |
" | Distributable cash flow increased 45% compared to the 3rd quarter of 2013 |
" | Adjusted EBITDA increased 25% compared to the 3rd quarter of 2013 |
" | Earnings adversely affected by one-time non-cash charges |
KILGORE, Texas, October 29, 2014 (GlobeNewswire) -- Martin Midstream Partners L.P. (Nasdaq: MMLP) (the "Partnership") announced today its financial results for the third quarter ended September 30, 2014.
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The Partnership's distributable cash flow for the third quarter of 2014 was $19.3 million compared to distributable cash flow for the third quarter of 2013 of $13.3 million, an increase of 45%. The Partnership's distributable cash flow for the nine months ended September 30, 2014 was $58.9 million compared to distributable cash flow for the nine months ended September 30, 2013 of $62.8 million. The reduction in distributable cash flow over the prior nine month period is due to increased maintenance capital expenditures and turnaround costs of $9.8 million, which were heavily weighted in the first nine months of 2014.
The Partnership's adjusted EBITDA for the third quarter of 2014 was $33.7 million compared to adjusted EBITDA for the third quarter of 2013 of $26.8 million, an increase of 25%. As a result of a $30.1 million non-cash reduction in the carrying value of the Partnership's 42.2% unconsolidated investment in Cardinal Gas Storage Partners LLC ("Cardinal"), the Partnership reported a net loss for the third quarter of 2014 of $26.9 million, or $0.82 per limited partner unit. The reduction of the investment occurred as a result of the Partnership's acquisition of the 57.8% controlling interest in Cardinal on August 29, 2014. The third quarter of 2014 also included a $3.4 million non-cash asset impairment charge related to one offshore tug and barge unit in the Partnership's Marine Transportation segment. These non-cash transactions negatively impacted earnings but had no impact on distributable cash flow. Net income for the third quarter of 2013 was $0.2 million, or $0.01 per limited partner unit.
The Partnership's adjusted EBITDA for the nine months ended September 30, 2014 was $104.4 million compared to adjusted EBITDA for the nine months ended September 30, 2013 of $99.4 million. As a result of the $30.1 million non-cash charge referenced above, the Partnership reported a net loss for the nine months ended September 30, 2014 of $16.1 million, or $0.54 per limited partner unit. Earnings for the nine months ended September 30, 2014 was also negatively impacted by the $3.4 million non-cash asset impairment charge referenced above. These non-cash transactions negatively impacted earnings but had no impact on distributable cash flow. Net income for the nine months ended September 30, 2013 was $25.9 million, or $0.95 per limited partner unit.
Revenues for the third quarter of 2014 were $390.0 million compared to $359.6 million for the third quarter of 2013. Revenues for the nine months ended September 30, 2014 were $1.3 billion compared to revenues of $1.2 billion for the nine months ended September 30, 2013.
Distributable cash flow, 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.
Included with this press release are the Partnership's consolidated financial statements as of and for the three and nine months ended September 30, 2014 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 October 29, 2014.
Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of Martin Midstream Partners, said, We finished the third quarter 2014 with a 0.78 times distribution coverage ratio based on actual distributions paid during the quarter. This performance exceeded our expectations during what we typically see as a seasonally weaker third quarter. During the quarter we completed the acquisition of the controlling interests in Cardinal Gas Storage Partners LLC which we believe will reduce the seasonality in our business by providing stable, fee-based cash flow for many years to come. On a pro forma basis, had MMLP owned Cardinal for the entire three month period, our third quarter distribution would have been 0.89 times inclusive of the additional debt and equity financing costs associated the acquisition.
"Operationally, we benefitted from stronger than anticipated cash flow from our Marine Transportation segment. Expecting a full recovery versus last quarter and having all of our regulatory maintenance behind us, we saw excellent operating conditions, significantly beating our internal forecast.
"Likewise, the NGL businesses housed within our Natural Gas Services segment were stronger than we forecasted this quarter. Additionally, this segment benefitted from both the full quarter contribution of our West Texas LPG pipeline investment and a one month contribution from our recent Cardinal Gas Storage acquisition. Based on the Cardinal acquisition and the forward outlook of the Partnership, we were pleased to announce a distribution increase of $0.02 payable November 14, 2014. This increase to $0.8125 brings our annualized distribution to $3.25 representing our best year over year distribution growth since 2009.
"Finally, I would like to announce certain changes to the Martin Midstream GP LLC Board of Directors. These changes stem from the investment made by Alinda Capital Partners into MMGP Holdings LLC in 2013. Based on our agreement, Alinda now has the right to place an additional independent member on our board. Accordingly, and effective October 29th, Alinda has appointed J.M. Jim Collingsworth. Jim brings many years of senior level management in the liquids and midstream energy businesses. Immediately prior to Mr. Collingsworths appointment, and to graciously accommodate the Alinda agreement, Charles Hank Still and Joe N. Averett, Jr. both resigned from their positions as members of the board. Upon the resignation of Hank and Joe, Martin Resource Management ("MRMC") appointed Robert Bob D. Bondurant. As many are aware, Bob is the chief financial and accounting officer of both MMLP and MRMC and has over thirty years experience with affiliated Martin entities. I welcome Jim and Bob and want to thank Hank and Joe for their many years of service and dedication assisting MMLP in its growth.
Quarterly Cash Distribution
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The quarterly cash distribution of $0.8125 per common unit, which was announced on October 23, 2014, is payable on November 14, 2014 to common unitholders of record as of the close of business on November 7, 2014. The ex-dividend date for the cash distribution is November 5, 2014. This distribution reflects an annualized distribution rate of $3.25 per unit.
Investors' Conference Call
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An investors' conference call to review the third quarter results will be held on Thursday, October 30, 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 October 30, 2014 through 10:59 p.m. Central Time on November 11, 2014. The access code for the conference call and the audio replay is Conference ID No. 23531470. The audio replay of the conference call will also be archived on Martin Midstream Partners' website at www.martinmidstream.com.
About Martin Midstream Partners
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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 segments 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
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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 the Partnership's 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
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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 unitholders.
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: Joe McCreery, Head of Investor Relations, at (903) 988-6425 and (877) 256-6644.
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED BALANCE SHEETS
(Dollars in thousands)
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� | September 30, 2014 | December 31, 2013 | |||||
(Unaudited) | (Audited) | ||||||
Assets | � | � | |||||
Cash | $ | 3,006 | $ | 16,542 | |||
Accounts and other receivables, less allowance for doubtful accounts of $1,608 and $2,492, respectively | 132,839 | 163,855 | |||||
Product exchange receivables | 6,351 | 2,727 | |||||
Inventories | 120,369 | 94,902 | |||||
Due from affiliates | 14,581 | 12,099 | |||||
Fair value of derivatives | 879 | ||||||
Other current assets | 10,256 | 7,353 | |||||
Assets held for sale | 700 | ||||||
Total current assets | 288,981 | 297,478 | |||||
Property, plant and equipment, at cost | 1,359,620 | 929,183 | |||||
Accumulated depreciation | (334,150 | ) | (304,808 | ) | |||
Property, plant and equipment, net | 1,025,470 | 624,375 | |||||
Goodwill | 23,802 | 23,802 | |||||
Investment in unconsolidated entities | 135,219 | 128,662 | |||||
Debt issuance costs, net | 13,833 | 15,659 | |||||
Note receivable - Martin Energy Trading LLC | 15,000 | ||||||
Other assets, net | 86,431 | 7,943 | |||||
� | $ | 1,588,736 | $ | 1,097,919 | |||
Liabilities and Partners Capital | � | � | |||||
Trade and other accounts payable | $ | 120,037 | $ | 142,951 | |||
Product exchange payables | 18,860 | 9,595 | |||||
Due to affiliates | 11,713 | 2,596 | |||||
Income taxes payable | 1,002 | 1,204 | |||||
Fair value of derivatives | 542 | ||||||
Other accrued liabilities | 13,041 | 20,242 | |||||
Total current liabilities | 165,195 | 176,588 | |||||
Long-term debt | 910,077 | 658,695 | |||||
Other long-term obligations | 3,174 | 2,219 | |||||
Total liabilities | 1,078,446 | 837,502 | |||||
Commitments and contingencies | |||||||
Partners capital | 510,290 | 260,417 | |||||
� | $ | 1,588,736 | $ | 1,097,919 | |||
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 October 29, 2014.
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, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Revenues: | � | � | |||||||||||||
Terminalling and storage��* | $ | 31,880 | $ | 28,956 | $ | 97,848 | $ | 85,267 | |||||||
Marine transportation��* | 24,282 | 24,217 | 69,845 | 74,694 | |||||||||||
Natural gas services | 5,764 | 5,764 | |||||||||||||
Sulfur services | 3,037 | 3,001 | 9,112 | 9,003 | |||||||||||
Product sales: * | |||||||||||||||
Natural gas services | 230,294 | 204,296 | 812,232 | 650,605 | |||||||||||
Sulfur services | 46,993 | 39,096 | 157,706 | 164,375 | |||||||||||
Terminalling and storage | 47,735 | 60,050 | 153,451 | 167,546 | |||||||||||
� | 325,022 | 303,442 | 1,123,389 | 982,526 | |||||||||||
Total revenues | 389,985 | 359,616 | 1,305,958 | 1,151,490 | |||||||||||
Costs and expenses: | � | � | � | � | |||||||||||
Cost of products sold: (excluding depreciation and amortization) | � | � | � | � | |||||||||||
Natural gas services * | 218,356 | 196,308 | 777,676 | 626,609 | |||||||||||
Sulfur services * | 38,841 | 33,994 | 122,009 | 131,577 | |||||||||||
Terminalling and storage * | 42,239 | 52,718 | 137,074 | 146,806 | |||||||||||
� | 299,436 | 283,020 | 1,036,759 | 904,992 | |||||||||||
Expenses: | � | � | � | � | |||||||||||
Operating expenses��* | 48,391 | 43,444 | 140,543 | 129,839 | |||||||||||
Selling, general and administrative��* | 10,302 | 7,211 | 27,653 | 20,624 | |||||||||||
Depreciation and amortization | 16,743 | 13,698 | 45,329 | 37,944 | |||||||||||
Total costs and expenses | 374,872 | 347,373 | 1,250,284 | 1,093,399 | |||||||||||
Impairment of long-lived assets | (3,445 | ) | (3,445 | ) | |||||||||||
Other operating income | 347 | 401 | 796 | ||||||||||||
Operating income | 12,015 | 12,243 | 52,630 | 58,887 | |||||||||||
Other income (expense): | � | � | � | � | |||||||||||
Equity in earnings (loss) of unconsolidated entities | 2,655 | (577 | ) | 4,297 | (878 | ) | |||||||||
Interest expense, net | (11,459 | ) | (11,060 | ) | (34,351 | ) | (31,058 | ) | |||||||
Debt prepayment premium | (7,767 | ) | |||||||||||||
Reduction in carrying value of investment in Cardinal due to the purchase of the controlling interest | (30,102 | ) | (30,102 | ) | |||||||||||
Other, net | 286 | (111 | ) | 169 | (134 | ) | |||||||||
Total other expense | (38,620 | ) | (11,748 | ) | (67,754 | ) | (32,070 | ) | |||||||
Net income (loss) before taxes | (26,605 | ) | 495 | (15,124 | ) | 26,817 | |||||||||
Income tax expense | (300 | ) | (303 | ) | (954 | ) | (910 | ) | |||||||
Net income (loss) | (26,905 | ) | 192 | (16,078 | ) | 25,907 | |||||||||
Less general partner's interest in net (income) loss | 539 | (4 | ) | 322 | (518 | ) | |||||||||
Less (income) loss allocable to unvested restricted units | 62 | (1 | ) | 33 | (67 | ) | |||||||||
Limited partners' interest in net income (loss) | $ | (26,304 | ) | $ | 187 | $ | (15,723 | ) | $ | 25,322 | |||||
Net income (loss) per unit attributable to limited partners - basic | $ | (0.82 | ) | $ | 0.01 | $ | (0.54 | ) | $ | 0.95 | |||||
Weighted average limited partner units - basic | 32,243 | 26,552 | 29,271 | 26,561 | |||||||||||
Net income (loss) per unit attributable to limited partners - diluted | $ | (0.82 | ) | $ | 0.01 | $ | (0.54 | ) | $ | 0.95 | |||||
Weighted average limited partner units - diluted | 32,243 | 26,579 | 29,271 | 26,581 | |||||||||||
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 October 29, 2014.
*Related Party Transactions Shown Below
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, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Revenues: | � | � | � | � | |||||||||||
Terminalling and storage | $ | 19,045 | $ | 18,044 | $ | 55,798 | $ | 52,857 | |||||||
Marine transportation | 6,076 | 5,943 | 18,340 | 18,828 | |||||||||||
Product Sales | 883 | 964 | 6,484 | 4,012 | |||||||||||
Costs and expenses: | � | � | � | � | |||||||||||
Cost of products sold: (excluding depreciation and amortization) | � | � | � | � | |||||||||||
Natural gas services | 9,908 | 7,799 | 29,169 | 23,391 | |||||||||||
Sulfur services | 4,491 | 4,539 | 13,808 | 13,514 | |||||||||||
Terminalling and storage | 9,174 | 13,488 | 25,571 | 39,638 | |||||||||||
Expenses: | � | � | � | � | |||||||||||
Operating expenses | 21,013 | 17,902 | 58,500 | 53,410 | |||||||||||
Selling, general and administrative | 7,230 | 4,356 | 18,103 | 12,944 | |||||||||||
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 October 29, 2014.
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL
(Unaudited)
(Dollars in thousands)
� | Partners Capital | � | ||||||||||||
� | Common Limited | General Partner Amount | � | |||||||||||
� | Units | Amount | Total | |||||||||||
Balances - January 1, 2013 | 26,566,776 | $ | 349,490 | $ | 8,472 | $ | 357,962 | |||||||
Net income | 25,389 | 518 | 25,907 | |||||||||||
Issuance of restricted units | 63,750 | |||||||||||||
Forfeiture of restricted units | (250 | ) | ||||||||||||
General partner contribution | 37 | 37 | ||||||||||||
Cash distributions | (61,902 | ) | (1,384 | ) | (63,286 | ) | ||||||||
Excess purchase price over carrying value of acquired assets | (301 | ) | (301 | ) | ||||||||||
Unit-based compensation | 737 | 737 | ||||||||||||
Purchase of treasury units | (6,000 | ) | (250 | ) | (250 | ) | ||||||||
Balances - September 30, 2013 | 26,624,276 | $ | 313,163 | $ | 7,643 | $ | 320,806 | |||||||
Balances - January 1, 2014 | 26,625,026 | $ | 254,028 | $ | 6,389 | $ | 260,417 | |||||||
Net loss | (15,756 | ) | (322 | ) | (16,078 | ) | ||||||||
Issuance of common units | 8,727,673 | 331,571 | 331,571 | |||||||||||
Issuance of restricted units | 6,900 | |||||||||||||
Forfeiture of restricted units | (3,500 | ) | ||||||||||||
General partner contribution | 6,995 | 6,995 | ||||||||||||
Cash distributions | (66,473 | ) | (1,506 | ) | (67,979 | ) | ||||||||
Unit-based compensation | 589 | 589 | ||||||||||||
Excess purchase price over carrying value of acquired assets | (4,948 | ) | (4,948 | ) | ||||||||||
Purchase of treasury units | (6,400 | ) | (277 | ) | (277 | ) | ||||||||
Balances - September 30, 2014 | 35,349,699 | $ | 498,734 | $ | 11,556 | $ | 510,290 | |||||||
�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 October 29, 2014.
�
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
� | Nine Months Ended | ||||||
September 30, | |||||||
� | 2014 | 2013 | |||||
Cash flows from operating activities: | � | � | |||||
Net income (loss) | $ | (16,078 | ) | $ | 25,907 | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | � | � | |||||
Depreciation and amortization | 45,329 | 37,944 | |||||
Amortization of deferred debt issuance costs | 5,415 | 2,890 | |||||
Amortization of debt discount | 1,305 | 230 | |||||
Amortization of premium on notes payable | (164 | ) | |||||
Gain on sale of property, plant and equipment | (54 | ) | (796 | ) | |||
Impairment of long-lived assets | 3,445 | ||||||
Equity in (earnings) loss of unconsolidated entities | (4,297 | ) | 878 | ||||
Reduction in carrying value of investment in Cardinal due to purchase of the controlling interest | 30,102 | ||||||
Non-cash mark-to-market on derivatives | 489 | ||||||
Unit-based compensation | 589 | 737 | |||||
Preferred dividends on MET investment | 1,498 | 1,171 | |||||
Return on investment | 600 | ||||||
Other | 7 | ||||||
Change in current assets and liabilities, excluding effects of acquisitions and dispositions: | � | � | |||||
Accounts and other receivables | 32,443 | 43,043 | |||||
Product exchange receivables | (3,624 | ) | (219 | ) | |||
Inventories | (25,223 | ) | (8,362 | ) | |||
Due from affiliates | (2,482 | ) | (5,188 | ) | |||
Other current assets | 1,219 | (6,358 | ) | ||||
Trade and other accounts payable | (29,600 | ) | (29,641 | ) | |||
Product exchange payables | 9,265 | 936 | |||||
Due to affiliates | 9,117 | (525 | ) | ||||
Income taxes payable | (202 | ) | (440 | ) | |||
Other accrued liabilities | (7,214 | ) | 8,842 | ||||
Change in other non-current assets and liabilities | 1,123 | (210 | ) | ||||
Net cash provided by continuing operating activities | 53,001 | 70,846 | |||||
Net cash used in discontinued operating activities | (8,678 | ) | |||||
Net cash provided by operating activities | 53,001 | 62,168 | |||||
Cash flows from investing activities: | � | � | |||||
Payments for property, plant and equipment | (58,522 | ) | (68,591 | ) | |||
Acquisitions, less cash acquired | (100,046 | ) | (73,921 | ) | |||
Payments for plant turnaround costs | (4,000 | ) | |||||
Proceeds from sale of property, plant and equipment | 702 | 4,719 | |||||
Proceeds from involuntary conversion of property, plant and equipment | 2,475 | ||||||
Investment in unconsolidated entities | (134,413 | ) | |||||
Return of investments from unconsolidated entities | 726 | 1,551 | |||||
Contributions to unconsolidated entities | (3,386 | ) | (30,877 | ) | |||
Net cash used in investing activities | (296,464 | ) | (167,119 | ) | |||
Cash flows from financing activities: | � | � | |||||
Payments of long-term debt | (1,458,096 | ) | (518,000 | ) | |||
Payments of notes payable and capital lease obligations | (251 | ) | |||||
Proceeds from long-term debt | 1,426,250 | 691,000 | |||||
Net proceeds from issuance of common units | 331,571 | ||||||
General partner contribution | 6,995 | 37 | |||||
Purchase of treasury units | (277 | ) | (250 | ) | |||
Payment of debt issuance costs | (3,589 | ) | (9,115 | ) | |||
Excess purchase price over carrying value of acquired assets | (4,948 | ) | (301 | ) | |||
Cash distributions paid | (67,979 | ) | (63,286 | ) | |||
Net cash provided by financing activities | 229,927 | 99,834 | |||||
Net decrease in cash | (13,536 | ) | (5,117 | ) | |||
Cash at beginning of period | 16,542 | 5,162 | |||||
Cash at end of period | $ | 3,006 | $ | 45 | |||
Non-cash additions to property, plant and equipment | $ | 4,208 | $ | ||||
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 October 29, 2014.
MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Unaudited)
(Dollars and volumes in thousands, except BBL per day)
Terminalling and Storage Segment
Comparative Results of Operations for the Three Months Ended September�30, 2014 and 2013
� | Three Months Ended September 30, | Variance | Percent Change | ||||||||||
� | 2014 | 2013 | |||||||||||
� | (In thousands, except BBL per day) | ||||||||||||
Revenues: | � | � | |||||||||||
Services | $ | 33,213 | $ | 30,151 | $ | 3,062 | 10% | ||||||
Products | 47,735 | 60,054 | (12,319 | ) | (21)% | ||||||||
Total revenues | 80,948 | 90,205 | (9,257 | ) | (10)% | ||||||||
Cost of products sold | 43,193 | 53,215 | (10,022 | ) | (19)% | ||||||||
Operating expenses | 21,506 | 19,427 | 2,079 | 11% | |||||||||
Selling, general and administrative expenses | 786 | 979 | (193 | ) | (20)% | ||||||||
Depreciation and amortization | 9,512 | 8,532 | 980 | 11% | |||||||||
� | 5,951 | 8,052 | (2,101 | ) | (26)% | ||||||||
Other operating income | 347 | 347 | |||||||||||
Operating income | $ | 6,298 | $ | 8,052 | $ | (1,754 | ) | (22)% | |||||
Lubricant sales volumes (gallons) | 8,193 | 10,638 | (2,445 | ) | (23)% | ||||||||
Shore-based throughput volumes (gallons) | 64,338 | 65,516 | (1,178 | ) | (2)% | ||||||||
Smackover refinery throughput volumes (BBL per day) | 7,123 | 6,878 | 245 | 4% | |||||||||
Corpus Christi crude terminal (BBL per day) | 173,315 | 101,921 | 71,394 | 70% | |||||||||
Comparative Results of Operations for the Nine Months Ended September 30, 2014 and 2013
� | Nine Months Ended September 30, | Variance | Percent Change | ||||||||||
� | 2014 | 2013 | |||||||||||
� | (In thousands, except BBL per day) | ||||||||||||
Revenues: | � | � | |||||||||||
Services | $ | 101,711 | $ | 88,770 | $ | 12,941 | 15% | ||||||
Products | 153,451 | 167,550 | (14,099 | ) | (8)% | ||||||||
Total revenues | 255,162 | 256,320 | (1,158 | ) | % | ||||||||
Cost of products sold | 139,028 | 148,624 | (9,596 | ) | (6)% | ||||||||
Operating expenses | 61,628 | 54,860 | 6,768 | 12% | |||||||||
Selling, general and administrative expenses | 2,484 | 2,422 | 62 | 3% | |||||||||
Depreciation and amortization | 27,902 | 22,925 | 4,977 | 22% | |||||||||
� | 24,120 | 27,489 | (3,369 | ) | (12)% | ||||||||
Other operating income | 385 | 168 | 217 | 129% | |||||||||
Operating income | $ | 24,505 | $ | 27,657 | $ | (3,152 | ) | (11)% | |||||
Lubricant sales volumes (gallons) | 26,170 | 29,885 | (3,715 | ) | (12)% | ||||||||
Shore-based throughput volumes (gallons) | 186,956 | 207,533 | (20,577 | ) | (10)% | ||||||||
Smackover refinery throughput volumes (BBL per day) | 5,803 | 6,780 | (977 | ) | (14)% | ||||||||
Corpus Christi crude terminal (BBL per day) | 160,332 | 105,783 | 54,549 | 52% | |||||||||
MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Unaudited)
(Dollars and volumes in thousands, except BBL per day)
Natural Gas Services Segment
Comparative Results of Operations for the Three Months Ended September�30, 2014 and 2013
� | Three Months Ended September 30, | Variance | Percent Change | ||||||||||
� | 2014 | 2013 | |||||||||||
� | (In thousands) | ||||||||||||
Revenues: | |||||||||||||
Marine transportation | $ | $ | 630 | $ | (630 | ) | (100)% | ||||||
Services | 5,764 | 5,764 | |||||||||||
Products | 230,294 | 204,296 | 25,998 | 13% | |||||||||
Total revenues | 236,058 | 204,926 | 31,132 | 15% | |||||||||
Cost of products sold | 218,882 | 196,719 | 22,163 | 11% | |||||||||
Operating expenses | 4,546 | 1,863 | 2,683 | 144% | |||||||||
Selling, general and administrative expenses | 3,507 | 1,156 | 2,351 | 203% | |||||||||
Depreciation and amortization | 2,684 | 598 | 2,086 | 349% | |||||||||
Operating income | $ | 6,439 | $ | 4,590 | $ | 1,849 | 40% | ||||||
Distributions from unconsolidated entities | $ | 982 | $ | 761 | $ | 221 | 29% | ||||||
NGL sales volumes (Bbls) | 3,737 | 3,162 | 575 | 18% | |||||||||
Comparative Results of Operations for the Nine Months Ended September 30, 2014 and 2013
� | Nine Months Ended September 30, | Variance | Percent Change | ||||||||||
� | 2014 | 2013 | |||||||||||
� | (In thousands) | ||||||||||||
Revenues: | |||||||||||||
Marine transportation | $ | 365 | $ | 2,475 | $ | (2,110 | ) | (85)% | |||||
Services | 5,764 | 5,764 | |||||||||||
Products | 812,232 | 650,605 | 161,627 | 25% | |||||||||
Total revenues | 818,361 | 653,080 | 165,281 | 25% | |||||||||
Cost of products sold | 779,136 | 627,748 | 151,388 | 24% | |||||||||
Operating expenses | 8,779 | 3,834 | 4,945 | 129% | |||||||||
Selling, general and administrative expenses | 6,684 | 2,800 | 3,884 | 139% | |||||||||
Depreciation and amortization | 3,863 | 1,444 | 2,419 | 168% | |||||||||
Operating income | $ | 19,899 | $ | 17,254 | $ | 2,645 | 15% | ||||||
Distributions from unconsolidated entities | $ | 2,323 | $ | 2,722 | $ | (399 | ) | (15)% | |||||
NGL sales volumes (Bbls) | 12,734 | 9,883 | 2,851 | 29% | |||||||||
MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Unaudited)
(Dollars and volumes in thousands, except BBL per day)
Sulfur Services Segment
Comparative Results of Operations for the Three Months Ended September�30, 2014 and 2013
� | Three Months Ended September 30, | Variance | Percent Change | ||||||||||
� | 2014 | 2013 | |||||||||||
� | (In thousands) | ||||||||||||
Revenues: | � | � | |||||||||||
Services | $ | 3,037 | $ | 3,001 | $ | 36 | 1% | ||||||
Products | 46,993 | 39,096 | 7,897 | 20% | |||||||||
Total revenues | 50,030 | 42,097 | 7,933 | 19% | |||||||||
Cost of products sold | 38,932 | 34,085 | 4,847 | 14% | |||||||||
Operating expenses | 4,497 | 4,166 | 331 | 8% | |||||||||
Selling, general and administrative expenses | 1,166 | 1,069 | 97 | 9% | |||||||||
Depreciation and amortization | 2,078 | 2,024 | 54 | 3% | |||||||||
Operating income | $ | 3,357 | $ | 753 | $ | 2,604 | 346% | ||||||
Sulfur (long tons) | 251.0 | 211.8 | 39.2 | 19% | |||||||||
Fertilizer (long tons) | 52.1 | 44.8 | 7.3 | 16% | |||||||||
Total sulfur services volumes (long tons) | 303.1 | 256.6 | 46.5 | 18% | |||||||||
Comparative Results of Operations for the Nine Months Ended September 30, 2014 and 2013
� | Nine Months Ended September 30, | Variance | Percent Change | ||||||||||
� | 2014 | 2013 | |||||||||||
� | (In thousands) | ||||||||||||
Revenues: | � | � | |||||||||||
Services | $ | 9,112 | $ | 9,003 | $ | 109 | 1% | ||||||
Products | 157,706 | 164,375 | (6,669 | ) | (4)% | ||||||||
Total revenues | 166,818 | 173,378 | (6,560 | ) | (4)% | ||||||||
Cost of products sold | 122,281 | 131,849 | (9,568 | ) | (7)% | ||||||||
Operating expenses | 13,283 | 12,791 | 492 | 4% | |||||||||
Selling, general and administrative expenses | 3,404 | 3,132 | 272 | 9% | |||||||||
Depreciation and amortization | 6,092 | 5,947 | 145 | 2% | |||||||||
Operating income | $ | 21,758 | $ | 19,659 | $ | 2,099 | 11% | ||||||
Sulfur (long tons) | 645.5 | 614.9 | 30.6 | 5% | |||||||||
Fertilizer (long tons) | 233.1 | 219.8 | 13.3 | 6% | |||||||||
Total sulfur services volumes (long tons) | 878.6 | 834.7 | 43.9 | 5% | |||||||||
MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Unaudited)
(Dollars and volumes in thousands, except BBL per day)
Marine Transportation Segment
Comparative Results of Operations for the Three Months Ended September�30, 2014 and 2013
� | Three Months Ended September 30, | Variance | Percent Change | ||||||||||
� | 2014 | 2013 | |||||||||||
� | (In thousands) | ||||||||||||
Revenues | $ | 25,859 | $ | 24,751 | $ | 1,108 | 4% | ||||||
Operating expenses | 19,181 | 19,352 | (171 | ) | (1)% | ||||||||
Selling, general and administrative expenses | 364 | 228 | 136 | 60% | |||||||||
Depreciation and amortization | 2,469 | 2,544 | (75 | ) | (3)% | ||||||||
� | 3,845 | 2,627 | 1,218 | 46% | |||||||||
Impairment of long-lived assets | (3,445 | ) | (3,445 | ) | |||||||||
Operating income | $ | 400 | $ | 2,627 | $ | (2,227 | ) | (85)% | |||||
Comparative Results of Operations for the Nine Months Ended September 30, 2014 and 2013
� | Nine Months Ended September 30, | Variance | Percent Change | ||||||||||
� | 2014 | 2013 | |||||||||||
� | (In thousands) | ||||||||||||
Revenues | $ | 73,255 | $ | 75,004 | $ | (1,749 | ) | (2)% | |||||
Operating expenses | 60,805 | 61,417 | (612 | ) | (1)% | ||||||||
Selling, general and administrative expenses | 867 | 1,000 | (133 | ) | (13)% | ||||||||
Depreciation and amortization | 7,472 | 7,628 | (156 | ) | (2)% | ||||||||
� | 4,111 | 4,959 | (848 | ) | (17)% | ||||||||
Impairment of long-lived assets | (3,445 | ) | (3,445 | ) | |||||||||
Other operating income | 16 | 628 | (612 | ) | (97)% | ||||||||
Operating income | $ | 682 | $ | 5,587 | $ | (4,905 | ) | (88)% | |||||
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 nine months ended September 30, 2014 and 2013.
Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
� | 2014 | 2013 | 2014 | 2013 | |||||||||||
� | � | � | � | ||||||||||||
Net income (loss) | $ | (26,905 | ) | $ | 192 | $ | (16,078 | ) | $ | 25,907 | |||||
Adjustments: | |||||||||||||||
Interest expense | 11,459 | 11,060 | 34,351 | 31,058 | |||||||||||
Income tax expense | 300 | 303 | 954 | 910 | |||||||||||
Depreciation and amortization | 16,743 | 13,698 | 45,329 | 37,944 | |||||||||||
EBITDA | 1,597 | 25,253 | 64,556 | 95,819 | |||||||||||
Adjustments: | |||||||||||||||
Equity in (earnings) loss of unconsolidated entities | (2,655 | ) | 577 | (4,297 | ) | 878 | |||||||||
Gain on sale of property, plant and equipment | (54 | ) | (796 | ) | |||||||||||
Impairment of long-lived assets | 3,445 | 3,445 | |||||||||||||
Reduction in carrying value of investment in Cardinal due to the purchase of the controlling interest | 30,102 | 30,102 | |||||||||||||
Debt prepayment premium | 7,767 | ||||||||||||||
Distributions from unconsolidated entities | 982 | 761 | 2,323 | 2,722 | |||||||||||
Unit-based compensation | 201 | 257 | 589 | 737 | |||||||||||
Adjusted EBITDA | 33,672 | 26,848 | 104,431 | 99,360 | |||||||||||
Adjustments: | |||||||||||||||
Interest expense | (11,459 | ) | (11,060 | ) | (34,351 | ) | (31,058 | ) | |||||||
Income tax expense | (300 | ) | (303 | ) | (954 | ) | (910 | ) | |||||||
Amortization of debt discount | 77 | 1,305 | 230 | ||||||||||||
Amortization of debt premium | (82 | ) | (164 | ) | |||||||||||
Amortization of deferred debt issuance costs | 827 | 815 | 5,415 | 2,890 | |||||||||||
Non-cash mark-to-market on derivatives | 1,036 | 489 | |||||||||||||
Payments of installment notes payable and capital lease obligations | (91 | ) | (251 | ) | |||||||||||
Payments for plant turnaround costs | (90 | ) | (4,000 | ) | |||||||||||
Maintenance capital expenditures | (4,306 | ) | (2,973 | ) | (13,260 | ) | (7,473 | ) | |||||||
Distributable Cash Flow | $ | 19,298 | $ | 13,313 | $ | 58,911 | $ | 62,788 | |||||||
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