UNITED STATES
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d)
 
of the Securities Exchange Act of 1934
 
Date of report (date of earliest event reported): March 2, 2011
 
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)
     
4200 STONE ROAD
   
KILGORE, TEXAS
(Address of principal executive offices)
 
75662
(Zip code)
 
Registrant’s telephone number, including area code: (903) 983-6200
 
(Former name or former address, if changed since last report)
 
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))

 
 

 
 
 
  
 


 





 
     
Item 2.02
 
Results of Operations and Financial Condition.
 
    On March 2, 2011, Martin Midstream Partners L.P. (the “Partnership”) issued a press release reporting its financial results for the quarter and year ended December 31, 2010.
 
    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 the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”).
 
    As previously reported, on March 3, 2011, at 8:00 a.m. Central Time, the Partnership will hold an investors’ conference call to discuss the Partnership’s financial results for the fourth quarter and year ended December 31, 2010. The supplemental financial data, including certain non-generally accepted accounting principle financial measures, that will be discussed during the investors’ conference call is included in the above referenced press release.

     
Item 9.01.
 
Financial Statements and Exhibits.
 
      (d)  Exhibits
 
    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 the Exchange Act.
         
Exhibit
   
Number
 
Description
 
99.1
   
Press release dated March 2, 2011.
 
 1

 
 
 

 

 
 
 
SIGNATURES
 
    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: March 2, 2011 
By: /s/ Robert D. Bondurant  
 
 
Robert D. Bondurant, 
 
 
Executive Vice President and
Chief Financial Officer 
 
 
 
 2
 


 


 
 

 

 
 
INDEX TO EXHIBITS
         
Exhibit
   
Number
 
Description
 
99.1
   
Press release dated March 2, 2011.
 
 3
 


 
 

 

Exhibit 99.1
MARTIN MIDSTREAM PARTNERS REPORTS
2010 FOURTH QUARTER
 AND ANNUAL FINANCIAL RESULTS

KILGORE, Texas, March 2, 2011/GlobeNewswire/ -- Martin Midstream Partners L.P. (NASDAQ: MMLP) (the “Partnership”) announced today its financial results for the fourth quarter and year ended December 31, 2010.

The Partnership reported net income for the fourth quarter of 2010 of $6.5 million, or $0.30 per limited partner unit. This compared to net income for the fourth quarter of 2009 of $2.0 million, or $.15 per limited partner unit. Revenues for the fourth quarter of 2010 were $262.1 million compared to $200.9 million for the fourth quarter of 2009.  Fourth quarter 2010 net income was negatively impacted by a $4.0 million, or $0.23 per limited partner unit, non-cash derivatives loss from certain commodity and interest rate swaps that are not accounted for using hedge accounting.  Fourth quarter 2009 net income was negatively impacted by a $0.2 million, or $0.01 per limited partner unit, non-cash derivatives loss from certain commodity and interest rate swaps that are not accounted for using hedge accounting.

The Partnership reported net income for the year ended December 31, 2010 of $16.0 million, or $0.63 per limited partner unit.  This compared to net income for the year ended December 31, 2009 of $22.2 million, or $1.17 per limited partner unit.  Revenues for the year ended December 31, 2010 were $912.1 million, compared to revenues of $662.3 million for the year ended December 31, 2009.  Net income for the year ended December 31, 2010 was negatively impacted by $4.2 million, or $0.24 per limited partner unit, due to the payment of fees for the early extinguishment of interest rate swaps in the first quarter 2010 ($3.8 million) and of non-cash derivatives losses from certain commodity and interest rate swaps that are not accounted for using hedge accounting ($0.4 million). Net income for the year ended December 31, 2009 was negatively impacted by $2.5 million, or $0.15 per limited partner unit, of non-cash derivatives losses from certain commodity and interest rate swaps that are not accounted for using hedge accounting.  Net income for the year ended December 31, 2009 was positively impacted by $6.0 million, or $0.41 per limited partner unit, of gains from the sale of property, plant and equipment ($5.0 million) and on the involuntary conversion of property, plant and equipment ($1.0 million) resulting from Hurricanes Gustav and Ike.

The Partnership’s distributable cash flow for the three months ended December 31, 2010 was $22.2 million and for the year ended December 31, 2010 was $65.5 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 “I am pleased with the Partnership’s fourth quarter and year end 2010 performance.  The fourth quarter 2010 was our best quarter during the year in terms of cash flow generation as we achieved a strong distribution coverage ratio of 1.53 times.  That put us in a position to increase our most recent distribution to unitholders for the first time in nine quarters.  Further, for the year ended 2010, all four of our operating segments met or exceeded planned performance giving us a solid distribution coverage ratio of 1.16 times.

During the fourth quarter, our sulfur services segment rebounded from the seasonal weakness we typically see in the third quarter.  We saw sulfur experience a solid pricing recovery based on high demand across agricultural markets both foreign and domestic.  We expect this demand for our sulfur and sulfur-based fertilizer products to remain strong into 2011.  Our Marine Transportation segment was also strong during the fourth quarter.  Our inland fleet continues to operate near full utilization; and day rate pricing for certain products we move has recently increased.  Given the current condition of the oil refining business we feel good about our inland fleet for 2011.  On the offshore side, our work on the Macondo disaster recovery is now complete and thus we have two offshore vessels that will seek opportunities in the spot market.

Looking forward, several organic growth initiatives combined with some additional contracting have us well positioned for 2011.  Specifically, we expect that planned growth in our Natural Gas Services and our Sulfur Services segments will increase distributable cash flow this year.  Also, we recently added incremental fee-based contracts for our prilling capacity within our Sulfur Services segment and renegotiated a contract with a significant sulfur buyer to reduce our exposure to price fluctuation as we continue to achieve our long-stated goal of becoming a more fee-based Partnership.  Finally, as previously disclosed, low cost multiple growth projects are underway at our Cross lubricant processing facility that will be completed during calendar 2012.”

Due to FASB ASC 850, the Partnership is required to account for the Cross Oil asset contribution as a transfer of net assets between entities under common control.  As such, the revenues, earnings and distributable cash flow data for periods prior to the November 2009 contribution date as set forth above and elsewhere herein require adjustment to be viewed on a comparable year over year basis.  Before giving effect to the Cross transaction, revenue for the year ended December 31, 2009 would have been $633.8 million, compared to revenues of $1.2 billion for the year ended December 31, 2008.  Additionally, net income for the year ended December 31, 2009 would have been $20.5 million compared to net income of $42.8 million for the year ended December 31, 2008.  Finally, distributable cash flow for the year ended December 31, 2009 would have been $49.4 million.  For a more detailed reconciliation of the Cross asset acquisition, please refer to Item 6. Selected Financial Data in our Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 2, 2011.

Included with this press release are the Partnership’s consolidated financial statements as of and for the quarter and year ended December 31, 2010 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, filed with the SEC on March 2, 2011.

Investors’ Conference Call

An investor’s conference call to review the fourth quarter and year end results will be held on Thursday,  March 3, 2011, 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 (800) 642-1687 from 11:00 a.m. Central Time on March 3, 2011 through 10:59 p.m. Central Time on March 17, 2011.  The access codes for the conference call and the audio replay are as follows:  Conference ID No. 39490604.  The audio replay of the conference call will also be archived on the Partnership’s website at www.martinmidstream.com.

About Martin Midstream Partners LP

Martin Midstream Partners LP is a publicly traded limited partnership with a diverse set of operations focused primarily in the United States Gulf Coast region. The Partnership’s primary business lines include: terminalling and storage services for petroleum products and by-products; natural gas gathering, processing and NGL distribution; sulfur and sulfur-based products processing, manufacturing, and distribution; and marine transportation services for petroleum products and by-products.

Additional information concerning the Partnership is available on the Partnership’s website at www.martinmidstream.com.

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: net income (as reported in statements of operations), plus depreciation and amortization, amortization of debt discount, and amortization of deferred debt issue costs (as reported in statements of cash flows), plus (less) deferred income taxes (as reported in statements of cash flows), plus costs related to the early extinguishment of interest rate swaps (as reported under the caption “Long-Term Debt and Capital Leases” in the Partnership’s Annual Report on Form 10-K filed with the SEC on March 2, 2011), plus distribution equivalents from unconsolidated entities (as described below), plus (less) invested cash in unconsolidated entities (as described below), less equity in earnings of unconsolidated entities (as reported in statements of operations), plus non-cash mark-to-market on derivatives (as reported in statements of cash flows), less maintenance capital expenditures (as reported under the caption “Liquidity and Capital Resources” in the Partnership’s Annual Report on Form 10-K filed with the SEC on March 2, 2011), plus (less) gain/(loss) on disposition or sale of property, plant and equipment (as reported in statements of cash flows), less payments for plant turn around costs (as reported in statements of cash flows),  plus unit-based compensation (as reported in statements of changes in capital).
 
The Partnership’s distribution equivalents from unconsolidated entities is calculated as distributions from unconsolidated entities (as reported in statements of cash flows), plus return of investments from unconsolidated entities (as reported in statements of cash flows), plus distributions in-kind from unconsolidated entities (as reported in statements of cash flows).  For the quarter ended December 31, 2010, the Partnership’s distributions from unconsolidated entities, return of investments from unconsolidated entities and distributions in-kind from equity investments were $0.0 million, $0.1 million and $3.0 million, respectively.  For the year ended December 31, 2010, the Partnership’s distributions from unconsolidated entities, return of investments from unconsolidated entities and distributions in-kind from equity investments were $0.0 million, $2.5 million and $10.5 million, respectively.
 
The Partnership’s invested cash in unconsolidated entities is calculated as distributions from (contributions to) unconsolidated entities for operations (as reported in statements of cash flows), plus expansion capital expenditures in unconsolidated entities (as reported under the caption “Liquidity and Capital Resources” in the Partnership’s Annual Report on Form 10-K filed with the SEC on March 2, 2011). For the quarter ended December 31, 2010, the Partnership’s distributions from (contributions to) unconsolidated entities for operations and capital expenditures in unconsolidated entities were $(1.4) million and $1.2 million, respectively.  For the year ended December 31, 2010, the Partnership’s distributions from (contributions to) unconsolidated entities for operations and capital expenditures in unconsolidated entities were $(0.7) million and $3.2 million, respectively.
 
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

   
December 31,
 
   
2010
   
2009
 
   
(Dollars in thousands)
 
Assets
           
             
Cash
  $ 11,380     $ 5,956  
Accounts and other receivables, less allowance for doubtful accounts of $2,528 and $481, respectively
    95,276       77,413  
Product exchange receivables
    9,099       4,132  
Inventories
    52,616       35,510  
Due from affiliates
    6,437       3,051  
Fair value of derivatives
    2,142       1,872  
Other current assets
    2,784       1,340  
Total current assets
    179,734       129,274  
                 
Property, plant and equipment, at cost
    632,456       584,036  
Accumulated depreciation                                                                                              
    (200,276 )     (162,121 )
Property, plant and equipment, net
    432,180       421,915  
                 
Goodwill
    37,268       37,268  
Investment in unconsolidated entities
    98,217       80,582  
Debt issuance costs, net
    13,497       10,780  
Other assets
    24,582       6,120  
    $ 785,478     $ 685,939  
Liabilities and Partners’ Capital
               
                 
Current installments of long-term debt and capital lease obligations
  $ 1,121     $ 111  
Trade and other accounts payable
    82,837       71,911  
Product exchange payables
    22,353       7,986  
Due to affiliates
    6,957       13,810  
Income taxes payable
    811       454  
Fair value of derivatives
    282       7,227  
Other accrued liabilities
     10,034       5,000  
Total current liabilities
    124,395       106,499  
                 
Long-term debt and capital leases, less current maturities
    372,862       304,372  
Deferred income taxes
    8,213       8,628  
Fair value of derivatives
    4,100        
Other long-term obligations
    1,102       1,489  
Total liabilities
    510,672       420,988  
                 
Partners’ capital
    273,387       267,027  
Accumulated other comprehensive loss
    1,419       (2,076 )
Total partners’ capital
    274,806       264,951  
Commitments and contingencies
               
    $ 785,478     $ 685,939  

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 filed with the SEC on March 2, 2011.
 
.
 

 
 

 

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS

   
Year Ended December 31,
 
   
2010
   
2009
   
2008
 
   
(Dollars in thousands, except per unit amounts)
 
Revenues:
                 
Terminalling and storage  *
  $ 67,117     $ 69,710     $ 68,552  
Marine transportation  *
    77,642       68,480       76,349  
Product sales: *
                       
Natural gas services
    554,482       408,982       679,375  
Sulfur services
    165,078       79,629       371,949  
Terminalling and storage
    47,799       35,584       50,219  
      767,359       524,195       1,101,543  
Total revenues
    912,118       662,385       1,246,444  
                         
Costs and expenses:
                       
Cost of products sold: (excluding depreciation and amortization)
                       
Natural gas services *
    527,232       382,542       657,662  
Sulfur services *
    122,121       43,386       313,143  
Terminalling and storage
    44,549       31,331       42,721  
      693,902       457,259       1,013,526  
Expenses:
                       
Operating expenses  *
    116,402       117,438       126,808  
Selling, general and administrative  *
    21,118       19,775       19,062  
Depreciation and amortization
    40,656       39,506       34,893  
Total costs and expenses
    872,078       633,978       1,194,289  
Other operating income
    136       6,013       209  
Operating income
    40,176       34,420       52,364  
                         
Other income (expense):
                       
Equity in earnings of unconsolidated entities
    9,792       7,044       13,224  
Interest expense
    (33,716 )     (18,995 )     (21,433 )
Other, net
    287       326       801  
Total other income (expense)
    (23,637 )     (11,625 )     (7,408 )
Net income before taxes
    16,539       22,795       44,956  
Income tax benefit (expense)
    (517 )     (592 )     (1,398 )
Net income
  $ 16,022     $ 22,203     $ 43,558  
 
                       
General partner’s interest in net income¹
  $ 3,869     $ 3,249     $ 3,301  
Limited partners’ interest in net income¹
  $ 11,045     $ 17,179     $ 39,509  
                         
Net income per limited partner unit - basic and diluted
  $ 0.63     $ 1.17     $ 2.72  
Weighted average limited partner units - basic
    17,525,089       14,680,807       14,529,826  
Weighted average limited partner units - diluted
    17,525,989       14,684,775       14,534,722  
 
¹ General and limited partner’s interest in net income includes net income attributable to the Cross assets since the date of the acquisition noted above.
 
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 filed with the SEC on March 2, 2011.

*Related Party Transactions Included Above
Revenues:
                 
Terminalling and storage
  $ 46,823     $ 19,998     $ 18,362  
Marine transportation
    28,194       19,370       24,956  
Product Sales
    14,998       5,838       26,704  
Costs and expenses:
                       
Cost of products sold: (excluding depreciation and amortization)
                       
Natural gas services
    79,321       56,914       92,322  
Sulfur services
    16,061       12,583       13,282  
Expenses:
                       
Operating expenses
    49,286       37,284       37,661  
Selling, general and administrative
    10,918       7,162       6,284  

 

 
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL
For the years ended December 31, 2010, 2009 and 2008

   
Partners’ Capital
             
   
 
Parent Net
   
 
Common
   
 
Subordinated
   
General Partner
   
Accumulated
Comprehensive
Income
       
   
Investment
   
Units
   
Amount
   
Units
   
Amount
   
Amount
   
Amount
   
Total
 
   
(Dollars in thousands)
 
                                                 
Balances – December 31, 2007
  $ 10,917       12,837,480     $ 244,520       1,701,346     $ (6,022 )   $ 4,112     $ (6,762 )   $ 246,765  
                                                                 
Net Income
    748             34,978             4,531       3,301             43,558  
                                                                 
Cash distributions ($2.91  per unit)
                (37,357 )           (4,951 )     (3,409 )           (45,717 )
                                                                 
Conversion of subordinated units to common units
          850,672       (2,754 )     (850,672 )     2,754                    
                                                                 
Unit-based compensation
          3,000       39                               39  
                                                                 
Purchase of treasury units
            (3,000 )     (93 )                             (93 )
                                                                 
Adjustment in fair value of derivatives
                                        1,827       1,827  
                                                                 
Balances – December 31, 2008
  $ 11,665       13,688,152     $ 239,333       850,674     $ (3,688 )   $ 4,004     $ (4,935 )   $ 246,379  
                                                                 
Net Income
    1,664             16,310             980       3,249             22,203  
                                                                 
General partner contribution
                                  1,324             1,324  
                                                                 
Units issued in connection with Cross acquisition
            804,721       16,523       889,444       16,434                   32,957  
                                                                 
Recognition of beneficial conversion feature
                (111 )           111                    
                                                                 
Issuance of common units                                                  
          714,285       20,000                               20,000  
                                                                 
Cash distributions ($3.00  per unit)
                (41,064 )           (2,552 )     (3,846 )           (47,462 )
                                                                 
Conversion of subordinated units to common units
          850,674       (5,328 )     (850,674 )     5,328                    
                                                                 
Unit-based compensation
          3,000       98                               98  
                                                                 
Purchase of treasury units
          (3,000 )     (78 )                             (78 )
                                                                 
Contributions to parent
    (13,329 )                                         (13,329 )
                                                                 
Adjustment in fair value of derivatives
                                        2,859       2,859  
                                                                 
Balances – December 31, 2009
  $       16,057,832     $ 245,683       889,444     $ 16,613     $ 4,731     $ (2,076 )   $ 264,951  
                                                                 
Net Income
                12,151                   3,871             16,022  
                                                                 
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  
                                                                 
Distributions to parent
                (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
  $       17,707,832     $ 250,785       889,444     $ 17,721     $ 4,881     $ 1,419     $ 274,806  
 

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 filed with the SEC on March 2, 2011.

 
 

 

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 (Dollars in thousands)


   
Year Ended December 31,
   
   
2010
   
2009
   
2008
   
(Dollars in thousands)
    Net income
  $ 16,022     $ 22,203     $ 43,558  
    Changes in fair values of commodity cash flow hedges
    143       14       4,219  
    Commodity cash flow hedging (gains) losses reclassified to earnings
    (617 )     (2,646 )     3,043  
    Changes in fair value of interest rate cash flow hedges
    (241 )     (1,854 )     (5,435 )
    Interest rate cash flow hedging losses reclassified to earnings
     4,210       7,345        
                           
                  Comprehensive income
  $ 19,517     $ 25,062     $ 45,385  
 
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 filed with the SEC on March 2, 2011.
 
 

 
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS

   
Year Ended December 31,
 
   
2010
   
2009
   
2008
 
   
(Dollars in thousands)
 
Cash flows from operating activities:
                 
Net income
  $ 16,022     $ 22,203     $ 43,558  
                         
Adjustments to reconcile net income to net cash provided by operating activities:
                       
Depreciation and amortization
    40,656       39,506       34,895  
Amortization of deferred debt issue costs
    4,814       1,689       1,120  
Amortization of discount on notes payable
    269              
Deferred income taxes
    (415 )     294       2,442  
Gain on disposition or sale of property, plant, and equipment
    (136 )     (4,996 )     (131 )
Gain on involuntary conversion of property, plant, and equipment
          (1,017 )     (65 )
Equity in earnings of unconsolidated entities
    (9,792 )     (7,044 )     (13,224 )
Distributions from unconsolidated entities
          650       500  
Distribution in-kind from unconsolidated entities
    10,545       5,826       9,725  
Non-cash mark-to-market on derivatives
    380       2,526       (2,327 )
Other
    113       98       39  
Change in current assets and liabilities, excluding effects of acquisitions and dispositions:
                       
Accounts and other receivables                                                                       
    (17,863 )     (10,471 )     19,753  
Product exchange receivables                                                                       
    (4,967 )     2,792       3,988  
Inventories                                                                       
    (17,106 )     7,135       9,398  
 Due from affiliates                                                                        
    (3,386 )     1,560       1,770  
Other current assets                                                                       
    (1,444 )     2,461       (992 )
Trade and other accounts payable                                                                       
    10,918       (15,874 )     (14,904 )
Product exchange payables                                                                       
    14,366       (2,938 )     (13,629 )
 Due to affiliates                                                                        
    (6,853 )     4,133       5,966  
Income taxes payable                                                                       
    357       569       (453 )
Other accrued liabilities                                                                       
    5,382       871       101  
Change in other non-current assets and liabilities
    (4,342 )     (2,381 )     (1,190 )
Net cash provided by operating activities
    37,518       47,592       86,340  
                         
Cash flows from investing activities:
                       
Payments for property, plant, and equipment
    (17,907 )     (35,846 )     (101,450 )
Acquisitions, net of cash acquired
    (46,352 )     (327 )     (5,983 )
Payments for plant turnaround costs
    (1,090 )            
Proceeds from sale of property, plant, and equipment
    2,419       19,445       463  
Insurance proceeds from involuntary conversion of property, plant and equipment
          2,224       1,503  
Investments in unconsolidated entities
    (20,110 )            
Return of investments from unconsolidated entities
    2,470       877       1,225  
(Contributions to) unconsolidated entities for operations
    (748 )     (1,048 )     (2,379 )
Net cash used in investing activities
    (81,318 )     (14,675 )     (106,621 )
Cash flows from financing activities:
                       
Payments of long-term debt
    (441,979 )     (431,982 )     (257,191 )
Proceeds from long-term debt
    503,856       433,700       327,170  
Net proceeds from follow on public offering
    78,600              
General partner contribution
    1,089       1,324        
    Redemption of common units
    (28,070 )            
    Contributions to parent
                 
Purchase of treasury units
    (108 )     (78 )     (93 )
Proceeds from issuance of common units
          20,000        
Payments of debt issuance costs
    (7,468 )     (10,446 )     (18 )
Cash distributions paid
    (56,696 )     (47,462 )     (45,717 )
Net cash provided by (used in) financing activities
    49,224       (34,944 )     24,151  
                         
Net increase(decrease) in cash
    5,424       (2,027 )     3,870  
Cash at beginning of period
    5,956       7,983       4,113  
Cash at end of period
  $ 11,380     $ 5,956     $ 7,983  
                         
Supplemental schedule of non-cash investing and financing activities:
                       
         Purchase of assets under capital lease obligations
  $     $ 7,764     $  
         Issuance of common and subordinated units in connection with Cross acquisition
  $     $ 32,957     $  
         Purchase of assets under note payable
  $ 7,354     $     $  

 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 filed with the SEC on March 2, 2011.
 
 

 

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS

   
4th Quarter
   
4th Quarter
 
   
2010
   
2009
 
   
(Dollars in thousands)
(except per unit amounts)
(Unaudited)
 
Revenues:
           
Terminalling and storage
  $ 17,055     $ 16,039  
Marine transportation
    20,184       19,258  
Product sales:
               
Natural gas services
    156,627       140,233  
Sulfur
    51,133       18,600  
Terminalling and storage
    17,112       6,731  
      224,872       165,564  
Total revenues                                                                           
    262,111       200,861  
                 
Costs and expenses:
               
Cost of products sold:
               
Natural gas services
    147,799       133,849  
Sulfur
    35,266       8,644  
Terminalling and storage
    15,778       5,773  
      198,843       148,266  
Expenses:
               
Operating expenses
    30,088       32,790  
Selling, general and administrative
    6,468       6,023  
Depreciation and amortization
    10,590       10,250  
Total costs and expenses
    245,989       197,329  
Other operating income (loss)
    (314 )     962  
Operating income
    15,808       4,494  
                 
Other income (expense):
               
Equity in earnings of unconsolidated entities
    2,323       1,817  
Interest expense
    (11,468 )     (5,408 )
Other, net
    170       (19 )
Total other income (expense)
    (8,975 )     (3,610 )
                 
Income tax expense (benefit)
    (293 )     (1,072 )
                 
Net income
  $ 6,540     $ 1,956  
                 
General partner’s interest in net income¹1
  $ 1,037     $ 774  
Limited partners’ interest in net income¹
  $ 5,226     $ 2,342  
Net income per limited partner unit — basic and diluted
  $ 0.30     $ 0.15  
Weighted average limited partner units
    17,701,094       15,149,731  
 
¹ General and limited partner’s interest in net income includes net income of the Cross assets since the date of the acquisition.
 
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 filed with the SEC on March 2, 2011.
 

 



 
 

 

DISTRIBUTABLE CASH FLOW
(Dollars in thousands)
(Unaudited Non-GAAP Financial Measure)

   
Three Months Ended
 December 31, 2010
   
Year Ended
December 31, 2010
 
             
Net income
  $ 6,540     $ 16,022  
Adjustments to reconcile net income to distributable cash flow:
               
     Depreciation and amortization
    10,590       40,656  
     Amortization of deferred debt issue costs                                                                                                     
    1,139       4,814  
     Amortization of discount on notes payable                                                                                                     
    88       269  
     Deferred income taxes                                                                                                     
    59       (415 )
     Early extinguishments of interest rate swaps                                                                                                     
          3,850  
     Distribution equivalents from unconsolidated entities¹
    3,061       13,015  
     Invested cash in unconsolidated entities²
    (154 )     2,469  
     Equity in earnings of unconsolidated entities
    (2,323 )     (9,792 )
     Non-cash mark-to-market on derivatives
    3,973       380  
     Maintenance capital expenditures
    (1,181 )     (4,653 )
     Payments for plant turnaround costs
          (1,090 )
     Gain on disposition or sale of property, plant and equipment
    314       (136 )
     Unit based compensation
    48       113  
   Distributable cash flow
  $ 22,154     $ 65,502  
 
 
   
Three Months Ended
 December 31, 2010
   
Year Ended
December 31,  2010
 
¹Distribution equivalents from unconsolidated entities:
           
Distributions from unconsolidated entities                                                                                               
  $     $  
Return of investments from unconsolidated entities                                                                                               
    40       2,470  
Distributions in-kind from unconsolidated entities                                                                                               
    3,021       10,545  
Distribution equivalents from unconsolidated entities
  $ 3,061     $ 13,015  
²Invested cash in unconsolidated entities::
               
Distributions from (contributions to) unconsolidated entities for operations
  $ (1,377 )   $ (748 )
Expansion capital expenditures in unconsolidated entities
    1,223       3,217  
Invested cash in unconsolidated entities
  $ (154 )   $ 2,469