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)
|
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 2.01
|
Completion of Acquisition or Disposition of Assets.
|
Item 9.01
|
Financial Statements and Exhibits.
|
Exhibit
|
||||
Number
|
Description
|
|||
99.1
|
Unaudited Pro Forma Condensed Consolidated Financial Information..
|
MARTIN MIDSTREAM PARTNERS L.P.
By: Martin Midstream GP LLC,
Its General Partner
|
||||
Date August 3, 2012
|
By: /s/ Robert D. Bondurant
|
|||
Robert D. Bondurant,
|
||||
Executive Vice President and
Chief Financial Officer
|
||||
INDEX TO EXHIBITS |
Exhibit | ||||
Number | Description | |||
99.1 | Unaudited Pro Forma Condensed Consolidated Financial Information |
MMLP
Historical
|
Natural Gas
Gathering and
Processing Assets
|
Pro Forma
Consolidated
|
||||||||||||
Assets
|
||||||||||||||
Cash | $ | 8,782 | $ | 273,300 |
(a)
|
$ | 46,095 | |||||||
(235,987 | ) | (c) | ||||||||||||
Accounts and other receivables, less allowance for doubtful accounts of $2,979
|
112,137 | — | 112,137 | |||||||||||
Product exchange receivables
|
9,213 | — | 9,213 | |||||||||||
Inventories
|
81,487 | (2,213 | ) |
(b)
|
79,274 | |||||||||
Due from affiliates
|
9,923 | — | 9,923 | |||||||||||
Fair value of derivatives
|
675 | — |
|
675 | ||||||||||
Other current assets
|
2,001 | — | 2,001 | |||||||||||
Total current assets
|
224,218 | (35,100 | ) | 259,318 | ||||||||||
Property, plant and equipment, at cost
|
740,978 | (78,880 | ) |
(b)
|
662,098 | |||||||||
Accumulated depreciation
|
(244,023 | ) | 19,532 |
(b)
|
(224,491 | ) | ||||||||
Property, plant and equipment, net
|
496,955 | (59,348 | ) | 437,607 | ||||||||||
Goodwill
|
37,268 | (28,931 | ) |
(b)
|
8,337 | |||||||||
Investment in unconsolidated entities
|
177,428 | (102,881 | ) |
(b)
|
74,547 | |||||||||
Debt issuance costs, net
|
12,640 | — |
|
12,640 | ||||||||||
Fair value of derivatives
|
41 | — |
|
41 | ||||||||||
Other assets, ne
|
19,115 | (15,664 | ) |
(b)
|
3,451 | |||||||||
$ | 967,665 | (171,724 | ) | $ | 795,941 | |||||||||
Liabilities and Partners’ Capital
|
||||||||||||||
Current installments of long-term debt and capital lease obligations
|
$ | 198 | $ | (198 | ) | (c) | $ | — | ||||||
Trade and other accounts payable
|
96,107 | 841 |
(d)
|
96,948 | ||||||||||
Product exchange payables
|
30,583 | — | 30,583 | |||||||||||
Due to affiliates
|
14,167 | — | 14,167 | |||||||||||
Income taxes payable
|
1,156 | 5,846 |
(d)
|
7,002 | ||||||||||
Fair value of derivatives
|
530 | — | 530 | |||||||||||
Other accrued liabilities
|
12,131 | — | 12,131 | |||||||||||
Total current liabilities
|
154,872 | 6,489 | 161,361 | |||||||||||
Long-term debt and capital leases, less current maturities
|
433,684 | (235,789 | ) |
(c)
|
197,895 | |||||||||
Deferred income taxes
|
7,487 | (7,524 | ) |
(d)
|
(37 | ) | ||||||||
Other long-term obligations
|
1,601 | (505 | ) |
(b)
|
1,096 | |||||||||
Total liabilities
|
597,644 | (237,329 | ) | 360,315 | ||||||||||
Partners’ capital
|
369,459 | 65,605 |
(d)
|
435,626 | ||||||||||
562 |
(e)
|
|||||||||||||
Accumulated other comprehensive income
|
562 | (562 | ) |
(e)
|
— | |||||||||
Total partners’ capital
|
370,021 | 65,605 | 435,626 | |||||||||||
|
||||||||||||||
$ | 967,665 | $ | (171,724 | ) | $ | 795,941 |
MMLP
Historical
|
Natural Gas
Gathering and
Processing Assets
|
Pro Forma
Consolidated
|
||||||||||||
(Dollars in thousands, except per unit amounts)
|
||||||||||||||
Revenues:
|
||||||||||||||
Terminalling and storage
|
$ | 20,186 | $ | — | $ | 20,186 | ||||||||
Marine transportation
|
20,862 | — | 20,862 | |||||||||||
Sulfur services
|
2,926 | — | 2,926 | |||||||||||
Product sales:
|
||||||||||||||
Natural gas services
|
201,013 | (28,902 | ) |
(f)
|
172,111 | |||||||||
Sulfur services
|
71,626 | — | 71,626 | |||||||||||
Terminalling and storage
|
21,673 | — | 21,673 | |||||||||||
294,312 | (28,902 | ) | 265,410 | |||||||||||
Total revenues
|
338,286 | (28,902 | ) | 309,384 | ||||||||||
Costs and expenses:
|
||||||||||||||
Cost of products sold: (excluding depreciation and amortization)
|
||||||||||||||
Natural gas services
|
193,180 | (25,980 | ) |
(f)
|
167,200 | |||||||||
Sulfur services
|
54,960 | — | 54,960 | |||||||||||
Terminalling and storage
|
20,020 | — | 20,020 | |||||||||||
268,160 | (25,980 | ) | 242,180 | |||||||||||
Expenses:
|
||||||||||||||
Operating expenses
|
38,170 | (1,158 | ) |
(f)
|
37,012 | |||||||||
Selling, general and administrative
|
5,689 | (1,285 | ) |
(f)
|
4,404 | |||||||||
Depreciation and amortization
|
11,095 | (1,394 | ) |
(f)
|
9,701 | |||||||||
Total costs and expenses
|
323,114 | (29,817 | ) | 293,297 | ||||||||||
Other operating income
|
4 | (10 | ) |
(f)
|
(6 | ) | ||||||||
Operating income
|
15,176 | 905 | 16,081 | |||||||||||
Other income (expense):
|
||||||||||||||
Equity in earnings of unconsolidated entities
|
2,847 | (2,325 | ) |
(f)
|
522 | |||||||||
Interest expense
|
(7,207 | ) | 1,781 |
(g)
|
(5,426 | ) | ||||||||
Debt prepayment premium
|
(251 | ) | — | (251 | ) | |||||||||
Other, net
|
61 | — | 61 | |||||||||||
Total other income (expense)
|
(4,550 | ) | (544 | ) | (5,094 | ) | ||||||||
Net income before taxes
|
10,626 | 361 | 10,987 | |||||||||||
Income tax expense
|
(97 | ) | (168 | ) |
(f)
|
(265 | ) | |||||||
Net income
|
$ | 10,529 | $ | 193 | $ | 10,722 | ||||||||
|
||||||||||||||
General partner’s interest in net income
|
$ | 1,450 | $ | 1,615 | ||||||||||
Limited partners’ interest in net income
|
$ | 9,079 | $ | 9,107 | ||||||||||
Net income per limited partner unit - basic and diluted
|
$ | 0.40 | $ | 0.40 | ||||||||||
Weighted average limited partner units - basic
|
22,576,404 | 22,576,404 | ||||||||||||
Weighted average limited partner units - diluted
|
22,579,908 | 22,579,908 |
|
See accompanying notes to unaudited pro forma condensed consolidated financial information.
|
MMLP
Historical
|
Natural Gas
Gathering and
Processing Assets
|
Pro Forma
Consolidated
|
||||||||||||
(Dollars in thousands, except per unit amounts)
|
||||||||||||||
Revenues:
|
||||||||||||||
Terminalling and storage
|
$ | 18,123 | $ | — | $ | 18,123 | ||||||||
Marine transportation
|
19,399 | — | 19,399 | |||||||||||
Sulfur services
|
2,850 | — | 2,850 | |||||||||||
Product sales:
|
||||||||||||||
Natural gas services
|
167,211 | (30,055 | ) |
(f)
|
137,156 | |||||||||
Sulfur services
|
56,908 | — | 56,908 | |||||||||||
Terminalling and storage
|
18,545 | — | 18,545 | |||||||||||
242,664 | (30,055 | ) | 212,609 | |||||||||||
Total revenues
|
283,036 | (30,055 | ) | 252,981 | ||||||||||
Costs and expenses:
|
||||||||||||||
Cost of products sold: (excluding depreciation and amortization)
|
||||||||||||||
Natural gas services
|
158,204 | (25,926 | ) |
(f)
|
132,278 | |||||||||
Sulfur services
|
44,442 | — | 44,442 | |||||||||||
Terminalling and storage
|
16,560 | — | 16,560 | |||||||||||
219,206 | (25,926 | ) | 193,280 | |||||||||||
Expenses:
|
||||||||||||||
Operating expenses
|
34,349 | (1,399 | ) |
(f)
|
32,950 | |||||||||
Selling, general and administrative
|
5,028 | (1,302 | ) |
(f)
|
3,726 | |||||||||
Depreciation and amortization
|
10,942 | (1,371 | ) |
(f)
|
9,571 | |||||||||
Total costs and expenses
|
269,525 | (29,998 | ) | 239,527 | ||||||||||
Other operating income
|
— | — | — | |||||||||||
Operating income
|
13,511 | (57 | ) | 13,454 | ||||||||||
Other income (expense):
|
||||||||||||||
Equity in earnings of unconsolidated entities
|
2,376 | (2,350 | ) |
(f)
|
26 | |||||||||
Interest expense
|
(8,402 | ) | 1,952 |
(g)
|
(6,450 | ) | ||||||||
Debt prepayment premium
|
— | — | — | |||||||||||
Other, net
|
60 | (1 | ) |
(f)
|
59 | |||||||||
Total other income (expense)
|
(5,966 | ) | (399 | ) | (6,365 | ) | ||||||||
Net income before taxes
|
7,545 | (456 | ) | 7,089 | ||||||||||
Income tax benefit (expense)
|
(223 | ) | 2 |
(f)
|
(221 | ) | ||||||||
Net income
|
$ | 7,322 | $ | (454 | ) | $ | 6,868 | |||||||
|
||||||||||||||
General partner’s interest in net income
|
$ | 1,224 | $ | 1,220 | ||||||||||
Limited partners’ interest in net income
|
$ | 5,580 | $ | 5,371 | ||||||||||
Net income per limited partner unit - basic and diluted
|
$ | 0.30 | $ | 0.29 | ||||||||||
Weighted average limited partner units - basic
|
18,760,861 | 18,760,861 | ||||||||||||
Weighted average limited partner units - diluted
|
18,761,611 | 18,761,611 |
MMLP
Historical
|
Natural Gas
Gathering and
Processing Assets
|
Pro Forma
Consolidated
|
||||||||||||
(Dollars in thousands, except per unit amounts)
|
||||||||||||||
Revenues:
|
||||||||||||||
Terminalling and storage
|
$ | 77,283 | $ | — | $ | 77,283 | ||||||||
Marine transportation
|
76,936 | — | 76,936 | |||||||||||
Sulfur services
|
11,400 | — | 11,400 | |||||||||||
Product sales:
|
||||||||||||||
Natural gas services
|
733,087 | (121,338 | ) |
(f)
|
611,749 | |||||||||
Sulfur services
|
263,644 | — | 263,644 | |||||||||||
Terminalling and storage
|
74,723 | — | 74,723 | |||||||||||
1,071,454 | (121,338 | ) | 950,116 | |||||||||||
Total revenues
|
1,237,073 | (121,338 | ) | 1,115,735 | ||||||||||
Costs and expenses:
|
||||||||||||||
Cost of products sold: (excluding depreciation and amortization)
|
||||||||||||||
Natural gas services
|
704,073 | (105,259 | ) |
(f)
|
598,814 | |||||||||
Sulfur services
|
219,697 | — | 219,697 | |||||||||||
Terminalling and storage
|
67,134 | — | 67,134 | |||||||||||
990,904 | (105,259 | ) | 885,645 | |||||||||||
Expenses:
|
||||||||||||||
Operating expenses
|
140,197 | (5,463 | ) |
(f)
|
134,734 | |||||||||
Selling, general and administrative
|
22,665 | (5,236 | ) |
(f)
|
17,429 | |||||||||
Depreciation and amortization
|
44,957 | (5,512 | ) |
(f)
|
39,445 | |||||||||
Total costs and expenses
|
1,198,723 | (121,470 | ) | 1,077,253 | ||||||||||
Other operating income
|
1,326 | — | 1,326 | |||||||||||
Operating income
|
39,676 | 132 | 39,808 | |||||||||||
Other income (expense):
|
||||||||||||||
Equity in earnings of unconsolidated entities
|
9,536 | (9,142 | ) |
(f)
|
394 | |||||||||
Interest expense
|
(24,518 | ) | 7,641 |
(g)
|
(16,877 | ) | ||||||||
Other, net
|
233 | — | 233 | |||||||||||
Total other income (expense)
|
(14,749 | ) | (1,501 | ) | (16,250 | ) | ||||||||
Net income before taxes
|
24,927 | (1,369 | ) | 23,558 | ||||||||||
Income tax expense
|
(585 | ) | (111 | ) |
(f)
|
(696 | ) | |||||||
Net income
|
$ | 24,342 | $ | (1,480 | ) | $ | 22,862 | |||||||
|
||||||||||||||
General partner’s interest in net income
|
$ | 5,289 | $ | 5,260 | ||||||||||
Limited partners’ interest in net income
|
$ | 17,945 | $ | 16,495 | ||||||||||
Net income per limited partner unit - basic and diluted
|
$ | 0.92 | $ | 0.84 | ||||||||||
Weighted average limited partner units - basic
|
19,545,427 | 19,545,427 | ||||||||||||
Weighted average limited partner units - diluted
|
19,546,705 | 19,546,705 |
MMLP
Historical
|
Natural Gas
Gathering and
Processing Assets
|
Pro Forma
Consolidated
|
||||||||||||
(Dollars in thousands, except per unit amounts)
|
||||||||||||||
Revenues:
|
||||||||||||||
Terminalling and storage
|
$ | 67,117 | $ | — | $ | 67,117 | ||||||||
Marine transportation
|
77,642 | — | 77,642 | |||||||||||
Sulfur services
|
— | — | — | |||||||||||
Product sales:
|
||||||||||||||
Natural gas services
|
554,482 | (112,477 | ) |
(f)
|
442,005 | |||||||||
Sulfur services
|
165,078 | — | 165,078 | |||||||||||
Terminalling and storage
|
47,799 | — | 47,799 | |||||||||||
767,359 | (112,477 | ) | 654,882 | |||||||||||
Total revenues
|
912,118 | (112,477 | ) | 799,641 | ||||||||||
Costs and expenses:
|
||||||||||||||
Cost of products sold: (excluding depreciation and amortization)
|
||||||||||||||
Natural gas services
|
527,232 | (99,575 | ) |
(f)
|
427,657 | |||||||||
Sulfur services
|
122,121 | — | 122,121 | |||||||||||
Terminalling and storage
|
44,549 | — | 44,549 | |||||||||||
693,902 | (99,575 | ) | 594,327 | |||||||||||
Expenses:
|
||||||||||||||
Operating expenses
|
116,402 | (4,479 | ) |
(f)
|
111,923 | |||||||||
Selling, general and administrative
|
21,118 | (6,007 | ) |
(f)
|
15,111 | |||||||||
Depreciation and amortization
|
40,656 | (4,452 | ) |
(f)
|
36,204 | |||||||||
Total costs and expenses
|
872,078 | (114,513 | ) | 757,565 | ||||||||||
Other operating income
|
136 | 92 |
(f)
|
228 | ||||||||||
Operating income
|
40,176 | 2,128 | 42,304 | |||||||||||
Other income (expense):
|
||||||||||||||
Equity in earnings of unconsolidated entities
|
9,792 | (9,831 | ) |
(f)
|
(39 | ) | ||||||||
Interest expense
|
(33,716 | ) | — | (33,716 | ) | |||||||||
Other, net
|
287 | — | 287 | |||||||||||
Total other income (expense)
|
(23,637 | ) | (9,831 | ) | (33,468 | ) | ||||||||
Net income before taxes
|
16,539 | (7,703 | ) | 8,836 | ||||||||||
Income tax expense
|
(517 | ) | (397 | ) |
(f)
|
(914 | ) | |||||||
Net income
|
$ | 16,022 | $ | (8,100 | ) | $ | 7,922 | |||||||
|
||||||||||||||
General partner’s interest in net income
|
$ | 3,869 | $ | 3,709 | ||||||||||
Limited partners’ interest in net income
|
$ | 11,045 | $ | 3,105 | ||||||||||
Net income per limited partner unit - basic and diluted
|
$ | 0.63 | $ | 0.18 | ||||||||||
Weighted average limited partner units - basic
|
17,525,089 | 17,525,089 | ||||||||||||
Weighted average limited partner units - diluted
|
17,525,089 | 17,525,089 |
MMLP
Historical
|
Natural Gas
Gathering and
Processing Assets
|
Pro Forma
Consolidated
|
||||||||||
(Dollars in thousands, except per unit amounts)
|
||||||||||||
Revenues:
|
||||||||||||
Terminalling and storage
|
$ | 69,710 | $ | — | $ | 69,710 | ||||||
Marine transportation
|
68,480 | — | 68,480 | |||||||||
Sulfur services
|
— | — | — | |||||||||
Product sales
|
||||||||||||
Natural gas services
|
408,982 | (71,141 | ) |
(f)
|
337,841 | |||||||
Sulfur services
|
79,629 | — | 79,629 | |||||||||
Terminalling and storage
|
35,584 | — | 35,584 | |||||||||
524,195 | (71,141 | ) | 453,054 | |||||||||
Total revenues
|
662,385 | (71,141 | ) | 591,244 | ||||||||
Costs and expenses:
|
||||||||||||
Cost of products sold: (excluding depreciation and amortization)
|
||||||||||||
Natural gas services
|
382,542 | (59,152 | ) |
(f)
|
323,390 | |||||||
Sulfur services
|
43,386 | — | 43,386 | |||||||||
Terminalling and storage
|
31,331 | — | 31,331 | |||||||||
457,259 | (59,152 | ) | 398,107 | |||||||||
Expenses:
|
||||||||||||
Operating expenses
|
117,438 | (5,537 | ) |
(f)
|
111,901 | |||||||
Selling, general and administrative
|
19,775 | (5,225 | ) |
(f)
|
14,550 | |||||||
Depreciation and amortization
|
39,506 | (3,963 | ) |
(f)
|
35,543 | |||||||
Total costs and expenses
|
633,978 | (73,877 | ) | 560,101 | ||||||||
Other operating income
|
6,013 | 12 |
(f)
|
6,025 | ||||||||
Operating income
|
34,420 | 2,748 | 37,168 | |||||||||
Other income (expense):
|
||||||||||||
Equity in earnings of unconsolidated entities
|
7,044 | (6,303 | ) |
(f)
|
741 | |||||||
Interest expense
|
(18,995 | ) |
|
(18,995 | ) | |||||||
Other, net
|
326 | — | 326 | |||||||||
Total other income (expense)
|
(11,625 | ) | (6,303 | ) | (17,928 | ) | ||||||
Net income before taxes
|
22,795 | (3,555 | ) | 19,240 | ||||||||
Income tax expense
|
(592 | ) | (972 | ) |
(f)
|
(1,564 | ) | |||||
Net income
|
$ | 22,203 | $ | (4,527 | ) | $ | 17,676 | |||||
|
||||||||||||
General partner’s interest in net income
|
$ | 3,249 | $ | 3,192 | ||||||||
Limited partners’ interest in net income
|
$ | 17,179 | $ | 12,709 | ||||||||
Net income per limited partner unit - basic and diluted
|
$ | 1.17 | $ | 0.87 | ||||||||
Weighted average limited partner units - basic
|
14,680,807 | 14,680,807 | ||||||||||
Weighted average limited partner units - diluted
|
14,684,775 | 14,684,775 |
(a)
|
To reflect the Partnership's net cash proceeds of $273.3 million, subject to potential post-closing adjustments and transaction costs, from the disposition of the Prism Assets.
|
(b)
|
To reflect the disposition of the Prism Assets' specified balance sheet accounts (primarily fixed assets and working capital accounts) as set forth in the asset purchase agreement dated June 18, 2012, the final amount of which will be determined subsequent to closing.
|
(c)
|
To reflect the application of the Partnership's net proceeds from the disposition of the Prism Assets to reduce long-term debt.
|
(d)
|
To reflect estimated gain, net of tax, at the time of sale of approximately $65.6 million from the disposition of the Prism Assets. The adjustments also reflect an estimated tax benefit of $1.7 million and estimated transaction costs of $0.8 million.
|
Proceeds
|
$ | 273,300 | ||
Less: | ||||
Carrying value of assets sold | 208,532 | |||
Transaction costs
|
841 | |||
63,927 | ||||
Tax benefit
|
1,678 | |||
Estimated gain
|
$ | 65,605 |
(e)
|
To recognize the gains in accumulated other comprehensive income in the results of operations for all of the Partnership's derivative contracts, as the purpose of these instruments was to hedge commodity risk exposure associated with the operation of the Prism Assets.
|
(f)
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To reflect the removal of the operating results of the Prism Assets as if the transaction occurred on January 1, 2009. The operations of a partnership are generally not subject to income tax, however one subsidiary whose assets are included in the transaction is subject to income taxes due to its corporate structure. Therefore, the tax adjustments above reflect this subsidiary’s federal income tax in addition to the effects of the Texas margin tax on all Prism Assets.
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(g)
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To reflect the reduction in interest expense due to repayment of borrowings under the revolving loan facility, notes payable, and capital lease obligations using a portion of the net cash proceeds from the sale of Prism Assets. The remaining net proceeds from the sale of the Prism Assets are assumed to be retained in cash. No adjustments were made to interest expense for the years ended December 31, 2010 and 2009.
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