EX-99.1 2 exhibit99_1q32015.htm EXHIBIT 99.1 Exhibit
EXHIBIT 99.1


MARTIN MIDSTREAM PARTNERS REPORTS
INCREASED DISTRIBUTABLE CASH FLOW AND ADJUSTED EBITDA
IN 2015 THIRD QUARTER RESULTS

•
Distributable cash flow from continuing operations increased 53% compared to the third quarter of 2014
•
Adjusted EBITDA of $41.4 million representing an increase of 20% compared to the third quarter of 2014
•
Distribution coverage ratio for trailing twelve months of 1.02 times

KILGORE, Texas, October 28, 2015 (GlobeNewswire) -- Martin Midstream Partners L.P. (Nasdaq: MMLP) (the "Partnership") announced today its financial results for the quarter ended September 30, 2015.

Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of MMLP, said, "We finished the third quarter 2015 with a 0.87 times distribution coverage ratio. For the twelve months ended September 30, 2015 our distribution coverage ratio was 1.02 times. This quarter once again demonstrated the benefit of the diverse nature of our revenue streams even as underlying fundamentals across energy markets are experiencing weakness as we beat our internal cash flow forecast by approximately $2.1 million.

"Looking at our operations, performance for the third quarter included the full positive benefit of our new Arcadia Rail Terminal which is housed within our Natural Gas Services segment and provides us nationwide access to natural gas liquids where previously we were confined to servicing customers within the geographic footprint of trucking capabilities. The true benefit of this asset should be seen in the fourth quarter this year and the first quarter next year as we realize the cash flow from forward sales of butane to the refineries during blending season.

"Our Cardinal Gas Storage operating subsidiary, also within our Natural Gas Services segment, continued its strong year to date performance in the third quarter delivering better than expected cash flow from interruptible business services. Cardinal has now exceeded forecasted cash flow in all four quarters since being wholly-owned by the Partnership. Additionally, we saw an increased distribution from our West Texas LPG Pipeline joint venture of $1.1 million based on new shipping tariffs. We also outperformed our internal forecast in the Terminalling and Storage segment, particularly in our legacy specialty terminals division and at the Smackover refinery, both aided by reduced operating expenses.

"Going forward, our focus continues to be increasing our coverage ratio by improving upon our predominantly refinery-facing lines of business. For the fourth quarter 2015, we are optimistic we can achieve improved results from higher marine utilization and lower repair and maintenance costs. Additionally, we will begin the early seasonal shipment of next spring’s fertilizer volumes, which combined with realized sales in our refinery grade butane business is expected to improve our balance sheet by reducing working capital and providing additional cash flow."

The Partnership's distributable cash flow from continuing operations for the third quarter of 2015 was $29.1 million compared to distributable cash flow from continuing operations for the third quarter of 2014 of $19.1 million, an increase of 53%.

The Partnership's distributable cash flow from continuing operations for the nine months ended September 30, 2015 was $98.1 million compared to distributable cash flow from continuing operations for the nine months ended September 30, 2014 of $60.9 million, an increase of 61%.

The Partnership's adjusted EBITDA from continuing operations for the third quarter of 2015 was $41.4 million compared to adjusted EBITDA from continuing operations for the third quarter of 2014 of $34.5 million, an increase of 20%. Net income for the third quarter of 2015 was $3.3 million, which resulted in a loss per limited



partner unit of $0.02 after the incentive distribution rights were allocated to the general partner. 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 and a $3.4 million non-cash asset impairment in the Partnership's Marine Transportation segment, the Partnership reported a loss for the third quarter of 2014 of $26.9 million, or $0.82 per limited partner unit.

The Partnership's adjusted EBITDA from continuing operations for the nine months ended September 30, 2015 was $136.8 million compared to adjusted EBITDA from continuing operations for the nine months ended September 30, 2014 of $106.4 million, an increase of 29%. Net income for the nine months ended September 30, 2015 was $31.5 million, or $0.54 per limited partner unit. As a result of a the non-cash charges referenced above, the Partnership reported a net loss of $16.1 million, or $0.54 per limited partner unit for nine months ended September 30, 2014.

Revenues for the third quarter of 2015 were $226.0 million compared to $377.1 million for the third quarter of 2014. Revenues for the nine months ended September 30, 2015 were $782.5 million compared to $1.3 billion for the nine months ended September 30, 2014. The decline in revenues is attributable primarily to significantly lower natural gas liquids prices.
    
On February 12, 2015, the Partnership exited the natural gas liquids floating storage and trans-loading businesses as a result of the sale of its six liquefied petroleum gas pressure barges, collectively referred to as the "Floating Storage Assets", for $41.3 million. The Partnership recorded a gain on the disposition of $1.5 million.

The Partnership had no net income, distributable cash flow or adjusted EBITDA from discontinued operations related to the Floating Storage Assets in the third quarter of 2015. Distributable cash flow and EBITDA from discontinued operations were negative $0.9 million for the third quarter of 2014. Discontinued operations resulted in a loss of $1.2 million, or $0.04 per limited partner unit, for the third quarter of 2014.

Distributable cash flow and adjusted EBITDA from discontinued operations were $1.2 million for the nine months ended September 30, 2015. The Partnership had net income from discontinued operations for the nine months ended September 30, 2015 of $1.2 million, or $0.02 per limited partner unit.

Distributable cash flow and adjusted EBITDA from discontinued operations were negative $2.0 million for the nine months ended September 30, 2014. Discontinued operations resulted in a loss of $3.0 million, or $0.10 per limited partner unit, for the nine months ended September 30, 2014.

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 directly 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, 2015 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 28, 2015.
    
Quarterly Cash Distribution
 
The quarterly cash distribution of $0.8125 per common unit, which was announced on October 22, 2015, is payable on November 13, 2015 to common unitholders of record as of the close of business on November 6, 2015. The ex-dividend date for the cash distribution is November 4, 2015. This distribution reflects an annualized distribution rate of $3.25 per unit.




Investors' Conference Call
  
An investors' conference call to review the second quarter results will be held on Thursday, October 29, 2015, 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 29, 2015 through 10:59 p.m. Central Time on November 10, 2015. The access code for the conference call and the audio replay is Conference ID No. 66621468. The audio replay of the conference call will also be archived on Martin Midstream Partners' website at www.martinmidstream.com.

About Martin Midstream Partners
    
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 transportation and distribution services and natural gas storage; (3) sulfur and sulfur-based products processing, manufacturing, marketing and distribution; and (4) marine transportation services for petroleum products and by-products.

Forward-Looking Statements
 
Statements about the Partnership's outlook and all other statements in this release other than historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements and all references to financial estimates rely on a number of assumptions concerning future events and are subject to a number of uncertainties and other factors, many of which are outside 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
  
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 historical 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
(Unaudited)
(Dollars in thousands)


 
 
September 30, 2015
 
December 31, 2014
Assets
 
 
 
Cash
$
13

 
$
42

Accounts and other receivables, less allowance for doubtful accounts of $488 and $1,620, respectively
63,881

 
134,173

Product exchange receivables
2,137

 
3,046

Inventories
91,803

 
88,718

Due from affiliates
11,164

 
14,512

Other current assets
6,344

 
6,772

Assets held for sale
—

 
40,488

Total current assets
175,342

 
287,751

 
 
 
 
Property, plant and equipment, at cost
1,382,972

 
1,343,674

Accumulated depreciation
(393,035
)
 
(345,397
)
Property, plant and equipment, net
989,937

 
998,277

 
 
 
 
Goodwill
23,802

 
23,802

Investment in unconsolidated entities
132,458

 
134,506

Note receivable - Martin Energy Trading LLC
15,000

 
15,000

Other assets, net
64,896

 
81,465

Total assets
$
1,401,435

 
$
1,540,801

 
 
 
 
Liabilities and Partners’ Capital
 

 
 

Trade and other accounts payable
$
69,584

 
$
125,332

Product exchange payables
16,756

 
10,396

Due to affiliates
2,937

 
4,872

Income taxes payable
788

 
1,174

Fair value of derivatives
358

 
—

Other accrued liabilities
12,845

 
21,801

Total current liabilities
103,268

 
163,575

 
 
 
 
Long-term debt, net
876,405

 
888,887

Other long-term obligations
2,193

 
2,668

Total liabilities
981,866

 
1,055,130

 
 
 
 
Commitments and contingencies


 


Partners’ capital
419,569

 
485,671

Total liabilities and partners' capital
$
1,401,435

 
$
1,540,801


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 28, 2015.




MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars and units in thousands, except per unit amounts)

 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Revenues:
 
 
 
 
 
 
 
Terminalling and storage  *
$
33,578

 
$
31,880

 
$
100,828

 
$
97,848

Marine transportation  *
18,977

 
24,281

 
59,956

 
69,479

Natural gas services
17,120

 
5,764

 
50,171

 
5,764

Sulfur services
3,090

 
3,037

 
9,270

 
9,112

Product sales: *
 
 
 
 
 
 
 
Natural gas services
86,714

 
217,398

 
330,803

 
771,798

Sulfur services
33,213

 
46,993

 
128,544

 
157,706

Terminalling and storage
33,329

 
47,735

 
102,901

 
153,451

 
153,256

 
312,126

 
562,248

 
1,082,955

Total revenues
226,021

 
377,088

 
782,473

 
1,265,158

 
 
 
 
 
 
 
 
Costs and expenses:
 

 
 

 
 

 
 

Cost of products sold: (excluding depreciation and amortization)
 

 
 

 
 

 
 

Natural gas services *
80,709

 
205,828

 
307,039

 
738,561

Sulfur services *
26,144

 
38,841

 
95,685

 
122,009

Terminalling and storage *
28,237

 
42,239

 
87,977

 
137,074

 
135,090

 
286,908

 
490,701

 
997,644

Expenses:
 

 
 

 
 

 
 

Operating expenses  *
45,310

 
47,283

 
138,399

 
137,294

Selling, general and administrative  *
8,666

 
10,161

 
26,507

 
27,222

Depreciation and amortization
23,335

 
16,457

 
68,737

 
44,277

Total costs and expenses
212,401

 
360,809

 
724,344

 
1,206,437

 
 
 
 
 
 
 
 
Impairment of long-lived assets
—

 
(3,445
)
 
—

 
(3,445
)
Other operating income (loss)
(1,586
)
 
347

 
(1,763
)
 
401

Operating income
12,034

 
13,181

 
56,366

 
55,677

 
 
 
 
 
 
 
 
Other income (expense):
 

 
 

 
 

 
 

Equity in earnings of unconsolidated entities
2,363

 
2,655

 
5,752

 
4,297

Interest expense, net
(11,994
)
 
(11,459
)
 
(32,465
)
 
(34,351
)
Gain on retirement of senior unsecured notes
728

 
—

 
728

 
—

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
399

 
287

 
757

 
170

Total other expense
(8,504
)
 
(38,619
)
 
(25,228
)
 
(67,753
)
 
 
 
 
 
 
 
 
Net income (loss) before taxes
3,530

 
(25,438
)
 
31,138

 
(12,076
)
Income tax expense
(200
)
 
(300
)
 
(814
)
 
(954
)
Income (loss) from continuing operations
3,330

 
(25,738
)
 
30,324

 
(13,030
)
Income (loss) from discontinued operations, net of income taxes
—

 
(1,167
)
 
1,215

 
(3,048
)
Net income (loss)
3,330

 
(26,905
)
 
31,539

 
(16,078
)
Less general partner's interest in net (income) loss
(3,959
)
 
539

 
(12,310
)
 
322

Less (income) loss allocable to unvested restricted units
(16
)
 
62

 
(127
)
 
33

Limited partners' interest in net income (loss)
$
(645
)
 
$
(26,304
)
 
$
19,102

 
$
(15,723
)

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 28, 2015.

*Related Party Transactions Shown Below


MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars and units in thousands, except per unit amounts)



*Related Party Transactions Included Above
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Revenues:*
 
 
 
 
 
 
 
Terminalling and storage
$
15,091

 
$
19,045

 
$
58,626

 
$
55,798

Marine transportation
6,552

 
6,076

 
19,919

 
18,340

Product Sales
1,731

 
883

 
5,079

 
6,484

Costs and expenses:*
 
 
 
 
 
 
 
Cost of products sold: (excluding depreciation and amortization)
 
 
 
 
 
 
 
Natural gas services
6,470

 
9,908

 
20,198

 
29,169

Sulfur services
3,387

 
4,491

 
10,629

 
13,808

Terminalling and storage
3,227

 
9,174

 
14,261

 
25,571

Expenses:
 
 
 
 
 
 
 
Operating expenses
19,290

 
21,013

 
58,605

 
58,500

Selling, general and administrative
5,922

 
7,230

 
17,765

 
18,103


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 28, 2015.


MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars and units in thousands, except per unit amounts)

 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Allocation of net income (loss) attributable to:
 
 
 
 
 
 
 
Limited partner interest:
 
 
 
 
 
 
 
 Continuing operations
$
(645
)
 
$
(25,162
)
 
$
18,366

 
$
(12,743
)
 Discontinued operations
—

 
(1,142
)
 
736

 
(2,980
)
 
$
(645
)
 
$
(26,304
)
 
$
19,102

 
$
(15,723
)
General partner interest:
 
 
 
 
 
 
 
  Continuing operations
$
3,959

 
$
(515
)
 
$
11,836

 
$
(261
)
  Discontinued operations
—

 
(24
)
 
474

 
(61
)
 
$
3,959

 
$
(539
)
 
$
12,310

 
$
(322
)
 
 
 
 
 
 
 
 
Net income (loss) per unit attributable to limited partners:
 
 
 
 
 
 
 
Basic:
 
 
 
 
 
 
 
Continuing operations
$
(0.02
)
 
$
(0.78
)
 
$
0.52

 
$
(0.44
)
Discontinued operations
—

 
(0.04
)
 
0.02

 
(0.10
)
 
$
(0.02
)
 
$
(0.82
)
 
$
0.54

 
$
(0.54
)
 
 
 
 
 
 
 
 
Weighted average limited partner units - basic
35,308

 
32,243

 
35,309

 
29,271

 
 
 
 
 
 
 
 
Diluted:
 
 
 
 
 
 
 
Continuing operations
$
(0.02
)
 
$
(0.78
)
 
$
0.52

 
$
(0.44
)
Discontinued operations
—

 
(0.04
)
 
0.02

 
(0.1
)
 
$
(0.02
)
 
$
(0.82
)
 
$
0.54

 
$
(0.54
)
 
 
 
 
 
 
 
 
Weighted average limited partner units - diluted
35,308

 
32,243

 
35,369

 
29,271


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 28, 2015.



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, 2014
26,625,026

 
$
254,028

 
$
6,389

 
$
260,417

Net income
—

 
(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
)
Excess purchase price over carrying value of acquired assets
—

 
(4,948
)
 
—

 
(4,948
)
Unit-based compensation
—

 
589

 
—

 
589

Purchase of treasury units
(6,400
)
 
(277
)
 
—

 
(277
)
Balances - September 30, 2014
35,349,699

 
$
498,734

 
$
11,556

 
$
510,290

 
 
 
 
 
 
 
 
Balances - January 1, 2015
35,365,912

 
$
470,943

 
$
14,728

 
$
485,671

Net income
—

 
19,229

 
12,310

 
31,539

Issuance of common units, net of issuance related costs
—

 
(330
)
 
—

 
(330
)
Issuance of restricted units
91,950

 
—

 
—

 
—

Forfeiture of restricted units
(1,250
)
 
—

 
—

 
—

General partner contribution
—

 
—

 
55

 
55

Cash distributions
—

 
(86,420
)
 
(13,526
)
 
(99,946
)
Unit-based compensation
—

 
1,080

 
—

 
1,080

Reimbursement of excess purchase price over carrying value of acquired assets
—

 
1,500

 
—

 
1,500

Balances - September 30, 2015
35,456,612

 
$
406,002

 
$
13,567

 
$
419,569


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 28, 2015.
 


MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)


 
Nine Months Ended
 
September 30,
 
2015
 
2014
Cash flows from operating activities:
 
 
 
Net income (loss)
$
31,539

 
$
(16,078
)
Less: (Income) loss from discontinued operations, net of income taxes
(1,215
)
 
3,048

Net income from continuing operations
30,324

 
(13,030
)
Adjustments to reconcile net income to net cash provided by operating activities:
 

 
 

Depreciation and amortization
68,737

 
44,277

Amortization of deferred debt issuance costs
4,142

 
5,415

Amortization of debt discount
—

 
1,305

Amortization of premium on notes payable
(246
)
 
(164
)
Loss (gain) on sale of property, plant and equipment
1,751

 
(54
)
Impairment of long-lived assets
—

 
3,445

Gain on retirement of senior notes
(728
)
 
—

Equity in earnings of unconsolidated entities
(5,752
)
 
(4,297
)
Reduction in carrying value of investment in Cardinal due to purchase of the controlling interest
—

 
30,102

Non-cash mark-to-market on derivatives
358

 
489

Unit-based compensation
1,080

 
589

Preferred dividends on MET investment
—

 
1,498

Return on investment in unconsolidated subsidiary
7,800

 
600

Change in current assets and liabilities, excluding effects of acquisitions and dispositions:
 

 
 

Accounts and other receivables
69,967

 
32,345

Product exchange receivables
909

 
(3,624
)
Inventories
(3,134
)
 
(21,793
)
Due from affiliates
3,348

 
(2,482
)
Other current assets
354

 
1,219

Trade and other accounts payable
(59,124
)
 
(28,426
)
Product exchange payables
6,360

 
9,265

Due to affiliates
(1,935
)
 
9,117

Income taxes payable
(386
)
 
(202
)
Other accrued liabilities
(8,490
)
 
(7,214
)
Change in other non-current assets and liabilities
(999
)
 
1,115

Net cash provided by continuing operating activities
114,336

 
59,495

Net cash used in discontinued operating activities
(1,352
)
 
(6,494
)
Net cash provided by operating activities
112,984

 
53,001

Cash flows from investing activities:
 

 
 

Payments for property, plant and equipment
(40,123
)
 
(58,522
)
Acquisitions, less cash acquired
—

 
(100,046
)
Payments for plant turnaround costs
(1,754
)
 
(4,000
)
Proceeds from sale of property, plant and equipment
1,985

 
702

Proceeds from involuntary conversion of property, plant and equipment
—

 
2,475

Investment in unconsolidated entities
—

 
(134,413
)
Return of investments from unconsolidated entities
—

 
726

Contributions to unconsolidated entities
—

 
(3,386
)
Net cash used in continuing investing activities
(39,892
)
 
(296,464
)
Net cash provided by discontinued investing activities
41,250

 
—

Net cash provided by (used in) investing activities
1,358

 
(296,464
)
Cash flows from financing activities:
 

 
 

Payments of long-term debt
(224,310
)
 
(1,458,096
)
Proceeds from long-term debt
209,000

 
1,426,250

Proceeds from issuance of common units, net of issuance related costs
(330
)
 
331,571

General partner contribution
55

 
6,995

Purchase of treasury units
—

 
(277
)
Payment of debt issuance costs
(340
)
 
(3,589
)
Excess purchase price over carrying value of acquired assets
—

 
(4,948
)
Reimbursement of excess purchase price over carrying value of acquired assets
1,500

 
—

Cash distributions paid
(99,946
)
 
(67,979
)
Net cash provided by (used in) financing activities
(114,371
)
 
229,927

Net decrease in cash
(29
)
 
(13,536
)
Cash at beginning of period
42

 
16,542

Cash at end of period
$
13

 
$
3,006

Non-cash additions to property, plant and equipment
$
4,389

 
$
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 28, 2015.


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, 2015 and 2014
 
Three Months Ended September 30,
 
Variance
 
Percent Change
 
2015
 
2014
 
 
 
(In thousands, except BBL per day)
 
 
Revenues:
 
 
 
 
 
 
 
Services
$
35,144

 
$
33,213

 
$
1,931

 
6%
Products
33,329

 
47,735

 
(14,406
)
 
(30)%
Total revenues
68,473

 
80,948

 
(12,475
)
 
(15)%
 
 
 
 
 
 
 
 
Cost of products sold
28,765

 
43,193

 
(14,428
)
 
(33)%
Operating expenses
20,268

 
21,506

 
(1,238
)
 
(6)%
Selling, general and administrative expenses
995

 
786

 
209

 
27%
Depreciation and amortization
9,624

 
9,512

 
112

 
1%
 
8,821

 
5,951

 
2,870

 
48%
Other operating income (loss)
2

 
347

 
(345
)
 
(99)%
Operating income
$
8,823

 
$
6,298

 
$
2,525

 
40%
 
 
 
 
 
 
 
 
Lubricant sales volumes (gallons)
5,974

 
8,193

 
(2,219
)
 
(27)%
Shore-based throughput volumes (gallons)
36,383

 
64,338

 
(27,955
)
 
(43)%
Smackover refinery throughput volumes (BBL per day)
6,205

 
7,123

 
(918
)
 
(13)%
Corpus Christi crude terminal (BBL per day)
148,377

 
173,315

 
(24,938
)
 
(14)%

Comparative Results of Operations for the Nine Months Ended September 30, 2015 and 2014
 
Nine Months Ended September 30,
 
Variance
 
Percent Change
 
2015
 
2014
 
 
 
(In thousands, except BBL per day)
 
 
Revenues:
 
 
 
 
 
 
 
Services
$
104,893

 
$
101,711

 
$
3,182

 
3%
Products
102,901

 
153,451

 
(50,550
)
 
(33)%
Total revenues
207,794

 
255,162

 
(47,368
)
 
(19)%
 
 
 
 
 
 
 
 
Cost of products sold
90,076

 
139,028

 
(48,952
)
 
(35)%
Operating expenses
62,947

 
61,628

 
1,319

 
2%
Selling, general and administrative expenses
2,806

 
2,484

 
322

 
13%
Depreciation and amortization
29,030

 
27,902

 
1,128

 
4%
 
22,935

 
24,120

 
(1,185
)
 
(5)%
Other operating income (loss)
(199
)
 
385

 
(584
)
 
(152)%
Operating income
$
22,736

 
$
24,505

 
$
(1,769
)
 
(7)%
 
 
 
 
 
 
 
 
Lubricant sales volumes (gallons)
18,007

 
26,170

 
(8,163
)
 
(31)%
Shore-based throughput volumes (gallons)
122,743

 
186,956

 
(64,213
)
 
(34)%
Smackover refinery throughput volumes (BBL per day)
6,091

 
5,803

 
288

 
5%
Corpus Christi crude terminal (BBL per day)
166,129

 
160,332

 
5,797

 
4%



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, 2015 and 2014
 
Three Months Ended September 30,
 
Variance
 
Percent Change
 
2015
 
2014
 
 
 
(In thousands)
 
 
Revenues:
 
 
 
 
 
 
 
Services
$
17,120

 
$
5,764

 
$
11,356

 
197%
Products
86,714

 
217,398

 
(130,684
)
 
(60)%
Total revenues
103,834

 
223,162

 
(119,328
)
 
(53)%
 
 
 
 
 
 
 
 
Cost of products sold
81,472

 
206,354

 
(124,882
)
 
(61)%
Operating expenses
6,489

 
3,438

 
3,051

 
89%
Selling, general and administrative expenses
1,848

 
3,366

 
(1,518
)
 
(45)%
Depreciation and amortization
8,522

 
2,398

 
6,124

 
255%
Operating income
$
5,503

 
$
7,606

 
$
(2,103
)
 
(28)%
 
 
 
 
 
 
 
 
NGL sales volumes (Bbls)
3,138

 
3,511

 
(373
)
 
(11)%

Comparative Results of Operations for the Nine Months Ended September 30, 2015 and 2014
 
Nine Months Ended September 30,
 
Variance
 
Percent Change
 
2015
 
2014
 
 
 
(In thousands)
 
 
Revenues:
 
 
 
 
 
 
 
Services
$
50,171

 
$
5,764

 
$
44,407

 
770%
Products
330,803

 
771,798

 
(440,995
)
 
(57)%
Total revenues
380,974

 
777,562

 
(396,588
)
 
(51)%
 
 
 
 
 
 
 
 
Cost of products sold
308,713

 
740,021

 
(431,308
)
 
(58)%
Operating expenses
17,905

 
5,530

 
12,375

 
224%
Selling, general and administrative expenses
6,313

 
6,253

 
60

 
1%
Depreciation and amortization
25,297

 
2,811

 
22,486

 
800%
 
22,746

 
22,947

 
(201
)
 
(1)%
Other operating income (loss)
(7
)
 
—

 
(7
)
 
 
Operating income
$
22,739

 
$
22,947

 
$
(208
)
 
(1)%
 
 
 
 
 
 
 
 
NGL sales volumes (Bbls)
10,227

 
12,027

 
(1,800
)
 
(15)%

    


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, 2015 and 2014
 
Three Months Ended September 30,
 
Variance
 
Percent Change
 
2015
 
2014
 
 
 
(In thousands)
 
 
Revenues:
 
 
 
 
 
 
 
Services
$
3,090

 
$
3,037

 
$
53

 
2%
Products
33,213

 
46,993

 
(13,780
)
 
(29)%
Total revenues
36,303

 
50,030

 
(13,727
)
 
(27)%
 
 
 
 
 
 
 
 
Cost of products sold
26,235

 
38,932

 
(12,697
)
 
(33)%
Operating expenses
3,427

 
4,497

 
(1,070
)
 
(24)%
Selling, general and administrative expenses
934

 
1,166

 
(232
)
 
(20)%
Depreciation and amortization
2,129

 
2,078

 
51

 
2%
 
3,578

 
3,357

 
221

 
7%
Other operating income
(5
)
 
—

 
(5
)
 
 
Operating income
$
3,573

 
$
3,357

 
$
216

 
6%
 
 
 
 
 
 
 
 
Sulfur (long tons)
203

 
251

 
(48
)
 
(19)%
Fertilizer (long tons)
51

 
52

 
(1
)
 
(2)%
Total sulfur services volumes (long tons)
254

 
303

 
(49
)
 
(16)%

Comparative Results of Operations for the Nine Months Ended September 30, 2015 and 2014    
 
Nine Months Ended September 30,
 
Variance
 
Percent Change
 
2015
 
2014
 
 
 
(In thousands)
 
 
Revenues:
 
 
 
 
 
 
 
Services
$
9,270

 
$
9,112

 
$
158

 
2%
Products
128,544

 
157,706

 
(29,162
)
 
(18)%
Total revenues
137,814

 
166,818

 
(29,004
)
 
(17)%
 
 
 
 
 
 
 
 
Cost of products sold
95,961

 
122,281

 
(26,320
)
 
(22)%
Operating expenses
11,697

 
13,283

 
(1,586
)
 
(12)%
Selling, general and administrative expenses
2,859

 
3,404

 
(545
)
 
(16)%
Depreciation and amortization
6,360

 
6,092

 
268

 
4%
 
20,937

 
21,758

 
(821
)
 
(4)%
Other operating loss
(5
)
 
—

 
(5
)
 

Operating income
$
20,932

 
$
21,758

 
$
(826
)
 
(4)%
 
 
 
 
 
 
 
 
Sulfur (long tons)
641

 
646

 
(5
)
 
(1)%
Fertilizer (long tons)
229

 
233

 
(4
)
 
(2)%
Total sulfur services volumes (long tons)
870

 
879

 
(9
)
 
(1)%




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, 2015 and 2014
 
Three Months Ended September 30,
 
Variance
 
Percent Change
 
2015
 
2014
 
 
 
(In thousands)
 
 
Revenues
$
19,522

 
$
25,858

 
$
(6,336
)
 
(25)%
Operating expenses
15,855

 
19,181

 
(3,326
)
 
(17)%
Selling, general and administrative expenses
(59
)
 
364

 
(423
)
 
(116)%
Depreciation and amortization
3,060

 
2,469

 
591

 
24%
 
666

 
3,844

 
(3,178
)
 
(83)%
Impairment of long-lived assets
—

 
(3,445
)
 
3,445

 
(100)%
Other operating income
(1,583
)
 
—

 
(1,583
)
 

Operating income (loss)
$
(917
)
 
$
399

 
$
(1,316
)
 
(330)%

Comparative Results of Operations for the Nine Months Ended September 30, 2015 and 2014
 
Nine Months Ended September 30,
 
Variance
 
Percent Change
 
2015
 
2014
 
 
 
(In thousands)
 
 
Revenues
$
62,354

 
$
73,254

 
$
(10,900
)
 
(15)%
Operating expenses
48,284

 
60,805

 
(12,521
)
 
(21)%
Selling, general and administrative expenses
251

 
867

 
(616
)
 
(71)%
Depreciation and amortization
8,050

 
7,472

 
578

 
8%
  Operating income  
$
5,769

 
$
4,110

 
$
1,659

 
40%
Impairment of long-lived assets
—

 
(3,445
)
 
3,445

 
100%
Other operating income
(1,552
)
 
16

 
(1,568
)
 
(9,800)%
Operating income
$
4,217

 
$
681

 
$
3,536

 
519%
 

Distributions from Unconsolidated Entities

Comparative Results of Operations for the Three Months Ended September 30, 2015 and 2014
 
Three Months Ended September 30,
 
Variance
 
Percent Change
 
2015
 
2014
 
 
 
(In thousands)
 
 
Distributions from WTLPG
$
3,400

 
$
600

 
$
2,800

 
467%
Distributions from Cardinal
—

 
—

 
—

 
 
Distributions from MET
—

 
382

 
(382
)
 
(100)%
Distributions from unconsolidated entities
$
3,400

 
$
982

 
$
2,418

 
246%



MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Unaudited)
(Dollars and volumes in thousands, except BBL per day)

Comparative Results of Operations for the Nine Months Ended September 30, 2015 and 2014
 
Nine Months Ended September 30,
 
Variance
 
Percent Change
 
2015
 
2014
 
 
 
(In thousands)
 
 
Distributions from WTLPG
$
7,800

 
$
600

 
$
7,200

 
1,200%
Distributions from Cardinal
—

 
225

 
(225
)
 
100%
Distributions from MET
—

 
1,498

 
(1,498
)
 
(100)%
Distributions from unconsolidated entities
$
7,800

 
$
2,323

 
$
5,477

 
236%






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, 2015 and 2014.

Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
 
(in thousands)
Net income (loss)
$
3,330

 
$
(26,905
)
 
$
31,539

 
$
(16,078
)
Less: (Income) loss from discontinued operations, net of income taxes
—

 
1,167

 
(1,215
)
 
3,048

Income (loss) from continuing operations
3,330

 
(25,738
)
 
30,324

 
(13,030
)
Adjustments:
 
 
 
 
 
 
 
Interest expense
11,994

 
11,459

 
32,465

 
34,351

Income tax expense
200

 
300

 
814

 
954

Depreciation and amortization
23,335

 
16,457

 
68,737

 
44,277

EBITDA
38,859

 
2,478

 
132,340

 
66,552

Adjustments:
 
 
 
 
 
 
 
Equity in earnings of unconsolidated entities
(2,363
)
 
(2,655
)
 
(5,752
)
 
(4,297
)
(Gain) loss on sale of property, plant and equipment
1,586

 
—

 
1,751

 
(54
)
Impairment of long-lived assets
—

 
3,445

 
—

 
3,445

Unrealized mark to market on commodity derivatives
358

 
(21
)
 
358

 
(21
)
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

Gain on retirement of senior unsecured notes
(728
)
 
—

 
(728
)
 
—

Distributions from unconsolidated entities
3,400

 
982

 
7,800

 
2,323

Unit-based compensation
330

 
201

 
1,080

 
589

Adjusted EBITDA
41,442

 
34,532

 
136,849

 
106,406

Adjustments:
 
 
 
 
 
 
 
Interest expense
(11,994
)
 
(11,459
)
 
(32,465
)
 
(34,351
)
Income tax expense
(200
)
 
(300
)
 
(814
)
 
(954
)
Amortization of debt discount
—

 
—

 
—

 
1,305

Amortization of debt premium
(82
)
 
(82
)
 
(246
)
 
(164
)
Amortization of deferred debt issuance costs
2,400

 
827

 
4,142

 
5,415

Non-cash mark-to-market on derivatives
—

 
(58
)
 
—

 
489

Payments for plant turnaround costs
—

 
(90
)
 
(1,754
)
 
(4,000
)
Maintenance capital expenditures
(2,438
)
 
(4,306
)
 
(7,621
)
 
(13,260
)
Distributable Cash Flow
$
29,128

 
$
19,064

 
$
98,091

 
$
60,886