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Martin Midstream Partners Reports Increased Distributable Cash Flow and Adjusted EBITDA in 2014 Fourth Quarter and Year End Results

  • Distributable cash flow from continuing operations increased 43% compared to the 4th quarter of 2013
  • Distribution increase of $0.03, or 3.8%, per unit compared to the 4th quarter of 2013
  • Adjusted EBITDA from continuing operations increased 12% compared to the 4th quarter of 2013

KILGORE, Texas, Feb. 25, 2015 (GLOBE NEWSWIRE) -- Martin Midstream Partners L.P. (Nasdaq:MMLP) (the "Partnership") announced today its financial results for the fourth quarter and year ended December 31, 2014.

Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership, said, "As we all know, during the fourth quarter 2014, commodity prices, particularly crude oil, declined significantly. Our Partnership has no direct commodity exposure to crude oil, and our businesses and the services we provide are generally far removed from the well-head. Nonetheless, our unit price, as if tied directly to the price of crude oil, suffered significantly during the last half of 2014. While we do have some risk associated with reduced volumes of commodities being handled utilizing our assets, this represents a relatively small portion of our cash flow. More so, these cash flows are typically supported by minimum contractual throughput commitments. Throughout the Partnership's history, our businesses have tended to be tied much closer to refinery utilization rather than to the production of oil and natural gas. We have seen before, and continue to believe, the necessary services and logistical support we provide to refineries have a level of staying power throughout the commodity price cycle. We expect the resilience of our diverse model will play out again in the current cycle. For the fourth quarter, excluding the recently discontinued operations of our NGL floating storage business, we had a distribution coverage ratio of 1.14 times. For the year ended 2014, excluding the discontinued operations of our NGL floating storage business, our distribution coverage ratio was 0.97 times. With respect to distributable cash flow, 2014 was an unusual year in terms of heavy maintenance capital expenditures due to the timing of the biennial turnaround at the Smackover refinery and the convergence of numerous regulatory-driven offshore marine dry dockings.

"Crude oil throughput volume at the Corpus Christi Crude Terminal remained steady during the quarter even as crude oil prices declined. Volumes through the terminal averaged 175,769 barrels per day in the fourth quarter and 164,223 barrels per day for 2014. Volume through the terminal in early 2015 is currently averaging approximately 175,000 barrels per day. Our traditional fee-based terminalling and storage business outperformed its forecast for the fourth quarter and all of 2014. However, such outperformance was offset by a continued challenging landscape in the packaging and lubricants business. Weak margins, decreased demand, and continued oversupply in the base oil market drove profitability to less than 40% of what was originally projected in our packaging and lubricants business. While we anticipate continued weakness for 2015 in our packaging and lubricants business, cash flow should improve year over year.

"In 2014 the Partnership made two significant capital investments, closing on the purchase of the remaining interests in Cardinal Gas Storage Partners LLC ("Cardinal") and a 20% interest in West Texas LPG Pipeline L.P. ("WTLPG"). To date, both WTLPG and Cardinal have performed well, exceeding our cash flow forecasts. Based on the strength of interruptible services, particularly at the Monroe Gas Storage facility, Cardinal surpassed its fourth quarter forecast. We expect over $50 million of combined cash flow from these fee-based acquisitions driving positive cash flow growth in 2015.

"Also, our NGL logistics business, which includes the marketing and distribution of refinery grade butane and wholesale propane, performed near forecasted levels for the year ended 2014 despite tremendous commodity price decline experienced in the fourth quarter. Also, we are anticipating our NGL rail rack at our underground storage in North Louisiana to be completed sometime in the second quarter of 2015. This will allow us to expand our geographical footprint in our NGL logistics business.

"The Sulfur Services segment exceeded its forecast in the fourth quarter based on improved winter fill fertilizer volume and an increased demand for our prilling services as a result of improved sulfur prices. For the year ended 2014, Sulfur Services finished ahead of our internal forecast by approximately 18%. Driving this improved performance was a prolonged fertilizer application season and strong prilling demand particularly in our West Coast system. Looking ahead, we anticipate a reduced level of overall U.S. agricultural acreage planted in 2015, which could slightly impact our fertilizer business' cash flow. This may be somewhat offset by continued strength in sulfur pricing and global demand.

"Our Marine Transportation segment also performed well during the last quarter of 2014. Cash flow was approximately $6.4 million - our strongest quarter since 2010. After planned regulatory dry docking expenses were incurred during the first two quarters of 2014, the marine segment's performance in the second half of 2014 was strong, particularly in our offshore fleet. We expect similar strength in the performance of our marine assets in 2015 with minimal dry dockings scheduled this year.

"We achieved tremendous accomplishments in 2014 despite the overall decline in commodity prices suffered in the second half of the year. The Partnership completed two of its largest high-quality, fee-based acquisitions that we believe will continue to add significant value to the Partnership. In 2015, we will continue our focus on optimizing our existing operations and working on growth opportunities."

The Partnership's distributable cash flow from continuing operations for the fourth quarter of 2014 was $33.5 million. This compared to distributable cash flow from continuing operations for the fourth quarter of 2013 of $23.4 million. The Partnership's distributable cash flow from continuing operations for the year ended December 31, 2014 was $94.4 million. This compared to distributable cash flow from continuing operations for the year ended December 31, 2013 of $84.5 million.

The Partnership's adjusted EBITDA from continuing operations for the fourth quarter of 2014 was $42.5 million. This compared to adjusted EBITDA from continuing operations for the fourth quarter of 2013 of $37.9 million. Net income for the fourth quarter of 2014 was $4.4 million, which resulted in a loss per limited partner unit of $0.07 after the incentive distribution rights were allocated to the general partner. The Partnership had a net loss of $39.3 million, or $1.44 per limited partner unit, for the fourth quarter of 2013. Results for the fourth quarter of 2013 were negatively impacted by the $54.1 million non-cash charge related to the Partnership's share of an impairment of the Monroe Gas Storage Company LLC ("Monroe") assets at Cardinal Gas Storage Partners, LLC ("Cardinal"), a previously held equity method investment of the Partnership.

The Partnership's adjusted EBITDA from continuing operations for the year ended December 31, 2014 was $149.0 million. This compared to adjusted EBITDA from continuing operations for the year ended December 31, 2013 of $135.5 million. 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, the Partnership reported a net loss for the year ended December 31, 2014 of $11.7 million, or a loss of $0.49 per limited partner unit. The reduction of the Cardinal investment occurred as a result of the Partnership's acquisition of the 57.8% controlling interest on August 29, 2014. The year ended December 31, 2014 also included a $3.4 million non-cash asset impairment charge related to one offshore tug and barge unit in the Partnership's Marine Transportation segment. These non-cash transactions negatively impacted earnings but had no impact on distributable cash flow. The Partnership had a net loss of $13.4 million, or $0.50 per limited partner unit, for the year ended December 31, 2013. Results for the year ended December 31, 2013 were negatively impacted by the $54.1 million non-cash charge related to the Partnership's share of an impairment of the Monroe assets at Cardinal.

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 expects to record a gain on the disposition of $1.5 million. The Partnership's adjusted EBITDA from the Floating Storage Assets for the fourth quarter of 2014 and the year ended December 31, 2014 was negative $1.8 million and negative $3.8 million, respectively.

The Partnership's distributable cash flow and adjusted EBITDA from discontinued operations related to the Floating Storage Assets for the fourth quarter of 2014 was negative $1.8 million. This compared to distributable cash flow and adjusted EBITDA from discontinued operations for the fourth quarter of 2013 of $0.7 million. The Partnership had a net loss from discontinued operations related to the Floating Storage Assets for the fourth quarter of 2014 of $2.3 million, or $0.07 per limited partner unit. This compared to net income from discontinued operations for the fourth quarter of 2013 of $0.4 million, or $0.01 per limited partner unit.

The Partnership's distributable cash flow and adjusted EBITDA from discontinued operations related to the Floating Storage Assets for the year ended December 31, 2014 was negative $3.8 million. This compared to distributable cash flow and adjusted EBITDA from discontinued operations for the year ended December 31, 2013 of $2.5 million. The Partnership had a net loss from discontinued operations related to the Floating Storage Assets for the year ended December 31, 2014 of $5.3 million, or $0.22 per limited partner unit. This compared to net income from discontinued operations for the year ended December 31, 2013 of $1.2 million, or $0.04 per limited partner unit.

Revenues for the fourth quarter of 2014 were $377.0 million compared to $467.1 million for the fourth quarter of 2013. Revenues were $1.6 billion for each of the years ended December 31, 2014 and 2013.

Distributable cash flow, EBITDA and adjusted EBITDA are non-GAAP financial measures which are explained in greater detail below under the heading "Use of Non-GAAP Financial Information." The Partnership has also included below a table entitled "Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow" in order to show the components of these non-GAAP financial measures and their reconciliation to the most comparable GAAP measurement.

Included with this press release are the Partnership's consolidated financial statements as of and for the year ended December 31, 2014 and certain prior periods. These financial statements should be read in conjunction with the information contained in the Partnership's Annual Report on Form 10-K, to be filed with the SEC on March 2, 2015.

Investors' Conference Call

An investors' conference call to review the fourth quarter results will be held on Thursday, February 26, 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 February 26, 2015 through 10:59 p.m. Central Time on March 10, 2015. The access code for the conference call and the audio replay is Conference ID No. 70900825. The audio replay of the conference call will also be archived on Martin Midstream Partners' website at www.martinmidstream.com.

About Martin Midstream Partners L.P.

The Partnership is a publicly traded limited partnership with a diverse set of operations focused primarily in the United States Gulf Coast region. The Partnership's primary business lines include: (1) terminalling, storage and packaging services for petroleum products and by-products; (2) natural gas services, including liquids transport 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 its control, which could cause actual results to differ materially from such statements. While the Partnership believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in anticipating or predicting certain important factors. A discussion of these factors, including risks and uncertainties, is set forth in the Partnership's annual and quarterly reports filed from time to time with the Securities and Exchange Commission. The Partnership disclaims any intention or obligation to revise any forward-looking statements, including financial estimates, whether as a result of new information, future events, or otherwise.

Use of Non-GAAP Financial Information

The Partnership's management uses a variety of financial and operational measurements other than its financial statements prepared in accordance with United States Generally Accepted Accounting Principles ("GAAP") to analyze its performance. These include: (1) net income before interest expense, income tax expense, and depreciation and amortization ("EBITDA"), (2) adjusted EBITDA and (3) distributable cash flow. The Partnership's management views these measures as important performance measures of core profitability for its operations and the ability to generate and distribute cash flow, and as key components of its internal financial reporting. The Partnership's management believes investors benefit from having access to the same financial measures that management uses.

EBITDA and Adjusted EBITDA. Certain items excluded from EBITDA and adjusted EBITDA are significant components in understanding and assessing an entity's financial performance, such as cost of capital and historic costs of depreciable assets. The Partnership has included information concerning EBITDA and adjusted EBITDA because it provides investors and management with additional information to better understand the following: financial performance of the Partnership's assets without regard to financing methods, capital structure or historical cost basis; the Partnership's operating performance and return on capital as compared to those of other similarly situated entities; and the viability of acquisitions and capital expenditure projects. The Partnership's method of computing adjusted EBITDA may not be the same method used to compute similar measures reported by other entities. The economic substance behind the Partnership's use of adjusted EBITDA is to measure the ability of the Partnership's assets to generate cash sufficient to pay interest costs, support its indebtedness and make distributions to its unit holders.

Distributable Cash Flow. Distributable cash flow is a significant performance measure used by the Partnership's management and by external users of its financial statements, such as investors, commercial banks and research analysts, to compare basic cash flows generated by the Partnership to the cash distributions it expects to pay unitholders. Distributable cash flow is also an important financial measure for the Partnership's unitholders since it serves as an indicator of the Partnership's success in providing a cash return on investment. Specifically, this financial measure indicates to investors whether or not the Partnership is generating cash flow at a level that can sustain or support an increase in its quarterly distribution rates. Distributable cash flow is also a quantitative standard used throughout the investment community with respect to publicly-traded partnerships because the value of a unit of such an entity is generally determined by the unit's yield, which in turn is based on the amount of cash distributions the entity pays to a unitholder.

EBITDA, adjusted EBITDA and distributable cash flow should not be considered alternatives to, or more meaningful than, net income, cash flows from operating activities, or any other measure presented in accordance with GAAP. The Partnership's method of computing these measures may not be the same method used to compute similar measures reported by other entities.

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

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
December 31,
2014 2013
Assets
Cash $ 42 $ 16,542
Accounts and other receivables, less allowance for doubtful accounts of $1,620 and $2,492, respectively 134,173 163,855
Product exchange receivables 3,046 2,727
Inventories 88,718 94,902
Due from affiliates 14,512 12,099
Other current assets 6,772 7,353
Assets held for sale 40,488
Total current assets 287,751 297,478
Property, plant and equipment, at cost 1,343,674 929,183
Accumulated depreciation (345,397) (304,808)
Property, plant and equipment, net 998,277 624,375
Goodwill 23,802 23,802
Investment in unconsolidated entities 134,506 128,662
Debt issuance costs, net 13,118 15,659
Notes receivable - Martin Energy Trading LLC 15,000
Intangibles and other assets, net 81,465 7,943
$ 1,553,919 $ 1,097,919
Liabilities and Partners' Capital
Trade and other accounts payable $ 125,332 $ 142,951
Product exchange payables 10,396 9,595
Due to affiliates 4,872 2,596
Income taxes payable 1,174 1,204
Other accrued liabilities 21,801 20,242
Total current liabilities 163,575 176,588
Long-term debt 902,005 658,695
Other long-term obligations 2,668 2,219
Total liabilities 1,068,248 837,502
Commitments and contingencies
Partners' capital 485,671 260,417
$ 1,553,919 $ 1,097,919
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
Year Ended December 31,
2014 2013 2012
Revenues:
Terminalling and storage * $ 130,506 $ 115,965 $ 90,243
Marine transportation * 91,372 95,496 85,748
Natural gas storage services 22,991
Sulfur services 12,149 12,004 11,702
Product sales: *
Natural gas services 990,844 966,909 825,506
Sulfur services 203,322 201,120 249,882
Terminalling and storage 190,957 221,245 227,280
1,385,123 1,389,274 1,302,668
Total revenues 1,642,141 1,612,739 1,490,361
Costs and expenses:
Cost of products sold: (excluding depreciation and amortization)
Natural gas services * 948,765 928,725 801,724
Sulfur services * 159,782 157,723 194,952
Terminalling and storage * 172,069 195,640 205,588
1,280,616 1,282,088 1,202,264
Expenses:
Operating expenses * 184,049 170,155 146,287
Selling, general and administrative * 36,316 29,236 25,494
Impairment of long lived assets 3,445
Depreciation and amortization 68,830 50,962 42,063
Total costs and expenses 1,573,256 1,532,441 1,416,108
Other operating income (loss) (1,014) 1,166 (418)
Operating income 67,871 81,464 73,835
Other income (expense):
Equity in earnings (loss) of unconsolidated entities 5,466 (53,048) (1,113)
Debt prepayment premium (7,767) (272) (2,470)
Interest expense, net (42,203) (42,495) (30,665)
Reduction in fair value of investment in Cardinal due to the purchase of the controlling interest (30,102)
Other, net 1,505 542 1,092
Total other income (expense) (73,101) (95,273) (33,156)
Net income (loss) before taxes (5,230) (13,809) 40,679
Income tax expense (1,137) (753) (3,557)
Income (loss) from continuing operations (6,367) (14,562) 37,122
Income (loss) from discontinued operations, net of income taxes (5,338) 1,208 64,865
Net income (loss) (11,705) (13,354) 101,987
Less general partner's interest in net (income) loss (3,503) 267 (4,748)
Less pre-acquisition income allocated to Parent (4,622)
Less loss allocable to unvested restricted units 32 40
Limited partner's interest in net income (loss) $ (15,176) $ (13,047) $ 92,617
*Related Party Transactions Shown Below
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
*Related Party Transactions Included Above
Year Ended December 31,
2014 2013 2012
Revenues:
Terminalling and storage $ 74,467 $ 71,517 $ 64,669
Marine transportation 24,389 24,654 17,494
Product sales 7,661 4,698 7,201
Costs and expenses:
Cost of products sold: (excluding depreciation and amortization)
Natural gas services 37,703 32,639 27,512
Sulfur services 18,390 18,161 16,968
Terminalling and storage 36,341 48,868 48,375
Expenses:
Operating expenses 79,577 70,333 58,834
Selling, general and administrative 23,679 17,689 13,678
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
Year Ended December 31,
2014 2013 2012
Allocation of net income (loss) attributable to:
Limited partner interest:
Continuing operations $ (8,255) $ (14,227) $ 30,915
Discontinued operations (6,921) 1,180 61,702
$ (15,176) $ (13,047) $ 92,617
General partner interest:
Continuing operations $ 1,906 $ (291) $ 1,585
Discontinued operations 1,597 24 3,163
$ 3,503 $ (267) $ 4,748
Net income (loss) per unit attributable to limited partners:
Basic:
Continuing operations $ (0.27) $ (0.54) $ 1.32
Discontinued operations (0.22) 0.04 2.64
$ (0.49) $ (0.50) $ 3.96
Weighted average limited partner units - basic 30,785 26,558 23,362
Diluted:
Continuing operations $ (0.27) $ (0.54) $ 1.32
Discontinued operations (0.22) 0.04 2.64
$ (0.49) $ (0.50) $ 3.96
Weighted average limited partner units - diluted 30,785 26,558 23,365
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands)
Year Ended December 31,
2014 2013 2012
Net income (loss) $ (11,705) $ (13,354) $ 101,987
Other comprehensive income adjustments:
Changes in fair values of commodity cash flow hedges 126
Commodity cash flow hedging gains reclassified to earnings (752)
Other comprehensive loss (626)
Comprehensive income (loss) $ (11,705) $ (13,354) $ 101,361
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF CAPITAL
(Dollars in thousands)
Partners' Capital
General
Common Partner
Units Amount Amount Total
Balances – December 31, 2012 26,566,776 $ 349,490 $ 8,472 $ 357,962
Net loss (13,087) (267) (13,354)
Issuance of restricted units 64,500
Forfeiture of restricted units (250)
General partner contribution 37 37
Cash distributions ($3.11 per unit) (82,735) (1,853) (84,588)
Excess purchase price over carrying value of acquired assets (301) (301)
Unit-based compensation 911 911
Purchase of treasury units (6,000) (250) (250)
Balances – December 31, 2013 26,625,026 254,028 6,389 260,417
Net loss (15,208) 3,503 (11,705)
Issuance of common units 8,743,386 331,728 331,728
Issuance of restricted units 8,900
Forfeiture of restricted units (5,000)
General partner contribution 7,007 7,007
Purchase of treasury units (6,400) (277) (277)
Cash distributions ($3.18 per unit) (95,197) (2,171) (97,368)
Excess purchase price over carrying value of acquired assets (4,948) (4,948)
Unit-based compensation 817 817
Balances – December 31, 2014 35,365,912 $ 470,943 $ 14,728 $ 485,671
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Year Ended December 31,
2014 2013 2012
Cash flows from operating activities:
Net income (loss) $ (11,705) $ (13,354) $ 101,987
Less: (Income) loss from discontinued operations 5,338 (1,208) (64,865)
Net income (loss) from continuing operations (6,367) (14,562) 37,122
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization 68,830 50,962 42,063
Amortization of deferred debt issue costs 6,263 3,700 3,290
Amortization of discount on notes payable 1,305 306 581
Amortization of premium on notes payable (245)
Deferred income taxes 402
(Gain) loss on disposition or sale of property, plant, and equipment 1,353 (217) 795
Gain on sale of equity method investment (750) (486)
Impairment of long lived assets 3,445
Equity in (income) loss of unconsolidated entities (5,466) 53,048 1,113
Reduction in fair value of investment in Cardinal due to the purchase of the controlling interest 30,102
Unrealized mark-to-market on derivatives 818
Unit-based compensation 817 911 385
Preferred dividends from Martin Energy Trading 1,498 1,738
Return on investment 2,600
Other 6
Change in current assets and liabilities, excluding effects of acquisitions and dispositions:
Accounts and other receivables 29,025 26,270 (56,856)
Product exchange receivables (319) 689 14,230
Inventories 5,680 4,559 (2,733)
Due from affiliates (2,413) 1,244 (20,135)
Other current assets 4,123 (5,432) 3,046
Trade and other accounts payable (26,349) (9,978) 17,595
Product exchange payables 801 (2,592) (25,126)
Due to affiliates 2,276 (1,203) 18,976
Income taxes payable (30) (357) 367
Other accrued liabilities 1,084 10,749 (1,463)
Change in other non-current assets and liabilities 181 (1,449) 872
Net cash provided by continuing operating activities 119,012 117,642 34,038
Net cash used in discontinued operating activities (3,432) (5,459) (1,360)
Net cash provided by operating activities 115,580 112,183 32,678
Cash flows from investing activities:
Payments for property, plant, and equipment (84,307) (92,243) (93,640)
Acquisitions, net of cash acquired (102,696) (31,321) (224,603)
Proceeds from sale of acquired assets 56,000
Payments for plant turnaround costs (3,974) (2,107)
Proceeds from sale of property, plant, and equipment 1,030 5,576 44
Proceeds from sale of equity method investment 750 531
Proceeds from involuntary conversion of property, plant and equipment 2,475 2,200
Investments in unconsolidated entities (134,030) (775)
Milestone distributions from ECP 2,208
Return of investments from unconsolidated entities 225 1,738 5,980
Contributions to unconsolidated entities for operations (3,386) (30,877) (30,279)
Net cash used in continuing investing activities (324,663) (144,177) (286,641)
Net cash provided by (used in) discontinued investing activities (42,600) 271,605
Net cash used in investing activities (324,663) (186,777) (15,036)
Cash flows from financing activities:
Payments of long-term debt (1,533,087) (650,000) (706,000)
Payments of notes payable and capital lease obligations (8,809) (6,556)
Proceeds from long-term debt 1,493,250 839,000 727,000
Net proceeds from issuance of common units 331,728 194,170
General partner contributions 7,007 37 4,145
Excess purchase price over carrying value of acquired assets (4,948) (301) (142,075)
Excess carrying value of assets over the purchase price paid by Martin Resource Management (4,268)
Purchase of treasury units (277) (250) (222)
Decrease in affiliate funding of investments in unconsolidated entities (2,208)
Payments of debt issuance costs (3,722) (9,115) (204)
Cash distributions paid (97,368) (84,588) (76,528)
Net cash provided by (used in) financing activities 192,583 85,974 (12,746)
Net increase (decrease) in cash (16,500) 11,380 4,896
Cash at beginning of period 16,542 5,162 266
Cash at end of period $ 42 $ 16,542 $ 5,162
MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Dollars and volumes in thousands, except BBL per day)
Terminalling and Storage Segment
Comparative Results of Operations for the Twelve Months Ended December 31, 2014 and 2013
Year Ended December 31, Percent
2014 2013 Variance Change
(In thousands)
Revenues:
Services $ 135,697 $ 120,717 $ 14,980 12%
Products 190,957 221,249 (30,292) (14)%
Total revenues 326,654 341,966 (15,312) (4)%
Cost of products sold 175,246 197,974 (22,728) (11)%
Operating expenses 83,504 74,441 9,063 12%
Selling, general and administrative expenses 3,565 3,238 327 10%
Depreciation and amortization 37,622 31,823 5,799 18%
26,717 34,490 (7,773) (23)%
Other operating income 290 792 (502) 63%
Operating income $ 27,007 $ 35,282 $ (8,275) (23)%
Lubricant sales volumes (gallons) 32,418 39,342 (6,924) (18)%
Shore-based throughput volumes (gallons) 253,262 270,522 (17,260) (6)%
Smackover refinery throughput volumes (barrels per day) 6,159 6,912 (753) (11)%
Corpus Christi crude terminal throughput volumes (barrels per day) 164,223 108,652 55,571 51%
Comparative Results of Operations for the Twelve Months Ended December 31, 2013 and 2012
Year Ended December 31, Percent
2013 2012 Variance Change
(In thousands)
Revenues:
Services $ 120,717 $ 94,895 $ 25,822 27%
Products 221,249 227,280 (6,031) (3)%
Total revenues 341,966 322,175 19,791 6%
Cost of products sold 197,974 207,699 (9,725) (5)%
Operating expenses 74,441 58,766 15,675 27%
Selling, general and administrative expenses 3,238 4,671 (1,433) (31)%
Depreciation and amortization 31,823 22,976 8,847 39%
34,490 28,063 6,427 23%
Other operating income (loss) 792 (119) 911 766%
Operating income $ 35,282 $ 27,944 $ 7,338 26%
Lubricant sales volumes (gallons) 39,342 38,107 1,235 3%
Shore-based throughput volumes (gallons) 270,522 218,494 52,028 24%
Smackover refinery throughput volumes (barrels per day) 6,912 5,994 918 15%
Corpus Christi crude terminal (barrels per day) 108,652 55,529 53,123 96%
MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Dollars and volumes in thousands, except BBL per day)
Natural Gas Services Segment
Comparative Results of Operations for the Twelve Months Ended December 31, 2014 and 2013
Year Ended December 31, Percent
2014 2013 Variance Change
(In thousands)
Revenues:
Services $ 22,991 $ — $ 22,991
Products 990,844 966,909 23,935 2%
Total revenues 1,013,835 966,909 46,926 5%
Cost of products sold 950,742 930,315 20,427 2%
Operating expenses 10,797 3,918 6,879 176%
Selling, general and administrative expenses 8,596 3,731 4,865 130%
Depreciation and amortization 13,090 962 12,128 1,261%
30,610 27,983 2,627 9%
Other operating income 20 (20) (100)%
Operating income $ 30,610 $ 28,003 $ 2,607 9%
Distributions from unconsolidated entities $ 4,323 $ 3,476 $ 847 24%
NGLs Volumes (barrels) 19,793 14,874 4,919 33%
Comparative Results of Operations for the Twelve Months Ended December 31, 2013 and 2012
Year Ended December 31, Percent
2013 2012 Variance Change
(In thousands)
Revenues $ 966,909 $ 825,506 $ 141,403 17%
Cost of products sold 930,315 803,195 127,120 16%
Operating expenses 3,918 3,550 368 10%
Selling, general and administrative expenses 3,731 4,236 (505) (12)%
Depreciation and amortization 962 601 361 60%
27,983 13,924 14,059 101%
Other operating income 20 20
Operating income $ 28,003 $ 13,924 $ 14,079 101%
Distributions from unconsolidated entities $ 3,476 $ 3,961 $ (485) (12)%
NGLs Volumes (barrels) 14,874 12,080 2,794 23%
MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Dollars and volumes in thousands, except BBL per day)
Sulfur Services Segment
Comparative Results of Operations for the Twelve Months Ended December 31, 2014 and 2013
Year Ended December 31, Percent
2014 2013 Variance Change
(In thousands)
Revenues:
Services $ 12,149 $ 12,004 $ 145 1%
Products 203,322 201,120 2,202 1%
Total revenues 215,471 213,124 2,347 1%
Cost of products sold 160,144 158,085 2,059 1%
Operating expenses 17,136 16,975 161 1%
Selling, general and administrative expenses 4,359 4,083 276 7%
Depreciation and amortization 8,176 7,979 197 2%
Operating income $ 25,656 $ 26,002 $ (346) (1)%
Sulfur (long tons) 847.7 836.6 11.1 1%
Fertilizer (long tons) 306.6 273 33.6 12%
Sulfur services volumes (long tons) 1,154.3 1,109.6 44.7 4%
Comparative Results of Operations for the Twelve Months Ended December 31, 2013 and 2012
Year Ended December 31, Percent
2013 2012 Variance Change
(In thousands)
Revenues:
Services $ 12,004 $ 11,702 $ 302 3%
Products 201,120 249,882 (48,762) (20)%
Total revenues 213,124 261,584 (48,460) (19)%
Cost of products sold 158,085 195,314 (37,229) (19)%
Operating expenses 16,975 17,404 (429) (2)%
Selling, general and administrative expenses 4,083 3,975 108 3%
Depreciation and amortization 7,979 7,371 608 8%
26,002 37,520 (11,518) (31)%
Other operating loss (258) 258 100%
Operating income $ 26,002 $ 37,262 $ (11,260) (30)%
Sulfur (long tons) 836.6 959.9 (123.3) (13)%
Fertilizer (long tons) 273.0 306.1 (33.1) (11)%
Sulfur services volumes (long tons) 1,109.6 1,266.0 (156.4) (12)%
MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Dollars and volumes in thousands, except BBL per day)
Marine Transportation Segment
Comparative Results of Operations for the Twelve Months Ended December 31, 2014 and 2013
Year Ended December 31, Percent
2014 2013 Variance Change
(In thousands)
Revenues $ 97,049 $ 99,511 $ (2,462) (2)%
Operating expenses 77,964 79,306 (1,342) (2)%
Selling, general and administrative expenses 1,084 1,347 (263) (20)%
Impairment of long lived assets (3,445) (3,445)
Depreciation and amortization 9,942 10,198 (256) (3)%
11,504 8,660 2,844 33%
Other operating income (loss) (1,304) 354 (1,658) (468)%
Operating income $ 10,200 $ 9,014 $ 1,186 13%
Comparative Results of Operations for the Twelve Months Ended December 31, 2013 and 2012
Year Ended December 31, Percent
2013 2012 Variance Change
(In thousands)
Revenues $ 99,511 $ 88,815 $ 10,696 12%
Operating expenses 79,306 70,342 8,964 13%
Selling, general and administrative expenses 1,347 566 781 138%
Depreciation and amortization 10,198 11,115 (917) (8)%
8,660 6,792 1,868 28%
Other operating income (loss) 354 (41) 395 963%
Operating income $ 9,014 $ 6,751 $ 2,263 34%

Non-GAAP Financial Measures

The following table reconciles the non-GAAP financial measurements used by management to our most directly comparable GAAP measures for the three and twelve months ended December 31, 2014 and 2013, which represents EBITDA, Adjusted EBITDA and Distributable Cash Flow from continuing operations.

Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow
Three Months Ended Twelve Months Ended
December 31, December 31,
2014 2013 2014 2013
Net income (loss) $ 4,374 $ (39,261) $ (11,705) $ (13,354)
Less: (Income) loss from discontinued operations, net of income taxes 2,290 (356) 5,338 (1,208)
Income (loss) from continuing operations 6,664 (39,617) (6,367) (14,562)
Adjustments:
Interest expense 7,852 11,437 42,203 42,495
Income tax (benefit) expense 183 (157) 1,137 753
Depreciation and amortization 24,554 13,913 68,830 50,962
EBITDA 39,253 (14,424) 105,803 79,648
Adjustments:
Equity in (income) loss of unconsolidated entities (1,169) 52,170 (5,466) 53,048
(Gain) loss on sale of property, plant and equipment 1,407 579 1,353 (217)
Gain on sale of equity method investment (750) (750)
Gain on involuntary conversion of property, plant and equipment (909) (909)
Impairment of long lived asset 3,445
Unrealized mark to market on commodity derivatives 818 818
Reduction in fair value of investment in Cardinal due to purchase of the controlling interest 30,102
Debt prepayment premium 272 7,767 272
Distributions from unconsolidated entities 2,000 754 4,323 3,476
Unit-based compensation 228 174 817 911
Adjusted EBITDA 42,537 37,866 148,962 135,479
Adjustments:
Interest expense (7,852) (11,437) (42,203) (42,495)
Income tax benefit (expense) (183) 157 (1,137) (753)
Amortization of deferred debt issuance costs 848 810 6,263 3,700
Amortization of debt discount 76 1,305 306
Amortization of debt premium (81) (245)
Unrealized mark to market on interest rate derivatives (489)
Payments of installment notes payable and capital lease obligations (56) (307)
Payments for plant turnaround costs 26 (3,974)
Maintenance capital expenditures (1,296) (3,972) (14,556) (11,445)
Distributable Cash Flow $ 33,510 $ 23,444 $ 94,415 $ 84,485

The following table reconciles the non-GAAP financial measurements used by management to our most directly comparable GAAP measures for each of the quarters in the year ended December 31, 2014 and 2013, which represents Distributable Cash Flow from discontinued operations.

2014
First Second Third Fourth
Quarter Quarter Quarter Quarter YTD
Loss from discontinued operations, net of income taxes $ (589) $ (1,292) $ (1,167) $ (2,290) $ (5,338)
Adjustments:
Depreciation and amortization 383 384 285 482 1,534
Distributable Cash Flow from discontinued operations $ (206) $ (908) $ (882) $ (1,808) $ (3,804)
2013
First Second Third Fourth
Quarter Quarter Quarter Quarter YTD
Income (loss) from discontinued operations, net of income taxes $ 196 $ 1,093 $ (437) $ 356 $ 1,208
Adjustments:
Depreciation and amortization 128 383 384 383 1,278
Distributable Cash Flow from discontinued operations $ 324 $ 1,476 $ (53) $ 739 $ 2,486

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

Source:Martin Midstream Partners L.P.