×

Martin Midstream Partners Reports 2017 Second Quarter Financial Results

  • Net Income of $14.6 million for the First Six Months of 2017
  • Quarterly Distribution Coverage Ratio Exceeds Forecast
  • Improved Second Quarter Leverage Compared to a Year Ago
  • Full Year Distribution Coverage Ratio of 1.2 Times Affirmed

KILGORE, Texas, July 26, 2017 (GLOBE NEWSWIRE) -- Martin Midstream Partners L.P. (Nasdaq:MMLP) (the "Partnership") announced today its financial results for the quarter ended June 30, 2017.

Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership said, “For the second quarter ended June 30, 2017, the Partnership generated a distribution coverage ratio of 1.00 times. This was above our forecasted ratio for the quarter, based on lower than anticipated maintenance capital expenditures.

“Looking across our operating segments, overall performance was consistent with forecasted levels during the second quarter. Through six months ended June 30, 2017, our Adjusted EBITDA of $79.8 million is approximately $0.9 million ahead of our Adjusted EBITDA guidance level. Further, we expect performance for the next two quarters to be in line with our previously released estimates, as well as slightly reducing our maintenance capital expenditures to $22.2 million for the full year 2017. Thus, we affirm our projected distribution coverage ratio of 1.2 times.

“Our long-stated goal has been, and will continue to be, an improved leverage profile. During the second quarter, we improved our leverage ratio when looking at a year-over-year basis.”

The Partnership had net income for the second quarter of 2017 of $1.0 million, or $0.03 per limited partner unit. The Partnership had a net loss for the second quarter of 2016 of $1.2 million, a loss of $0.14 per limited partner unit. The Partnership's adjusted EBITDA for the second quarter of 2017 was $33.0 million compared to adjusted EBITDA from for the second quarter of 2016 of $41.6 million.

The Partnership had net income for the six months ended June 30, 2017 of $14.6 million, or $0.38 per limited partner unit. The Partnership had net income for the six months ended June 30, 2016 of $14.7 million, or $0.19 per limited partner unit. The Partnership's adjusted EBITDA for the six months ended June 30, 2017 was $79.8 million compared to adjusted EBITDA for the six months ended June 30, 2016 of $90.9 million.

The Partnership's distributable cash flow for the second quarter of 2017 was $19.6 million compared to distributable cash flow for the second quarter of 2016 of $25.4 million.

The Partnership's distributable cash flow for the six months ended June 30, 2017 was $49.9 million compared to distributable cash flow for the six months ended June 30, 2016 of $57.9 million.

Revenues for the second quarter of 2017 were $193.9 million compared to the second quarter of 2016 of $190.3 million. Revenues for the six months ended June 30, 2017 were $447.2 million compared to the six months ended June 30, 2016 of $416.0 million.

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 and condensed financial statements as of and for the three and six months ended June 30, 2017 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 July 26, 2017.

An attachment accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/1483b7a7-b482-4d33-8eb8-d68fcc4d636c.

Investors' Conference Call

An investors’ conference call to review the second quarter results will be held on Thursday, July 27, 2017, 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 July 27, 2017 through 10:59 p.m. Central Time on August 7, 2017. The access code for the conference call and the audio replay is Conference ID No. 53345764. 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 or by contacting:

Joe McCreery, IRC - Vice President - Finance & Head of Investor Relations
(903) 988-6425


MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSE BALANCE SHEETS
(Dollars in thousands)
June 30, 2017 December 31, 2016
(Unaudited) (Audited)
Assets
Cash$32 $15
Accounts and other receivables, less allowance for doubtful accounts of $238 and $372, respectively50,986 80,508
Product exchange receivables220 207
Inventories101,696 82,631
Due from affiliates21,293 11,567
Fair value of derivatives133
Other current assets4,756 3,296
Assets held for sale13,764 15,779
Total current assets192,880 194,003
Property, plant and equipment, at cost1,248,328 1,224,277
Accumulated depreciation(399,684) (378,593)
Property, plant and equipment, net848,644 845,684
Goodwill17,296 17,296
Investment in WTLPG128,909 129,506
Note receivable - affiliate 15,000
Other assets, net38,791 44,874
Total assets$1,226,520 $1,246,363
Liabilities and Partners’ Capital
Trade and other accounts payable$68,029 $70,249
Product exchange payables7,606 7,360
Due to affiliates2,700 8,474
Income taxes payable402 870
Fair value of derivatives 3,904
Other accrued liabilities26,689 26,717
Total current liabilities105,426 117,574
Long-term debt, net780,359 808,107
Other long-term obligations6,055 8,676
Total liabilities891,840 934,357
Commitments and contingencies (Note 17)
Partners’ capital334,680 312,006
Total partners’ capital334,680 312,006
Total liabilities and partners' capital$1,226,520 $1,246,363

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 July 26, 2017.


MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2017 2016 2017 2016
Revenues:
Terminalling and storage *$24,695 $31,090 $49,353 $62,795
Marine transportation *12,433 14,339 25,254 30,685
Natural gas services*14,838 15,403 29,503 31,500
Sulfur services2,850 2,700 5,700 5,400
Product sales: *
Natural gas services73,666 58,899 200,323 149,990
Sulfur services32,027 39,588 71,554 79,063
Terminalling and storage33,413 28,329 65,560 56,520
139,106 126,816 337,437 285,573
Total revenues193,922 190,348 447,247 415,953
Costs and expenses:
Cost of products sold: (excluding depreciation and amortization)
Natural gas services *70,198 55,579 178,377 134,123
Sulfur services *21,207 24,700 45,690 52,224
Terminalling and storage *28,014 22,934 54,460 46,766
119,419 103,213 278,527 233,113
Expenses:
Operating expenses *34,435 40,822 69,492 82,054
Selling, general and administrative *8,909 8,144 18,830 16,315
Loss on impairment of goodwill 4,145 4,145
Depreciation and amortization20,326 22,089 45,662 44,137
Total costs and expenses183,089 178,413 412,511 379,764
Other operating income (loss)15 (1,679) (140) (1,595)
Operating income10,848 10,256 34,596 34,594
Other income (expense):
Equity in earnings of WTLPG853 805 1,758 2,482
Interest expense, net(11,219) (12,155) (22,139) (22,267)
Other, net520 74 550 136
Total other expense(9,846) (11,276) (19,831) (19,649)
Net income (loss) before taxes1,002 (1,020) 14,765 14,945
Income tax expense(13) (191) (193) (242)
Net income (loss)989 (1,211) 14,572 14,703
Less general partner's interest in net income(19) (3,869) (291) (8,080)
Less (income) loss allocable to unvested restricted units(3) 4 (38) (39)
Limited partners' interest in net income (loss)$967 $(5,076) $14,243 $6,584
Net income (loss) per unit attributable to limited partners - basic$0.03 $(0.14) $0.38 $0.19
Net income (loss) per unit attributable to limited partners - diluted$0.03 $(0.14) $0.38 $0.19
Weighted average limited partner units - basic38,357 35,346 37,842 35,366
Weighted average limited partner units - diluted38,414 35,346 37,895 35,380

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 July 26, 2017.

*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
Three Months Ended Six Months Ended
June 30, June 30,
2017 2016 2017 2016
Revenues:*
Terminalling and storage$20,331 $20,590 $40,035 $41,548
Marine transportation4,187 6,036 8,512 12,447
Natural gas services6 129 118 442
Product Sales724 968 2,154 1,668
Costs and expenses:*
Cost of products sold: (excluding depreciation and amortization)
Natural gas services2,909 4,498 11,803 7,883
Sulfur services3,767 3,810 7,442 7,622
Terminalling and storage4,119 4,081 9,186 7,466
Expenses:
Operating expenses16,452 18,088 32,828 35,445
Selling, general and administrative6,500 6,911 14,068 12,343

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 July 26, 2017.

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL
(Dollars in thousands)
Partners’ Capital
Common Limited General
Partner
Amount
Units Amount Total
Balances - January 1, 201635,456,612 $380,845 $13,034 $393,879
Net income 6,623 8,080 14,703
Issuance of restricted units13,800
Forfeiture of restricted units(250)
Cash distributions (57,603) (9,119) (66,722)
Reimbursement of excess purchase price over carrying
value of acquired assets
1,875 1,875
Unit-based compensation 486 486
Purchase of treasury units(15,200) (330) (330)
Balances - June 30, 201635,454,962 $331,896 $11,995 $343,891
Balances - January 1, 201735,452,062 $304,594 $7,412 $312,006
Net income 14,281 291 14,572
Issuance of common units, net of issuance related costs2,990,000 51,071 51,071
Issuance of restricted units12,000
Forfeiture of restricted units(1,750)
General partner contribution 1,098 1,098
Cash distributions (36,952) (754) (37,706)
Unit-based compensation 405 405
Excess purchase price over carrying value of acquired
assets
(7,887) (7,887)
Reimbursement of excess purchase price over carrying
value of acquired assets
1,125 1,125
Purchase of treasury units(200) (4) (4)
Balances - June 30, 201738,452,112 $326,633 $8,047 $334,680

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 July 26, 2017.

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Six Months Ended
June 30,
2017 2016
Cash flows from operating activities:
Net income$14,572 $14,703
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization45,662 44,137
Amortization of deferred debt issuance costs1,445 2,247
Amortization of premium on notes payable(153) (153)
Loss on sale of property, plant and equipment140 1,595
Loss on impairment of goodwill 4,145
Equity in earnings of WTLPG(1,758) (2,482)
Derivative (income) loss2,392 (1,125)
Net cash (paid) received for commodity derivatives(6,429) 1,666
Net cash received for interest rate derivatives 160
Net premiums received on derivatives that settled during the year on interest rate swaption contracts 630
Unit-based compensation405 486
Cash distributions from WTLPG2,500 4,300
Change in current assets and liabilities, excluding effects of acquisitions and dispositions:
Accounts and other receivables29,522 23,995
Product exchange receivables(13) 932
Inventories(19,065) (14,766)
Due from affiliates(9,726) 2,154
Other current assets(1,372) 509
Trade and other accounts payable(4,067) (3,429)
Product exchange payables246 (3,923)
Due to affiliates(5,774) (1,879)
Income taxes payable(468) (615)
Other accrued liabilities(2,761) 2,130
Change in other non-current assets and liabilities490 (614)
Net cash provided by operating activities45,788 74,803
Cash flows from investing activities:
Payments for property, plant and equipment(19,756) (27,844)
Acquisitions(19,533)
Acquisition of intangible assets (2,150)
Payments for plant turnaround costs(1,591) (1,184)
Proceeds from sale of property, plant and equipment1,597 655
Proceeds from involuntary conversion of property, plant and equipment 9,100
Proceeds from repayment of Note receivable - affiliate15,000
Contributions to WTLPG(145)
Net cash used in investing activities(24,428) (21,423)
Cash flows from financing activities:
Payments of long-term debt(184,000) (163,700)
Proceeds from long-term debt155,000 180,700
Proceeds from issuance of common units, net of issuance related costs51,071
General partner contribution1,098
Purchase of treasury units(4) (330)
Payment of debt issuance costs(40) (5,206)
Excess purchase price over carrying value of acquired assets(7,887)
Reimbursement of excess purchase price over carrying value of acquired assets1,125 1,875
Cash distributions paid(37,706) (66,722)
Net cash used in financing activities(21,343) (53,383)
Net increase (decrease) in cash17 (3)
Cash at beginning of period15 31
Cash at end of period$32 $28
Non-cash additions to property, plant and equipment$3,666 $989

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 July 26, 2017.

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 Three Months Ended June 30, 2017 and 2016
Three Months Ended
June 30,
Variance Percent
Change

2017 2016
(In thousands, except BBL per day)
Revenues:
Services$26,148 $32,392 $(6,244) (19)%
Products33,413 28,329 5,084 18%
Total revenues59,561 60,721 (1,160) (2)%
Cost of products sold28,591 23,471 5,120 22%
Operating expenses15,081 17,725 (2,644) (15)%
Selling, general and administrative expenses1,444 1,007 437 43%
Depreciation and amortization10,327 10,078 249 2%
4,118 8,440 (4,322) (51)%
Other operating income10 10
Operating income$4,128 $8,440 $(4,312) (51)%
Lubricant sales volumes (gallons)5,361 5,194 167 3%
Shore-based throughput volumes (guaranteed minimum) (gallons)41,666 50,000 (8,334) (17)%
Smackover refinery throughput volumes (guaranteed minimum BBL per day)6,500 6,500 %
Corpus Christi crude terminal (BBL per day) 74,565 (74,565) (100)%


Comparative Results of Operations for the Six Months Ended June 30, 2017 and 2016
Six Months Ended
June 30,
Variance Percent
Change

2017 2016
(In thousands, except BBL per day)
Revenues:
Services$52,579 $65,549 $(12,970) (20)%
Products65,560 56,522 9,038 16%
Total revenues118,139 122,071 (3,932) (3)%
Cost of products sold55,602 47,821 7,781 16%
Operating expenses30,726 36,441 (5,715) (16)%
Selling, general and administrative expenses2,769 2,107 662 31%
Depreciation and amortization25,804 20,076 5,728 29%
3,238 15,626 (12,388) (79)%
Other operating income (loss)(3) 100 (103) (103)%
Operating income$3,235 $15,726 $(12,491) (79)%
Lubricant sales volumes (gallons)10,695 10,340 355 3%
Shore-based throughput volumes (guaranteed minimum) (gallons)83,333 100,000 (16,667) (17)%
Smackover refinery throughput volumes (guaranteed minimum) (BBL per day)6,500 6,500 %
Corpus Christi crude terminal (BBL per day) 83,600 (83,600) (100)%


Natural Gas Services Segment
Comparative Results of Operations for the Three Months Ended June 30, 2017 and 2016
Three Months Ended
June 30,
Variance Percent
Change

2017 2016
(In thousands)
Revenues:
Services$14,838 $15,403 $(565) (4)%
Products73,666 58,899 14,767 25%
Total revenues88,504 74,302 14,202 19%
Cost of products sold71,003 56,233 14,770 26%
Operating expenses5,567 6,138 (571) (9)%
Selling, general and administrative expenses2,115 1,807 308 17%
Depreciation and amortization6,205 6,983 (778) (11)%
3,614 3,141 473 15%
Other operating income (loss)5 (96) 101 (105)%
Operating income$3,619 $3,045 $574 19%
Distributions from WTLPG$1,300 $1,800 $(500) (28)%
NGL sales volumes (Bbls)1,794 1,726 68 4%


Comparative Results of Operations for the Six Months Ended June 30, 2017 and 2016
Six Months Ended
June 30,
Variance Percent
Change

2017 2016
(In thousands)
Revenues:
Services$29,503 $31,500 $(1,997) (6)%
Products200,323 149,990 50,333 34%
Total revenues229,826 181,490 48,336 27%
Cost of products sold180,306 135,581 44,725 33%
Operating expenses11,225 11,657 (432) (4)%
Selling, general and administrative expenses5,166 4,111 1,055 26%
Depreciation and amortization12,366 13,957 (1,591) (11)%
20,763 16,184 4,579 28%
Other operating income (loss)5 (96) 101 (105)%
Operating income$20,768 $16,088 $4,680 29%
Distributions from WTLPG$2,500 $4,300 $(1,800) (42)%
NGL sales volumes (Bbls)4,604 4,928 (324) (7)%


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 Three Months Ended June 30, 2017 and 2016
Three Months Ended
June 30,
Variance Percent
Change

2017 2016
(In thousands)
Revenues:
Services$2,850 $2,700 $150 6%
Products32,027 39,588 (7,561) (19)%
Total revenues34,877 42,288 (7,411) (18)%
Cost of products sold21,297 24,790 (3,493) (14)%
Operating expenses3,417 3,442 (25) (1)%
Selling, general and administrative expenses1,007 930 77 8%
Depreciation and amortization2,030 2,011 19 1%
7,126 11,115 (3,989) (36)%
Other operating loss (16) 16 (100)%
Operating income$7,126 $11,099 $(3,973) (36)%
Sulfur (long tons)192 181 11 6%
Fertilizer (long tons)71 87 (16) (18)%
Total sulfur services volumes (long tons)263 268 (5) (2)%


Comparative Results of Operations for the Six Months Ended June 30, 2017 and 2016
Six Months Ended
June 30,
Variance Percent
Change

2017 2016
(In thousands)
Revenues:
Services$5,700 $5,400 $300 6%
Products71,554 79,063 (7,509) (9)%
Total revenues77,254 84,463 (7,209) (9)%
Cost of products sold45,871 52,405 (6,534) (12)%
Operating expenses6,664 6,199 465 8%
Selling, general and administrative expenses2,028 1,888 140 7%
Depreciation and amortization4,063 3,981 82 2%
18,628 19,990 (1,362) (7)%
Other operating loss(22) (32) 10 (31)%
Operating income$18,606 $19,958 $(1,352) (7)%
Sulfur (long tons)409 338 71 21%
Fertilizer (long tons)165 170 (5) (3)%
Total sulfur services volumes (long tons)574 508 66 13%


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 Three Months Ended June 30, 2017 and 2016
Three Months Ended
June 30,
Variance Percent
Change

2017 2016
(In thousands)
Revenues$13,144 $15,032 $(1,888) (13)%
Operating expenses11,062 14,231 (3,169) (22)%
Selling, general and administrative expenses71 158 (87) (55)%
Loss on impairment of goodwill 4,145 (4,145) (100)%
Depreciation and amortization1,764 3,017 (1,253) (42)%
247 (6,519) 6,766 (104)%
Other operating loss (1,567) 1,567 (100)%
Operating income (loss)$247 $(8,086) $8,333 (103)%


Comparative Results of Operations for the Six Months Ended June 30, 2017 and 2016
Six Months Ended
June 30,
Variance Percent
Change

2017 2016
(In thousands)
Revenues$26,558 $31,934 $(5,376) (17)%
Operating expenses22,155 29,068 (6,913) (24)%
Selling, general and administrative expenses175 (261) 436 (167)%
Loss on impairment of goodwill 4,145 (4,145) (100)%
Depreciation and amortization3,429 6,123 (2,694) (44)%
$799 $(7,141) $7,940 (111)%
Other operating loss(120) (1,567) 1,447 (92)%
Operating income (loss)$679 $(8,708) $9,387 (108)%


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 six months ended June 30, 2017 and 2016, which represents EBITDA, Adjusted EBITDA and Distributable Cash Flow.

Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow
Three Months Ended Six Months Ended
June 30, June 30,
2017 2016 2017 2016
(in thousands)
Net income (loss)$ 989 $(1,211) $ 14,572 $ 14,703
Adjustments:
Interest expense, net11,219 12,155 22,139 22,267
Income tax expense13 191 193 242
Depreciation and amortization20,326 22,089 45,662 44,137
EBITDA32,547 33,224 82,566 81,349
Adjustments:
Equity in earnings of WTLPG(853) (805) (1,758) (2,482)
(Gain) loss on sale of property, plant and equipment(15) 1,679 140 1,595
Loss on impairment of goodwill 4,145 4,145
Unrealized mark-to-market on commodity derivatives(200) 1,327 (4,037) 1,537
Distributions from WTLPG1,300 1,800 2,500 4,300
Unit-based compensation219 264 405 486
Adjusted EBITDA32,998 41,634 79,816 90,930
Adjustments:
Interest expense, net(11,219) (12,155) (22,139) (22,267)
Income tax expense(13) (191) (193) (242)
Amortization of debt premium(76) (76) (153) (153)
Amortization of deferred debt issuance costs724 1,532 1,445 2,247
Non-cash mark-to-market on interest rate derivatives (206)
Payments for plant turnaround costs(197) (193) (1,591) (1,184)
Maintenance capital expenditures(2,618) (5,165) (7,286) (11,209)
Distributable Cash Flow$19,599 $25,386 $49,899 $57,916


Source:Martin Midstream Partners L.P.