Document


UNITED STATES
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d)
 
of the Securities Exchange Act of 1934
 
Date of report (date of earliest event reported): July 26, 2017
 
MARTIN MIDSTREAM PARTNERS L.P.
(Exact name of Registrant as specified in its charter)
DELAWARE
(State of incorporation
or organization)
 
000-50056
(Commission file number)
 
05-0527861
(I.R.S. employer identification number)
 
 
 
4200 STONE ROAD
 
 
KILGORE, TEXAS
(Address of principal executive offices)
 
75662
(Zip code)
 
Registrant's telephone number, including area code: (903) 983-6200
 
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the
Exchange Act. o







Item 2.02
 
Results of Operations and Financial Condition.
 
          On July 26, 2017, Martin Midstream Partners L.P. (the “Partnership”) issued a press release reporting its financial results for the quarter ended June 30, 2017.   A copy of the press release is furnished as Exhibit 99.1 to this Current Report and will be published on the Partnership's website at www.martinmidstream.com. In accordance with General Instruction B.2 of Form 8-K, the information set forth herein and in the press release is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). 

Item 9.01
 
Financial Statements and Exhibits.
 
(d)      Exhibits
 
          In accordance with General Instruction B.2 of Form 8-K, the information set forth in the attached Exhibit 99.1 and Exhibit 99.2 are deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act.

Exhibit
Number
 
Description
99.1
 
Press release dated July 26, 2017
99.2
 
Supplemental information - Martin Midstream Partners L.P. Adjusted EBITDA comparison to guidance

























 





 SIGNATURES
 
     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
MARTIN MIDSTREAM PARTNERS L.P.
 
By: Martin Midstream GP LLC,
Its General Partner
 
Date: July 26, 2017
 
By: /s/ Robert D. Bondurant  
 
 
Robert D. Bondurant
 
 
Executive Vice President, Treasurer, Principal Accounting Officer and
Chief Financial Officer 
 
 












































 INDEX TO EXHIBITS

Exhibit
 
 
Number
 
Description
 
99.1
 
 
Press release dated July 26, 2017
 
99.2
 
 
Supplemental information - Martin Midstream Partners L.P. Adjusted EBITDA comparison to guidance













































Exhibit


EXHIBIT 99.1

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 (GlobeNewswire) -- 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, respectively
50,986

 
80,508

Product exchange receivables
220

 
207

Inventories
101,696

 
82,631

Due from affiliates
21,293

 
11,567

Fair value of derivatives
133

 

Other current assets
4,756

 
3,296

Assets held for sale
13,764

 
15,779

Total current assets
192,880

 
194,003

 
 
 
 
Property, plant and equipment, at cost
1,248,328

 
1,224,277

Accumulated depreciation
(399,684
)
 
(378,593
)
Property, plant and equipment, net
848,644

 
845,684

 
 
 
 
Goodwill
17,296

 
17,296

Investment in WTLPG
128,909

 
129,506

Note receivable - affiliate

 
15,000

Other assets, net
38,791

 
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 payables
7,606

 
7,360

Due to affiliates
2,700

 
8,474

Income taxes payable
402

 
870

Fair value of derivatives

 
3,904

Other accrued liabilities
26,689

 
26,717

Total current liabilities
105,426

 
117,574

 
 
 
 
Long-term debt, net
780,359

 
808,107

Other long-term obligations
6,055

 
8,676

Total liabilities
891,840

 
934,357

 
 
 
 
Commitments and contingencies (Note 17)


 


Partners’ capital
334,680

 
312,006

Total partners’ capital
334,680

 
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 services
2,850

 
2,700

 
5,700

 
5,400

Product sales: *
 
 
 
 
 
 
 
Natural gas services
73,666

 
58,899

 
200,323

 
149,990

Sulfur services
32,027

 
39,588

 
71,554

 
79,063

Terminalling and storage
33,413

 
28,329

 
65,560

 
56,520

 
139,106

 
126,816

 
337,437

 
285,573

Total revenues
193,922

 
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 amortization
20,326

 
22,089

 
45,662

 
44,137

Total costs and expenses
183,089

 
178,413

 
412,511

 
379,764

 
 
 
 
 
 
 
 
Other operating income (loss)
15

 
(1,679
)
 
(140
)
 
(1,595
)
Operating income
10,848

 
10,256

 
34,596

 
34,594

 
 
 
 
 
 
 
 
Other income (expense):
 

 
 

 
 

 
 

Equity in earnings of WTLPG
853

 
805

 
1,758

 
2,482

Interest expense, net
(11,219
)
 
(12,155
)
 
(22,139
)
 
(22,267
)
Other, net
520

 
74

 
550

 
136

Total other expense
(9,846
)
 
(11,276
)
 
(19,831
)
 
(19,649
)
 
 
 
 
 
 
 
 
Net income (loss) before taxes
1,002

 
(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 - basic
38,357

 
35,346

 
37,842

 
35,366

Weighted average limited partner units - diluted
38,414

 
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 transportation
4,187

 
6,036

 
8,512

 
12,447

Natural gas services
6

 
129

 
118

 
442

Product Sales
724

 
968

 
2,154

 
1,668

Costs and expenses:*
 
 
 
 
 
 
 
Cost of products sold: (excluding depreciation and amortization)
 
 
 
 
 
 
 
Natural gas services
2,909

 
4,498

 
11,803

 
7,883

Sulfur services
3,767

 
3,810

 
7,442

 
7,622

Terminalling and storage
4,119

 
4,081

 
9,186

 
7,466

Expenses:
 
 
 
 
 
 
 
Operating expenses
16,452

 
18,088

 
32,828

 
35,445

Selling, general and administrative
6,500

 
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, 2016
35,456,612

 
$
380,845

 
$
13,034

 
$
393,879

Net income

 
6,623

 
8,080

 
14,703

Issuance of restricted units
13,800

 

 

 

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, 2016
35,454,962

 
$
331,896

 
$
11,995

 
$
343,891

 
 
 
 
 
 
 
 
Balances - January 1, 2017
35,452,062

 
$
304,594

 
$
7,412

 
$
312,006

Net income

 
14,281

 
291

 
14,572

Issuance of common units, net of issuance related costs
2,990,000

 
51,071

 

 
51,071

Issuance of restricted units
12,000

 

 

 

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, 2017
38,452,112

 
$
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 amortization
45,662

 
44,137

Amortization of deferred debt issuance costs
1,445

 
2,247

Amortization of premium on notes payable
(153
)
 
(153
)
Loss on sale of property, plant and equipment
140

 
1,595

Loss on impairment of goodwill

 
4,145

Equity in earnings of WTLPG
(1,758
)
 
(2,482
)
Derivative (income) loss
2,392

 
(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 compensation
405

 
486

Cash distributions from WTLPG
2,500

 
4,300

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

 
 

Accounts and other receivables
29,522

 
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 payables
246

 
(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 liabilities
490

 
(614
)
Net cash provided by operating activities
45,788

 
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 equipment
1,597

 
655

Proceeds from involuntary conversion of property, plant and equipment

 
9,100

Proceeds from repayment of Note receivable - affiliate
15,000

 

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 debt
155,000

 
180,700

Proceeds from issuance of common units, net of issuance related costs
51,071

 

General partner contribution
1,098

 

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 assets
1,125

 
1,875

Cash distributions paid
(37,706
)
 
(66,722
)
Net cash used in financing activities
(21,343
)
 
(53,383
)
 
 
 
 
Net increase (decrease) in cash
17

 
(3
)
Cash at beginning of period
15

 
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
)%
Products
33,413

 
28,329

 
5,084

 
18
 %
Total revenues
59,561

 
60,721

 
(1,160
)
 
(2
)%
 
 
 
 
 
 
 
 
Cost of products sold
28,591

 
23,471

 
5,120

 
22
 %
Operating expenses
15,081

 
17,725

 
(2,644
)
 
(15
)%
Selling, general and administrative expenses
1,444

 
1,007

 
437

 
43
 %
Depreciation and amortization
10,327

 
10,078

 
249

 
2
 %
 
4,118

 
8,440

 
(4,322
)
 
(51
)%
Other operating income
10

 

 
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
)%
Products
65,560

 
56,522

 
9,038

 
16
 %
Total revenues
118,139

 
122,071

 
(3,932
)
 
(3
)%
 
 
 
 
 
 
 

Cost of products sold
55,602

 
47,821

 
7,781

 
16
 %
Operating expenses
30,726

 
36,441

 
(5,715
)
 
(16
)%
Selling, general and administrative expenses
2,769

 
2,107

 
662

 
31
 %
Depreciation and amortization
25,804

 
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
)%
Products
73,666

 
58,899

 
14,767

 
25
 %
Total revenues
88,504

 
74,302

 
14,202

 
19
 %
 
 
 
 
 
 
 
 
Cost of products sold
71,003

 
56,233

 
14,770

 
26
 %
Operating expenses
5,567

 
6,138

 
(571
)
 
(9
)%
Selling, general and administrative expenses
2,115

 
1,807

 
308

 
17
 %
Depreciation and amortization
6,205

 
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
)%
Products
200,323

 
149,990

 
50,333

 
34
 %
Total revenues
229,826

 
181,490

 
48,336

 
27
 %
 
 
 
 
 
 
 
 
Cost of products sold
180,306

 
135,581

 
44,725

 
33
 %
Operating expenses
11,225

 
11,657

 
(432
)
 
(4
)%
Selling, general and administrative expenses
5,166

 
4,111

 
1,055

 
26
 %
Depreciation and amortization
12,366

 
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
 %
Products
32,027

 
39,588

 
(7,561
)
 
(19
)%
Total revenues
34,877

 
42,288

 
(7,411
)
 
(18
)%
 
 
 
 
 
 
 
 
Cost of products sold
21,297

 
24,790

 
(3,493
)
 
(14
)%
Operating expenses
3,417

 
3,442

 
(25
)
 
(1
)%
Selling, general and administrative expenses
1,007

 
930

 
77

 
8
 %
Depreciation and amortization
2,030

 
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
 %
Products
71,554

 
79,063

 
(7,509
)
 
(9
)%
Total revenues
77,254

 
84,463

 
(7,209
)
 
(9
)%
 
 
 
 
 
 
 
 
Cost of products sold
45,871

 
52,405

 
(6,534
)
 
(12
)%
Operating expenses
6,664

 
6,199

 
465

 
8
 %
Selling, general and administrative expenses
2,028

 
1,888

 
140

 
7
 %
Depreciation and amortization
4,063

 
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 expenses
11,062

 
14,231

 
(3,169
)
 
(22)%
Selling, general and administrative expenses
71

 
158

 
(87
)
 
(55)%
Loss on impairment of goodwill

 
4,145

 
(4,145
)
 
(100)%
Depreciation and amortization
1,764

 
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 expenses
22,155

 
29,068

 
(6,913
)
 
(24)%
Selling, general and administrative expenses
175

 
(261
)
 
436

 
(167)%
Loss on impairment of goodwill

 
4,145

 
(4,145
)
 
(100)%
Depreciation and amortization
3,429

 
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, net
11,219

 
12,155

 
22,139

 
22,267

Income tax expense
13

 
191

 
193

 
242

Depreciation and amortization
20,326

 
22,089

 
45,662

 
44,137

EBITDA
32,547

 
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 WTLPG
1,300

 
1,800

 
2,500

 
4,300

Unit-based compensation
219

 
264

 
405

 
486

Adjusted EBITDA
32,998

 
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 costs
724

 
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





a2q17earningssummaryexhi
MMLP 2Q 2017 ADJUSTED EBITDA COMPARISON TO GUIDANCE Unallocated SG&A $(15.6) $(3.9) $(3.5) Total Adjusted EBITDA $157.4 $34.3 $33.0 Natural Gas Services Terminalling & Storage Sulfur Services Marine Transportatio n SG&A Interest Expense 2Q17 Actual Net income (loss) $4.4 $4.1 $7.1 $0.3 $(3.7) $(11.2) $1.0 Interest Expense Add-back -- -- -- -- -- $11.2 $11.2 Depreciation & amortization $6.3 $10.3 $2.1 $1.7 -- -- $20.4 (Gain) loss on sale of property, plant & equipment -- -- -- -- -- -- $0.0 Unrealized mark-to-market on commodity derivatives $(0.2) -- -- -- -- -- $(0.2) Distributions from unconsolidated entities $1.3 -- -- -- -- -- $1.3 Equity in earnings of unconsolidated entities $(0.9) -- -- -- -- -- $(0.9) Unit-based compensation -- -- -- -- $0.2 -- $0.2 Income tax expense -- -- -- -- -- -- $0.0 Adjusted EBITDA $10.9 $14.4 $9.2 $2.0 $(3.5) $0.0 $33.0 Terminalling & Storage 2017E Guidance 2Q17 Guidance 2Q17 Actual Shore-Based Terminals $15.7 $4.0 $3.8 Martin Lubricants $9.4 $2.5 $2.7 Smackover Refinery $20.7 $5.3 $5.3 Specialty Terminals $13.3 $2.5 $2.6 Total T&S $59.1 $14.3 $14.4 Natural Gas Services 2017E Guidance 2Q17 Guidance 2Q17 Actual Cardinal $36.3 $9.2 $10.1 Butane $26.1 $0.5 $(1.2) WTLPG $8.8 $1.5 $1.3 NGLs $2.5 $0.6 $0.6 Propane $3.2 $0.0 $0.1 Total NGS $76.9 $11.8 $10.9 Sulfur Services 2017E Guidance 2Q17 Guidance 2Q17 Actual Fertilizer $15.8 $6.9 $5.9 Molten Sulfur $6.6 $1.6 $1.7 Sulfur Prilling $7.4 $1.8 $1.6 Total Sulfur Services $29.8 $10.3 $9.2 Marine Transportation 2017E Guidance 2Q17 Guidance 2Q17 Actual Inland $9.6 $2.4 $2.4 Offshore $2.4 $0.6 $0.7 Marine USG&A $(4.8) $(1.2) $(1.1) Total Marine $7.2 $1.8 $2.0 $ millions Exhibit 99.2


 
MMLP FULL YEAR 2017E ADJUSTED EBITDA GUIDANCE $ millions Natural Gas Services 1Q17E 2Q17E 3Q17E 4Q17E 2017E Cardinal $9.0 $9.2 $8.7 $9.4 $36.3 Butane $9.6 $0.5 $0.7 $15.3 $26.1 WTLPG $1.8 $1.5 $2.6 $2.9 $8.8 NGLs $0.5 $0.6 $0.6 $0.8 $2.5 Propane $1.8 $0.0 $0.1 $1.3 $3.2 Total NGS $22.7 $11.8 $12.7 $29.7 $76.9 Natural Gas Services Terminalling & Storage(1) Sulfur Services Marine Transportation SG&A Interest Expense 2017E Net income (loss) $47.5 $9.8 $21.5 $(1.2) $(17.1) $(45.6) $14.9 Interest expense add back -- -- -- -- -- $45.6 $45.6 Depreciation and amortization $28.0 $49.3 $8.3 $8.4 -- -- $94.0 Distributions from unconsolidated entities $8.8 -- -- -- -- -- $8.8 Equity in earnings of unconsolidated entities $(7.4) -- -- -- -- -- $(7.4) Unit-based compensation -- -- -- -- $0.9 -- $0.9 Income tax expense -- -- -- -- $0.6 -- $0.6 Adjusted EBITDA $76.9 $59.1 $29.8 $7.2 $(15.6) $0.0 $157.4 Terminalling & Storage (1) 1Q17E 2Q17E 3Q17E(1) 4Q17E(1) 2017E Shore-Based Terminals $3.7 $4.0 $4.0 $4.0 $15.7 Martin Lubricants $2.3 $2.5 $2.5 $2.1 $9.4 Smackover Refinery $5.2 $5.3 $5.0 $5.2 $20.7 Specialty Terminals $2.6 $2.5 $4.1 $4.1 $13.3 Total T&S $13.8 $14.3 $15.6 $15.4 $59.1 Sulfur Services 1Q17E 2Q17E 3Q17E 4Q17E 2017E Fertilizer $6.9 $6.9 $0.4 $1.6 $15.8 Molten Sulfur $1.6 $1.6 $1.7 $1.7 $6.6 Sulfur Prilling $1.9 $1.8 $1.9 $1.8 $7.4 Total Sulfur Services $10.4 $10.3 $4.0 $5.1 $29.8 Marine Transportation 1Q17E 2Q17E 3Q17E 4Q17E 2017E Inland $2.3 $2.4 $2.4 $2.5 $9.6 Offshore $0.5 $0.6 $0.7 $0.6 $2.4 Marine USG&A $(1.2) $(1.2) $(1.2) $(1.2) $(4.8) Total Marine $1.6 $1.8 $1.9 $1.9 $7.2 Unallocated SG&A $(3.9) $(3.9) $(3.9) $(3.9) $(15.6) Total Adjusted EBITDA $44.6 $34.3 $30.3 $48.2 $157.4 (1) These figures include the incremental adjusted EBITDA associated with the Partnership’s February 22, 2017 acquisition of certain asphalt terminalling assets located in Hondo, Texas.


 
Natural Gas Services Terminalling & Storage Sulfur Services Marine Transportation SG&A Interest Expense 1H2017 Net income (loss) $22.5 $3.2 $18.6 $0.7 $(8.3) $(22.1) $14.6 Interest expense add back -- -- -- -- -- $22.1 $22.1 Depreciation and amortization $12.4 $25.8 $4.1 $3.4 -- -- $45.7 (Gain) loss on sale of property, plant and equipment -- -- -- $0.1 -- -- $0.1 Unrealized mark-to-market on commodity derivatives $(4.0) -- -- -- -- -- $(4.0) Distributions from unconsolidated entities $2.5 -- -- -- -- -- $2.5 Equity in earnings of unconsolidated entities $(1.8) -- -- -- -- -- $(1.8) Unit-based compensation -- -- -- -- $0.4 -- $0.4 Income tax expense -- -- -- -- $0.2 -- $0.2 Adjusted EBITDA $31.6 $29.0 $22.7 $4.2 $(7.7) $0.0 $79.8 Natural Gas Services Terminalling & Storage(1) Sulfur Services Marine Transportation SG&A Interest Expense 3Q2017E Net income (loss) $5.4 $4.1 $1.8 $(0.1) $(4.3) $(11.7) $(4.8) Interest expense add back -- -- -- -- -- $11.7 $11.7 Depreciation and amortization $7.1 $11.5 $2.2 $2.0 -- -- $22.8 Distributions from unconsolidated entities $2.6 -- -- -- -- -- $2.6 Equity in earnings of unconsolidated entities $(2.4) -- -- -- -- -- $(2.4) Unit-based compensation -- -- -- -- $0.2 -- $0.2 Income tax expense -- -- -- -- $0.2 -- $0.2 Adjusted EBITDA $12.7 $15.6 $4.0 $1.9 $(3.9) $0.0 $30.3 Natural Gas Services Terminalling & Storage(1) Sulfur Services Marine Transportation SG&A Interest Expense 4Q2017E Net income (loss) $22.1 $5.2 $3.0 $(0.2) $(4.3) $(11.8) $14.0 Interest expense add back -- -- -- -- -- $11.8 $11.8 Depreciation and amortization $7.1 $10.2 $2.1 $2.1 -- -- $21.5 Distributions from unconsolidated entities $2.9 -- -- -- -- -- $2.9 Equity in earnings of unconsolidated entities $(2.4) -- -- -- -- -- $(2.4) Unit-based compensation -- -- -- -- $0.2 -- $0.2 Income tax expense -- -- -- -- $0.2 -- $0.2 Adjusted EBITDA $29.7 $15.4 $5.1 $1.9 $(3.9) $0.0 $48.2 MMLP 1H 2017 ADJUSTED EBITDA MMLP 3Q 2017E ADJUSTED EBITDA GUIDANCE MMLP 4Q 2017E ADJUSTED EBITDA GUIDANCE $ millions (1) These figures include the incremental adjusted EBITDA associated with the Partnership’s February 22, 2017 acquisition of certain asphalt terminalling assets located in Hondo, Texas.


 
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”), and (2) adjusted EBITDA. 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. EBITDA and adjusted EBITDA 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. USE OF NON-GAAP FINANCIAL INFORMATION