February 24, 2016

Martin Midstream Partners Reports Increased Distributable Cash Flow and Adjusted EBITDA in 2015 Fourth Quarter and Year End Results

  • Distributable cash flow from continuing operations increased 42% compared to the year ended 2014
  • Adjusted EBITDA from continuing operations increased 26% compared to the year ended 2014
  • Distribution coverage ratio for fiscal year 2015 of 1.00 times
  • No capital markets dependency in 2016

KILGORE, Texas, Feb. 24, 2016 (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, 2015.

Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership, said, "I am pleased with the fourth quarter 2015 performance and our full year results. For the quarter, our distribution coverage ratio was 1.07x. For the year ended 2015, our distribution coverage ratio was 1.00x as we achieved record levels of distributable cash flow. Our overall business and asset performance was strong during the fourth quarter in an increasingly challenging environment. We continue to see the benefits of multiple lines of business as our diversification creates stability of cash flow. On a consolidated basis, our cash flow exceeded internal forecast for the full year by approximately $2.0 million.  Further, our distance from the wellhead and our refinery services centric model has continued to deliver solid performance in these conditions.

"Looking across our segments and starting with our Natural Gas Services segment, we experienced strong cash flow from both our Cardinal Gas Storage assets and our refinery grade butane businesses.  As anticipated, during 2015, the Natural Gas Services segment became our largest cash flow contributor across MMLP's four segments.  Due to our new natural gas liquids rail terminal facility and the full year impact of our West Texas LPG Pipeline joint venture, we exceeded our cash flow guidance by approximately $2.4 million.  We anticipate that the Natural Gas Services segment will again be our largest cash flow contributor in 2016.

"In our Terminalling and Storage segment, we met our cash flow forecast in the fourth quarter by experiencing stronger than anticipated performance in our legacy specialty terminals. For the full year 2015, our Terminalling and Storage segment cash flow was $4.7 million below our guidance level due to underperformance within our Martin Lubricants platform and lower than forecasted crude oil throughput at our Corpus Christi Crude Terminal.  The lubricants division underperformed due to consistently weak market conditions throughout 2015. This is especially true during the first half of the year when base oil margins were at record low levels. Offsetting this weakness was better than projected cash flow at the Smackover refinery.

"During the fourth quarter, the pure sulfur side exceeded forecast in both the molten and prilled sulfur lines of business.  Volumes within our fertilizer business decreased during the quarter, however, sales migrated to higher margin product lines.  For 2015, we exceeded full year guidance by more than $8.6 million in the Sulfur Services segment based on margin improvement as raw material costs declined. Our Sulfur Services segment has proven to be resilient, even approaching a counter-cyclical nature to the current commodity price environment.  Based on 2016 agricultural planting forecasts, we are optimistic that fertilizer performance within our Sulfur Services segment will again be strong.

"In the fourth quarter, our Marine Transportation segment experienced a slight recovery from third quarter performance, however it did not achieve our forecasted performance due to lower than anticipated utilization and unanticipated repair and maintenance expenses.  For the full year, cash flow was approximately $4.3 million below our guidance primarily attributed to two offshore vessels being non-operational during the second half of 2015 and higher than forecasted repair and maintenance expenses.

"Looking ahead, MMLP has modest capital requirements for 2016. We do not anticipate needing to access the capital markets during the year as our growth capital expenditures are forecasted to be less than $30 million.  We envision utilizing our revolving credit facility for these growth capital needs. Our maintenance capital expenditures should be in-line with prior years, between $15 and $20 million.  In all, we continue to believe in our diverse refinery services based model and are confident we can perform through all commodity price cycles."

The Partnership's distributable cash flow from continuing operations for the fourth quarter of 2015 was $35.8 million.  This compared to distributable cash flow from continuing operations for the fourth quarter of 2014 of $33.5 million, an increase of 7%.

The Partnership's distributable cash flow from continuing operations for the year ended December 31, 2015 was $133.9 million.  This compared to distributable cash flow from continuing operations for the year ended December 31, 2014 of $94.4 million, an increase of 42%.       

The Partnership's adjusted EBITDA from continuing operations for the fourth quarter of 2015 was $51.4 million.  This compared to adjusted EBITDA from continuing operations for the fourth quarter of 2014 of $42.5 million.   Net income for the fourth quarter of 2015 was $6.8 million, or $0.08 per limited partner unit.  Net income was negatively impacted by $9.3 million and $1.3 million in non-cash asset impairment charges in the Partnership's Terminalling and Storage and Marine Transportation segments, respectively, or $0.26 and $0.04 per limited partner unit.  These non-cash transactions negatively impacted earnings but had no impact on distributable cash flow.  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's adjusted EBITDA from continuing operations for the year ended December 31, 2015 was $188.3 million.  This compared to adjusted EBITDA from continuing operations for the year ended December 31, 2014 of $149.0 million, an increase of 26%.  Net income for the year ended December 31, 2015 was $38.4 million, or $0.62 per limited partner unit.  Net income was negatively impacted by $9.3 million and $1.3 million in non-cash asset impairment charges in the Partnership's Terminalling and Storage and Marine Transportation segments, respectively, or $0.26 and $0.04 per limited partner unit.  Specific to the Terminalling and Storage segment impairment, the Partnership elected to discontinue pursuing its splitter project in the Corpus Christi market based on the federal government's decision to lift the exportation ban on crude oil.  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.

Revenues for the fourth quarter of 2015 were $254.4 million compared to $377.0 million for the fourth quarter of 2014. Revenues were $1.0 billion for the year ended December 31, 2015 compared to $1.6 billion for the year ended December 31, 2014.  The decline in revenues is attributable primarily to significantly lower natural gas liquids prices.

On February 12, 2015, the Partnership exited the natural gas liquids floating storage and trans-loading businesses as a result of the sale of its six liquefied petroleum gas pressure barges, collectively referred to as the "Floating Storage Assets", for $41.3 million.  The Partnership recorded a gain on the disposition of $1.5 million.

The Partnership had no net income, distributable cash flow or adjusted EBITDA from discontinued operations related to the Floating Storage Assets in the fourth quarter of 2015.  This compared to a net loss from discontinued operations of $2.3 million, or $0.07 per limited partner unit, and distributable cash flow and adjusted EBITDA from discontinued operations of negative $1.8 million for the fourth quarter of 2014.

The Partnership had net income from discontinued operations for the year ended December 31, 2015 of $1.2 million, or $0.02 per limited partner unit.  Distributable cash flow and adjusted EBITDA from discontinued operations were negative $0.2 million for the year ended December 31, 2015.

Discontinued operations resulted in a net loss of $5.3 million, or $0.22 per limited partner unit, for the year ended December 31, 2014.   Distributable cash flow and adjusted EBITDA from discontinued operations were negative $3.8 million for the year ended December 31, 2014.

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

Included with this press release are the Partnership's consolidated financial statements as of and for the year ended December 31, 2015 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 February 29, 2016.

Investors' Conference Call

An investors' conference call to review the fourth quarter results will be held on Thursday, February 25, 2016, 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 25, 2016 through 10:59 p.m. Central Time on March 8, 2016.  The access code for the conference call and the audio replay is Conference ID No. 34231812.  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

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.

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
  
 December 31,
 2015 2014
Assets    
Cash$31  $42 
Trade and accrued accounts receivable, less allowance for doubtful accounts of $430 and $1,620 respectively74,355  134,173 
Product exchange receivables1,050  3,046 
Inventories75,870  88,718 
Due from affiliates10,126  14,512 
Fair value of derivatives675   
Other current assets 5,718  6,772 
Assets held for sale  40,488 
Total current assets167,825  287,751 
    
Property, plant and equipment, at cost1,387,814  1,343,674 
Accumulated depreciation(404,574) (345,397)
Property, plant and equipment, net983,240  998,277 
    
Goodwill23,802  23,802 
Investment in unconsolidated entities132,292  134,506 
Notes receivable - Martin Energy Trading LLC15,000  15,000 
Intangibles and other assets, net58,314  81,465 
 $1,380,473  $1,540,801 
Liabilities and Partners' Capital   
Trade and other accounts payable$81,180  $125,332 
Product exchange payables12,732  10,396 
Due to affiliates5,738  4,872 
Income taxes payable985  1,174 
Other accrued liabilities18,533  21,801 
Total current liabilities119,168  163,575 
    
Long-term debt, net865,003  888,887  
Fair value of derivatives206   
Other long-term obligations2,217  2,668 
Total liabilities986,594  1,055,130 
Commitments and contingencies   
Partners' capital 393,879  485,671 
 $1,380,473  $1,540,801 
        
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on February 29, 2016.


MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
  
 Year Ended December 31,
 2015 2014 2013
Revenues:     
Terminalling and storage  *$132,945  $ 130,506  $115,965 
Marine transportation  *78,753  91,372  95,496 
Natural gas storage services *64,858  22,991   
Sulfur services12,270  12,149  12,004 
Product sales: *     
Natural gas services458,302  990,844  966,909 
Sulfur services157,891  203,322  201,120 
Terminalling and storage131,825  190,957  221,245 
 748,018  1,385,123  1,389,274 
Total revenues1,036,844  1,642,141  1,612,739 
      
Costs and expenses:     
Cost of products sold: (excluding depreciation and amortization)      
Natural gas services *413,795  948,765  928,725 
Sulfur services *114,766   159,782  157,723 
Terminalling and storage *112,836  172,069  195,640 
 641,397  1,280,616  1,282,088 
Expenses:     
Operating expenses  *183,466  184,049  170,155 
Selling, general and administrative  *36,788  36,316  29,236 
Impairment of long lived assets10,629  3,445   
Depreciation and amortization92,250  68,830  50,962 
Total costs and expenses964,530  1,573,256  1,532,441 
Other operating income (loss)(2,161) (1,014) 1,166 
Operating income70,153  67,871  81,464 
      
Other income (expense):     
Equity in earnings (loss) of unconsolidated entities8,986  5,466  (53,048)
Debt prepayment premium  (7,767)  (272)
Interest expense, net(43,292) (42,203) (42,495)
Gain on retirement of senior unsecured notes1,242     
Reduction in fair value of investment in Cardinal due to the purchase of the controlling interest  (30,102)   
Other, net1,124  1,505  542 
Total other income (expense)(31,940) (73,101) (95,273)
Net income (loss) before taxes38,213  (5,230)  (13,809)
Income tax expense(1,048) (1,137) (753)
Income (loss) from continuing operations37,165  (6,367) (14,562)
Income (loss) from discontinued operations, net of income taxes1,215   (5,338) 1,208 
Net income (loss)38,380  (11,705) (13,354)
Less general partner's interest in net (income) loss(16,338) (3,503) 267 
Less (income) loss allocable to unvested restricted units(140) 32  40 
Limited partner's interest in net income (loss)$ 21,902  $(15,176) $(13,047)
            
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on February 29, 2016.
 
*Related Party Transactions Shown Below


MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
 
*Related Party Transactions Included Above
  
 Year Ended December 31,
 2015 2014 2013
Revenues:     
Terminalling and storage$78,233  $74,467  $71,517 
Marine transportation27,724  24,389  24,654 
Natural gas services878     
Product sales5,671  7,661  4,698 
Costs and expenses:     
Cost of products sold: (excluding depreciation and amortization)     
Natural gas services25,797  37,703  32,639 
Sulfur services16,579  18,390  18,161 
Terminalling and storage17,718  36,341  48,868 
Expenses:     
Operating expenses77,871  79,577  70,333 
Selling, general and administrative24,968  23,679  17,689 
         
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on February 29, 2016.


MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
  
 Year Ended December 31,
 2015 2014 2013
Allocation of net income (loss) attributable to:     
Limited partner interest:     
Continuing operations$21,208  $(8,255)  $(14,227)
Discontinued operations694  (6,921) 1,180 
 $21,902  $(15,176) $(13,047)
General partner interest:     
Continuing operations$15,821  $1,906  $(291)
Discontinued operations517  1,597  24 
 $16,338  $3,503  $(267)
      
Net income (loss) per unit attributable to limited partners:     
Basic:      
Continuing operations$0.60  $(0.27) $(0.54)
Discontinued operations0.02  (0.22) 0.04 
 $0.62  $(0.49) $(0.50)
      
Weighted average limited partner units - basic35,309  30,785  26,558 
      
Diluted:     
Continuing operations$0.60  $(0.27) $(0.54)
Discontinued operations0.02  (0.22) 0.04 
 $0.62  $ (0.49) $(0.50)
      
Weighted average limited partner units - diluted35,372  30,785  26,558 
         
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on February 29, 2016.


 
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF CAPITAL
(Dollars in thousands)
    
 Partners' Capital  
 Common General
Partner
  
 Units Amount Amount Total
Balances - December 31, 201226,566,776  $349,490  $8,472  $357,962 
        
Net loss  (13,087) (267) (13,354)
Issuance of restricted units64,500       
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, 201326,625,026  254,028  6,389  260,417 
        
Net income (loss)  (15,208) 3,503  (11,705)
Issuance of common units8,743,386  331,728    331,728 
Issuance of restricted units8,900       
Forfeiture of restricted units(5,000)      
General partner contribution    7,007  7,007 
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 
Purchase of treasury units(6,400) (277 )   (277)
Balances - December 31, 201435,365,912  470,943  14,728  485,671 
        
Net income  22,042  16,338  38,380 
Issuance of common units   (590)   (590)
Issuance of restricted units91,950       
Forfeiture of restricted units(1,250)      
General partner contribution    55  55 
Cash distributions ($3.25 per unit)  (115,229) (18,087) (133,316)
Reimbursement of excess purchase price over carrying value of acquired assets  2,250    2,250 
Unit-based compensation  1,429    1,429 
Balances - December 31, 201535,456,612   $380,845  $13,034  $393,879 
               
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on February 29, 2016.


MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
  
 Year Ended December 31,
 2015 2014 2013
Cash flows from operating activities:     
Net income (loss)$38,380  $(11,705) $(13,354)
Less:  (Income) loss from discontinued operations(1,215) 5,338  (1,208)
Net income (loss) from continuing operations37,165  (6,367) (14,562)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:     
Depreciation and amortization92,250  68,830  50,962 
Amortization of deferred debt issue costs4,859  6,263  3,700 
Amortization of discount on notes payable  1,305  306 
Amortization of premium on notes payable(324) (245)  
(Gain) loss on disposition or sale of property, plant, and equipment2,149  1,353  (217)
Gain on sale of equity method investment    (750)
Gain on retirement of senior unsecured notes(1,242)    
Impairment of long lived assets10,629  3,445   
Equity in (earnings) loss of unconsolidated entities(8,986) (5,466) 53,048 
Reduction in fair value of investment in Cardinal due to the purchase of the controlling interest  30,102   
Derivative (income)(3,107) (5,877)  
Net cash received for commodity derivatives143  3   
Net premiums received on derivatives that settled during the year on interest rate swaption contracts2,495  6,692   
Unit-based compensation1,429  817  911 
Preferred dividends from Martin Energy Trading  1,498  1,738 
Return on investment11,200  2,600   
Other    6 
Change in current assets and liabilities, excluding effects of acquisitions and dispositions:     
Accounts and other receivables59,479  29,025  26,270 
Product exchange receivables1,996  (319) 689 
Inventories12,799  5,680  4,559 
Due from affiliates4,386  (2,413) 1,244 
Other current assets891  4,123  (5,432)
Trade and other accounts payable(44,153) (26,349) (9,978)
Product exchange payables2,336  801  (2,592)
Due to affiliates866   2,276  (1,203)
Income taxes payable(189) (30) (357)
Other accrued liabilities(2,802) 1,084  10,749 
Change in other non-current assets and liabilities(345) 181  (1,449)
Net cash provided by continuing operating activities183,924  119,012  117,642 
Net cash used in discontinued operating activities(1,352) (3,432) (5,459)
Net cash provided by operating activities182,572  115,580  112,183 
Cash flows from investing activities:     
Payments for property, plant, and equipment(65,791) (84,307) (92,243)
Acquisitions, net of cash acquired  (102,696) (31,321)
Payments for plant turnaround costs(1,908) (3,974)  
Proceeds from sale of property, plant, and equipment2,644  1,030  5,576 
Proceeds from sale of equity method investment    750 
Proceeds from involuntary conversion of property, plant and equipment  2,475  2,200 
Investments in unconsolidated entities  (134,030)  
Return of investments from unconsolidated entities  225  1,738 
Contributions to unconsolidated entities for operations  (3,386) (30,877)
Net cash used in continuing investing activities(65,055) (324,663) (144,177)
Net cash provided by (used in) discontinued investing activities41,250    (42,600)
Net cash used in investing activities(23,805) (324,663) (186,777)
Cash flows from financing activities:     
Payments of long-term debt(308,836) (1,533,087) (650,000)
Payments of notes payable and capital lease obligations    (8,809)
Proceeds from long-term debt282,000  1,493,250  839,000 
Net proceeds from issuance of common units(590) 331,728   
General partner contributions55  7,007   37 
Excess purchase price over carrying value of acquired assets  (4,948) (301)
Reimbursement of excess purchase price over carrying value of acquired assets2,250     
Purchase of treasury units  (277) (250)
Payments of debt issuance costs(341) (3,722) (9,115)
Cash distributions paid(133,316) (97,368) (84,588)
Net cash provided by (used in) financing activities(158,778) 192,583  85,974 
Net increase (decrease) in cash(11) (16,500) 11,380 
Cash at beginning of year42  16,542  5,162 
Cash at end of year$31  $42  $16,542 
            
These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on February 29, 2016.


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, 2015 and 2014
 
      
 Year Ended
December 31,
 Variance Percent
Change
  2015 2014  
 (In thousands)  
Revenues:       
Services$138,614  $135,697  $2,917   2%
Products131,826  190,957  (59,131)  (31)%
Total revenues270,440  326,654   (56,214)  (17)%
        
Cost of products sold115,460  175,246  (59,786)  (34)%
Operating expenses83,917  83,504  413  —%
Selling, general and administrative expenses3,804  3,565  239   7%
Impairment of long lived assets9,305    9,305   
Depreciation and amortization38,731  37,622  1,109   3%
 19,223  26,717  (7,494)  (28)%
Other operating income (loss)(473) 290  (763)  263%
Operating income$18,750  $27,007  $(8,257)  (31)%
         
Lubricant sales volumes (gallons)22,909  32,418  (9,509)  (29)%
Shore-based throughput volumes (gallons)159,598  253,262  (93,664)  (37)%
Smackover refinery throughput volumes (barrels per day)6,162  6,159  3  —%
Corpus Christi crude terminal throughput volumes (barrels per day)154,381  164,223  (9,842)  (6)%


Comparative Results of Operations for the Twelve Months Ended December 31, 2014 and 2013
 
  Year Ended
December 31,
 Variance Percent
Change
 2014 2013  
 (In thousands)  
Revenues:       
Services$135,697  $120,717  $14,980   12%
Products190,957  221,249  (30,292)  (14)%
Total revenues326,654  341,966  (15,312)  (4)%
        
Cost of products sold175,246   197,974  (22,728)  (11)%
Operating expenses83,504  74,441  9,063   12%
Selling, general and administrative expenses3,565  3,238  327   10%
Depreciation and amortization37,622  31,823  5,799   18%
 26,717  34,490  (7,773)  (23)%
Other operating income290  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 (barrels per day)164,223  108,652  55,571   51%


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, 2015 and 2014
       
 Year Ended
December 31,
 Variance Percent
Change
 2015 2014  
 (In thousands)  
Revenues:       
Services$64,858  $22,991  $41,867   182%
Products458,302  990,844  (532,542)  (54)%
Total revenues523,160  1,013,835  (490,675)  (48)%
        
Cost of products sold416,404  950,742  (534,338)  (56)%
Operating expenses 23,979  10,797  13,182   122%
Selling, general and administrative expenses9,791  8,596  1,195   14%
Depreciation and amortization34,072  13,090  20,982   160%
 38,914  30,610  8,304   27%
Other operating loss(303)   (303)  
Operating income$38,611  $30,610  $8,001   26%
        
Distributions from unconsolidated entities$11,200  $4,323  $6,877   159%
         
NGLs Volumes (barrels)14,340  16,448  (2,108)  (13)%


Comparative Results of Operations for the Twelve Months Ended December 31, 2014 and 2013
      
 Year Ended
December 31,
 Variance Percent
Change
 2014 2013  
  (In thousands)  
Revenues:       
Services$22,991  $  $22,991   
Products990,844  966,909  23,935   2%
Total revenues1,013,835  966,909  46,926   5%
        
Cost of products sold950,742  930,315  20,427   2%
Operating expenses10,797  3,918  6,879   176%
Selling, general and administrative expenses8,596  3,731  4,865   130%
Depreciation and amortization13,090  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)16,448  14,874  1,574   11%


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, 2015 and 2014
      
 Year Ended
December 31,
 Variance Percent
Change
 2015 2014  
 (In thousands)  
Revenues:       
Services$12,270  $12,149  $121   1%
Products157,891  203,322  (45,431)  (22)%
Total revenues170,161  215,471  (45,310)  (21)%
        
Cost of products sold115,133  160,144  (45,011)  (28)%
Operating expenses15,279  17,136  (1,857)  (11)%
Selling, general and administrative expenses3,805  4,359  (554)  (13)%
Depreciation and amortization8,455  8,176  279   3%
 27,489  25,656  1,833   7%
Other operating loss(376)   (376)  
Operating income$27,113  $25,656  $1,457   6%
        
Sulfur (long tons)856.0  848.0  8.0   1%
Fertilizer (long tons) 274.0  306.0  (32.0)  (10)%
Sulfur services volumes (long tons)1,130.0  1,154.0  (24.0)  (2)%

                

Comparative Results of Operations for the Twelve Months Ended December 31, 2014 and 2013
      
 Year Ended
December 31,
 Variance Percent
Change
 2014 2013  
 (In thousands)  
Revenues:       
Services$12,149  $12,004  $145    1%
Products203,322  201,120  2,202   1%
Total revenues215,471  213,124   2,347   1%
        
Cost of products sold160,144  158,085  2,059   1%
Operating expenses17,136  16,975  161   1%
Selling, general and administrative expenses4,359  4,083  276   7%
Depreciation and amortization8,176  7,979  197   2%
Operating income$25,656  $26,002  $(346)  (1)%
        
Sulfur (long tons)848.0  837.0  11.0   1%
Fertilizer (long tons)306.0  273.0  33.0   12%
Sulfur services volumes (long tons)1,154.0  1,110.0  44.0   4%


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, 2015 and 2014
      
 Year Ended
December 31,
 Variance Percent
Change
 2015 2014  
 (In thousands)  
Revenues$81,784  $97,049  $(15,265)  (16)%
Operating expenses63,412  77,964  (14,552)  (19)%
Selling, general and administrative expenses417  1,084  (667)  (62)%
Impairment of long lived assets1,324  3,445  (2,121)  (62)%
Depreciation and amortization10,992  9,942  1,050   11%
 5,639  4,614  1,025   22%
Other operating loss(1,009) (1,304) 295   (23)%
Operating income$ 4,630  $3,310  $1,320   40%

                

Comparative Results of Operations for the Twelve Months Ended December 31, 2014 and 2013
      
 Year Ended
December 31,
 Variance Percent
Change
 2014 2013  
 (In thousands)  
Revenues$97,049  $99,511  $(2,462)  (2)%
Operating expenses77,964  79,306  (1,342)  (2)%
Selling, general and administrative expenses1,084  1,347  (263)  (20)%
Impairment of long lived assets3,445    3,445   
Depreciation and amortization9,942  10,198  (256)  (3)%
  4,614  8,660  (4,046)  (47)%
Other operating income (loss)(1,304) 354  (1,658)  468%
Operating income$3,310  $9,014  $(5,704)  (63)%


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, 2015 and 2014, 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,
 2015 2014 2015  2014
        
Net income (loss)$6,841  $4,374  $38,380  $(11,705)
Less:  (Income) loss from discontinued operations, net of income taxes  2,290  (1,215) 5,338 
Income (loss) from continuing operations6,841  6,664  37,165  (6,367)
Adjustments:       
Interest expense10,827  7,852  43,292  42,203 
Income tax (benefit) expense234  183  1,048  1,137 
Depreciation and amortization23,513  24,554  92,250  68,830 
EBITDA41,415  39,253  173,755  105,803 
Adjustments:       
Equity in (income) loss of unconsolidated entities(3,234) (1,169) (8,986) (5,466)
(Gain) loss on sale of property, plant and equipment398  1,407  2,149  1,353 
Gain on retirement of senior unsecured notes(514)   (1,242)  
Impairment of long lived asset 10,629    10,629  3,445 
Unrealized mark to market on commodity derivatives(1,033) 818  (675) 818 
Reduction in fair value of investment in Cardinal due to purchase of the controlling interest      30,102 
Debt prepayment premium      7,767 
Distributions from unconsolidated entities3,400  2,000  11,200  4,323 
Unit-based compensation349  228  1,429  817 
Adjusted EBITDA51,410  42,537  188,259  148,962 
Adjustments:       
Interest expense(10,827) (7,852) (43,292) (42,203)
Income tax benefit (expense)(234) (183) (1,048) (1,137)
Amortization of deferred debt issuance costs717  848  4,859  6,263 
Amortization of debt discount      1,305 
Amortization of debt premium(78) (81) (324) (245)
Unrealized mark to market on interest rate derivatives206  (489) 206   
Payments for plant turnaround costs(154) 26  (1,908) (3,974)
Maintenance capital expenditures(5,281) (1,296) (12,902) (14,556)
Distributable Cash Flow$35,759  $33,510  $133,850  $94,415 


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, 2015 and 2014, which represents Distributable Cash Flow from discontinued operations.

 2015
 First
Quarter
 Second
Quarter
 Third
Quarter
 Fourth
Quarter
 YTD
Income from discontinued operations, net of income taxes$1,215  $  $  $  $1,215 
Adjustments:         
Gain on sale of property, plant and equipment(1,462)       (1,462)
Distributable Cash Flow from discontinued operations$(247) $  $  $  $(247)


 2014
 First
Quarter
 Second
Quarter
 Third
Quarter
 Fourth
Quarter
 YTD
Loss from discontinued operations, net of income taxes$(589) $(1,292) $(1,167) $(2,290) $(5,338)
Adjustments:         
Depreciation and amortization383  383  286  482  1,534 
Distributable Cash Flow from discontinued operations$(206) $(909) $(881) $(1,808) $(3,804)

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Source: Martin Midstream Partners L.P.

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