Martin Midstream Partners Reports 2013 Fourth Quarter and Fiscal Year Financial Results

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| Source: Martin Midstream Partners L.P.

KILGORE, Texas, Feb. 26, 2014 (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, 2013.

The Partnership's adjusted EBITDA for the fourth quarter of 2013 was $38.6 million. This compared to adjusted EBITDA for the fourth quarter of 2012 of $32.0 million. The Partnership's adjusted EBITDA for the year ended December 31, 2013 was $138.0 million. This compared to adjusted EBITDA for the year ended December 31, 2012 of $121.3 million. 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.

The Partnership's distributable cash flow for the fourth quarter of 2013 was $24.2 million. This compared to distributable cash flow for the fourth quarter of 2012 of $20.6 million. The Partnership's distributable cash flow for the year ended December 31, 2013 was $87.0 million. This compared to distributable cash flow for the year ended December 31, 2012 of $80.3 million. Distributable cash flow is a non-GAAP financial measure which is explained in greater detail below under "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 this non-GAAP financial measure and its reconciliation to the most comparable GAAP measurement.

The Partnership reported a loss for the fourth quarter of 2013 of $39.3 million, or $1.44 per limited partner unit. This compared to net income for the fourth quarter of 2012 of $7.2 million, or $0.29 per limited partner unit. Results for the fourth quarter of 2013 were negatively impacted by the $54.1 million non-cash charge related to the Partnership's share of an impairment of the Monroe Gas Storage Company LLC ("Monroe") assets at Cardinal Gas Storage Partners, LLC ("Cardinal"), an equity method investment of the Partnership. Net income from continuing operations for the fourth quarter of 2012 was $9.7 million, $0.38 per limited partner unit. The Partnership reported a net loss from discontinued operations for the fourth quarter of 2012 of $2.5 million, or $0.09 per limited partner unit. The Partnership reported no income from discontinued operations for the fourth quarter of 2013. Revenues for the fourth quarter of 2013 were $482.0 million compared to $454.1 million for the fourth quarter of 2012.

The Partnership reported a loss from continuing operations for the year ended December 31, 2013 of $13.4 million, or $0.49 per limited partner unit. Results for the year ended December 31, 2013 were negatively impacted by the $54.1 million non-cash charge related to the Partnership's share of an impairment of the Monroe assets at Cardinal. Net income from continuing operations for the year ended December 31, 2012 was $37.1 million, or $1.32 per limited partner unit. The Partnership reported no income from discontinued operations for the year ended December 31, 2013. This compared to net income from discontinued operations for the year ended December 31, 2012 of $64.9 million, or $2.64 per limited partner unit. Income from discontinued operations was positively impacted by a gain on the sale of certain gas gathering and processing assets of $61.8 million for the year ended December 31, 2012. Revenues for the year ended December 31, 2013 were $1.6 billion compared to $1.5 billion for the year ended December 31, 2012.

Included with this press release are the Partnership's consolidated financial statements as of and for the quarter and year ended December 31, 2013 and certain prior periods. These financial statements should be read in conjunction with the information contained in the Partnership's Annual Report on Form 10-K, to be filed with the SEC on March 3, 2014.

Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership, said "I am pleased with our performance in the fourth quarter of 2013 and the Partnership's recovery from our seasonally weak third quarter. For the quarter, our distributable cash flow (DCF) coverage ratio was 1.14 times the distribution paid to our unitholders. Likewise, our DCF coverage ratio was 1.03 times for the year ended 2013. Our overall business and asset performance was strong during the quarter, however, DCF was offset by due diligence expenses associated with unsuccessful acquisition opportunities of approximately $1.9 million and increased maintenance capital expenditures. That being said, based on our strong performance and coverage during the fourth quarter we were again able to increase our quarterly distribution. This marks the fifth consecutive quarter we have provided increased distributions to our unitholders.

"Looking at our fourth quarter by segment, and starting with Terminalling and Storage, in late November 2013, we put in service a newly constructed dock facility dedicated solely to our Corpus Christi Crude Terminal and its customer. With the addition of our second docking system and related infrastructure, all of which was completed ahead of schedule, we more than doubled our crude loading capacity. Additionally, as increased Eagle Ford Shale crude oil production drives terminal through-put increases, we are well-positioned with additional tankage under construction. Once fully completed in the second quarter of this year, we expect year over year cash flow from the terminal to increase by over 25%. Partially offsetting the strong results surrounding our Corpus Christi assets were lower than forecasted through-put at the Smackover refinery and weaker than forecasted lubricant sales within our Martin Lubricants platform. However, we continue to view Martin Lubricants as a solid growth platform for the Partnership and are currently exploring several growth initiatives.

"In the Natural Gas Services segment, our wholesale propane and butane distribution services had a strong fourth quarter. Improved market conditions allowed us to capture greater than forecasted volume and margins in our legacy businesses. Additionally, in our refinery grade butane service we again successfully benefited by capturing seasonal margin differentials from butane inventories we placed in storage during the second and third quarters. As fuel blending continues today, butane sales will continue through the end the first quarter, thus completing the seasonal cycle. To date, margins have remained favorable mid-way through the first quarter.

"On the natural gas storage side, prolonged weakness in demand for storage capacity and financing covenants that restrict cash flow have negatively impacted the distributions we have received from our Cardinal investment. Specific to the Monroe facility, our cash flow available for distributions from that asset was $1.7 million in 2013. Based on this weakness, and the unlikelihood of near-term cash flow improvement, Cardinal recorded an impairment charge specific to the Monroe Gas Storage facility of $129.4 million. The Partnership's share of this charge was $54.1 million recorded in "Equity in Earnings in Unconsolidated Entities" in the Consolidated Statements of Operations in the year end results. Looking ahead, this non-cash asset impairment will have minimal impact on our DCF and our ability to pay distributions to unitholders at the current level as projected cash flow from Monroe is approximately $0.2 million for 2014.

"Lastly, I note that our Partnership's Redbird ownership interests in the other Cardinal projects at Arcadia, Cadeville and Perryville, Louisiana are operating and generating cash flow at projected levels. Because of current contracted levels of cash flow and operational performance, no asset write-downs are contemplated with any of these three projects. However, because each of those projects has an asset level project financing in place, upstream distributions are prohibited until certain leverage metrics are achieved.

"Our Sulfur Services segment rebounded from our seasonally weaker third quarter and posted stronger than forecasted performance. Fertilizer volume returned from seasonal lows sooner than we anticipated. Historically, the fourth quarter typically shows improvement as production volume begins delivery and deployment toward the field. Likewise, our pure sulfur businesses showed a recovery from the third quarter and exceeded planned performance. Our fee-based prilling and formed sulfur businesses met expectations for the fourth quarter and full year target performance.

"Finally, our Marine Transportation segment posted solid performance during the fourth quarter and finished the year ahead of the forecasted plan. Both our inland and offshore fleets had near full utilization. The inland fleet in particular had one of its best quarters since 2010. As we forecasted, the incremental demand for liquids transportation connected to shale play off-take was strong during 2013. Accordingly, the Partnership has been able to rely on the stability of cash flow from the Marine Transportation. For 2014, however, we are forecasting a slight reduction in cash flow compared to 2013 for this segment. This is primarily attributed to a disproportionate amount of regulatory dry-docking that will include our entire offshore marine fleet.

"Looking ahead, we have multiple organic growth platforms and projects across our business segments that should render continued near-term and long-term distribution growth. Additionally, we continue to pursue accretive acquisitions."

Investors' Conference Call

An investors' conference call to review the fourth quarter results will be held on Thursday, February 27, 2014, 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 27, 2014 through 10:59 p.m. Central Time on March 6, 2014. The access code for the conference call and the audio replay is Conference ID No. 44678069. 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 distribution services and natural gas storage; (3) sulfur and sulfur-based products processing, manufacturing, marketing and distribution; and (4) marine transportation services for petroleum products and by-products.

Forward-Looking Statements

Statements about the Partnership's outlook and all other statements in this release other than historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements and all references to financial estimates rely on a number of assumptions concerning future events and are subject to a number of uncertainties and other factors, many of which are outside its control, which could cause actual results to differ materially from such statements. While the Partnership believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in anticipating or predicting certain important factors. A discussion of these factors, including risks and uncertainties, is set forth in the Partnership's annual and quarterly reports filed from time to time with the Securities and Exchange Commission. The Partnership disclaims any intention or obligation to revise any forward-looking statements, including financial estimates, whether as a result of new information, future events, or otherwise.

Use of Non-GAAP Financial Information

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

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

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

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

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

MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED BALANCE SHEETS
(Dollars in thousands)
     
  December 31,
  2013 2012
Assets    
Cash  $ 16,542  $ 5,162
Accounts and other receivables, less allowance for doubtful accounts of $2,492 and $2,805, respectively 163,855 190,652
Product exchange receivables 2,727 3,416
Inventories 94,902 95,987
Due from affiliates 12,099 13,343
Other current assets 7,353 2,777
Assets held for sale 3,578
Total current assets 297,478 314,915
     
Property, plant and equipment, at cost 929,183 767,344
Accumulated depreciation (304,808) (256,963)
Property, plant and equipment, net 624,375 510,381
     
Goodwill 23,802 19,616
Investment in unconsolidated entities 128,662 154,309
Debt issuance costs, net 15,659 10,244
Other assets, net 7,943 3,531
   $ 1,097,919  $ 1,012,996
Liabilities and Partners' Capital    
Current portion of long-term debt and capital lease obligations $ —  $ 3,206
Trade and other accounts payable 142,951 140,045
Product exchange payables 9,595 12,187
Due to affiliates 2,596 3,316
Income taxes payable 1,204 10,239
Other accrued liabilities 20,242 9,489
Total current liabilities 176,588 178,482
     
Long-term debt and capital leases, less current maturities 658,695 474,992
Other long-term obligations 2,219 1,560
Total liabilities 837,502 655,034
Commitments and contingencies    
Partners' capital 260,417 357,962
   $ 1,097,919  $ 1,012,996
     
     
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
       
  Year Ended December 31,
  2013 2012 2011
Revenues:      
Terminalling and storage *  $ 115,965  $ 90,243  $ 77,283
Marine transportation * 98,523 85,748 76,936
Sulfur services * 12,004 11,702 11,400
Product sales:      
Natural gas services* 984,653 825,506 611,749
Sulfur services* 201,120 249,882 263,644
Terminalling and storage* 221,245 227,280 201,478
  1,407,018 1,302,668 1,076,871
Total revenues 1,633,510 1,490,361 1,242,490
       
Costs and expenses:      
Cost of products sold: (excluding depreciation and amortization)      
Natural gas services * 944,961 801,724 598,814
Sulfur services * 157,723 194,952 219,697
Terminalling and storage * 195,640 205,588 182,412
  1,298,324 1,202,264 1,000,923
Expenses:      
Operating expenses * 172,043 146,287 134,734
Selling, general and administrative * 29,397 25,494 20,531
Depreciation and amortization 52,240 42,063 40,276
Total costs and expenses 1,552,004 1,416,108 1,196,464
Other operating income (loss) 1,166 (418) 1,326
Operating income 82,672 73,835 47,352
       
Other income (expense):      
Equity in loss of unconsolidated entities (53,048) (1,113) (4,752)
Debt prepayment premium (272) (2,470)
Interest expense (42,495) (30,665) (26,781)
Other, net 542 1,092 420
Total other income (expense) (95,273) (33,156) (31,113)
Net income (loss) before taxes (12,601) 40,679 16,239
Income tax expense (753) (3,557) (2,872)
Income (loss) from continuing operations (13,354) 37,122 13,367
Income from discontinued operations, net of income taxes 64,865 9,392
Net income (loss) (13,354) 101,987 22,759
Less general partner's interest in net (income) loss 267 (4,748) (5,289)
Less pre-acquisition (income) loss allocated to Parent (4,622) 1,583
Less (income) loss allocable to unvested restricted units 40
Less beneficial conversion feature (1,108)
Limited partner's interest in net income $ (13,047)  $ 92,617  $ 17,945
       
 *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,
  2013 2012 2011
Revenues:      
Terminalling and storage  $ 71,517  $ 64,669  $ 54,211
Marine transportation 24,654 17,494 23,478
Product sales 4,698 7,201 9,081
Costs and expenses:      
Cost of products sold: (excluding depreciation and amortization)      
Natural gas services 32,639 27,512 16,749
Sulfur services 18,161 16,968 18,314
   Terminalling and storage 48,868 48,375 45,089
Expenses:      
Operating expenses 70,333 58,834 58,051
Selling, general and administrative 17,733 13,678 8,610
       
       
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
       
  Year Ended December 31,
  2013 2012 2011
Allocation of net income (loss) attributable to:      
Limited partner interest:      
 Continuing operations $ (13,047)  $ 30,915  $ 11,193
 Discontinued operations 61,702 6,752
  (13,047) 92,617 17,945
General partner interest:      
 Continuing operations (267) 1,585 3,106
 Discontinued operations 3,163 2,183
  (267) 4,748 5,289
       
Net income (loss) per unit attributable to limited partners:      
Basic:      
Continuing operations $ (0.49)  $ 1.32  $ 0.57
Discontinued operations 2.64 0.35
  $ (0.49)  $ 3.96  $ 0.92
       
Weighted average limited partner units - basic 26,558 23,362 19,545
       
Diluted:      
Continuing operations $ (0.49)  $ 1.32  $ 0.57
Discontinued operations 2.64 0.35
  $ (0.49)  $ 3.96  $ 0.92
       
Weighted average limited partner units - diluted 26,558 23,365 19,547
       
       
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL
(Dollars in thousands)
                 
  Partners' Capital    
              Accumulated  
            General Comprehensive  
  Parent Net Common Subordinated Partner Income  
  Investment Units Amount Units Amount Amount Amount Total
Balances – December 31, 2010  $ 53,154  17,707,832  $ 250,787 889,444  $ 17,721  $ 4,879  $ 1,419  $ 327,960
                 
Net income (loss) (1,583) 19,053 5,289 22,759
Recognition of beneficial conversion feature (1,108) 1,108
Follow-on public offering 1,874,500 70,330 70,330
Issuance of restricted units 14,850
General partner contribution 1,505 1,505
Conversion of subordinated units to common units 889,444 18,829 (889,444) (18,829)
Cash distributions ($3.05 per unit) (58,252) (6,245) (64,497)
Excess purchase price over carrying value of acquired assets (19,685) (19,685)
Unit-based compensation 190 190
Purchase of treasury units (14,850) (582) (582)
Adjustment in fair value of derivatives (793) (793)
Balances – December 31, 2011 51,571 20,471,776 279,562 5,428 626 337,187
                 
Net income 4,622   92,617     4,748   101,987
Follow-on public offering 6,095,000 194,170 194,170
Issuance of restricted units 6,250
General partner contribution 4,145 4,145
Cash distributions ($3.06 per unit) (70,679) (5,849) (76,528)
Excess purchase price over carrying value of acquired assets (142,075) (142,075)
Excess carrying value of assets over the purchase price paid by Martin Resource Management (4,268) (4,268)
Unit-based compensation 385 385
Purchase of treasury units (6,250) (222) (222)
Contributions to parent (56,193) (56,193)
Adjustment in fair value of derivatives (626) (626)
Balances – December 31, 2012 26,566,776 349,490 8,472 357,962
                 
Net loss (13,087) (267) (13,354)
Issuance of restricted units 64,500
Forfeiture of restricted units (250)
General partner contribution 37 37
Purchase of treasury units (6,000) (250) (250)
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
Balances – December 31, 2013 $ —  26,625,026  $ 254,028  — $ —  $ 6,389 $ —  $ 260,417
                 
                 
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
       
  Year Ended December 31,
  2013 2012 2011
Cash flows from operating activities:      
Net income (loss) $ (13,354)  $ 101,987  $ 22,759
Less: Income from discontinued operations (64,865) (9,392)
Net income (loss) from continuing operations (13,354) 37,122 13,367
Adjustments to reconcile net income (loss) to net cash provided by operating activities:      
Depreciation and amortization 52,240 42,063 40,276
Amortization of deferred debt issue costs 3,700 3,290 3,755
Amortization of discount on notes payable 306 581 351
Deferred income taxes 402 622
(Gain) loss on disposition or sale of property, plant, and equipment (217) 795 898
Gain on sale of equity method investment (750) (486)
Equity in loss of unconsolidated entities 53,048 1,113 4,752
Unit-based compensation 911 385 190
Preferred dividends on Martin Energy Trading 1,738
Other 6
Change in current assets and liabilities, excluding effects of acquisitions and dispositions:      
Accounts and other receivables 23,847 (56,856) (34,626)
Product exchange receivables 689 14,230 (8,547)
Inventories 3,762 (2,733) (28,714)
Due from affiliates 1,244 (20,135) 5,551
Other current assets (5,432) 3,046 (1,996)
Trade and other accounts payable (6,019) 17,595 50,904
Product exchange payables (2,592) (25,126) 14,961
Due to affiliates (1,203) 18,976 11,874
Income taxes payable (357) 367 (943)
Other accrued liabilities 10,753 (1,463) 1,063
Change in other non-current assets and liabilities (1,459) 872 3,500
Net cash provided by continuing operating activities 120,861 34,038 77,238
Net cash provided by (used in) discontinued operating activities (8,678) (1,360) 14,124
Net cash provided by operating activities 112,183 32,678 91,362
Cash flows from investing activities:      
Payments for property, plant, and equipment (92,243) (93,640) (77,202)
Acquisitions, net of cash acquired (73,921) (224,603) (16,815)
Proceeds from sale of acquired assets 56,000
Payments for plant turnaround costs (2,107) (2,103)
Proceeds from sale of property, plant, and equipment 5,576 44 1,025
Proceeds from sale of equity method investment 750 531
Proceeds from involuntary conversion of property, plant and equipment 2,200
Investments in unconsolidated entities (775) (59,319)
Milestone distributions from ECP 2,208
Return of investments from unconsolidated entities 1,738 5,980 1,432
Contributions to unconsolidated entities for operations (30,877) (30,279) (35,765)
Net cash used in continuing investing activities (186,777) (286,641) (188,747)
Net cash provided by (used in) discontinued investing activities 271,605 (13,908)
Net cash used in investing activities (186,777) (15,036) (202,655)
Cash flows from financing activities:      
Payments of long-term debt (650,000) (706,000) (442,000)
Payments of notes payable and capital lease obligations (8,809) (6,556) (1,132)
Proceeds from long-term debt 839,000 727,000 529,000
Net proceeds from follow on public offerings 194,170 70,330
General partner contributions 37 4,145 1,505
Excess purchase price over carrying value of acquired assets (301) (142,075) (19,685)
Excess carrying value of assets over the purchase price paid by Martin Resource Management (4,268)
Purchase of treasury units (250) (222) (582)
Increase (decrease) in affiliate funding of investments in unconsolidated entities (2,208) 30,828
Payments of debt issuance costs (9,115) (204) (3,588)
Cash distributions paid (84,588) (76,528) (64,497)
Net cash provided by (used in) financing activities 85,974 (12,746) 100,179
       
Net increase (decrease) in cash 11,380 4,896 (11,114)
Cash at beginning of period 5,162 266 11,380
Cash at end of period  $ 16,542  $ 5,162  $ 266
       
       
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, 2013 and 2012 
         
  Year Ended December 31,   Percent
  2013 2012 Variance Change
  (In thousands)  
Revenues:        
Services  $ 120,717  $ 94,895  $ 25,822 27%
Products 221,249 227,280 (6,031) (3)%
Total revenues 341,966 322,175 19,791 6%
         
Cost of products sold 197,974 207,699 (9,725) (5)%
Operating expenses 74,441 58,766 15,675 27%
Selling, general and administrative expenses 3,238 4,671 (1,433) (31)%
Depreciation and amortization 31,823 22,976 8,847 39%
  34,490 28,063 6,427 23%
Other operating income (loss) 792 (119) 911 766%
Operating income  $ 35,282  $ 27,944  $ 7,338 26%
         
Lubricant sales volumes (gallons) 39,342 38,107 1,235 3%
Shore-based throughput volumes (gallons) 270,522 218,494 52,028 24%
Smackover refinery throughput volumes (BBL per day) 6,912 5,994 918 15%
Corpus Christi crude terminal (BBL per day) 108,652 55,529 53,123 96%
         
Comparative Results of Operations for the Twelve Months Ended December 31, 2012 and 2011 
         
  Year Ended December 31,   Percent
  2012 2011 Variance Change
  (In thousands)  
Revenues:        
Services  $ 94,895  $ 81,697  $ 13,198 16%
Products 227,280 201,478 25,802 13%
Total revenues 322,175 283,175 39,000 14%
         
Cost of products sold 207,699 185,879 21,820 12%
Operating expenses 58,766 52,041 6,725 13%
Selling, general and administrative expenses 4,671 3,343 1,328 40%
Depreciation and amortization 22,976 19,814 3,162 16%
  28,063 22,098 5,965 27%
Other operating loss (119) (531) 412 78%
Operating income  $ 27,944  $ 21,567  $ 6,377 30%
         
Lubricant sales volumes (gallons) 38,107 36,189 1,918 5%
Shore-based throughput volumes (gallons) 218,494 216,410 2,084 1%
Smackover refinery throughput volumes (BBL per day) 5,994 6,820 (826) (12)%
Corpus Christi crude terminal (BBL per day) 55,529 55,529  
         
         
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, 2013 and 2012 
         
  Year Ended December 31,   Percent
  2013 2012 Variance   Change
  (In thousands)  
Revenues:        
Marine transportation  $ 3,028 $ —  $ 3,028  
Products 984,653 825,506 159,147 19%
Total revenues 987,681 825,506 162,175
         
Cost of products sold 946,551 803,195 143,356 18%
Operating expenses 5,806 3,550 2,256 64%
Selling, general and administrative expenses 3,892 4,236 (344) (8)%
Depreciation and amortization 2,240 601 1,639 273%
  29,192 13,924 15,268 110%
Other operating income 20 20  
Operating income $ 29,212 $ 13,924 $ 15,288 110%
         
NGLs Volumes (Bbls) 15,168 12,080  3,088 26%
         
Comparative Results of Operations for the Twelve Months Ended December 31, 2012 and 2011 
         
  Year Ended December 31,   Percent
  2012 2011 Variance  Change
  (In thousands)  
Revenues  $ 825,506  $ 611,749  $ 213,757 35%
Cost of products sold 803,195 600,034 203,161 34%
Operating expenses 3,550 2,994 556 19%
Selling, general and administrative expenses 4,236 1,876 2,360 126%
Depreciation and amortization 601 578 23 4%
Operating income  $ 13,924  $ 6,267  $ 7,657 122%
         
NGLs Volumes (Bbls) 12,080 7,866 4,214 54%
         
         
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, 2013 and 2012 
         
  Year Ended December 31,   Percent
  2013 2012 Variance Change
  (In thousands)  
Revenues:        
Services  $ 12,004  $ 11,702  $ 302 3%
Products 201,120 249,882 (48,762) (20)%
Total revenues 213,124 261,584 (48,460) (19)%
         
Cost of products sold 158,085 195,314 (37,229) (19)%
Operating expenses 16,975 17,404 (429) (2)%
Selling, general and administrative expenses 4,083 3,975 108 3%
Depreciation and amortization 7,979 7,371 608 8%
  26,002 37,520 (11,518) (31)%
Other operating loss (258) 258 100%
Operating income  $ 26,002  $ 37,262 $ (11,260) (30)%
         
Sulfur (long tons) 836.6 959.9 (123.3) (13)%
Fertilizer (long tons) 273.0 306.1 (33.1) (11)%
Sulfur services volumes (long tons) 1,109.6 1,266.0 (156.4) (12)%
         
Comparative Results of Operations for the Twelve Months Ended December 31, 2012 and 2011 
         
  Year Ended December 31,   Percent
  2012 2011 Variance Change
  (In thousands)  
Revenues:        
Services  $ 11,702  $ 11,400  $ 302 3%
Products 249,882 263,644 (13,762) (5)%
Total revenues 261,584 275,044 (13,460) (5)%
         
Cost of products sold 195,314 220,059 (24,745) (11)%
Operating expenses 17,404 19,328 (1,924) (10)%
Selling, general and administrative expenses 3,975 3,361 614 18%
Depreciation and amortization 7,371 6,725 646 10%
  37,520 25,571 11,949 47%
Other operating income (loss) (258) 2,080 (2,338) (112)%
Operating income  $ 37,262  $ 27,651  $ 9,611 35%
         
Sulfur (long tons) 959.9 1,217.0 (257.1) (21)%
Fertilizer (long tons) 306.1 271.8 34.3 13%
Sulfur services volumes (long tons) 1,266.0 1,488.8 (222.8) (15)%
         
         
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, 2013 and 2012 
         
  Year Ended December 31,   Percent
  2013 2012 Variance   Change
  (In thousands)  
Revenues  $ 99,510  $ 88,815  $ 10,695 12%
Operating expenses 79,306 70,342 8,964 13%
Selling, general and administrative expenses 1,347 566 781 138%
Depreciation and amortization 10,198 11,115 (917) (8)%
  8,659 6,792 1,867 27%
Other operating income (loss) 354 (41) 395 963%
Operating income  $ 9,013  $ 6,751  $ 2,262 34%
         
Comparative Results of Operations for the Twelve Months Ended December 31, 2012 and 2011 
         
  Year Ended December 31,   Percent
  2012 2011 Variance   Change
  (In thousands)  
Revenues  $ 88,815  $ 83,971  $ 4,844 6%
Operating expenses 70,342 66,771 3,571 5%
Selling, general and administrative expenses 566 3,087 (2,521) (82)%
Depreciation and amortization 11,115 13,159 (2,044) (16)%
  6,792 954 5,838 612%
Other operating loss (41) (223) 182 82%
Operating income  $ 6,751  $ 731  $ 6,020 824%
         
         

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, 2013 and 2012, 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,
  2013 2012 2013 2012
         
Net income (loss) $ (39,261)  $ 7,243 $ (13,354)  $ 101,987
Less: (Income) loss from discontinued operations, net of income taxes 2,447 (64,865)
Income from continuing operations (39,261) 9,690 (13,354) 37,122
Adjustments:        
Interest expense 11,437 7,381 42,495 30,665
Income tax benefit (expense) (157) 191 753 3,557
Depreciation and amortization 14,296 11,748 52,240 42,063
EBITDA (13,685) 29,010 82,134 113,407
Adjustments:        
Equity in loss of unconsolidated entities 52,170 1,369 53,048 1,113
(Gain) loss on sale of property, plant and equipment 579 788 (217) 795
Gain on sale of equity method investment (750) (750) (486)
Gain on involuntary conversion of property, plant and equipment (909) (909)
Debt prepayment premium 272 272 2,470
Distributions from unconsolidated entities 754 847 3,476 3,961
Mont Belvieu indemnity escrow payment (375)
Unit-based compensation 174 6 911 385
Adjusted EBITDA 38,605 32,020 137,965 121,270
Adjustments:        
Interest expense (11,437) (7,381) (42,495) (30,665)
Income tax benefit (expense) 157 (191) (753) (3,557)
Amortization of deferred debt issuance costs 810 679 3,700 3,290
Amortization of debt discount 76 77 306 581
Payments of installment notes payable and capital lease obligations (56) (23) (307) (279)
Deferred income taxes 402
Payments for plant turnaround costs 471 (2,107)
Maintenance capital expenditures (3,972) (5,055) (11,445) (8,658)
Distributable Cash Flow  $ 24,183  $ 20,597  $ 86,971  $ 80,277
         
Robert D. Bondurant,
Executive Vice President
and Chief Financial Officer of Martin
Midstream GP LLC, the Partnership's general
partner at (903) 983-6200