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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Martin Midstream Partners LP | NASDAQ:MMLP | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 3.03 | 1.22 | 3.23 | 0 | 09:09:40 |
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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
o
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TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
Delaware
|
|
05-0527861
|
(State or other jurisdiction of incorporation or organization)
|
|
(IRS Employer Identification No.)
|
Yes
x
|
|
No
o
|
Yes
x
|
|
No
o
|
Large accelerated filer
x
|
Accelerated filer
o
|
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
o
|
Yes
o
|
|
No
x
|
|
|
Page
|
|
|
|
|
|
|
|
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|
|
|
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|
|
Item 1.
|
Financial Statements
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
|
(Unaudited)
|
|
(Audited)
|
||||
Assets
|
|
|
|
||||
Cash
|
$
|
10
|
|
|
$
|
31
|
|
Accounts and other receivables, less allowance for doubtful accounts of $453 and $430, respectively
|
46,327
|
|
|
74,355
|
|
||
Product exchange receivables
|
159
|
|
|
1,050
|
|
||
Inventories
|
107,476
|
|
|
75,870
|
|
||
Due from affiliates
|
8,194
|
|
|
10,126
|
|
||
Fair value of derivatives
|
89
|
|
|
675
|
|
||
Other current assets
|
4,439
|
|
|
5,718
|
|
||
Assets held for sale
|
73,197
|
|
|
—
|
|
||
Total current assets
|
239,891
|
|
|
167,825
|
|
||
|
|
|
|
||||
Property, plant and equipment, at cost
|
1,301,233
|
|
|
1,387,814
|
|
||
Accumulated depreciation
|
(411,821
|
)
|
|
(404,574
|
)
|
||
Property, plant and equipment, net
|
889,412
|
|
|
983,240
|
|
||
|
|
|
|
||||
Goodwill
|
17,296
|
|
|
23,802
|
|
||
Investment in WTLPG
|
129,794
|
|
|
132,292
|
|
||
Note receivable - Martin Energy Trading LLC
|
15,000
|
|
|
15,000
|
|
||
Other assets, net
|
48,951
|
|
|
58,314
|
|
||
Total assets
|
$
|
1,340,344
|
|
|
$
|
1,380,473
|
|
|
|
|
|
||||
Liabilities and Partners’ Capital
|
|
|
|
|
|
||
Trade and other accounts payable
|
$
|
60,462
|
|
|
$
|
81,180
|
|
Product exchange payables
|
10,188
|
|
|
12,732
|
|
||
Due to affiliates
|
3,879
|
|
|
5,738
|
|
||
Income taxes payable
|
550
|
|
|
985
|
|
||
Fair value of derivatives
|
209
|
|
|
—
|
|
||
Other accrued liabilities
|
14,804
|
|
|
18,533
|
|
||
Liabilities held for sale
|
23,400
|
|
|
—
|
|
||
Total current liabilities
|
113,492
|
|
|
119,168
|
|
||
|
|
|
|
||||
Long-term debt, net
|
913,504
|
|
|
865,003
|
|
||
Fair value of derivatives
|
—
|
|
|
206
|
|
||
Other long-term obligations
|
2,435
|
|
|
2,217
|
|
||
Total liabilities
|
1,029,431
|
|
|
986,594
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 16)
|
|
|
|
|
|
||
Partners’ capital
|
310,913
|
|
|
393,879
|
|
||
Total partners’ capital
|
310,913
|
|
|
393,879
|
|
||
Total liabilities and partners' capital
|
$
|
1,340,344
|
|
|
$
|
1,380,473
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Terminalling and storage *
|
$
|
30,770
|
|
|
$
|
33,578
|
|
|
$
|
93,565
|
|
|
$
|
100,828
|
|
Marine transportation *
|
13,846
|
|
|
18,977
|
|
|
44,531
|
|
|
59,956
|
|
||||
Natural gas services*
|
14,618
|
|
|
17,120
|
|
|
46,118
|
|
|
50,171
|
|
||||
Sulfur services
|
2,700
|
|
|
3,090
|
|
|
8,100
|
|
|
9,270
|
|
||||
Product sales: *
|
|
|
|
|
|
|
|
||||||||
Natural gas services
|
57,378
|
|
|
86,714
|
|
|
207,368
|
|
|
330,803
|
|
||||
Sulfur services
|
26,396
|
|
|
33,213
|
|
|
105,459
|
|
|
128,544
|
|
||||
Terminalling and storage
|
28,829
|
|
|
33,329
|
|
|
85,349
|
|
|
102,901
|
|
||||
|
112,603
|
|
|
153,256
|
|
|
398,176
|
|
|
562,248
|
|
||||
Total revenues
|
174,537
|
|
|
226,021
|
|
|
590,490
|
|
|
782,473
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of products sold: (excluding depreciation and amortization)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Natural gas services *
|
50,658
|
|
|
80,709
|
|
|
184,781
|
|
|
307,039
|
|
||||
Sulfur services *
|
21,510
|
|
|
26,144
|
|
|
73,734
|
|
|
95,685
|
|
||||
Terminalling and storage *
|
23,540
|
|
|
28,237
|
|
|
70,306
|
|
|
87,977
|
|
||||
|
95,708
|
|
|
135,090
|
|
|
328,821
|
|
|
490,701
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating expenses *
|
39,488
|
|
|
45,310
|
|
|
121,542
|
|
|
138,399
|
|
||||
Selling, general and administrative *
|
8,049
|
|
|
8,666
|
|
|
24,364
|
|
|
26,507
|
|
||||
Loss on impairment of goodwill
|
—
|
|
|
—
|
|
|
4,145
|
|
|
—
|
|
||||
Depreciation and amortization
|
22,129
|
|
|
23,335
|
|
|
66,266
|
|
|
68,737
|
|
||||
Total costs and expenses
|
165,374
|
|
|
212,401
|
|
|
545,138
|
|
|
724,344
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other operating income (loss)
|
13
|
|
|
(1,586
|
)
|
|
(1,582
|
)
|
|
(1,763
|
)
|
||||
Operating income
|
9,176
|
|
|
12,034
|
|
|
43,770
|
|
|
56,366
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity in earnings of WTLPG
|
1,120
|
|
|
2,363
|
|
|
3,602
|
|
|
5,752
|
|
||||
Interest expense, net
|
(11,779
|
)
|
|
(11,994
|
)
|
|
(34,046
|
)
|
|
(32,465
|
)
|
||||
Gain on retirement of senior unsecured notes
|
—
|
|
|
728
|
|
|
—
|
|
|
728
|
|
||||
Other, net
|
730
|
|
|
399
|
|
|
866
|
|
|
757
|
|
||||
Total other expense
|
(9,929
|
)
|
|
(8,504
|
)
|
|
(29,578
|
)
|
|
(25,228
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss) before taxes
|
(753
|
)
|
|
3,530
|
|
|
14,192
|
|
|
31,138
|
|
||||
Income tax expense
|
(180
|
)
|
|
(200
|
)
|
|
(422
|
)
|
|
(814
|
)
|
||||
Income (loss) from continuing operations
|
(933
|
)
|
|
3,330
|
|
|
13,770
|
|
|
30,324
|
|
||||
Income from discontinued operations, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
1,215
|
|
||||
Net income (loss)
|
(933
|
)
|
|
3,330
|
|
|
13,770
|
|
|
31,539
|
|
||||
Less general partner's interest in net (income) loss
|
18
|
|
|
(3,959
|
)
|
|
(8,062
|
)
|
|
(12,310
|
)
|
||||
Less (income) loss allocable to unvested restricted units
|
3
|
|
|
(16
|
)
|
|
(36
|
)
|
|
(127
|
)
|
||||
Limited partners' interest in net income (loss)
|
$
|
(912
|
)
|
|
$
|
(645
|
)
|
|
$
|
5,672
|
|
|
$
|
19,102
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenues:*
|
|
|
|
|
|
|
|
||||||||
Terminalling and storage
|
$
|
20,649
|
|
|
$
|
15,091
|
|
|
$
|
62,197
|
|
|
$
|
58,626
|
|
Marine transportation
|
4,861
|
|
|
6,552
|
|
|
17,308
|
|
|
19,919
|
|
||||
Natural gas services
|
132
|
|
|
—
|
|
|
574
|
|
|
—
|
|
||||
Product Sales
|
723
|
|
|
1,731
|
|
|
2,391
|
|
|
5,079
|
|
||||
Costs and expenses:*
|
|
|
|
|
|
|
|
||||||||
Cost of products sold: (excluding depreciation and amortization)
|
|
|
|
|
|
|
|
||||||||
Natural gas services
|
2,946
|
|
|
6,470
|
|
|
10,829
|
|
|
20,198
|
|
||||
Sulfur services
|
3,678
|
|
|
3,387
|
|
|
11,300
|
|
|
10,629
|
|
||||
Terminalling and storage
|
3,766
|
|
|
3,227
|
|
|
11,232
|
|
|
14,261
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
17,810
|
|
|
19,290
|
|
|
53,255
|
|
|
58,605
|
|
||||
Selling, general and administrative
|
5,748
|
|
|
5,922
|
|
|
18,091
|
|
|
17,765
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Allocation of net income (loss) attributable to:
|
|
|
|
|
|
|
|
||||||||
Limited partner interest:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
(912
|
)
|
|
$
|
(645
|
)
|
|
$
|
5,672
|
|
|
$
|
18,366
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
736
|
|
||||
|
$
|
(912
|
)
|
|
$
|
(645
|
)
|
|
$
|
5,672
|
|
|
$
|
19,102
|
|
General partner interest:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
(18
|
)
|
|
$
|
3,959
|
|
|
$
|
8,062
|
|
|
$
|
11,836
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
474
|
|
||||
|
$
|
(18
|
)
|
|
$
|
3,959
|
|
|
$
|
8,062
|
|
|
$
|
12,310
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per unit attributable to limited partners:
|
|
|
|
|
|
|
|
||||||||
Basic:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
(0.03
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
0.16
|
|
|
$
|
0.52
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.02
|
|
||||
|
$
|
(0.03
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
0.16
|
|
|
$
|
0.54
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average limited partner units - basic
|
35,346
|
|
|
35,308
|
|
|
35,358
|
|
|
35,309
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Diluted:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
(0.03
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
0.16
|
|
|
$
|
0.52
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.02
|
|
||||
|
$
|
(0.03
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
0.16
|
|
|
$
|
0.54
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average limited partner units - diluted
|
35,346
|
|
|
35,308
|
|
|
35,381
|
|
|
35,369
|
|
|
Partners’ Capital
|
|
|
|||||||||||
|
Common Limited
|
|
General Partner Amount
|
|
|
|||||||||
|
Units
|
|
Amount
|
|
|
Total
|
||||||||
Balances - January 1, 2015
|
35,365,912
|
|
|
$
|
470,943
|
|
|
$
|
14,728
|
|
|
$
|
485,671
|
|
Net income
|
—
|
|
|
19,229
|
|
|
12,310
|
|
|
31,539
|
|
|||
Issuance of common units, net
|
—
|
|
|
(330
|
)
|
|
—
|
|
|
(330
|
)
|
|||
Issuance of restricted units
|
91,950
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Forfeiture of restricted units
|
(1,250
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
General partner contribution
|
—
|
|
|
—
|
|
|
55
|
|
|
55
|
|
|||
Cash distributions
|
—
|
|
|
(86,420
|
)
|
|
(13,526
|
)
|
|
(99,946
|
)
|
|||
Reimbursement of excess purchase price over carrying value of acquired assets
|
—
|
|
|
1,500
|
|
|
—
|
|
|
1,500
|
|
|||
Unit-based compensation
|
—
|
|
|
1,080
|
|
|
—
|
|
|
1,080
|
|
|||
Balances - September 30, 2015
|
35,456,612
|
|
|
$
|
406,002
|
|
|
$
|
13,567
|
|
|
$
|
419,569
|
|
|
|
|
|
|
|
|
|
|||||||
Balances - January 1, 2016
|
35,456,612
|
|
|
$
|
380,845
|
|
|
$
|
13,034
|
|
|
$
|
393,879
|
|
Net income
|
—
|
|
|
5,708
|
|
|
8,062
|
|
|
13,770
|
|
|||
Issuance of common units, net of issuance related costs
|
—
|
|
|
(28
|
)
|
|
—
|
|
|
(28
|
)
|
|||
Issuance of restricted units
|
13,800
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Forfeiture of restricted units
|
(500
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Cash distributions
|
—
|
|
|
(86,410
|
)
|
|
(13,680
|
)
|
|
(100,090
|
)
|
|||
Unit-based compensation
|
—
|
|
|
712
|
|
|
—
|
|
|
712
|
|
|||
Reimbursement of excess purchase price over carrying value of acquired assets
|
—
|
|
|
3,000
|
|
|
—
|
|
|
3,000
|
|
|||
Purchase of treasury units
|
(15,200
|
)
|
|
(330
|
)
|
|
—
|
|
|
(330
|
)
|
|||
Balances - September 30, 2016
|
35,454,712
|
|
|
$
|
303,497
|
|
|
$
|
7,416
|
|
|
$
|
310,913
|
|
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
13,770
|
|
|
$
|
31,539
|
|
Less: Income from discontinued operations, net of income taxes
|
—
|
|
|
(1,215
|
)
|
||
Net income from continuing operations
|
13,770
|
|
|
30,324
|
|
||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
66,266
|
|
|
68,737
|
|
||
Amortization and write-off of deferred debt issuance costs
|
2,965
|
|
|
4,142
|
|
||
Amortization of premium on notes payable
|
(230
|
)
|
|
(246
|
)
|
||
Loss on sale of property, plant and equipment
|
1,582
|
|
|
1,751
|
|
||
Loss on impairment of goodwill
|
4,145
|
|
|
—
|
|
||
Gain on retirement of senior unsecured notes
|
—
|
|
|
(728
|
)
|
||
Equity in earnings of unconsolidated entities
|
(3,602
|
)
|
|
(5,752
|
)
|
||
Derivative income
|
(1,867
|
)
|
|
(2,137
|
)
|
||
Net cash received for commodity derivatives
|
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
|
|
|
2,495
|
|
||
Unit-based compensation
|
712
|
|
|
1,080
|
|
||
Cash distributions from WTLPG
|
6,100
|
|
|
7,800
|
|
||
Change in current assets and liabilities, excluding effects of acquisitions and dispositions:
|
|
|
|
|
|
||
Accounts and other receivables
|
28,028
|
|
|
69,967
|
|
||
Product exchange receivables
|
891
|
|
|
909
|
|
||
Inventories
|
(31,606
|
)
|
|
(3,134
|
)
|
||
Due from affiliates
|
1,932
|
|
|
3,348
|
|
||
Other current assets
|
(4,693
|
)
|
|
354
|
|
||
Trade and other accounts payable
|
(15,782
|
)
|
|
(59,124
|
)
|
||
Product exchange payables
|
(2,544
|
)
|
|
6,360
|
|
||
Due to affiliates
|
(1,859
|
)
|
|
(1,935
|
)
|
||
Income taxes payable
|
(435
|
)
|
|
(386
|
)
|
||
Other accrued liabilities
|
(3,729
|
)
|
|
(8,490
|
)
|
||
Change in other non-current assets and liabilities
|
(765
|
)
|
|
(999
|
)
|
||
Net cash provided by continuing operating activities
|
61,735
|
|
|
114,336
|
|
||
Net cash used in discontinued operating activities
|
—
|
|
|
(1,352
|
)
|
||
Net cash provided by operating activities
|
61,735
|
|
|
112,984
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Payments for property, plant and equipment
|
(31,884
|
)
|
|
(40,123
|
)
|
||
Acquisition of intangible assets
|
(2,150
|
)
|
|
—
|
|
||
Payments for plant turnaround costs
|
(1,614
|
)
|
|
(1,754
|
)
|
||
Proceeds from sale of property, plant and equipment
|
2,174
|
|
|
1,985
|
|
||
Proceeds from involuntary conversion of property, plant and equipment
|
23,400
|
|
|
—
|
|
||
Net cash used in continuing investing activities
|
(10,074
|
)
|
|
(39,892
|
)
|
||
Net cash provided by discontinued investing activities
|
—
|
|
|
41,250
|
|
||
Net cash provided by (used in) investing activities
|
(10,074
|
)
|
|
1,358
|
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Payments of long-term debt
|
(219,700
|
)
|
|
(224,310
|
)
|
||
Proceeds from long-term debt
|
270,700
|
|
|
209,000
|
|
||
Proceeds from issuance of common units, net of issuance related costs
|
(28
|
)
|
|
(330
|
)
|
||
General partner contribution
|
—
|
|
|
55
|
|
||
Purchase of treasury units
|
(330
|
)
|
|
—
|
|
||
Payment of debt issuance costs
|
(5,234
|
)
|
|
(340
|
)
|
||
Reimbursement of excess purchase price over carrying value of acquired assets
|
3,000
|
|
|
1,500
|
|
||
Cash distributions paid
|
(100,090
|
)
|
|
(99,946
|
)
|
||
Net cash used in financing activities
|
(51,682
|
)
|
|
(114,371
|
)
|
||
Net decrease in cash
|
(21
|
)
|
|
(29
|
)
|
||
Cash at beginning of period
|
31
|
|
|
42
|
|
||
Cash at end of period
|
$
|
10
|
|
|
$
|
13
|
|
Non-cash additions to property, plant and equipment
|
$
|
1,068
|
|
|
$
|
4,389
|
|
(1)
|
General
|
(2)
|
New Accounting Pronouncements
|
(3)
|
Divestitures and discontinued operations
|
|
2016
|
||
Assets:
|
|
||
Other assets
|
$
|
4,333
|
|
Property, plant, and equipment
|
91,594
|
|
|
Accumulated depreciation
|
(25,091
|
)
|
|
Goodwill
|
2,361
|
|
|
Assets held for sale
|
$
|
73,197
|
|
|
|
||
Liabilities:
|
|
||
Current liabilities
|
$
|
23,400
|
|
Liabilities held for sale
|
$
|
23,400
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Total revenues from third parties
1
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
791
|
|
Total costs and expenses and other, net, excluding depreciation and amortization
|
—
|
|
|
—
|
|
|
—
|
|
|
1,038
|
|
||||
Depreciation and amortization
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other operating income
2
|
—
|
|
|
—
|
|
|
—
|
|
|
1,462
|
|
||||
Income from discontinued operations before income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
1,215
|
|
||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Income from discontinued operations, net of income taxes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,215
|
|
(4)
|
Inventories
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Natural gas liquids
|
$
|
65,107
|
|
|
$
|
20,959
|
|
Sulfur
|
6,959
|
|
|
13,812
|
|
||
Sulfur based products
|
12,541
|
|
|
19,400
|
|
||
Lubricants
|
19,918
|
|
|
18,675
|
|
||
Other
|
2,951
|
|
|
3,024
|
|
||
|
$
|
107,476
|
|
|
$
|
75,870
|
|
(5)
|
Investment in West Texas LPG Pipeline L.P.
|
|
As of September 30,
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||
|
Total
Assets
|
|
Members' Equity
|
|
Revenues
|
|
Net Income
|
|
Revenues
|
|
Net Income
|
||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
WTLPG
|
$
|
815,700
|
|
|
$
|
791,762
|
|
|
$
|
21,849
|
|
|
$
|
5,515
|
|
|
$
|
66,870
|
|
|
$
|
18,240
|
|
|
As of December 31,
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
WTLPG
|
$
|
819,342
|
|
|
$
|
804,023
|
|
|
$
|
26,094
|
|
|
$
|
11,815
|
|
|
$
|
70,010
|
|
|
$
|
28,760
|
|
(6)
|
Derivative Instruments and Hedging Activities
|
|
Fair Values of Derivative Instruments in the Consolidated Balance Sheets
|
|||||||||||||||
|
Derivative Assets
|
Derivative Liabilities
|
||||||||||||||
|
|
Fair Values
|
|
Fair Values
|
||||||||||||
|
Balance Sheet Location
|
September 30, 2016
|
|
December 31, 2015
|
Balance Sheet Location
|
September 30, 2016
|
|
December 31, 2015
|
||||||||
Derivatives not designated as hedging instruments:
|
Current:
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
Fair value of derivatives
|
$
|
89
|
|
|
$
|
675
|
|
Fair value of derivatives
|
$
|
209
|
|
|
$
|
—
|
|
Derivatives not designated as hedging instruments:
|
Non Current:
|
|
|
|
|
|
Non Current:
|
|
|
|
|
|||||
Interest rate contracts
|
Fair value of derivatives
|
—
|
|
|
—
|
|
Fair value of derivatives
|
—
|
|
|
206
|
|
||||
Total derivatives not designated as hedging instruments
|
|
$
|
89
|
|
|
$
|
675
|
|
|
$
|
209
|
|
|
$
|
206
|
|
|
Location of Gain (Loss)
Recognized in Income on
Derivatives
|
Amount of Gain (Loss) Recognized in
Income on Derivatives
|
||||||
|
|
2016
|
|
2015
|
||||
Derivatives not designated as hedging instruments:
|
|
|
||||||
Interest rate swaption contracts
|
Interest expense
|
$
|
—
|
|
|
$
|
750
|
|
Commodity contracts
|
Cost of products sold
|
742
|
|
|
(358
|
)
|
||
Total derivatives not designated as hedging instruments
|
$
|
742
|
|
|
$
|
392
|
|
|
Location of Gain (Loss)
Recognized in Income on
Derivatives
|
Amount of Gain (Loss) Recognized in
Income on Derivatives
|
||||||
|
|
2016
|
|
2015
|
||||
Derivatives not designated as hedging instruments:
|
|
|
||||||
Interest rate swaption contracts
|
Interest expense
|
$
|
630
|
|
|
$
|
2,495
|
|
Interest rate contracts
|
Interest expense
|
366
|
|
|
—
|
|
||
Commodity contracts
|
Cost of products sold
|
871
|
|
|
(358
|
)
|
||
Total derivatives not designated as hedging instruments
|
$
|
1,867
|
|
|
$
|
2,137
|
|
(7)
|
Fair Value Measurements
|
|
Level 2
|
||||||
|
September 30, 2016
|
|
December 31, 2015
|
||||
Commodity derivative contracts, net
|
$
|
(120
|
)
|
|
$
|
675
|
|
Interest rate derivative contracts
|
—
|
|
|
(206
|
)
|
•
|
Accounts and other receivables, trade and other accounts payable, accrued interest payable, other accrued liabilities, income taxes payable and due from/to affiliates: The carrying amounts approximate fair value due to the short maturity and highly liquid nature of these instruments, and as such these have been excluded from the table below. There is negligible credit risk associated with these instruments.
|
•
|
Note receivable and long-term debt including current portion: The carrying amount of the revolving credit facility approximates fair value due to the debt having a variable interest rate and is in Level 2. The Partnership has not had any indicators which represent a change in the market spread associated with its variable interest rate debt.
|
•
|
The estimated fair value of the senior unsecured notes is based on market prices of similar debt. The estimated fair value of the note receivable from Martin Energy Trading was determined by calculating the net present value of the payments over the life of the note. The note is considered Level 3 due to the lack of observable inputs for similar transactions between related parties.
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||||
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
||||||||
Note receivable - MET
|
$
|
15,000
|
|
|
$
|
15,803
|
|
|
$
|
15,000
|
|
|
$
|
15,830
|
|
2021 Senior unsecured notes
|
372,144
|
|
|
359,184
|
|
|
371,861
|
|
|
318,000
|
|
(8)
|
Supplemental Balance Sheet Information
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Customer contracts and relationships, net
|
$
|
40,386
|
|
|
$
|
50,452
|
|
Other intangible assets
|
2,417
|
|
|
1,818
|
|
||
Other
|
6,148
|
|
|
6,044
|
|
||
|
$
|
48,951
|
|
|
$
|
58,314
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Accrued interest
|
$
|
3,721
|
|
|
$
|
10,365
|
|
Property and other taxes payable
|
8,535
|
|
|
6,668
|
|
||
Accrued payroll
|
2,505
|
|
|
1,389
|
|
||
Other
|
43
|
|
|
111
|
|
||
|
$
|
14,804
|
|
|
$
|
18,533
|
|
(9)
|
Long-Term Debt
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
$664,444
3
Revolving credit facility at variable interest rate (3.53%
1
weighted average at September 30, 2016), due March 2020 secured by substantially all of the Partnership’s assets, including, without limitation, inventory, accounts receivable, vessels, equipment, fixed assets and the interests in the Partnership’s operating subsidiaries and equity method investees, net of unamortized debt issuance costs of $7,640 and $4,858, respectively
2
|
$
|
541,360
|
|
|
$
|
493,142
|
|
$400,000 Senior notes, 7.25% interest, net of unamortized debt issuance costs of $2,994 and $3,507, respectively, including unamortized premium of $1,338 and $1,568, respectively, issued $250,000 February 2013 and $150,000 April 2014, $26,200 repurchased during 2015, due February 2021, unsecured
2
|
372,144
|
|
|
371,861
|
|
||
Total long-term debt, net
|
$
|
913,504
|
|
|
$
|
865,003
|
|
(10)
|
Partners' Capital
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Continuing operations:
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Income (loss) from continuing operations
|
$
|
(933
|
)
|
|
$
|
3,330
|
|
|
$
|
13,770
|
|
|
$
|
30,324
|
|
Less general partner’s interest in net income:
|
|
|
|
|
|
|
|
||||||||
Distributions payable on behalf of IDRs
|
—
|
|
|
3,893
|
|
|
7,786
|
|
|
11,230
|
|
||||
Distributions payable on behalf of general partner interest
|
361
|
|
|
667
|
|
|
1,696
|
|
|
1,925
|
|
||||
General partner interest in undistributed earnings
|
(379
|
)
|
|
(601
|
)
|
|
(1,420
|
)
|
|
(1,319
|
)
|
||||
Less income (loss) allocable to unvested restricted units
|
(3
|
)
|
|
16
|
|
|
36
|
|
|
122
|
|
||||
Limited partners’ interest in income (loss) from continuing operations
|
$
|
(912
|
)
|
|
$
|
(645
|
)
|
|
$
|
5,672
|
|
|
$
|
18,366
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Discontinued operations:
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Income from discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,215
|
|
Less general partner’s interest in net income:
|
|
|
|
|
|
|
|
||||||||
Distributions payable on behalf of IDRs
|
—
|
|
|
—
|
|
|
—
|
|
|
450
|
|
||||
Distributions payable on behalf of general partner interest
|
—
|
|
|
—
|
|
|
—
|
|
|
77
|
|
||||
General partner interest in undistributed earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
(53
|
)
|
||||
Less income allocable to unvested restricted units
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Limited partners’ interest in income from discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
736
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Basic weighted average limited partner units outstanding
|
35,346,412
|
|
|
35,307,583
|
|
|
35,358,217
|
|
|
35,308,990
|
|
Dilutive effect of restricted units issued
|
—
|
|
|
—
|
|
|
22,850
|
|
|
59,976
|
|
Total weighted average limited partner diluted units outstanding
|
35,346,412
|
|
|
35,307,583
|
|
|
35,381,067
|
|
|
35,368,966
|
|
(11)
|
Related Party Transactions
|
•
|
providing terminalling and storage services for petroleum products and by-products including the refining, blending and packaging of finished lubricants;
|
•
|
the ownership and/or operation on the Partnership’s behalf of any asset or group of assets owned by it or its affiliates;
|
•
|
any business operated by Martin Resource Management, including the following:
|
◦
|
providing land transportation of various liquids;
|
◦
|
distributing fuel oil, sulfuric acid, marine fuel and other liquids;
|
◦
|
providing marine bunkering and other shore-based marine services in Alabama, Florida, Louisiana, Mississippi and Texas;
|
◦
|
operating a crude oil gathering business in Stephens, Arkansas;
|
◦
|
providing crude oil gathering, refining, and marketing services of base oils, asphalt, and distillate products in Smackover, Arkansas;
|
◦
|
providing crude oil marketing and transportation from the well head to the end market;
|
◦
|
operating an environmental consulting company;
|
◦
|
operating an engineering services company;
|
◦
|
supplying employees and services for the operation of the Partnership's business;
|
◦
|
operating a natural gas optimization business; and
|
◦
|
operating, solely for the Partnership's account, the asphalt facilities in Omaha, Nebraska, Port Neches, Texas and South Houston, Texas.
|
•
|
any business that Martin Resource Management acquires or constructs that has a fair market value of less than
$5,000
;
|
•
|
any business that Martin Resource Management acquires or constructs that has a fair market value of
$5,000
or more if the Partnership has been offered the opportunity to purchase the business for fair market value and the Partnership declines to do so with the concurrence of the conflicts committee of the board of directors of the general partner of the Partnership (the "Conflicts Committee"); and
|
•
|
any business that Martin Resource Management acquires or constructs where a portion of such business includes a restricted business and the fair market value of the restricted business is
$5,000
or more and represents less than
20%
of the aggregate value of the entire business to be acquired or constructed; provided that, following completion of the acquisition or construction, the Partnership will be provided the opportunity to purchase the restricted business.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Terminalling and storage
|
$
|
20,649
|
|
|
$
|
15,091
|
|
|
$
|
62,197
|
|
|
$
|
58,626
|
|
Marine transportation
|
4,861
|
|
|
6,552
|
|
|
17,308
|
|
|
19,919
|
|
||||
Natural gas services
|
132
|
|
|
—
|
|
|
574
|
|
|
—
|
|
||||
Product sales:
|
|
|
|
|
|
|
|
||||||||
Natural gas services
|
—
|
|
|
479
|
|
|
—
|
|
|
779
|
|
||||
Sulfur services
|
502
|
|
|
864
|
|
|
1,551
|
|
|
2,908
|
|
||||
Terminalling and storage
|
221
|
|
|
388
|
|
|
840
|
|
|
1,392
|
|
||||
|
723
|
|
|
1,731
|
|
|
2,391
|
|
|
5,079
|
|
||||
|
$
|
26,365
|
|
|
$
|
23,374
|
|
|
$
|
82,470
|
|
|
$
|
83,624
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Cost of products sold:
|
|
|
|
|
|
|
|
||||||||
Natural gas services
|
$
|
2,946
|
|
|
$
|
6,470
|
|
|
$
|
10,829
|
|
|
$
|
20,198
|
|
Sulfur services
|
3,678
|
|
|
3,387
|
|
|
11,300
|
|
|
10,629
|
|
||||
Terminalling and storage
|
3,766
|
|
|
3,227
|
|
|
11,232
|
|
|
14,261
|
|
||||
|
$
|
10,390
|
|
|
$
|
13,084
|
|
|
$
|
33,361
|
|
|
$
|
45,088
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Marine transportation
|
$
|
6,959
|
|
|
$
|
8,055
|
|
|
$
|
21,606
|
|
|
$
|
24,653
|
|
Natural gas services
|
2,329
|
|
|
2,218
|
|
|
6,955
|
|
|
6,373
|
|
||||
Sulfur services
|
1,510
|
|
|
1,649
|
|
|
4,315
|
|
|
5,348
|
|
||||
Terminalling and storage
|
7,012
|
|
|
7,368
|
|
|
20,379
|
|
|
22,231
|
|
||||
|
$
|
17,810
|
|
|
$
|
19,290
|
|
|
$
|
53,255
|
|
|
$
|
58,605
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Selling, general and administrative:
|
|
|
|
|
|
|
|
||||||||
Marine transportation
|
$
|
9
|
|
|
$
|
6
|
|
|
$
|
22
|
|
|
$
|
22
|
|
Natural gas services
|
1,173
|
|
|
1,263
|
|
|
4,265
|
|
|
3,664
|
|
||||
Sulfur services
|
678
|
|
|
661
|
|
|
2,089
|
|
|
2,099
|
|
||||
Terminalling and storage
|
630
|
|
|
572
|
|
|
1,937
|
|
|
1,721
|
|
||||
Indirect, including overhead allocation
|
3,258
|
|
|
3,420
|
|
|
9,778
|
|
|
10,259
|
|
||||
|
$
|
5,748
|
|
|
$
|
5,922
|
|
|
$
|
18,091
|
|
|
$
|
17,765
|
|
(12)
|
Income Taxes
|
(13)
|
Business Segments
|
Three Months Ended September 30, 2016
|
Operating Revenues
|
|
Intersegment Revenues Eliminations
|
|
Operating Revenues after Eliminations
|
|
Depreciation and Amortization
|
|
Operating Income (Loss) after Eliminations
|
|
Capital Expenditures and Plant Turnaround Costs
|
||||||||||||
Terminalling and storage
|
$
|
60,943
|
|
|
$
|
(1,344
|
)
|
|
$
|
59,599
|
|
|
$
|
10,828
|
|
|
$
|
5,748
|
|
|
$
|
2,929
|
|
Natural gas services
|
71,996
|
|
|
—
|
|
|
71,996
|
|
|
7,050
|
|
|
7,150
|
|
|
728
|
|
||||||
Sulfur services
|
29,096
|
|
|
—
|
|
|
29,096
|
|
|
1,997
|
|
|
(965
|
)
|
|
632
|
|
||||||
Marine transportation
|
14,920
|
|
|
(1,074
|
)
|
|
13,846
|
|
|
2,254
|
|
|
1,449
|
|
|
260
|
|
||||||
Indirect selling, general and administrative
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,206
|
)
|
|
—
|
|
||||||
Total
|
$
|
176,955
|
|
|
$
|
(2,418
|
)
|
|
$
|
174,537
|
|
|
$
|
22,129
|
|
|
$
|
9,176
|
|
|
$
|
4,549
|
|
Three Months Ended September 30, 2015
|
Operating Revenues
|
|
Intersegment Revenues Eliminations
|
|
Operating Revenues after Eliminations
|
|
Depreciation and Amortization
|
|
Operating Income (Loss) after Eliminations
|
|
Capital Expenditures and Plant Turnaround Costs
|
||||||||||||
Terminalling and storage
|
$
|
68,473
|
|
|
$
|
(1,566
|
)
|
|
$
|
66,907
|
|
|
$
|
9,624
|
|
|
$
|
7,786
|
|
|
$
|
7,928
|
|
Natural gas services
|
103,834
|
|
|
—
|
|
|
103,834
|
|
|
8,522
|
|
|
6,265
|
|
|
3,784
|
|
||||||
Sulfur services
|
36,303
|
|
|
—
|
|
|
36,303
|
|
|
2,129
|
|
|
2,908
|
|
|
289
|
|
||||||
Marine transportation
|
19,522
|
|
|
(545
|
)
|
|
18,977
|
|
|
3,060
|
|
|
23
|
|
|
717
|
|
||||||
Indirect selling, general and administrative
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,948
|
)
|
|
—
|
|
||||||
Total
|
$
|
228,132
|
|
|
$
|
(2,111
|
)
|
|
$
|
226,021
|
|
|
$
|
23,335
|
|
|
$
|
12,034
|
|
|
$
|
12,718
|
|
Nine Months Ended September 30, 2016
|
Operating Revenues
|
|
Intersegment Revenues Eliminations
|
|
Operating Revenues after Eliminations
|
|
Depreciation and Amortization
|
|
Operating Income (Loss) after Eliminations
|
|
Capital Expenditures and Plant Turnaround Costs
|
||||||||||||
Terminalling and storage
|
$
|
183,014
|
|
|
$
|
(4,100
|
)
|
|
$
|
178,914
|
|
|
$
|
30,904
|
|
|
$
|
19,773
|
|
|
$
|
18,059
|
|
Natural gas services
|
253,486
|
|
|
—
|
|
|
253,486
|
|
|
21,007
|
|
|
24,695
|
|
|
3,881
|
|
||||||
Sulfur services
|
113,559
|
|
|
—
|
|
|
113,559
|
|
|
5,978
|
|
|
17,506
|
|
|
4,425
|
|
||||||
Marine transportation
|
46,854
|
|
|
(2,323
|
)
|
|
44,531
|
|
|
8,377
|
|
|
(5,528
|
)
|
|
2,197
|
|
||||||
Indirect selling, general and administrative
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,676
|
)
|
|
—
|
|
||||||
Total
|
$
|
596,913
|
|
|
$
|
(6,423
|
)
|
|
$
|
590,490
|
|
|
$
|
66,266
|
|
|
$
|
43,770
|
|
|
$
|
28,562
|
|
Nine Months Ended September 30, 2015
|
Operating Revenues
|
|
Intersegment Revenues Eliminations
|
|
Operating Revenues after Eliminations
|
|
Depreciation and Amortization
|
|
Operating Income (Loss) after Eliminations
|
|
Capital Expenditures and Plant Turnaround Costs
|
||||||||||||
Terminalling and storage
|
$
|
207,794
|
|
|
$
|
(4,065
|
)
|
|
$
|
203,729
|
|
|
$
|
29,030
|
|
|
$
|
20,771
|
|
|
$
|
25,810
|
|
Natural gas services
|
380,974
|
|
|
—
|
|
|
380,974
|
|
|
25,297
|
|
|
24,412
|
|
|
17,893
|
|
||||||
Sulfur services
|
137,814
|
|
|
—
|
|
|
137,814
|
|
|
6,360
|
|
|
18,174
|
|
|
650
|
|
||||||
Marine transportation
|
62,354
|
|
|
(2,398
|
)
|
|
59,956
|
|
|
8,050
|
|
|
7,267
|
|
|
1,913
|
|
||||||
Indirect selling, general and administrative
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,258
|
)
|
|
—
|
|
||||||
Total
|
$
|
788,936
|
|
|
$
|
(6,463
|
)
|
|
$
|
782,473
|
|
|
$
|
68,737
|
|
|
$
|
56,366
|
|
|
$
|
46,266
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Total assets:
|
|
|
|
||||
Terminalling and storage
|
$
|
412,604
|
|
|
$
|
417,202
|
|
Natural gas services
|
687,579
|
|
|
694,333
|
|
||
Sulfur services
|
118,699
|
|
|
134,108
|
|
||
Marine transportation
|
121,462
|
|
|
134,830
|
|
||
Total assets
|
$
|
1,340,344
|
|
|
$
|
1,380,473
|
|
(14)
|
Unit Based Awards
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Employees
|
$
|
204
|
|
|
$
|
333
|
|
|
$
|
614
|
|
|
$
|
985
|
|
Non-employee directors
|
22
|
|
|
(3
|
)
|
|
98
|
|
|
95
|
|
||||
Total unit-based compensation expense
|
$
|
226
|
|
|
$
|
330
|
|
|
$
|
712
|
|
|
$
|
1,080
|
|
|
Number of Units
|
|
Weighted Average Grant-Date Fair Value Per Unit
|
||||
Non-vested, beginning of period
|
150,474
|
|
|
$
|
28.98
|
|
|
Granted
|
13,800
|
|
|
$
|
15.13
|
|
|
Vested
|
(55,474
|
)
|
|
$
|
30.57
|
|
|
Forfeited
|
(500
|
)
|
|
$
|
28.50
|
|
|
Non-Vested, end of period
|
108,300
|
|
|
$
|
27.03
|
|
|
|
|
|
|
||||
Aggregate intrinsic value, end of period
|
$
|
2,170
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Aggregate intrinsic value of units vested
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,183
|
|
|
$
|
110
|
|
Fair value of units vested
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,685
|
|
|
$
|
113
|
|
(15)
|
Condensed Consolidating Financial Information
|
(16)
|
Commitments and Contingencies
|
(17)
|
Impairments and other charges
|
(18)
|
Subsequent Events
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Terminalling and storage services for petroleum products and by-products including the refining of naphthenic crude oil and the blending and packaging of finished lubricants;
|
•
|
Natural gas liquids transportation and distribution services and natural gas storage;
|
•
|
Sulfur and sulfur-based products gathering, processing, marketing, manufacturing and distribution; and
|
•
|
Marine transportation services for petroleum products and by-products.
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ from Estimates and Assumptions
|
Allowance for Doubtful Accounts
|
||||
We evaluate our allowance for doubtful accounts on an ongoing basis and record adjustments when, in management's judgment, circumstances warrant. Reserves are recorded to reduce receivables to the amount ultimately expected to be collected.
|
|
We evaluate the collectability of our accounts receivable based on factors such as the customer's ability to pay, the age of the receivable and our historical collection experience. A deterioration in any of these factors could result in an increase in the allowance for doubtful accounts balance.
|
|
If actual collection results are not consistent with our judgments, we may experience an increase in uncollectible receivables. A 10% increase in our allowance for doubtful accounts would not significantly impact net income.
|
Depreciation
|
||||
Depreciation expense is computed using the straight-line method over the useful life of the assets.
|
|
Determination of depreciation expense requires judgment regarding estimated useful lives and salvage values of property, plant and equipment. As circumstances warrant, estimates are reviewed to determine if any changes in the underlying assumptions are needed.
|
|
The lives of our fixed assets range from 3 - 50 years. If the depreciable lives of our assets were decreased by 10%, we estimate that annual depreciation expense would increase approximately $7.6 million, resulting in a corresponding reduction in net income.
|
Impairment of Long-Lived Assets
|
||||
We periodically evaluate whether the carrying value of long-lived assets has been impaired when circumstances indicate the carrying value of the assets may not be recoverable. These evaluations are based on undiscounted cash flow projections over the remaining useful life of the asset. The carrying value is not recoverable if it exceeds the sum of the undiscounted cash flows. Any impairment loss is measured as the excess of the asset's carrying value over its fair value.
|
|
Our impairment analyses require management to use judgment in estimating future cash flows and useful lives, as well as assessing the probability of different outcomes.
|
|
No impairment of long-lived assets was recorded during the three or nine months ended September 30, 2016 or 2015.
|
Impairment of Goodwill
|
Goodwill is subject to a fair-value based impairment test on an annual basis, or more frequently if events or changes in circumstances indicate that the fair value of any of our reporting units is less than its carrying amount.
|
|
We determine fair value using accepted valuation techniques, including discounted cash flow, the guideline public company method and the guideline transaction method. These analyses require management to make assumptions and estimates regarding industry and economic factors, future operating results and discount rates. We conduct impairment testing using present economic conditions, as well as future expectations.
|
|
During the three months ended June 30, 2016, we determined that based on a continued decrease in the demand for utilization and transportation day rates forecasted in our Marine Transportation reporting unit, an impairment of goodwill may exist. Based on the results of our impairment analysis, we determined that a $4.1 million impairment loss of all goodwill in the Marine Transportation reporting unit was incurred during the three months ended June 30, 2016. See note 17 for more information. We are in the process of completing the most recent annual review as of August 31, 2016. Based on preliminary results of the evaluation, no impairment exists with the remaining goodwill.
|
Purchase Price Allocations
|
||||
We allocate the purchase price of an acquired business to its identifiable assets (including identifiable intangible assets) and liabilities based on their fair values at the date of acquisition. Any excess of purchase price in excess of amounts allocated to identifiable assets and liabilities is recorded as goodwill. As additional information becomes available, we may adjust the preliminary allocation for a period of up to one year.
|
|
The determination of fair values of acquired assets and liabilities requires a significant level of management judgment. Fair values are estimated using various methods as deemed appropriate. For significant transactions, third party assessments may be engaged to assist in the valuation process.
|
|
If subsequent factors indicate that estimates and assumptions used to allocate costs to acquired assets and liabilities differ from actual results, the allocation between goodwill, other intangible assets and fixed assets could significantly differ. Any such differences could impact future earnings through depreciation and amortization expense. Additionally, if estimated results supporting the valuation of goodwill or other intangible assets are not achieved, impairments could result.
|
Asset Retirement Obligations
|
||||
Asset retirement obligations ("AROs") associated with a contractual or regulatory remediation requirement are recorded at fair value in the period in which the obligation can be reasonably estimated and depreciated over the life of the related asset or contractual term. The liability is determined using a credit-adjusted risk-free interest rate and is accreted over time until the obligation is settled.
|
|
Determining the fair value of AROs requires management judgment to evaluate required remediation activities, estimate the cost of those activities and determine the appropriate interest rate.
|
|
If actual results differ from judgments and assumptions used in valuing an ARO, we may experience significant changes in ARO balances. The establishment of an ARO has no initial impact on earnings.
|
Environmental Liabilities
|
||||
We estimate environmental liabilities using both internal and external resources. Activities include feasibility studies and other evaluations management considers appropriate. Environmental liabilities are recorded in the period in which the obligation can be reasonably estimated.
|
|
Estimating environmental liabilities requires significant management judgment as well as possible use of third party specialists knowledgeable in such matters.
|
|
Environmental liabilities have not adversely affected our results of operations or financial condition in the past, and we do not anticipate that they will in the future.
|
•
|
providing land transportation of various liquids using a fleet of trucks and road vehicles and road trailers;
|
•
|
distributing fuel oil, ammonia, asphalt, sulfuric acid, marine fuel and other liquids;
|
•
|
providing marine bunkering and other shore-based marine services in Alabama, Louisiana, Florida, Mississippi and Texas;
|
•
|
operating a crude oil gathering business in Stephens, Arkansas;
|
•
|
providing crude oil gathering, refining, and marketing services of base oils, asphalt, and distillate products in Smackover, Arkansas;
|
•
|
providing crude oil marketing and transportation from the well head to the end market;
|
•
|
operating an environmental consulting company;
|
•
|
operating an engineering services company;
|
•
|
supplying employees and services for the operation of our business;
|
•
|
operating a natural gas optimization business;
|
•
|
operating, for its account and our account, the docks, roads, loading and unloading facilities and other common use facilities or access routes at our Stanolind terminal; and
|
•
|
operating, solely for our account, the asphalt facilities in Omaha, Nebraska, Port Neches, Texas and South Houston, Texas.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in thousands)
|
||||||||||||||
Net income (loss)
|
$
|
(933
|
)
|
|
$
|
3,330
|
|
|
$
|
13,770
|
|
|
$
|
31,539
|
|
Less: Income from discontinued operations, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,215
|
)
|
||||
Income (loss) from continuing operations
|
(933
|
)
|
|
3,330
|
|
|
13,770
|
|
|
30,324
|
|
||||
Adjustments:
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
11,779
|
|
|
11,994
|
|
|
34,046
|
|
|
32,465
|
|
||||
Income tax expense
|
180
|
|
|
200
|
|
|
422
|
|
|
814
|
|
||||
Depreciation and amortization
|
22,129
|
|
|
23,335
|
|
|
66,266
|
|
|
68,737
|
|
||||
EBITDA
|
33,155
|
|
|
38,859
|
|
|
114,504
|
|
|
132,340
|
|
||||
Adjustments:
|
|
|
|
|
|
|
|
||||||||
Equity in earnings of unconsolidated entities
|
(1,120
|
)
|
|
(2,363
|
)
|
|
(3,602
|
)
|
|
(5,752
|
)
|
||||
(Gain) loss on sale of property, plant and equipment
|
(13
|
)
|
|
1,586
|
|
|
1,582
|
|
|
1,751
|
|
||||
Loss on impairment of goodwill
|
—
|
|
|
—
|
|
|
4,145
|
|
|
—
|
|
||||
Unrealized mark-to-market on commodity derivatives
|
(742
|
)
|
|
358
|
|
|
795
|
|
|
358
|
|
||||
Gain on retirement of senior unsecured notes
|
—
|
|
|
(728
|
)
|
|
—
|
|
|
(728
|
)
|
||||
Distributions from unconsolidated entities
|
1,800
|
|
|
3,400
|
|
|
6,100
|
|
|
7,800
|
|
||||
Unit-based compensation
|
226
|
|
|
330
|
|
|
712
|
|
|
1,080
|
|
||||
Adjusted EBITDA
|
33,306
|
|
|
41,442
|
|
|
124,236
|
|
|
136,849
|
|
||||
Adjustments:
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(11,779
|
)
|
|
(11,994
|
)
|
|
(34,046
|
)
|
|
(32,465
|
)
|
||||
Income tax expense
|
(180
|
)
|
|
(200
|
)
|
|
(422
|
)
|
|
(814
|
)
|
||||
Amortization of debt premium
|
(77
|
)
|
|
(82
|
)
|
|
(230
|
)
|
|
(246
|
)
|
||||
Amortization of deferred debt issuance costs
|
718
|
|
|
2,400
|
|
|
2,965
|
|
|
4,142
|
|
||||
Non-cash mark-to-market on interest rate derivatives
|
—
|
|
|
—
|
|
|
(206
|
)
|
|
—
|
|
||||
Payments for plant turnaround costs
|
(430
|
)
|
|
—
|
|
|
(1,614
|
)
|
|
(1,754
|
)
|
||||
Maintenance capital expenditures
|
(1,609
|
)
|
|
(2,438
|
)
|
|
(12,818
|
)
|
|
(7,621
|
)
|
||||
Distributable Cash Flow
|
$
|
19,949
|
|
|
$
|
29,128
|
|
|
$
|
77,865
|
|
|
$
|
98,091
|
|
|
Operating Revenues
|
|
Intersegment Revenues Eliminations
|
|
Operating Revenues
after Eliminations
|
|
Operating Income (Loss)
|
|
Operating Income (Loss) Intersegment Eliminations
|
|
Operating
Income (Loss)
after
Eliminations
|
||||||||||||
Three Months Ended September 30, 2016
|
(in thousands)
|
||||||||||||||||||||||
Terminalling and storage
|
$
|
60,943
|
|
|
$
|
(1,344
|
)
|
|
$
|
59,599
|
|
|
$
|
6,513
|
|
|
$
|
(765
|
)
|
|
$
|
5,748
|
|
Natural gas services
|
71,996
|
|
|
—
|
|
|
71,996
|
|
|
6,455
|
|
|
695
|
|
|
7,150
|
|
||||||
Sulfur services
|
29,096
|
|
|
—
|
|
|
29,096
|
|
|
229
|
|
|
(1,194
|
)
|
|
(965
|
)
|
||||||
Marine transportation
|
14,920
|
|
|
(1,074
|
)
|
|
13,846
|
|
|
185
|
|
|
1,264
|
|
|
1,449
|
|
||||||
Indirect selling, general and administrative
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,206
|
)
|
|
—
|
|
|
(4,206
|
)
|
||||||
Total
|
$
|
176,955
|
|
|
$
|
(2,418
|
)
|
|
$
|
174,537
|
|
|
$
|
9,176
|
|
|
$
|
—
|
|
|
$
|
9,176
|
|
Three Months Ended September 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Terminalling and storage
|
$
|
68,473
|
|
|
$
|
(1,566
|
)
|
|
$
|
66,907
|
|
|
$
|
8,823
|
|
|
$
|
(1,037
|
)
|
|
$
|
7,786
|
|
Natural gas services
|
103,834
|
|
|
—
|
|
|
103,834
|
|
|
5,503
|
|
|
762
|
|
|
6,265
|
|
||||||
Sulfur services
|
36,303
|
|
|
—
|
|
|
36,303
|
|
|
3,573
|
|
|
(665
|
)
|
|
2,908
|
|
||||||
Marine transportation
|
19,522
|
|
|
(545
|
)
|
|
18,977
|
|
|
(917
|
)
|
|
940
|
|
|
23
|
|
||||||
Indirect selling, general and administrative
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,948
|
)
|
|
—
|
|
|
(4,948
|
)
|
||||||
Total
|
$
|
228,132
|
|
|
$
|
(2,111
|
)
|
|
$
|
226,021
|
|
|
$
|
12,034
|
|
|
$
|
—
|
|
|
$
|
12,034
|
|
|
Operating Revenues
|
|
Intersegment Revenues Eliminations
|
|
Operating Revenues
after Eliminations
|
|
Operating Income (Loss)
|
|
Operating Income (Loss) Intersegment Eliminations
|
|
Operating
Income (Loss)
after
Eliminations
|
||||||||||||
Nine Months Ended September 30, 2016
|
(in thousands)
|
||||||||||||||||||||||
Terminalling and storage
|
$
|
183,014
|
|
|
$
|
(4,100
|
)
|
|
$
|
178,914
|
|
|
$
|
22,239
|
|
|
$
|
(2,466
|
)
|
|
$
|
19,773
|
|
Natural gas services
|
253,486
|
|
|
—
|
|
|
253,486
|
|
|
22,543
|
|
|
2,152
|
|
|
24,695
|
|
||||||
Sulfur services
|
113,559
|
|
|
—
|
|
|
113,559
|
|
|
20,187
|
|
|
(2,681
|
)
|
|
17,506
|
|
||||||
Marine transportation
|
46,854
|
|
|
(2,323
|
)
|
|
44,531
|
|
|
(8,523
|
)
|
|
2,995
|
|
|
(5,528
|
)
|
||||||
Indirect selling, general and administrative
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,676
|
)
|
|
—
|
|
|
(12,676
|
)
|
||||||
Total
|
$
|
596,913
|
|
|
$
|
(6,423
|
)
|
|
$
|
590,490
|
|
|
$
|
43,770
|
|
|
$
|
—
|
|
|
$
|
43,770
|
|
|
Operating Revenues
|
|
Intersegment Revenues Eliminations
|
|
Operating Revenues
after Eliminations
|
|
Operating Income (Loss)
|
|
Operating Income (Loss) Intersegment Eliminations
|
|
Operating
Income (Loss)
after
Eliminations
|
||||||||||||
Nine Months Ended September 30, 2015
|
(in thousands)
|
||||||||||||||||||||||
Terminalling and storage
|
$
|
207,794
|
|
|
$
|
(4,065
|
)
|
|
$
|
203,729
|
|
|
$
|
22,736
|
|
|
$
|
(1,965
|
)
|
|
$
|
20,771
|
|
Natural gas services
|
380,974
|
|
|
—
|
|
|
380,974
|
|
|
22,739
|
|
|
1,673
|
|
|
24,412
|
|
||||||
Sulfur services
|
137,814
|
|
|
—
|
|
|
137,814
|
|
|
20,932
|
|
|
(2,758
|
)
|
|
18,174
|
|
||||||
Marine transportation
|
62,354
|
|
|
(2,398
|
)
|
|
59,956
|
|
|
4,217
|
|
|
3,050
|
|
|
7,267
|
|
||||||
Indirect selling, general and administrative
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,258
|
)
|
|
—
|
|
|
(14,258
|
)
|
||||||
Total
|
$
|
788,936
|
|
|
$
|
(6,463
|
)
|
|
$
|
782,473
|
|
|
$
|
56,366
|
|
|
$
|
—
|
|
|
$
|
56,366
|
|
|
Three Months Ended September 30,
|
|
Variance
|
|
Percent Change
|
|||||||||
|
2016
|
|
2015
|
|
|
|||||||||
|
(In thousands, except BBL per day)
|
|
|
|||||||||||
Revenues:
|
|
|
|
|
|
|
|
|||||||
Services
|
$
|
32,114
|
|
|
$
|
35,144
|
|
|
$
|
(3,030
|
)
|
|
(9
|
)%
|
Products
|
28,829
|
|
|
33,329
|
|
|
(4,500
|
)
|
|
(14
|
)%
|
|||
Total revenues
|
60,943
|
|
|
68,473
|
|
|
(7,530
|
)
|
|
(11
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Cost of products sold
|
24,118
|
|
|
28,765
|
|
|
(4,647
|
)
|
|
(16
|
)%
|
|||
Operating expenses
|
18,299
|
|
|
20,268
|
|
|
(1,969
|
)
|
|
(10
|
)%
|
|||
Selling, general and administrative expenses
|
1,439
|
|
|
995
|
|
|
444
|
|
|
45
|
%
|
|||
Depreciation and amortization
|
10,828
|
|
|
9,624
|
|
|
1,204
|
|
|
13
|
%
|
|||
|
6,259
|
|
|
8,821
|
|
|
(2,562
|
)
|
|
(29
|
)%
|
|||
Other operating income
|
254
|
|
|
2
|
|
|
252
|
|
|
12,600
|
%
|
|||
Operating income
|
$
|
6,513
|
|
|
$
|
8,823
|
|
|
$
|
(2,310
|
)
|
|
(26
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Lubricant sales volumes (gallons)
|
5,196
|
|
|
5,974
|
|
|
(778
|
)
|
|
(13
|
)%
|
|||
Shore-based throughput volumes (gallons)
|
25,313
|
|
|
36,383
|
|
|
(11,070
|
)
|
|
(30
|
)%
|
|||
Smackover refinery throughput volumes (BBL per day)
|
5,924
|
|
|
6,205
|
|
|
(281
|
)
|
|
(5
|
)%
|
|||
Corpus Christi crude terminal (BBL per day)
|
65,116
|
|
|
148,377
|
|
|
(83,261
|
)
|
|
(56
|
)%
|
|
Nine Months Ended September 30,
|
|
Variance
|
|
Percent Change
|
|||||||||
|
2016
|
|
2015
|
|
|
|||||||||
|
(In thousands, except BBL per day)
|
|
|
|||||||||||
Revenues:
|
|
|
|
|
|
|
|
|||||||
Services
|
$
|
97,663
|
|
|
$
|
104,893
|
|
|
$
|
(7,230
|
)
|
|
(7
|
)%
|
Products
|
85,351
|
|
|
102,901
|
|
|
(17,550
|
)
|
|
(17
|
)%
|
|||
Total revenues
|
183,014
|
|
|
207,794
|
|
|
(24,780
|
)
|
|
(12
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Cost of products sold
|
71,939
|
|
|
90,076
|
|
|
(18,137
|
)
|
|
(20
|
)%
|
|||
Operating expenses
|
54,740
|
|
|
62,947
|
|
|
(8,207
|
)
|
|
(13
|
)%
|
|||
Selling, general and administrative expenses
|
3,546
|
|
|
2,806
|
|
|
740
|
|
|
26
|
%
|
|||
Depreciation and amortization
|
30,904
|
|
|
29,030
|
|
|
1,874
|
|
|
6
|
%
|
|||
|
21,885
|
|
|
22,935
|
|
|
(1,050
|
)
|
|
(5
|
)%
|
|||
Other operating income (loss)
|
354
|
|
|
(199
|
)
|
|
553
|
|
|
(278
|
)%
|
|||
Operating income
|
$
|
22,239
|
|
|
$
|
22,736
|
|
|
$
|
(497
|
)
|
|
(2
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Lubricant sales volumes (gallons)
|
15,536
|
|
|
18,007
|
|
|
(2,471
|
)
|
|
(14
|
)%
|
|||
Shore-based throughput volumes (gallons)
|
77,059
|
|
|
122,743
|
|
|
(45,684
|
)
|
|
(37
|
)%
|
|||
Smackover refinery throughput volumes (BBL per day)
|
5,644
|
|
|
6,091
|
|
|
(447
|
)
|
|
(7
|
)%
|
|||
Corpus Christi crude terminal (BBL per day)
|
77,394
|
|
|
166,129
|
|
|
(88,735
|
)
|
|
(53
|
)%
|
|
Three Months Ended September 30,
|
|
Variance
|
|
Percent Change
|
|||||||||
|
2016
|
|
2015
|
|
|
|||||||||
|
(In thousands)
|
|
|
|||||||||||
Revenues:
|
|
|
|
|
|
|
|
|||||||
Services
|
$
|
14,618
|
|
|
$
|
17,120
|
|
|
$
|
(2,502
|
)
|
|
(15
|
)%
|
Products
|
57,378
|
|
|
86,714
|
|
|
(29,336
|
)
|
|
(34
|
)%
|
|||
Total revenues
|
71,996
|
|
|
103,834
|
|
|
(31,838
|
)
|
|
(31
|
)%
|
|||
|
|
|
|
|
|
|
|
|
||||||
Cost of products sold
|
51,353
|
|
|
81,472
|
|
|
(30,119
|
)
|
|
(37
|
)%
|
|||
Operating expenses
|
5,822
|
|
|
6,489
|
|
|
(667
|
)
|
|
(10
|
)%
|
|||
Selling, general and administrative expenses
|
1,309
|
|
|
1,848
|
|
|
(539
|
)
|
|
(29
|
)%
|
|||
Depreciation and amortization
|
7,050
|
|
|
8,522
|
|
|
(1,472
|
)
|
|
(17
|
)%
|
|||
|
6,462
|
|
|
5,503
|
|
|
959
|
|
|
17
|
%
|
|||
Other operating loss
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|
|
|
|||
Operating income
|
$
|
6,455
|
|
|
$
|
5,503
|
|
|
$
|
952
|
|
|
17
|
%
|
|
|
|
|
|
|
|
|
|
||||||
Distributions from unconsolidated entities
|
$
|
1,800
|
|
|
$
|
3,400
|
|
|
$
|
(1,600
|
)
|
|
(47
|
)%
|
|
|
|
|
|
|
|
|
|
||||||
NGL sales volumes (Bbls)
|
1,592
|
|
|
3,138
|
|
|
(1,546
|
)
|
|
(49
|
)%
|
|
Nine Months Ended September 30,
|
|
Variance
|
|
Percent Change
|
|||||||||
|
2016
|
|
2015
|
|
|
|||||||||
|
(In thousands)
|
|
|
|||||||||||
Revenues:
|
|
|
|
|
|
|
|
|||||||
Services
|
$
|
46,118
|
|
|
$
|
50,171
|
|
|
$
|
(4,053
|
)
|
|
(8
|
)%
|
Products
|
207,368
|
|
|
330,803
|
|
|
(123,435
|
)
|
|
(37
|
)%
|
|||
Total revenues
|
253,486
|
|
|
380,974
|
|
|
(127,488
|
)
|
|
(33
|
)%
|
|||
|
|
|
|
|
|
|
|
|
||||||
Cost of products sold
|
186,934
|
|
|
308,713
|
|
|
(121,779
|
)
|
|
(39
|
)%
|
|||
Operating expenses
|
17,479
|
|
|
17,905
|
|
|
(426
|
)
|
|
(2
|
)%
|
|||
Selling, general and administrative expenses
|
5,420
|
|
|
6,313
|
|
|
(893
|
)
|
|
(14
|
)%
|
|||
Depreciation and amortization
|
21,007
|
|
|
25,297
|
|
|
(4,290
|
)
|
|
(17
|
)%
|
|||
|
22,646
|
|
|
22,746
|
|
|
(100
|
)
|
|
—
|
%
|
|||
Other operating loss
|
(103
|
)
|
|
(7
|
)
|
|
(96
|
)
|
|
1,371
|
%
|
|||
Operating income
|
$
|
22,543
|
|
|
$
|
22,739
|
|
|
$
|
(196
|
)
|
|
(1
|
)%
|
|
|
|
|
|
|
|
|
|
||||||
Distributions from unconsolidated entities
|
$
|
6,100
|
|
|
$
|
7,800
|
|
|
$
|
(1,700
|
)
|
|
(22
|
)%
|
|
|
|
|
|
|
|
|
|
||||||
NGL sales volumes (Bbls)
|
6,520
|
|
|
10,227
|
|
|
(3,707
|
)
|
|
(36
|
)%
|
|
Three Months Ended September 30,
|
|
Variance
|
|
Percent Change
|
|||||||||
|
2016
|
|
2015
|
|
|
|||||||||
|
(In thousands)
|
|
|
|||||||||||
Revenues:
|
|
|
|
|
|
|
|
|||||||
Services
|
$
|
2,700
|
|
|
$
|
3,090
|
|
|
$
|
(390
|
)
|
|
(13
|
)%
|
Products
|
26,396
|
|
|
33,213
|
|
|
(6,817
|
)
|
|
(21
|
)%
|
|||
Total revenues
|
29,096
|
|
|
36,303
|
|
|
(7,207
|
)
|
|
(20
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Cost of products sold
|
21,601
|
|
|
26,235
|
|
|
(4,634
|
)
|
|
(18
|
)%
|
|||
Operating expenses
|
4,089
|
|
|
3,427
|
|
|
662
|
|
|
19
|
%
|
|||
Selling, general and administrative expenses
|
946
|
|
|
934
|
|
|
12
|
|
|
1
|
%
|
|||
Depreciation and amortization
|
1,997
|
|
|
2,129
|
|
|
(132
|
)
|
|
(6
|
)%
|
|||
|
463
|
|
|
3,578
|
|
|
(3,115
|
)
|
|
(87
|
)%
|
|||
Other operating loss
|
(234
|
)
|
|
(5
|
)
|
|
(229
|
)
|
|
4,580
|
%
|
|||
Operating income
|
$
|
229
|
|
|
$
|
3,573
|
|
|
$
|
(3,344
|
)
|
|
(94
|
)%
|
|
|
|
|
|
|
|
|
|
||||||
Sulfur (long tons)
|
241
|
|
|
203
|
|
|
38
|
|
|
19
|
%
|
|||
Fertilizer (long tons)
|
47
|
|
|
51
|
|
|
(4
|
)
|
|
(8
|
)%
|
|||
Total sulfur services volumes (long tons)
|
288
|
|
|
254
|
|
|
34
|
|
|
13
|
%
|
|
Nine Months Ended September 30,
|
|
Variance
|
|
Percent Change
|
|||||||||
|
2016
|
|
2015
|
|
|
|||||||||
|
(In thousands)
|
|
|
|||||||||||
Revenues:
|
|
|
|
|
|
|
|
|||||||
Services
|
$
|
8,100
|
|
|
$
|
9,270
|
|
|
$
|
(1,170
|
)
|
|
(13
|
)%
|
Products
|
105,459
|
|
|
128,544
|
|
|
(23,085
|
)
|
|
(18
|
)%
|
|||
Total revenues
|
113,559
|
|
|
137,814
|
|
|
(24,255
|
)
|
|
(18
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Cost of products sold
|
74,006
|
|
|
95,961
|
|
|
(21,955
|
)
|
|
(23
|
)%
|
|||
Operating expenses
|
10,288
|
|
|
11,697
|
|
|
(1,409
|
)
|
|
(12
|
)%
|
|||
Selling, general and administrative expenses
|
2,834
|
|
|
2,859
|
|
|
(25
|
)
|
|
(1
|
)%
|
|||
Depreciation and amortization
|
5,978
|
|
|
6,360
|
|
|
(382
|
)
|
|
(6
|
)%
|
|||
|
20,453
|
|
|
20,937
|
|
|
(484
|
)
|
|
(2
|
)%
|
|||
Other operating loss
|
(266
|
)
|
|
(5
|
)
|
|
(261
|
)
|
|
5,220
|
%
|
|||
Operating income
|
$
|
20,187
|
|
|
$
|
20,932
|
|
|
$
|
(745
|
)
|
|
(4
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Sulfur (long tons)
|
579
|
|
|
641
|
|
|
(62
|
)
|
|
(10
|
)%
|
|||
Fertilizer (long tons)
|
217
|
|
|
229
|
|
|
(12
|
)
|
|
(5
|
)%
|
|||
Total sulfur services volumes (long tons)
|
796
|
|
|
870
|
|
|
(74
|
)
|
|
(9
|
)%
|
|
Three Months Ended September 30,
|
|
Variance
|
|
Percent Change
|
||||||||
|
2016
|
|
2015
|
|
|
||||||||
|
(In thousands)
|
|
|
||||||||||
Revenues
|
$
|
14,920
|
|
|
$
|
19,522
|
|
|
$
|
(4,602
|
)
|
|
(24)%
|
Operating expenses
|
12,332
|
|
|
15,855
|
|
|
(3,523
|
)
|
|
(22)%
|
|||
Selling, general and administrative expenses
|
149
|
|
|
(59
|
)
|
|
208
|
|
|
(353)%
|
|||
Depreciation and amortization
|
2,254
|
|
|
3,060
|
|
|
(806
|
)
|
|
(26)%
|
|||
|
185
|
|
|
666
|
|
|
(481
|
)
|
|
(72)%
|
|||
Other operating loss
|
—
|
|
|
(1,583
|
)
|
|
1,583
|
|
|
(100)%
|
|||
Operating income (loss)
|
$
|
185
|
|
|
$
|
(917
|
)
|
|
$
|
1,102
|
|
|
(120)%
|
|
Nine Months Ended September 30,
|
|
Variance
|
|
Percent Change
|
||||||||
|
2016
|
|
2015
|
|
|
||||||||
|
(In thousands)
|
|
|
||||||||||
Revenues
|
$
|
46,854
|
|
|
$
|
62,354
|
|
|
$
|
(15,500
|
)
|
|
(25)%
|
Operating expenses
|
41,400
|
|
|
48,284
|
|
|
(6,884
|
)
|
|
(14)%
|
|||
Selling, general and administrative expenses
|
(112
|
)
|
|
251
|
|
|
(363
|
)
|
|
(145)%
|
|||
Loss on impairment of goodwill
|
4,145
|
|
|
—
|
|
|
4,145
|
|
|
|
|||
Depreciation and amortization
|
8,377
|
|
|
8,050
|
|
|
327
|
|
|
4%
|
|||
Operating income
|
$
|
(6,956
|
)
|
|
$
|
5,769
|
|
|
$
|
(12,725
|
)
|
|
(221)%
|
Other operating loss
|
(1,567
|
)
|
|
(1,552
|
)
|
|
(15
|
)
|
|
1%
|
|||
Operating income (loss)
|
$
|
(8,523
|
)
|
|
$
|
4,217
|
|
|
$
|
(12,740
|
)
|
|
(302)%
|
|
Three Months Ended September 30,
|
|
Variance
|
|
Percent Change
|
||||||||
|
2016
|
|
2015
|
|
|
||||||||
|
(In thousands)
|
|
|
||||||||||
Equity in earnings of WTLPG
|
$
|
1,120
|
|
|
$
|
2,363
|
|
|
$
|
(1,243
|
)
|
|
(53)%
|
|
Three Months Ended September 30,
|
|
Variance
|
|
Percent Change
|
||||||||
|
2016
|
|
2015
|
|
|
||||||||
|
(In thousands)
|
|
|
||||||||||
Distributions from WTLPG
|
$
|
1,800
|
|
|
$
|
3,400
|
|
|
$
|
(1,600
|
)
|
|
(47)%
|
|
Nine Months Ended September 30,
|
|
Variance
|
|
Percent Change
|
|||||||||
|
2016
|
|
2015
|
|
|
|||||||||
|
(In thousands)
|
|
|
|||||||||||
Equity in earnings of WTLPG
|
$
|
3,602
|
|
|
$
|
5,752
|
|
|
$
|
(2,150
|
)
|
|
(37
|
)%
|
|
Nine Months Ended September 30,
|
|
Variance
|
|
Percent Change
|
|||||||||
|
2016
|
|
2015
|
|
|
|||||||||
|
(In thousands)
|
|
|
|||||||||||
Distributions from WTLPG
|
$
|
6,100
|
|
|
$
|
7,800
|
|
|
$
|
(1,700
|
)
|
|
(22
|
)%
|
|
Three Months Ended September 30,
|
|
Variance
|
|
Percent Change
|
||||||||
|
2016
|
|
2015
|
|
|
||||||||
|
(In thousands)
|
|
|
||||||||||
Revolving loan facility
|
$
|
4,981
|
|
|
$
|
4,043
|
|
|
$
|
938
|
|
|
23%
|
7.25% Senior notes
|
6,775
|
|
|
7,253
|
|
|
(478
|
)
|
|
(7)%
|
|||
Amortization of deferred debt issuance costs
|
718
|
|
|
2,400
|
|
|
(1,682
|
)
|
|
(70)%
|
|||
Amortization of debt discount
|
(77
|
)
|
|
(82
|
)
|
|
5
|
|
|
(6)%
|
|||
Impact of interest rate derivative activity, including cash settlements
|
—
|
|
|
(750
|
)
|
|
750
|
|
|
(100)%
|
|||
Other
|
178
|
|
|
124
|
|
|
54
|
|
|
44%
|
|||
Capitalized interest
|
(229
|
)
|
|
(427
|
)
|
|
198
|
|
|
(46)%
|
|||
Interest income
|
(567
|
)
|
|
(567
|
)
|
|
—
|
|
|
—%
|
|||
Total interest expense, net
|
$
|
11,779
|
|
|
$
|
11,994
|
|
|
$
|
(215
|
)
|
|
(2)%
|
|
Nine Months Ended September 30,
|
|
Variance
|
|
Percent Change
|
||||||||
|
2016
|
|
2015
|
|
|
||||||||
|
(In thousands)
|
|
|
||||||||||
Revolving loan facility
|
$
|
13,707
|
|
|
$
|
12,173
|
|
|
$
|
1,534
|
|
|
13%
|
7.25% Senior notes
|
20,401
|
|
|
21,753
|
|
|
(1,352
|
)
|
|
(6)%
|
|||
Amortization of deferred debt issuance costs
|
2,965
|
|
|
4,142
|
|
|
(1,177
|
)
|
|
(28)%
|
|||
Amortization of debt premium
|
(230
|
)
|
|
(246
|
)
|
|
16
|
|
|
(7)%
|
|||
Impact of interest rate derivative activity, including cash settlements
|
(995
|
)
|
|
(2,495
|
)
|
|
1,500
|
|
|
(60)%
|
|||
Other
|
798
|
|
|
343
|
|
|
455
|
|
|
133%
|
|||
Capitalized interest
|
(911
|
)
|
|
(1,522
|
)
|
|
611
|
|
|
(40)%
|
|||
Interest income
|
(1,689
|
)
|
|
(1,683
|
)
|
|
(6
|
)
|
|
—%
|
|||
Total interest expense, net
|
$
|
34,046
|
|
|
$
|
32,465
|
|
|
$
|
1,581
|
|
|
5%
|
|
Three Months Ended September 30,
|
|
Variance
|
|
Percent Change
|
|
Nine Months Ended September 30,
|
|
Variance
|
|
Percent Change
|
||||||||||||||||
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
|
|
||||||||||||||||
|
(In thousands)
|
|
|
|
(In thousands)
|
|
|
||||||||||||||||||||
Indirect selling, general and administrative expenses
|
$
|
4,206
|
|
|
$
|
4,948
|
|
|
$
|
(742
|
)
|
|
(15)%
|
|
$
|
12,676
|
|
|
$
|
14,258
|
|
|
$
|
(1,582
|
)
|
|
(11)%
|
|
Three Months Ended September 30,
|
|
Variance
|
|
Percent Change
|
|
Nine Months Ended September 30,
|
|
Variance
|
|
Percent Change
|
||||||||||||||||
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
|
|
||||||||||||||||
|
(In thousands)
|
|
|
|
(In thousands)
|
|
|
||||||||||||||||||||
Conflicts Committee approved reimbursement amount
|
$
|
3,258
|
|
|
$
|
3,420
|
|
|
$
|
(162
|
)
|
|
(5)%
|
|
$
|
9,775
|
|
|
$
|
10,259
|
|
|
$
|
(484
|
)
|
|
(5)%
|
|
Nine Months Ended September 30,
|
|
Variance
|
|
Percent Change
|
||||||||
|
2016
|
|
2015
|
|
|
||||||||
|
(In thousands)
|
|
|
|
|
||||||||
Net cash provided by (used in):
|
|
|
|
|
|
|
|
||||||
Operating activities
|
$
|
61,735
|
|
|
$
|
112,984
|
|
|
$
|
(51,249
|
)
|
|
(45)%
|
Investing activities
|
(10,074
|
)
|
|
1,358
|
|
|
(11,432
|
)
|
|
(842)%
|
|||
Financing activities
|
(51,682
|
)
|
|
(114,371
|
)
|
|
62,689
|
|
|
(55)%
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
(21
|
)
|
|
$
|
(29
|
)
|
|
$
|
8
|
|
|
(28)%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In thousands)
|
||||||||||||||
Expansion capital expenditures
|
$
|
2,510
|
|
|
$
|
10,280
|
|
|
$
|
14,130
|
|
|
$
|
36,891
|
|
Maintenance capital expenditures
|
1,609
|
|
|
2,438
|
|
|
12,818
|
|
|
7,621
|
|
||||
Plant turnaround costs
|
430
|
|
|
—
|
|
|
1,614
|
|
|
1,754
|
|
||||
Total
|
$
|
4,549
|
|
|
$
|
12,718
|
|
|
$
|
28,562
|
|
|
$
|
46,266
|
|
|
Payments due by period
|
||||||||||||||||||
Type of Obligation
|
Total
Obligation
|
|
Less than
One Year
|
|
1-3
Years
|
|
3-5
Years
|
|
Due
Thereafter
|
||||||||||
Revolving credit facility
|
$
|
549,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
549,000
|
|
|
$
|
—
|
|
2021 Senior unsecured notes
|
373,800
|
|
|
—
|
|
|
—
|
|
|
373,800
|
|
|
—
|
|
|||||
Throughput commitment
|
29,954
|
|
|
6,191
|
|
|
12,874
|
|
|
10,889
|
|
|
—
|
|
|||||
Exclusive right of use commitment
|
5,000
|
|
|
5,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Operating leases
|
49,202
|
|
|
12,512
|
|
|
16,682
|
|
|
11,353
|
|
|
8,655
|
|
|||||
Interest payable on fixed long-term debt obligations
|
118,565
|
|
|
27,101
|
|
|
54,201
|
|
|
37,263
|
|
|
—
|
|
|||||
Total contractual cash obligations
|
$
|
1,125,521
|
|
|
$
|
50,804
|
|
|
$
|
83,757
|
|
|
$
|
982,305
|
|
|
$
|
8,655
|
|
Leverage Ratio
|
Base Rate Loans
|
|
Eurodollar
Rate
Loans
|
|
Letters of Credit
|
|||
Less than 3.00 to 1.00
|
1.00
|
%
|
|
2.00
|
%
|
|
2.00
|
%
|
Greater than or equal to 3.00 to 1.00 and less than 3.50 to 1.00
|
1.25
|
%
|
|
2.25
|
%
|
|
2.25
|
%
|
Greater than or equal to 3.50 to 1.00 and less than 4.00 to 1.00
|
1.50
|
%
|
|
2.50
|
%
|
|
2.50
|
%
|
Greater than or equal to 4.00 to 1.00 and less than 4.50 to 1.00
|
1.75
|
%
|
|
2.75
|
%
|
|
2.75
|
%
|
Greater than or equal to 4.50 to 1.00
|
2.00
|
%
|
|
3.00
|
%
|
|
3.00
|
%
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 6.
|
Exhibits
|
|
Martin Midstream Partners L.P.
|
|
||
|
|
|
|
|
|
By:
|
Martin Midstream GP LLC
|
|
|
|
|
Its General Partner
|
|
|
|
|
|
|
|
Date: 10/26/2016
|
By:
|
/s/ Robert D. Bondurant
|
|
|
|
|
Robert D. Bondurant
|
|
|
|
|
Executive Vice President, Treasurer, Chief Financial Officer, and Principal Accounting Officer
|
|
Exhibit
Number
|
|
Exhibit Name
|
|
|
|
10.1
|
|
Asset Purchase Agreement by and among Martin Operating Partnership L.P. and Nustar Logistics, L.P. dated October 14, 2016 (filed as Exhibit 10.1 to the Partnership's Current Report on Form 8-K (Reg. No. 000-50056), filed October 20, 2016, and incorporated herein by reference).
|
31.1*
|
|
Certifications of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2*
|
|
Certifications of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1*
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Pursuant to SEC Release 34-47551, this Exhibit is furnished to the SEC and shall not be deemed to be "filed."
|
32.2*
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Pursuant to SEC Release 34-47551, this Exhibit is furnished to the SEC and shall not be deemed to be "filed."
|
101
|
|
Interactive Data: the following financial information from Martin Midstream Partners L.P.’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2016, formatted in Extensible Business Reporting Language: (1) the Consolidated and Condensed Balance Sheets; (2) the Consolidated and Condensed Statements of Income; (3) the Consolidated and Condensed Statements of Cash Flows; (4) the Consolidated and Condensed Statements of Capital; and (5) the Notes to Consolidated and Condensed Financial Statements.
|
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