MARTIN MIDSTREAM PARTNERS L.P.
(Unaudited)
(Dollars in thousands, except per unit amounts)
|
|
Three Months Ended
March 31,
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
Terminalling and storage *
|
|
$ |
20,186 |
|
|
$ |
18,123 |
|
Marine transportation *
|
|
|
20,862 |
|
|
|
19,399 |
|
Sulfur services
|
|
|
2,926 |
|
|
|
2,850 |
|
Product sales: *
|
|
|
|
|
|
|
|
|
Natural gas services
|
|
|
201,013 |
|
|
|
167,211 |
|
Sulfur services
|
|
|
71,626 |
|
|
|
56,908 |
|
Terminalling and storage
|
|
|
21,673 |
|
|
|
18,545 |
|
|
|
|
294,312 |
|
|
|
242,664 |
|
Total revenues
|
|
|
338,286 |
|
|
|
283,036 |
|
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
Cost of products sold: (excluding depreciation and amortization)
|
|
|
|
|
|
|
|
|
Natural gas services *
|
|
|
193,180 |
|
|
|
158,204 |
|
Sulfur services *
|
|
|
54,960 |
|
|
|
44,442 |
|
Terminalling and storage
|
|
|
20,020 |
|
|
|
16,560 |
|
|
|
|
268,160 |
|
|
|
219,206 |
|
Expenses:
|
|
|
|
|
|
|
|
|
Operating expenses *
|
|
|
38,170 |
|
|
|
34,349 |
|
Selling, general and administrative *
|
|
|
5,689 |
|
|
|
5,028 |
|
Depreciation and amortization
|
|
|
11,095 |
|
|
|
10,942 |
|
Total costs and expenses
|
|
|
323,114 |
|
|
|
269,525 |
|
Other operating income
|
|
|
4 |
|
|
|
— |
|
Operating income
|
|
|
15,176 |
|
|
|
13,511 |
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
Equity in earnings of unconsolidated entities
|
|
|
2,847 |
|
|
|
2,376 |
|
Interest expense
|
|
|
(7,207 |
) |
|
|
(8,402 |
) |
Debt prepayment premium
|
|
|
(251 |
) |
|
|
— |
|
Other, net
|
|
|
61 |
|
|
|
60 |
|
Total other income (expense)
|
|
|
(4,550 |
) |
|
|
(5,966 |
) |
|
|
|
|
|
|
|
|
|
Net income before taxes
|
|
|
10,626 |
|
|
|
7,545 |
|
Income tax benefit (expense)
|
|
|
(97 |
) |
|
|
(223 |
) |
Net income
|
|
$ |
10,529 |
|
|
$ |
7,322 |
|
|
|
|
|
|
|
|
|
|
General partner’s interest in net income
|
|
$ |
1,450 |
|
|
$ |
1,229 |
|
Limited partners’ interest in net income
|
|
$ |
9,079 |
|
|
$ |
5,816 |
|
|
|
|
|
|
|
|
|
|
Net income per limited partner unit – basic and diluted
|
|
$ |
0.40 |
|
|
$ |
0.31 |
|
|
|
|
|
|
|
|
|
|
Weighted average limited partner units - basic
|
|
|
22,576,404 |
|
|
|
18,760,861 |
|
Weighted average limited partner units - diluted
|
|
|
22,579,908 |
|
|
|
18,761,611 |
|
See accompanying notes to consolidated and condensed financial statements.
*Related Party Transactions Included Above
Revenues:
|
|
|
|
|
|
|
Terminalling and storage
|
|
$ |
15,274 |
|
|
$ |
12,938 |
|
Marine transportation
|
|
|
4,857 |
|
|
|
6,565 |
|
Product Sales
|
|
|
4,290 |
|
|
|
5,399 |
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
Cost of products sold: (excluding depreciation and amortization)
|
|
|
|
|
|
|
|
|
Natural gas services
|
|
|
25,345 |
|
|
|
23,205 |
|
Sulfur services
|
|
|
4,431 |
|
|
|
4,152 |
|
Expenses:
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
14,091 |
|
|
|
12,042 |
|
Selling, general and administrative
|
|
|
3,678 |
|
|
|
3,031 |
|
MARTIN MIDSTREAM PARTNERS L.P.
(Unaudited)
(Dollars in thousands)
|
|
Three Months Ended
March 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$ |
10,529 |
|
|
$ |
7,322 |
|
Other comprehensive income adjustments:
|
|
|
|
|
|
|
|
|
Changes in fair values of commodity cash flow hedges
|
|
|
122 |
|
|
|
(908 |
) |
Commodity cash flow hedging gains (losses) reclassified to earnings
|
|
|
(186 |
) |
|
|
(434 |
) |
Interest rate cash flow hedging losses reclassified to earnings
|
|
|
— |
|
|
|
19 |
|
Other comprehensive income
|
|
|
(64 |
) |
|
|
(1,323 |
) |
Comprehensive income
|
|
$ |
10,465 |
|
|
$ |
5,999 |
|
See accompanying notes to consolidated and condensed financial statements.
MARTIN MIDSTREAM PARTNERS L.P.
(Unaudited)
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
Partner
|
|
|
Accumulated Other Comprehensive
Income
|
|
|
|
|
|
|
Units
|
|
|
Amount
|
|
|
Units
|
|
|
Amount
|
|
|
Amount
|
|
|
(Loss)
|
|
|
Total
|
|
Balances – January 1, 2011
|
|
|
17,707,832 |
|
|
$ |
250,785 |
|
|
|
889,444 |
|
|
$ |
17,721 |
|
|
$ |
4,881 |
|
|
$ |
1,419 |
|
|
$ |
274,806 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
— |
|
|
|
6,093 |
|
|
|
— |
|
|
|
— |
|
|
|
1,229 |
|
|
|
— |
|
|
|
7,322 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recognition of beneficial conversion feature
|
|
|
— |
|
|
|
(277 |
) |
|
|
— |
|
|
|
277 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Follow-on public offering
|
|
|
1,874,500 |
|
|
|
70,330 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
70,330 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General partner contribution
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,505 |
|
|
|
— |
|
|
|
1,505 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash distributions
|
|
|
— |
|
|
|
(13,458 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1,416 |
) |
|
|
— |
|
|
|
(14,874 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excess purchase price over carrying value of acquired assets
|
|
|
— |
|
|
|
(19,685 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(19,685 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unit-based compensation
|
|
|
9,100 |
|
|
|
36 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of treasury units
|
|
|
( 9,100 |
) |
|
|
(347 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(347 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment in fair value of derivatives
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,323 |
) |
|
|
(1,323 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances – March 31, 2011
|
|
|
19,582,332 |
|
|
$ |
293,477 |
|
|
|
889,444 |
|
|
$ |
17,998 |
|
|
$ |
6,199 |
|
|
$ |
96 |
|
|
$ |
317,770 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances – January 1, 2012
|
|
|
20,471,776 |
|
|
$ |
279,562 |
|
|
|
— |
|
|
$ |
— |
|
|
$ |
5,428 |
|
|
$ |
626 |
|
|
$ |
285,616 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
— |
|
|
|
9,079 |
|
|
|
— |
|
|
|
|
|
|
|
1,450 |
|
|
|
— |
|
|
|
10,529 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Follow-on public offering
|
|
|
2,645,000 |
|
|
|
91,377 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
91,377 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General partner contribution
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,951 |
|
|
|
— |
|
|
|
1,951 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash distributions
|
|
|
— |
|
|
|
(17,626 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1,818 |
) |
|
|
— |
|
|
|
(19,444 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unit-based compensation
|
|
|
|
|
|
|
56 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
56 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment in fair value of derivatives
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(64 |
) |
|
|
(64 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances – March 31, 2012
|
|
|
23,116,776 |
|
|
$ |
362,448 |
|
|
|
— |
|
|
$ |
— |
|
|
$ |
7,011 |
|
|
$ |
562 |
|
|
$ |
370,021 |
|
See accompanying notes to consolidated and condensed financial statements.
MARTIN MIDSTREAM PARTNERS L.P.
(Unaudited)
(Dollars in thousands)
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
Net income
|
|
$ |
10,529 |
|
|
$ |
7,322 |
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
11,095 |
|
|
|
10,942 |
|
Amortization of deferred debt issuance costs
|
|
|
690 |
|
|
|
1,140 |
|
Amortization of debt discount
|
|
|
87 |
|
|
|
88 |
|
Deferred taxes
|
|
|
(170 |
) |
|
|
(3 |
) |
Gain on sale of property, plant and equipment
|
|
|
(4 |
) |
|
|
— |
|
Equity in earnings of unconsolidated entities
|
|
|
(2,847 |
) |
|
|
(2,376 |
) |
Distributions in-kind from equity investments
|
|
|
3,090 |
|
|
|
3,948 |
|
Non-cash mark-to-market on derivatives
|
|
|
10 |
|
|
|
456 |
|
Other
|
|
|
56 |
|
|
|
36 |
|
Change in current assets and liabilities, excluding effects of acquisitions and dispositions:
|
|
|
|
|
|
|
|
|
Accounts and other receivables
|
|
|
14,324 |
|
|
|
577 |
|
Product exchange receivables
|
|
|
8,433 |
|
|
|
3,845 |
|
Inventories
|
|
|
(3,324 |
) |
|
|
2,320 |
|
Due from affiliates
|
|
|
(3,955 |
) |
|
|
(2,792 |
) |
Other current assets
|
|
|
(23 |
) |
|
|
(461 |
) |
Trade and other accounts payable
|
|
|
(29,863 |
) |
|
|
(2,333 |
) |
Product exchange payables
|
|
|
(6,730 |
) |
|
|
(2,649 |
) |
Due to affiliates
|
|
|
(4,318 |
) |
|
|
4,314 |
|
Income taxes payable
|
|
|
263 |
|
|
|
226 |
|
Other accrued liabilities
|
|
|
1,109 |
|
|
|
3,299 |
|
Change in other non-current assets and liabilities
|
|
|
53 |
|
|
|
155 |
|
Net cash provided by (used in) operating activities
|
|
|
(1,495 |
) |
|
|
28,054 |
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Payments for property, plant and equipment
|
|
|
(30,082 |
) |
|
|
(14,875 |
) |
Acquisitions
|
|
|
— |
|
|
|
(16,815 |
) |
Payments for plant turnaround costs
|
|
|
(305 |
) |
|
|
(1,995 |
) |
Proceeds from sale of property, plant and equipment
|
|
|
95 |
|
|
|
— |
|
Return of investments from unconsolidated entities
|
|
|
1,232 |
|
|
|
60 |
|
Distributions from (contributions to) unconsolidated entities for operations
|
|
|
(8,406 |
) |
|
|
(3,651 |
) |
Net cash used in investing activities
|
|
|
(37,466 |
) |
|
|
(37,276 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Payments of long-term debt
|
|
|
(146,000 |
) |
|
|
(101,500 |
) |
Payments of notes payable and capital lease obligations
|
|
|
(6,407 |
) |
|
|
(268 |
) |
Proceeds from long-term debt
|
|
|
126,000 |
|
|
|
73,500 |
|
Net proceeds from follow on offering
|
|
|
91,377 |
|
|
|
70,330 |
|
Treasury units purchased
|
|
|
— |
|
|
|
(347 |
) |
General partner contribution
|
|
|
1,951 |
|
|
|
1,505 |
|
Excess purchase price over carrying value of acquired assets
|
|
|
— |
|
|
|
(19,685 |
) |
Cash distributions paid
|
|
|
(19,444 |
) |
|
|
(14,874 |
) |
Net cash provided by financing activities
|
|
|
47,477 |
|
|
|
8,661 |
|
Net increase (decrease) in cash
|
|
|
8,516 |
|
|
|
(561 |
) |
Cash at beginning of period
|
|
|
266 |
|
|
|
11,380 |
|
Cash at end of period
|
|
$ |
8,782 |
|
|
$ |
10,819 |
|
See accompanying notes to consolidated and condensed financial statements.
MARTIN MIDSTREAM PARTNERS L.P.
(Dollars in thousands, except where otherwise indicated)
March 31, 2012
(Unaudited)
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. Its four primary business lines include: terminalling and storage services for petroleum products and by-products, natural gas services, sulfur and sulfur-based products processing, manufacturing, marketing and distribution, and marine transportation services for petroleum products and by-products.
The Partnership’s unaudited consolidated and condensed financial statements have been prepared in accordance with the requirements of Form 10-Q and United States generally accepted accounting principles for interim financial reporting. Accordingly, these financial statements have been condensed and do not include all of the information and footnotes required by generally accepted accounting principles for annual audited financial statements of the type contained in the Partnership’s annual reports on Form 10-K. In the opinion of the management of the Partnership’s general partner, all adjustments and elimination of significant intercompany balances necessary for a fair presentation of the Partnership’s results of operations, financial position and cash flows for the periods shown have been made. All such adjustments are of a normal recurring nature. Results for such interim periods are not necessarily indicative of the results of operations for the full year. These financial statements should be read in conjunction with the Partnership’s audited consolidated financial statements and notes thereto included in the Partnership’s annual report on Form 10-K for the year ended December 31, 2011, filed with the Securities and Exchange Commission (the “SEC”) on March 5, 2012.
Management has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with accounting principles generally accepted in the United States. Actual results could differ from those estimates.
In February 2011, the Partnership issued 9,100 restricted common units to certain Martin Resource Management employees under its long-term incentive plan from 9,100 treasury units purchased by the Partnership in the open market for $347. These units vest in 25% increments beginning in February 2012 and will be fully vested in February 2015.
The cost resulting from share-based payment transactions was $56 and $36 for the three months ended March 31, 2012 and 2011, respectively.
|
(c)
|
Incentive Distribution Rights
|
The Partnership’s general partner, Martin Midstream GP LLC, holds a 2% general partner interest and certain incentive distribution rights (“IDRs”) in the Partnership. IDRs are a separate class of non-voting limited partner interest that may be transferred or sold by the general partner under the terms of the partnership agreement of the Partnership (the “Partnership Agreement”), and represent the right to receive an increasing percentage of cash distributions after the minimum quarterly distribution and any cumulative arrearages on common units once certain target distribution levels have been achieved. The Partnership is required to distribute all of its available cash from operating surplus, as defined in the Partnership Agreement.
The target distribution levels entitle the general partner to receive 2% of quarterly cash distributions up to $0.55 per unit, 15% of quarterly cash distributions in excess of $0.55 per unit until all unitholders have received $0.625 per unit, 25% of quarterly cash distributions in excess of $0.625 per unit until all unitholders have received $0.75 per unit and 50% of quarterly cash distributions in excess of $0.75 per unit.
For the three months ended March 31, 2012 and 2011 the general partner received $ 1,265 and $1,105, respectively, in incentive distributions.
MARTIN MIDSTREAM PARTNERS L.P.
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
March 31, 2012
(Unaudited)
The Partnership follows the provisions of ASC 260-10 related to earnings per share, which addresses the application of the two-class method in determining income per unit for master limited partnerships having multiple classes of securities that may participate in partnership distributions accounted for as equity distributions. To the extent the Partnership Agreement does not explicitly limit distributions to the general partner, any earnings in excess of distributions are to be allocated to the general partner and limited partners utilizing the distribution formula for available cash specified in the Partnership Agreement. When current period distributions are in excess of earnings, the excess distributions for the period are to be allocated to the general partner and limited partners based on their respective sharing of losses specified in the Partnership Agreement.
The provisions of ASC 260-10 did not impact the Partnership’s computation of earnings per limited partner unit as cash distributions exceeded earnings for the three months ended March 31, 2012 and 2011, respectively, and the IDRs do not share in losses under the Partnership Agreement. In the event the Partnership’s earnings exceed cash distributions, ASC 260-10 will have an impact on the computation of the Partnership’s earnings per limited partner unit. For the three months ended March 31, 2012 and 2011, the general partner’s interest in net income, including the IDRs, represents distributions declared after period-end on behalf of the general partner interest and IDRs less the allocated excess of distributions over earnings for the periods.
For purposes of computing diluted net income per unit, the Partnership uses the more dilutive of the two-class and if-converted methods. Under the if-converted method, the beneficial conversion feature is added back to net income available to common limited partners, the weighted-average number of subordinated units outstanding for the period is added to the weighted-average number of common units outstanding for purposes of computing basic net income per unit and the resulting amount is compared to the diluted net income per unit computed using the two-class method.
The following table reconciles net income to limited partners’ interest in net income:
|
|
Three Months Ended
March 31,
|
|
|
|
|
|
|
|
|
Net income
|
|
$ |
10,529 |
|
|
$ |
7,322 |
|
Less general partner’s interest in net income:
|
|
|
|
|
|
|
|
|
Distributions payable on behalf of IDRs
|
|
|
1,265 |
|
|
|
1,105 |
|
Distributions payable on behalf of general partner interest
|
|
|
344 |
|
|
|
311 |
|
Distributions payable to the general partner interest in excess of earnings allocable to the general partner interest
|
|
|
(159 |
) |
|
|
(187 |
) |
Less beneficial conversion feature
|
|
|
— |
|
|
|
277 |
|
Limited partners’ interest in net income
|
|
$ |
9,079 |
|
|
$ |
5,816 |
|
The weighted average units outstanding for basic net income per unit was 22,576,404 and 18,760,861 for the three months ended March 31, 2012 and 2011, respectively. For diluted net income per unit, the weighted average units outstanding were increased by 3,504 and 750 for the three months ended March 31, 2012 and 2011, respectively, due to the dilutive effect of restricted units granted under the Partnership’s long-term incentive plan.
With respect to the Partnership’s taxable subsidiary, Woodlawn Pipeline Co., Inc. (“Woodlawn”), income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
MARTIN MIDSTREAM PARTNERS L.P.
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
March 31, 2012
(Unaudited)
(2)
|
New Accounting Pronouncements
|
In September 2011, the Financial Accounting Standards Board (“FASB”) amended the provisions of ASC 350 related to testing goodwill for impairment. This update simplifies the goodwill impairment assessment by allowing a company to first review qualitative factors to determine the likelihood of whether the fair value of a reporting unit is less than its carrying amount before applying the two-step goodwill impairment test. If it is determined that it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, the company would not be required to perform the two-step goodwill impairment test for that reporting unit. This update is effective for interim and annual goodwill impairment tests performed for fiscal years beginning after December 15, 2011. This amended guidance was adopted by the Partnership effective January 1, 2012.
In June 2011, the FASB amended the provisions of ASC 220 related to other comprehensive income. This newly issued guidance: (1) eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity; (2) requires the consecutive presentation of the statement of net income and other comprehensive income; and (3) requires an entity to present reclassification adjustments on the face of the financial statements from other comprehensive income to net income. The amendments in this guidance do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income nor do the amendments affect how earnings per share is calculated or presented. This guidance is required to be applied retrospectively and is effective for fiscal years and interim periods within those years beginning after December 15, 2011. This amended guidance was adopted by the Partnership effective January 1, 2012. As this new guidance only requires enhanced disclosure, adoption did not impact the Partnership’s financial position or results of operations.
Redbird Gas Storage
On May 31, 2011, the Partnership acquired all of the Class B equity interests in Redbird for approximately $59,319. This amount was recorded as an investment in an unconsolidated entity. Redbird, a subsidiary of Martin Resource Management, is a natural gas storage joint venture formed to invest in Cardinal Gas Storage Partners, LLC (“Cardinal”). Cardinal is a joint venture between Redbird and Energy Capital Partners that is focused on the development, construction, operation and management of natural gas storage facilities across North America. Redbird owns an unconsolidated 40.23% interest in Cardinal. Concurrent with the closing of this transaction, Cardinal acquired all of the outstanding equity interests in Monroe Gas Storage Company, LLC (“Monroe”) as well as an option on development rights to an adjacent depleted reservoir facility. This acquisition was funded by borrowings under the Partnership’s revolving credit facility. In addition to owning all of the Class B equity interests of Redbird, the Partnership also owns 4.46% of the Class A equity interests of Redbird at March 31, 2012.
Terminalling Facilities
On January 31, 2011, the Partnership acquired 13 shore-based marine terminalling facilities, one specialty terminalling facility and certain terminalling related assets from Martin Resource Management for $36,500. These assets are located across the Louisiana Gulf Coast. This acquisition was funded by borrowings under the Partnership’s revolving credit facility.
These terminalling assets were acquired by Martin Resource Management in its acquisition of L&L Holdings LLC (“L&L”) on January 31, 2011. During the second quarter of 2011, Martin Resource Management finalized the purchase price allocation for the acquisition of L&L, including the final determination of the fair value of the terminalling assets acquired by the Partnership. The Partnership recorded an adjustment in the amount of $19,685 to reduce property, plant and equipment and partners’ capital for the difference between the purchase price and the fair value of the terminalling assets acquired based on Martin Resource Management’s final purchase price allocation.
Components of inventories at March 31, 2012 and December 31, 2011, were as follows:
MARTIN MIDSTREAM PARTNERS L.P.
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
March 31, 2012
(Unaudited)
|
|
|
|
|
|
|
Natural gas liquids
|
|
$ |
29,648 |
|
|
$ |
25,664 |
|
Sulfur
|
|
|
25,331 |
|
|
|
24,335 |
|
Sulfur Based Products
|
|
|
12,458 |
|
|
|
14,857 |
|
Lubricants
|
|
|
11,711 |
|
|
|
11,012 |
|
Other
|
|
|
2,339 |
|
|
|
2,295 |
|
|
|
$ |
81,487 |
|
|
$ |
78,163 |
|
(5)
|
Investments in Unconsolidated Entities and Joint Ventures
|
Prism Gas owns an unconsolidated 50% interest in Waskom, the Matagorda Offshore Gathering System (“Matagorda”) and Panther Interstate Pipeline Energy LLC (“PIPE”). As a result, these assets are accounted for by the equity method.
In accounting for the acquisition of the interests in Waskom, Matagorda and PIPE, the carrying amount of these investments exceeded the underlying net assets by approximately $46,176. The difference was attributable to property and equipment of $11,872 and equity-method goodwill of $34,304. The excess investment relating to property and equipment is being amortized over an average life of 20 years, which approximates the useful life of the underlying assets. Such amortization amounted to $148 and $148 for the three months ended March 31, 2012 and 2011, respectively, and has been recorded as a reduction of equity in earnings of unconsolidated entities. The remaining unamortized excess investment relating to property and equipment was $8,161 and, $8,309 at March 31, 2012 and December 31, 2011, respectively. The equity-method goodwill is not amortized; however, it is analyzed for impairment annually or when changes in circumstance indicate that a potential impairment exists. No impairment was recognized for the three months ended March 31, 2012 or 2011.
As a partner in Waskom, the Partnership receives distributions in kind of natural gas liquids (“NGLs”) that are retained according to Waskom’s contracts with certain producers. The NGLs are valued at prevailing market prices. In addition, cash distributions are received and cash contributions are made to fund operating and capital requirements of Waskom.
The Partnership and Martin Resource Management formed Redbird, a natural gas storage joint venture formed to invest in Cardinal. The Partnership owns 4.46% of the Class A equity interests and all the Class B equity interests in Redbird. Redbird owns an unconsolidated 40.23% interest in Cardinal. Redbird utilized the investments by the Partnership to invest in Cardinal to fund projects for natural gas storage facilities.
Activity related to these investment accounts for the three months ended March 31, 2012 and 2011 is as follows:
|
|
Waskom
|
|
|
PIPE
|
|
|
Matagorda
|
|
|
Redbird
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in unconsolidated entities, December 31, 2011
|
|
$ |
102,896 |
|
|
$ |
1,291 |
|
|
$ |
3,362 |
|
|
$ |
62,948 |
|
|
$ |
170,497 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions in kind
|
|
|
(3,090 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,090 |
) |
Contributions to unconsolidated entities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributions to unconsolidated entities for operations
|
|
|
749 |
|
|
|
— |
|
|
|
— |
|
|
|
7,657 |
|
|
|
8,406 |
|
Return of investments
|
|
|
— |
|
|
|
— |
|
|
|
(160 |
) |
|
|
(1,072 |
) |
|
|
(1,232 |
) |
Equity in earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings (losses) from operations
|
|
|
2,462 |
|
|
|
(44 |
) |
|
|
195 |
|
|
|
382 |
|
|
|
2,995 |
|
Amortization of excess investment
|
|
|
(137 |
) |
|
|
(4 |
) |
|
|
(7 |
) |
|
|
— |
|
|
|
(148 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in unconsolidated entities, March 31, 2012
|
|
$ |
102,880 |
|
|
$ |
1,243 |
|
|
$ |
3,390 |
|
|
$ |
69,915 |
|
|
$ |
177,428 |
|
|
|
Waskom
|
|
|
PIPE
|
|
|
Matagorda
|
|
|
Redbird
|
|
|
Total
|
|
Investment in unconsolidated entities, December 31, 2010
|
|
$ |
93,768 |
|
|
$ |
1,311 |
|
|
$ |
3,138 |
|
|
$ |
— |
|
|
$ |
98,217 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions in kind
|
|
|
(3,948 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,948 |
) |
Contributions to unconsolidated entities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributions to unconsolidated entities for operations
|
|
|
3,651 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,651 |
|
Return of investments
|
|
|
— |
|
|
|
— |
|
|
|
(60 |
) |
|
|
— |
|
|
|
(60 |
) |
Equity in earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
Equity in earnings (losses) from operations
|
|
|
2,488 |
|
|
|
(15 |
) |
|
|
51 |
|
|
|
— |
|
|
|
2,524 |
|
Amortization of excess investment
|
|
|
(138 |
) |
|
|
(3 |
) |
|
|
(7 |
) |
|
|
— |
|
|
|
(148 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in unconsolidated entities, March 31, 2011
|
|
$ |
95,821 |
|
|
$ |
1,293 |
|
|
$ |
3,122 |
|
|
$ |
— |
|
|
$ |
100,236 |
|
MARTIN MIDSTREAM PARTNERS L.P.
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
March 31, 2012
(Unaudited)
Select financial information for significant unconsolidated equity-method investees is as follows:
|
|
As of March 31
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
Waskom
|
|
$ |
144,926 |
|
|
$ |
127,107 |
|
|
$ |
31,284 |
|
|
$ |
4,924 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Waskom
|
|
$ |
125,890 |
|
|
$ |
111,889 |
|
|
$ |
31,506 |
|
|
$ |
4,976 |
|
As of March 31, 2012 and December 31, 2011 the amount of the Partnership’s consolidated retained earnings that represents undistributed earnings related to the unconsolidated equity-method investees is $48,769 and $47,152, respectively. There are no material restrictions to transfer funds in the form of dividends, loans or advances related to the equity-method investees.
As of March 31, 2012 and December 31, 2011, the Partnership’s interest in cash of the unconsolidated equity-method investees was $991and $565, respectively.
(6)
|
Derivative Instruments and Hedging Activities
|
The Partnership’s results of operations are materially impacted by changes in crude oil, natural gas and NGL prices and interest rates. In an effort to manage its exposure to these risks, the Partnership periodically enters into various derivative instruments, including commodity and interest rate hedges. The Partnership is required to recognize all derivative instruments as either assets or liabilities at fair value on the Partnership’s Consolidated Balance Sheets and to recognize certain changes in the fair value of derivative instruments on the Partnership’s Consolidated Statements of Operations.
The Partnership performs, at least quarterly, a retrospective assessment of the effectiveness of its hedge contracts, including assessing the possibility of counterparty default. If the Partnership determines that a derivative is no longer expected to be highly effective, the Partnership discontinues hedge accounting prospectively and recognizes subsequent changes in the fair value of the hedge in earnings. As a result of its effectiveness assessment at March 31, 2012, the Partnership believes certain hedge contracts will continue to be effective in offsetting changes in cash flow or fair value attributable to the hedged risk.
All derivatives and hedging instruments are included on the balance sheet as an asset or a liability measured at fair value and changes in fair value are recognized currently in earnings unless specific hedge accounting criteria are met. If a derivative qualifies for hedge accounting, changes in the fair value can be offset against the change in the fair value of the hedged item through earnings or recognized in accumulated other comprehensive income (“AOCI”) until such time as the hedged item is recognized in earnings. The Partnership is exposed to the risk that periodic changes in the fair value of derivatives qualifying for hedge accounting will not be effective, as defined, or that derivatives will no longer qualify for hedge accounting. To the extent that the periodic changes in the fair value of the derivatives are not effective, that ineffectiveness is recorded to earnings. Likewise, if a hedge ceases to qualify for hedge accounting, any change in the fair value of derivative instruments since the last period is recorded to earnings; however, any amounts previously recorded to AOCI would remain there until such time as the original forecasted transaction occurs, then would be reclassified to earnings or if it is determined that continued reporting of losses in AOCI would lead to recognizing a net loss on the combination of the hedging instrument and the hedge transaction in future periods, then the losses would be immediately reclassified to earnings.
For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of AOCI and reclassified into earnings in the same period during which the hedged transaction affects earnings. The effective portion of the derivative represents the change in fair value of the hedge that offsets the change in fair value of the hedged item. To the extent the change in the fair value of the hedge does not perfectly offset the change in the fair value of the hedged item, the ineffective portion of the hedge is immediately recognized in earnings.
MARTIN MIDSTREAM PARTNERS L.P.
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
March 31, 2012
(Unaudited)
|
(a)
|
Commodity Derivative Instruments
|
The Partnership is exposed to market risks associated with commodity prices and uses derivatives to manage the risk of commodity price fluctuation. The Partnership has established a hedging policy and monitors and manages the commodity market risk associated with its commodity risk exposure. The Partnership has entered into hedging transactions through 2013 to protect a portion of its commodity exposure. These hedging arrangements are in the form of swaps for crude oil, natural gas and natural gasoline. In addition, the Partnership is focused on utilizing counterparties for these transactions whose financial condition is appropriate for the credit risk involved in each specific transaction.
Due to the volatility in commodity markets, the Partnership is unable to predict the amount of ineffectiveness each period, including the loss of hedge accounting, which is determined on a derivative by derivative basis. This may result, and has resulted, in increased volatility in the Partnership’s financial results. Factors that have and may continue to lead to ineffectiveness and unrealized gains and losses on derivative contracts include: a substantial fluctuation in energy prices, the number of derivatives the Partnership holds and significant weather events that have affected energy production. The number of instances in which the Partnership has discontinued hedge accounting for specific hedges is primarily due to those reasons. However, even though these derivatives may not qualify for hedge accounting, the Partnership continues to hold the instruments as it believes they continue to afford the Partnership opportunities to manage commodity risk exposure.
As of March 31, 2012 and 2011, the Partnership has both derivative instruments qualifying for hedge accounting with fair value changes being recorded in AOCI as a component of partners’ capital and derivative instruments not designated as hedges being marked to market with all market value adjustments being recorded in earnings.
Set forth below is the summarized notional amount and terms of all instruments held for price risk management purposes at March 31, 2012 (all gas quantities are expressed in British Thermal Units, crude oil and natural gas liquids are expressed in barrels). As of March 31, 2012, the remaining term of the contracts extend no later than December 2013, with no single contract longer than one year. For the three months ended March 31, 2012 and 2011, changes in the fair value of the Partnership’s derivative contracts were recorded in both earnings and in AOCI as a component of partners’ capital.
Transaction Type |
Total
Volume
Per Month
|
Pricing Terms
|
Remaining Terms
of Contracts
|
|
Fair Value
|
|
|
|
|
|
|
|
|
Mark to Market Derivatives::
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural Gasoline Swap
|
1,000 BBL
|
Fixed price of $90.20/bbl settled against WTI NYMEX average monthly closings
|
April 2012 to
December 2012
|
|
$ |
(126 |
) |
|
|
|
|
|
|
|
|
Natural Gasoline Swap
|
1,000 BBL
|
Fixed price of $2.34/gal settled against Mont Belvieu Non-TET OPIS Average
|
April 2012 to
December 2012
|
|
|
(74 |
) |
|
|
|
|
|
|
|
|
Total commodity swaps not designated as hedging instruments
|
|
|
$ |
(200 |
) |
|
|
|
|
|
|
|
|
Cash Flow Hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural Gas Swap
|
10,000 Mmbtu
|
Fixed price of $4.87/Mmbtu settled against IF_ANR_LA first of the month posting
|
April 2012 to
December 2012
|
|
|
218 |
|
|
|
|
|
|
|
|
|
Natural Gas Swap
|
20,000 Mmbtu
|
Fixed price of $4.96/Mmbtu settled against IF_ANR_LA first of the month posting
|
April 2012 to
December 2012
|
|
|
453 |
|
|
|
|
|
|
|
|
|
Crude Oil Swap
|
2,000 BBL
|
Fixed price of $88.63/bbl settled against WTI NYMEX average monthly closings
|
April 2012 to
December 2012
|
|
|
(280 |
) |
|
|
|
|
|
|
|
|
Natural Gasoline Swap
|
2,000 BBL
|
Fixed price of $2.47/gal settled against Mont Belvieu Non-TET OPIS Average
|
April 2012 to
December 2012
|
|
|
(50 |
) |
|
|
|
|
|
|
|
|
Crude Oil Swap
|
2,000 BBL
|
Fixed price of $105.90/bbl settled against WTI NYMEX average monthly closings
|
January 2013 to
December 2013
|
|
|
45 |
|
|
|
|
|
|
|
|
|
Total commodity swaps designated as hedging instruments
|
|
|
$ |
386 |
|
|
|
|
|
|
|
|
Total net fair value of commodity derivatives
|
|
|
|
$ |
186 |
|
MARTIN MIDSTREAM PARTNERS L.P.
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
March 31, 2012
(Unaudited)
Based on estimated volumes, as of March 31, 2012, the Partnership had hedged approximately 42% and 8% of its commodity risk by volume for 2012 and 2013, respectively. The Partnership anticipates entering into additional commodity derivatives on an ongoing basis to manage its risks associated with these market fluctuations and will consider using various commodity derivatives, including forward contracts, swaps, collars, futures and options, although there is no assurance that the Partnership will be able to do so or that the terms thereof will be similar to the Partnership’s existing hedging arrangements.
The Partnership’s credit exposure related to commodity cash flow hedges is represented by the positive fair value of contracts to the Partnership at March 31, 2012. These outstanding contracts expose the Partnership to credit loss in the event of nonperformance by the counterparties to the agreements. The Partnership has incurred no losses associated with counterparty nonperformance on derivative contracts.
On all transactions where the Partnership is exposed to counterparty risk, the Partnership analyzes the counterparty’s financial condition prior to entering into an agreement; establishes a maximum credit limit threshold pursuant to its hedging policy; and monitors the appropriateness of these limits on an ongoing basis. The Partnership has agreements with three counterparties containing collateral provisions. Based on those current agreements, cash deposits are required to be posted whenever the net fair value of derivatives associated with the individual counterparty exceed a specific threshold. If this threshold is exceeded, cash is posted by the Partnership if the value of derivatives is a liability to the Partnership. As of March 31, 2012, the Partnership has no cash collateral deposits posted with counterparties.
The Partnership’s principal customers with respect to Prism Gas’ natural gas gathering and processing are large, natural gas marketing services, oil and gas producers and industrial end-users. In addition, substantially all of the Partnership’s natural gas and NGL sales are made at market-based prices. The Partnership’s standard gas and NGL sales contracts contain adequate assurance provisions, which allows for the suspension of deliveries, cancellation of agreements or discontinuance of deliveries to the buyer unless the buyer provides security for payment in a form satisfactory to the Partnership.
|
(b)
|
Impact of Commodity Cash Flow Hedges
|
Crude Oil. For the three months ended March 31, 2012 and 2011, net gains and losses on swap hedge contracts decreased crude revenue by $86 and $60, respectively. As of March 31, 2012, an unrealized derivative fair value loss of $235, related to current and terminated cash flow hedges of crude oil price risk, was recorded in AOCI. Fair value losses of $280 and fair value gains of $45 are expected to be reclassified into earnings in 2012 and 2013, respectively. The actual reclassification to earnings for contracts remaining in effect will be based on mark-to-market prices at the contract settlement date or for those terminated contracts based on the recorded values at March 31, 2012, adjusted for any impairment, along with the realization of the gain or loss on the related physical volume, which is not reflected above.
MARTIN MIDSTREAM PARTNERS L.P.
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
March 31, 2012
(Unaudited)
Natural Gas. For the three months ended March 31, 2012 and 2011, net gains and losses on swap hedge contracts increased gas revenue by $204 and $75, respectively. As of March 31, 2012, an unrealized derivative fair value gain of $660 related to cash flow hedges of natural gas was recorded in AOCI. This fair value gain is expected to be reclassified into earnings in 2012. The actual reclassification to earnings will be based on mark-to-market prices at the contract settlement date, along with the realization of the gain or loss on the related physical volume, which is not reflected above.
Natural Gas Liquids. For the three months ended March 31, 2012 and 2011, net gains and losses on swap hedge contracts decreased liquids revenue by $55 and increased liquids revenue by $162, respectively. As of March 31, 2012, an unrealized derivative fair value gain of $137 related to current and terminated cash flow hedges of NGLs price risk was recorded in AOCI. This fair value gain is expected to be reclassified into earnings in 2012. The actual reclassification to earnings for contracts remaining in effect will be based on mark-to-market prices at the contract settlement date or for those terminated contracts based on the recorded values at March 31, 2012, adjusted for any impairment, along with the realization of the gain or loss on the related physical volume, which is not reflected above.
For information regarding fair value amounts and gains and losses on commodity derivative instruments and related hedged items, see “Tabular Presentation of Fair Value Amounts, and Gains and Losses on Derivative Instruments and Related Hedged Items” within this Note.
|
(c)
|
Impact of Interest Rate Derivative Instruments
|
The Partnership is exposed to market risks associated with interest rates. The Partnership enters into interest rate swaps to manage interest rate risk associated with the Partnership’s variable rate debt credit facility and its’ senior notes. All derivatives and hedging instruments are included on the balance sheet as an asset or a liability measured at fair value and changes in fair value are recognized currently in earnings unless specific hedge accounting criteria are met. If a derivative qualifies for hedge accounting, changes in the fair value can be offset against the change in the fair value of the hedged item through earnings or recognized in AOCI until such time as the hedged item is recognized in earnings.
In August 2011, the Partnership terminated all of its existing interest swap agreements with an aggregate notional amount of $100,000, which it had entered to hedge its exposure to changes in the fair value of Senior Notes as described in Note 10. These interest rate swap contracts were not designated as fair value hedges and therefore, did not receive hedge accounting but were marked to market through earnings. Termination fees of $2,800 were received on the early extinguishment of the interest rate swap agreements in August 2011.
The Partnership recognized increases in interest expense of $0 and $633 for the three months ended March 31, 2012 and 2011, respectively, related to the difference between the fixed rate and the floating rate of interest on the interest rate swap and net cash settlement of interest rate swaps and hedges.
For information regarding fair value amounts and gains and losses on interest rate derivative instruments and related hedged items, see “Tabular Presentation of Fair Value Amounts, and Gains and Losses on Derivative Instruments and Related Hedged Items” below.
|
(d)
|
Tabular Presentation of Fair Value Amounts, and Gains and Losses on Derivative Instruments and Related Hedged Items
|
The following table summarizes the fair values and classification of the Partnership’s derivative instruments in its Consolidated Balance Sheet:
MARTIN MIDSTREAM PARTNERS L.P.
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
March 31, 2012
(Unaudited)
|
Fair Values of Derivative Instruments in the Consolidated Balance Sheet
|
|
|
|
|
|
Derivative Assets |
|
Derivative Liabilities |
|
|
|
|
Fair Values
|
|
|
|
Fair Values
|
|
|
Balance Sheet
Location
|
|
March 31, 2012
|
|
|
December 31, 2011
|
|
Balance Sheet Location
|
|
March 31, 2012
|
|
|
December 31, 2011
|
|
Derivatives designated as hedging instruments
|
Current:
|
|
|
|
|
|
|
Current:
|
|
|
|
|
|
|
Commodity contracts
|
Fair value of derivatives
|
|
$ |
675 |
|
|
$ |
622 |
|
Fair value of derivatives
|
|
$ |
330 |
|
|
$ |
245 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current:
|
|
|
|
|
|
|
|
|
Non-current:
|
|
|
|
|
|
|
|
|
Commodity contracts
|
Fair value of derivatives
|
|
|
41 |
|
|
|
— |
|
Fair value of derivatives
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total derivatives designated as hedging instruments
|
|
|
$ |
716 |
|
|
$ |
622 |
|
|
|
$ |
330 |
|
|
$ |
245 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current:
|
|
|
|
|
|
|
|
|
Current:
|
|
|
|
|
|
|
|
|
Commodity contracts
|
Fair value of derivatives
|
|
$ |
— |
|
|
$ |
— |
|
Fair value of derivatives
|
|
$ |
200 |
|
|
$ |
117 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current:
|
|
|
|
|
|
|
|
|
Non-current:
|
|
|
|
|
|
|
|
|
Commodity contracts
|
Fair value of derivatives
|
|
|
— |
|
|
|
— |
|
Fair value of derivatives
|
|
|
— |
|
|
|
— |
|
Total derivatives not designated as hedging instruments
|
|
|
$ |
— |
|
|
$ |
— |
|
|
|
$ |
200 |
|
|
$ |
117 |
|
MARTIN MIDSTREAM PARTNERS L.P.
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
March 31, 2012
(Unaudited)
|
|
Effect of Derivative Instruments on the Consolidated Statement of Operations
For the Three Months Ended March 31, 2012 and 2011
|
|
|
|
|
|
|
|
|
|
Ineffective Portion and Amount
Excluded from Effectiveness Testing
|
|
|
|
Amount of Gain or
(Loss) Recognized in
OCI on Derivatives
|
|
Location of
Gain or (Loss) Reclassified
from Accumulated
OCI into
|
|
Amount of Gain or (Loss) Reclassified from
Accumulated OCI into
Income
|
|
Location of
Gain or
(Loss)
Recognized
in Income
on
|
|
Amount of Gain or (Loss) Recognized in Income on Derivatives
|
|
|
|
2012
|
|
|
2011
|
|
Income |
|
2012
|
|
|
2011
|
|
Derivatives |
|
2012
|
|
|
2011
|
|
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate contracts
|
|
$ |
— |
|
|
$ |
— |
|
Interest Expense
|
|
$ |
— |
|
|
$ |
(19 |
) |
Interest Expense
|
|
$ |
— |
|
|
$ |
— |
|
Commodity contracts
|
|
|
126 |
|
|
|
(908 |
) |
Natural Gas Revenues
|
|
|
186 |
|
|
|
434 |
|
Natural Gas Revenues
|
|
|
4 |
|
|
|
— |
|
Total derivatives designated as hedging instruments
|
|
$ |
126 |
|
|
$ |
(908 |
) |
|
|
$ |
186 |
|
|
$ |
415 |
|
|
|
$ |
4 |
|
|
$ |
— |
|
|
Location of Gain or (Loss)
Recognized in Income on
Derivatives
|
|
Amount of Gain or (Loss) Recognized in
Income on Derivatives
|
|
|
|
|
2012
|
|
|
2011
|
|
Derivatives not designated as hedging instruments
|
|
|
|
|
Interest rate contracts
|
Interest Expense
|
|
$ |
— |
|
|
$ |
(614 |
) |
Commodity contracts
|
Natural Gas Services Revenues
|
|
|
(127 |
) |
|
|
(257 |
) |
Total derivatives not designated as hedging instruments
|
|
|
$ |
(127 |
) |
|
$ |
(871 |
) |
Amounts expected to be reclassified into earnings for the subsequent 12-month period are gains of $521 for commodity cash flow hedges.
(7)
|
Fair Value Measurements
|
The Partnership provides disclosures pursuant to certain provisions of ASC 820, which provides a framework for measuring fair value and expanded disclosures about fair value measurements. ASC 820 applies to all assets and liabilities that are being measured and reported on a fair value basis. This statement enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value of each asset and liability carried at fair value into one of the following categories:
Level 1: Quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.
Level 3: Unobservable inputs that are not corroborated by market data.
The Partnership’s derivative instruments, which consist of commodity and interest rate swaps, are required to be measured at fair value on a recurring basis. The fair value of the Partnership’s derivative instruments is determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets, which is considered Level 2. Refer to Note 6 for further information on the Partnership’s derivative instruments and hedging activities.
MARTIN MIDSTREAM PARTNERS L.P.
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
March 31, 2012
(Unaudited)
The following items are measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 at March 31, 2012:
|
|
Fair Value Measurements at Reporting Date Using
|
|
|
|
|
|
|
Quoted Prices in
Active Markets
for
|
|
|
Significant Other
|
|
|
Significant
Unobservable
|
|
Description
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas derivatives
|
|
$ |
671 |
|
|
$ |
— |
|
|
$ |
671 |
|
|
$ |
— |
|
Crude oil derivatives
|
|
|
45 |
|
|
|
— |
|
|
|
45 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$ |
716 |
|
|
$ |
— |
|
|
$ |
716 |
|
|
$ |
— |
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil derivatives
|
|
$ |
280 |
|
|
$ |
— |
|
|
$ |
280 |
|
|
$ |
— |
|
Natural gas liquids derivatives
|
|
|
250 |
|
|
|
— |
|
|
|
250 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
$ |
530 |
|
|
$ |
— |
|
|
$ |
530 |
|
|
$ |
— |
|
The following items are measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 at December 31, 2011:
|
|
Fair Value Measurements at Reporting Date Using
|
|
|
|
|
|
|
Quoted Prices in
Active Markets
for
|
|
|
Significant Other
|
|
|
Significant
Unobservable
|
|
Description
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas derivatives
|
|
$ |
622 |
|
|
$ |
— |
|
|
$ |
622 |
|
|
$ |
— |
|
Total assets
|
|
$ |
622 |
|
|
$ |
— |
|
|
$ |
622 |
|
|
$ |
— |
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil derivatives
|
|
|
245 |
|
|
|
— |
|
|
|
245 |
|
|
|
— |
|
Natural gas liquids derivatives
|
|
|
117 |
|
|
|
— |
|
|
|
117 |
|
|
|
— |
|
Total liabilities
|
|
$ |
362 |
|
|
$ |
— |
|
|
$ |
362 |
|
|
$ |
— |
|
ASC 825-10-65, related to disclosures about fair value of financial instruments, requires that the Partnership disclose estimated fair values for its financial instruments. Fair value estimates are set forth below for the Partnership’s financial instruments. The following methods and assumptions were used to estimate the fair value of each class of financial instrument:
|
●
|
Accounts and other receivables, trade and other accounts 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.
|
|
●
|
Long-term debt including current installments — the carrying amount of the revolving credit loan facility approximates fair value due to the debt having a variable interest rate.
|
MARTIN MIDSTREAM PARTNERS L.P.
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
March 31, 2012
(Unaudited)
The estimated fair value of the Senior Notes was approximately $207,800 as of March 31, 2012 based on market prices of similar debt at March 31, 2012.
(8)
|
Related Party Transactions
|
As of March 31, 2012, Martin Resource Management owns 6,593,267 of the Partnership’s common units representing approximately 28.5% of the Partnership’s outstanding limited partnership units. The Partnership’s general partner is a wholly-owned subsidiary of Martin Resource Management. The Partnership’s general partner owns a 2.0% general partner interest in the Partnership and the Partnership’s incentive distribution rights. The Partnership’s general partner’s ability, as general partner, to manage and operate the Partnership, and Martin Resource Management’s ownership as of March 31, 2012, of approximately 28.5% of the Partnership’s outstanding limited partnership units, effectively gives Martin Resource Management the ability to veto some of the Partnership’s actions and to control the Partnership’s management.
The following is a description of the Partnership’s material related party transactions:
Omnibus Agreement
Omnibus Agreement. The Partnership and its general partner are parties to an omnibus agreement dated November 1, 2002, with Martin Resource Management that governs, among other things, potential competition and indemnification obligations among the parties to the agreement, related party transactions, the provision of general administration and support services by Martin Resource Management and the Partnership’s use of certain of Martin Resource Management’s trade names and trademarks. The omnibus agreement was amended on November 24, 2009, to include processing crude oil into finished products including naphthenic lubricants, distillates, asphalt and other intermediate cuts.
Non-Competition Provisions. Martin Resource Management has agreed for so long as it controls the general partner of the Partnership, not to engage in the business of:
|
|
providing terminalling, refining, processing, distribution and midstream logistical services for hydrocarbon products and by-products;
|
|
|
providing marine and other transportation of hydrocarbon products and by-products; and
|
|
|
manufacturing and marketing fertilizers and related sulfur-based products.
|
This restriction does not apply to:
|
|
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 small crude oil gathering business in Stephens, Arkansas;
|
|
|
operating an underground NGL storage facility in Arcadia, Louisiana;
|
|
|
building and marketing sulfur processing equipment; and
|
|
|
developing an underground natural gas storage facility in Arcadia, Louisiana.
|
|
|
any business that Martin Resource Management acquires or constructs that has a fair market value of less than $5,000;
|
MARTIN MIDSTREAM PARTNERS L.P.
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
March 31, 2012
(Unaudited)
|
|
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; 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.
|
Services. Under the omnibus agreement, Martin Resource Management provides the Partnership with corporate staff, support services, and administrative services necessary to operate the Partnership’s business. The omnibus agreement requires the Partnership to reimburse Martin Resource Management for all direct expenses it incurs or payments it makes on the Partnership’s behalf or in connection with the operation of the Partnership’s business. There is no monetary limitation on the amount the Partnership is required to reimburse Martin Resource Management for direct expenses. In addition to the direct expenses, Martin Resource Management is entitled to reimbursement for a portion of indirect general and administrative and corporate overhead expenses. Under the omnibus agreement, the Partnership is required to reimburse Martin Resource Management for indirect general and administrative and corporate overhead expenses.
Effective October 1, 2011, through September 30, 2012, the Conflicts Committee of the board of directors of the general partner of the Partnership (the “Conflicts Committee”) approved an annual reimbursement amount for indirect expenses of $6,582. The Partnership reimbursed Martin Resource Management for $1,646 and $1,042 of indirect expenses for the three months ended March 31, 2012 and 2011, respectively. The Conflicts Committee will review and approve future adjustments in the reimbursement amount for indirect expenses, if any, annually.
These indirect expenses are intended to cover the centralized corporate functions Martin Resource Management provides for the Partnership, such as accounting, treasury, clerical billing, information technology, administration of insurance, general office expenses and employee benefit plans and other general corporate overhead functions the Partnership shares with Martin Resource Management retained businesses. The provisions of the omnibus agreement regarding Martin Resource Management’s services will terminate if Martin Resource Management ceases to control the general partner of the Partnership.
Related Party Transactions. The omnibus agreement prohibits the Partnership from entering into any material agreement with Martin Resource Management without the prior approval of the conflicts committee of the general partner’s board of directors. For purposes of the omnibus agreement, the term material agreements means any agreement between the Partnership and Martin Resource Management that requires aggregate annual payments in excess of then-applicable agreed upon reimbursable amount of indirect general and administrative expenses. Please read “Services” above.
License Provisions. Under the omnibus agreement, Martin Resource Management has granted the Partnership a nontransferable, nonexclusive, royalty-free right and license to use certain of its trade names and marks, as well as the trade names and marks used by some of its affiliates.
Amendment and Termination. The omnibus agreement may be amended by written agreement of the parties; provided, however, that it may not be amended without the approval of the conflicts committee of the Partnership’s general partner if such amendment would adversely affect the unitholders. The omnibus agreement was amended on November 24, 2009, to permit the Partnership to provide refining services to Martin Resource Management. Such amendment was approved by the conflicts committee of the Partnership’s general partner. The omnibus agreement, other than the indemnification provisions and the provisions limiting the amount for which the Partnership will reimburse Martin Resource Management for general and administrative services performed on its behalf, will terminate if the Partnership is no longer an affiliate of Martin Resource Management.
MARTIN MIDSTREAM PARTNERS L.P.
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
March 31, 2012
(Unaudited)
Motor Carrier Agreement
Motor Carrier Agreement. The Partnership is a party to a motor carrier agreement effective January 1, 2006, with Martin Transport, Inc., a wholly owned subsidiary of Martin Resource Management through which Martin Resource Management operates its land transportation operations. This agreement replaced a prior agreement effective November 1, 2002, between the Partnership and Martin Transport, Inc. for land transportation services. Under the agreement, Martin Transport Inc. agreed to ship our NGL shipments as well as other liquid products.
Term and Pricing. This agreement was amended in November 2006, January 2007, April 2007 and January 2008 to add additional point-to-point rates and to modify certain fuel and insurance surcharges being charged to the Partnership. The agreement has an initial term that expired in December 2007 but automatically renews for consecutive one-year periods unless either party terminates the agreement by giving written notice to the other party at least 30 days prior to the expiration of the then-applicable term. The Partnership has the right to terminate this agreement at any time by providing 90 days prior notice. Under this agreement, Martin Transport, Inc. transports the Partnership’s NGL shipments as well as other liquid products. These rates are subject to any adjustment which are mutually agreed or in accordance with a price index. Additionally, during the term of the agreement, shipping charges are also subject to fuel surcharges determined on a weekly basis in accordance with the U.S. Department of Energy’s national diesel price list.
Marine Agreements
Marine Transportation Agreement. The Partnership is a party to a marine transportation agreement effective January 1, 2006, which was amended January 1, 2007, under which the Partnership provides marine transportation services to Martin Resource Management on a spot-contract basis at applicable market rates. This agreement replaced a prior agreement effective November 1, 2002 between the Partnership and Martin Resource Management covering marine transportation services which expired November 2005. Effective each January 1, this agreement automatically renews for consecutive one-year periods unless either party terminates the agreement by giving written notice to the other party at least 60 days prior to the expiration of the then applicable term. The fees the Partnership charges Martin Resource Management are based on applicable market rates.
Cross Marine Charter Agreements. Cross Oil & Refining Marketing Inc. (“Cross”) entered into four marine charter agreements with the Partnership effective March 1, 2007. These agreements have an initial term of five years and continue indefinitely thereafter subject to cancellation after the initial term by either party upon a 30 day written notice of cancellation. The charter hire payable under these agreements will be adjusted annually to reflect the percentage change in the Consumer Price Index.
Marine Fuel. The Partnership is a party to an agreement with Martin Resource Management under which Martin Resource Management provides the Partnership with marine fuel from its locations in the Gulf of Mexico at a fixed rate over the Platt’s U.S. Gulf Coast Index for #2 Fuel Oil. Under this agreement, the Partnership agreed to purchase all of its marine fuel requirements that occur in the areas serviced by Martin Resource Management.
Terminal Services Agreements
Diesel Fuel Terminal Services Agreement. The Partnership is a party to an agreement under which the Partnership provides terminal services to Martin Resource Management. This agreement was amended and restated as of October 27, 2004, and was set to expire in December 2006, but automatically renewed and will continue to automatically renew on a month-to-month basis until either party terminates the agreement by giving 60 days written notice. The per gallon throughput fee the Partnership charges under this agreement may be adjusted annually based on a price index.
Miscellaneous Terminal Services Agreements. The Partnership is currently party to several terminal services agreements and from time to time the Partnership may enter into other terminal service agreements for the purpose of providing terminal services to related parties. Individually, each of these agreements is immaterial but when considered in the aggregate they could be deemed material. These agreements are throughput based with a minimum volume commitment. Generally, the fees due under these agreements are adjusted annually based on a price index.
MARTIN MIDSTREAM PARTNERS L.P.
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
March 31, 2012
(Unaudited)
Other Agreements
Cross Tolling Agreement. The Partnership is a party to an agreement under which it processes crude oil into finished products, including naphthenic lubricants, distillates, asphalt and other intermediate cuts for Cross. The Tolling Agreement has a 12 year term which expires November 24, 2021. Under this Tolling Agreement, Martin Resource Management agreed to process a minimum of 6,500 barrels per day of crude oil at the facility at a fixed price per barrel. Any additional barrels are processed at a modified price per barrel. In addition, Martin Resource Management agreed to pay a monthly reservation fee and a periodic fuel surcharge fee based on certain parameters specified in the Tolling Agreement. All of these fees (other than the fuel surcharge) are subject to escalation annually based upon the greater of 3% or the increase in the Consumer Price Index for a specified annual period. In addition, every three years, the parties can negotiate an upward or downward adjustment in the fees subject to their mutual agreement.
Sulfuric Acid Sales Agency Agreement. The Partnership is party to an agreement under which Martin Resource Management purchases and markets the sulfuric acid produced by the Partnership’s sulfuric acid production plant at Plainview, Texas, that is not consumed by the Partnership’s internal operations. This agreement, which was amended and restated in July 2011, will remain in place until the Partnership terminates it by providing 180 days’ written notice. Under this agreement, the Partnership sells all of its excess sulfuric acid to Martin Resource Management. Martin Resource Management then markets such acid to third-parties and the Partnership shares in the profit of Martin Resource Management’s sales of the excess acid to such third parties.
Other Miscellaneous Agreements. From time to time the Partnership enters into other miscellaneous agreements with Martin Resource Management for the provision of other services or the purchase of other goods.
The tables below summarize the related party transactions that are included in the related financial statement captions on the face of the Partnership’s Consolidated Statements of Operations. The revenues, costs and expenses reflected in these tables are tabulations of the related party transactions that are recorded in the corresponding caption of the consolidated financial statement and do not reflect a statement of profits and losses for related party transactions.
The impact of related party revenues from sales of products and services is reflected in the consolidated financial statement as follows:
|
|
Three Months Ended March 31,
|
|
Revenues:
|
|
|
|
|
|
|
Terminalling and storage
|
|
$ |
15,274 |
|
|
$ |
12,938 |
|
Marine transportation
|
|
|
4,857 |
|
|
|
6,565 |
|
Product sales:
|
|
|
|
|
|
|
|
|
Natural gas services
|
|
|
2,176 |
|
|
|
2,203 |
|
Sulfur services
|
|
|
1,715 |
|
|
|
3,186 |
|
Terminalling and storage
|
|
|
399 |
|
|
|
10 |
|
|
|
|
4,290 |
|
|
|
5,399 |
|
|
|
$ |
24,421 |
|
|
$ |
24,902 |
|
The impact of related party cost of products sold is reflected in the consolidated financial statement as follows:
Costs and expenses:
|
|
|
|
|
|
|
Cost of products sold:
|
|
|
|
|
|
|
Natural gas services
|
|
$ |
25,345 |
|
|
$ |
23,205 |
|
Sulfur services
|
|
|
4,431 |
|
|
|
4,152 |
|
Terminalling and storage
|
|
|
87 |
|
|
|
56 |
|
|
|
$ |
29,863 |
|
|
$ |
27,413 |
|
The impact of related party operating expenses is reflected in the consolidated financial statement as follows:
Operating expenses
|
|
|
|
|
|
|
Terminalling and storage
|
|
$ |
6,978 |
|
|
$ |
4,202 |
|
Natural gas services
|
|
|
746 |
|
|
|
608 |
|
Sulfur services
|
|
|
1,318 |
|
|
|
1,244 |
|
Marine Transportation
|
|
|
5,049 |
|
|
|
5,988 |
|
|
|
$ |
14,091 |
|
|
$ |
12,042 |
|
MARTIN MIDSTREAM PARTNERS L.P.
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
March 31, 2012
(Unaudited)
The impact of related party selling, general and administrative expenses is reflected in the consolidated financial statement as follows:
Selling, general and administrative:
|
|
|
|
|
|
|
Terminalling and storage
|
|
$ |
5 |
|
|
$ |
15 |
|
Natural gas services
|
|
|
1,316 |
|
|
|
1,332 |
|
Sulfur services
|
|
|
711 |
|
|
|
642 |
|
Indirect overhead allocation, net of reimbursement
|
|
|
1,646 |
|
|
|
1,042 |
|
|
|
$ |
3,678 |
|
|
$ |
3,031 |
|
The Partnership has four reportable segments: terminalling and storage, natural gas services, sulfur services and marine transportation. The Partnership’s reportable segments are strategic business units that offer different products and services. The operating income of these segments is reviewed by the chief operating decision maker to assess performance and make business decisions.
The accounting policies of the operating segments are the same as those described in Note 2 in the Partnership’s annual report on Form 10-K for the year ended December 31, 2011, filed with the SEC on March 5, 2012. The Partnership evaluates the performance of its reportable segments based on operating income. There is no allocation of administrative expenses or interest expense.
|
|
|
|
|
Intersegment
Revenues Eliminations
|
|
|
Operating
Revenues
after
Eliminations
|
|
|
Depreciation
and
Amortization
|
|
|
Operating
Income (loss)
after
eliminations
|
|
|
|
|
Three months ended March 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terminalling and storage
|
|
$ |
43,034 |
|
|
$ |
(1,175 |
) |
|
$ |
41,859 |
|
|
$ |
4,723 |
|
|
$ |
3,082 |
|
|
$ |
22,727 |
|
Natural gas services
|
|
|
201,013 |
|
|
|
— |
|
|
|
201,013 |
|
|
|
1,538 |
|
|
|
2,312 |
|
|
|
658 |
|
Sulfur services
|
|
|
74,552 |
|
|
|
— |
|
|
|
74,552 |
|
|
|
1,793 |
|
|
|
13,627 |
|
|
|
989 |
|
Marine transportation
|
|
|
21,567 |
|
|
|
(705 |
) |
|
|
20,862 |
|
|
|
3,041 |
|
|
|
(1,427 |
) |
|
|
5,708 |
|
Indirect selling, general and administrative
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,418 |
) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$ |
340,166 |
|
|
$ |
(1,880 |
) |
|
$ |
338,286 |
|
|
$ |
11,095 |
|
|
$ |
15,176 |
|
|
$ |
30,082 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terminalling and storage
|
|
$ |
37,646 |
|
|
|