• Strong Fourth Quarter Distribution Coverage Ratio of 1.59x, Full Year Coverage of 1.18x
  • Net income of $17.1 million for 2017
  • Detailed 2018 Cash Flow Guidance to be Released on February 21st

KILGORE, Texas, Feb. 14, 2018 (GLOBE NEWSWIRE) — Martin Midstream Partners L.P. (Nasdaq:MMLP) (the “Partnership”) announced today its financial results for the fourth quarter and year ended December 31, 2017.

Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership said, “During the fourth quarter, the Partnership generated strong cash flow with adjusted EBITDA of $49.3 million which exceeded our guidance level.  Based on this solid performance, distributable cash flow was $31.2 million with a 1.59 times distribution coverage ratio for the quarter.  For the full year 2017, the Partnership’s adjusted EBITDA and distributable cash flow were approximately $156.2 and $91.1 million, respectively.  When compared to full year guidance, we fell modestly short of cash flow expectations by $1.2 million, however, we exceeded distributable cash flow expectations by $0.8 million and generated a solid distribution coverage of 1.18 times.  As is typical in our business cycle, we often follow the third quarter, our seasonally weakest, with our strongest cash flowing quarter.  Accordingly, during the fourth quarter, we saw the positive seasonal impacts of our fertilizer and butane businesses fully restored.

“As expected, based on price performance and a strong storage season last summer, we realized robust performance from our Natural Gas Services segment.  Specifically, our butane optimization business exceeded expectations during the quarter.  Also within the segment, we experienced better than anticipated interruptible services revenue from our Cardinal Gas Storage division.  For the full year 2017, our Natural Gas Services segment trailed guidance by $0.7 million, or 0.7%.  Generally speaking, we met our cash flow target within the segment as our slight miss to guidance was primarily due to the continued delay with the WTLPG pipeline tariff challenge process currently in front of the Texas Railroad Commission.  Last year our expected cash flow included a resolution to this matter by the end of the third quarter.  As this did not occur, our cash flow attributed to distributions from WTLPG were below planned levels.

“Our Terminalling and Storage segment missed fourth quarter and full year guidance estimates primarily attributed to repair expenses and lost revenue from Hurricane Harvey.  During the fourth quarter, the Partnership incurred hurricane related costs totaling $2.8 million, of which $2.4 million related to the Terminalling and Storage segment.  For the full year 2017, the Terminalling and Storage segment missed cash flow guidance by approximately $4.3 million, or 7.3%, again the majority of this variance to guidance was attributed to the negative impact of Hurricane Harvey during the third and fourth quarters.  Looking ahead, we expect a full recovery of cash flow in our specialty and legacy terminalling divisions and the full year benefit of our Hondo asphalt terminal in 2018.

“Our Sulfur Services segment posted a strong fourth quarter.  We exceeded cash flow guidance by $3.6 million, or approximately 70.6%.  This is primarily attributed to stronger than forecasted fertilizer margins as product volume sold matched our expectation during the quarter.  Additionally, within the segment, we experienced strong demand for our prilling services as the export pricing alternative was greater than domestic prices.  For the full year 2017, the Sulfur Services segment exceeded cash flow guidance by approximately $4.2 million, or 14.1%.

“Marine Transportation modestly outperformed our guidance expectations for both the fourth quarter and full year 2017.  During the quarter we benefitted from a continued reduction in operating expenses.  For the full year 2017, we cut operating expenses by approximately $8.4 million reflective of the reduction in our fleet by 13 assets over the last two years.  Based on this commitment to cost reduction, we exceed 2017 full year cash flow guidance by approximately $0.3 million, or 4.5%.

“As 2017 finished with a strong distribution coverage, we remain comfortable with the current annualized distribution run-rate of $2.00 per unit.  We look forward to February 21 when we will deliver our full year detailed 2018 cash flow guidance.”

The Partnership had net income for the fourth quarter 2017 of $18.8 million, or $0.47 per limited partner unit.  The Partnership had net income for the fourth quarter 2016 of $17.9 million, or $0.49 per limited partner unit.  For the fourth quarter of 2016, net income was positively impacted by the gain on disposition of the Partnership’s terminalling assets located in Corpus Christi, Texas of $37.3 million and negatively impacted by non-cash impairment charges of $27.0 million.  Of these non-cash impairment charges, $15.3 million occurred in our Terminalling and Storage segment and was related to the discontinuation of certain organic growth projects no longer deemed economically viable.  Additionally, our Marine Transportation segment experienced an $11.7 million non-cash charge related to the planned disposal of certain inland and offshore non-core transportation assets.  The Partnership’s adjusted EBITDA for the fourth quarter 2017 was $49.3 million compared to adjusted EBITDA for the fourth quarter 2016 of $52.3 million.

Net income for the year ended December 31, 2017 was $17.1 million, or $0.44 per limited partner unit.  Net income for the year ended December 31, 2016 was $31.7 million, or $0.65 per limited partner unit.  Net income for the year ended December 31, 2016 was positively impacted by the gain on disposition of the Partnership’s terminalling assets located in Corpus Christi, Texas of $37.3 million and negatively impacted by non-cash impairment charges of $31.1 million.  Of these non-cash impairment charges, $15.3 million occurred in our Terminalling and Storage segment and was related to the discontinuation of certain organic growth projects no longer deemed economically viable.  Additionally, our Marine Transportation segment experienced an $11.7 million non-cash charge related to the planned disposal of certain inland and offshore non-core transportation assets and a $4.1 million non-cash goodwill impairment charge.  The Partnership’s adjusted EBITDA for the year ended December 31, 2017 was $156.2 million compared to adjusted EBITDA for the year ended December 31, 2016 of $176.6 million.

The Partnership’s distributable cash flow for the fourth quarter of 2017 was $31.2 million compared to distributable cash flow for the fourth quarter of 2016 of $35.8 million.

The Partnership’s distributable cash flow for the year ended December 31, 2017 was $91.1 million compared to distributable cash flow for the year ended December 31, 2016 of $113.7 million.

Revenues for the fourth quarter of 2017 were $305.7 million compared to $236.9 million for the fourth quarter of 2016.  Revenues for the year ended December 31, 2017 were $946.1 million compared to $827.4 million for the year ended December 31, 2016.

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

Included with this press release are the Partnership’s consolidated financial statements as of and for the year ended December 31, 2017 and certain prior periods.  These financial statements should be read in conjunction with the information contained in the Partnership’s Annual Report on Form 10-K, to be filed with the SEC on February 16, 2018.

An attachment accompanying this announcement is available at http://resource.globenewswire.com/Resource/Download/8b25966a-2220-4b67-b6ad-a8a5eabca95f.

Investors’ Conference Call

An investors’ conference call to review the fourth quarter results will be held on Thursday, February 15, 2018, at 8:00 a.m. Central Time.  The conference call can be accessed by calling (877) 878-2695.  An audio replay of the conference call will be available by calling (855) 859-2056 from 11:00 a.m. Central Time on February 15, 2018 through 10:59 p.m. Central Time on February 26, 2018.  The access code for the conference call and the audio replay is Conference ID No. 7799099.  The audio replay of the conference call will also be archived on Martin Midstream Partners’ website at www.martinmidstream.com.

About Martin Midstream Partners
           
The Partnership is a publicly traded limited partnership with a diverse set of operations focused primarily in the United States Gulf Coast region. The Partnership’s primary business segments include: (1) natural gas services, including liquids transportation and distribution services and natural gas storage; (2) terminalling, storage and packaging services for petroleum products and by-products; (3) sulfur and sulfur-based products processing, manufacturing, marketing and distribution; and (4) marine transportation services for petroleum products and by-products.

Forward-Looking Statements

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

Use of Non-GAAP Financial Information

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

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

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

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

Additional information concerning the Partnership is available on the Partnership’s website at www.martinmidstream.com or by contacting:

Joe McCreery, IRC – Vice President – Finance & Head of Investor Relations
(877) 256-6644

 
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED BALANCE SHEETS
(Dollars in thousands)
 
  December 31,
  2017   2016
Assets      
Cash $ 27     $ 15  
Trade and accrued accounts receivable, less allowance for doubtful accounts of $314 and $372 respectively 107,242     80,508  
Product exchange receivables 29     207  
Inventories 97,252     82,631  
Due from affiliates 23,668     11,567  
Other current assets 4,866     3,296  
Assets held for sale 9,579     15,779  
Total current assets 242,663     194,003  
       
Property, plant and equipment, at cost 1,253,065     1,224,277  
Accumulated depreciation (421,137 )   (378,593 )
Property, plant and equipment, net 831,928     845,684  
       
Goodwill 17,296     17,296  
Investment in unconsolidated entities 128,810     129,506  
Notes receivable – Martin Energy Trading LLC     15,000  
Intangibles and other assets, net 32,801     44,874  
  $ 1,253,498     $ 1,246,363  
Liabilities and Partners’ Capital      
Trade and other accounts payable $ 92,567     $ 70,249  
Product exchange payables 11,751     7,360  
Due to affiliates 3,168     8,474  
Income taxes payable 510     870  
Fair value of derivatives 72     3,904  
Other accrued liabilities 26,340     26,717  
Total current liabilities 134,408     117,574  
       
Long-term debt, net 812,632     808,107  
Other long-term obligations 8,217     8,676  
Total liabilities 955,257     934,357  
Commitments and contingencies      
Partners’ capital 298,241     312,006  
Total partners’ capital 298,241     312,006  
  $ 1,253,498     $ 1,246,363  
               

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership’s Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on February 16, 2018.

 
 
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
 
  Year Ended December 31,
  2017   2016   2015
Revenues:          
Terminalling and storage  * $ 99,705     $ 123,132     $ 132,945  
Marine transportation  * 48,579     58,290     78,753  
Natural gas storage services * 58,817     61,133     64,858  
Sulfur services 10,952     10,800     12,270  
Product sales: *          
Natural gas services 473,865     330,200     458,302  
Sulfur services 123,732     130,258     157,891  
Terminalling and storage 130,466     113,578     131,825  
  728,063     574,036     748,018  
Total revenues 946,116     827,391     1,036,844  
           
Costs and expenses:          
Cost of products sold: (excluding depreciation and amortization)          
Natural gas services * 421,444     289,516     413,795  
Sulfur services * 82,338     87,963     114,766  
Terminalling and storage * 109,798     94,175     112,836  
  613,580     471,654     641,397  
Expenses:          
Operating expenses  * 146,874     158,864     183,466  
Selling, general and administrative  * 38,950     34,385     36,788  
Impairment of long-lived assets 2,225     26,953     10,629  
Impairment of goodwill     4,145      
Depreciation and amortization 85,195     92,132     92,250  
Total costs and expenses 886,824     788,133     964,530  
Other operating income (loss), net 523     33,400     (2,161 )
Operating income 59,815     72,658     70,153  
           
Other income (expense):          
Equity in earnings of unconsolidated entities 4,314     4,714     8,986  
Interest expense, net (47,743 )   (46,100 )   (43,292 )
Gain on retirement of senior unsecured notes         1,242  
Other, net 1,101     1,106     1,124  
Total other income (expense) (42,328 )   (40,280 )   (31,940 )
Net income before taxes 17,487     32,378     38,213  
Income tax expense (352 )   (726 )   (1,048 )
Income from continuing operations 17,135     31,652     37,165  
Income from discontinued operations, net of income taxes         1,215  
Net income 17,135     31,652     38,380  
Less general partner’s interest in net income (343 )   (8,419 )   (16,338 )
Less income allocable to unvested restricted units (42 )   (90 )   (140 )
Limited partner’s interest in net income $ 16,750     $ 23,143     $ 21,902  
                       

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership’s Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on February 16, 2018.

*Related Party Transactions Shown Below

 
 
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
 
*Related Party Transactions Included Above
  Year Ended December 31,
  2017   2016   2015
Revenues:          
Terminalling and storage $ 82,205     $ 82,437     $ 78,233  
Marine transportation 16,801     21,767     27,724  
Natural gas services 122     699     878  
Product sales 3,578     3,034     5,671  
Costs and expenses:          
Cost of products sold: (excluding depreciation and amortization)          
Natural gas services 18,946     22,886     25,797  
Sulfur services 15,564     15,339     16,579  
        Terminalling and storage 17,612     13,838     17,718  
Expenses:          
Operating expenses 64,344     70,841     77,871  
Selling, general and administrative 29,416     25,890     24,968  

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership’s Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on February 16, 2018.

 
 
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
 
  Year Ended December 31,
  2017   2016   2015
Allocation of net income attributable to:          
Limited partner interest:          
 Continuing operations $ 16,750     $ 23,143     $ 21,208  
 Discontinued operations         694  
  $ 16,750     $ 23,143     $ 21,902  
General partner interest:          
  Continuing operations $ 343     $ 8,419     $ 15,821  
  Discontinued operations         517  
  $ 343     $ 8,419     $ 16,338  
           
Net income per unit attributable to limited partners:          
Basic:          
Continuing operations $ 0.44     $ 0.65     $ 0.60  
Discontinued operations         0.02  
  $ 0.44     $ 0.65     $ 0.62  
           
Weighted average limited partner units – basic 38,102     35,347     35,309  
           
Diluted:          
Continuing operations $ 0.44     $ 0.65     $ 0.60  
Discontinued operations         0.02  
  $ 0.44     $ 0.65     $ 0.62  
           
Weighted average limited partner units – diluted 38,165     35,375     35,372  

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership’s Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on February 16, 2018.

 
 
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL
(Dollars in thousands)
 
  Partners’ Capital    
  Common   General
Partner
   
  Units   Amount   Amount   Total
Balances – December 31, 2014 35,365,912     $ 470,943     $ 14,728     $ 485,671  
               
Net income     22,042     16,338     38,380  
Issuance of common units, net     (590 )       (590 )
Issuance of restricted units 91,950              
Forfeiture of restricted units (1,250 )            
General partner contribution         55     55  
Cash distributions     (115,229 )   (18,087 )   (133,316 )
Reimbursement of excess purchase price over carrying value of acquired assets     2,250         2,250  
Unit-based compensation     1,429         1,429  
Balances – December 31, 2015 35,456,612     380,845     13,034     393,879  
               
Net income     23,233     8,419     31,652  
Issuance of common units, net     (29 )       (29 )
Issuance of restricted units 13,800              
Forfeiture of restricted units (2,250 )            
Cash distributions     (104,137 )   (14,041 )   (118,178 )
Reimbursement of excess purchase price over carrying value of acquired assets     4,125         4,125  
Unit-based compensation     904         904  
Purchase of treasury units (16,100 )   (347 )       (347 )
Balances – December 31, 2016 35,452,062     304,594     7,412     312,006  
               
Net income     16,792     343     17,135  
Issuance of common units, net 2,990,000     51,056         51,056  
Issuance of restricted units 12,000              
Forfeiture of restricted units (9,250 )            
General partner contribution         1,098     1,098  
Cash distributions     (75,399 )   (1,539 )   (76,938 )
Reimbursement of excess purchase price over carrying value of acquired assets     1,125         1,125  
Excess purchase price over carrying value of acquired assets     (7,887 )       (7,887 )
Unit-based compensation     650         650  
Purchase of treasury units (200 )   (4 )       (4 )
Balances – December 31, 2017 38,444,612     $ 290,927     $ 7,314     $ 298,241  
                             

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership’s Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on February 16, 2017.

 
 
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
 
  Year Ended December 31,
  2017   2016   2015
Cash flows from operating activities:          
Net income $ 17,135     $ 31,652     $ 38,380  
Less:  Income from discontinued operations         (1,215 )
Net income from continuing operations 17,135     31,652     37,165  
Adjustments to reconcile net income to net cash provided by operating activities:          
Depreciation and amortization 85,195     92,132     92,250  
Amortization of deferred debt issue costs 2,897     3,684     4,859  
Amortization of premium on notes payable (306 )   (306 )   (324 )
(Gain) loss on disposition or sale of property, plant, and equipment (523 )   (33,400 )   2,149  
Gain on retirement of senior unsecured notes         (1,242 )
Impairment of long lived assets 2,225     26,953     10,629  
Impairment of goodwill     4,145      
Equity in earnings unconsolidated entities (4,314 )   (4,714 )   (8,986 )
Derivative (income) loss 1,304     4,133     (3,107 )
Net cash (paid) received for commodity derivatives (5,136 )   (550 )   143  
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 650     904     1,429  
Return on investment 5,400     7,500     11,200  
Change in current assets and liabilities, excluding effects of acquisitions and dispositions:          
Accounts and other receivables (26,739 )   (6,153 )   59,479  
Product exchange receivables 178     843     1,996  
Inventories (14,656 )   (6,761 )   12,799  
Due from affiliates (12,096 )   (1,441 )   4,386  
Other current assets (1,699 )   2,478     891  
Trade and other accounts payable 20,037     3,254     (44,153 )
Product exchange payables 4,391     (5,372 )   2,336  
Due to affiliates (5,306 )   2,736     866  
Income taxes payable (360 )   (115 )   (189 )
Other accrued liabilities (3,187 )   686     (2,802 )
Change in other non-current assets and liabilities 2,416     (12,230 )   (345 )
Net cash provided by continuing operating activities 67,506     110,848     183,924  
Net cash used in discontinued operating activities         (1,352 )
Net cash provided by operating activities 67,506     110,848     182,572  
Cash flows from investing activities:          
Payments for property, plant, and equipment (39,749 )   (40,455 )   (65,791 )
Acquisitions, net of cash acquired (19,533 )   (2,150 )    
Payments for plant turnaround costs (1,583 )   (2,061 )   (1,908 )
Proceeds from sale of property, plant, and equipment 8,377     108,505     2,644  
Proceeds from repayment of Note receivable – affiliate  15,000          
Contributions to unconsolidated entities for operations (390 )        
Net cash provided by (used in) continuing investing activities (37,878 )   63,839     (65,055 )
Net cash provided by discontinued investing activities         41,250  
Net cash provided by (used in) investing activities (37,878 )   63,839     (23,805 )
Cash flows from financing activities:          
Payments of long-term debt (339,000 )   (386,700 )   (308,836 )
Proceeds from long-term debt 341,000     331,700     282,000  
Net proceeds from issuance of common units 51,056     (29 )   (590 )
General partner contributions 1,098         55  
Excess purchase price over carrying value of acquired assets (7,887 )        
Reimbursement of excess purchase price over carrying value of acquired assets 1,125     4,125     2,250  
Purchase of treasury units (4 )   (347 )    
Payments of debt issuance costs (66 )   (5,274 )   (341 )
Cash distributions paid (76,938 )   (118,178 )   (133,316 )
Net cash used in financing activities (29,616 )   (174,703 )   (158,778 )
           
Net increase (decrease) in cash 12     (16 )   (11 )
Cash at beginning of year 15     31     42  
Cash at end of year $ 27     $ 15     $ 31  
           

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership’s Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on February 16, 2017.

MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Dollars and volumes in thousands, except BBL per day)

Terminalling and Storage Segment

Comparative Results of Operations for the Twelve Months Ended December 31, 2017 and 2016

  Year Ended
December 31,
       
  2017   2016   Variance   Percent
Change
                           
  (In thousands)    
Revenues:              
Services $ 105,703     $ 128,783     $ (23,080 )   (18 )%
Products 130,466     113,580     16,886     15 %
Total revenues 236,169     242,363     (6,194 )   (3 )%
               
Cost of products sold 112,135     96,344     15,791     16 %
Operating expenses 69,888     71,831     (1,943 )   (3 )%
Selling, general and administrative expenses 5,832     4,677     1,155     25 %
Impairment of long-lived assets 600     15,252     (14,652 )   (96 )%
Depreciation and amortization 45,160     45,484     (324 )   (1 )%
  2,554     8,775     (6,221 )   (71 )%
Other operating income, net 751     35,368     (34,617 )   (98 )%
Operating income $ 3,305     $ 44,143     $ (40,838 )   (93 )%
               
Lubricant sales volumes (gallons) 21,897     17,995     3,902     22 %
Shore-based throughput volumes (guaranteed minimum) (gallons) 144,998     200,000     (55,002 )   (28 )%
Smackover refinery throughput volumes (guaranteed minimum BBL per day) 6,500     6,500         %
Corpus Christi crude terminal throughput volumes (barrels per day)     66,167     (66,167 )   (100 )%
                       

Comparative Results of Operations for the Twelve Months Ended December 31, 2016 and 2015

  Year Ended
December 31,
             
  2016   2015   Variance   Percent
Change
                           
  (In thousands)    
Revenues:              
Services $ 128,783     $ 138,614     $ (9,831 )   (7 )%
Products 113,580     131,826     (18,246 )   (14 )%
Total revenues 242,363     270,440     (28,077 )   (10 )%
               
Cost of products sold 96,344     115,460     (19,116 )   (17 )%
Operating expenses 71,831     83,917     (12,086 )   (14 )%
Selling, general and administrative expenses 4,677     3,804     873     23 %
Impairment of long-lived assets 15,252     9,305     5,947     64 %
Depreciation and amortization 45,484     38,731     6,753     17 %
  8,775     19,223     (10,448 )   (54 )%
Other operating income (loss), net 35,368     (473 )   35,841     (7,577 )%
Operating income $ 44,143     $ 18,750     $ 25,393     135 %
               
Lubricant sales volumes (gallons) 17,995     23,045     (5,050 )   (22 )%
Shore-based throughput volumes (guaranteed minimum) (gallons) 200,000     275,000     (75,000 )   (27 )%
Smackover refinery throughput volumes (guaranteed minimum BBL per day) 6,500     6,500         %
Corpus Christi crude terminal (barrels per day) 66,167     154,381     (88,214 )   (57 )%
                       

Natural Gas Services Segment

Comparative Results of Operations for the Twelve Months Ended December 31, 2017 and 2016

  Year Ended
December 31,
           
  2017   2016   Variance   Percent
Change
                           
  (In thousands)    
Revenues:              
Services $ 58,817     $ 61,133     $ (2,316 )   (4 )%
Products 474,091     330,200     143,891     44 %
Total revenues 532,908     391,333     141,575     36 %
               
Cost of products sold 425,073     292,573     132,500     45 %
Operating expenses 22,347     23,152     (805 )   (3 )%
Selling, general and administrative expenses 11,292     9,035     2,257     25 %
Depreciation and amortization 24,916     28,081     (3,165 )   (11 )%
  49,280     38,492     10,788     28 %
Other operating loss, net (89 )   (110 )   21     (19 )%
Operating income $ 49,191     $ 38,382     $ 10,809     28 %
               
Distributions from unconsolidated entities $ 5,400     $ 7,500     $ (2,100 )   (28 )%
               
NGLs Volumes (barrels) 10,487     9,532     955     10 %
                       

Comparative Results of Operations for the Twelve Months Ended December 31, 2016 and 2015

  Year Ended
December 31,
             
  2016   2015   Variance   Percent
Change
                           
  (In thousands)    
Revenues:              
Services $ 61,133     $ 64,858     $ (3,725 )   (6 )%
Products 330,200     458,302     (128,102 )   (28 )%
Total revenues 391,333     523,160     (131,827 )   (25 )%
               
Cost of products sold 292,573     416,404     (123,831 )   (30 )%
Operating expenses 23,152     23,979     (827 )   (3 )%
Selling, general and administrative expenses 9,035     9,791     (756 )   (8 )%
Depreciation and amortization 28,081     34,072     (5,991 )   (18 )%
  38,492     38,914     (422 )   (1 )%
Other operating loss, net (110 )   (303 )   193     (64 )%
Operating income $ 38,382     $ 38,611     $ (229 )   (1 )%
               
Distributions from unconsolidated entities $ 7,500     $ 11,200     $ (3,700 )   (33 )%
               
NGLs Volumes (barrels) 9,532     14,340     (4,808 )   (34 )%
                       
                       

MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Dollars and volumes in thousands, except BBL per day)

Sulfur Services Segment

Comparative Results of Operations for the Twelve Months Ended December 31, 2017 and 2016

  Year Ended
December 31,
             
  2017   2016   Variance   Percent
Change
                             
  (In thousands)    
Revenues:              
Services $ 10,952     $ 10,800     $ 152     1 %
Products 123,732     130,258     (6,526 )   (5 )%
Total revenues 134,684     141,058     (6,374 )   (5 )%
               
Cost of products sold 82,760     88,325     (5,565 )   (6 )%
Operating expenses 13,783     13,771     12     %
Selling, general and administrative expenses 4,136     3,861     275     7 %
Depreciation and amortization 8,117     7,995     122     2 %
  25,888     27,106     (1,218 )   (4 )%
Other operating loss, net (26 )   (291 )   265     (91 )%
Operating income $ 25,862     $ 26,815     $ (953 )   (4 )%
               
Sulfur (long tons) 807.0     797.0     10.0     1 %
Fertilizer (long tons) 276.0     262.0     14.0     5 %
Sulfur services volumes (long tons) 1,083.0     1,059.0     24.0     2 %
                       

Comparative Results of Operations for the Twelve Months Ended December 31, 2016 and 2015

  Year Ended
December 31,
             
  2016   2015   Variance   Percent
Change
                           
  (In thousands)    
Revenues:              
Services $ 10,800     $ 12,270     $ (1,470 )   (12 )%
Products 130,258     157,891     (27,633 )   (18 )%
Total revenues 141,058     170,161     (29,103 )   (17 )%
               
Cost of products sold 88,325     115,133     (26,808 )   (23 )%
Operating expenses 13,771     15,279     (1,508 )   (10 )%
Selling, general and administrative expenses 3,861     3,805     56     1 %
Depreciation and amortization 7,995     8,455     (460 )   (5 )%
  27,106     27,489     (383 )   (1 )%
Other operating loss, net (291 )   (376 )   85     (23 )%
Operating income $ 26,815     $ 27,113     $ (298 )   (1 )%
               
Sulfur (long tons) 797.0     856.0     (59.0 )   (7 )%
Fertilizer (long tons) 262.0     274.0     (12.0 )   (4 )%
Sulfur services volumes (long tons) 1,059.0     1,130.0     (71.0 )   (6 )%
                       
                       

MARTIN MIDSTREAM PARTNERS L.P.
SEGMENT OPERATING INCOME
(Dollars and volumes in thousands, except BBL per day)

Marine Transportation Segment

Comparative Results of Operations for the Twelve Months Ended December 31, 2017 and 2016

  Year Ended
December 31,
             
  2017   2016   Variance   Percent
Change
                           
  (In thousands)    
Revenues $ 51,915     $ 61,233     $ (9,318 )   (15 )%
Operating expenses 44,028     53,118     (9,090 )   (17 )%
Selling, general and administrative expenses 358     18     340     1,889 %
Impairment of long-lived assets 1,625     11,701     (10,076 )   (86 )%
Impairment of goodwill     4,145     (4,145 )   (100 )%
Depreciation and amortization 7,002     10,572     (3,570 )   (34 )%
  (1,098 )   (18,321 )   17,223     (94 )%
Other operating loss, net (113 )   (1,567 )   1,454     (93 )%
Operating loss $ (1,211 )   $ (19,888 )   $ 18,677     (94 )%
                             

Comparative Results of Operations for the Twelve Months Ended December 31, 2016 and 2015

  Year Ended
December 31,
             
  2016   2015   Variance   Percent
Change
                           
  (In thousands)    
Revenues $ 61,233     $ 81,784     $ (20,551 )   (25 )%
Operating expenses 53,118     63,412     (10,294 )   (16 )%
Selling, general and administrative expenses 18     417     (399 )   (96 )%
Impairment of long lived assets 11,701     1,324     10,377     784 %
Impairment of goodwill 4,145         4,145      
Depreciation and amortization 10,572     10,992     (420 )   (4 )%
  (18,321 )   5,639     (23,960 )   (425 )%
Other operating loss, net (1,567 )   (1,009 )   (558 )   55 %
Operating income (loss) $ (19,888 )   $ 4,630     $ (24,518 )   (530 )%
                             


Non-GAAP Financial Measures

The following table reconciles the non-GAAP financial measurements used by management to our most directly comparable GAAP measures for the quarter and years ended December 31, 2017 and 2016, which represents EBITDA, Adjusted EBITDA and Distributable Cash Flow.

Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow

  Three Months Ended   Twelve Months Ended
  December 31,   December 31,
  2017   2016   2017   2016
               
Net income 18,849     17,882     17,135     31,652  
Adjustments:              
Interest expense 13,066     12,054     47,743     46,100  
Income tax expense 51     304     352     726  
Depreciation and amortization 19,247     25,866     85,195     92,132  
EBITDA 51,213     56,106     150,425     170,610  
Adjustments:              
Equity in earnings of unconsolidated entities (1,767 )   (1,112 )   (4,314 )   (4,714 )
Gain on sale of property, plant and equipment (850 )   (34,982 )   (523 )   (33,400 )
Impairment of long-lived assets 2,225     26,953     2,225     26,953  
Impairment of goodwill             4,145  
Unrealized mark-to-market on commodity derivatives 205     3,784     (3,832 )   4,579  
Hurricane damage repair accrual (3,068 )       657      
Asset retirement obligation revision         5,547      
Distributions from unconsolidated entities 1,200     1,400     5,400     7,500  
Unit-based compensation 132     192     650     904  
Adjusted EBITDA 49,290     52,341     156,235     176,577  
Adjustments:              
Interest expense (13,066 )   (12,054 )   (47,743 )   (46,100 )
Income tax expense (51 )   (304 )   (352 )   (726 )
Amortization of deferred debt issuance costs 727     719     2,897     3,684  
Amortization of debt premium (76 )   (76 )   (306 )   (306 )
Non-cash mark-to-market on interest rate derivatives             (206 )
Payments for plant turnaround costs     (447 )   (1,583 )   (2,061 )
Maintenance capital expenditures (5,586 )   (4,345 )   (18,080 )   (17,163 )
Distributable Cash Flow $ 31,238     $ 35,834     $ 91,068     $ 113,699