8-K
Martin Midstream Partners L.P. (MMLP)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (date of earliest event reported): February 22, 2021
MARTIN MIDSTREAM PARTNERS L.P.
(Exact name of Registrant as specified in its charter)
| Delaware | 000-50056 | 05-0527861 | |
|---|---|---|---|
| (State of incorporation<br><br>or organization) | (Commission file number) | (I.R.S. employer identification number) | |
| 4200 Stone Road |
Kilgore, Texas 75662
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (903) 983-6200
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | | --- | --- || ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | | --- | --- || ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | | --- | --- || ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | | --- | --- |
Securities registered pursuant to Section 12(b) of the Act
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Units representing limited partnership interests | MMLP | The NASDAQ Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the
Exchange Act. o
| Item 2.02 | Results of Operations and Financial Condition. |
|---|
On February 22, 2021, Martin Midstream Partners L.P. (the "Partnership") issued a press release reporting its financial results for the quarter and year-ended December 31, 2020. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and will be published on the Partnership's website at www.MMLP.com. In accordance with General Instruction B.2 of Form 8-K, the information set forth herein and in the press release is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
| Item 9.01 | Financial Statements and Exhibits. |
|---|
(d) Exhibits
In accordance with General Instruction B.2 of Form 8-K, the information set forth in the attached Exhibit 99.1 and Exhibit 99.2 are deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act.
| Exhibit<br>Number | Description |
|---|---|
| 99.1 | Press release dated February22, 2021 |
| 99.2 | Supplemental information - Martin Midstream Partners L.P. 4th Quarter and Full Year Earnings Summary and 2021 Financial Guidance |
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document (contained in Exhibit 101). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| MARTIN MIDSTREAM PARTNERS L.P.<br><br><br><br>By: Martin Midstream GP LLC,<br><br>Its General Partner | ||
|---|---|---|
| Date: February 22, 2021 | By: /s/ Sharon L. Taylor | |
| Sharon L. Taylor | ||
| Vice President and Chief Financial Officer |
Document
EXHIBIT 99.1
MARTIN MIDSTREAM PARTNERS REPORTS FOURTH QUARTER AND FULL YEAR 2020 FINANCIAL RESULTS AND RELEASES 2021 FINANCIAL GUIDANCE
•Full year 2020 financial performance meets low end of guidance range despite challenges of COVID-19
•Reported net loss of $2.6 million and $6.8 million for the fourth quarter and year ended December 31, 2020, respectively
•Reported adjusted EBITDA of $17.4 million and $94.9 million for the fourth quarter and year ended December 31, 2020, respectively
•Generated distributable cash flow of $0.8 million and $39.7 million for the fourth quarter and year ended December 31, 2020, respectively
•Releases 2021 Financial Guidance
KILGORE, Texas, February 22, 2021 (GLOBE NEWSWIRE) -- Martin Midstream Partners L.P. (Nasdaq:MMLP) (the "Partnership") today announced its financial results for the three months and year ended December 31, 2020.
"We entered 2020 with a confident outlook and for very good reason. Our fourth quarter and full year 2019 results exceeded our guidance and we were executing on our priorities of strengthening the balance sheet and reducing leverage," stated Bob Bondurant, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership. "However, by March the impacts on refinery utilization due to demand destruction from COVID-19 were beginning to become apparent and there was, and continues to be, no clear line of sight to the end, although we do see reasons for optimism.
"Despite the difficulties associated with the pandemic and the specific challenges to our industry we were able to meet the low end of our full year guidance even though the fourth quarter fell short of our expectations. Headwinds in both our Transportation and NGL segments impacted our results significantly. In the Transportation segment, as expected, reduced refinery utilization resulted in lower demand for our marine assets. In the NGL segment, the backwardation of the butane price curve led refineries to delay purchases anticipating a lower price environment in the first quarter of 2021. This negatively impacted our fourth quarter sales volumes, specifically in December, resulting in a misalignment between physical sales and financially hedged volumes.
"As we look to 2021, I am optimistic that refinery utilization will continue to increase as demand rises as a result of widespread vaccinations, government stimulus and a rebounding economy. Our businesses remain solid with approximately 62% of our cash flows tied to fixed-fee contracts. We will continue to focus on optimizing utilization of our asset base, reducing costs, and generating consistent cash flows to meet our leverage reduction goals and return value to our unitholders."
FOURTH QUARTER 2020 OPERATING RESULTS BY BUSINESS SEGMENT
TERMINALLING AND STORAGE ("T&S")
T&S Operating Income for the three months ended December 31, 2020 and 2019 was $12.6 million and $2.6 million, respectively.
Adjusted segment EBITDA for T&S was $10.6 million and $11.5 million for the three months ended December 31, 2020 and 2019, respectively, reflecting reduced operating expenses from lower repairs and maintenance and labor cost at our Specialty Terminals, improved margins on packaged lubricants products from lower production cost and operating efficiencies. These were offset by reduced throughput volume and rates at our Shore-Based Terminals and expired capital recovery fees at the Smackover Refinery as well as decreased fees related to a crude pipeline gathering rate adjustment.
TRANSPORTATION
Transportation Operating Income for the three months ended December 31, 2020 and 2019 was an operating loss of $2.3 million and operating income of $5.5 million, respectively.
Adjusted segment EBITDA for Transportation was $1.7 million and $9.1 million for the three months ended December 31, 2020 and 2019, respectively, reflecting lower marine utilization and reduced day rates along with lower land transportation load count related to demand destruction and lower refinery utilization as a result of COVID-19.
SULFUR SERVICES
Sulfur Services Operating Income for the three months ended December 31, 2020 and 2019 was $4.7 million and $4.6 million, respectively.
Adjusted segment EBITDA for Sulfur Services was $7.4 million for both the three months ended December 31, 2020 and 2019, respectively. Within the segment, the Fertilizer division results recovered when compared to last year as a result of improved planting conditions and higher commodity prices. This was offset by lower results for the Sulfur division as margins decreased in our sulfur trading business and 2019 results benefited from business interruption insurance proceeds.
NATURAL GAS LIQUIDS ("NGL")
NGL Operating Income for the three months ended December 31, 2020 and 2019 was $1.5 million and $9.5 million, respectively.
Adjusted segment EBITDA from continuing operations for NGL was $2.0 million and $11.4 million for the three months ended December 31, 2020 and 2019, respectively, primarily as a result of reduced demand in our butane optimization business due to the impact of COVID-19 on refinery utilization and backwardation of the forward price curve delaying refinery purchases causing misalignment of our physical sales and financially hedged volumes.
UNALLOCATED SELLING, GENERAL AND ADMINISTRATIVE EXPENSE ("USGA")
USGA expenses included in operating income were $4.6 million and $4.2 million for the three months ended December 31, 2020 and 2019, respectively.
USGA expenses included in adjusted EBITDA were $4.3 million and $3.9 million for the three months ended December 31, 2020 and 2019, respectively, primarily as a result of the 2019 period including insurance recoveries related to the settlement of an insurance claim which offset legal expense during that period.
2021 FINANCIAL GUIDANCE
The Partnership expects to generate Adjusted EBITDA between $95 million and $102 million for 2021. Guidance assumptions include increases to refined product demand beginning in the second half of the year as vaccines are more widely distributed, travel restrictions are lifted and the global economy recovers from the COVID-19 pandemic.
The Partnership intends to update and provide more detailed guidance when visibility to refined product demand and refinery utilization improves throughout the year.
The Partnership has not provided comparable GAAP financial information on a forward-looking basis because it would require the Partnership to create estimated ranges on a GAAP basis, which would entail unreasonable effort as the adjustments required to reconcile forward-looking non-GAAP measures cannot be predicted with a reasonable degree of certainty but may include, among others, costs related to debt amendments and unusual charges, expenses and gains. Some or all of those adjustments could be significant.
LIQUIDITY
At December 31, 2020, the Partnership had $148 million drawn on its $300 million revolving credit facility, a $57 million decrease from September 30, 2020. The decrease was attributable to the seasonal inventory liquidation in the NGL segment as working capital declined by $23.6 million and we received net proceeds of $20.7 million from the Mega Lubricants disposition. As previously announced, on August 12, 2020, the Partnership successfully completed an exchange offer and cash tender offer for its senior unsecured notes due February 2021. At December 31, 2020, the Partnership had the following outstanding senior notes: senior unsecured notes due 2021 ("2021 Notes") of $28.8 million, senior secured notes of $53.8 million due 2024 and senior secured notes of $291.9 million due 2025, for a total of senior notes outstanding of $374.5 million. The Partnership’s leverage ratio, as calculated under the revolving credit facility, was 5.4 times on December 31, 2020 compared to 4.9 times on September 30, 2020. The Partnership is in compliance with all debt covenants as of December 31, 2020. On February 15, 2021, the 2021 Notes matured and the Partnership retired the outstanding balance of $28.8 million using its revolving credit facility.
COVID-19 RESPONSE
The Partnership initiated and continues to evaluate protocols in response to the COVID-19 pandemic which include work from home initiatives to protect the health and safety of our employees as well as the communities where we operate, travel restrictions, and training personnel regarding preventative measures when accessing docks, vessels and operating locations. At this time all facilities are operational and monitored closely.
RESULTS OF OPERATIONS
The Partnership had a net loss from continuing operations for the three months ended December 31, 2020 of $2.6 million, a loss of $0.06 per limited partner unit. The Partnership had net income from continuing operations for the three months ended December 31, 2019 of $6.6 million, or $0.14 per limited partner unit. Adjusted EBITDA from continuing operations for the three months ended December 31, 2020 was $17.4 million compared to the three months ended December 31, 2019 of $35.5 million. Distributable cash flow from continuing operations for the three months ended December 31, 2020 was $0.8 million compared to the three months ended December 31, 2019 of $20.7 million.
The Partnership had no net income, adjusted EBITDA or distributable cash flow from discontinued operations for the three months ended December 31, 2020 or 2019.
The Partnership had a net loss from continuing operations for the year ended December 31, 2020 of $6.8 million, a loss of $0.17 per limited partner unit. The Partnership had net income from continuing operations for the year ended December 31, 2019 of $4.5 million, or $0.11 per limited partner unit. Adjusted EBITDA from continuing operations for the year ended December 31, 2020 was $94.9 million compared to the year ended December 31, 2019 of $108.3 million. Distributable cash flow from continuing operations for the year ended December 31, 2020 was $39.7 million compared to the year ended December 31, 2019 of $41.8 million.
The Partnership had no net income from discontinued operations for the year ended December 31, 2020 compared to a loss of $179.5 million, or $4.55 per limited partner unit, for the year ended December 31, 2019. The Partnership had no adjusted EBITDA from discontinued operations for the year ended December 31, 2020 compared to $10.7 million for the year ended December 31, 2019. The Partnership had no distributable cash flow
from discontinued operations for the year ended December 31, 2020 compared to $9.8 million for the year ended December 31, 2019.
Revenues for the three months ended December 31, 2020 were $180.1 million compared to the three months ended December 31, 2019 of $241.9 million. Revenues for the year ended December 31, 2020 were $672.1 million compared to the year ended December 31, 2019 of $847.1 million.
Distributable cash flow from continuing operations, distributable cash flow from discontinued operations, EBITDA, adjusted EBITDA from continuing operations, and adjusted EBITDA from discontinued operations 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 from continuing operations, 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.
An attachment included in the Current Report on Form 8-K to which this announcement is included, contains a comparison of the Partnership’s Adjusted EBITDA for the fourth quarter 2020 to the Partnership's Adjusted EBITDA for the fourth quarter 2019.
Investors' Conference Call
Date: Tuesday, February 23, 2021
Time: 8:00 a.m. CT (please dial in by 7:55 a.m.)
Dial In #: (833) 900-2251
Conference ID: 9494038
Replay Dial In # (800) 585-8367 – Conference ID: 9494038
Webcast & Presentation: available at www.MMLP.com.
About Martin Midstream Partners
Martin Midstream Partners L.P., headquartered in Kilgore, Texas, is a publicly traded limited partnership with a diverse set of operations focused primarily in the United States Gulf Coast region. The Partnership's primary business lines include: (1) terminalling, processing, storage, and packaging services for petroleum products and by-products; (2) land and marine transportation services for petroleum products and by-products, chemicals, and specialty products; (3) sulfur and sulfur-based products processing, manufacturing, marketing and distribution; and (4) natural gas liquids marketing, distribution and transportation services. To learn more, visit www.MMLP.com.
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 guidance or to financial or operational estimates or projections rely on a number of assumptions concerning future events and are subject to a number of uncertainties, including (i) the current and potential impacts of the COVID-19 pandemic generally, on an industry-specific basis, and on the Partnership’s specific operations and business, (ii) the effects of the continued volatility of commodity prices and the related macroeconomic and political environment, and (iii) other factors, many of which are outside its control, which could cause actual results to differ materially from such statements. While the Partnership believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in anticipating or predicting certain important factors. A discussion of these factors, including risks and uncertainties, is set forth in the Partnership’s annual and quarterly reports filed from time to time with the Securities and Exchange Commission. The Partnership disclaims any intention or obligation to revise any forward-looking statements, including financial estimates, whether as a result of new information, future events, or otherwise except where required to do so by law.
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, Adjusted EBITDA from Continuing Operations, and Adjusted EBITDA from Discontinued Operations. Certain items excluded from EBITDA, adjusted EBITDA from continuing operations, and adjusted EBITDA from discontinued operations 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, adjusted EBITDA from continuing operations, and adjusted EBITDA from discontinued operations 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 and Distributable Cash Flow from Discontinued Operations. 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 from continuing operations, adjusted EBITDA from discontinued operations, distributable cash flow, and distributable cash flow from discontinued operations, 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.
Contact:
Sharon Taylor - Vice President & Chief Financial Officer
(877) 256-6644
ir@martinmlp.com
MMLP-F
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
| December 31, | ||||
|---|---|---|---|---|
| 2020 | 2019 | |||
| Assets | ||||
| Cash | $ | 4,958 | $ | 2,856 |
| Trade and accrued accounts receivable, less allowance for doubtful accounts of $261 and $532, respectively | 52,748 | 87,254 | ||
| Inventories | 54,122 | 62,540 | ||
| Due from affiliates | 14,807 | 17,829 | ||
| Other current assets | 8,991 | 5,833 | ||
| Assets held for sale | — | 5,052 | ||
| Total current assets | 135,626 | 181,364 | ||
| Property, plant and equipment, at cost | 889,108 | 884,728 | ||
| Accumulated depreciation | (509,237) | (467,531) | ||
| Property, plant and equipment, net | 379,871 | 417,197 | ||
| Goodwill | 16,823 | 17,705 | ||
| Right-of-use assets | 22,260 | 23,901 | ||
| Deferred income taxes, net | 22,253 | 23,422 | ||
| Intangibles and other assets, net | 2,805 | 3,567 | ||
| $ | 579,638 | $ | 667,156 | |
| Liabilities and Partners’ Capital (Deficit) | ||||
| Current portion of long term debt and finance lease obligations | $ | 31,497 | $ | 6,758 |
| Trade and other accounts payable | 51,900 | 64,802 | ||
| Product exchange payables | 373 | 4,322 | ||
| Due to affiliates | 435 | 1,470 | ||
| Income taxes payable | 556 | 472 | ||
| Fair value of derivatives | 207 | 667 | ||
| Other accrued liabilities | 34,407 | 28,789 | ||
| Total current liabilities | 119,375 | 107,280 | ||
| Long-term debt, net | 484,597 | 569,788 | ||
| Finance lease obligations | 289 | 717 | ||
| Operating lease liabilities | 15,181 | 16,656 | ||
| Other long-term obligations | 7,067 | 8,911 | ||
| Total liabilities | 626,509 | 703,352 | ||
| Commitments and contingencies | ||||
| Partners’ capital (deficit) | (46,871) | (36,196) | ||
| Total partners’ capital (deficit) | (46,871) | (36,196) | ||
| $ | 579,638 | $ | 667,156 |
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
| Year Ended December 31, | ||||||
|---|---|---|---|---|---|---|
| 2020 | 2019 | 2018 | ||||
| Revenues: | ||||||
| Terminalling and storage * | $ | 80,864 | $ | 87,397 | $ | 96,204 |
| Transportation * | 132,492 | 159,622 | 150,121 | |||
| Sulfur services | 11,659 | 11,434 | 11,148 | |||
| Product sales: * | ||||||
| Natural gas liquids | 247,479 | 366,502 | 496,007 | |||
| Sulfur services | 96,348 | 99,906 | 121,388 | |||
| Terminalling and storage | 103,300 | 122,257 | 145,236 | |||
| 447,127 | 588,665 | 762,631 | ||||
| Total revenues | 672,142 | 847,118 | 1,020,104 | |||
| Costs and expenses: | ||||||
| Cost of products sold: (excluding depreciation and amortization) | ||||||
| Natural gas liquids * | 215,895 | 325,376 | 449,103 | |||
| Sulfur services * | 58,515 | 65,893 | 83,641 | |||
| Terminalling and storage * | 82,516 | 101,526 | 126,562 | |||
| 356,926 | 492,795 | 659,306 | ||||
| Expenses: | ||||||
| Operating expenses * | 183,747 | 209,313 | 216,182 | |||
| Selling, general and administrative * | 40,900 | 41,433 | 39,116 | |||
| Impairment of long-lived assets | — | — | — | |||
| Impairment of goodwill | — | — | — | |||
| Depreciation and amortization | 61,462 | 60,060 | 61,484 | |||
| Total costs and expenses | 643,035 | 803,601 | 976,088 | |||
| Other operating income, net | 12,488 | 14,587 | 1,041 | |||
| Gain on involuntary conversion of property, plant and equipment | 4,907 | — | — | |||
| Operating income | 46,502 | 58,104 | 45,057 | |||
| Other income (expense): | ||||||
| Interest expense, net | (46,210) | (51,690) | (52,349) | |||
| Gain on retirement of senior unsecured notes | 3,484 | — | — | |||
| Loss on exchange of senior unsecured notes | (8,817) | — | — | |||
| Other, net | 6 | 6 | 38 | |||
| Total other income (expense) | (51,537) | (51,684) | (52,311) | |||
| Net income (loss) before taxes | (5,035) | 6,420 | (7,254) | |||
| Income tax expense | (1,736) | (1,900) | (577) | |||
| Income (loss) from continuing operations | (6,771) | 4,520 | (7,831) | |||
| Income (loss) from discontinued operations, net of income taxes | — | (179,466) | 63,486 | |||
| Net income (loss) | (6,771) | (174,946) | 55,655 | |||
| Less general partner's interest in net (income) loss | 135 | 3,499 | (882) | |||
| Less pre-acquisition income allocated to the general partner | — | — | (11,550) | |||
| Less (income) loss allocable to unvested restricted units | 21 | (41) | (28) | |||
| Limited partners' interest in net income (loss) | $ | (6,615) | $ | (171,488) | $ | 43,195 |
*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, | ||||||
|---|---|---|---|---|---|---|
| 2020 | 2019 | 2018 | ||||
| Revenues: | ||||||
| Terminalling and storage | $ | 63,823 | $ | 71,733 | $ | 79,137 |
| Transportation | 21,997 | 24,243 | 27,588 | |||
| Product sales | 317 | 931 | 1,297 | |||
| Costs and expenses: | ||||||
| Cost of products sold: (excluding depreciation and amortization) | ||||||
| Sulfur services | 10,519 | 10,765 | 10,641 | |||
| Terminalling and storage | 18,429 | 23,859 | 24,613 | |||
| Expenses: | ||||||
| Operating expenses | 80,075 | 88,194 | 90,878 | |||
| Selling, general and administrative | 32,886 | 32,622 | 26,441 |
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
| Year Ended December 31, | ||||||
|---|---|---|---|---|---|---|
| 2020 | 2019 | 2018 | ||||
| Allocation of net income (loss) attributable to: | ||||||
| Limited partner interest: | ||||||
| Continuing operations | $ | (6,615) | $ | 4,430 | $ | (18,982) |
| Discontinued operations | — | (175,918) | 62,177 | |||
| $ | (6,615) | $ | (171,488) | $ | 43,195 | |
| General partner interest: | ||||||
| Continuing operations | $ | (135) | $ | 91 | $ | (387) |
| Discontinued operations | — | (3,590) | 1,269 | |||
| $ | (135) | $ | (3,499) | $ | 882 | |
| Net income (loss) per unit attributable to limited partners: | ||||||
| Basic: | ||||||
| Continuing operations | $ | (0.17) | $ | 0.11 | $ | (0.49) |
| Discontinued operations | — | (4.55) | 1.60 | |||
| $ | (0.17) | $ | (4.44) | $ | 1.11 | |
| Weighted average limited partner units - basic | 38,657 | 38,659 | 38,907 | |||
| Diluted: | ||||||
| Continuing operations | $ | (0.17) | $ | 0.11 | $ | (0.49) |
| Discontinued operations | — | (4.55) | 1.60 | |||
| $ | (0.17) | $ | (4.44) | $ | 1.11 | |
| Weighted average limited partner units - diluted | 38,657 | 38,659 | 38,923 |
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF CAPITAL
(Dollars in thousands)
| Partners’ Capital (Deficit) | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Parent Net Investment | Common | General Partner | ||||||||||||
| Units | Amount | Amount | Total | |||||||||||
| Balances – December 31, 2017 | $ | 24,240 | 38,444,612 | $ | 290,927 | $ | 7,314 | $ | 322,481 | |||||
| Net income | 11,550 | — | 43,223 | 882 | 55,655 | |||||||||
| Issuance of common units, net | — | — | (118) | — | (118) | |||||||||
| Issuance of time-based restricted units | — | 315,500 | — | — | — | |||||||||
| Issuance of performance-based restricted units | 317,925 | — | ||||||||||||
| Forfeiture of restricted units | — | (27,000) | — | — | — | |||||||||
| General partner contribution | — | — | — | — | — | |||||||||
| Cash distributions | — | — | (76,872) | (1,569) | (78,441) | |||||||||
| Deemed distribution from Martin Resource Management Corporation | (12,070) | — | — | — | (12,070) | |||||||||
| Reimbursement of excess purchase price over carrying value of acquired assets | — | — | — | — | — | |||||||||
| Excess carrying value of the assets over the purchase price paid by Martin Resource Management | — | — | (26) | — | (26) | |||||||||
| Unit-based compensation | — | — | 1,224 | — | 1,224 | |||||||||
| Purchase of treasury units | — | (18,800) | (273) | — | (273) | |||||||||
| Balances – December 31, 2018 | 23,720 | 39,032,237 | 258,085 | 6,627 | 288,432 | |||||||||
| Net loss | — | — | (171,447) | (3,499) | (174,946) | |||||||||
| Issuance of common units, net | — | — | (289) | — | (289) | |||||||||
| Issuance of time-based restricted units | — | 16,944 | — | — | — | |||||||||
| Forfeiture of restricted units | — | (154,288) | — | — | — | |||||||||
| Cash distributions | — | — | (48,111) | (982) | (49,093) | |||||||||
| Excess purchase price over carrying value of acquired assets | — | — | (102,393) | — | (102,393) | |||||||||
| Deferred taxes on acquired assets and liabilities | — | — | 24,781 | — | 24,781 | |||||||||
| Unit-based compensation | — | — | 1,424 | — | 1,424 | |||||||||
| Purchase of treasury units | — | (31,504) | (392) | — | (392) | |||||||||
| Contribution to parent | (23,720) | — | — | — | (23,720) | |||||||||
| Balances – December 31, 2019 | — | 38,863.389 | (38,342) | 2,146 | (36,196) | |||||||||
| Net loss | — | — | (6,636) | (135) | (6,771) | |||||||||
| Issuance of time-based restricted units | — | 81,000 | — | — | — | |||||||||
| Forfeiture of restricted units | — | (85,467) | — | — | — | |||||||||
| Cash distributions | — | — | (5,211) | (106) | (5,317) | |||||||||
| Unit-based compensation | — | — | 1,422 | — | 1,422 | |||||||||
| Purchase of treasury units | — | (7,748) | (9) | — | (9) | |||||||||
| Balances – December 31, 2020 | $ | — | 38,851,174 | $ | (48,776) | $ | 1,905 | $ | (46,871) |
MARTIN MIDSTREAM PARTNERS L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
| Year Ended December 31, | ||||||
|---|---|---|---|---|---|---|
| 2020 | 2019 | 2018 | ||||
| Cash flows from operating activities: | ||||||
| Net income (loss) | $ | (6,771) | $ | (174,946) | $ | 55,655 |
| Less: (Income) loss from discontinued operations | — | 179,466 | (63,486) | |||
| Net income (loss) from continuing operations | (6,771) | 4,520 | (7,831) | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||
| Depreciation and amortization | 61,462 | 60,060 | 61,484 | |||
| Amortization and write-off of deferred debt issue costs | 3,422 | 4,041 | 3,445 | |||
| Amortization of premium on notes payable | (191) | (306) | (306) | |||
| Deferred income tax expense | 1,169 | 1,360 | 208 | |||
| Gain on disposition or sale of property, plant, and equipment | (9,788) | (13,332) | (1,041) | |||
| Gain on involuntary conversion of property, plant and equipment | (4,907) | — | — | |||
| Gain on retirement of senior unsecured notes | (3,484) | — | — | |||
| Non-cash impact related to exchange of senior unsecured notes | (749) | — | — | |||
| Derivative (income) loss | 8,209 | 5,137 | (14,024) | |||
| Net cash (paid) received for commodity derivatives | (8,669) | (4,466) | 13,948 | |||
| Unit-based compensation | 1,422 | 1,424 | 1,224 | |||
| Change in current assets and liabilities, excluding effects of acquisitions and dispositions: | ||||||
| Accounts and other receivables | 30,741 | 62 | 29,085 | |||
| Product exchange receivables | — | 166 | (137) | |||
| Inventories | 5,264 | 21,493 | 13,370 | |||
| Due from affiliates | 2,932 | 1,822 | 5,961 | |||
| Other current assets | (5,733) | (254) | 1,485 | |||
| Trade and other accounts payable | (7,318) | (898) | (27,321) | |||
| Product exchange payables | (3,949) | (7,781) | 555 | |||
| Due to affiliates | (1,035) | (1,469) | 99 | |||
| Income taxes payable | 84 | 27 | (65) | |||
| Other accrued liabilities | 4,144 | (3,017) | (6,636) | |||
| Change in other non-current assets and liabilities | (1,470) | (543) | 1,206 | |||
| Net cash provided by continuing operating activities | 64,785 | 68,046 | 74,709 | |||
| Net cash provided by discontinued operating activities | — | 7,769 | 30,321 | |||
| Net cash provided by operating activities | 64,785 | 75,815 | 105,030 | |||
| Cash flows from investing activities: | ||||||
| Payments for property, plant, and equipment | (28,622) | (30,621) | (35,255) | |||
| Acquisitions, net of cash acquired | — | (23,720) | — | |||
| Payments for plant turnaround costs | (1,478) | (5,677) | (1,893) | |||
| Proceeds from sale of property, plant, and equipment | 25,154 | 20,660 | 11,483 | |||
| Proceeds from involuntary conversion of property, plant and equipment | 7,550 | 5,031 | — | |||
| Net cash provided by (used in) continuing investing activities | 2,604 | (34,327) | (25,665) | |||
| Net cash provided by (used in) discontinued investing activities | — | 209,155 | 173,287 | |||
| Net cash provided by (used in) investing activities | 2,604 | 174,828 | 147,622 | |||
| Cash flows from financing activities: | ||||||
| Payments of long-term debt and finance lease obligations | (338,199) | (729,514) | (559,201) | |||
| Proceeds from long-term debt | 282,019 | 638,000 | 399,000 | |||
| Proceeds from issuance of common units, net of issuance related costs | — | (289) | (118) | |||
| Deemed contribution from (distribution to) Martin Resource Management | — | — | (12,070) | |||
| Excess purchase price over carrying value of acquired assets | — | (102,393) | (26) | |||
| Purchase of treasury units | (9) | (392) | (273) | |||
| Payments of debt issuance costs | (3,781) | (4,406) | (1,312) | |||
| Cash distributions paid | (5,317) | (49,093) | (78,441) | |||
| Net cash used in financing activities | (65,287) | (248,087) | (252,441) | |||
| Net increase in cash | 2,102 | 2,556 | 211 | |||
| Cash at beginning of year | 2,856 | 300 | 89 | |||
| Cash at end of year | $ | 4,958 | $ | 2,856 | $ | 300 |
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 Years Ended December 31, 2020 and 2019
| Year Ended December 31, | Variance | Percent Change | |||||
|---|---|---|---|---|---|---|---|
| 2020 | 2019 | ||||||
| (In thousands) | |||||||
| Revenues: | |||||||
| Services | $ | 87,661 | $ | 93,980 | $ | (6,319) | (7)% |
| Products | 103,380 | 122,333 | (18,953) | (15)% | |||
| Total revenues | 191,041 | 216,313 | (25,272) | (12)% | |||
| Cost of products sold | 87,495 | 107,081 | (19,586) | (18)% | |||
| Operating expenses | 50,421 | 53,279 | (2,858) | (5)% | |||
| Selling, general and administrative expenses | 6,159 | 5,997 | 162 | 3% | |||
| Depreciation and amortization | 29,489 | 30,952 | (1,463) | (5)% | |||
| 17,477 | 19,004 | (1,527) | (8)% | ||||
| Other operating income (loss), net | 6,429 | (1,334) | 7,763 | 582% | |||
| Gain on involuntary conversion of property, plant and equipment | 63 | — | 63 | ||||
| Operating income | $ | 23,969 | $ | 17,670 | $ | 6,299 | 36% |
| Shore-based throughput volumes (guaranteed minimum) (gallons) | 80,000 | 80,000 | — | —% | |||
| Smackover refinery throughput volumes (guaranteed minimum BBL per day) | 6,500 | 6,500 | — | —% |
Transportation Segment
Comparative Results of Operations for the Years Ended December 31, 2020 and 2019
| Year Ended December 31, | Variance | Percent Change | |||||
|---|---|---|---|---|---|---|---|
| 2020 | 2019 | ||||||
| (In thousands) | |||||||
| Revenues | $ | 150,285 | $ | 183,740 | $ | (33,455) | (18)% |
| Operating expenses | 122,064 | 141,713 | (19,649) | (14)% | |||
| Selling, general and administrative expenses | 8,245 | 8,199 | 46 | 1% | |||
| Depreciation and amortization | 17,505 | 15,307 | 2,198 | 14% | |||
| 2,471 | 18,521 | (16,050) | (87)% | ||||
| Other operating loss, net | (690) | (1,691) | 1,001 | 59% | |||
| Operating income | $ | 1,781 | $ | 16,830 | $ | (15,049) | (89)% |
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 Years Ended December 31, 2020 and 2019
| Year Ended December 31, | Variance | Percent Change | |||||
|---|---|---|---|---|---|---|---|
| 2020 | 2019 | ||||||
| (In thousands) | |||||||
| Revenues: | |||||||
| Services | $ | 11,659 | $ | 11,434 | $ | 225 | 2% |
| Products | 96,361 | 99,906 | (3,545) | (4)% | |||
| Total revenues | 108,020 | 111,340 | (3,320) | (3)% | |||
| Cost of products sold | 62,920 | 71,806 | (8,886) | (12)% | |||
| Operating expenses | 10,891 | 10,639 | 252 | 2% | |||
| Selling, general and administrative expenses | 4,791 | 4,784 | 7 | —% | |||
| Depreciation and amortization | 12,012 | 11,332 | 680 | 6% | |||
| 17,406 | 12,779 | 4,627 | 36% | ||||
| Other operating income, net | 6,751 | 1,210 | 5,541 | 458% | |||
| Gain on involuntary conversion of property, plant and equipment | 4,844 | — | 4,844 | ||||
| Operating income | $ | 29,001 | $ | 13,989 | $ | 15,012 | 107% |
| Sulfur (long tons) | 642.0 | 665.0 | (23.0) | (3)% | |||
| Fertilizer (long tons) | 275.0 | 260.0 | 15.0 | 6% | |||
| Sulfur services volumes (long tons) | 917.0 | 925.0 | (8.0) | (1)% |
Natural Gas Services Segment
Comparative Results of Operations for the Years Ended December 31, 2020 and 2019
| Year Ended December 31, | Variance | Percent Change | |||||
|---|---|---|---|---|---|---|---|
| 2020 | 2019 | ||||||
| (In thousands) | |||||||
| Products Revenues | $ | 247,484 | $ | 366,502 | (119,018) | (32)% | |
| Cost of products sold | 228,345 | 341,800 | (113,455) | (33)% | |||
| Operating expenses | 3,008 | 6,300 | (3,292) | (52)% | |||
| Selling, general and administrative expenses | 4,013 | 4,739 | (726) | (15)% | |||
| Depreciation and amortization | 2,456 | 2,469 | (13) | (1)% | |||
| 9,662 | 11,194 | (1,532) | (14)% | ||||
| Other operating income (loss), net | (2) | 16,402 | (16,404) | (100)% | |||
| Operating income | $ | 9,660 | $ | 27,596 | $ | (17,936) | (65)% |
| NGLs Volumes (barrels) | 9,231 | 9,820 | (589) | (6)% |
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, 2020 and 2019, which represents EBITDA, Adjusted EBITDA and Distributable Cash Flow.
Reconciliation of EBITDA, Adjusted EBITDA, and Distributable Cash Flow
| Three Months Ended December 31, | Year Ended December 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |||||
| Net income (loss) | $ | (2,564) | $ | 6,642 | $ | (6,771) | $ | (174,946) |
| Less: Loss from discontinued operations, net of income taxes | — | — | — | 179,466 | ||||
| Income (loss) from continuing operations | (2,564) | 6,642 | (6,771) | 4,520 | ||||
| Adjustments: | ||||||||
| Interest expense | 13,965 | 11,060 | 46,210 | 51,690 | ||||
| Income tax expense | 226 | 328 | 1,736 | 1,900 | ||||
| Depreciation and amortization | 15,604 | 15,063 | 61,462 | 60,060 | ||||
| EBITDA from Continuing Operations | 27,231 | 33,093 | 102,637 | 118,170 | ||||
| Adjustments: | ||||||||
| (Gain) loss on sale of property, plant and equipment | (9,941) | 617 | (9,788) | (13,332) | ||||
| Gain on involuntary conversion of property, plant and equipment | (384) | — | (4,907) | — | ||||
| Gain on retirement of senior unsecured notes | — | — | (3,484) | — | ||||
| Loss on exchange of senior unsecured notes | 301 | — | 8,817 | — | ||||
| Unrealized mark-to-market on commodity derivatives | (184) | 1,200 | (460) | 671 | ||||
| Non-cash insurance related accruals | — | — | 250 | 500 | ||||
| Lower of cost or market adjustments | — | 226 | 370 | 633 | ||||
| Unit-based compensation | 352 | 360 | 1,422 | 1,424 | ||||
| Transaction costs associated with acquisitions | — | — | — | 224 | ||||
| Adjusted EBITDA from Continuing Operations | 17,375 | 35,496 | 94,857 | 108,290 | ||||
| Adjustments: | ||||||||
| Interest expense | (13,965) | (11,060) | (46,210) | (51,690) | ||||
| Income tax expense | (226) | (328) | (1,736) | (1,900) | ||||
| Amortization of deferred debt issuance costs | 748 | 483 | 3,422 | 4,041 | ||||
| Amortization of debt premium | — | (76) | (191) | (306) | ||||
| Deferred income taxes | (33) | 260 | 1,169 | 1,360 | ||||
| Payments for plant turnaround costs | (841) | (560) | (1,478) | (5,677) | ||||
| Maintenance capital expenditures | (2,256) | (3,492) | (10,138) | (12,368) | ||||
| Distributable Cash Flow from Continuing Operations | $ | 802 | $ | 20,723 | $ | 39,695 | $ | 41,750 |
| Loss from discontinued operations, net of income taxes | $ | — | $ | — | $ | — | $ | (179,466) |
| Adjustments: | ||||||||
| Depreciation and amortization | — | — | — | 8,161 | ||||
| EBITDA from Discontinued Operations | ||||||||
| Gain on sale of property, plant and equipment, net | — | — | — | 178,781 | ||||
| Non-cash insurance related accruals | — | — | — | 3,213 | ||||
| Adjusted EBITDA from Discontinued Operations | $ | — | $ | — | $ | — | $ | 10,689 |
| Maintenance capital expenditures | $ | — | $ | — | $ | — | $ | (912) |
| Distributable Cash Flow from Discontinued Operations | $ | — | $ | — | $ | — | $ | 9,777 |
exhibit992_mmlp4q2020and
1 Martin Midstream Partners L.P. February 22, 2021 Fourth Quarter and Full Year 2020 Earnings Summary and 2021 Financial Guidance Exhibit 99.2
2 Use of Non-GAAP Financial Measures Disclaimers Forward Looking Statements This presentation includes certain non-GAAP financial measures such as EBITDA, Adjusted EBITDA, Distributable Cash Flow and Adjusted Free Cash Flow. Adjusted Free Cash Flow is defined as Distributable Cash Flow less Growth Capital Expenditures and Principle Payments under Finance Lease Obligations. These non-GAAP financial measures are not meant to be considered in isolation or as a substitute for results prepared in accordance with accounting principles generally accepted in the United States (GAAP). A reconciliation of non-GAAP financial measures included in this presentation to the most directly comparable financial measures calculated and presented in accordance with GAAP is set forth in the Appendix of this presentation or on our web site at www.MMLP.com. MMLP’s management believes that these non-GAAP financial measures may provide useful information to investors regarding MMLP’s financial condition and results of operations as they provide another measure of the profitability and ability to service its debt and are considered important measures by financial analysts covering MMLP and its peers. The Partnership has not provided comparable GAAP financial information on a forward-looking basis because it would require the Partnership to create estimated ranges on a GAAP basis, which would entail unreasonable effort. Adjustments required to reconcile forward-looking non-GAAP measures cannot be predicted with reasonable certainty but may include, among others, costs related to debt amendments and unusual charges, expenses and gains. Some or all of those adjustments could be significant. 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 or operational estimates rely on a number of assumptions concerning future events and are subject to a number of uncertainties, including (i) the current and potential impacts of the COVID 19 pandemic generally, on an industry-specific basis, and on Martin Midstream Partners' specific operations and business, (ii) the effects of the continued volatility of commodity prices and the related macroeconomic and political environment, and (iii) other factors, many of which are outside its control, which could cause actual results to differ materially from such statements. While the Partnership believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in anticipating or predicting certain important factors. A discussion of these factors, including risks and uncertainties, is set forth in the Partnership's annual and quarterly reports filed from time to time with the Securities and Exchange Commission. The Partnership disclaims any intention or obligation to revise any forward-looking statements, including financial estimates, whether as a result of new information, future events, or otherwise except where required to do so by law.
3 MMLP 4Q 2020 Adjusted EBITDA Comparison & Reconciliation Note: numbers may not add due to rounding *Pre-Unallocated SG&A (in millions) Terminalling & Storage Sulfur Services Transportation Natural Gas Liquids SG&A Interest Expense 4Q 2020 Net income (loss) $12.6 $4.7 $(2.3) $1.5 $(5.1) $(13.9) $(2.6) Interest expense add back -- -- -- -- -- $13.9 $13.9 Loss on exchange of senior unsecured notes -- -- -- -- $0.3 -- $0.3 Income tax expense -- -- -- -- $0.2 -- $0.2 Operating Income (loss) $12.6 $4.7 $(2.3) $1.5 $(4.6) -- $11.9 Depreciation and amortization $7.5 $3.1 $4.5 $0.6 -- -- $15.7 Gain on disposition or sale of PP&E $(9.5) -- $(0.5) -- -- -- $(10.0) Gain on involuntary conversion of PP&E -- $(0.4) -- -- -- -- $(0.4) Non-cash mark to market on commodity derivatives -- -- -- $(0.1) -- -- $(0.1) Non-cash compensation expense -- -- -- -- $0.3 -- $0.3 Adjusted EBITDA $10.6 $7.4 $1.7 $2.0 $(4.3) $0.0 $17.4 Adjusted EBITDA* $39.4 $21.7 Unallocated SG&A $(3.9) $(4.3) Total Adjusted EBITDA $35.5 $17.4 Terminalling & Storage 4Q19 Actual 4Q20 Actual Smackover Refinery $5.5 $4.2 Martin Lubricants $2.9 $3.4 Specialty Terminals $2.2 $2.9 Shore-Based Terminals $0.6 $0.0 Shore-Based Lubricants $0.4 $0.1 Total T&S $11.5 $10.6 Natural Gas Liquids 4Q19 Actual 4Q20 Actual Butane $9.4 $1.0 Natural Gasoline $0.6 $0.2 Propane $1.4 $0.8 Total NGLs $11.4 $2.0 Sulfur Services 4Q19 Actual 4Q20 Actual Fertilizer $3.5 $5.0 Sulfur Prilling $2.3 $1.8 Molten Sulfur $1.6 $0.6 Total Sulfur Services $7.4 $7.4 Transportation 4Q19 Actual 4Q20 Actual Land $4.7 $3.0 Marine $4.4 $(1.3) Total Transportation $9.1 $1.7
4 (in millions) Terminalling & Storage Sulfur Services Transportation Natural Gas Liquids SG&A Interest Expense 2020A Net Income (loss) $23.9 $29.0 $1.8 $9.6 $(24.9) $(46.2) $(6.8) Interest expense add back -- -- -- -- -- $46.2 $46.2 Loss on exchange of senior unsecured notes -- -- -- -- $8.8 -- $8.8 Income tax expense -- -- -- -- $1.7 -- $1.7 Operating income (loss) $23.9 $29.0 $1.8 $9.6 $(14.4) -- $49.9 Depreciation and amortization $29.5 $12.1 $17.5 $2.5 -- -- $61.6 (Gain) loss on disposition or sale of PP&E $(6.4) $(4.1) $0.7 -- -- -- $(9.8) Lower of cost or market adjustments -- -- -- $0.3 -- -- $0.3 Unit based compensation -- -- -- -- $0.4 -- $0.4 Gain on involuntary conversion of PP&E $(0.1) $(4.8) -- -- -- --- $(4.9) Gain on repurchase of senior unsecured notes -- -- -- -- $(3.5) -- $(3.5) Non-cash insurance related accruals -- $0.3 -- -- -- -- $0.3 Non-cash mark to market on commodity derivatives -- -- -- $(0.4) -- -- $(0.4) Non-cash compensation expense -- -- -- -- $0.9 -- $0.9 Adjusted EBITDA $46.9 $32.5 $20.0 $12.0 $(16.6) $0.0 $94.9 Terminalling & Storage 1Q20A 2Q20A 3Q20A 4Q20A 2020A Smackover Refinery $4.7 $4.5 $4.7 $4.2 $18.0 Fixed-Fee Martin Lubricants $3.5 $2.8 $5.0 $3.4 $14.8 Margin Specialty Terminals $2.5 $3.2 $3.7 $2.9 $12.4 Fixed-Fee Shore-Based Terminals $0.3 $0.3 $0.9 $0.0 $1.5 Fixed-Fee Shore-Based Lubricants $0.5 $(0.1) $(0.2) $0.1 $0.3 Margin Total T&S $11.5 $10.6 $14.2 $10.6 $46.9 MMLP YTD 2020 Adjusted EBITDA Natural Gas Liquids 1Q20A 2Q20A 3Q20A 4Q20A 2020A Butane $3.4 $0.5 $2.6 $1.0 $7.5 Margin Natural Gasoline $1.4 $0.9 $(0.1) $0.2 $2.3 Fixed-Fee Propane $0.7 $0.3 $0.4 $0.8 $2.3 Margin Total NGLs $5.5 $1.6 $2.8 $2.0 $12.0 Sulfur Services 1Q20A 2Q20A 3Q20A 4Q20A 2020A Fertilizer $4.9 $6.8 $0.6 $5.0 $17.3 Margin Sulfur Prilling $4.1 $2.2 $2.0 $1.8 $10.1 Fixed-Fee Molten Sulfur $1.1 $1.7 $1.5 $0.6 $5.0 Fixed-Fee Total Sulfur Services $10.1 $10.8 $4.2 $7.4 $32.5 Transportation 1Q20A 2Q20A 3Q20A 4Q20A 2020A Land $4.8 $3.3 $4.1 $3.0 $15.2 Marine $3.1 $1.6 $1.5 $(1.3) $4.8 Total Transportation $7.9 $4.9 $5.5 $1.7 $20.0 Fixed-Fee Note: numbers may not add due to rounding *Pre-Unallocated SG&A F = Fixed Fee/ M = Margin Adjusted EBITDA* $35.1 $27.9 $26.7 $21.7 $111.3 62% F – 38% M Unallocated SG&A $(4.0) $(4.0) $(4.2) $(4.3) $(16.6) Total Adjusted EBITDA $31.0 $23.9 $22.5 $17.4 $94.9
5 MMLP 4Q 2019 Adjusted EBITDA Reconciliation Note: numbers may not add due to rounding (in millions) Terminalling & Storage Sulfur Services Transportation Natural Gas Liquids SG&A Interest Expense 4Q 2019 Net income (loss) $2.6 $4.6 $5.5 $9.5 $(4.5) $(11.1) $6.6 Interest expense add back -- -- -- -- -- $11.1 $11.1 Income tax expense -- -- -- -- $0.3 -- $0.3 Operating Income (loss) $2.6 $4.6 $5.5 $9.5 $(4.2) -- $18.0 Depreciation and amortization $7.6 $2.8 $4.1 $0.6 -- -- $15.1 Gain on disposition or sale of PP&E $1.3 -- $(0.5) $(0.1) -- -- $0.7 Lower of cost or market adjustments -- -- -- $0.2 -- -- $0.2 Non-cash mark to market on commodity derivatives -- -- -- $1.2 -- -- $1.2 Non-cash compensation expense -- -- -- -- $0.3 -- $0.3 Adjusted EBITDA $11.5 $7.4 $9.1 $11.4 $(3.9) $0.0 $35.5
6 2021E Guidance Range of Adjusted EBITDA, Distributable Cash Flow and Adjusted Free Cash Flow (in millions) Guidance Year Ending December 31, 2021 (Unaudited) Adjusted EBITDA $95 - 102 Less: Interest $49 Maintenance capital expenditures $17 - 19 Distributable cash flow $29 - 34 Less: Expansion capital expenditures $4 - 5 Principle payments under finance lease obligations $3 Adjusted free cash flow $22 - 26