EXHIBIT 99.1
MARTIN MIDSTREAM PARTNERS L.P.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma condensed consolidated financial information is based upon the historical financial statements of the Partnership, adjusted to reflect the disposition of its 900,000 barrel crude oil storage terminal known as the Corpus Christi Crude Terminal (or CCCT), its refined product barge terminal, certain pipelines and related easements as well as dockage and trans-loading assets (collectively, the "CCCT Assets").
The following unaudited pro forma condensed consolidated financial information of the Partnership should be read in conjunction with the related notes and with the historical consolidated financial statements of the Partnership and the related notes included in previous filings with the Securities and Exchange Commission. The unaudited pro forma condensed consolidated balance sheet reflects the disposition of the CCCT Assets, as if it occurred on September 30, 2016, while the unaudited pro forma condensed consolidated statements of operations give effect to the disposition as if it occurred on January 1, 2015. The pro forma adjustments, described in the related notes, are based on the best available information and certain assumptions that the Partnership’s management believes are reasonable.
The unaudited pro forma condensed consolidated financial information is presented for informational purposes only and do not purport to be indicative of the actual operating results or financial position that would have occurred if the transaction described above had occurred as presented in such statements. In addition, future results may vary significantly from the results reflected in such statements. For example, this financial information does not reflect any potential earnings from the use of the proceeds from the disposition or reductions of previously allocated corporate costs.
MARTIN MIDSTREAM PARTNERS L.P.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of September 30, 2016
(Dollars in thousands)
|
| | | | | | | | | | | | |
| | MMLP | | Adjustments for | | Pro Forma |
| | Historical | | CCCT Assets | | Consolidated |
| Assets | | | | | | |
| Cash | $ | 10 |
| | $ | 95,657 |
| A | | $ | 2,067 |
|
| | | | (93,600 | ) | C | | |
| Accounts and other receivables, less allowance for doubtful accounts of $453 | 46,327 |
| | — |
| | | 46,327 |
|
| Product exchange receivables | 159 |
| | — |
| | | 159 |
|
| Inventories | 107,476 |
| | — |
| | | 107,476 |
|
| Due from affiliates | 8,194 |
| | — |
| | | 8,194 |
|
| Fair value of derivatives | 89 |
| | — |
| | | 89 |
|
| Other current assets | 4,439 |
| | — |
| | | 4,439 |
|
| Assets held for sale | 73,197 |
| | (73,197 | ) | B | | — |
|
| Total current assets | 239,891 |
| | (71,140 | ) | | | 168,751 |
|
| | | | | | | |
| Property, plant and equipment, at cost | 1,301,233 |
| | — |
| | | 1,301,233 |
|
| Accumulated depreciation | (411,821 | ) | | — |
| | | (411,821 | ) |
| Property, plant and equipment, net | 889,412 |
| | — |
| | | 889,412 |
|
| | | | | | | |
| Goodwill | 17,296 |
| | — |
| | | 17,296 |
|
| Investment in WTLPG | 129,794 |
| | — |
| | | 129,794 |
|
| Note receivable - Martin Energy Trading LLC | 15,000 |
| | — |
| | | 15,000 |
|
| Other assets, net | 48,951 |
| | — |
| | | 48,951 |
|
| Total assets | $ | 1,340,344 |
| | $ | (71,140 | ) | | | $ | 1,269,204 |
|
| | | | | | | |
| Liabilities and Partners’ Capital | |
| | |
| | | |
|
| Trade and other accounts payable | $ | 60,462 |
| | $ | — |
| | | 60,462 |
|
| Product exchange payables | 10,188 |
| | — |
| | | 10,188 |
|
| Due to affiliates | 3,879 |
| | — |
| | | 3,879 |
|
| Income taxes payable | 550 |
| | — |
| | | 550 |
|
| Fair value of derivatives | 209 |
| | — |
| | | 209 |
|
| Other accrued liabilities | 14,804 |
| | — |
| | | 14,804 |
|
| Liabilities held for sale | 23,400 |
| | (23,400 | ) | B | | — |
|
| Total current liabilities | 113,492 |
| | (23,400 | ) | | | 90,092 |
|
| | | | | | | |
| Long-term debt, net | 913,504 |
| | (93,600 | ) | C | | 819,904 |
|
| Other long-term obligations | 2,435 |
| | — |
| | | 2,435 |
|
| Total liabilities | 1,029,431 |
| | (117,000 | ) | | | 912,431 |
|
| | | | | | | |
| Commitments and contingencies | | | | | |
|
|
| Partners’ capital | 310,913 |
| | 45,860 |
| D | | 356,773 |
|
| Total partners’ capital | 310,913 |
| | 45,860 |
| | | 356,773 |
|
| Total liabilities and partners' capital | $ | 1,340,344 |
| | $ | (71,140 | ) | | | $ | 1,269,204 |
|
See accompanying notes to unaudited pro forma condensed consolidated financial information.
MARTIN MIDSTREAM PARTNERS L.P.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Nine Months Ended September 30, 2016
(Dollars in thousands, except per unit amounts)
|
| | | | | | | | | | | | |
| | MMLP | | Adjustments for | | Pro Forma |
| | Historical | | CCCT Assets | | Consolidated |
| Revenues: | | | | | | |
| Terminalling and storage | $ | 93,565 |
| | $ | (16,654 | ) | E | | $ | 76,911 |
|
| Marine transportation | 44,531 |
| | — |
| | | 44,531 |
|
| Natural gas services | 46,118 |
| | — |
| | | 46,118 |
|
| Sulfur services | 8,100 |
| | — |
| | | 8,100 |
|
| Product sales: | | | | | |
|
|
| Natural gas services | 207,368 |
| | — |
| | | 207,368 |
|
| Sulfur services | 105,459 |
| | — |
| | | 105,459 |
|
| Terminalling and storage | 85,349 |
| | — |
| | | 85,349 |
|
| | 398,176 |
| | — |
| | | 398,176 |
|
| Total revenues | 590,490 |
| | (16,654 | ) | | | 573,836 |
|
| | | | | | | |
| Costs and expenses: | |
| | |
| | | |
|
| Cost of products sold: (excluding depreciation and amortization) | |
| | |
| | | |
|
| Natural gas services | 184,781 |
| | — |
| | | 184,781 |
|
| Sulfur services | 73,734 |
| | — |
| | | 73,734 |
|
| Terminalling and storage | 70,306 |
| | — |
| | | 70,306 |
|
| | 328,821 |
| | — |
| | | 328,821 |
|
| Expenses: | |
| | |
| | | |
|
| Operating expenses | 121,542 |
| | (6,971 | ) | E | | 114,571 |
|
| Selling, general and administrative | 24,364 |
| | (20 | ) | E | | 24,344 |
|
| Loss on impairment of goodwill | 4,145 |
| | — |
| | | 4,145 |
|
| Depreciation and amortization | 66,266 |
| | (5,381 | ) | E | | 60,885 |
|
| Total costs and expenses | 545,138 |
| | (12,372 | ) | | | 532,766 |
|
| | | | | | | |
| Other operating income (loss) | (1,582 | ) | | — |
| | | (1,582 | ) |
| Operating income | 43,770 |
| | (4,282 | ) | | | 39,488 |
|
| | | | | | | |
| Other income (expense): | |
| | |
| | | |
|
| Equity in earnings of WTLPG | 3,602 |
| | — |
| | | 3,602 |
|
| Interest expense, net | (34,046 | ) | | 2,293 |
| F | | (31,753 | ) |
| Other, net | 866 |
| | (12 | ) | E | | 854 |
|
| Total other expense | (29,578 | ) | | 2,281 |
| | | (27,297 | ) |
| | | | | | | |
| Net income (loss) before taxes | 14,192 |
| | (2,001 | ) | | | 12,191 |
|
| Income tax expense | (422 | ) | | 34 |
| E | | (388 | ) |
| Income (loss) from continuing operations | 13,770 |
| | (1,967 | ) | | | 11,803 |
|
| Less general partner's interest in net (income) loss | (8,062 | ) | | 39 |
| | | (8,023 | ) |
| Less (income) loss allocable to unvested restricted units | (36 | ) | | 5 |
| | | (31 | ) |
| Limited partners' interest in net income (loss) | $ | 5,672 |
| | $ | (1,923 | ) | | | $ | 3,749 |
|
| | | | | | | |
| Net income per limited partner unit - basic and diluted | $ | 0.16 |
| | | | | $ | 0.11 |
|
| Weighted average limited partner units - basic | 35,358,217 |
| | | | | 35,358,217 |
|
| Weighted average limited partner units - diluted | 35,381,067 |
| | | | | 35,381,067 |
|
See accompanying notes to unaudited pro forma condensed consolidated financial information.
MARTIN MIDSTREAM PARTNERS L.P.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended December 31, 2015
(Dollars in thousands, except per unit amounts)
|
| | | | | | | | | | | | |
| | MMLP | | Adjustments for | | Pro Forma |
| | Historical | | CCCT Assets | | Consolidated |
| Revenues: | | | | | | |
| Terminalling and storage | $ | 132,945 |
| | $ | (32,363 | ) | E | | $ | 100,582 |
|
| Marine transportation | 78,753 |
| | — |
| | | 78,753 |
|
| Natural gas services | 64,858 |
| | — |
| | | 64,858 |
|
| Sulfur services | 12,270 |
| | — |
| | | 12,270 |
|
| Product sales: | | | | | | |
| Natural gas services | 458,302 |
| | — |
| | | 458,302 |
|
| Sulfur services | 157,891 |
| | — |
| | | 157,891 |
|
| Terminalling and storage | 131,825 |
| | — |
| | | 131,825 |
|
| | 748,018 |
| | — |
| | | 748,018 |
|
| Total revenues | 1,036,844 |
| | (32,363 | ) | | | 1,004,481 |
|
| | | | | | | |
| Costs and expenses: | |
| | |
| | | |
|
| Cost of products sold: (excluding depreciation and amortization) | |
| | |
| | | |
|
| Natural gas services | 413,795 |
| | — |
| | | 413,795 |
|
| Sulfur services | 114,766 |
| | — |
| | | 114,766 |
|
| Terminalling and storage | 112,836 |
| | — |
| | | 112,836 |
|
| | 641,397 |
| | — |
| | | 641,397 |
|
| Expenses: | |
| | |
| | | |
|
| Operating expenses | 183,466 |
| | (15,291 | ) | E | | 168,175 |
|
| Selling, general and administrative | 36,788 |
| | (48 | ) | E | | 36,740 |
|
| Impairment of long lived assets | 10,629 |
| | — |
| | | 10,629 |
|
| Depreciation and amortization | 92,250 |
| | (6,156 | ) | E | | 86,094 |
|
| Total costs and expenses | 964,530 |
| | (21,495 | ) | | | 943,035 |
|
| | | | | | | |
| Other operating loss | (2,161 | ) | | — |
| | | (2,161 | ) |
| Operating income | 70,153 |
| | (10,868 | ) | | | 59,285 |
|
| | | | | | | |
| Other income (expense): | |
| | |
| | | |
|
| Equity in earnings of WTLPG | 8,986 |
| | — |
| | | 8,986 |
|
| Interest expense, net | (43,292 | ) | | 2,747 |
| F | | (40,545 | ) |
| Gain on retirement of senior unsecured notes | 1,242 |
| | — |
| | | 1,242 |
|
| Other, net | 1,124 |
| | (12 | ) | E | | 1,112 |
|
| Total other expense | (31,940 | ) | | 2,735 |
| | | (29,205 | ) |
| | | | | | | |
| Net income (loss) before taxes | 38,213 |
| | (8,133 | ) | | | 30,080 |
|
| Income tax expense | (1,048 | ) | | 65 |
| E | | (983 | ) |
| Income (loss) from continuing operations | 37,165 |
| | (8,068 | ) | | | 29,097 |
|
| Income from discontinued operations, net of income taxes | 1,215 |
| | — |
| | | 1,215 |
|
| Net income (loss) | 38,380 |
| | (8,068 | ) | | | 30,312 |
|
| Less general partner's interest in net (income) loss | (16,338 | ) | | 161 |
| | | (16,177 | ) |
| Less (income) loss allocable to unvested restricted units | (140 | ) | | 29 |
| | | (111 | ) |
| Limited partners' interest in net income (loss) | $ | 21,902 |
| | $ | (7,878 | ) | | | $ | 14,024 |
|
| | | | | | | |
| Net income per limited partner unit - basic and diluted | $ | 0.62 |
| | | | | $ | 0.40 |
|
| Weighted average limited partner units - basic | 35,308,649 |
| | | | | 35,308,649 |
|
| Weighted average limited partner units - diluted | 35,371,529 |
| | | | | 35,371,529 |
|
See accompanying notes to unaudited pro forma condensed consolidated financial information.
MARTIN MIDSTREAM PARTNERS L.P.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)
| |
| (A) | To reflect the Partnership's cash proceeds of $95,657. |
| |
| (B) | To reflect the disposition of the CCCT Assets' specified balance sheet accounts (primarily fixed assets and working capital accounts) as set forth in the asset purchase agreement. |
| |
| (C) | To reflect the application of the Partnership's net cash proceeds from the disposition of the CCCT Assets to reduce long-term debt. |
| |
| (D) | To reflect the impact on equity at the time of sale of approximately $45,860 from the disposition of the CCCT Assets. |
|
| | | |
| Net proceeds | $ | 95,657 |
|
| Less: | |
| Carrying value of assets sold | 49,797 |
|
| Impact on equity | $ | 45,860 |
|
| |
| (E) | To reflect the removal of the operating results of the CCCT Assets as if the transaction occurred on January 1, 2015. |
| |
| (F) | To reflect the reduction in interest expense due to repayment of borrowings under the revolving credit facility using the net cash proceeds from the sale of CCCT Assets. |
