þ | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 05-0527861 | |
(State or other jurisdiction of
incorporation or organization) |
(IRS Employer
Identification No.) |
Large accelerated filer o | Accelerated filer þ |
Non-accelerated filer
o
(Do not check if a smaller reporting company) |
Smaller reporting company o |
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24
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46
47
CONSOLIDATED AND CONDENSED BALANCE SHEETS
(Dollars in thousands)
September 30,
December 31,
2008
2007
(Unaudited)
(Audited)
$
7,019
$
4,113
105,334
88,039
32,323
10,912
78,002
51,798
7,929
2,325
354
235
2,132
584
233,093
158,006
516,420
441,117
(117,752
)
(98,080
)
398,668
343,037
37,405
37,405
79,687
75,690
159
8,006
9,439
$
757,018
$
623,577
$
$
21
158,904
104,598
47,298
24,554
17,500
7,543
398
602
5,657
4,502
5,711
4,752
235,468
146,572
280,000
225,000
8,593
8,815
4,933
5,576
1,716
1,766
530,710
387,729
234,803
242,610
(8,495
)
(6,762
)
226,308
235,848
$
757,018
$
623,577
Table of Contents
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per unit amounts)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2008
2007
2008
2007
$
8,527
$
7,570
$
26,347
$
21,558
20,116
15,469
55,828
44,507
188,200
120,994
577,317
328,103
133,276
29,866
289,528
89,599
14,267
10,951
36,525
19,193
335,743
161,811
903,370
436,895
364,386
184,850
985,545
502,960
178,996
115,112
562,170
312,823
121,158
22,515
253,462
66,732
11,031
10,004
31,222
16,936
311,185
147,631
846,854
396,491
26,093
21,528
76,505
61,184
3,726
2,890
10,672
8,355
7,979
6,236
22,933
16,598
348,983
178,285
956,964
482,628
17
143
15,420
6,565
28,724
20,332
3,503
2,736
11,385
7,204
(4,971
)
(3,640
)
(13,609
)
(9,956
)
87
54
334
205
(1,381
)
(850
)
(1,890
)
(2,547
)
14,039
5,715
26,834
17,785
(292
)
(212
)
(753
)
(552
)
$
13,747
$
5,503
$
26,081
$
17,233
$
941
$
465
$
2,257
$
1,094
$
12,806
$
5,038
$
23,824
$
16,139
$
0.88
$
0.35
$
1.64
$
1.17
14,532,826
14,532,826
14,532,826
13,845,573
14,534,972
14,536,939
14,535,025
13,849,749
Table of Contents
CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL
(Unaudited)
(Dollars in thousands)
Partners Capital
Accumulated
Other
General
Comprehensive
Common
Subordinated
Partner
Income
Units
Amount
Units
Amount
Amount
Amount
Total
10,603,808
$
201,387
2,552,018
$
(6,237
)
$
3,253
$
122
$
198,525
13,454
2,685
1,094
17,233
1,380,000
55,933
55,933
1,192
1,192
(21,272
)
(4,900
)
(1,223
)
(27,395
)
3,000
34
34
( 2,172
)
(2,172
)
11,986,808
$
249,536
2,552,018
$
(8,452
)
$
4,316
$
(2,050
)
$
243,350
12,837,480
$
244,520
1,701,346
$
(6,022
)
$
4,112
$
(6,762
)
$
235,848
21,532
2,292
2,257
26,081
(27,729
)
(3,675
)
(2,448
)
(33,852
)
57
57
(93
)
(93
)
(1,733
)
(1,733
)
12,837,480
$
238,287
1,701,346
$
(7,405
)
$
3,921
$
(8,495
)
$
226,308
Table of Contents
CONSOLIDATED AND CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(Dollars in thousands)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2008
2007
2008
2007
$
13,747
$
5,503
$
26,081
$
17,233
6,834
(543
)
(1,654
)
(900
)
1,097
234
473
(198
)
(124
)
(2,056
)
(552
)
(1,074
)
$
21,554
$
3,138
$
24,348
$
15,061
Table of Contents
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
Nine Months Ended
September 30,
2008
2007
$
26,081
$
17,233
22,933
16,598
840
810
(222
)
(111
)
(143
)
(11,385
)
(7,204
)
673
8,392
6,628
(1,499
)
2,036
57
45
(17,295
)
(4,899
)
(21,411
)
(4,067
)
(26,204
)
(6,346
)
(5,604
)
(1,787
)
(1,548
)
(167
)
54,306
22,429
22,744
(2,388
)
9,957
(5,055
)
(204
)
365
959
903
(111
)
(94
)
60,643
35,602
(72,185
)
(57,524
)
(5,983
)
(37,344
)
419
4
995
2,642
(1,999
)
(6,130
)
(78,753
)
(98,352
)
(180,391
)
(125,105
)
235,370
161,050
(93
)
55,933
1,192
(18
)
(33,852
)
(27,395
)
21,016
65,675
2,906
2,925
4,113
3,675
$
7,019
$
6,600
Table of Contents
(Dollars in thousands, except where otherwise indicated)
September 30, 2008
(Unaudited)
(1)
General
(a)
Use of Estimates
(b)
Unit Grants
Table of Contents
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
September 30, 2008
(Unaudited)
(c)
Incentive Distribution Rights
(d)
Net Income per Unit
(e)
Income taxes
Table of Contents
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
September 30, 2008
(Unaudited)
(f)
Reclassification
(2)
New Accounting Pronouncements
Table of Contents
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
September 30, 2008
(Unaudited)
(3)
Fair Value Measurements
(4)
Acquisitions
(a)
Stanolind Assets
(b)
Asphalt Terminal
Table of Contents
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
September 30, 2008
(Unaudited)
(c)
Lubricants Terminal
$
446
3,042
1,020
530
(300
)
$
4,738
(d)
Woodlawn Pipeline Co., Inc.
Table of Contents
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
September 30, 2008
(Unaudited)
$
4,297
29,101
8,785
3,339
(3,889
)
(8,964
)
(63
)
$
32,606
(5)
Inventories
September 30,
December 31,
2008
2007
$
15,664
$
31,283
34,101
7,490
17,096
6,626
8,699
5,345
2,442
1,054
$
78,002
$
51,798
(6)
Investment in Unconsolidated Partnerships and Joint Ventures
Table of Contents
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
September 30, 2008
(Unaudited)
Waskom
PIPE
Matagorda
BCP
Total
$
70,237
$
1,582
$
3,693
$
178
$
75,690
(8,392
)
(8,392
)
1,250
80
1,330
669
669
(300
)
(180
)
(515
)
(995
)
11,451
17
485
(124
)
11,829
(412
)
(11
)
(21
)
(444
)
$
74,503
$
1,408
$
3,642
$
134
$
79,687
Waskom
PIPE
Matagorda
BCP
Total
$
64,937
$
1,718
$
3,786
$
210
$
70,651
(6,628
)
(6,628
)
(200
)
(200
)
6,023
107
6,130
(2,625
)
(365
)
(125
)
(3,115
)
7,205
464
78
(99
)
7,648
(412
)
(11
)
(21
)
(444
)
$
68,500
$
1,606
$
3,718
$
218
$
74,042
(7)
Commodity Cash Flow Hedges
Table of Contents
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
September 30, 2008
(Unaudited)
Three Months Ended
Nine Months Ended
September 30
September 30
2008
2007
2008
2007
$
2,718
$
(572
)
$
(5,428
)
$
(1,365
)
2,091
(199
)
2,128
(109
)
$
4,809
$
(771
)
$
(3,300
)
$
(1,474
)
September 30,
December 31,
2008
2007
$
354
$
235
159
(2,738
)
(3,261
)
(2,606
)
(2,140
)
$
(4,831
)
$
(5,166
)
Table of Contents
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
September 30, 2008
(Unaudited)
Table of Contents
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
September 30, 2008
(Unaudited)
As of September 30, 2008
Year
Commodity Hedged
Volume
Type of Derivative
Basis Reference
Condensate & Natural Gasoline
5,000 BBL/Month
Crude Oil Swap ($66.20)
NYMEX
Natural Gas
30,000 MMBTU/Month
Natural Gas Swap ($8.12)
Houston Ship Channel
Ethane
5,000 BBL/Month
Ethane Swap ($27.30)
Mt. Belvieu
Natural Gasoline
3,000 BBL/Month
Crude Oil Swap ($70.75)
NYMEX
Natural Gasoline
3,000 BBL/Month
Natural Gasoline Swap ($85.79)
Mt. Belvieu
(Non-TET)
Natural Gas
30,000 MMBTU/Month
Natural Gas Swap ($9.025)
Columbia Gulf
Condensate & Natural Gasoline
3,000 BBL/Month
Crude Oil Swap ($69.08)
NYMEX
Natural Gasoline
3,000 BBL/Month
Crude Oil Swap ($70.90)
NYMEX
Condensate
1,000 BBL/Month
Crude Oil Swap ($70.45)
NYMEX
Natural Gasoline
2,000 BBL/Month
Natural Gasoline Swap ($86.42)
Mt. Belvieu
(Non-TET)
Condensate
2,000 BBL/Month
Crude Oil Swap ($69.15)
NYMEX
Natural Gasoline
3,000 BBL/Month
Crude Oil Swap ($72.25)
NYMEX
Condensate
1,000 BBL/Month
Crude Oil Swap ($104.80)
NYMEX
Natural Gasoline
1,000 BBL/Month
Natural Gasoline Swap ($94.14)
Mt. Belvieu
(Non-TET)
Condensate
2,000 BBL/Month
Crude Oil Swap ($99.15)
NYMEX
Condensate
1,000 BBL/Month
Crude Oil Swap ($103.80)
NYMEX
Natural Gasoline
2,000 BBL/Month
Natural Gasoline Swap ($93.18)
NYMEX
Table of Contents
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
September 30, 2008
(Unaudited)
(8)
Interest Rate Cash Flow Hedge
Table of Contents
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
September 30, 2008
(Unaudited)
Date of Hedge
Notional Amount
Fixed Rate
Maturity Date
$
25,000
3.400
%
January 2010
$
25,000
4.605
%
September 2010
$
40,000
4.820
%
December 2009
$
75,000
5.250
%
November 2010
September 30,
December 31,
2008
2007
$
(2,919
)
$
(1,241
)
(2,327
)
(3,436
)
$
(5,246
)
$
(4,677
)
(9)
Related Party Transactions
Three Months Ended
Nine Months Ended
September 30,
September 30,
2008
2007
2008
2007
$
5,142
$
3,092
$
13,374
$
8,360
6,383
5,409
18,826
18,096
1,876
1,483
3,950
2,124
8,867
593
17,788
692
26
14
44
24
10,769
2,090
21,782
2,840
$
22,294
$
10,591
$
53,982
$
29,296
Table of Contents
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
September 30, 2008
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2008
2007
2008
2007
$
28,051
$
15,857
$
77,033
$
41,713
3,203
3,165
9,919
10,454
25
322
$
31,279
$
19,022
$
87,274
$
52,167
$
5,755
$
5,932
$
17,956
$
15,217
391
365
1,164
1,128
1,040
334
2,909
940
2,392
1,437
6,960
3,612
$
9,578
$
8,068
$
28,989
$
20,897
$
176
$
225
$
561
$
566
479
377
1,387
1,161
13
41
674
326
2,021
978
$
1,329
$
941
$
3,969
$
2,746
(10)
Business Segments
Operating
Intersegment
Operating
Depreciation
Income
Operating
Revenues
Revenues after
and
(loss) after
Capital
Revenues
Eliminations
Eliminations
Amortization
eliminations
Expenditures
$
23,847
$
(1,053
)
$
22,794
$
2,342
$
1,961
$
7,167
188,200
188,200
1,028
4,928
4,368
21,129
(1,013
)
20,116
3,159
1,972
7,357
133,660
(384
)
133,276
1,450
7,973
537
(1,414
)
$
366,836
$
(2,450
)
$
364,386
$
7,979
$
15,420
$
19,429
$
18,788
$
(267
)
$
18,521
$
1,700
$
2,411
$
7,695
120,994
120,994
970
1,676
1,444
16,459
(990
)
15,469
2,377
944
8,361
29,949
(83
)
29,866
1,189
2,375
3,252
(841
)
$
186,190
$
(1,340
)
$
184,850
$
6,236
$
6,565
$
20,752
Table of Contents
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
September 30, 2008
(Unaudited)
Operating
Operating
Depreciation
Income
Operating
Intersegment
Revenues after
and
(loss) after
Capital
Revenues
Eliminations
Eliminations
Amortization
eliminations
Expenditures
$
66,004
$
(3,132
)
$
62,872
$
6,784
$
5,293
$
16,993
577,317
577,317
2,966
2,303
8,127
58,418
(2,590
)
55,828
8,901
4,757
43,901
290,346
(818
)
289,528
4,282
20,427
3,164
(4,056
)
$
992,085
$
(6,540
)
$
985,545
$
22,933
$
28,724
$
72,185
$
41,252
$
(501
)
$
40,751
$
4,506
$
7,951
$
18,978
328,103
328,103
2,271
4,084
3,038
47,231
(2,724
)
44,507
6,280
3,347
24,004
89,852
(253
)
89,599
3,541
7,397
11,504
(2,447
)
$
506,438
$
(3,478
)
$
502,960
$
16,598
$
20,332
$
57,524
Three Months Ended
Nine Months Ended
September 30
September 30
2008
2007
2008
2007
$
15,420
$
6,565
$
28,724
$
20,332
3,503
2,736
11,385
7,204
(4,971
)
(3,640
)
(13,609
)
(9,956
)
87
54
334
205
(292
)
(212
)
(753
)
(552
)
$
13,747
$
5,503
$
26,081
$
17,233
September 30,
December 31,
2008
2007
$
154,410
$
126,575
282,528
268,230
146,412
107,081
173,668
121,691
$
757,018
$
623,577
(11)
Public Equity Offerings
Table of Contents
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
September 30, 2008
(Unaudited)
$
58,305
1,190
$
59,495
$
2,107
265
55,850
1,273
$
59,495
(12)
Long-term Debt
September 30,
December 31,
2008
2007
$
150,000
$
95,000
130,000
130,000
21
280,000
225,021
21
$
280,000
$
225,000
*
Interest rate fluctuates based on the LIBOR rate plus an applicable margin set on the date of each
advance. The margin above LIBOR is set every three months. Indebtedness under the credit facility
bears interest at either LIBOR plus an applicable margin or the base prime rate plus an applicable
margin. The applicable margin for revolving loans that are LIBOR loans ranges from 1.50% to 3.00%
and the applicable margin for revolving loans that are base prime rate loans ranges from 0.50% to
2.00%. The applicable margin for term loans that are LIBOR loans ranges from 2.00% to 3.00% and
the applicable margin for term loans that are base prime rate loans ranges from 1.00% to 2.00%.
The applicable margin for existing borrowings is 2.00%. Effective October 1, 2008, the applicable
margin for existing borrowings will increase to 2.50%. As a result of our leverage ratio test as
of September 30, 2008, effective January 1, 2009, the applicable margin for existing borrowings
will decrease to 2.00%. The Partnership incurs a commitment fee on the unused portions of the
credit facility.
**
Effective January, 2008, the Partnership entered into a cash flow hedge that swaps $25,000 of
floating rate to fixed rate. The fixed rate cost is 3.400% plus the Partnerships applicable
LIBOR borrowing spread. The cash flow hedge matures in January, 2010.
Table of Contents
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
September 30, 2008
(Unaudited)
**
Effective September, 2007, the Partnership entered into a cash flow hedge that swaps $25,000 of
floating rate to fixed rate. The fixed rate cost is 4.605% plus the Partnerships applicable
LIBOR borrowing spread. The cash flow hedge matures in September, 2010.
**
Effective November, 2006, the Partnership entered into a cash flow hedge that swaps $40,000 of
floating rate to fixed rate. The fixed rate cost is 4.82% plus the Partnerships applicable LIBOR
borrowing spread. The cash flow hedge matures in December, 2009.
***
The $130,000 term loan has $105,000 hedged. Effective March, 2006, the Partnership entered into
a cash flow hedge that swaps $75,000 of floating rate to fixed rate. The fixed rate cost is 5.25%
plus the Partnerships applicable LIBOR borrowing spread. The cash flow hedge matures in November,
2010. Effective November 2006, the Partnership entered into an additional interest rate swap that
swaps $30,000 of floating rate to fixed rate. The fixed rate cost is 4.765% plus the Partnerships
applicable LIBOR borrowing spread. This cash flow hedge matures in March, 2010.
Table of Contents
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
September 30, 2008
(Unaudited)
(13)
Income Taxes
Table of Contents
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
September 30, 2008
(Unaudited)
Three Months Ended
Nine Months Ended
September 30
September 30
2008
2007
2008
2007
$
174
$
80
$
421
$
237
185
175
554
426
359
255
975
663
(67
)
(43
)
(222
)
(111
)
$
292
$
212
$
753
$
552
(14)
Consolidated Financial Statements
Table of Contents
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
September 30, 2008
(Unaudited)
(15)
Hurricane Damage
(16)
Commitments and Contingencies
Table of Contents
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except where otherwise indicated)
September 30, 2008
(Unaudited)
Table of Contents
Item 2.
Managements Discussion and Analysis of Financial Condition and Results of Operations
Terminalling and storage services for petroleum and by-products;
Natural gas services;
Marine transportation services for petroleum products and by-products; and
Sulfur and sulfur-based products gathering, processing, marketing, manufacturing and
distribution.
Table of Contents
Table of Contents
Table of Contents
providing land transportation of various liquids using a fleet of trucks and
road vehicles and road trailers;
distributing fuel oil, asphalt, sulfuric acid, marine fuel and other liquids;
providing marine bunkering and other shore-based marine services in Alabama,
Louisiana, Mississippi and Texas;
operating a small crude oil gathering business in Stephens, Arkansas;
operating a lube oil processing facility in Smackover, Arkansas;
operating an underground NGL storage facility in Arcadia, Louisiana;
developing an underground natural gas storage facility in Arcadia, Louisiana;
supplying employees and services for the operation of our business;
operating, for its account and our account, the docks, roads, loading and
unloading facilities and other common use facilities or access routes at our
Stanolind terminal;
operating, solely for our account, an NGL truck loading and unloading and
pipeline distribution terminal in Mont Belvieu, Texas; and
operating, solely for our account, the asphalt facilities in Omaha, Nebraska.
Table of Contents
Table of Contents
Operating
Operating
Operating
Revenues
Revenues
Income
Income (loss)
Operating
Intersegment
after
Operating
Intersegment
after
Revenues
Eliminations
Eliminations
Income (loss)
Eliminations
Eliminations
(In thousands)
$
23,847
$
(1,053
)
$
22,794
$
2,911
$
(950
)
$
1,961
188,200
188,200
4,685
243
4,928
21,129
(1,013
)
20,116
2,576
(604
)
1,972
133,660
(384
)
133,276
6,662
1,311
7,973
(1,414
)
(1,414
)
$
366,836
$
(2,450
)
$
364,386
$
15,420
$
$
15,420
$
18,788
$
(267
)
$
18,521
$
2,631
$
(220
)
$
2,411
120,994
120,994
1,547
129
1,676
16,459
(990
)
15,469
1,805
(861
)
944
29,949
(83
)
29,866
1,423
952
2,375
(841
)
(841
)
$
186,190
$
(1,340
)
$
184,850
$
6,565
$
$
6,565
Table of Contents
Operating
Operating
Operating
Revenues
Revenues
Income
Income (loss)
Operating
Intersegment
after
Operating
Intersegment
after
Revenues
Eliminations
Eliminations
Income (loss)
Eliminations
Eliminations
(In thousands)
$
66,004
$
(3,132
)
$
62,872
$
8,045
$
(2,752
)
$
5,293
577,317
577,317
1,596
707
2,303
58,418
(2,590
)
55,828
6,428
(1,671
)
4,757
290,346
(818
)
289,528
16,711
3,716
20,427
(4,056
)
(4,056
)
$
992,085
$
(6,540
)
$
985,545
$
28,724
$
$
28,724
$
41,252
$
(501
)
$
40,751
$
8,128
$
(177
)
$
7,951
328,103
328,103
3,955
129
4,084
47,231
(2,724
)
44,507
5,889
(2,542
)
3,347
89,852
(253
)
89,599
4,807
2,590
7,397
(2,447
)
(2,447
)
$
506,438
$
(3,478
)
$
502,960
$
20,332
$
$
20,332
Three Months Ended
September 30,
2008
2007
(In thousands)
$
10,546
$
7,570
13,301
11,218
23,847
18,788
11,031
10,003
7,541
4,406
22
48
2,342
1,700
2,911
2,631
$
2,911
$
2,631
Table of Contents
Three Months Ended
September 30,
2008
2007
(In thousands)
$
166,564
$
109,822
16,470
11,352
6,629
(653
)
(1,820
)
(118
)
357
591
188,200
120,994
162,718
104,469
16,519
10,771
179,237
115,240
2,070
1,968
1,181
1,269
1,027
970
$
4,685
$
1,547
1,929
1,870
1,818
1,897
$
3,503
$
2,736
239
252
9,965
9,301
Table of Contents
Three Months Ended
September 30,
2008
2007
(In thousands)
$
21,129
$
16,459
15,033
12,141
376
136
3,159
2,377
2,561
1,805
15
$
2,576
$
1,805
Table of Contents
Three Months Ended
September 30,
2008
2007
(In thousands)
$
133,660
$
29,949
120,267
22,759
4,547
3,982
733
596
1,451
1,189
$
6,662
$
1,423
348.2
321.2
Table of Contents
Nine Months Ended
September 30,
2008
2007
(In thousands)
$
29,378
$
21,559
36,626
19,693
66,004
41,252
31,222
17,107
19,883
11,403
56
108
6,784
4,506
8,059
8,128
(14
)
$
8,045
$
8,128
Table of Contents
Nine Months Ended
September 30,
2008
2007
(In thousands)
$
528,353
$
302,840
50,090
24,839
1,517
(1,728
)
(4,816
)
254
2,173
1,898
577,317
328,103
513,221
289,449
49,656
23,502
562,877
312,951
6,287
5,103
3,594
3,823
2,966
2,271
1,593
3,955
3
$
1,596
$
3,955
6,457
5,742
5,517
3,792
$
11,385
$
7,204
256
222
10,317
8,258
Table of Contents
Nine Months Ended
September 30,
2008
2007
(In thousands)
$
58,418
$
47,231
42,350
34,843
893
219
8,901
6,280
6,274
5,889
154
$
6,428
$
5,889
Table of Contents
Nine Months Ended
September 30,
2008
2007
(In thousands)
$
290,346
$
89,852
254,173
67,562
13,107
12,185
2,073
1,757
4,282
3,541
$
16,711
$
4,807
1,027.5
1,042.0
Table of Contents
Three Months Ended
Nine Months Ended
September 30,
September 30,
2008
2007
2008
2007
100
%
100
%
100
%
100
%
85
%
80
%
86
%
79
%
8
%
12
%
8
%
12
%
1
%
2
%
1
%
2
%
2
%
3
%
2
%
3
%
Table of Contents
maintenance capital expenditures, which are capital expenditures made to replace
assets to maintain our existing operations and to extend the useful lives of our
assets; and
expansion capital expenditures, which are capital expenditures made to grow our
business, to expand and upgrade our existing terminalling, marine transportation,
storage and manufacturing facilities, and to construct new terminalling facilities,
plants, storage facilities and new marine transportation assets.
For the nine months ended September 30, 2008, we spent $68.2 million for expansion
and $10.0 million for maintenance. Our expansion capital expenditures were made in
connection with assets acquired in the Stanolind acquisition, marine vessel purchases
and conversions and construction projects associated with our terminalling business.
Our maintenance capital expenditures were primarily made in our marine transportation
segment for routine dry dockings of our vessels pursuant to the United States Coast
Guard requirements.
For the nine months ended September 30, 2007, we spent $82.9 million for expansion
and $6.8 million for maintenance. Our expansion capital expenditures were made in
connection with assets acquired in the Woodlawn and Mega Lubricants acquisitions,
marine vessel purchases and conversions, construction projects associated with our
terminalling business, and the sulfuric acid plant construction project at our
facility in Plainview, Texas. Our maintenance capital expenditures were primarily
made in our marine transportation segment for routine dry dockings of our vessels
pursuant to the United States Coast Guard requirements and include $0.2 million spent
in connection with restoration of assets destroyed in Hurricanes Rita and Katrina.
Table of Contents
Table of Contents
Payment due by period
Total
Less than
1-3
3-5
Due
Type of Obligation
Obligation
One Year
Years
Years
Thereafter
$
150,000
$
$
150,000
$
$
130,000
130,000
550
250
150
100
50
26,026
3,647
9,496
4,844
8,039
18,418
8,724
9,694
19,173
9,082
10,091
$
344,167
$
21,703
$
309,431
$
4,944
$
8,089
(1)
Interest commitments are estimated using our current interest rates for the respective credit
agreements over their remaining terms.
Table of Contents
Table of Contents
Table of Contents
As of September 30, 2008
Year
Commodity Hedged
Volume
Type of Derivative
Basis Reference
Condensate & Natural Gasoline
5,000 BBL/Month
Crude Oil Swap ($66.20)
NYMEX
Natural Gas
30,000 MMBTU/Month
Natural Gas Swap ($8.12)
Houston Ship Channel
Ethane
5,000 BBL/Month
Ethane Swap ($27.30)
Mt. Belvieu
Natural Gasoline
3,000 BBL/Month
Crude Oil Swap ($70.75)
NYMEX
Natural Gasoline
3,000 BBL/Month
Natural Gasoline Swap ($85.79)
Mt. Belvieu (Non-TET)
Natural Gas
30,000 MMBTU/Month
Natural Gas Swap ($9.025)
Columbia Gulf
Condensate & Natural Gasoline
3,000 BBL/Month
Crude Oil Swap ($69.08)
NYMEX
Natural Gasoline
3,000 BBL/Month
Crude Oil Swap ($70.90)
NYMEX
Condensate
1,000 BBL/Month
Crude Oil Swap ($70.45)
NYMEX
Natural Gasoline
2,000 BBL/Month
Natural Gasoline Swap ($86.42)
Mt. Belvieu (Non-TET)
Condensate
2,000 BBL/Month
Crude Oil Swap ($69.15)
NYMEX
Natural Gasoline
3,000 BBL/Month
Crude Oil Swap ($72.25)
NYMEX
Condensate
1,000 BBL/Month
Crude Oil Swap ($104.80)
NYMEX
Natural Gasoline
1,000 BBL/Month
Natural Gasoline Swap ($94.14)
Mt. Belvieu (Non-TET)
Condensate
2,000 BBL/Month
Crude Oil Swap ($99.15)
NYMEX
Condensate
1,000 BBL/Month
Crude Oil Swap ($103.80)
NYMEX
Natural Gasoline
2,000 BBL/Month
Natural Gasoline Swap ($93.18)
NYMEX
Table of Contents
Table of Contents
48
Table of Contents
49
Martin Midstream Partners L.P.
By: Martin Midstream GP LLC
Its General Partner
Date: November 6, 2008
By:
/s/ Ruben S. Martin
Ruben S. Martin
President and Chief Executive Officer
Table of Contents
50
Exhibit
Number
Exhibit Name
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10
4.1
4.2
10.1
*
10.2
31.1
*
31.2
*
32.1
*
32.2
*
99.1
*
*
Filed or furnished herewith
1
2
3
4
5
6
7
8
MARTIN MIDSTREAM PARTNERS L.P.
By: Martin Midstream GP LLC Its General Partner |
||||
By: | ||||
Name: | ||||
Title: | ||||
Address: 4200 Stone Road
Kilgore, Texas 75662 MARTIN MIDSTREAM GP LLC |
||||
By: | ||||
Name: | ||||
Title: | ||||
Address: 4200 Stone Road
Kilgore, Texas 75662 INDEMNITEE: | ||||
[Name] | ||||
Address: | ||||
9
/s/ Ruben S. Martin | ||||
Ruben S. Martin, President and | ||||
Chief Executive Officer of
Martin Midstream GP LLC, the General Partner of Martin Midstream Partners L.P. |
||||
/s/ Robert D. Bondurant | ||||
Robert D. Bondurant, Executive Vice President and | ||||
Chief Financial Officer of
Martin Midstream GP LLC, the General Partner of Martin Midstream Partners L.P. |
||||
/s/ Ruben S. Martin | ||||
Ruben S. Martin, | ||||
Chief Executive Officer of Martin Midstream GP LLC,
General Partner of Martin Midstream Partners L.P. November 6, 2008 |
||||
* | A signed original of this written statement required by Section 906 has been provided to the Partnership and will be retained by the Partnership and furnished to the Securities and Exchange Commission or its staff upon request. |
/s/ Robert D. Bondurant | ||||
Robert D. Bondurant, | ||||
Chief Financial Officer
of Martin Midstream GP LLC, General Partner of Martin Midstream Partners L.P. November 6, 2008 |
||||
* | A signed original of this written statement required by Section 906 has been provided to the Partnership and will be retained by the Partnership and furnished to the Securities and Exchange Commission or its staff upon request. |
September 30, | December 31, | |||||||
2008 | 2007 | |||||||
(Unaudited) | (Audited) | |||||||
Assets
|
||||||||
|
||||||||
Cash
|
$ | 7,019 | $ | 4,113 | ||||
Accounts and other receivables, less
allowance for doubtful accounts of $392
and $211, respectively
|
105,334 | 88,039 | ||||||
Product exchange receivables
|
32,323 | 10,912 | ||||||
Inventories
|
78,002 | 51,798 | ||||||
Due from affiliates
|
7,952 | 2,325 | ||||||
Fair value of derivatives
|
354 | 235 | ||||||
Other current assets
|
2,132 | 584 | ||||||
|
||||||||
Total current assets
|
233,116 | 158,006 | ||||||
|
||||||||
|
||||||||
Property, plant and equipment, at cost
|
516,420 | 441,117 | ||||||
Accumulated depreciation
|
(117,752 | ) | (98,080 | ) | ||||
|
||||||||
Property, plant and equipment, net
|
398,668 | 343,037 | ||||||
|
||||||||
|
||||||||
Goodwill
|
37,405 | 37,405 | ||||||
Investment in unconsolidated entities
|
79,687 | 75,690 | ||||||
Fair value of derivatives
|
159 | | ||||||
Other assets, net
|
8,006 | 9,439 | ||||||
|
||||||||
|
$ | 757,041 | $ | 623,577 | ||||
|
||||||||
|
||||||||
Liabilities and Members Equity
|
||||||||
|
||||||||
Current installments of long-term debt
|
$ | | $ | 21 | ||||
Trade and other accounts payable
|
158,904 | 104,598 | ||||||
Product exchange payables
|
47,298 | 24,554 | ||||||
Due to affiliates
|
17,500 | 9,323 | ||||||
Income taxes payable
|
946 | 974 | ||||||
Fair value of derivatives
|
5,657 | 4,502 | ||||||
Other accrued liabilities
|
5,711 | 4,762 | ||||||
|
||||||||
Total current liabilities
|
236,016 | 148,734 | ||||||
|
||||||||
|
||||||||
Long-term debt
|
280,000 | 225,000 | ||||||
Deferred income taxes
|
9,179 | 9,244 | ||||||
Fair value of derivatives
|
4,933 | 5,576 | ||||||
Other long-term obligations
|
1,716 | 1,767 | ||||||
|
||||||||
Total liabilities
|
531,844 | 390,321 | ||||||
|
||||||||
|
||||||||
Minority interests
|
222,388 | 231,737 | ||||||
Members equity
|
2,809 | 1,519 | ||||||
|
||||||||
|
225,197 | 233,256 | ||||||
|
||||||||
|
||||||||
Commitments and contingencies
|
||||||||
|
$ | 757,041 | $ | 623,577 | ||||
|
1
2
3
4
5
Current assets
|
$ | 446 | ||
Property, plant and equipment, net
|
3,042 | |||
Goodwill
|
1,020 | |||
Other assets
|
530 | |||
Other liabilities
|
(300 | ) | ||
|
||||
Total
|
$ | 4,738 | ||
|
6
Current assets
|
$ | 4,297 | ||
Property, plant and equipment, net
|
29,101 | |||
Goodwill
|
8,785 | |||
Other assets
|
3,339 | |||
Current liabilities
|
(3,889 | ) | ||
Deferred income taxes
|
(8,964 | ) | ||
Other long-term obligations
|
(63 | ) | ||
|
||||
Total
|
$ | 32,606 | ||
|
September 30, | December 31, | |||||||
2008 | 2007 | |||||||
Natural gas liquids
|
$ | 15,664 | $ | 31,283 | ||||
Sulfur
|
34,101 | 7,490 | ||||||
Sulfur Based Products
|
17,096 | 6,626 | ||||||
Lubricants
|
8,699 | 5,345 | ||||||
Other
|
2,442 | 1,054 | ||||||
|
||||||||
|
$ | 78,002 | $ | 51,798 | ||||
|
7
Waskom | PIPE | Matagorda | BCP | Total | ||||||||||||||||
|
||||||||||||||||||||
Investment in unconsolidated entities, December 31, 2007
|
$ | 70,237 | $ | 1,582 | $ | 3,693 | $ | 178 | $ | 75,690 | ||||||||||
|
||||||||||||||||||||
Distributions in kind from equity investments
|
(8,392 | ) | | | | (8,392 | ) | |||||||||||||
Return on investments from unconsolidated entities
|
| | | | | |||||||||||||||
Contributions to (distributions from) unconsolidated
entities:
|
||||||||||||||||||||
Cash contributions
|
1,250 | | | 80 | 1,330 | |||||||||||||||
Distributions from (contributions to) unconsolidated
entities for operations
|
669 | | | | 669 | |||||||||||||||
Return of investments from unconsolidated entities
|
(300 | ) | (180 | ) | (515 | ) | | (995 | ) | |||||||||||
Equity in earnings:
|
||||||||||||||||||||
Equity in earnings from operations
|
11,451 | 17 | 485 | (124 | ) | 11,829 | ||||||||||||||
Amortization of excess investment
|
(412 | ) | (11 | ) | (21 | ) | | (444 | ) | |||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Investment in unconsolidated entities, September 30, 2008
|
$ | 74,503 | $ | 1,408 | $ | 3,642 | $ | 134 | $ | 79,687 | ||||||||||
|
Waskom | PIPE | Matagorda | BCP | Total | ||||||||||||||||
|
||||||||||||||||||||
Investment in unconsolidated entities, December 31, 2006
|
$ | 64,937 | $ | 1,718 | $ | 3,786 | $ | 210 | $ | 70,651 | ||||||||||
|
||||||||||||||||||||
Distributions in kind from equity investments
|
(6,628 | ) | | | | (6,628 | ) | |||||||||||||
Return on investments from unconsolidated entities
|
| (200 | ) | | | (200 | ) | |||||||||||||
Contributions to (distributions from) unconsolidated
entities:
|
||||||||||||||||||||
Cash contributions
|
| | | | | |||||||||||||||
Distributions from (contributions to) unconsolidated entities for operations
|
6,023 | | | 107 | 6,130 | |||||||||||||||
Return of investments from unconsolidated entities
|
(2,625 | ) | (365 | ) | (125 | ) | | (3,115 | ) | |||||||||||
Equity in earnings:
|
||||||||||||||||||||
Equity in earnings from operations
|
7,205 | 464 | 78 | (99 | ) | 7,648 | ||||||||||||||
Amortization of excess investment
|
(412 | ) | (11 | ) | (21 | ) | | (444 | ) | |||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Investment in unconsolidated entities, September 30, 2007
|
$ | 68,500 | $ | 1,606 | $ | 3,718 | $ | 218 | $ | 74,042 | ||||||||||
|
As of September 30, | ||||||||
Total | Partners | |||||||
Assets | Capital | |||||||
2008
|
||||||||
|
||||||||
Waskom
|
$ | 87,618 | $ | 66,506 | ||||
|
As of December 31, | ||||||||
2007
|
||||||||
|
||||||||
Waskom
|
$ | 66,772 | $ | 57,149 | ||||
|
8
(8) | COMMODITY CASH FLOW HEDGES |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30 | September 30 | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Change in fair value of derivatives that do not qualify for hedge
accounting and settlements of maturing hedges
|
$ | 2,718 | $ | (572 | ) | $ | (5,428 | ) | $ | (1,365 | ) | |||||
Ineffective portion of derivatives qualifying for hedge accounting
|
2,091 | (199 | ) | 2,128 | (110 | ) | ||||||||||
|
||||||||||||||||
Change in fair value of derivatives in the Consolidated Statement
of Operations
|
$ | 4,809 | $ | (771 | ) | $ | (3,300 | ) | $ | (1,475 | ) | |||||
|
September 30, | December 31, | |||||||
2008 | 2007 | |||||||
|
||||||||
Fair value of derivative assets current
|
$ | 354 | $ | 235 | ||||
Fair value of derivative assets long term
|
159 | | ||||||
Fair value of derivative liabilities current
|
(2,738 | ) | (3,261 | ) | ||||
Fair value of derivative liabilities long term
|
(2,606 | ) | (2,140 | ) | ||||
|
||||||||
Net fair value of derivatives
|
$ | (4,831 | ) | $ | (5,166 | ) | ||
|
9
10
Year | Commodity Hedged | Volume | Type of Derivative | Basis Reference | ||||
2008
|
Condensate & Natural Gasoline | 5,000 BBL/Month | Crude Oil Swap ($66.20) | NYMEX | ||||
2008
|
Natural Gas | 30,000 MMBTU/Month | Natural Gas Swap ($8.12) | Houston Ship Channel | ||||
2008
|
Ethane | 5,000 BBL/Month | Ethane Swap ($27.30) | Mt. Belvieu | ||||
2008
|
Natural Gasoline | 3,000 BBL/Month | Crude Oil Swap ($70.75) | NYMEX | ||||
2008
|
Natural Gasoline | 3,000 BBL/Month | Natural Gasoline Swap ($85.79) | Mt. Belvieu (Non-TET) | ||||
2009
|
Natural Gas | 30,000 MMBTU/Month | Natural Gas Swap (9.025) | Columbia Gulf | ||||
2009
|
Condensate & Natural Gasoline | 3,000 BBL/Month | Crude Oil Swap ($69.08) | NYMEX |
11
Year | Commodity Hedged | Volume | Type of Derivative | Basis Reference | ||||
2009
|
Natural Gasoline | 3,000 BBL/Month | Crude Oil Swap ($70.90) | NYMEX | ||||
2009
|
Condensate | 1,000 BBL/Month | Crude Oil Swap ($70.45) | NYMEX | ||||
2009
|
Natural Gasoline | 2,000 BBL/Month | Natural Gasoline Swap ($86.42) | Mt. Belvieu (Non-TET) | ||||
2010
|
Condensate | 2,000 BBL/Month | Crude Oil Swap ($69.15) | NYMEX | ||||
2010
|
Natural Gasoline | 3,000 BBL/Month | Crude Oil Swap ($72.25) | NYMEX | ||||
2010
|
Condensate | 1,000 BBL/Month | Crude Oil Swap ($104.80) | NYMEX | ||||
2010
|
Natural Gasoline | 1,000 BBL/Month | Natural Gasoline Swap ($94.14) | Mt. Belvieu (Non-TET) | ||||
2011
|
Condensate | 2,000 BBL/Month | Crude Oil Swap ($99.15) | NYMEX | ||||
2011
|
Condensate | 1,000 BBL/Month | Crude Oil Swap ($103.80) | NYMEX | ||||
2011
|
Natural Gasoline | 2,000 BBL/Month | Natural Gasoline Swap ($93.18) | NYMEX |
(9) | INTEREST RATE CASH FLOW HEDGES |
Date of Hedge | Notional Amount | Fixed Rate | Maturity Date | |||||||
January 2008
|
$ | 25,000 | 3.400 | % | January 2010 | |||||
September 2007
|
$ | 25,000 | 4.605 | % | September 2010 | |||||
November 2006
|
$ | 40,000 | 4.820 | % | December 2009 | |||||
March 2006
|
$ | 75,000 | 5.250 | % | November 2010 |
September 30, | December 31, | |||||||
2008 | 2007 | |||||||
Fair value of derivative liabilities current
|
$ | (2,919 | ) | $ | (1,241 | ) | ||
Fair value of derivative liabilities long term
|
(2,327 | ) | (3,436 | ) | ||||
|
||||||||
Net fair value of derivatives
|
$ | (5,246 | ) | $ | (4,677 | ) | ||
|
12
Proceeds received:
|
||||
Sale of common units
|
$ | 58,305 | ||
General partner contribution
|
1,190 | |||
|
||||
Total proceeds received
|
$ | 59,495 | ||
|
||||
|
||||
Use of Proceeds:
|
||||
Underwriters fees
|
$ | 2,107 | ||
Professional fees and other costs
|
265 | |||
Repayment of debt under revolving credit facility
|
55,850 | |||
Working capital
|
1,273 | |||
|
||||
Total use of proceeds
|
$ | 59,495 | ||
|
September 30, | December 31, | |||||||
2008 | 2007 | |||||||
**$195,000 Revolving loan facility at variable
interest rate (5.82%* weighted average at
September 30, 2008), due November 2010 secured by
substantially all of our assets, including,
without limitation, inventory, accounts
receivable, vessels, equipment, fixed assets and
the interests in our operating subsidiaries and
equity method investees
|
$ | 150,000 | $ | 95,000 |
13
September 30, | December 31, | |||||||
2008 | 2007 | |||||||
***$130,000 Term loan facility at variable
interest rate (6.99%* at September 30, 2008), due
November 2010, secured by substantially all of
our assets, including, without limitation,
inventory, accounts receivable, vessels,
equipment, fixed assets and the interests in our
operating subsidiaries
|
130,000 | 130,000 | ||||||
|
||||||||
Other secured debt maturing in 2008, 7.25%
|
| 21 | ||||||
|
||||||||
Total long-term debt
|
280,000 | 225,021 | ||||||
Less current installments
|
| 21 | ||||||
|
||||||||
Long-term debt, net of current installments
|
$ | 280,000 | $ | 225,000 | ||||
|
* | Interest rate fluctuates based on the LIBOR rate plus an applicable margin set on the date of each advance. The margin above LIBOR is set every three months. Indebtedness under the credit facility bears interest at either LIBOR plus an applicable margin or the base prime rate plus an applicable margin. The applicable margin for revolving loans that are LIBOR loans ranges from 1.50% to 3.00% and the applicable margin for revolving loans that are base prime rate loans ranges from 0.50% to 2.00%. The applicable margin for term loans that are LIBOR loans ranges from 2.00% to 3.00% and the applicable margin for term loans that are base prime rate loans ranges from 1.00% to 2.00%. The applicable margin for existing borrowings is 2.00%. Effective October 1, 2008, the applicable margin for existing borrowings will increase to 2.50%. As a result of our leverage ratio test as of September 30, 2008, effective January 1, 2009, the applicable margin for existing borrowings will decrease to 2.00%. The Company incurs a commitment fee on the unused portions of the credit facility. | |
** | Effective January, 2008, the Company entered into a cash flow hedge that swaps $25,000 of floating rate to fixed rate. The fixed rate cost is 3.400% plus the Companys applicable LIBOR borrowing spread. The cash flow hedge matures in January, 2010. | |
** | Effective September, 2007, the Company entered into a cash flow hedge that swaps $25,000 of floating rate to fixed rate. The fixed rate cost is 4.605% plus the Companys applicable LIBOR borrowing spread. The cash flow hedge matures in September, 2010. | |
** | Effective November, 2006, the Company entered into a cash flow hedge that swaps $40,000 of floating rate to fixed rate. The fixed rate cost is 4.82% plus the Companys applicable LIBOR borrowing spread. The cash flow hedge matures in December, 2009. | |
*** | The $130,000 term loan has $105,000 hedged. Effective March, 2006, the Company entered into a cash flow hedge that swaps $75,000 of floating rate to fixed rate. The fixed rate cost is 5.25% plus the Companys applicable LIBOR borrowing spread. The cash flow hedge matures in November, 2010. Effective November 2006, the Company entered into an additional interest rate swap that swaps $30,000 of floating rate to fixed rate. The fixed rate cost is 4.765% plus the Companys applicable LIBOR borrowing spread. This cash flow hedge matures in March, 2010. |
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