Mark One
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Annual Report Pursuant to Section 13 or 15(d) of the
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Securities Exchange Act of 1934
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For the fiscal year ended December 31, 2016
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Transition Report Pursuant to Section 13 or 15(d) of the
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Securities Exchange Act of 1934
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Delaware
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05-0527861
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State or other jurisdiction of incorporation or organization
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(I.R.S. Employer Identification No.)
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Title of each class
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Name of each exchange on which registered
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Common Units representing limited partnership interests
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NASDAQ Global Select Market
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Large accelerated filer o
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Accelerated filer x
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Non-accelerated filer o
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Smaller reporting company o
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(Do not check if a smaller reporting company)
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Page
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PART I
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Item 1.
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Business
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Item 1A.
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Risk Factors
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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PART II
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Item 5.
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Market for Our Common Equity, Related Unitholder Matters and Issuer Purchases of Equity Securities
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Item 6.
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Selected Financial Data
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Item 7A.
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Quantitative and Qualitative Disclosures about Market Risk
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Item 8.
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Financial Statements and Supplementary Data
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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Item 9A.
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Controls and Procedures
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Item 9B.
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Other Information
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PART III
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Item 10.
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Directors, Executive Officers and Corporate Governance
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Item 11.
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Executive Compensation
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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Item 14.
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Principal Accounting Fees and Services
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PART IV
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Item 15.
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Exhibits, Financial Statement Schedules
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Item 1.
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Business
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Terminalling and storage services for petroleum products and by-products, including the refining of naphthenic crude oil and the blending and packaging of finished lubricants;
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Natural gas liquids transportation and distribution services and natural gas storage;
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Sulfur and sulfur-based products gathering, processing, marketing, manufacturing and distribution; and
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Marine transportation services for petroleum products and by-products.
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Terminalling and Storage. We own or operate 26 marine shore-based terminal facilities and 14 specialty terminal facilities located primarily in the U.S. Gulf Coast region that provide storage, refining, blending, packaging, and handling services for producers and suppliers of petroleum products and by-products, including the refining of naphthenic crude oil and the blending and packaging of various grades and quantities of industrial, commercial, and automotive lubricants and greases. Our facilities and resources provide us with the ability to handle various products that require specialized treatment, such as molten sulfur and asphalt. We also provide land rental to oil and gas companies along with storage and handling services for lubricants and fuels. We provide these terminalling and storage services on a fee basis primarily under long-term contracts. A significant portion of the contracts in this segment provide for minimum fee arrangements that are not based on the volumes handled.
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Natural Gas Services. We distribute natural gas liquids ("NGLs"). We purchase NGLs primarily from refineries and natural gas processors. We store and transport NGLs for wholesale deliveries to refineries, industrial NGL users in Texas and the Southeastern U.S, and propane retailers. We own a NGL pipeline, which spans approximately 200 miles from Kilgore, Texas to Beaumont, Texas. We own approximately 2.4 million barrels of underground storage capacity for NGLs. Additionally, we own 100% of the interests in Cardinal Gas Storage Partners LLC ("Cardinal"), which is focused on the development, construction, operation and management of natural gas storage facilities across northern Louisiana and Mississippi. We own a combined 20% interest in West Texas LPG Pipeline L.P. ("WTLPG"). WTLPG is operated by ONEOK Partners, L.P. ("ONEOK"), which owns the remaining 80.0% interest. WTLPG owns an approximate 2,300 mile common-carrier pipeline system that transports NGLs from New Mexico and Texas to Mont Belvieu, Texas for fractionation. This asset enables us to participate in the transportation of NGL production in originating in the Permian and other basins along the WTLPG pipeline route.
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Sulfur Services. We have developed an integrated system of transportation assets and facilities relating to sulfur services. We process and distribute sulfur produced by oil refineries primarily located in the U.S. Gulf Coast region. We buy and sell molten sulfur on contracts that are tied to sulfur indices and tend to provide stable margins. We process molten sulfur into prilled or pelletized sulfur at our facilities in Port of Stockton, California and Beaumont, Texas on contracts that often provide guaranteed minimum fees. The sulfur we process and handle is primarily used in the production of fertilizers and industrial chemicals. We own and operate five sulfur-based fertilizer production plants and one emulsified sulfur blending plant that manufactures primarily sulfur-based fertilizer products for wholesale distributors and industrial users. These plants are located in Texas and
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Marine Transportation. We operate a fleet of 35 inland marine tank barges, 19 inland push boats and one offshore tug and barge unit that transport petroleum products and by-products largely in the U.S. Gulf Coast region. We provide these transportation services on a fee basis primarily under annual contracts, and many of our customers have long standing contractual relationships with us. Our modernized asset base is attractive both to our existing customers as well as potential new customers. In addition, our fleet contains several vessels that reflect our focus on specialty products.
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Pursue Organic Growth Projects. We continually evaluate economically attractive organic expansion opportunities in new or existing areas of operation that will allow us to leverage our existing market position and increase the distributable cash flow from our existing assets through improved utilization and efficiency.
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Pursue Internal Organic Growth by Attracting New Customers and Expanding Services Provided to Existing Customers. Significant opportunities exist to expand our customer base and provide additional services and products to existing customers. We generally begin a relationship with a customer by transporting, storing or marketing a limited range of products and services. Expanding our customer base and our service and product offerings to existing customers is an efficient and cost effective method of achieving organic growth in revenues and cash flow.
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Pursue Strategic Acquisitions. We continually monitor the marketplace to identify and pursue accretive acquisitions that expand the services and products we offer or that expand our geographic presence. After acquiring other businesses, we attempt to utilize our industry knowledge, network of customers and suppliers and strategic asset base to operate the acquired businesses more efficiently and competitively, thereby increasing revenues and cash flow. Our diversified base of operations provides multiple platforms for strategic growth through acquisitions.
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Pursue Strategic Commercial Alliances. Many of our larger customers, which include major integrated energy companies, have established strategic alliances with midstream service providers such as us to address logistical and transportation problems or achieve operational synergies. We intend to pursue strategic commercial alliances with such customers in the future.
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Terminal
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Location
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Aggregate Capacity
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Products
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Description
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Tampa (1)
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Tampa, Florida
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719,000 barrels
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Asphalt and fuel oil
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Marine terminal, loading/unloading for vessels, barges, railcars and trucks
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Stanolind
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Beaumont, Texas
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593,200 barrels
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Asphalt, crude oil, sulfur, sulfuric acid and fuel oil
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Marine terminal, marine dock for loading/unloading of vessels, barges, railcars and trucks
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Neches
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Beaumont, Texas
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546,750 barrels
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Molten sulfur, ammonia, asphalt, fuel oil, crude oil and sulfur-based fertilizer
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Marine terminal, loading/unloading for vessels, barges, railcars and trucks
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(1)
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This terminal is located on land owned by the Tampa Port Authority that was leased to us under a 10-year lease that expires in December 2021. This lease may be extended at the option of the tenant for one option period of five years.
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Terminal
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Location
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Aggregate Capacity
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Products
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Description
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Channelview
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Houston, Texas
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44,000 sq. ft. Warehouse; 39,800 barrels
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Lubricants
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Lubricants blending, storage, packaging and distribution
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Smackover Refinery
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Smackover, Arkansas
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7,700 barrels per day
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Naphthenic lubricants, distillates, asphalt
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Crude refining facility
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Smackover Refinery
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Smackover, Arkansas
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275,000 barrels of crude bulk storage; 641,000 barrels of lubricant storage
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Crude oil, lubricants
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Crude refining facility
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Martin Lubricants
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Smackover, Arkansas
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235,000 sq. ft. Warehouse; 3.9 million gallons bulk storage
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Gard, SynGard, Unimark and Xtreme brands, and grease
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Lubricants packaging facility
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Martin Lubricants (1)
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Kansas City, Missouri
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75,000 sq. ft. Warehouse; 0.2 million gallons bulk storage
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Automotive, commercial and industrial greases
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Grease manufacturing and packaging facility
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South Houston Asphalt
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Houston, Texas
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95,500 barrels
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Asphalt
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Asphalt processing and storage
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Port Neches Asphalt
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Port Neches, Texas
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30,100 barrels
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Asphalt
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Asphalt processing and storage
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Omaha Asphalt
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Omaha, Nebraska
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113,900 barrels
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Asphalt
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Asphalt processing and storage
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Dunphy (2)
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Elko, Nevada
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63,200 barrels
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Sulfuric acid
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Sulfuric acid storage
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Spindletop
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Beaumont, Texas
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90,000 barrels
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Natural gasoline
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Pipeline receipts and shipments
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Jennings Bulk Plant
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Jennings, Louisiana
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36,000 sq. ft. building;
6,800 barrels |
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Lubricants, fuel
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Lubricants and fuel storage
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(1)
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This terminal contains a warehouse owned by third parties and leased under a lease that expires in December 2020 and can be extended by us for two successive five-year periods.
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(2)
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This terminal is located on land owned by third parties and leased under a lease that expires in May 2024 and can be extended by us for two successive five-year periods.
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Terminal
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Location
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Aggregate Capacity (barrels)
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End of Lease (Including Options)
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Amelia 2
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Amelia, Louisiana
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13,000
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August 2023
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Cameron West (2)
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Cameron, Louisiana
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16,300
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February 2033
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Dock 193 (3)
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Gueydan, Louisiana
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11,000
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May 2018
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Fourchon 15
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Fourchon, Louisiana
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7,600
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February 2047
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Freshwater City (1)
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Freshwater City, Louisiana
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0
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March 2017
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Harbor Island (3)
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Harbor Island, Texas
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6,800
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December 2039
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Intracoastal City-2
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Intracoastal City, Louisiana
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17,700
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December 2025
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Pelican Island
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Galveston, Texas
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87,600
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Own
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Theodore
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Theodore, Alabama
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19,900
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Own
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Venice (1)
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Venice, Louisiana
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25,100
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September 2017
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(1)
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These terminals are currently in caretaker status and the lease will not be renewed at the end of the term.
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(2)
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This terminal is currently in caretaker status.
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(3)
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A portion of this terminal is owned.
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Terminal
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Location
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Aggregate Capacity (barrels)
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End of Lease (Including Options)
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Berwick (1)
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Berwick, Louisiana
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0
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September 2017
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Cameron East (1)
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Cameron, Louisiana
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0
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March 2017
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Dulac (1)
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Dulac, Louisiana
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15,400
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December 2021
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Fourchon
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Fourchon, Louisiana
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80,900
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May 2027
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Fourchon 16
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Fourchon, Louisiana
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16,400
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March 2022
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Fourchon 17
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Fourchon, Louisiana
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41,200
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March 2023
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Fourchon T
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Fourchon, Louisiana
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10,200
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October 2038
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Galveston T (2)
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Galveston, Texas
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1,400
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Own
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Intracoastal City (2)
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Intracoastal City, Louisiana
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0
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Own
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Lake Charles T
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Lake Charles, Louisiana
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1,000
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April 2018
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Morgan City DWC 31
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Morgan City, Louisiana
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7,100
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December 2019
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Pascagoula
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Pascagoula, Mississippi
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10,400
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Own
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Port Arthur
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Port Arthur, Texas
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16,300
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November 2025
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Port O'Connor (2)
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Port O'Connor, Texas
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6,800
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March 2017
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River Ridge
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River Ridge, Louisiana
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8,700
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April 2019
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Sabine Pass (2)
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Sabine Pass, Texas
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16,500
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September 2036
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(1)
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These terminals are currently in caretaker status and the lease will not be renewed at the end of the term.
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(2)
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These terminals are currently in caretaker status.
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storage of NGLs purchased in off-peak months;
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efficient use of railroad tank cars and the transportation fleet of vehicles owned by Martin Resource Management; and
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product management expertise to obtain supplies when needed.
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NGL Facility
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Location
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Capacity
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Description
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Wholesale terminals
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Arcadia, Louisiana
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2,400,000 barrels
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Underground storage
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Breaux Bridge, Louisiana (1)
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420,000 barrels
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Underground storage
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Napoleonville, Louisiana (1)
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370,000 barrels
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Underground storage
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Hattiesburg, Mississippi (1)
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240,000 barrels
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Underground storage
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Mont Belvieu, Texas (1)
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60,000 barrels
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Underground storage
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Retail terminals
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Kilgore, Texas
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90,000 gallons
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Retail propane distribution
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Longview, Texas
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30,000 gallons
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Retail propane distribution
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Henderson, Texas
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12,000 gallons
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Retail propane distribution
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Rail terminal
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Arcadia, Louisiana
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24 railcars per day
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NGL rail loading and unloading capabilities
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(1)
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We lease our underground storage at Breaux Bridge, Louisiana, Hattiesburg, Mississippi, Napoleonville, Louisiana, and Mont Belvieu, Texas, from third parties under one-year lease agreements.
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Facility Name / Location
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Facility Type
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Storage Capacity
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Percent of Capacity Contracted (1)
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Weighted Average Life of Remaining Contract Term
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Arcadia Gas Storage, LLC Bienville Parish, Louisiana
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Salt dome
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16.3 billion cubic feet (bcf)
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89%
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2.6 years
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Cadeville Gas Storage, LLC Ouachita Parish, Louisiana
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Depleted reservoir
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17.0 bcf
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100%
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6.4 years
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Perryville Gas Storage, LLC Franklin Parish, Louisiana
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Salt dome
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9.0 bcf
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94%
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2.0 years
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Monroe Gas Storage Company, LLC Monroe County, Mississippi
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Depleted reservoir
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7.4 bcf
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89%
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3.3 years
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Plant nutrient sulfur products. We produce plant nutrient and agricultural ground sulfur products at our facilities in Odessa, Texas, Seneca, Illinois and Cactus, Texas. Our plant nutrient sulfur product is a 90% degradable sulfur product marketed under the Disper-Sul® trade name and sold throughout the U.S. to direct application agricultural markets. Our agricultural ground sulfur products are used primarily in the western U.S. on grapes and vegetable crops.
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Ammonium sulfate products. We produce various grades of ammonium sulfate including granular, coarse, standard, and 40% ammonium sulfate solution. These products primarily serve direct application agricultural markets. We package these custom grade products under both proprietary and private labels and sell them to major retail distributors and other retail customers.
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Industrial sulfur products. We produce industrial sulfur products such as elemental pastille sulfur, industrial ground sulfur products, and emulsified sulfur. We produce elemental pastille sulfur at our Odessa, Texas and Seneca, Illinois facilities. Elemental pastille sulfur is used to increase the efficiency of the coal-fired precipitators in the power industry. These industrial ground sulfur products are also used in a variety of dusting and wettable sulfur applications such as rubber manufacturing, fungicides, sugar and animal feeds. We produce emulsified sulfur at our Nash, Texas facility. Emulsified sulfur is primarily used to control the sulfur content in the pulp and paper manufacturing processes.
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Liquid sulfur products. We produce ammonium thiosulfate at our Neches terminal facility in Beaumont, Texas. This agricultural sulfur product is a clear liquid containing 12% nitrogen and 26% sulfur. This product serves as a liquid plant nutrient used directly through spray rigs or irrigation systems. It is also blended with other nitrogen phosphorus potassium liquids or suspensions as well. Our market is predominantly the Mid-South U.S. and Coastal Bend area of Texas.
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Asset
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Class of Equipment
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Capacity/Horsepower
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Products Transported
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Margaret Sue
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Offshore tank barge
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10,500 long tons
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Molten sulfur
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M/V Martin Explorer
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Offshore tugboat
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7,130 horsepower
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N/A
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M/V Martin Express
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Inland push boat
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1,200 horsepower
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N/A
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MGM 101
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Inland tank barge
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2,500 long tons
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Molten sulfur
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MGM 102
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Inland tank barge
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3,400 long tons
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Molten sulfur
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Terminal
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Location
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Daily Production Capacity
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Products Stored
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Neches
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Beaumont, Texas
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5,500 metric tons per day
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Molten, prilled and granulated sulfur
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Stockton
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Stockton, California
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1,000 metric tons per day
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Molten and prilled sulfur
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Facility
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Location
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Annual Capacity
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Description
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Fertilizer plant
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Plainview, Texas
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150,000 tons
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Fertilizer production
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Fertilizer plant
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Beaumont, Texas
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110,000 tons
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Liquid sulfur fertilizer production
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Fertilizer plants
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Odessa, Texas
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35,000 tons
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Dry sulfur fertilizer production
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Fertilizer plant
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Seneca, Illinois
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36,000 tons
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Dry sulfur fertilizer production
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Fertilizer plant
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Cactus, Texas
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20,000 tons
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Dry sulfur fertilizer production
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Industrial sulfur plant
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Nash, Texas
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18,000 tons
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Emulsified sulfur production
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Sulfuric acid plant
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Plainview, Texas
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150,000 tons
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Sulfuric acid production
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Class of Equipment
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Number in Class
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Capacity/Horsepower
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Description of Products Carried
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Inland tank barges
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9
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Under 20,000 barrels
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Asphalt, crude oil, fuel oil, gasoline and sulfur
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Inland tank barges
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26
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20,000 - 31,000 barrels
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Asphalt, crude oil, fuel oil and gasoline
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Inland push boats
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19
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800 - 3,800 horsepower
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N/A
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Offshore tank barge
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1
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58,000 barrels
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Diesel fuel
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Offshore tugboat
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1
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5,100 horsepower
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N/A
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providing land transportation of various liquids using a fleet of trucks and road vehicles and road trailers;
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distributing fuel oil, ammonia, asphalt, sulfuric acid, marine fuel and other liquids;
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providing marine bunkering and other shore-based marine services in Texas, Louisiana, Mississippi, Alabama, and Florida;
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operating a crude oil gathering business in Stephens, Arkansas;
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providing crude oil gathering, refining, and marketing services of base oils, asphalt, and distillate products in Smackover, Arkansas;
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providing crude oil marketing and transportation from the well head to the end market;
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operating an environmental consulting company;
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operating an engineering services company;
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supplying employees and services for the operation of our business;
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operating a crude oil, natural gas, natural gas liquids, and biofuels optimization business; and
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operating, solely for our account, the asphalt facilities in Omaha, Nebraska, Port Neches, Texas and South Houston, Texas.
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Item 1A.
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Risk Factors
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the prices of petroleum products and by-products;
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fluctuations in our working capital;
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the level of capital expenditures we make;
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restrictions contained in our debt instruments and our debt service requirements;
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our ability to make working capital borrowings under our credit facility; and
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the amount, if any, of cash reserves established by our general partner in its discretion.
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our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be impaired or such financing may not be available on favorable terms;
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our funds available for operations, future business opportunities and distributions to unitholders will be reduced by that portion of our cash flows required to make interest payments on the debt;
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we may be more vulnerable to competitive pressures or a downturn in our business or the economy generally; and
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our flexibility in responding to changing business and economic conditions may be limited.
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one or more of our lenders may be unable or otherwise fail to meet its funding obligations;
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the lenders do not have to provide funding if there is a default under the credit facility or if any of the representations or warranties included in the credit facility are false in any material respect; and
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if any lender refuses to fund its commitment for any reason, whether or not valid, the other lenders are not required to provide additional funding to make up for the unfunded portion.
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post-closing discovery of material undisclosed liabilities of the acquired business or assets;
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the unexpected loss of key employees or customers from the acquired businesses;
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difficulties resulting from our integration of the operations, systems and management of the acquired business; and
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an unexpected diversion of our management's attention from other operations.
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accidents on rivers or at sea and other hazards that could result in releases, spills and other environmental damages, personal injuries, loss of life and suspension of operations;
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leakage of NGLs, natural gas, and other petroleum products and by-products;
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fires and explosions;
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damage to transportation, terminalling and storage facilities and surrounding properties caused by natural disasters; and
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terrorist attacks or sabotage.
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prevailing oil and natural gas prices and expectations about future prices and price volatility;
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the cost of offshore exploration for and production and transportation of oil and natural gas;
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worldwide demand for oil and natural gas;
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consolidation of oil and gas and oil service companies operating offshore;
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•
|
availability and rate of discovery of new oil and natural gas reserves in offshore areas;
|
•
|
local and international political and economic conditions and policies;
|
•
|
technological advances affecting energy production and consumption;
|
•
|
weather conditions;
|
•
|
environmental regulation; and
|
•
|
the ability of oil and gas companies to generate or otherwise obtain funds for exploration and production.
|
•
|
catastrophic events, including hurricanes;
|
•
|
environmental remediation;
|
•
|
labor difficulties; and
|
•
|
disruptions in the supply of our products to our facilities or means of transportation.
|
•
|
the issuance of common units in additional public offerings or in connection with acquisitions that increase cash flow from operations on a pro forma, per unit basis;
|
•
|
the conversion of subordinated units into common units;
|
•
|
the conversion of units of equal rank with the common units into common units under some circumstances; or
|
•
|
the conversion of our general partner's general partner interest in us and its incentive distribution rights into common units as a result of the withdrawal of our general partner.
|
•
|
we had been conducting business in any state without compliance with the applicable limited partnership statute; or
|
•
|
the right or the exercise of the right by our unitholders as a group to remove or replace our general partner, to approve some amendments to our partnership agreement, or to take other action under our partnership agreement constituted participation in the "control" of our business.
|
•
|
permits our general partner to make a number of decisions in its "sole discretion." This entitles our general partner to consider only the interests and factors that it desires, and it has no duty or obligation to give any consideration to any interest of, or factors affecting, us, our affiliates or any limited partner;
|
•
|
provides that our general partner is entitled to make other decisions in its "reasonable discretion," which may reduce the obligations to which our general partner would otherwise be held;
|
•
|
generally provides that affiliated transactions and resolutions of conflicts of interest not involving a required vote of unitholders must be "fair and reasonable" to us and that, in determining whether a transaction or resolution is "fair and reasonable," our general partner may consider the interests of all parties involved, including its own; and
|
•
|
provides that our general partner and its officers and directors will not be liable for monetary damages to us, our limited partners or assignees for errors of judgment or for any acts or omissions if our general partner and those other persons acted in good faith.
|
•
|
the issuance of common units in additional public offerings or in connection with acquisitions that increase cash flow from operations on a pro forma, per unit basis;
|
•
|
the conversion of subordinated units into common units;
|
•
|
the conversion of units of equal rank with the common units into common units under some circumstances; or
|
•
|
the conversion of our general partner's general partner interest in us and its incentive distribution rights into common units as a result of the withdrawal of our general partner.
|
•
|
our unitholders' proportionate ownership interest in us will decrease;
|
•
|
the amount of cash available for distribution on a per unit basis may decrease;
|
•
|
because a lower percentage of total outstanding units will be subordinated units, the risk that a shortfall in the payment of the minimum quarterly distribution will be borne by our common unitholders will increase;
|
•
|
the relative voting strength of each previously outstanding unit will diminish;
|
•
|
the market price of the common units may decline; and
|
•
|
the ratio of taxable income to distributions may increase.
|
•
|
Officers of Martin Resource Management who provide services to us also devote significant time to the businesses of Martin Resource Management and are compensated by Martin Resource Management for that time;
|
•
|
Neither our partnership agreement nor any other agreement requires Martin Resource Management to pursue a business strategy that favors us or utilizes our assets or services. Martin Resource Management's directors and officers have a fiduciary duty to make these decisions in the best interests of the shareholders of Martin Resource Management without regard to the best interests of the unitholders;
|
•
|
Martin Resource Management may engage in limited competition with us;
|
•
|
Our general partner is allowed to take into account the interests of parties other than us, such as Martin Resource Management, in resolving conflicts of interest, which has the effect of reducing its fiduciary duty to our unitholders;
|
•
|
Under our partnership agreement, our general partner may limit its liability and reduce its fiduciary duties, while also restricting the remedies available to our unitholders for actions that, without the limitations and reductions, might constitute breaches of fiduciary duty. As a result of purchasing units, our unitholders will be treated as having consented to some actions and conflicts of interest that, without such consent, might otherwise constitute a breach of fiduciary or other duties under applicable state law;
|
•
|
Our general partner determines which costs incurred by Martin Resource Management are reimbursable by us;
|
•
|
Our partnership agreement does not restrict our general partner from causing us to pay it or its affiliates for any services rendered on terms that are fair and reasonable to us or from entering into additional contractual arrangements with any of these entities on our behalf;
|
•
|
Our general partner controls the enforcement of obligations owed to us by Martin Resource Management;
|
•
|
Our general partner decides whether to retain separate counsel, accountants or others to perform services for us;
|
•
|
The audit committee of our general partner retains our independent auditors;
|
•
|
In some instances, our general partner may cause us to borrow funds to permit us to pay cash distributions, even if the purpose or effect of the borrowing is to make incentive distributions; and
|
•
|
Our general partner has broad discretion to establish financial reserves for the proper conduct of our business. These reserves also will affect the amount of cash available for distribution.
|
Item 1B.
|
Unresolved Staff Comments
|
Item 2.
|
Properties
|
Item 3.
|
Legal Proceedings
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Market for Our Common Equity, Related Unitholder Matters and Issuer Purchases of Equity Securities
|
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
||||||||||||
|
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||
First Quarter
|
|
$
|
22.22
|
|
|
$
|
14.05
|
|
|
$
|
35.44
|
|
|
$
|
24.97
|
|
Second Quarter
|
|
$
|
23.77
|
|
|
$
|
19.40
|
|
|
$
|
38.03
|
|
|
$
|
30.95
|
|
Third Quarter
|
|
$
|
25.12
|
|
|
$
|
18.99
|
|
|
$
|
32.83
|
|
|
$
|
23.43
|
|
Fourth Quarter
|
|
$
|
21.63
|
|
|
$
|
15.80
|
|
|
$
|
29.44
|
|
|
$
|
18.62
|
|
Declared for Quarter Ended
|
|
Distribution Per Common Unit
|
|
Date Declared
|
|
Date Paid
|
||
December 31, 2016
|
|
$
|
0.5000
|
|
|
January 19, 2017
|
|
February 14, 2017
|
September 30, 2016
|
|
$
|
0.5000
|
|
|
October 20, 2016
|
|
November 14, 2016
|
June 30, 2016
|
|
$
|
0.8125
|
|
|
July 21, 2016
|
|
August 12, 2016
|
March 31, 2016
|
|
$
|
0.8125
|
|
|
April 21, 2016
|
|
May 13, 2016
|
December 31, 2015
|
|
$
|
0.8125
|
|
|
January 21, 2016
|
|
February 12, 2016
|
September 30, 2015
|
|
$
|
0.8125
|
|
|
October 22, 2015
|
|
November 13, 2015
|
June 30, 2015
|
|
$
|
0.8125
|
|
|
July 23, 2015
|
|
August 14, 2015
|
March 31, 2015
|
|
$
|
0.8125
|
|
|
April 23, 2015
|
|
May 15, 2015
|
Item 6.
|
Selected Financial Data
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
(Dollars in thousands, except per unit amounts)
|
||||||||||||||||||
|
|
|
|
|
|
||||||||||||||
Revenues
|
$
|
827,391
|
|
|
$
|
1,036,844
|
|
|
$
|
1,642,141
|
|
|
$
|
1,612,739
|
|
|
$
|
1,490,361
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations
|
$
|
31,652
|
|
|
$
|
37,165
|
|
|
$
|
(6,367
|
)
|
|
$
|
(14,562
|
)
|
|
$
|
37,122
|
|
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
1,215
|
|
|
(5,338
|
)
|
|
1,208
|
|
|
64,865
|
|
|||||
Net income (loss)
|
$
|
31,652
|
|
|
$
|
38,380
|
|
|
$
|
(11,705
|
)
|
|
$
|
(13,354
|
)
|
|
$
|
101,987
|
|
Net income (loss) attributable to limited partners
|
$
|
23,143
|
|
|
$
|
21,902
|
|
|
$
|
(15,176
|
)
|
|
$
|
(13,047
|
)
|
|
$
|
92,617
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) per limited partner unit – continuing operations
|
$
|
0.65
|
|
|
$
|
0.60
|
|
|
$
|
(0.27
|
)
|
|
$
|
(0.54
|
)
|
|
$
|
1.32
|
|
Net income (loss) per limited partner unit – discontinued operations
|
—
|
|
|
0.02
|
|
|
(0.22
|
)
|
|
0.04
|
|
|
2.64
|
|
|||||
Net income (loss) per limited partner unit
|
$
|
0.65
|
|
|
$
|
0.62
|
|
|
$
|
(0.49
|
)
|
|
$
|
(0.50
|
)
|
|
$
|
3.96
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
1,246,363
|
|
|
$
|
1,380,473
|
|
|
$
|
1,553,919
|
|
|
$
|
1,097,919
|
|
|
$
|
1,012,996
|
|
Long-term debt
|
$
|
808,107
|
|
|
$
|
865,003
|
|
|
$
|
902,005
|
|
|
$
|
658,695
|
|
|
$
|
474,992
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends per common unit (in dollars)
|
$
|
2.94
|
|
|
$
|
3.25
|
|
|
$
|
3.18
|
|
|
$
|
3.11
|
|
|
$
|
3.06
|
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Terminalling and storage services for petroleum products and by-products, including the refining of naphthenic crude oil and the blending and packaging of finished lubricants;
|
•
|
Natural gas liquids transportation and distribution services and natural gas storage;
|
•
|
Sulfur and sulfur-based products gathering, processing, marketing, manufacturing and distribution; and
|
•
|
Marine transportation services for petroleum products and by-products.
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ from Estimates and Assumptions
|
Allowance for Doubtful Accounts
|
||||
We evaluate our allowance for doubtful accounts on an ongoing basis and record adjustments when, in management's judgment, circumstances warrant it. Reserves are recorded to reduce receivables to the amount ultimately expected to be collected.
|
|
We evaluate the collectability of our accounts receivable based on factors such as the customer's ability to pay, the age of the receivable and our historical collection experience. A deterioration in any of these factors could result in an increase in the allowance for doubtful accounts balance.
|
|
If actual collection results are not consistent with our judgments, we may experience an increase in uncollectible receivables. A 10% increase in our allowance for doubtful accounts would result in a decrease in net income of approximately $0.4 million.
|
Depreciation
|
||||
Depreciation expense is computed using the straight-line method over the useful life of the assets.
|
|
Determination of depreciation expense requires judgment regarding estimated useful lives and salvage values of property, plant and equipment. As circumstances warrant, estimates are reviewed to determine if any changes in the underlying assumptions are needed.
|
|
The lives of our fixed assets range from 3 - 50 years. If the depreciable lives of our assets were decreased by 10%, we estimate that annual depreciation expense would increase approximately $8.0 million, resulting in a corresponding reduction in net income.
|
Impairment of Long-Lived Assets
|
||||
We periodically evaluate whether the carrying value of long-lived assets has been impaired when circumstances indicate the carrying value of the assets may not be recoverable. These evaluations are based on undiscounted cash flow projections over the remaining useful life of the asset. The carrying value is not recoverable if it exceeds the sum of the undiscounted cash flows. Any impairment loss is measured as the excess of the asset's carrying value over its fair value.
|
|
Our impairment analyses require management to use judgment in estimating future cash flows and useful lives, as well as assessing the probability of different outcomes.
|
|
Applying this impairment review methodology, in 2016 we recorded an impairment charge of $15.3 million in our Terminalling and Storage segment and $11.7 million in our Marine Transportation segment. In 2015 we recorded an impairment charge of $9.3 million in our Terminalling and Storage segment and $1.3 million in our Marine Transportation segment. During 2014, we recorded an impairment charge of $3.4 million in our Marine Transportation segment.
|
Impairment of Goodwill
|
Goodwill is subject to a fair-value based impairment test on an annual basis, or more frequently if events or changes in circumstances indicate that the fair value of any of our reporting units is less than its carrying amount. When assessing the recoverability of goodwill , we may first assess qualitative factors in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. After assessing qualitative factors, if we determine that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing a quantitative assessment is not required. If an initial qualitative assessment indicates that it is more likely than not the carrying amount exceeds the fair value of a reporting unit , a quantitative analysis will be performed. We may also elect to bypass the qualitative assessment and proceed directly to a quantitative analysis depending on the facts and circumstances.
|
|
As part of the quantitative evaluation, we determine fair value using accepted valuation techniques, including discounted cash flow, the guideline public company method and the guideline transaction method. These analyses require management to make assumptions and estimates regarding industry and economic factors, future operating results and discount rates. We conduct impairment testing using present economic conditions, as well as future expectations.
|
|
During the second quarter of 2016, we determined that based on a continued decrease in the demand for utilization and transportation day rates forecasted in our Marine Transportation reporting unit, an impairment of goodwill may exist. Based on the results of our impairment analysis, we determined that a $4.1 million impairment loss of all goodwill in the Marine Transportation reporting unit was incurred during the year ended December 31, 2016. See note 2 for more information. Based on the most recent annual review as of August 31, 2016, no impairment exists with the remaining goodwill.
|
Purchase Price Allocations
|
||||
We allocate the purchase price of an acquired business to its identifiable assets (including identifiable intangible assets) and liabilities based on their fair values at the date of acquisition. Any excess of purchase price in excess of amounts allocated to identifiable assets and liabilities is recorded as goodwill. As additional information becomes available, we may adjust the preliminary allocation for a period of up to one year.
|
|
The determination of fair values of acquired assets and liabilities requires a significant level of management judgment. Fair values are estimated using various methods as deemed appropriate. For significant transactions, third party assessments may be utilized to assist in the valuation process.
|
|
If subsequent factors indicate that estimates and assumptions used to allocate costs to acquired assets and liabilities differ from actual results, the allocation between goodwill, other intangible assets and fixed assets could significantly differ. Any such differences could impact future earnings through depreciation and amortization expense. Additionally, if estimated results supporting the valuation of goodwill or other intangible assets are not achieved, impairments could result.
|
Asset Retirement Obligations
|
||||
Asset retirement obligations ("AROs") associated with a contractual or regulatory remediation requirement are recorded at fair value in the period in which the obligation can be reasonably estimated and depreciated over the life of the related asset or contractual term. The liability is determined using a credit-adjusted risk-free interest rate and is accreted over time until the obligation is settled.
|
|
Determining the fair value of AROs requires management judgment to evaluate required remediation activities, estimate the cost of those activities and determine the appropriate interest rate.
|
|
If actual results differ from judgments and assumptions used in valuing an ARO, we may experience significant changes in ARO balances. The establishment of an ARO has no initial impact on earnings.
|
Environmental Liabilities
|
||||
We estimate environmental liabilities using both internal and external resources. Activities include feasibility studies and other evaluations management considers appropriate. Environmental liabilities are recorded in the period in which the obligation can be reasonably estimated.
|
|
Estimating environmental liabilities requires significant management judgment as well as possible use of third party specialists knowledgeable in such matters.
|
|
Environmental liabilities have not significantly affected our results of operations or financial condition in the past, and we do not anticipate that they will in the future.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
31,652
|
|
|
$
|
38,380
|
|
|
$
|
(11,705
|
)
|
Less: (Income) loss from discontinued operations, net of income taxes
|
—
|
|
|
(1,215
|
)
|
|
5,338
|
|
|||
Income (loss) from continuing operations
|
31,652
|
|
|
37,165
|
|
|
(6,367
|
)
|
|||
Adjustments:
|
|
|
|
|
|
||||||
Interest expense
|
46,100
|
|
|
43,292
|
|
|
42,203
|
|
|||
Income tax expense
|
726
|
|
|
1,048
|
|
|
1,137
|
|
|||
Depreciation and amortization
|
92,132
|
|
|
92,250
|
|
|
68,830
|
|
|||
EBITDA
|
170,610
|
|
|
173,755
|
|
|
105,803
|
|
|||
Adjustments:
|
|
|
|
|
|
||||||
Equity in earnings of unconsolidated entities
|
(4,714
|
)
|
|
(8,986
|
)
|
|
(5,466
|
)
|
|||
(Gain) loss on sale of property, plant and equipment
|
(33,400
|
)
|
|
2,149
|
|
|
1,353
|
|
|||
Gain on retirement of senior unsecured notes
|
—
|
|
|
(1,242
|
)
|
|
—
|
|
|||
Impairment of long lived assets
|
26,953
|
|
|
10,629
|
|
|
3,445
|
|
|||
Impairment of goodwill
|
4,145
|
|
|
—
|
|
|
—
|
|
|||
Unrealized mark to market on commodity derivatives
|
4,579
|
|
|
(675
|
)
|
|
818
|
|
|||
Reduction in fair value of investment in Cardinal due to purchase of the controlling interest
|
—
|
|
|
—
|
|
|
30,102
|
|
|||
Debt prepayment premium
|
—
|
|
|
—
|
|
|
7,767
|
|
|||
Distributions from unconsolidated entities
|
7,500
|
|
|
11,200
|
|
|
4,323
|
|
|||
Unit-based compensation
|
904
|
|
|
1,429
|
|
|
817
|
|
|||
Adjusted EBITDA
|
176,577
|
|
|
188,259
|
|
|
148,962
|
|
|||
Adjustments:
|
|
|
|
|
|
||||||
Interest expense
|
(46,100
|
)
|
|
(43,292
|
)
|
|
(42,203
|
)
|
|||
Income tax expense
|
(726
|
)
|
|
(1,048
|
)
|
|
(1,137
|
)
|
|||
Amortization of deferred debt issuance costs
|
3,684
|
|
|
4,859
|
|
|
6,263
|
|
|||
Amortization of debt discount
|
—
|
|
|
—
|
|
|
1,305
|
|
|||
Amortization of debt premium
|
(306
|
)
|
|
(324
|
)
|
|
(245
|
)
|
|||
Non-cash mark to market on interest rate derivatives
|
(206
|
)
|
|
206
|
|
|
—
|
|
|||
Payments for plant turnaround costs
|
(2,061
|
)
|
|
(1,908
|
)
|
|
(3,974
|
)
|
|||
Maintenance capital expenditures
|
(17,163
|
)
|
|
(12,902
|
)
|
|
(14,556
|
)
|
|||
Distributable Cash Flow
|
$
|
113,699
|
|
|
$
|
133,850
|
|
|
$
|
94,415
|
|
|
Operating Revenues
|
|
Revenues
Intersegment Eliminations
|
|
Operating Revenues
after Eliminations
|
|
Operating Income (loss)
|
|
Operating Income Intersegment Eliminations
|
|
Operating
Income (loss)
after
Eliminations
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Year Ended December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Terminalling and storage
|
$
|
242,363
|
|
|
$
|
(5,653
|
)
|
|
$
|
236,710
|
|
|
$
|
44,143
|
|
|
$
|
(3,483
|
)
|
|
$
|
40,660
|
|
Natural gas services
|
391,333
|
|
|
—
|
|
|
391,333
|
|
|
38,382
|
|
|
3,056
|
|
|
41,438
|
|
||||||
Sulfur services
|
141,058
|
|
|
—
|
|
|
141,058
|
|
|
26,815
|
|
|
(3,422
|
)
|
|
23,393
|
|
||||||
Marine transportation
|
61,233
|
|
|
(2,943
|
)
|
|
58,290
|
|
|
(19,888
|
)
|
|
3,849
|
|
|
(16,039
|
)
|
||||||
Indirect selling, general and administrative
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,794
|
)
|
|
—
|
|
|
(16,794
|
)
|
||||||
Total
|
$
|
835,987
|
|
|
$
|
(8,596
|
)
|
|
$
|
827,391
|
|
|
$
|
72,658
|
|
|
$
|
—
|
|
|
$
|
72,658
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Year Ended December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Terminalling and storage
|
$
|
270,440
|
|
|
$
|
(5,670
|
)
|
|
$
|
264,770
|
|
|
$
|
18,750
|
|
|
$
|
(3,046
|
)
|
|
$
|
15,704
|
|
Natural gas services
|
523,160
|
|
|
—
|
|
|
523,160
|
|
|
38,611
|
|
|
2,609
|
|
|
41,220
|
|
||||||
Sulfur services
|
170,161
|
|
|
—
|
|
|
170,161
|
|
|
27,113
|
|
|
(3,509
|
)
|
|
23,604
|
|
||||||
Marine transportation
|
81,784
|
|
|
(3,031
|
)
|
|
78,753
|
|
|
4,630
|
|
|
3,946
|
|
|
8,576
|
|
||||||
Indirect selling, general and administrative
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,951
|
)
|
|
—
|
|
|
(18,951
|
)
|
||||||
Total
|
$
|
1,045,545
|
|
|
$
|
(8,701
|
)
|
|
$
|
1,036,844
|
|
|
$
|
70,153
|
|
|
$
|
—
|
|
|
$
|
70,153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Year Ended December 31, 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Terminalling and storage
|
$
|
326,654
|
|
|
$
|
(5,191
|
)
|
|
$
|
321,463
|
|
|
$
|
27,007
|
|
|
$
|
(2,014
|
)
|
|
$
|
24,993
|
|
Natural gas services
|
1,013,835
|
|
|
—
|
|
|
1,013,835
|
|
|
30,610
|
|
|
3,964
|
|
|
34,574
|
|
||||||
Sulfur services
|
215,471
|
|
|
—
|
|
|
215,471
|
|
|
25,656
|
|
|
(6,191
|
)
|
|
19,465
|
|
||||||
Marine transportation
|
97,049
|
|
|
(5,677
|
)
|
|
91,372
|
|
|
3,310
|
|
|
4,241
|
|
|
7,551
|
|
||||||
Indirect selling, general and administrative
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,712
|
)
|
|
—
|
|
|
(18,712
|
)
|
||||||
Total
|
$
|
1,653,009
|
|
|
$
|
(10,868
|
)
|
|
$
|
1,642,141
|
|
|
$
|
67,871
|
|
|
$
|
—
|
|
|
$
|
67,871
|
|
|
Year Ended December 31,
|
|
Variance
|
|
Percent Change
|
||||||||
|
2016
|
|
2015
|
|
|
||||||||
|
(In thousands)
|
|
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||
Services
|
$
|
128,783
|
|
|
$
|
138,614
|
|
|
$
|
(9,831
|
)
|
|
(7)%
|
Products
|
113,580
|
|
|
131,826
|
|
|
(18,246
|
)
|
|
(14)%
|
|||
Total revenues
|
242,363
|
|
|
270,440
|
|
|
(28,077
|
)
|
|
(10)%
|
|||
|
|
|
|
|
|
|
|
||||||
Cost of products sold
|
96,344
|
|
|
115,460
|
|
|
(19,116
|
)
|
|
(17)%
|
|||
Operating expenses
|
71,831
|
|
|
83,917
|
|
|
(12,086
|
)
|
|
(14)%
|
|||
Selling, general and administrative expenses
|
4,677
|
|
|
3,804
|
|
|
873
|
|
|
23%
|
|||
Impairment of long-lived assets
|
15,252
|
|
|
9,305
|
|
|
5,947
|
|
|
64%
|
|||
Depreciation and amortization
|
45,484
|
|
|
38,731
|
|
|
6,753
|
|
|
17%
|
|||
|
8,775
|
|
|
19,223
|
|
|
(10,448
|
)
|
|
(54)%
|
|||
Other operating income (loss), net
|
35,368
|
|
|
(473
|
)
|
|
35,841
|
|
|
(7,577)%
|
|||
Operating income
|
$
|
44,143
|
|
|
$
|
18,750
|
|
|
$
|
25,393
|
|
|
135%
|
|
|
|
|
|
|
|
|
||||||
Lubricant sales volumes (gallons)
|
17,995
|
|
|
23,045
|
|
|
(5,050
|
)
|
|
(22)%
|
|||
Shore-based throughput volumes (gallons)
|
103,903
|
|
|
157,074
|
|
|
(53,171
|
)
|
|
(34)%
|
|||
Smackover refinery throughput volumes (barrels per day)
|
5,641
|
|
|
6,162
|
|
|
(521
|
)
|
|
(8)%
|
|||
Corpus Christi crude terminal throughput volumes (barrels per day)
|
66,167
|
|
|
154,381
|
|
|
(88,214
|
)
|
|
(57)%
|
|
Year Ended December 31,
|
|
Variance
|
|
Percent Change
|
||||||||
|
2015
|
|
2014
|
|
|
||||||||
|
(In thousands)
|
|
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||
Services
|
$
|
138,614
|
|
|
$
|
135,697
|
|
|
$
|
2,917
|
|
|
2%
|
Products
|
131,826
|
|
|
190,957
|
|
|
(59,131
|
)
|
|
(31)%
|
|||
Total revenues
|
270,440
|
|
|
326,654
|
|
|
(56,214
|
)
|
|
(17)%
|
|||
|
|
|
|
|
|
|
|
||||||
Cost of products sold
|
115,460
|
|
|
175,246
|
|
|
(59,786
|
)
|
|
(34)%
|
|||
Operating expenses
|
83,917
|
|
|
83,504
|
|
|
413
|
|
|
—%
|
|||
Selling, general and administrative expenses
|
3,804
|
|
|
3,565
|
|
|
239
|
|
|
7%
|
|||
Impairment of long-lived assets
|
9,305
|
|
|
—
|
|
|
9,305
|
|
|
|
|||
Depreciation and amortization
|
38,731
|
|
|
37,622
|
|
|
1,109
|
|
|
3%
|
|||
|
19,223
|
|
|
26,717
|
|
|
(7,494
|
)
|
|
(28)%
|
|||
Other operating income (loss), net
|
(473
|
)
|
|
290
|
|
|
(763
|
)
|
|
(263)%
|
|||
Operating income
|
$
|
18,750
|
|
|
$
|
27,007
|
|
|
$
|
(8,257
|
)
|
|
(31)%
|
|
|
|
|
|
|
|
|
||||||
Lubricant sales volumes (gallons)
|
23,045
|
|
|
32,418
|
|
|
(9,373
|
)
|
|
(29)%
|
|||
Shore-based throughput volumes (gallons)
|
157,074
|
|
|
253,262
|
|
|
(96,188
|
)
|
|
(38)%
|
|||
Smackover refinery throughput volumes (barrels per day)
|
6,162
|
|
|
6,159
|
|
|
3
|
|
|
—%
|
|||
Corpus Christi crude terminal (barrels per day)
|
154,381
|
|
|
164,223
|
|
|
(9,842
|
)
|
|
(6)%
|
|
Year Ended December 31,
|
|
Variance
|
|
Percent Change
|
||||||||
|
2016
|
|
2015
|
|
|
||||||||
|
(In thousands)
|
|
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||
Services
|
$
|
61,133
|
|
|
$
|
64,858
|
|
|
$
|
(3,725
|
)
|
|
(6)%
|
Products
|
330,200
|
|
|
458,302
|
|
|
(128,102
|
)
|
|
(28)%
|
|||
Total revenues
|
391,333
|
|
|
523,160
|
|
|
(131,827
|
)
|
|
(25)%
|
|||
|
|
|
|
|
|
|
|
||||||
Cost of products sold
|
292,573
|
|
|
416,404
|
|
|
(123,831
|
)
|
|
(30)%
|
|||
Operating expenses
|
23,152
|
|
|
23,979
|
|
|
(827
|
)
|
|
(3)%
|
|||
Selling, general and administrative expenses
|
9,035
|
|
|
9,791
|
|
|
(756
|
)
|
|
(8)%
|
|||
Depreciation and amortization
|
28,081
|
|
|
34,072
|
|
|
(5,991
|
)
|
|
(18)%
|
|||
|
38,492
|
|
|
38,914
|
|
|
(422
|
)
|
|
(1)%
|
|||
Other operating loss, net
|
(110
|
)
|
|
(303
|
)
|
|
193
|
|
|
(64)%
|
|||
Operating income
|
$
|
38,382
|
|
|
$
|
38,611
|
|
|
$
|
(229
|
)
|
|
(1)%
|
|
|
|
|
|
|
|
|
||||||
Distributions from unconsolidated entities
|
$
|
7,500
|
|
|
$
|
11,200
|
|
|
$
|
(3,700
|
)
|
|
(33)%
|
|
|
|
|
|
|
|
|
||||||
NGLs Volumes (barrels)
|
9,532
|
|
|
14,340
|
|
|
(4,808
|
)
|
|
(34)%
|
|
Year Ended December 31,
|
|
Variance
|
|
Percent Change
|
||||||||
|
2015
|
|
2014
|
|
|
||||||||
|
(In thousands)
|
|
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||
Services
|
$
|
64,858
|
|
|
$
|
22,991
|
|
|
$
|
41,867
|
|
|
182%
|
Products
|
458,302
|
|
|
990,844
|
|
|
(532,542
|
)
|
|
(54)%
|
|||
Total revenues
|
523,160
|
|
|
1,013,835
|
|
|
(490,675
|
)
|
|
(48)%
|
|||
|
|
|
|
|
|
|
|
||||||
Cost of products sold
|
416,404
|
|
|
950,742
|
|
|
(534,338
|
)
|
|
(56)%
|
|||
Operating expenses
|
23,979
|
|
|
10,797
|
|
|
13,182
|
|
|
122%
|
|||
Selling, general and administrative expenses
|
9,791
|
|
|
8,596
|
|
|
1,195
|
|
|
14%
|
|||
Depreciation and amortization
|
34,072
|
|
|
13,090
|
|
|
20,982
|
|
|
160%
|
|||
|
38,914
|
|
|
30,610
|
|
|
8,304
|
|
|
27%
|
|||
Other operating loss, net
|
(303
|
)
|
|
—
|
|
|
(303
|
)
|
|
|
|||
Operating income
|
$
|
38,611
|
|
|
$
|
30,610
|
|
|
$
|
8,001
|
|
|
26%
|
|
|
|
|
|
|
|
|
||||||
Distributions from unconsolidated entities
|
$
|
11,200
|
|
|
$
|
4,323
|
|
|
$
|
6,877
|
|
|
159%
|
|
|
|
|
|
|
|
|
||||||
NGLs Volumes (barrels)
|
14,340
|
|
|
16,448
|
|
|
(2,108
|
)
|
|
(13)%
|
|
Year Ended December 31,
|
|
Variance
|
|
Percent Change
|
||||||||
|
2016
|
|
2015
|
|
|
||||||||
|
(In thousands)
|
|
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||
Services
|
$
|
10,800
|
|
|
$
|
12,270
|
|
|
$
|
(1,470
|
)
|
|
(12)%
|
Products
|
130,258
|
|
|
157,891
|
|
|
(27,633
|
)
|
|
(18)%
|
|||
Total revenues
|
141,058
|
|
|
170,161
|
|
|
(29,103
|
)
|
|
(17)%
|
|||
|
|
|
|
|
|
|
|
||||||
Cost of products sold
|
88,325
|
|
|
115,133
|
|
|
(26,808
|
)
|
|
(23)%
|
|||
Operating expenses
|
13,771
|
|
|
15,279
|
|
|
(1,508
|
)
|
|
(10)%
|
|||
Selling, general and administrative expenses
|
3,861
|
|
|
3,805
|
|
|
56
|
|
|
1%
|
|||
Depreciation and amortization
|
7,995
|
|
|
8,455
|
|
|
(460
|
)
|
|
(5)%
|
|||
|
27,106
|
|
|
27,489
|
|
|
(383
|
)
|
|
(1)%
|
|||
Other operating loss, net
|
(291
|
)
|
|
(376
|
)
|
|
85
|
|
|
(23)%
|
|||
Operating income
|
$
|
26,815
|
|
|
$
|
27,113
|
|
|
$
|
(298
|
)
|
|
(1)%
|
|
|
|
|
|
|
|
|
||||||
Sulfur (long tons)
|
797.0
|
|
|
856.0
|
|
|
(59.0
|
)
|
|
(7)%
|
|||
Fertilizer (long tons)
|
262.0
|
|
|
274.0
|
|
|
(12.0
|
)
|
|
(4)%
|
|||
Sulfur services volumes (long tons)
|
1,059.0
|
|
|
1,130.0
|
|
|
(71.0
|
)
|
|
(6)%
|
|
Year Ended December 31,
|
|
Variance
|
|
Percent Change
|
||||||||
|
2015
|
|
2014
|
|
|
||||||||
|
(In thousands)
|
|
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||
Services
|
$
|
12,270
|
|
|
$
|
12,149
|
|
|
$
|
121
|
|
|
1%
|
Products
|
157,891
|
|
|
203,322
|
|
|
(45,431
|
)
|
|
(22)%
|
|||
Total revenues
|
170,161
|
|
|
215,471
|
|
|
(45,310
|
)
|
|
(21)%
|
|||
|
|
|
|
|
|
|
|
||||||
Cost of products sold
|
115,133
|
|
|
160,144
|
|
|
(45,011
|
)
|
|
(28)%
|
|||
Operating expenses
|
15,279
|
|
|
17,136
|
|
|
(1,857
|
)
|
|
(11)%
|
|||
Selling, general and administrative expenses
|
3,805
|
|
|
4,359
|
|
|
(554
|
)
|
|
(13)%
|
|||
Depreciation and amortization
|
8,455
|
|
|
8,176
|
|
|
279
|
|
|
3%
|
|||
|
27,489
|
|
|
25,656
|
|
|
1,833
|
|
|
7%
|
|||
Other operating loss, net
|
(376
|
)
|
|
—
|
|
|
(376
|
)
|
|
|
|||
Operating income
|
$
|
27,113
|
|
|
$
|
25,656
|
|
|
$
|
1,457
|
|
|
6%
|
|
|
|
|
|
|
|
|
||||||
Sulfur (long tons)
|
856.0
|
|
|
848.0
|
|
|
8.0
|
|
|
1%
|
|||
Fertilizer (long tons)
|
274.0
|
|
|
306.0
|
|
|
(32.0
|
)
|
|
(10)%
|
|||
Sulfur services volumes (long tons)
|
1,130.0
|
|
|
1,154.0
|
|
|
(24.0
|
)
|
|
(2)%
|
|
Year Ended December 31,
|
|
Variance
|
|
Percent Change
|
||||||||
|
2016
|
|
2015
|
|
|
||||||||
|
(In thousands)
|
|
|
||||||||||
Revenues
|
$
|
61,233
|
|
|
$
|
81,784
|
|
|
$
|
(20,551
|
)
|
|
(25)%
|
Operating expenses
|
53,118
|
|
|
63,412
|
|
|
(10,294
|
)
|
|
(16)%
|
|||
Selling, general and administrative expenses
|
18
|
|
|
417
|
|
|
(399
|
)
|
|
(96)%
|
|||
Impairment of long-lived assets
|
11,701
|
|
|
1,324
|
|
|
10,377
|
|
|
784%
|
|||
Impairment of goodwill
|
4,145
|
|
|
—
|
|
|
4,145
|
|
|
|
|||
Depreciation and amortization
|
10,572
|
|
|
10,992
|
|
|
(420
|
)
|
|
(4)%
|
|||
|
(18,321
|
)
|
|
5,639
|
|
|
(23,960
|
)
|
|
(425)%
|
|||
Other operating loss, net
|
(1,567
|
)
|
|
(1,009
|
)
|
|
(558
|
)
|
|
55%
|
|||
Operating income (loss)
|
$
|
(19,888
|
)
|
|
$
|
4,630
|
|
|
$
|
(24,518
|
)
|
|
(530)%
|
|
Year Ended December 31,
|
|
Variance
|
|
Percent Change
|
||||||||
|
2015
|
|
2014
|
|
|
||||||||
|
(In thousands)
|
|
|
||||||||||
Revenues
|
$
|
81,784
|
|
|
$
|
97,049
|
|
|
$
|
(15,265
|
)
|
|
(16)%
|
Operating expenses
|
63,412
|
|
|
77,964
|
|
|
(14,552
|
)
|
|
(19)%
|
|||
Selling, general and administrative expenses
|
417
|
|
|
1,084
|
|
|
(667
|
)
|
|
(62)%
|
|||
Impairment of long lived assets
|
1,324
|
|
|
3,445
|
|
|
(2,121
|
)
|
|
(62)%
|
|||
Depreciation and amortization
|
10,992
|
|
|
9,942
|
|
|
1,050
|
|
|
11%
|
|||
|
5,639
|
|
|
4,614
|
|
|
1,025
|
|
|
22%
|
|||
Other operating loss, net
|
(1,009
|
)
|
|
(1,304
|
)
|
|
295
|
|
|
(23)%
|
|||
Operating income
|
$
|
4,630
|
|
|
$
|
3,310
|
|
|
$
|
1,320
|
|
|
40%
|
|
Year Ended December 31,
|
|
Variance
|
|
Percent Change
|
|||||||
|
2016
|
|
2015
|
|
|
|||||||
|
(In thousands)
|
|
|
|||||||||
Equity in earnings of WTLPG
|
$
|
4,715
|
|
|
$
|
8,986
|
|
|
(4,271
|
)
|
|
(48)%
|
|
Year Ended December 31,
|
|
Variance
|
|
Percent Change
|
||||||||
|
2015
|
|
2014
|
|
|
||||||||
|
(In thousands)
|
|
|
||||||||||
Equity in earnings of WTLPG
|
$
|
8,986
|
|
|
$
|
3,076
|
|
|
$
|
5,910
|
|
|
192%
|
Equity in earnings of Cardinal
|
—
|
|
|
892
|
|
|
(892
|
)
|
|
(100)%
|
|||
Equity in earnings of MET
|
—
|
|
|
1,498
|
|
|
(1,498
|
)
|
|
(100)%
|
|||
Equity in earnings of unconsolidated entities
|
$
|
8,986
|
|
|
$
|
5,466
|
|
|
$
|
3,520
|
|
|
64%
|
|
Year Ended December 31,
|
|
Variance
|
|
Percent Change
|
||||||||
|
2015
|
|
2014
|
|
|
||||||||
|
(In thousands)
|
|
|
||||||||||
Distributions from WTLPG
|
$
|
11,200
|
|
|
$
|
2,600
|
|
|
$
|
8,600
|
|
|
331%
|
Distributions from Cardinal
|
—
|
|
|
225
|
|
|
(225
|
)
|
|
(100)%
|
|||
Distributions from MET
|
—
|
|
|
1,498
|
|
|
(1,498
|
)
|
|
(100)%
|
|||
Distributions from unconsolidated entities
|
$
|
11,200
|
|
|
$
|
4,323
|
|
|
$
|
6,877
|
|
|
159%
|
|
Year Ended December 31,
|
|
Variance
|
|
Percent Change
|
||||||||
|
2016
|
|
2015
|
|
|
||||||||
|
(In thousands)
|
|
|
||||||||||
Revolving loan facility
|
$
|
19,482
|
|
|
$
|
16,270
|
|
|
$
|
3,212
|
|
|
20%
|
7.250 % senior unsecured notes
|
27,326
|
|
|
28,583
|
|
|
(1,257
|
)
|
|
(4)%
|
|||
Amortization of deferred debt issuance costs
|
3,684
|
|
|
4,859
|
|
|
(1,175
|
)
|
|
(24)%
|
|||
Amortization of debt discount and premium
|
(306
|
)
|
|
(324
|
)
|
|
18
|
|
|
(6)%
|
|||
Impact of interest rate derivative activity, including cash settlements
|
(995
|
)
|
|
(2,289
|
)
|
|
1,294
|
|
|
(57)%
|
|||
Other
|
291
|
|
|
387
|
|
|
(96
|
)
|
|
(25)%
|
|||
Capitalized interest
|
(1,126
|
)
|
|
(1,944
|
)
|
|
818
|
|
|
(42)%
|
|||
Interest income
|
(2,256
|
)
|
|
(2,250
|
)
|
|
(6
|
)
|
|
—%
|
|||
Total interest expense, net
|
$
|
46,100
|
|
|
$
|
43,292
|
|
|
$
|
2,808
|
|
|
6%
|
|
Year Ended December 31,
|
|
Variance
|
|
Percent Change
|
||||||||
|
2015
|
|
2014
|
|
|
||||||||
|
(In thousands)
|
|
|
||||||||||
Revolving loan facility
|
$
|
16,270
|
|
|
$
|
12,684
|
|
|
$
|
3,586
|
|
|
28%
|
8.875 % senior unsecured notes
|
—
|
|
|
3,882
|
|
|
(3,882
|
)
|
|
(100)%
|
|||
7.250 % senior unsecured notes
|
28,583
|
|
|
26,252
|
|
|
2,331
|
|
|
9%
|
|||
Amortization of deferred debt issuance costs
|
4,859
|
|
|
6,263
|
|
|
(1,404
|
)
|
|
(22)%
|
|||
Amortization of debt discount and premium
|
(324
|
)
|
|
1,059
|
|
|
(1,383
|
)
|
|
(131)%
|
|||
Cash settlements on interest rate swaps
|
(2,289
|
)
|
|
(6,692
|
)
|
|
4,403
|
|
|
(66)%
|
|||
Other
|
387
|
|
|
944
|
|
|
(557
|
)
|
|
(59)%
|
|||
Capitalized interest
|
(1,944
|
)
|
|
(1,437
|
)
|
|
(507
|
)
|
|
35%
|
|||
Interest income
|
(2,250
|
)
|
|
(752
|
)
|
|
$
|
(1,498
|
)
|
|
199%
|
||
Total interest expense, net
|
$
|
43,292
|
|
|
$
|
42,203
|
|
|
$
|
1,089
|
|
|
3%
|
|
Year Ended December 31,
|
|
Variance
|
|
Percent Change
|
|
Year Ended December 31,
|
|
Variance
|
|
Percent Change
|
||||||||||||||||
|
2016
|
|
2015
|
|
|
|
2015
|
|
2014
|
|
|
||||||||||||||||
|
(In thousands)
|
|
|
|
(In thousands)
|
|
|
||||||||||||||||||||
Indirect selling, general and administrative expenses
|
$
|
16,795
|
|
|
$
|
18,951
|
|
|
$
|
(2,156
|
)
|
|
(11)%
|
|
$
|
18,951
|
|
|
$
|
18,712
|
|
|
$
|
239
|
|
|
1%
|
|
Year Ended December 31,
|
|
Variance
|
|
Percent Change
|
|
Year Ended December 31,
|
|
Variance
|
|
Percent Change
|
||||||||||||||||
|
2016
|
|
2015
|
|
|
|
2015
|
|
2014
|
|
|
||||||||||||||||
|
(In thousands)
|
|
|
|
(In thousands)
|
|
|
||||||||||||||||||||
Conflicts Committee approved reimbursement amount
|
$
|
13,033
|
|
|
$
|
13,679
|
|
|
$
|
(646
|
)
|
|
(5)%
|
|
$
|
13,679
|
|
|
$
|
12,535
|
|
|
$
|
1,144
|
|
|
9%
|
|
Years Ended December 31,
|
|
Variance
|
|
Percent Change
|
||||||||
|
2016
|
|
2015
|
|
|
||||||||
|
(In thousands)
|
|
|
||||||||||
Net cash provided by (used in):
|
|
|
|
|
|
|
|
||||||
Operating activities
|
$
|
110,848
|
|
|
$
|
182,572
|
|
|
$
|
(71,724
|
)
|
|
(39)%
|
Investing activities
|
63,839
|
|
|
(23,805
|
)
|
|
87,644
|
|
|
368%
|
|||
Financing activities
|
(174,703
|
)
|
|
(158,778
|
)
|
|
(15,925
|
)
|
|
10%
|
|||
Net decrease in cash and cash equivalents
|
$
|
(16
|
)
|
|
$
|
(11
|
)
|
|
$
|
(5
|
)
|
|
45%
|
|
Years Ended December 31,
|
|
Variance
|
|
Percent Change
|
||||||||
|
2015
|
|
2014
|
|
|
||||||||
|
(In thousands)
|
|
|
||||||||||
Net cash provided by (used in):
|
|
|
|
|
|
|
|
||||||
Operating activities
|
$
|
182,572
|
|
|
$
|
115,580
|
|
|
$
|
66,992
|
|
|
58%
|
Investing activities
|
(23,805
|
)
|
|
(324,663
|
)
|
|
300,858
|
|
|
93%
|
|||
Financing activities
|
(158,778
|
)
|
|
192,583
|
|
|
(351,361
|
)
|
|
182%
|
|||
Net decrease in cash and cash equivalents
|
$
|
(11
|
)
|
|
$
|
(16,500
|
)
|
|
$
|
16,489
|
|
|
(100)%
|
|
Three Months Ended December 31,
|
|
Years Ended December 31,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In thousands)
|
|
(In thousands)
|
||||||||||||
Expansion capital expenditures
|
$
|
4,977
|
|
|
$
|
17,026
|
|
|
$
|
19,107
|
|
|
$
|
53,917
|
|
Maintenance capital expenditures
|
4,345
|
|
|
5,281
|
|
|
17,163
|
|
|
12,902
|
|
||||
Plant turnaround costs
|
447
|
|
|
154
|
|
|
2,061
|
|
|
1,908
|
|
||||
Total
|
$
|
9,769
|
|
|
$
|
22,461
|
|
|
$
|
38,331
|
|
|
$
|
68,727
|
|
|
Payments due by period
|
||||||||||||||||||
Type of Obligation
|
Total
Obligation
|
|
Less than
One Year
|
|
1-3
Years
|
|
3-5
Years
|
|
Due
Thereafter
|
||||||||||
Revolving credit facility
|
$
|
443,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
443,000
|
|
|
$
|
—
|
|
2021 senior unsecured notes
|
373,800
|
|
|
—
|
|
|
—
|
|
|
373,800
|
|
|
—
|
|
|||||
Throughput commitment
|
28,008
|
|
|
6,153
|
|
|
12,790
|
|
|
9,065
|
|
|
—
|
|
|||||
Operating leases
|
33,006
|
|
|
10,458
|
|
|
9,669
|
|
|
4,430
|
|
|
8,449
|
|
|||||
Interest payable on fixed long-term obligations
|
111,790
|
|
|
27,101
|
|
|
54,201
|
|
|
30,488
|
|
|
—
|
|
|||||
Total contractual cash obligations
|
$
|
989,604
|
|
|
$
|
43,712
|
|
|
$
|
76,660
|
|
|
$
|
860,783
|
|
|
$
|
8,449
|
|
Leverage Ratio
|
Base Rate Loans
|
|
Eurodollar
Rate
Loans
|
|
Letters of Credit
|
|||
Less than 3.00 to 1.00
|
1.00
|
%
|
|
2.00
|
%
|
|
2.00
|
%
|
Greater than or equal to 3.00 to 1.00 and less than 3.50 to 1.00
|
1.25
|
%
|
|
2.25
|
%
|
|
2.25
|
%
|
Greater than or equal to 3.50 to 1.00 and less than 4.00 to 1.00
|
1.50
|
%
|
|
2.50
|
%
|
|
2.50
|
%
|
Greater than or equal to 4.00 to 1.00 and less than 4.50 to 1.00
|
1.75
|
%
|
|
2.75
|
%
|
|
2.75
|
%
|
Greater than or equal to 4.50 to 1.00
|
2.00
|
%
|
|
3.00
|
%
|
|
3.00
|
%
|
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
Page
|
Reports of Independent Registered Public Accounting Firm
|
|
Consolidated Balance Sheets as of December 31, 2016 and 2015
|
|
Consolidated Statements of Operations for the years ended December 31, 2016, 2015 and 2014
|
|
Consolidated Statements of Changes in Capital for the years ended December 31, 2016, 2015 and 2014
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014
|
|
Notes to Consolidated Financial Statements
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Assets
|
|
|
|
||||
Cash
|
$
|
15
|
|
|
$
|
31
|
|
Trade and accrued accounts receivable, less allowance for doubtful accounts of $372 and $430 respectively
|
80,508
|
|
|
74,355
|
|
||
Product exchange receivables
|
207
|
|
|
1,050
|
|
||
Inventories
|
82,631
|
|
|
75,870
|
|
||
Due from affiliates
|
11,567
|
|
|
10,126
|
|
||
Fair value of derivatives
|
—
|
|
|
675
|
|
||
Other current assets
|
3,296
|
|
|
5,718
|
|
||
Assets held for sale
|
15,779
|
|
|
—
|
|
||
Total current assets
|
194,003
|
|
|
167,825
|
|
||
|
|
|
|
||||
Property, plant and equipment, at cost
|
1,224,277
|
|
|
1,387,814
|
|
||
Accumulated depreciation
|
(378,593
|
)
|
|
(404,574
|
)
|
||
Property, plant and equipment, net
|
845,684
|
|
|
983,240
|
|
||
|
|
|
|
||||
Goodwill
|
17,296
|
|
|
23,802
|
|
||
Investment in unconsolidated entities
|
129,506
|
|
|
132,292
|
|
||
Notes receivable - Martin Energy Trading LLC
|
15,000
|
|
|
15,000
|
|
||
Intangibles and other assets, net
|
44,874
|
|
|
58,314
|
|
||
|
$
|
1,246,363
|
|
|
$
|
1,380,473
|
|
Liabilities and Partners’ Capital
|
|
|
|
||||
Trade and other accounts payable
|
$
|
70,249
|
|
|
$
|
81,180
|
|
Product exchange payables
|
7,360
|
|
|
12,732
|
|
||
Due to affiliates
|
8,474
|
|
|
5,738
|
|
||
Income taxes payable
|
870
|
|
|
985
|
|
||
Fair value of derivatives
|
3,904
|
|
|
—
|
|
||
Other accrued liabilities
|
26,717
|
|
|
18,533
|
|
||
Total current liabilities
|
117,574
|
|
|
119,168
|
|
||
|
|
|
|
||||
Long-term debt, net
|
808,107
|
|
|
865,003
|
|
||
Fair value of derivatives
|
—
|
|
|
206
|
|
||
Other long-term obligations
|
8,676
|
|
|
2,217
|
|
||
Total liabilities
|
934,357
|
|
|
986,594
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Partners’ capital
|
312,006
|
|
|
393,879
|
|
||
|
$
|
1,246,363
|
|
|
$
|
1,380,473
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Terminalling and storage *
|
$
|
123,132
|
|
|
$
|
132,945
|
|
|
$
|
130,506
|
|
Marine transportation *
|
58,290
|
|
|
78,753
|
|
|
91,372
|
|
|||
Natural gas storage services *
|
61,133
|
|
|
64,858
|
|
|
22,991
|
|
|||
Sulfur services
|
10,800
|
|
|
12,270
|
|
|
12,149
|
|
|||
Product sales: *
|
|
|
|
|
|
||||||
Natural gas services
|
330,200
|
|
|
458,302
|
|
|
990,844
|
|
|||
Sulfur services
|
130,258
|
|
|
157,891
|
|
|
203,322
|
|
|||
Terminalling and storage
|
113,578
|
|
|
131,825
|
|
|
190,957
|
|
|||
|
574,036
|
|
|
748,018
|
|
|
1,385,123
|
|
|||
Total revenues
|
827,391
|
|
|
1,036,844
|
|
|
1,642,141
|
|
|||
|
|
|
|
|
|
||||||
Costs and expenses:
|
|
|
|
|
|
||||||
Cost of products sold: (excluding depreciation and amortization)
|
|
|
|
|
|
||||||
Natural gas services *
|
289,516
|
|
|
413,795
|
|
|
948,765
|
|
|||
Sulfur services *
|
87,963
|
|
|
114,766
|
|
|
159,782
|
|
|||
Terminalling and storage *
|
94,175
|
|
|
112,836
|
|
|
172,069
|
|
|||
|
471,654
|
|
|
641,397
|
|
|
1,280,616
|
|
|||
Expenses:
|
|
|
|
|
|
||||||
Operating expenses *
|
158,864
|
|
|
183,466
|
|
|
184,049
|
|
|||
Selling, general and administrative *
|
34,385
|
|
|
36,788
|
|
|
36,316
|
|
|||
Impairment of long-lived assets
|
26,953
|
|
|
10,629
|
|
|
3,445
|
|
|||
Impairment of goodwill
|
4,145
|
|
|
—
|
|
|
—
|
|
|||
Depreciation and amortization
|
92,132
|
|
|
92,250
|
|
|
68,830
|
|
|||
Total costs and expenses
|
788,133
|
|
|
964,530
|
|
|
1,573,256
|
|
|||
Other operating income (loss), net
|
33,400
|
|
|
(2,161
|
)
|
|
(1,014
|
)
|
|||
Operating income
|
72,658
|
|
|
70,153
|
|
|
67,871
|
|
|||
|
|
|
|
|
|
||||||
Other income (expense):
|
|
|
|
|
|
||||||
Equity in earnings of unconsolidated entities
|
4,714
|
|
|
8,986
|
|
|
5,466
|
|
|||
Debt prepayment premium
|
—
|
|
|
—
|
|
|
(7,767
|
)
|
|||
Interest expense, net
|
(46,100
|
)
|
|
(43,292
|
)
|
|
(42,203
|
)
|
|||
Gain on retirement of senior unsecured notes
|
—
|
|
|
1,242
|
|
|
—
|
|
|||
Reduction in fair value of investment in Cardinal due to the purchase of the controlling interest
|
—
|
|
|
—
|
|
|
(30,102
|
)
|
|||
Other, net
|
1,106
|
|
|
1,124
|
|
|
1,505
|
|
|||
Total other income (expense)
|
(40,280
|
)
|
|
(31,940
|
)
|
|
(73,101
|
)
|
|||
Net income (loss) before taxes
|
32,378
|
|
|
38,213
|
|
|
(5,230
|
)
|
|||
Income tax expense
|
(726
|
)
|
|
(1,048
|
)
|
|
(1,137
|
)
|
|||
Income (loss) from continuing operations
|
31,652
|
|
|
37,165
|
|
|
(6,367
|
)
|
|||
Income (loss) from discontinued operations, net of income taxes
|
—
|
|
|
1,215
|
|
|
(5,338
|
)
|
|||
Net income (loss)
|
31,652
|
|
|
38,380
|
|
|
(11,705
|
)
|
|||
Less general partner's interest in net (income) loss
|
(8,419
|
)
|
|
(16,338
|
)
|
|
(3,503
|
)
|
|||
Less (income) loss allocable to unvested restricted units
|
(90
|
)
|
|
(140
|
)
|
|
32
|
|
|||
Limited partner's interest in net income (loss)
|
$
|
23,143
|
|
|
$
|
21,902
|
|
|
$
|
(15,176
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Terminalling and storage
|
$
|
82,437
|
|
|
$
|
78,233
|
|
|
$
|
74,467
|
|
Marine transportation
|
21,767
|
|
|
27,724
|
|
|
24,389
|
|
|||
Natural gas services
|
699
|
|
|
878
|
|
|
—
|
|
|||
Product sales
|
3,034
|
|
|
5,671
|
|
|
7,661
|
|
|||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|||
Cost of products sold: (excluding depreciation and amortization)
|
|
|
|
|
|
|
|
|
|||
Natural gas services
|
22,886
|
|
|
25,797
|
|
|
37,703
|
|
|||
Sulfur services
|
15,339
|
|
|
16,579
|
|
|
18,390
|
|
|||
Terminalling and storage
|
13,838
|
|
|
17,718
|
|
|
36,341
|
|
|||
Expenses:
|
|
|
|
|
|
|
|
|
|||
Operating expenses
|
70,841
|
|
|
77,871
|
|
|
79,577
|
|
|||
Selling, general and administrative
|
25,890
|
|
|
24,968
|
|
|
23,679
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Allocation of net income (loss) attributable to:
|
|
|
|
|
|
||||||
Limited partner interest:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
23,143
|
|
|
$
|
21,208
|
|
|
$
|
(8,255
|
)
|
Discontinued operations
|
—
|
|
|
694
|
|
|
(6,921
|
)
|
|||
|
$
|
23,143
|
|
|
$
|
21,902
|
|
|
$
|
(15,176
|
)
|
General partner interest:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
8,419
|
|
|
$
|
15,821
|
|
|
$
|
1,906
|
|
Discontinued operations
|
—
|
|
|
517
|
|
|
1,597
|
|
|||
|
$
|
8,419
|
|
|
$
|
16,338
|
|
|
$
|
3,503
|
|
|
|
|
|
|
|
||||||
Net income (loss) per unit attributable to limited partners:
|
|
|
|
|
|
||||||
Basic:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
0.65
|
|
|
$
|
0.60
|
|
|
$
|
(0.27
|
)
|
Discontinued operations
|
—
|
|
|
0.02
|
|
|
(0.22
|
)
|
|||
|
$
|
0.65
|
|
|
$
|
0.62
|
|
|
$
|
(0.49
|
)
|
|
|
|
|
|
|
||||||
Weighted average limited partner units - basic
|
35,347
|
|
|
35,309
|
|
|
30,785
|
|
|||
|
|
|
|
|
|
||||||
Diluted:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
0.65
|
|
|
$
|
0.60
|
|
|
$
|
(0.27
|
)
|
Discontinued operations
|
—
|
|
|
0.02
|
|
|
(0.22
|
)
|
|||
|
$
|
0.65
|
|
|
$
|
0.62
|
|
|
$
|
(0.49
|
)
|
|
|
|
|
|
|
||||||
Weighted average limited partner units - diluted
|
35,375
|
|
|
35,372
|
|
|
30,785
|
|
|
Partners’ Capital
|
|
|
|||||||||||
|
Common
|
|
General Partner
|
|
|
|||||||||
|
Units
|
|
Amount
|
|
Amount
|
|
Total
|
|||||||
Balances – December 31, 2013
|
26,625,026
|
|
|
$
|
254,028
|
|
|
$
|
6,389
|
|
|
$
|
260,417
|
|
|
|
|
|
|
|
|
|
|||||||
Net loss
|
—
|
|
|
(15,208
|
)
|
|
3,503
|
|
|
(11,705
|
)
|
|||
Issuance of common units, net
|
8,743,386
|
|
|
331,728
|
|
|
—
|
|
|
331,728
|
|
|||
Issuance of restricted units
|
8,900
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Forfeiture of restricted units
|
(5,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
General partner contribution
|
—
|
|
|
—
|
|
|
7,007
|
|
|
7,007
|
|
|||
Cash distributions
|
—
|
|
|
(95,197
|
)
|
|
(2,171
|
)
|
|
(97,368
|
)
|
|||
Excess purchase price over carrying value of acquired assets
|
—
|
|
|
(4,948
|
)
|
|
—
|
|
|
(4,948
|
)
|
|||
Unit-based compensation
|
—
|
|
|
817
|
|
|
—
|
|
|
817
|
|
|||
Purchase of treasury units
|
(6,400
|
)
|
|
(277
|
)
|
|
—
|
|
|
(277
|
)
|
|||
Balances – December 31, 2014
|
35,365,912
|
|
|
470,943
|
|
|
14,728
|
|
|
485,671
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Net income
|
—
|
|
|
22,042
|
|
|
16,338
|
|
|
38,380
|
|
|||
Issuance of common units, net
|
—
|
|
|
(590
|
)
|
|
—
|
|
|
(590
|
)
|
|||
Issuance of restricted units
|
91,950
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Forfeiture of restricted units
|
(1,250
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
General partner contribution
|
—
|
|
|
—
|
|
|
55
|
|
|
55
|
|
|||
Cash distributions
|
—
|
|
|
(115,229
|
)
|
|
(18,087
|
)
|
|
(133,316
|
)
|
|||
Reimbursement of excess purchase price over carrying value of acquired assets
|
—
|
|
|
2,250
|
|
|
—
|
|
|
2,250
|
|
|||
Unit-based compensation
|
—
|
|
|
1,429
|
|
|
—
|
|
|
1,429
|
|
|||
Balances – December 31, 2015
|
35,456,612
|
|
|
380,845
|
|
|
13,034
|
|
|
393,879
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Net income
|
—
|
|
|
23,233
|
|
|
8,419
|
|
|
31,652
|
|
|||
Issuance of common units, net
|
—
|
|
|
(29
|
)
|
|
—
|
|
|
(29
|
)
|
|||
Issuance of restricted units
|
13,800
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Forfeiture of restricted units
|
(2,250
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Cash distributions
|
—
|
|
|
(104,137
|
)
|
|
(14,041
|
)
|
|
(118,178
|
)
|
|||
Reimbursement of excess purchase price over carrying value of acquired assets
|
—
|
|
|
4,125
|
|
|
—
|
|
|
4,125
|
|
|||
Unit-based compensation
|
—
|
|
|
904
|
|
|
—
|
|
|
904
|
|
|||
Purchase of treasury units
|
(16,100
|
)
|
|
(347
|
)
|
|
—
|
|
|
(347
|
)
|
|||
Balances – December 31, 2016
|
35,452,062
|
|
|
$
|
304,594
|
|
|
$
|
7,412
|
|
|
$
|
312,006
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
31,652
|
|
|
$
|
38,380
|
|
|
$
|
(11,705
|
)
|
Less: (Income) loss from discontinued operations
|
—
|
|
|
(1,215
|
)
|
|
5,338
|
|
|||
Net income (loss) from continuing operations
|
31,652
|
|
|
37,165
|
|
|
(6,367
|
)
|
|||
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
92,132
|
|
|
92,250
|
|
|
68,830
|
|
|||
Amortization of deferred debt issue costs
|
3,684
|
|
|
4,859
|
|
|
6,263
|
|
|||
Amortization of discount on notes payable
|
—
|
|
|
—
|
|
|
1,305
|
|
|||
Amortization of premium on notes payable
|
(306
|
)
|
|
(324
|
)
|
|
(245
|
)
|
|||
(Gain) loss on disposition or sale of property, plant, and equipment
|
(33,400
|
)
|
|
2,149
|
|
|
1,353
|
|
|||
Gain on retirement of senior unsecured notes
|
—
|
|
|
(1,242
|
)
|
|
—
|
|
|||
Impairment of long lived assets
|
26,953
|
|
|
10,629
|
|
|
3,445
|
|
|||
Impairment of goodwill
|
4,145
|
|
|
—
|
|
|
—
|
|
|||
Equity in earnings unconsolidated entities
|
(4,714
|
)
|
|
(8,986
|
)
|
|
(5,466
|
)
|
|||
Reduction in fair value of investment in Cardinal due to the purchase of the controlling interest
|
—
|
|
|
—
|
|
|
30,102
|
|
|||
Derivative (income) loss
|
4,133
|
|
|
(3,107
|
)
|
|
(5,877
|
)
|
|||
Net cash received for commodity derivatives
|
(550
|
)
|
|
143
|
|
|
3
|
|
|||
Net cash received for interest rate derivatives
|
160
|
|
|
—
|
|
|
—
|
|
|||
Net premiums received on derivatives that settled during the year on interest rate swaption contracts
|
630
|
|
|
2,495
|
|
|
6,692
|
|
|||
Unit-based compensation
|
904
|
|
|
1,429
|
|
|
817
|
|
|||
Preferred dividends from Martin Energy Trading
|
—
|
|
|
—
|
|
|
1,498
|
|
|||
Return on investment
|
7,500
|
|
|
11,200
|
|
|
2,600
|
|
|||
Change in current assets and liabilities, excluding effects of acquisitions and dispositions:
|
|
|
|
|
|
||||||
Accounts and other receivables
|
(6,153
|
)
|
|
59,479
|
|
|
29,025
|
|
|||
Product exchange receivables
|
843
|
|
|
1,996
|
|
|
(319
|
)
|
|||
Inventories
|
(6,761
|
)
|
|
12,799
|
|
|
5,680
|
|
|||
Due from affiliates
|
(1,441
|
)
|
|
4,386
|
|
|
(2,413
|
)
|
|||
Other current assets
|
2,478
|
|
|
891
|
|
|
4,123
|
|
|||
Trade and other accounts payable
|
3,254
|
|
|
(44,153
|
)
|
|
(26,349
|
)
|
|||
Product exchange payables
|
(5,372
|
)
|
|
2,336
|
|
|
801
|
|
|||
Due to affiliates
|
2,736
|
|
|
866
|
|
|
2,276
|
|
|||
Income taxes payable
|
(115
|
)
|
|
(189
|
)
|
|
(30
|
)
|
|||
Other accrued liabilities
|
686
|
|
|
(2,802
|
)
|
|
1,084
|
|
|||
Change in other non-current assets and liabilities
|
(12,230
|
)
|
|
(345
|
)
|
|
181
|
|
|||
Net cash provided by continuing operating activities
|
110,848
|
|
|
183,924
|
|
|
119,012
|
|
|||
Net cash used in discontinued operating activities
|
—
|
|
|
(1,352
|
)
|
|
(3,432
|
)
|
|||
Net cash provided by operating activities
|
110,848
|
|
|
182,572
|
|
|
115,580
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Payments for property, plant, and equipment
|
(40,455
|
)
|
|
(65,791
|
)
|
|
(84,307
|
)
|
|||
Acquisitions, net of cash acquired
|
(2,150
|
)
|
|
—
|
|
|
(102,696
|
)
|
|||
Payments for plant turnaround costs
|
(2,061
|
)
|
|
(1,908
|
)
|
|
(3,974
|
)
|
|||
Proceeds from sale of property, plant, and equipment
|
108,505
|
|
|
2,644
|
|
|
1,030
|
|
|||
Proceeds from involuntary conversion of property, plant and equipment
|
—
|
|
|
—
|
|
|
2,475
|
|
|||
Investments in unconsolidated entities
|
—
|
|
|
—
|
|
|
(134,030
|
)
|
|||
Return of investments from unconsolidated entities
|
—
|
|
|
—
|
|
|
225
|
|
|||
Contributions to unconsolidated entities for operations
|
—
|
|
|
—
|
|
|
(3,386
|
)
|
|||
Net cash provided by (used in) continuing investing activities
|
63,839
|
|
|
(65,055
|
)
|
|
(324,663
|
)
|
|||
Net cash provided by discontinued investing activities
|
—
|
|
|
41,250
|
|
|
—
|
|
|||
Net cash provided by (used in) investing activities
|
63,839
|
|
|
(23,805
|
)
|
|
(324,663
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Payments of long-term debt
|
(386,700
|
)
|
|
(308,836
|
)
|
|
(1,533,087
|
)
|
|||
Proceeds from long-term debt
|
331,700
|
|
|
282,000
|
|
|
1,493,250
|
|
|||
Net proceeds from issuance of common units
|
(29
|
)
|
|
(590
|
)
|
|
331,728
|
|
|||
General partner contributions
|
—
|
|
|
55
|
|
|
7,007
|
|
|||
Excess purchase price over carrying value of acquired assets
|
—
|
|
|
—
|
|
|
(4,948
|
)
|
|||
Reimbursement of excess purchase price over carrying value of acquired assets
|
4,125
|
|
|
2,250
|
|
|
—
|
|
|||
Purchase of treasury units
|
(347
|
)
|
|
—
|
|
|
(277
|
)
|
|||
Payments of debt issuance costs
|
(5,274
|
)
|
|
(341
|
)
|
|
(3,722
|
)
|
|||
Cash distributions paid
|
(118,178
|
)
|
|
(133,316
|
)
|
|
(97,368
|
)
|
|||
Net cash provided by (used in) financing activities
|
(174,703
|
)
|
|
(158,778
|
)
|
|
192,583
|
|
|||
|
|
|
|
|
|
||||||
Net decrease in cash
|
(16
|
)
|
|
(11
|
)
|
|
(16,500
|
)
|
|||
Cash at beginning of year
|
31
|
|
|
42
|
|
|
16,542
|
|
|||
Cash at end of year
|
$
|
15
|
|
|
$
|
31
|
|
|
$
|
42
|
|
|
|
|
|
|
|
(1)
|
Organization and Description of Business
|
(2)
|
Significant Accounting Policies
|
(3)
|
Recent Accounting Pronouncements
|
(4)
|
Acquisitions
|
Cash payment for 57.8% interest in Cardinal
|
$
|
120,973
|
|
Fair value of the Partnership's previously owned 42.2% interest in Cardinal
|
87,613
|
|
|
Total
|
$
|
208,586
|
|
Restricted cash
|
$
|
17,566
|
|
Other current assets
|
9,385
|
|
|
Property, plant and equipment
|
390,895
|
|
|
Intangible and other assets
|
80,135
|
|
|
Project level finance debt
|
(282,087
|
)
|
|
Other current liabilities
|
(6,713
|
)
|
|
Other non-current liabilities
|
(595
|
)
|
|
Total
|
$
|
208,586
|
|
Property, plant and equipment
|
$
|
2,453
|
|
Current liabilities
|
(13
|
)
|
|
|
$
|
2,440
|
|
|
|
Year Ended December 31, 2014
|
||
Revenue:
|
|
|
||
As reported
|
|
$
|
1,642,141
|
|
Pro forma
|
|
$
|
1,688,629
|
|
Net income (loss) from continuing operations attributable to limited partners:
|
|
|
||
As reported
|
|
$
|
(8,255
|
)
|
Pro forma
|
|
$
|
1,676
|
|
Net loss from discontinued operations attributable to limited partners:
|
|
|
||
As reported
|
|
$
|
(6,921
|
)
|
Pro forma
|
|
$
|
(6,921
|
)
|
Net income (loss) from continuing operations per unit attributable to limited partners - basic
|
|
|
||
As reported
|
|
$
|
(0.27
|
)
|
Pro forma
|
|
$
|
0.05
|
|
Net loss from discontinued operations per unit attributable to limited partners - basic
|
|
|
||
As reported
|
|
$
|
(0.22
|
)
|
Pro forma
|
|
$
|
(0.22
|
)
|
Net income (loss) from continuing operations per unit attributable to limited partners - diluted
|
|
|
||
As reported
|
|
$
|
(0.27
|
)
|
Pro forma
|
|
$
|
0.05
|
|
Net loss from discontinued operations per unit attributable to limited partners - diluted
|
|
|
||
As reported
|
|
$
|
(0.22
|
)
|
Pro forma
|
|
$
|
(0.22
|
)
|
(5)
|
Discontinued Operations, Divestitures, and Assets Held for Sale
|
|
December 31, 2016
|
||
|
|
||
Terminalling and storage
|
$
|
10,852
|
|
Marine transportation
|
4,927
|
|
|
Assets held for sale
|
$
|
15,779
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
||||||
Total revenues from third parties1
|
$
|
—
|
|
|
$
|
791
|
|
|
$
|
51,264
|
|
Total costs and expenses and other, net, excluding depreciation and amortization
|
—
|
|
|
1,038
|
|
|
55,068
|
|
|||
Depreciation and amortization
|
—
|
|
|
—
|
|
|
1,534
|
|
|||
Other operating income, net 2
|
—
|
|
|
1,462
|
|
|
—
|
|
|||
Income (loss) from discontinued operations before income taxes
|
—
|
|
|
1,215
|
|
|
(5,338
|
)
|
|||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|||
Income (loss) from discontinued operations, net of income taxes
|
$
|
—
|
|
|
$
|
1,215
|
|
|
$
|
(5,338
|
)
|
(6)
|
Inventories
|
|
2016
|
|
2015
|
||||
Natural gas liquids
|
$
|
33,656
|
|
|
$
|
20,959
|
|
Sulfur
|
8,521
|
|
|
13,812
|
|
||
Sulfur based products
|
19,107
|
|
|
19,400
|
|
||
Lubricants
|
18,276
|
|
|
18,675
|
|
||
Other
|
3,071
|
|
|
3,024
|
|
||
|
$
|
82,631
|
|
|
$
|
75,870
|
|
(7)
|
Property, Plant and Equipment
|
|
Depreciable Lives
|
|
2016
|
|
2015
|
||||
Land
|
—
|
|
$
|
20,679
|
|
|
$
|
23,931
|
|
Improvements to land and buildings
|
10-25 years
|
|
135,852
|
|
|
159,160
|
|
||
Storage equipment
|
5-50 years
|
|
168,839
|
|
|
191,095
|
|
||
Marine vessels
|
4-25 years
|
|
181,659
|
|
|
257,858
|
|
||
Operating plant and equipment
|
3-50 years
|
|
620,303
|
|
|
631,728
|
|
||
Base Gas
|
—
|
|
43,799
|
|
|
43,799
|
|
||
Furniture, fixtures and other equipment
|
3-20 years
|
|
19,034
|
|
|
4,375
|
|
||
Transportation equipment
|
3-7 years
|
|
1,738
|
|
|
2,237
|
|
||
Construction in progress
|
|
|
32,374
|
|
|
73,631
|
|
||
|
|
|
$
|
1,224,277
|
|
|
$
|
1,387,814
|
|
|
2015
|
|
Impairment1
|
|
CCCT Assets2
|
|
2016
|
||||||||
Carrying amount of goodwill:
|
|
|
|
|
|
|
|
||||||||
Terminalling and storage
|
$
|
14,229
|
|
|
$
|
—
|
|
|
$
|
(2,361
|
)
|
|
$
|
11,868
|
|
Natural gas services
|
79
|
|
|
—
|
|
|
—
|
|
|
$
|
79
|
|
|||
Sulfur services
|
5,349
|
|
|
—
|
|
|
—
|
|
|
$
|
5,349
|
|
|||
Marine transportation
|
4,145
|
|
|
(4,145
|
)
|
|
—
|
|
|
$
|
—
|
|
|||
Total goodwill
|
$
|
23,802
|
|
|
$
|
(4,145
|
)
|
|
$
|
(2,361
|
)
|
|
$
|
17,296
|
|
Fiscal year
|
Operating Leases
|
||
|
|
||
2017
|
$
|
10,458
|
|
2018
|
5,633
|
|
|
2019
|
4,036
|
|
|
2020
|
3,389
|
|
|
2021
|
1,041
|
|
|
Thereafter
|
8,449
|
|
|
Total
|
$
|
33,006
|
|
|
As of December 31,
|
|
Years ended December 31,
|
||||||||||||||||
|
Total Assets
|
|
Long-Term Debt
|
|
Members’ Equity/Partners' Capital
|
|
Revenues
|
|
Net Income
|
||||||||||
2016
|
|
|
|
|
|
|
|
|
|
||||||||||
WTLPG
|
$
|
812,464
|
|
|
$
|
—
|
|
|
$
|
790,406
|
|
|
$
|
88,468
|
|
|
$
|
23,883
|
|
2015
|
|
|
|
|
|
|
|
|
|
||||||||||
WTLPG
|
$
|
819,342
|
|
|
$
|
—
|
|
|
$
|
804,023
|
|
|
$
|
100,708
|
|
|
$
|
46,294
|
|
2014
|
|
|
|
|
|
|
|
|
|
||||||||||
WTLPG
|
$
|
827,697
|
|
|
$
|
—
|
|
|
$
|
818,546
|
|
|
$
|
95,315
|
|
|
$
|
38,698
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cardinal1
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
46,488
|
|
|
$
|
1,911
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 2
|
||||||
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Commodity derivative contracts, net
|
$
|
(3,904
|
)
|
|
$
|
675
|
|
Interest rate derivative contracts
|
—
|
|
|
(206
|
)
|
•
|
Accounts and other receivables, trade and other accounts payable, accrued interest payable, other accrued liabilities, income taxes payable and due from/to affiliates: The carrying amounts approximate fair value due to the short maturity and highly liquid nature of these instruments, and as such these have been excluded from the table below. There is negligible credit risk associated with these instruments.
|
•
|
Note receivable and long-term debt including current portion: The carrying amount of the revolving credit facility approximates fair value due to the debt having a variable interest rate and is in Level 2. The Partnership has not had any indicators which represent a change in the market spread associated with its variable interest rate debt.
|
•
|
The estimated fair value of the senior unsecured notes is based on market prices of similar debt. The estimated fair value of the note receivable from Martin Energy Trading was determined by calculating the net present value of the payments over the life of the note. The note is considered Level 3 due to the lack of observable inputs for similar transactions between related parties.
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
||||||||
Note receivable - MET
|
$
|
15,000
|
|
|
$
|
15,797
|
|
|
$
|
15,000
|
|
|
$
|
15,830
|
|
2021 Senior unsecured notes
|
372,239
|
|
|
377,882
|
|
|
371,861
|
|
|
318,000
|
|
|
Fair Values of Derivative Instruments in the Consolidated Balance Sheet
|
|||||||||||||||
|
Derivative Assets
|
Derivative Liabilities
|
||||||||||||||
|
|
Fair Values
|
|
Fair Values
|
||||||||||||
|
Balance Sheet Location
|
December 31, 2016
|
|
December 31, 2015
|
Balance Sheet Location
|
December 31, 2016
|
|
December 31, 2015
|
||||||||
Derivatives not designated as hedging instruments:
|
Current:
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
Fair value of derivatives
|
$
|
—
|
|
|
$
|
675
|
|
Fair value of derivatives
|
$
|
3,904
|
|
|
$
|
—
|
|
Derivatives not designated as hedging instruments:
|
Non Current:
|
|
|
|
|
|
Non Current:
|
|
|
|
|
|||||
Interest rate contracts
|
Fair value of derivatives
|
—
|
|
|
—
|
|
Fair value of derivatives
|
—
|
|
|
206
|
|
||||
Total derivatives not designated as hedging instruments
|
|
$
|
—
|
|
|
$
|
675
|
|
|
$
|
3,904
|
|
|
$
|
206
|
|
•
|
providing terminalling and storage services for petroleum products and by-products including the refining, blending and packaging of finished lubricants;
|
•
|
the ownership and/or operation on the Partnership’s behalf of any asset or group of assets owned by it or its affiliates;
|
•
|
any business operated by Martin Resource Management, including the following:
|
◦
|
providing land transportation of various liquids;
|
◦
|
distributing fuel oil, sulfuric acid, marine fuel and other liquids;
|
◦
|
providing marine bunkering and other shore-based marine services in Texas, Louisiana, Mississippi, Alabama, and Florida;
|
◦
|
operating a crude oil gathering business in Stephens, Arkansas;
|
◦
|
providing crude oil gathering, refining, and marketing services of base oils, asphalt, and distillate products in Smackover, Arkansas;
|
◦
|
providing crude oil marketing and transportation from the well head to the end market;
|
◦
|
operating an environmental consulting company;
|
◦
|
operating an engineering services company;
|
◦
|
supplying employees and services for the operation of the Partnership's business;
|
◦
|
operating a crude oil, natural gas, natural gas liquids, and biofuels optimization business; and
|
◦
|
operating, solely for the Partnership's account, the asphalt facilities in Omaha, Nebraska, Port Neches, Texas and South Houston, Texas.
|
•
|
any business that Martin Resource Management acquires or constructs that has a fair market value of less than $5,000;
|
•
|
any business that Martin Resource Management acquires or constructs that has a fair market value of $5,000 or more if the Partnership has been offered the opportunity to purchase the business for fair market value and the Partnership declines to do so with the concurrence of the Conflicts Committee; and
|
•
|
any business that Martin Resource Management acquires or constructs where a portion of such business includes a restricted business and the fair market value of the restricted business is $5,000 or more and represents less than 20% of the aggregate value of the entire business to be acquired or constructed; provided that, following completion of the acquisition or construction, the Partnership will be provided the opportunity to purchase the restricted business.
|
Revenues:
|
2016
|
|
2015
|
|
2014
|
||||||
Terminalling and storage
|
$
|
82,437
|
|
|
$
|
78,233
|
|
|
$
|
74,467
|
|
Marine transportation
|
21,767
|
|
|
27,724
|
|
|
24,389
|
|
|||
Natural gas services
|
699
|
|
|
878
|
|
|
—
|
|
|||
Product sales:
|
|
|
|
|
|
||||||
Natural gas services
|
8
|
|
|
196
|
|
|
3,064
|
|
|||
Sulfur services
|
2,006
|
|
|
3,639
|
|
|
3,921
|
|
|||
Terminalling and storage
|
1,020
|
|
|
1,836
|
|
|
676
|
|
|||
|
3,034
|
|
|
5,671
|
|
|
7,661
|
|
|||
|
$
|
107,937
|
|
|
$
|
112,506
|
|
|
$
|
106,517
|
|
Cost of products sold:
|
|
|
|
|
|
||||||
Natural gas services
|
$
|
22,886
|
|
|
$
|
25,797
|
|
|
$
|
37,703
|
|
Sulfur services
|
15,339
|
|
|
16,579
|
|
|
18,390
|
|
|||
Terminalling and storage
|
13,838
|
|
|
17,718
|
|
|
36,341
|
|
|||
|
$
|
52,063
|
|
|
$
|
60,094
|
|
|
$
|
92,434
|
|
Operating expenses:
|
|
|
|
|
|
||||||
Marine transportation
|
$
|
28,107
|
|
|
$
|
32,373
|
|
|
$
|
37,703
|
|
Natural gas services
|
9,258
|
|
|
8,639
|
|
|
4,870
|
|
|||
Sulfur services
|
5,995
|
|
|
6,928
|
|
|
7,479
|
|
|||
Terminalling and storage
|
27,481
|
|
|
29,931
|
|
|
29,525
|
|
|||
|
$
|
70,841
|
|
|
$
|
77,871
|
|
|
$
|
79,577
|
|
Selling, general and administrative:
|
|
|
|
|
|
||||||
Marine transportation
|
$
|
30
|
|
|
$
|
29
|
|
|
$
|
30
|
|
Natural gas services
|
7,566
|
|
|
6,216
|
|
|
6,039
|
|
|||
Sulfur services
|
2,732
|
|
|
2,760
|
|
|
3,201
|
|
|||
Terminalling and storage
|
2,526
|
|
|
2,284
|
|
|
1,874
|
|
|||
Indirect overhead allocation, net of reimbursement
|
13,036
|
|
|
13,679
|
|
|
12,535
|
|
|||
|
$
|
25,890
|
|
|
$
|
24,968
|
|
|
$
|
23,679
|
|
(14)
|
Supplemental Balance Sheet Information
|
|
2016
|
|
2015
|
||||
Customer contracts and relationships, net
|
$
|
36,528
|
|
|
$
|
50,452
|
|
Other intangible assets
|
2,280
|
|
|
1,818
|
|
||
Other
|
6,066
|
|
|
6,044
|
|
||
|
$
|
44,874
|
|
|
$
|
58,314
|
|
|
2016
|
|
2015
|
||||
Accrued interest
|
$
|
10,629
|
|
|
$
|
10,365
|
|
Asset retirement obligations
|
7,953
|
|
|
—
|
|
||
Property and other taxes payable
|
6,443
|
|
|
6,668
|
|
||
Accrued payroll
|
1,672
|
|
|
1,389
|
|
||
Other
|
20
|
|
|
111
|
|
||
|
$
|
26,717
|
|
|
$
|
18,533
|
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||
|
|
|
|
||||
Beginning asset retirement obligations
|
$
|
2,163
|
|
|
$
|
2,052
|
|
Revisions to existing liabilities1
|
14,379
|
|
|
—
|
|
||
Accretion
|
178
|
|
|
111
|
|
||
Liabilities settled
|
(302
|
)
|
|
—
|
|
||
Ending asset retirement obligations
|
16,418
|
|
|
2,163
|
|
||
Current portion of asset retirement obligations2
|
(7,953
|
)
|
|
—
|
|
||
Long-term portion of asset retirement obligations3
|
$
|
8,465
|
|
|
$
|
2,163
|
|
|
2016
|
|
2015
|
||||
$664,4441 Revolving credit facility at variable interest rate (3.76%2 weighted average at December 31, 2016), due March 2020 secured by substantially all of the Partnership’s assets, including, without limitation, inventory, accounts receivable, vessels, equipment, fixed assets and the interests in the Partnership’s operating subsidiaries and equity method investees, net of unamortized debt issuance costs of $7,132 and $4,858, respectively3
|
$
|
435,868
|
|
|
$
|
493,142
|
|
$400,000 Senior notes, 7.25% interest, including unamortized premium of $1,262 and $1,568, respectively, also net of unamortized debt issuance costs of $2,823 and $3,507 respectively, issued $250,000 February 2013 and $150,000 April 2014, $26,200 repurchased during 2015, due February 2021, unsecured3,4
|
372,239
|
|
|
371,861
|
|
||
Total long-term debt
|
$
|
808,107
|
|
|
$
|
865,003
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Continuing operations:
|
|
|
|
|
|
||||||
Income (loss) from continuing operations
|
$
|
31,652
|
|
|
$
|
37,165
|
|
|
$
|
(6,367
|
)
|
Less general partner’s interest in net income:
|
|
|
|
|
|
||||||
Distributions payable on behalf of IDRs
|
7,786
|
|
|
15,078
|
|
|
2,033
|
|
|||
Distributions payable on behalf of general partner interest
|
2,058
|
|
|
2,585
|
|
|
1,181
|
|
|||
General partner interest in undistributed loss
|
(1,425
|
)
|
|
(1,842
|
)
|
|
(1,308
|
)
|
|||
Less income (loss) allocable to unvested restricted units
|
90
|
|
|
136
|
|
|
(18
|
)
|
|||
Limited partners’ interest in net income (loss)
|
$
|
23,143
|
|
|
$
|
21,208
|
|
|
$
|
(8,255
|
)
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Discontinued operations:
|
|
|
|
|
|
||||||
Income (loss) from discontinued operations
|
$
|
—
|
|
|
$
|
1,215
|
|
|
$
|
(5,338
|
)
|
Less general partner’s interest in net income:
|
|
|
|
|
|
||||||
Distributions payable on behalf of IDRs
|
—
|
|
|
493
|
|
|
1,704
|
|
|||
Distributions payable on behalf of general partner interest
|
—
|
|
|
84
|
|
|
990
|
|
|||
General partner interest in undistributed loss
|
—
|
|
|
(60
|
)
|
|
(1,097
|
)
|
|||
Less income (loss) allocable to unvested restricted units
|
—
|
|
|
4
|
|
|
(14
|
)
|
|||
Limited partners’ interest in net income (loss)
|
$
|
—
|
|
|
$
|
694
|
|
|
$
|
(6,921
|
)
|
|
For the Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Employees
|
$
|
783
|
|
|
$
|
1,338
|
|
|
$
|
537
|
|
Non-employee directors
|
121
|
|
|
91
|
|
|
280
|
|
|||
Total unit-based compensation expense
|
$
|
904
|
|
|
$
|
1,429
|
|
|
$
|
817
|
|
|
Number of Units
|
|
Weighted Average Grant-Date Fair Value Per Unit
|
||||
Non-vested, beginning of year
|
150,474
|
|
|
$
|
28.89
|
|
|
Granted
|
13,800
|
|
|
$
|
15.13
|
|
|
Vested
|
(58,224
|
)
|
|
$
|
30.61
|
|
|
Forfeited
|
(2,250
|
)
|
|
$
|
28.50
|
|
|
Non-Vested, end of year
|
103,800
|
|
|
$
|
26.54
|
|
|
|
|
|
|
||||
Aggregate intrinsic value, end of year
|
$
|
1,905
|
|
|
|
|
For the Year Ended
December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Aggregate intrinsic value of units vested
|
$
|
1,233
|
|
|
$
|
110
|
|
|
$
|
514
|
|
Fair value of units vested
|
$
|
1,773
|
|
|
$
|
128
|
|
|
$
|
450
|
|
|
Operating Revenues
|
|
Intersegment Eliminations
|
|
Operating Revenues After Eliminations
|
|
Depreciation and Amortization
|
|
Operating Income (Loss) after Eliminations
|
|
Capital Expenditures and Plant Turnaround Costs
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Year Ended December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Terminalling and storage
|
$
|
242,363
|
|
|
$
|
(5,653
|
)
|
|
$
|
236,710
|
|
|
$
|
45,484
|
|
|
$
|
40,660
|
|
|
$
|
26,097
|
|
Natural gas services
|
391,333
|
|
|
—
|
|
|
391,333
|
|
|
28,081
|
|
|
41,438
|
|
|
4,807
|
|
||||||
Sulfur services
|
141,058
|
|
|
—
|
|
|
141,058
|
|
|
7,995
|
|
|
23,393
|
|
|
5,093
|
|
||||||
Marine transportation
|
61,233
|
|
|
(2,943
|
)
|
|
58,290
|
|
|
10,572
|
|
|
(16,039
|
)
|
|
2,334
|
|
||||||
Indirect selling, general, and administrative
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,794
|
)
|
|
—
|
|
||||||
Total
|
$
|
835,987
|
|
|
$
|
(8,596
|
)
|
|
$
|
827,391
|
|
|
$
|
92,132
|
|
|
$
|
72,658
|
|
|
$
|
38,331
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Year Ended December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Terminalling and storage
|
$
|
270,440
|
|
|
$
|
(5,670
|
)
|
|
$
|
264,770
|
|
|
$
|
38,731
|
|
|
$
|
15,704
|
|
|
$
|
40,421
|
|
Natural gas services
|
523,160
|
|
|
—
|
|
|
523,160
|
|
|
34,072
|
|
|
41,220
|
|
|
24,330
|
|
||||||
Sulfur services
|
170,161
|
|
|
—
|
|
|
170,161
|
|
|
8,455
|
|
|
23,604
|
|
|
1,201
|
|
||||||
Marine transportation
|
81,784
|
|
|
(3,031
|
)
|
|
78,753
|
|
|
10,992
|
|
|
8,576
|
|
|
2,775
|
|
||||||
Indirect selling, general, and administrative
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,951
|
)
|
|
—
|
|
||||||
Total
|
$
|
1,045,545
|
|
|
$
|
(8,701
|
)
|
|
$
|
1,036,844
|
|
|
$
|
92,250
|
|
|
$
|
70,153
|
|
|
$
|
68,727
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Year Ended December 31, 2014:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Terminalling and storage
|
$
|
326,654
|
|
|
$
|
(5,191
|
)
|
|
$
|
321,463
|
|
|
$
|
37,622
|
|
|
$
|
24,993
|
|
|
$
|
53,450
|
|
Natural gas services
|
1,013,835
|
|
|
—
|
|
|
1,013,835
|
|
|
13,090
|
|
|
34,574
|
|
|
24,194
|
|
||||||
Sulfur services
|
215,471
|
|
|
—
|
|
|
215,471
|
|
|
8,176
|
|
|
19,465
|
|
|
4,115
|
|
||||||
Marine transportation
|
97,049
|
|
|
(5,677
|
)
|
|
91,372
|
|
|
9,942
|
|
|
7,551
|
|
|
11,498
|
|
||||||
Indirect selling, general, and administrative
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,712
|
)
|
|
—
|
|
||||||
Total
|
$
|
1,653,009
|
|
|
$
|
(10,868
|
)
|
|
$
|
1,642,141
|
|
|
$
|
68,830
|
|
|
$
|
67,871
|
|
|
$
|
93,257
|
|
|
2016
|
|
2015
|
||||
Total assets:
|
|
|
|
||||
Terminalling and storage
|
$
|
328,098
|
|
|
$
|
417,202
|
|
Natural gas services
|
684,722
|
|
|
694,333
|
|
||
Sulfur services
|
125,356
|
|
|
134,108
|
|
||
Marine transportation
|
108,187
|
|
|
134,830
|
|
||
Total assets
|
$
|
1,246,363
|
|
|
$
|
1,380,473
|
|
|
|
(Unaudited)
|
||||||||||||||
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth
Quarter
|
||||||||
|
|
(Dollar in thousands, except per unit amounts)
|
||||||||||||||
2016
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
225,605
|
|
|
$
|
190,348
|
|
|
$
|
174,537
|
|
|
$
|
236,901
|
|
|
Operating income
|
24,338
|
|
|
10,256
|
|
|
9,176
|
|
|
28,888
|
|
|||||
Equity in earnings of unconsolidated entities
|
1,677
|
|
|
805
|
|
|
1,120
|
|
|
1,112
|
|
|||||
Net income (loss)
|
$
|
15,914
|
|
|
$
|
(1,211
|
)
|
|
$
|
(933
|
)
|
|
$
|
17,882
|
|
|
Limited partners' interest in net income (loss) per limited partner unit
|
$
|
0.33
|
|
|
$
|
(0.14
|
)
|
|
(0.03
|
)
|
|
$
|
0.49
|
|
||
|
|
|
|
|
|
|
|
|
||||||||
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth
Quarter
|
||||||||
|
|
(Dollar in thousands, except per unit amounts)
|
||||||||||||||
2015
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
305,353
|
|
|
$
|
251,099
|
|
|
$
|
226,021
|
|
|
$
|
254,371
|
|
|
Operating income
|
24,702
|
|
|
19,630
|
|
|
12,034
|
|
|
13,787
|
|
|||||
Equity in earnings of unconsolidated entities
|
1,740
|
|
|
1,649
|
|
|
2,363
|
|
|
3,234
|
|
|||||
Income from continuing operations
|
16,033
|
|
|
10,961
|
|
|
3,330
|
|
|
6,841
|
|
|||||
Income from discontinued operations
|
1,215
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income
|
$
|
17,248
|
|
|
$
|
10,961
|
|
|
$
|
3,330
|
|
|
$
|
6,841
|
|
|
Limited partners' interest in net income (loss) per limited partner unit
|
$
|
0.37
|
|
|
0.19
|
|
|
(0.02
|
)
|
|
0.08
|
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Name
|
|
Age
|
|
Position with the General Partner
|
Ruben S. Martin
|
|
65
|
|
President, Chief Executive Officer and Director
|
Robert D. Bondurant
|
|
58
|
|
Executive Vice President and Chief Financial Officer and Director
|
Randall L. Tauscher
|
|
51
|
|
Executive Vice President and Chief Operating Officer
|
Chris H. Booth
|
|
47
|
|
Executive Vice President, Chief Legal Officer, General Counsel and Secretary
|
Scot A. Shoup
|
|
56
|
|
Senior Vice President of Operations
|
C. Scott Massey
|
|
64
|
|
Director
|
James M. Collingsworth
|
|
62
|
|
Director
|
Byron R. Kelley
|
|
69
|
|
Director
|
Sean P. Dolan
|
|
43
|
|
Director
|
Zachary S. Stanton
|
|
41
|
|
Director
|
Item 11.
|
Executive Compensation
|
Name and Principal Position
|
|
Year
|
|
Salary
|
|
Bonus
|
|
Stock Awards (1)
|
|
Total Compensation
|
||||||||
Ruben S. Martin, President and Chief Executive Officer
|
|
2016
|
|
$
|
412,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
412,500
|
|
|
2015
|
|
$
|
412,500
|
|
|
$
|
—
|
|
|
$
|
356,250
|
|
|
$
|
768,750
|
|
|
|
2014
|
|
$
|
412,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
412,500
|
|
|
Robert D. Bondurant, Executive Vice President and Chief Financial Officer
|
|
2016
|
|
$
|
230,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
230,000
|
|
|
2015
|
|
$
|
230,000
|
|
|
$
|
—
|
|
|
$
|
85,500
|
|
|
$
|
315,500
|
|
|
|
2014
|
|
$
|
230,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
230,000
|
|
|
Randall L. Tauscher, Executive Vice President and Chief Operating Officer
|
|
2016
|
|
$
|
308,200
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
308,200
|
|
|
2015
|
|
$
|
230,000
|
|
|
$
|
—
|
|
|
$
|
85,500
|
|
|
$
|
315,500
|
|
|
|
2014
|
|
$
|
308,200
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
308,200
|
|
|
Chris H. Booth, Executive Vice President, General Counsel and Secretary
|
|
2016
|
|
$
|
165,240
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
165,240
|
|
|
2015
|
|
$
|
146,880
|
|
|
$
|
—
|
|
|
$
|
71,250
|
|
|
$
|
218,130
|
|
|
|
2014
|
|
$
|
165,240
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
165,240
|
|
|
Scot A. Shoup, Senior Vice President of Operations
|
|
2016
|
|
$
|
180,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
180,000
|
|
|
2015
|
|
$
|
180,000
|
|
|
$
|
—
|
|
|
$
|
57,000
|
|
|
$
|
237,000
|
|
|
|
2014
|
|
$
|
180,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
180,000
|
|
Name
|
|
Fees Earned Paid in
Cash
|
|
Stock
Awards
|
|
Total
|
||||||
Ruben S. Martin
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Robert D. Bondurant
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
C. Scott Massey (1)
|
|
$
|
65,000
|
|
|
$
|
69,598
|
|
|
$
|
134,598
|
|
Byron R. Kelley (1)
|
|
$
|
65,000
|
|
|
$
|
69,598
|
|
|
$
|
134,598
|
|
James M. Collingsworth (1)
|
|
$
|
65,000
|
|
|
$
|
69,598
|
|
|
$
|
134,598
|
|
Alexander W.F Black
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Sean P. Dolan
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
/s/ James M. Collingsworth
|
James M. Collingsworth, Committee Chair
|
|
/s/ Byron R. Kelley
|
Byron R. Kelley
|
|
/s/ C. Scott Massey
|
C. Scott Massey
|
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Name of Beneficial Owner(1)
|
|
Common Units
Beneficially
Owned
|
|
Percentage of
Common Units
Beneficially
Owned (3)
|
|
MRMC ESOP Trust (4)
|
|
6,264,532
|
|
|
17.7%
|
Martin Resource Management Corporation (5)
|
|
6,264,532
|
|
|
17.7%
|
Martin Resource, LLC (5)
|
|
4,203,823
|
|
|
11.9%
|
Martin Product Sales LLC (5)
|
|
1,171,265
|
|
|
3.3%
|
Cross Oil Refining & Marketing Inc. (5)
|
|
889,444
|
|
|
2.5%
|
OppenheimerFunds, Inc. (2)
|
|
6,151,199
|
|
|
17.4%
|
Ruben S. Martin (6)
|
|
6,395,229
|
|
|
18.0%
|
Robert D. Bondurant
|
|
35,437
|
|
|
—%
|
Randall L. Tauscher
|
|
27,196
|
|
|
—%
|
Chris H. Booth
|
|
11,483
|
|
|
—%
|
Scot A. Shoup
|
|
6,378
|
|
|
—%
|
Sean Dolan
|
|
—
|
|
|
—%
|
Zachary S. Stanton
|
|
—
|
|
|
—%
|
C. Scott Massey (7)
|
|
27,000
|
|
|
—%
|
Byron R. Kelley
|
|
12,600
|
|
|
—%
|
James M. Collingsworth (8)
|
|
10,000
|
|
|
—%
|
All directors and executive officers as a group (10 persons) (9)
|
|
6,525,323
|
|
|
18.4%
|
(1)
|
The address for Martin Resource Management Corporation and all of the individuals listed in this table, unless otherwise indicated, is c/o Martin Midstream Partners L.P., 4200 Stone Road, Kilgore, Texas 75662.
|
(2)
|
The address for OppenheimerFunds, Inc. is 225 Liberty Street, New York, NY 10281.
|
(3)
|
The percent of class shown is less than one percent unless otherwise noted.
|
(4)
|
By virtue of its ownership of 85.90% of the outstanding common stock of Martin Resource Management Corporation ("Martin Resource Management"), the MRMC ESOP Trust (the "MRMC ESOP") is the controlling shareholder of Martin Resource Management, and may be deemed to beneficially own the 6,264,532 MMLP Common Units held by Martin Resource LLC, Cross Oil Refining & Marketing Inc., and Martin Product Sales LLC. Wilmington Trust Retirement and Institutional Services Company serves as trustee of the MRMC ESOP but all of its voting and investment decisions are directed by the board of directors of Martin Resource Management. The MRMC ESOP expressly disclaims beneficial ownership of the MMLP Common Units as voting and investment decisions are directed by the board of directors of Martin Resource Management.
|
(5)
|
Martin Resource Management is the owner of Martin Resource, LLC, Martin Product Sales LLC, and Cross Oil Refining & Marketing Inc., and as such may be deemed to beneficially own the common units held by Martin Resource LLC, Cross Oil Refining & Marketing Inc, and Martin Product Sales LLC. The 4,203,823 common units beneficially owned by Martin Resource Management through its ownership of Martin Resource, LLC have been pledged as security to a third party to secure payment for a loan made by such third party. The 1,171,265 common units beneficially owned by Martin Resource Management through its ownership of Martin Product Sales LLC have been pledged as security to a third party to secure payment for a loan made by such third party. The 889,444 common units beneficially owned by Martin Resource Management through its ownership of Cross Oil Refining & Marketing Inc. have been pledged as security to a third party to secure payment for a loan made by such third party.
|
(6)
|
Includes 130,697 common units owned directly by Mr. Martin, 46,477 of which are pledged to third parties to secure payment for loans. By virtue of serving as the Chairman of the Board and President of Martin Resource
|
(7)
|
Mr. Massey may be deemed to be the beneficial owner of 1,500 common units held by his wife.
|
(8)
|
Mr. Collingsworth may be deemed to be the beneficial owner of 775 common units held by his wife.
|
(9)
|
The total for all directors and executive officers as a group includes the common units directly owned by such directors and executive officers as well as the common units beneficially owned by Martin Resource Management as Ruben S. Martin may be deemed to be the beneficial owner thereof.
|
|
|
Beneficial Ownership of
Voting Common Stock
|
||||
Name of Beneficial Owner(1)
|
|
Number of
Shares
|
|
Percent of
Outstanding Voting Stock
|
||
MRMC ESOP Trust (2)
|
|
180,698.67
|
|
|
85.90
|
%
|
Martin ESOP Trust (3)
|
|
29,656.69
|
|
|
14.10
|
%
|
Robert D. Bondurant (3)
|
|
29,656.69
|
|
|
14.10
|
%
|
Randall Tauscher (3)
|
|
29,656.69
|
|
|
14.10
|
%
|
(1)
|
The business address of each shareholder, director and executive officer of Martin Resource Management Corporation is c/o Martin Resource Management Corporation, 4200 Stone Road, Kilgore, Texas 75662.
|
(2)
|
The MRMC ESOP owns 210,355.36 shares of common stock of Martin Resource Management. Wilmington Trust Retirement and Institutional Services Company serves as trustee of the MRMC ESOP but all of its voting and investment decisions related to the unallocated shares of common stock are directed by the board of directors of Martin Resource Management. Of the common stock held by the MRMC ESOP, 98,225 shares of common stock are allocated to participant accounts, and 82,474 shares of common stock are unallocated.
|
(3)
|
Robert D. Bondurant and Randall Tauscher (the "Co-Trustees") are co-trustees of the Martin Employee Stock Ownership Trust which converted from a profit sharing plan known as the Martin Employees' Stock Profit Sharing Plan on January 1, 2014. The Co-Trustees exercise shared control over the voting and disposition of the securities owned by this trust. As a result, the Co-Trustees may be deemed to be the beneficial owner of the securities held by such trust; thus, the number of shares of common stock reported herein as beneficially owned by the Co-Trustees includes the 29,657 shares owned by such trust. The Co-Trustees disclaim beneficial ownership of these 29,657 shares.
|
|
Number of
securities to be
issued upon exercise
of outstanding
options, Warrants
and rights
|
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
|
|
Number of securities
remaining available for
future issuance under equity compensation
plans (excluding
securities reflected in
column (a))
|
||||
Plan Category
|
(a)
|
|
(b)
|
|
(c)
|
||||
Equity compensation plans approved by security holders
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
Equity compensation plans not approved by security holders (1)
|
—
|
|
|
$
|
—
|
|
|
540,200
|
|
Total
|
—
|
|
|
$
|
—
|
|
|
540,200
|
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
•
|
providing terminalling and storage services for petroleum products and by-products including the refining, blending and packaging of finished lubricants;
|
•
|
the ownership and/or operation on the Partnership’s behalf of any asset or group of assets owned by it or its affiliates;
|
•
|
any business operated by Martin Resource Management, including the following:
|
◦
|
providing land transportation of various liquids;
|
◦
|
distributing fuel oil, sulfuric acid, marine fuel and other liquids;
|
◦
|
providing marine bunkering and other shore-based marine services in Texas, Louisiana, Mississippi, Alabama, and Florida;
|
◦
|
operating a crude oil gathering business in Stephens, Arkansas;
|
◦
|
providing crude oil gathering, refining, and marketing services of base oils, asphalt, and distillate products in Smackover, Arkansas;
|
◦
|
providing crude oil marketing and transportation from the well head to the end market;
|
◦
|
operating an environmental consulting company;
|
◦
|
operating an engineering services company;
|
◦
|
supplying employees and services for the operation of the Partnership's business;
|
◦
|
operating a crude oil, natural gas, natural gas liquids, and biofuels optimization business; and
|
◦
|
operating, solely for the Partnership's account, the asphalt facilities in Omaha, Nebraska, Port Neches, Texas and South Houston, Texas.
|
•
|
any business that Martin Resource Management acquires or constructs that has a fair market value of less than $5,000;
|
•
|
any business that Martin Resource Management acquires or constructs that has a fair market value of $5,000 or more if the Partnership has been offered the opportunity to purchase the business for fair market value and the Partnership declines to do so with the concurrence of the conflicts committee of the board of directors of the general partner of the Partnership (the "Conflicts Committee"); and
|
•
|
any business that Martin Resource Management acquires or constructs where a portion of such business includes a restricted business and the fair market value of the restricted business is $5,000 or more and represents less than 20%
|
Item 14.
|
Principal Accounting Fees and Services
|
|
|
2016
|
|
2015
|
|
||||
Audit fees
|
|
$
|
1,192,500
|
|
(1)
|
$
|
1,347,500
|
|
(1)
|
Audit related fees
|
|
—
|
|
|
—
|
|
|
||
Audit and audit related fees
|
|
1,192,500
|
|
|
1,347,500
|
|
|
||
Tax fees
|
|
105,070
|
|
(2)
|
253,700
|
|
(2)
|
||
All other fees
|
|
—
|
|
|
—
|
|
|
||
Total fees
|
|
$
|
1,297,570
|
|
|
$
|
1,601,200
|
|
|
(1)
|
2016 audit fees include fees for the annual integrated audit and fees related to services in connection with transactions. 2015 audit fees include fees for the annual integrated audit and fees related to services in connection with filing updated financial statements and in connection with transactions.
|
(2)
|
Tax fees are for services related to the review of our partnership K-1's returns, and research and consultations on other tax related matters.
|
Item 15.
|
Exhibits, Financial Statement Schedules
|
(1)
|
The following financial statements of Martin Midstream Partners L.P. are included in Part II, Item 8:
|
Exhibit
Number
|
Exhibit Name
|
|
|
3.1
|
Certificate of Limited Partnership of Martin Midstream Partners L.P. (the "Partnership"), dated June 21, 2002 (filed as Exhibit 3.1 to the Partnership's Registration Statement on Form S-1 (Reg. No. 333-91706), filed July 1, 2002, and incorporated herein by reference).
|
3.2
|
Second Amended and Restated Agreement of Limited Partnership of the Partnership, dated November 25, 2009 (filed as Exhibit 10.1 to the Partnership's Amendment to Current Report on Form 8-K/A (SEC File No. 000-50056), filed January 19, 2010, and incorporated herein by reference).
|
3.3
|
Amendment No. 2 to the Second Amended and Restated Agreement of Limited Partnership of the Partnership dated January 31, 2011 (filed as Exhibit 3.1 to the Partnership's Current Report on Form 8-K (SEC File No. 000-50056), filed February 1, 2011, and incorporated herein by reference).
|
3.4
|
Amendment No. 3 to the Second Amended and Restated Agreement of Limited Partnership of the Partnership dated October 2, 2012 (filed as Exhibit 10.5 to the Partnership's Current Report on Form 8-K (SEC File No. 000-50056), filed October 9, 2012, and incorporated herein by reference).
|
3.5
|
Certificate of Limited Partnership of Martin Operating Partnership L.P. (the "Operating Partnership"), dated June 21, 2002 (filed as Exhibit 3.3 to the Partnership's Registration Statement on Form S-1 (Reg. No. 333-91706), filed July 1, 2002, and incorporated herein by reference).
|
3.6
|
Amended and Restated Agreement of Limited Partnership of the Operating Partnership, dated November 6, 2002 (filed as Exhibit 3.2 to the Partnership's Current Report on Form 8-K (SEC File No. 000-50056), filed November 19, 2002, and incorporated herein by reference).
|
3.7
|
Certificate of Formation of Martin Midstream GP LLC (the "General Partner"), dated June 21, 2002 (filed as Exhibit 3.5 to the Partnership's Registration Statement on Form S-1 (Reg. No. 333-91706), filed July 1, 2002, and incorporated herein by reference).
|
3.8
|
Amended and Restated Limited Liability Company Agreement of the General Partner, dated August 30, 2013 (filed as Exhibit 3.1 to the Partnership's Current Report on Form 8-K (Reg. No. 000-50056), filed September 3, 2013, and incorporated herein by reference).
|
3.9
|
Certificate of Formation of Martin Operating GP LLC (the "Operating General Partner"), dated June 21, 2002 (filed as Exhibit 3.7 to the Partnership's Registration Statement on Form S-1 (Reg. No. 333-91706), filed July 1, 2002, and incorporated herein by reference).
|
3.10
|
Limited Liability Company Agreement of the Operating General Partner, dated June 21, 2002 (filed as Exhibit 3.8 to the Partnership's Registration Statement on Form S-1 (Reg. No. 333-91706), filed July 1, 2002, and incorporated herein by reference).
|
3.11
|
Certificate of Formation of Arcadia Gas Storage, LLC, dated June 26, 2006 (filed as Exhibit 3.11 to the Partnership’s Quarterly Report on Form 10-Q (SEC File No. 000-50056), filed October 29, 2014, and incorporated herein by reference).
|
3.12
|
Company Agreement of Arcadia Gas Storage, LLC, dated December 27, 2006 (filed as Exhibit 3.12 to the Partnership’s Quarterly Report on Form 10-Q (SEC File No. 000-50056), filed October 29, 2014, and incorporated herein by reference).
|
3.13
|
Amendment to the Company Agreement of Arcadia Gas Storage, LLC, dated September 5, 2014 (filed as Exhibit 3.13 to the Partnership’s Quarterly Report on Form 10-Q (SEC File No. 000-50056), filed October 29, 2014, and incorporated herein by reference).
|
3.14
|
Certificate of Formation of Cadeville Gas Storage LLC, dated May 23, 2008 (filed as Exhibit 3.14 to the Partnership’s Quarterly Report on Form 10-Q (SEC File No. 000-50056), filed October 29, 2014, and incorporated herein by reference).
|
3.15
|
Limited Liability Company Agreement of Cadeville Gas Storage LLC, dated May 23, 2008 (filed as Exhibit 3.15 to the Partnership’s Quarterly Report on Form 10-Q (SEC File No. 000-50056), filed October 29, 2014, and incorporated herein by reference).
|
3.16
|
First Amendment to the Limited Liability Company Agreement of Cadeville Gas Storage LLC, dated April 16, 2012 (filed as Exhibit 3.16 to the Partnership’s Quarterly Report on Form 10-Q (SEC File No. 000-50056), filed October 29, 2014, and incorporated herein by reference).
|
3.17
|
Second Amendment to the Limited Liability Company Agreement of Cadeville Gas Storage LLC, dated September 5, 2014 (filed as Exhibit 3.17 to the Partnership’s Quarterly Report on Form 10-Q (SEC File No. 000-50056), filed October 29, 2014, and incorporated herein by reference).
|
3.18
|
Certificate of Formation of Monroe Gas Storage Company, LLC, dated June 14, 2006 (filed as Exhibit 3.18 to the Partnership’s Quarterly Report on Form 10-Q (SEC File No. 000-50056), filed October 29, 2014, and incorporated herein by reference).
|
3.19
|
Amended and Restated Limited Liability Company Agreement of Monroe Gas Storage Company, LLC, dated May 31, 2011 (filed as Exhibit 3.19 to the Partnership’s Quarterly Report on Form 10-Q (SEC File No. 000-50056), filed October 29, 2014, and incorporated herein by reference).
|
3.20
|
First Amendment to the Amended and Restated Limited Liability Company Agreement of Monroe Gas Storage Company, LLC, dated September 5, 2014 (filed as Exhibit 3.20 to the Partnership’s Quarterly Report on Form 10-Q (SEC File No. 000-50056), filed October 29, 2014, and incorporated herein by reference).
|
3.21
|
Certificate of Formation of Perryville Gas Storage LLC, dated May 23, 2008.(filed as Exhibit 3.21 to the Partnership’s Quarterly Report on Form 10-Q (SEC File No. 000-50056), filed October 29, 2014, and incorporated herein by reference).
|
3.22
|
Limited Liability Company Agreement of Perryville Gas Storage LLC, dated June 16, 2008 (filed as Exhibit 3.22 to the Partnership’s Quarterly Report on Form 10-Q (SEC File No. 000-50056), filed October 29, 2014, and incorporated herein by reference).
|
3.23
|
First Amendment to the Limited Liability Company Agreement of Perryville Gas Storage LLC, dated April 14, 2010 (filed as Exhibit 3.23 to the Partnership’s Quarterly Report on Form 10-Q (SEC File No. 000-50056), filed October 29, 2014, and incorporated herein by reference).
|
3.24
|
Second Amendment to the Limited Liability Company Agreement of Perryville Gas Storage LLC, dated September 5, 2014 (filed as Exhibit 3.24 to the Partnership’s Quarterly Report on Form 10-Q (SEC File No. 000-50056), filed October 29, 2014, and incorporated herein by reference).
|
3.25
|
Certificate of Formation of Cardinal Gas Storage Partners LLC, dated April 2, 2008 (filed as Exhibit 3.25 to the Partnership’s Quarterly Report on Form 10-Q (SEC File No. 000-50056), filed October 29, 2014, and incorporated herein by reference).
|
3.26
|
Third Amended and Restated Limited Liability Company Agreement of Cardinal Gas Storage Partners LLC (F/K/A Redbird Gas Storage LLC) dated October 27, 2014 (filed as Exhibit 3.26 to the Partnership’s Quarterly Report on Form 10-Q (SEC File No. 000-50056), filed October 29, 2014, and incorporated herein by reference).
|
3.27
|
Certificate of Formation of Redbird Gas Storage LLC, dated May 24, 2011 (filed as Exhibit 3.27 to the Partnership's Annual Report on Form 10-K (SEC File No. 000-50056), filed March 2, 2015, and incorporation herein by reference).
|
3.28
|
Second Amended and Restated LLC Agreement of Redbird Gas Storage LLC, dated as of October 2, 2012. (filed as Exhibit 10.6 to the Partnership's Quarterly Report on Form 10-Q (SEC File No. 000-50056), filed November 5, 2012, and incorporated herein by reference).
|
3.29
|
Certificate of Merger of Cardinal Gas Storage Partners LLC with and into Redbird Gas Storage LLC, dated October 27, 2014 (filed as Exhibit 3.27 to the Partnership’s Quarterly Report on Form 10-Q (SEC File No. 000-50056), filed October 29, 2014, and incorporated herein by reference).
|
4.1
|
Specimen Unit Certificate for Common Units (contained in Exhibit 3.2).
|
4.2
|
Specimen Unit Certificate for Subordinated Units (filed as Exhibit 4.2 to Amendment No. 4 to the Partnership’s Registration Statement on Form S-1 (SEC File No. 333-91706), filed October 25, 2002, and incorporated herein by reference).
|
4.3
|
Indenture (including form of 7.250% Senior Notes due 2021), dated February 11, 2013, by and among the Partnership, Martin Midstream Finance Corp., the Guarantors named therein and Wells Fargo Bank, National Association, as trustee (filed as Exhibit 4.1 to the Partnership's Current Report on Form 8-K (SEC File No. 000-50056), filed February 12, 2013, and incorporated herein by reference).
|
4.4
|
Second Supplemental Indenture, to the Indenture dated February 11, 2013 dated September 30, 2014, by and among the Partnership, Martin Midstream Finance Corp., the Guarantors named therein and Wells Fargo Bank National Association, as trustee (filed as Exhibit 4.4 to the Partnership’s Quarterly Report on Form 10-Q (SEC File No. 000-50056), filed October 29, 2014 and incorporated herein by reference).
|
4.5
|
Third Supplemental Indenture, to the Indenture dated February 11, 2013 dated October 27, 2014, by and among the Partnership, Martin Midstream Finance Corp., the Guarantors named therein and Wells Fargo Bank National Association, as trustee (filed as Exhibit 4.5 to the Partnership’s Quarterly Report on Form 10-Q (SEC File No. 000-50056), filed October 29, 2014 and incorporated herein by reference).
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10.1
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Third Amended and Restated Credit Agreement, dated March 28, 2013, among the Partnership, the Operating Partnership, Royal Bank of Canada and the other Lenders set forth therein (filed as Exhibit 10.1 to the Partnership's Current Report on Form 8-K (SEC File No. 000-50056), filed April 3, 2013 and incorporated herein by reference).
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10.2
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First Amendment to Third Amended and Restated Credit Agreement, dated as of July 12, 2013, among the Partnership, the Operating Partnership, Royal Bank of Canada and the other Lenders as set forth therein (filed as Exhibit 10.2 to the Partnership’s Quarterly Report on Form 10-Q (SEC File No. 000-50056), filed May 5, 2014 and incorporated herein by reference).
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Martin Midstream Partners L.P
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(Registrant)
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By:
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Martin Midstream GP LLC
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It's General Partner
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Date: February 15, 2017
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By:
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/s/ Ruben S. Martin
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Ruben S. Martin
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President and Chief Executive Officer
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Signature
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Title
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/s/ Ruben S. Martin
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President, Chief Executive Officer and Director of Martin Midstream GP LLC (Principal Executive Officer)
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Ruben S. Martin
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/s/ Robert D. Bondurant
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Executive Vice President, Director, and Chief Financial Officer of Martin Midstream GP LLC (Principal Financial Officer, Principal Accounting Officer)
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Robert D. Bondurant
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/s/ Zachary S. Stanton
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Director of Martin Midstream GP LLC
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Zachary S. Stanton
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/s/ James M. Collingsworth
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Director of Martin Midstream GP LLC
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James M. Collingsworth
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/s/ Sean P. Dolan
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Director of Martin Midstream GP LLC
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Sean P. Dolan
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/s/ Byron R. Kelley
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Director of Martin Midstream GP LLC
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Byron R. Kelley
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/s/ C. Scott Massey
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Director of Martin Midstream GP LLC
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C. Scott Massey
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Date: February 15, 2017
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/s/ Ruben S. Martin
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Ruben S. Martin, President and
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Chief Executive Officer of
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Martin Midstream GP LLC,
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the General Partner of Martin Midstream Partners L.P.
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Date: February 15, 2017
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/s/ Robert D. Bondurant
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Robert D. Bondurant, Executive Vice President and
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Chief Financial Officer of
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Martin Midstream GP LLC,
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the General Partner of Martin Midstream Partners L.P.
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/s/ Ruben S. Martin
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Ruben S. Martin,
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Chief Executive Officer of Martin Midstream GP LLC,
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General Partner of Martin Midstream Partners L.P.
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February 15, 2017
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/s/ Robert D. Bondurant
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Robert D. Bondurant,
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Chief Financial Officer
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of Martin Midstream GP LLC,
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General Partner of Martin Midstream Partners L.P.
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February 15, 2017
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