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Press release from GlobeNewswire (a Nasdaq OMX company)

Martin Midstream Partners Reports 2012 Second Quarter Financial Results and Completes Divestiture of Natural Gas Gathering and Processing Assets

Wednesday, August 01, 2012

Martin Midstream Partners Reports 2012 Second Quarter Financial Results and Completes Divestiture of Natural Gas Gathering and Processing Assets13:00 EDT Wednesday, August 01, 2012KILGORE, Texas, Aug. 1, 2012 (GLOBE NEWSWIRE) -- Martin Midstream Partners L.P. (Nasdaq:MMLP) (the"Partnership") announced today its financial results for the second quarter ended June 30, 2012 and the completion of the sale of its East Texas and Northwest Louisiana gas gathering and processing assets (collectively "Prism Assets") on July 31, 2012 for net cash proceeds of $273.3 million. The Partnership has retrospectively adjusted its prior period consolidated financial statements to comparably classify the amounts related to the net assets and operations and cash flows of the Prism Assets as assets held for sale and discontinued operations, respectively. The Partnership has classified the Prism Assets, including related liabilities as held for sale at June 30, 2012 and December 31, 2011, and has presented the results of operations and cash flows as discontinued operations for the periods ended June 30, 2012 and 2011, respectively. The Partnership reported net income for the second quarter of $7.2 million, or $0.25 per limited partner unit. This compared to net income for the second quarter of 2011 of $8.8 million, or $0.37 per limited partner unit. The Partnership reported net income for the six months ended June 30, 2012 of $17.7 million, or $0.64 per limited partner unit. This compared to net income for the six months ended June 30, 2011 of $16.1 million, or $0.67 per limited partner unit. The Partnership reported income from continuing operations for the second quarter of 2012 of $5.2 million, or $0.18 per limited partner unit. This compared to income from continuing operations for the second quarter of 2011 of $5.7 million, or $0.24 per limited partner unit. The Partnership reported income from discontinued operations for the second quarter of 2012 of $2.0 million, or $0.07 per limited partner unit. This compared to income from discontinued operations for the second quarter of 2011 of $3.0 million, or $0.13 per limited partner unit. Revenues for the second quarter of 2012 were $292.9 million compared to $260.1 million for the second quarter of 2011. The Partnership reported income from continuing operations for the six months ended June 30, 2012 of $14.0 million, or $0.51 per limited partner unit. This compared to the income from continuing operations for the six months ended June 30, 2011 of $10.6 million, or $0.44 per limited partner unit. The Partnership reported income from discontinued operations for the six months ended June 30, 2012 of $3.7 million, or $0.13 per limited partner unit. This compared to income from discontinued operations for the six months ended June 30, 2011 of $5.5 million, or $0.23 per limited partner unit. Revenues for the six months ended June 30, 2012 were $602.3 million compared to $513.0 million for the six months ended June 30, 2011. The Partnership's distributable cash flow for the second quarter of 2012 was $21.7 million. The Partnership's distributable cash flow for the six months ended June 30, 2012 was $44.8 million. Distributable cash flow is a non-GAAP financial measure which is explained in greater detail below under "Use of Non-GAAP Financial Information." The Partnership has also included below a table entitled "Distributable Cash Flow" in order to show the components of this non-GAAP financial measure and its reconciliation to the most comparable GAAP measurement. Included with this press release are the Partnership's consolidated financial statements as of and for the three and six months ended June 30, 2012 and certain prior periods. These financial statements should be read in conjunction with the information contained in the Partnership's Quarterly Report on Form 10-Q, to be filed with the Securities and Exchange Commission on August 6, 2012. Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of Martin Midstream Partners, said, "We are pleased with the Partnership's second quarter 2012. During the quarter we saw the benefits of our organic growth projects coming on line in our Terminalling and Storage segment. Incremental cash flow from our new Corpus Christi crude terminal and Cross Lubricant Processing Facility assisted in generating our 1.12 times distribution coverage ratio. "For the quarter, continued strength in the Sulfur Services fertilizer division exceeded our expectations. Additionally, full utilization in our offshore Marine Transportation segment generated stronger than forecasted cash flow for the Partnership. "Lastly, we are pleased to announce that we have completed our gas gathering and processing divestiture. This sale will significantly enhance our balance sheet and liquidity position. We remain confident that our unit holders will benefit long-term from our ability to reinvest these proceeds at high levels of accretion and enhance future distribution growth." Investors' Conference Call An investors' conference call to review the second quarter results will be held on Thursday, August 2, 2012, at 8:00 a.m. Central Time. The conference call can be accessed by calling (877) 878-2695. An audio replay of the conference call will be available by calling (855) 859-2056 from 11:00 a.m. Central Time on August 2, 2012 through 10:59 p.m. Central Time on August 9, 2012. The access code for the conference call and the audio replay is Conference ID No. 14411949. The audio replay of the conference call will also be archived on Martin Midstream Partners' website at www.martinmidstream.com. Quarterly Cash Distribution The quarterly cash distribution which was announced on July 27, 2012 is payable on August 14, 2012 to common unitholders of record as of the close of business on August 7, 2012. The ex-dividend date for the cash distribution is August 3, 2012 as opposed to the date reported in the original press release on July 27, 2012. This distribution reflects an annualized distribution rate of $3.05 per unit and is based on Martin Midstream Partners' current operating performance and the current general economic, industry, and market conditions affecting it. About Martin Midstream Partners Martin Midstream Partners is a publicly traded limited partnership with a diverse set of operations focused primarily in the United States Gulf Coast region. The Partnership's primary business lines include: terminalling and storage services for petroleum products and by-products; NGL distribution; sulfur and sulfur-based products processing, manufacturing, and distribution; and marine transportation services for petroleum products and by-products. Forward-Looking Statements Statements about Martin Midstream Partners' outlook and all other statements in this release other than historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements and all references to financial estimates rely on a number of assumptions concerning future events and are subject to a number of uncertainties and other factors, many of which are outside its control, which could cause actual results to differ materially from such statements. While MMLP believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in anticipating or predicting certain important factors. A discussion of these factors, including risks and uncertainties, is set forth in the Partnership's annual and quarterly reports filed from time to time with the Securities and Exchange Commission. Martin Midstream Partners disclaims any intention or obligation to revise any forward-looking statements, including financial estimates, whether as a result of new information, future events, or otherwise. Use of Non-GAAP Financial Information The Partnership reports its financial results in accordance with United States generally accepted accounting principles (GAAP). However, from time to time, the Partnership uses certain non-GAAP financial measures such as distributable cash flow because the Partnership's management believes that this measure may provide users of this financial information with meaningful comparisons between current results and prior reported results and a meaningful measure of Partnership's cash available to pay distributions. Distributable cash flow should not be considered an alternative to cash flow from operating activities or any other measure of financial performance in accordance with GAAP. Distributable cash flow is not intended to represent cash flows for the period, nor is it presented as an alternative to income from continuing operations. Furthermore, it should not be seen as a measure of liquidity or a substitute for comparable metrics prepared in accordance with GAAP. This information may constitute non-GAAP financial measures within the meaning of Regulation G adopted by the Securities and Exchange Commission. Accordingly, the Partnership has presented herein, and will present in other information it publishes that contains this non-GAAP financial measure, a reconciliation of this measure to the most directly comparable GAAP financial measure. The Partnership has included below a table entitled "Distributable Cash Flow" in order to show the components of this non-GAAP financial measure and its reconciliation to the most comparable GAAP measure. The Partnership calculates distributable cash flow as follows: (1) net income from continuing operations (as reported in statements of operations); plus depreciation and amortization; plus loss on sale of property, plant and equipment; plus amortization of debt discount and amortization of deferred debt issue costs; less deferred taxes (all as reported in statements of cash flows); less payments of installment notes payable and capital lease obligations expenditures (as described below); plus distribution equivalents from unconsolidated entities (as described below); less Mont Belvieu indemnity escrow payment (as described below); plus debt prepayment premium (as described below); plus equity in losses of unconsolidated entities (as reported in statements of operations); less payments for plant turnaround costs (as reported in statements of cash flows); less maintenance capital expenditures (as reported under the caption "Liquidity and Capital Resources" in the Partnership's Quarterly Report on Form 10-Q to be filed with the SEC on August 6, 2012); plus unit-based compensation (as reported in statements of changes in capital); plus invested cash in unconsolidated entities (as described below); and (2) net income from discontinued operations (as reported in statements of operations); plus depreciation and amortization; plus transaction costs related to the disposition of Prism Assets; less gain on sale of property, plant and equipment; less equity in earnings of unconsolidated entities; (all as reported in Note 4 under the caption "Notes to the Consolidated and Condensed Financial Statements" in the Partnership's Quarterly Report on Form 10-Q to be filed with the SEC on August 6, 2012); less non-cash mark-to-market on derivatives (as reported in statements of cash flows; less maintenance capital expenditures (as reported under the caption "Liquidity and Capital Resources" in the Partnership's Quarterly Report on Form 10-Q to be filed with the SEC on August 6, 2012); plus distribution equivalents from unconsolidated entities and invested cash in unconsolidated entities (both as described below). The Partnership's payments of notes payable and capital lease obligations is calculated as payments of notes payable and capital lease obligations (as reported in the statement of cash flows), less the early extinguishment of notes payable of $6.3 million. During the second quarter of 2012, the Partnership incurred a premium related to the early redemption of $25.0 million of Senior Notes. The Partnership's distribution equivalents from unconsolidated entities from continuing operations is calculated as distributions from unconsolidated entities (as reported in statements of cash flows), plus return of investments from unconsolidated entities (calculated as the amount reported in statements of cash flows less a $2.0 million purchase price adjustment recorded as a return of investment by the Partnership in the statement of cash flows for the period ending June 30, 2012), plus distributions in-kind from unconsolidated entities (as reported in statements of cash flows). The Partnership's distribution equivalents from unconsolidated entities from discontinued operations is calculated as distributions from unconsolidated entities, plus return of investments from unconsolidated entities, plus distributions in-kind from unconsolidated entities (all as reported under the caption "Liquidity and Capital Resources" in the Partnership's Quarterly Report on Form 10-Q to be filed with the SEC on August 6, 2012). For the quarter ended June 30, 2012, the Partnership's distributions from unconsolidated entities, return of investments from unconsolidated entities, and distributions in-kind from equity investments (from both continuing and discontinued operations) were $0.0 million, $1.3 million and $2.5 million, respectively. For the six months ended June 30, 2012, the Partnership's distributions from unconsolidated entities, return of investments from unconsolidated entities, and distributions in-kind from equity investments (from both continuing and discontinued operations) were $0.0 million, $2.6 million and $5.6 million, respectively. The Partnership's invested cash in unconsolidated entities from continuing operations is calculated as distributions from (contributions to) unconsolidated entities for operations (as reported in statements of cash flows), plus expansion capital expenditures in unconsolidated entities (as reported under the caption "Liquidity and Capital Resources" in the Partnership's Annual Report on Form 10-K filed with the SEC on March 5, 2012). The Partnership's invested cash in unconsolidated entities from discontinued operations is calculated as distributions from (contributions to) unconsolidated entities for operations, plus expansion capital expenditures in unconsolidated entities (all as reported under the caption "Liquidity and Capital Resources" in the Partnership's Annual Report on Form 10-K filed with the SEC on March 5, 2012). For the quarter ended June 30, 2012, the Partnership's distributions from (contributions to) unconsolidated entities for operations and expansion capital expenditures in unconsolidated entities were (from both continuing and discontinued operations) ($10.3) million and $10.9 million, respectively. For the six months ended June 30, 2012, the Partnership's distributions from (contributions to) unconsolidated entities for operations and expansion capital expenditures in unconsolidated entities were (from both continuing and discontinued operations) ($18.7) million and $20.3 million, respectively. The Partnership's Mont Belvieu indemnity escrow payment represents the final proceeds from the 2009 sale of certain assets comprising the Mont Belvieu railcar unloading facility. Additional information concerning the Partnership is available on the Partnership's website at www.martinmidstream.com, or Joe McCreery, Vice President - Finance and Head of Investor Relations, Martin Midstream Partners L.P. Phone (903) 988-6425 joe.mccreery@martinmlp.com  MARTIN MIDSTREAM PARTNERS L.P.CONSOLIDATED AND CONDENSED BALANCE SHEETS(Dollars in thousands)        June 30, 2012(Unaudited)December 31, 2011 (Audited)Assets     Cash $ 106 $ 266 Accounts and other receivables, less allowance for doubtful accounts of $3,093 and $3,021, respectively 97,471 126,461 Product exchange receivables 8,129 17,646 Inventories 83,759 77,677 Due from affiliates 17,199 5,968 Fair value of derivatives 41 622 Other current assets 2,074 1,978 Assets held for sale  211,588  212,787 Total current assets  420,367  443,405       Property, plant and equipment, at cost 678,263 632,728 Accumulated depreciation  (234,168)  (215,272) Property, plant and equipment, net  444,095  417,456       Goodwill 8,337 8,337 Investment in unconsolidated entities 76,411 62,948 Debt issuance costs, net 11,603 13,330 Other assets, net  6,043  3,633   $ 966,856 $ 949,109     Liabilities and Partners' Capital     Current installments of long-term debt and capital lease obligations $ 206 $ 1,261 Trade and other accounts payable 109,429 125,970 Product exchange payables 15,779 37,313 Due to affiliates 12,316 18,485 Income taxes payable 839 893 Fair value of derivatives — 362 Other accrued liabilities 9,317 11,022 Liabilities held for sale   508   501 Total current liabilities 148,394 195,807       Long-term debt and capital leases, less current maturities 452,970 458,941 Deferred income taxes  7,336  7,657 Other long-term obligations  1,061  1,088 Total liabilities  609,761  663,493       Partners' capital 357,032 284,990 Accumulated other comprehensive income  63  626 Total partners' capital 357,095  285,616 Commitments and contingencies       $ 966,856 $ 949,109 These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on August 6, 2012.    MARTIN MIDSTREAM PARTNERS L.P.CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS (Unaudited)(Dollars in thousands, except per unit amounts)      Three Months EndedJune 30,Six Months EndedJune 30,  201220112012 2011 Revenues:     Terminalling and storage * $ 21,046 $ 19,327 $ 41,232 $ 37,450 Marine transportation * 20,714 17,376 41,576 36,775 Sulfur services  2,925 2,850 5,851 5,700 Product sales: *         Natural gas services 164,817 127,050 336,928 264,205 Sulfur services  64,168 74,083 135,794 130,991 Terminalling and storage  19,208   19,371  40,881  37,916    248,193  220,504  513,603  433,112 Total revenues  292,878  260,057  602,262  513,037 Costs and expenses:         Cost of products sold: (excluding depreciation and amortization)         Natural gas services *  163,043 125,648 330,242 257,926 Sulfur services * 47,350 59,892 102,310 104,334 Terminalling and storage  17,367  17,395  37,387  33,955    227,760  202,935  469,939  396,215 Expenses:         Operating expenses * 34,442 33,372 71,454 66,322 Selling, general and administrative * 4,603 3,751 9,007 7,477 Depreciation and amortization  9,791  9,928  19,491  19,498 Total costs and expenses 276,596 249,986  569,891  489,512 Other operating income  378  98  373  98 Operating income  16,660  10,169  32,744  23,623 Other income (expense):         Equity in earnings of unconsolidated entities (745) 153 (363) 153 Interest expense (8,265) (4,403) (15,472) (12,805) Debt prepayment premium (2,219) — (2,470) — Other, net   84  44  145  102 Total other (expense)  (11,145)  (4,206)  (18,160)  (12,550) Income from continuing operations before taxes  5,515  5,963  14,584  11,073 Income tax (expense)  (307)  (223)  (572)  (444) Income from continuing operations 5,208  5,740  14,012  10,629 Income from discontinued operations, net of income taxes    1,984    3,030    3,709   5,463 Net income  $ 7,192 $ 8,770 $ 17,721 $ 16,092           *Related Party Transactions Included Above                   Revenues:     Terminalling and storage  $ 14,805  $ 12,897  $ 30,080  $ 25,835 Marine transportation  4,446  6,306  9,303  12,871 Product Sales   1,958   1,768  4,147  5,569 Costs and expenses:         Cost of products sold: (excluding depreciation and amortization)         Natural gas services  7,707  1,961 12,022  4,422 Sulfur services  3,970  4,492  8,401  8,645 Expenses:         Operating expenses 14,392 13,477  28,208  25,265 Selling, general and administrative 2,828  1,965  5,494  3,971  MARTIN MIDSTREAM PARTNERS L.P.CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS(Unaudited)(Dollars and units in thousands, except per unit amounts)      Three Months EndedJune 30,Six Months EndedJune 30,  201220112012 2011 Allocation of net income attributable to:     Limited partner interest:         Continuing operations $ 4,089 $ 4,633 $ 11,644 $ 8,517 Discontinued operations  1,558  2,445  3,082  4,377    5,647  7,078  14,726  12,894 General partner interest:         Continuing operations  1,119  926 2,368  1,746 Discontinued operations  426  489  627  898    1,545  1,415  2,995  2,644 Net income attributable to:         Continuing operations  5,208  5,559 14,012  10,263 Discontinued operations  1,984  2,934  3,709    5,275   $ 7,192 $ 8,493 $ 17,721 $ 15,538 Net income attributable to limited partners:         Basic:         Continuing operations $ 0.18 $ 0.24 $ 0.51 $ 0.44 Discontinued operations  0.07  0.13  0.13  0.23   $ 0.25 $ 0.37 $ 0.64 $ 0.67 Weighted average limited partner units - basic 23,103 19,159 22,839  19,163   Diluted:         Continuing operations $ 0.18 $ 0.24 $ 0.51 $ 0.44 Discontinued operations  0.07  0.13  0.13  0.23   $ 0.25 $ 0.37 $ 0.64 $ 0.67 Weighted average limited partner units - diluted 23,104 19,159 22,842  19,164           These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on August 6, 2012.  MARTIN MIDSTREAM PARTNERS L.P.CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL(Unaudited)(Dollars in thousands)      Partners' Capital    Common Limited Subordinated Limited General PartnerAccumulated Other ComprehensiveIncome    UnitsAmountUnitsAmountAmount(Loss)Total                 Balances – January 1, 2011 17,707,832 $ 250,785  889,444 $ 17,721 $ 4,881 $ 1,419 $ 274,806                 Net income  — 13,448 — — 2,644 — 16,092                 Recognition of beneficial conversion feature — (554) — 554 — — —                 Follow-on public offering 1,874,500 70,330 — — — — 70,330                 General partner contribution — — — — 1,505 — 1,505                 Cash distributions   —  (28,390) —  —  (3,025) — (31,415)                 Excess purchase price over carrying value of acquired assets  —  (19,685) —  — — — (19,685)                 Unit-based compensation  15,350 96 —  — — — 96                 Purchase of treasury units (14,850) (582) — — — — (582)                 Unit-based compensation grant forfeitures (500) — — — — — —                 Adjustment in fair value of derivatives  —  —  —  —  —    (799)    (799)                 Balances – June 30, 2011 19,582,332 $ 285,448 889,444 $ 18,275 $6,005 $ 620 $ 310,348                                 Balances – January 1, 2012 20,471,776 $ 279,562  — $ — $ 5,428 $ 626 $ 285,616                 Net income  — 14,726 —   2,995 — 17,721                 Follow-on public offering 2,645,000 91,361 — — — — 91,361                 General partner contribution — — — — 1,951 — 1,951                 Cash distributions  —  (35,253) —  —  (3,635) — (38,888)                 Unit-based compensation 6,250 118 —  — — — 118                 Purchase of treasury units (6,250) (221) — — — — (221)                 Adjustment in fair value of derivatives  —  —  —  —  —  (563)  (563)                 Balances – June 30, 2012 23,116,776 $ 350,293  — $ — $ 6,739 $ 63 $ 357,095 These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on August 6, 2012.   MARTIN MIDSTREAM PARTNERS L.P.CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS(Unaudited)(Dollars in thousands)     Six Months Ended June 30,  20122011 Cash flows from operating activities:       Net income $ 17,721 $ 16,092   Less: Income from discontinued operations  (3,709)  (5,463)   Net income from continuing operations 14,012 10,629   Adjustments to reconcile net income to net cash provided by operating activities:       Depreciation and amortization 19,491 19,498   Amortization of deferred debt issuance costs 1,931 2,390   Amortization of debt discount 427 175   Deferred taxes (321) (32)   Loss on sale of property, plant and equipment 3 714   Equity in earnings (loss) of unconsolidated entities 363 (153)   Non-cash mark-to-market on derivatives (344) (2,346)   Other  118 96   Change in current assets and liabilities, excluding effects of acquisitions and dispositions:       Accounts and other receivables 28,990 (3,843)   Product exchange receivables 9,517 (7,542)   Inventories  (6,082) (10,344)   Due from affiliates (11,231) (12,685)   Other current assets (96) 1,176   Trade and other accounts payable (16,541) 7,848   Product exchange payables (21,534) 5,257   Due to affiliates  (6,169) 10,270   Income taxes payable (54) (210)   Other accrued liabilities (1,705) (365)   Change in other non-current assets and liabilities  (574)  (92)   Net cash provided by continuing operating activities 10,201 20,441   Net cash provided by discontinued operating activities  6,918  9,634   Net cash provided by operating activities  17,119  30,075           Cash flows from investing activities:       Payments for property, plant and equipment (45,616) (29,473)   Acquisitions — (16,815)   Payments for plant turnaround costs (2,403) (2,044)   Proceeds from sale of property, plant and equipment 23 —   Investment in unconsolidated subsidiaries (775) (59,319)   Return of investments from unconsolidated entities 4,297 —   Distributions from (contributions to) unconsolidated entities for operations   (17,348)   —   Net cash used in continuing investing activities (61,822) (107,651)   Net cash used in discontinued investing activities  (2,003)  (5,923)   Net cash used in investing activities  (63,825)  (113,574)   Cash flows from financing activities:       Payments of long-term debt (217,000) (301,500)   Payments of notes payable and capital lease obligations (6,453) (543)   Proceeds from long-term debt 216,000 357,500   Net proceeds from follow on offering 91,361 70,330   General partner contribution 1,951 1,505   Treasury units purchased (221) (582)   Payment of debt issuance costs (204) (3,424)   Excess purchase price over carrying value of acquired assets — (19,685)   Cash distributions paid  (38,888)  (31,415)   Net cash provided by financing activities  46,546  72,186   Net decrease in cash (160) (11,313)   Cash at beginning of period  266  11,380   Cash at end of period $ 106 $ 67   These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in the Partnership's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on August 6, 2012.  MARTIN MIDSTREAM PARTNERS L.PSEGMENT OPERATING INCOMEUnaudited  Terminalling and Storage SegmentThree Months Ended June 30,  20122011  (In thousands) Revenues:     Services $ 22,222 $ 20,375 Products  19,208  19,391 Total revenues 41,430 39,766       Cost of products sold 17,890 18,290 Operating expenses 13,922 12,939 Selling, general and administrative expenses 51 92 Depreciation and amortization  4,944  4,745    4,623  3,700 Other operating income (loss)  375  (577) Operating income $ 4,998 $ 3,123  Natural Gas Services SegmentThree Months Ended June 30,  20122011  (In thousands) Revenues $ 164,817 $ 127,050 Cost of products sold 163,427 125,891 Operating expenses 804 776 Selling, general and administrative expenses 859 522 Depreciation and amortization  144  144    (417)  (283) Other operating income  —  — Operating loss $ (417) $ (283)       NGLs Volumes (Bbls)  2,436  1,547       Equity in earnings (loss) of unconsolidated entities $ (745) $ 153 The Natural Gas Services segment information shown above excludes the discontinued operations of the Prism Assets for both periods.  MARTIN MIDSTREAM PARTNERS L.P.SEGMENT OPERATING INCOMEUnaudited    Sulfur Services SegmentThree Months Ended June 30,  20122011 Revenues:   Services $ 2,925 $ 2,850 Products  64,168  74,083 Total revenues 67,093  76,933       Cost of products sold 47,440 59,983 Operating expenses  4,614  4,966 Selling, general and administrative expenses 982 857 Depreciation and amortization   1,782   1,700   12,275 9,427 Other operating income 3      675  Operating income $ 12,278 $ 10,102       Sulfur (long tons) 328.0 339.6 Fertilizer (long tons)   83.6   69.4 Sulfur Services Volumes (long tons)   411.6    409.0   Marine Transportation SegmentThree Months Ended June 30,  20122011  (In thousands) Revenues $ 21,466 $ 19,351 Operating expenses  16,033 16,505 Selling, general and administrative expenses  362 518 Depreciation and amortization  2,921  3,339    2,150  (1,011) Other operating income  —  — Operating income $ 2,150 $ (1,011)        MARTIN MIDSTREAM PARTNERS L.P.SEGMENT OPERATING INCOMEUnaudited   Terminalling and Storage SegmentSix Months Ended June 30,  20122011  (In thousands) Revenues:     Services $ 43,583 $ 39,476 Products  40,881  37,936 Total revenues 84,464 77,412       Cost of products sold  38,430  35,780 Operating expenses  27,967  25,254 Selling, general and administrative expenses 61 176 Depreciation and amortization  9,667   9,285    8,339   6,917 Other operating income (loss)   395  (577) Operating income $ 8,734 $ 6,340  Natural Gas Services SegmentSix Months Ended June 30,  20122011  (In thousands) Revenues $ 336,928 $ 264,205 Cost of products sold 331,003 258,374 Operating expenses 1,756 1,487 Selling, general and administrative expenses 1,456 1,071 Depreciation and amortization  287    287    2,426  2,986 Other operating income  —    — Operating income $ 2,426 $ 2,986       NGLs Volumes (Bbls) 4,733 3,376       Equity in Earnings of Unconsolidated Entities $ (363) $ 153 The Natural Gas Services segment information shown above excludes the discontinued operations of the Prism Assets for both periods.  MARTIN MIDSTREAM PARTNERS L.P.SEGMENT OPERATING INCOMEUnaudited   Sulfur Services SegmentSix Months Ended June 30,  20122011 Revenues:   Services $ 5,851 $ 5,700 Products   135,794   130,991 Total revenues 141,645 136,691       Cost of products sold 102,491 104,515 Operating expenses 8,807 9,657 Selling, general and administrative expenses 1,937 1,743 Depreciation and amortization    3,575    3,322   24,835 17,454 Other operating income    (22)      675 Operating income $ 24,813  $ 18,129       Sulfur (long tons) 636.2 688.5 Fertilizer (long tons)  177.5  147.0 Sulfur Services Volumes (long tons)  813.7  835.5  Marine Transportation SegmentSix Months Ended June 30,  20122011  (In thousands) Revenues $ 43,033 $ 40,790 Operating expenses  34,747 33,531 Selling, general and administrative expenses  786 907 Depreciation and amortization    5,962  6,604     1,538  (252) Other operating income (loss)   —   — Operating income (loss) $ 1,538 $ (252)  MARTIN MIDSTREAM PARTNERS L.P.DISTRIBUTABLE CASH FLOWUnaudited Non-GAAP Financial Measure(Dollars in thousands)        Three months EndedJune 30,2012Six monthsEndedJune 30, 2012       Net income $ 7,192 $ 17,721 Less: Income from discontinued operations  (1,984)  (3,709) Net income from continuing operations 5,208 14,012       Adjustments to reconcile net income to distributable cash flow:           Continuing operations:     Depreciation and amortization 9,791 19,491 Loss on sale of property, plant and equipment 7 3 Amortization of debt discount 340 427 Amortization of deferred debt issuance costs 1,241 1,931 Deferred taxes (151) (321) Payments of installment notes payable and capital lease obligations (46) (176) Distribution equivalents from unconsolidated entities1 1,206 2,278 Mont Belvieu indemnity escrow payment   (375) (375) Debt prepayment premium   2,219 2,470 Equity in loss of unconsolidated entities   745 363 Payments for plant turnaround costs (2,098) (2,403) Maintenance capital expenditures (1,083) (2,265) Unit-based compensation  62   118 Invested cash in unconsolidated entities from discontinued operations3   —   — Distributable cash flow from continuing operations 17,066 35,553       Discontinued operations:     Income from discontinued operations 1,984 3,709 Depreciation and amortization from discontinued operations 926 2,320 Transaction costs related to the disposition of Prism Assets 841 841 Gain on sale of property, plant, and equipment of discontinued operations (10) (10) Equity in earnings of unconsolidated entities of discontinued operations (1,769) (4,234) Non-cash mark-to-market on derivatives (354) (344) Maintenance capital expenditures from discontinued operations (201) (549) Distribution equivalents from unconsolidated entities from discontinued operations2 2,670 5,920 Invested cash in unconsolidated entities from discontinued operations4  581  1,599 Distributable cash flow from discontinued operations  4,668  9,252       Distributable cash flow $ 21,734 $ 44,805     Three months Ended June 30, 2012 Six months Ended June 30, 20121  Distribution equivalents from unconsolidated entities from continuing operations:     Distributions from unconsolidated entities $ — $ — Return of investments from unconsolidated entities 1,206 2,278 Distributions in-kind from equity investments   —   — Distributions equivalents from unconsolidated entities $ 1,206 $ 2,278      2 Distribution equivalents from unconsolidated entities from discontinued operations:       Distributions from unconsolidated entities $ — $ — Return of investments from unconsolidated entities 135 295 Distributions in-kind from equity investments  2,535  5,625 Distributions equivalents from unconsolidated entities $ 2,670 $ 5,920      3 Invested cash in unconsolidated entities from continuing operations:     Distributions from (contributions to) unconsolidated entities for operations $ (9,691) $ (17,348) Expansion capital expenditures in unconsolidated entities  9,691  17,348 Invested cash in unconsolidated entities   $  — $  —     4 Invested cash in unconsolidated entities from discontinued operations:     Distributions from (contributions to) unconsolidated entities for operations $ (586) $ (1,335) Expansion capital expenditures in unconsolidated entities  1,167  2,934 Invested cash in unconsolidated entities   $ 581 $ 1,599