Business Context and Reporting Period
This Form 8-K Current Report is filed by Martin Midstream Partners L.P. on August 21, 2012. The report primarily addresses the completion of a significant asset sale and the subsequent reclassification of financial results for the year ended December 31, 2011.
Key Financial Metrics and Transactions
- Asset Sale Proceeds: The Partnership received net cash proceeds of $273.3 million (subject to purchase price adjustments) from the sale of its East Texas and Northwest Louisiana natural gas gathering and processing assets (Prism Gas Systems I, L.P. and related assets) to CenterPoint Energy Field Services, LLC.
- Pending Sale: An agreement was reached to sell the Matagorda Offshore Gathering System and Panther Interstate Pipeline Energy LLC for $2.0 million in cash, expected to close in Q3 2012.
- Accounting Treatment: Results of operations for the sold assets (collectively "Prism Assets") are now classified as income from discontinued operations.
- Financial Statements: The filing supersedes the Selected Financial Data, MD&A, and Financial Statements in the December 31, 2011 Form 10-K to reflect these discontinued operations.
Material Changes Versus Prior Period
The primary material change is the retroactive reclassification of the Prism Assets' results from continuing operations to discontinued operations in the historical financial statements for the year ended December 31, 2011. This filing revises the original 2011 Form 10-K to ensure future references to historical data align with the new presentation. No other updates to the 2011 Form 10-K regarding events after its original filing are included in this report.
Guidance, Outlook, and Risks
- Outlook: The sale of the Matagorda and PIPE assets is expected to be completed in the third quarter of 2012.
- Management Commentary: The filing emphasizes that the revised financial data (Exhibits 99.1, 99.2, and 99.3) should be used for all future references to the Partnership's historical financial statements and MD&A for the period ended December 31, 2011.
- Risks/Contingencies: The $273.3 million proceeds from the Prism Gas sale are subject to certain purchase price adjustments.
Investor Verification Checklist
- Verify the final purchase price adjustments applied to the $273.3 million Prism Gas sale proceeds.
- Confirm the closing date and final consideration for the Matagorda and PIPE asset sale ($2.0 million).
- Review Exhibits 99.1, 99.2, and 99.3 attached to this filing for the revised 2011 financial statements and MD&A reflecting discontinued operations.
- Assess the impact of the discontinued operations classification on the Partnership's reported historical earnings and cash flows.