Good morning, ladies and gentlemen, and welcome to the Martin Midstream Partners LP fourth quarter 2017 earnings conference call webcast. At this time all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Bob Bondurant. Please go ahead.

Thank you, Emily. To let everyone know who's on the call today, we have Ruben Martin, our CEO; Joe McCreery, our VP of Finance and Head of Investor Relations; and Scott Southard, VP of Commercial Development. Before we get started with the financial and operational results for the fourth quarter and the year, I need to make this disclaimer. Certain statements made during this conference call may be forward-looking statements relating to financial forecasts, future performance and our ability to make distributions to unitholders. We report our financial results in accordance with generally accepted accounting principles and use certain non-GAAP financial measures within the meanings of SEC Regulation G, such as distributable cash flow; and earnings before interest, tax, depreciation, amortization, or EBITDA; and we also use adjusted EBITDA. We use these measures, because we believe it provides users of our financial information with meaningful comparisons between current results and prior reported results, and it can be a meaningful measure of the partnership's cash available to pay distributions. We also included in our press release issued yesterday, a reconciliation of EBITDA, adjusted EBITDA, distributable cash flow and quarterly adjusted EBITDA guidance to the most comparable GAAP financial measure. Our earnings press release is available at our website, martinmidstream.com. Now, I would like to discuss our fourth quarter performance compared to the third quarter, and also discuss our fourth quarter and annual performance compared to our guidance. For the fourth quarter, we had adjusted EBITDA of $49.3 million compared to $27.1 million in the third quarter. Our distributable cash flow for the fourth quarter was $31.2 million, which provided a quarterly distribution coverage of 1.59 times, for the year our distributable cash flow was $91.1 million, which provide an annual distribution coverage ratio of 1.18 times. For the fourth quarter our…

Thanks Bob. I'll start with the normal walk through of the debt components of our balance sheet in our bank ratios, then provide a quick review of our fourth quarter and full year capital spending and finally some insight into our West Texas LPG tariff case currently in front of the Texas Railroad Commission. On December 31st, the partnership's balance sheet reflected total long-term funded debt of approximately $813 million. Our balance sheet funded debt is shown in our filings before unamortized debt issuance and unamortized issuance premiums, as actual funded debt outstanding was $819 million. Reconciling this amount at quarter end, our revolving credit facility balance was $445 million, and the notional amount of our senior unsecured notes was $374 million. Thus the partnership's total available liquidity under our revolving credit facility on December 31st, was $219 million based on our $664 million revolving credit facility. For the quarter ended and the year ended December 31, 2017, our bank compliant leverage ratios, defined as senior secured indebtedness to adjusted EBITDA and total indebtedness to adjusted EBITDA were 2.78 times and 5.11 times respectively. Our bank compliant interest coverage ratio as defined by adjusted EBITDA to consolidated interest expense was $3.47 times. Looking at the balance sheet, total debt to total capitalization on December 31, was 73.2% essentially flat when compared to the third quarter. In all, at year end, the partnership was in full compliance with all banking covenants, financial or otherwise. Now, I'd like to discuss our capital spending during the fourth quarter and full year 2017 starting first with our growth capital expenditures. Growth capital spending was higher than guided during the fourth quarter as we spent approximately $6.9 million. Approximately $2.8 million was attributed to the Martin Marine Transportation segment, were we commissioned a new push…

[Operator Instructions] And our first question comes from the line of Matt Schmid from Stephens. Your line is open.

Hey. Good morning guys.

Good morning, Matt.

Good morning.

Good. Well Bob, touched on it a little bit, but clearly the butane logistics business has been strong and maybe could you just provide a little additional color about, just how the business and spot the man has been trending in the first quarter of this year?

Yes, it's been a little bit behind due to some weather, some disruptions in the high storm and the things that we had come through with some weather. So that kind of got us a little bit behind, but we still expect first quarter to be on budget.

Okay, great. And…

I'll just add that it's becoming extremely difficult for transportation and things like that in that, so our transportation network and everything that we have there, concern in trucks has really helped us relative to a lot of other people in the business. So, it continues to be a strong good business.

Okay, great. And, just moving West Texas LPG, I mean obviously the tariff case is ongoing. But, maybe if you could provide a little color about the lower fourth quarter distribution and just it being down sequentially?

Yes this is Bob, I'll take that question. It was the West Texas LPG distribution committing for a lack of a better word, had some big property tax build that came in January, the business cash flow like normal, but they said we need to hold some cash and reserve to pay property taxes. So that was, that was why the holdback happened. And we did a reasonable forecast if you remember, we had forecasted two things we did not forecast for that holdback number one, and number two was we have forecasted beginning in the third quarter 2017 increased rates as we brought the resolution of the issue in front of the Railroad Commission what have been, would have occurred. Thanks we'll get, should get back to normal again kind of a preview you will see, a preview next week of our guidance, well we're talking about this and we are not in our guidance going to give any increase in, our resolution of the rate case, I guess we've been disappointed and that how it's evolved over time. So, we're not going to do that. So, when we give guidance next week, I just want you to know that we factor that into the equation or did not factor any increases.

Okay, well that's a helpful color. Thank you very much.

You bet.

Our next question comes from the line of Tom Murphy from Raymond James. Your line is open.

Hi thanks for taking my call and congrats on finishing the year pretty well. Just on the West Texas LPG expansion, I was curious if you had any color to add on financing assumptions and the timing all through, are consistent with what you guys had last quarter?

Yes Tom thanks. This is Joe, I'll take the question. From a perspective a couple of things one, we are certainly moving forward with the project as we are rated out last quarter, we certainly like the expansion and the opportunity it presents. And so from that perspective, what we're doing is working with our senior vendors on a plan to effectively assisting the funding of that and we'll lay that out next week on our guidance call. But, as I mentioned with respect to our $40 million of capital that's required there, it's pretty frontend loaded about 25 to that 40 is coming due here, we'll spend in the first two quarters of calendar 2018. So, we're working with the banks on that and we will provide that resolution next week.

Okay, thank you very much. That's all from me.

Our next question comes from the line of Mike Gyure from Janney. Your line is open.

Yes, can you guys talk a little bit about the Terminalling and Storage segment and kind of the hurricane costs and if there is anything else to do there, maybe even on the recovery side of things, how that's working out?

Yes, so big picture of the impact over the course of Q3 and Q4 was approximately about between repair and maintenance cost, maintenance capital expenditures that hit our DCF line and then also loss revenue primarily in the sulfur business, because refineries are down, we couldn't get volumes in the third quarter, really the month of September. The total impact was about $5.5 million spread over those two quarters and then probably about $200,000 or $300,000 left to spend I think in Q1.

Okay great. And then maybe can you talk a little bit about, may be your expectations, may be this is for next week about, kind of the upcoming asphalt season or what you are seeing there at this point?

Yes, we'll discuss, but it feels much better than it did a year ago, I'll just leave it at there.

Yes, and this is Joe and we'll have, Mike we'll have the benefit of course of Hondo for the fourth season as I mentioned in the prepared remarks, truly benefiting from the full winter filled season now and then of course the application season in the spring and summer of next, of this year. So, we're in pretty good shape, we'll talk about that next week.

Okay great, thanks very much guys.

Our next question comes from the line of T.J. Schultz from RBC Capital Markets. Your line is open.

Hey guys, good morning. Just on the rate case, what so, where is the next Railroad Commission meeting and if you could just expand a little bit on what the two members exactly wanted to study after the January, I guess January 23rd meeting that causes latest delay and kind of what you are expecting?

This is Scott Southard. January 23rd, when the case was remanded back to the ALJ, what that we were looking for was just additional market information to really prove up the competition for the market. The next meeting is set for February 27th, we're not sure if we get on that agenda or not in the meantime, West Texas as filed a motion for reconsideration and ask for some interim rate relief that is yet to be considered by the Railroad Commission. We're waiting for some feedback on that as well.

Okay. So, when you know if you are on that February 27th docket?

It will be best 7 days before the meeting. So in the next week or so.

In the next week or so. Okay.

And T.J., I'll just add, we're not anticipating any resolution here any time soon as Bob mentioned, kind of sneak peak on the guidance, there is no resolution factored into the financials for 2018. So from our perspective we're still a ways away here.

Okay understood. And then can you just remind me just moving on Cardinal, you've got some contracts that come up just remind me kind of what's due to come up to re-contract this year and your expectation on cash flow impact?

Yes again we'll get into further detail next week on our guidance, but we do have contracts rolling over a periwheel, I think a total of approximately 8 piece I believe and those obviously will be contracted at lower rates and what exist today. So there will be a reduced cash flow impact beginning in July of 2018 and we'll lay that out and you will be able to see those numbers in our quarterly guidance next week.

Okay sounds good. We'll talk next week, thank you.

You bet.

Our next question comes from the line of Kyle May from Capital One Securities. Your line is open.

Hey good morning everybody.

Good morning.

One quick one on the West Texas LPG distribution, can you talk about any tax impacts from that on the fourth quarter?

Tax, as when you are saying that, you are saying because the tax law change?

You're right.

There were no impacts from that, no.

Okay and then what about going forward?

Yes it's a pass through entity, so we don't expect there will be any impact from tax law changes at West Texas LPG.

Okay great. And one quick one, you were talking earlier about funding the West Texas LPG with or working with lenders to fund that, can you maybe expand on maybe consideration of what you are looking at is that, covenant waivers or something else of that nature?

Yes, I think we'll handle a couple of structural elements within our revolving credit facility Kyle. This is Joe and that's certainly one of the things kind of giving us some lead way within the revolving credit facility, almost treating it like an acquisition as you may be aware, we have a springing covenant because that is receptive to acquisition activities from M&A. And so, we're going to get kind of favorable treatment from this construction project and process almost treating as different acquisition. And then another structure element which will describe with respect to the revolving credit facility next week that it will also help in the build out.

Okay great. And last one if I can squeeze in, can you maybe walk through the assets that are listed on the balance sheet is still for sale?

Yes, one is that our refinery and state-of-the-art it's a hydrotreater that is for sale and in the balance are some older Marine assets, Kyle, I don't know the exact number, but it's a handful of barges in total. Have not created any revenue, none of these assets have created revenue in the last few years. So, that's what those are.

And I'll just make a point on the Hydrotreater in Arkansas, it was never we had purchased it out of a used equipment type of business and planned on putting it in and we found a better way to increase our hydrogen production up there that we didn't need it, so it's going to asset for sell its never been used and it's the same thing with marine equipment there are not generating any revenue. There actually having expense with keep them laid up, so that's one of the reasons we've got them on the market.

And Kyle, this is Joe. Our 10-K will be filed tomorrow after market close, if you got a weekend reading and events of the guidance call, but you get little more clarity there, so just look for that tomorrow.

Got it, okay thanks a lot guys. I appreciate it.

You bet.

Our next question comes from the line of Lynn Shen from HITE. Your line is open.

Hey good morning, thanks for taking my call. I just want to ask that recently there are a lot of discussions of IMO 2020, means that there refinery review be required to produce less sulfur products. I'm just wondering should this is going to be good for your sulfur business or kind of a negative there business?

It doesn't make a change, we have already saw that problem, we have a minimal amount of sulfur in our crude oil and what we do have, we have enough hydrogen treated. We make an ultralow sulfur diesel that is acceptable into the marketplace and our lubricants are as all of those particular test. And so, as far as the impact it said the refinery, but as far as the impact on everything else we expect the sulfur volumes to stay about the same. We don't look for a big increase due to that, because lot of them solved their problems already. But we didn't see a big downfall when we expected the refineries a few years ago to go to the sweeter crudes, so we're seeing approximately the same amount of sulfur its up slightly probably for more it had been in the past, but we don't expect much change.

Great, thank you.

And our last question comes from the line of Jordan Stevens from Caspian. Your line is open.

Hi guys, just wanted to and, what is, just maybe something for next week with guidance, but, obviously the call price and your bonds stepped down today. I just wanted to understand if you were still thinking of doing anything on kind of that part of the capital structure, as you are thinking about West Texas LPG in the rest of the year?

Jordan, this is Joe, I'll take the question. I wish we could asked two weeks ago, I think we would had a much easier answer for you. Obviously the markets have not been cooperating with respect to, a back-up in yields vis-à-vis where we think we could issue something on an accretive DCF nature. And so, we're very, very keen on watching we understand that the notes are cargo today 101 spot 8 and so from our perspective we would like to do something, if we could make it accretive on a DCF basis as I said. But, we're watching it very, very closely and continue to do so. But, we'll try a little more on insight on that next week, but really kind of market providing I think it's reasonable to assume that we would do something. But again I think we've kind of backed up maybe 40 to 50 basis points during the last kind of 10 days that has made it a little more difficult for us.

Got it. And that makes perfect sense.

And there are no further questions at this time. I would like to turn the call back over to Ruben Martin, for closing remarks.

I want to thank everybody for interest in our company and we appreciate the questions and everybody dialing in. We enjoyed a good strong fourth quarter and good coverages for the fourth quarter which gave us good coverages for the year. Next week, we'll give the detailed cash flow guidance for the next year. And with that, I want to thank everybody for again dialing in.

This concludes today's conference call. You may now disconnect.