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Item 1A. Risk Factors

2021-03-03 compared with 2020-02-14 · 182 added, 113 removed, 471 unchanged (39% of the section changed)

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In this case, we might not be able to pay distributions on our common units, the trading price of our common units could decline and unitholders could lose all or part of their investment.

These risk factors should be read in conjunction with the other detailed information concerning us set forth herein.

These risk factors should be read in conjunction with the other detailed information concerning us set forth herein, including our accompanying financial statements and notes and “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” included herein.

Risk Factor Summary

The following is a summary of risk factors that could adversely impact our business, financial condition, results of operations or our ability to make quarterly distributions to our unitholders:

1 The reduction in demand for refined products resulting from measures taken to prevent the spread of the COVID-19 virus has and is likely to continue to adversely affect our results of operations, cash flows and financial condition for an indeterminate amount of time.

2 We may not have sufficient cash after the establishment of cash reserves and payment of our general partner's expenses to enable us to pay a distribution each quarter.

3 Restrictions in our debt instruments could prevent us from making distributions to our unitholders or limit our ability to pursue opportunities that would increase our distributions to unitholders.

4 Demand for a portion of our terminalling and storage services is substantially dependent on the level of offshore oil and gas exploration, development and production activity.

5 We have a significant amount of indebtedness.

Debt we owe or incur in the future could limit our flexibility to obtain financing, to pursue other business opportunities, and to pay distributions to our unitholders.

6 We have significant capital needs, and our ability to access the capital and credit markets to raise capital on favorable terms is limited by our debt level, industry conditions, and financial covenants in our debt instruments.

7 Fluctuations in interest rates could materially affect our financial results, and the phase-out of LIBOR may adversely affect interest expense related to our floating rate debt.

8 We are exposed to counterparty risk in our credit facility and related interest rate protection agreements and we may not be able to access funds under our credit facility if there is a default.

9 We are exposed to counterparty credit risk.

Nonpayment and nonperformance by our customers, suppliers or vendors could reduce our revenues, increase our expenses and otherwise have a negative impact on our ability to conduct our business, operating results, cash flows and ability to make distributions to our unitholders.

10 Our future acquisitions may not be successful, may substantially increase our indebtedness and contingent liabilities and may create integration difficulties.

11 Our and our customers’ operations are subject to a series of risks arising out of the threat of climate change that could result in increased operating costs and reduced demand for our services.

12 Subsidence and coastal erosion could damage our facilities along the U.S.

Gulf Coast and offshore and the facilities of our customers, which could adversely affect our operations and financial condition.

13 Adverse weather conditions, including droughts, hurricanes, tropical storms and other severe weather, could reduce our results of operations and ability to make distributions to our unitholders.

14 If we incur material liabilities that are not fully covered by insurance, such as liabilities resulting from accidents on rivers or at sea, spills, fires or explosions, our results of operations and ability to make distributions to our unitholders could be adversely affected.

15 The price volatility of petroleum products and by-products could reduce our liquidity and results of operations and ability to make distributions to our unitholders.

16 Increasing energy prices could adversely affect our results of operations.

17 Decreasing energy prices could adversely affect our results of operations.

18 Our NGL and sulfur-based fertilizer products are subject to seasonal demand and could cause our revenues to vary.

19 The highly competitive nature of our industry could adversely affect our results of operations and ability to make distributions to our unitholders.

20 Our business is subject to compliance with environmental laws and regulations that could expose us to significant costs and liabilities and adversely affect our results of operations and ability to make distributions to our unitholders.

21 The loss or insufficient attention of key personnel could negatively impact our results of operations and ability to make distributions to our unitholders.

22 Our loss of significant commercial relationships with Martin Resource Management Corporation could adversely impact our results of operations and ability to make distributions to our unitholders.

23 Our business could be adversely affected if operations at our transportation, terminalling and storage and distribution facilities experienced significant interruptions.

Our business could also be adversely affected if the operations of our customers and suppliers experienced significant interruptions.

24 NASDAQ does not require a publicly traded partnership like us to comply with certain of its corporate governance requirements, and therefore, unitholders do not have the same protections afforded to shareholders of corporations subject to all NASDAQ requirements.

25 Our marine transportation business could be adversely affected if we do not satisfy the requirements of the Jones Act or if the Jones Act were modified or eliminated.

26 Our marine transportation business could be adversely affected if the U.S.

Government purchases or requisitions any of our vessels under the Merchant Marine Act.

27 Changes in transportation regulations may increase our costs and negatively impact our results of operations.

28 Our interest rate swap activities could have a material adverse effect on our earnings, profitability, liquidity, cash flows and financial condition.

29 The industry in which we operate is highly competitive, and increased competitive pressure could adversely affect our business and operating results.

30 Information technology systems present potential targets for cyber security attacks, which could adversely affect our business.

31 Units available for future sales by us or our affiliates could have an adverse impact on the price of our common units or on any trading market that may develop.

32 Unitholders have less power to elect or remove management of our general partner than holders of common stock in a corporation.

It is unlikely that our common unitholders will have sufficient voting power to elect or remove our general partner without consent of Martin Resource Management Corporation and its affiliates.

33 Our general partner's discretion in determining the level of our cash reserves may adversely affect our ability to make cash distributions to our unitholders.

34 Unitholders may not have limited liability if a court finds that we have not complied with applicable statutes or that unitholder action constitutes control of our business.

35 Our Partnership Agreement contains provisions that reduce the remedies available to unitholders for actions that might otherwise constitute a breach of fiduciary duty by our general partner.

36 We may issue additional common units without unitholder approval, which would dilute unitholder ownership interests.

37 The control of our general partner may be transferred to a third party and that party could replace our current management team, without unitholder consent.

38 Our general partner has a limited call right that may require unitholders to sell their common units at an undesirable time or price.

39 Our common units have a limited trading volume compared to other publicly traded securities.

40 Failure to achieve and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our unit price.

41 Cash reimbursements due to Martin Resource Management Corporation may be substantial and will reduce our cash available for distribution to our unitholders.

42 Martin Resource Management Corporation has conflicts of interest and limited fiduciary responsibilities, which may permit it to favor its own interest to detriment of our unitholders.

43 Martin Resource Management Corporation and its affiliates may engage in limited competition with us.

44 If Martin Resource Management Corporation were ever to file for bankruptcy or otherwise default on its obligations under its credit facility, amounts we owe under our credit facility may become immediately due and payable and our results of operations could be adversely affected.

Internal Revenue Service ("IRS") could treat us as a corporation for tax purposes, which would substantially reduce the cash available for distribution to unitholders.

46 The tax treatment of publicly traded partnerships or an investment in our units could be subject to potential legislative, judicial or administrative changes and differing interpretations, possibly on a retroactive basis.

47 A successful IRS contest of the federal income tax positions we take could adversely affect the market for our common units and the costs of any contest will be borne by our unitholders, debt security holders and our general partner.

48 If the IRS makes audit adjustments to our income tax returns, it may assess and collect any taxes (including any applicable penalties and interest) resulting from such audit adjustment directly from us, in which case our cash available for distribution to our unitholders might be substantially reduced.

49 Unitholders may be required to pay taxes on income from us, including their share of income from the cancellation of debt, even if they do not receive any cash distributions from us.

50 Tax gain or loss on the disposition of our common units could be different than expected.

51 Unitholders may be subject to limitations on their ability to deduct interest expenses incurred by us.

52 Tax-exempt entities and non-U.S.

persons face unique tax issues from owning common units that may result in adverse tax consequences to them.

53 We treat a purchaser of our common units as having the same tax benefits without regard to the seller's identity.

The IRS may challenge this treatment, which could adversely affect the value of the common units.

54 Entity level taxes on income from C Corporation subsidiaries will reduce cash available for distribution, and an individual unitholder's share of dividend and interest income from such subsidiaries would constitute portfolio income that could not be offset by the unitholder's share of our other losses or deductions.

55 Unitholders may be subject to state, local and foreign taxes and return filing requirements as a result of investing in our common units.

56 There are limits on the deductibility of our losses that may adversely affect our unitholders.

57 We prorate our items of income, gain, loss and deduction between transferors and transferees of our units each month based upon the ownership of our units on the first day of each month, instead of on the basis of the date a particular unit is transferred.

The IRS may challenge this treatment, which could change the allocation of items of income, gain, loss and deduction among our unitholders.

58 A unitholder whose units are loaned to a "short seller" to cover a short sale of units may be considered as having disposed of those units.

If so, he would no longer be treated for tax purposes as a partner with respect to those units during the period of the loan and may recognize gain or loss from the disposition.

59 We have adopted certain valuation methodologies and monthly conventions for U.S.

federal income tax purposes that may result in a shift of income, gain, loss and deduction among our unitholders.

The IRS may challenge this treatment, which could adversely affect the value of our units.

Risks Relating to Our Business

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Many of such factors are beyond our ability to control or predict.

Unitholders are cautioned not to put undue reliance on forward-looking statements.

Unitholders are cautioned not to put undue reliance on forward-

looking statements.

Additional risks that we do not yet know of or that we currently think are immaterial may also impair our business operations, financial condition and results of operations.

The reduction in demand for refined products resulting from measures taken to prevent the spread of the COVID-19 virus has and is likely to continue to adversely affect our results of operations, cash flows and financial condition for an indeterminate amount of time.

The markets have experienced a decline in oil prices in response to oil demand concerns due to the economic impacts of the COVID-19 pandemic, greatly impacting the demand for refined products resulting in a significant reduction in refinery utilization.

As demand for our services and products decline, we could experience a reduction in the utilization of our assets.

The continued spread of COVID-19 or a similar pandemic could result in further instability in the markets and decreases in commodity prices resulting in further adverse impacts on our results of operations, cash flows, and financial condition.

In addition, the continued spread of the COVID-19 virus, or similar pandemic, and the continuation of the measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter in place orders, and shutdowns, may further impact our workforce and operations, the operations of our customers, and those of our vendors and suppliers.

There is considerable uncertainty regarding such measures and potential future measures, which would have a material adverse effect on our results of operations, cash flows, and financial condition.

We may not have sufficient cash after the establishment of cash reserves and payment of our general partner's expenses to enable us to pay a distribution each quarter.

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Other than the requirement in our Partnership Agreement to distribute all of our available cash each quarter, we have no legal obligation to declare quarterly cash distributions, and our general partner has considerable discretion to determine the amount of our available cash each quarter.

Consistent with our strategy of reducing leverage and improving liquidity, on January 28, 2020, we announced a $0.75 per unit reduction on our cash distribution on an annual basis.

As we continue to pursue the strategy discussed above, we may not be able to maintain or increase the distributions on our common units.

In addition, our general partner determines the amount and timing of asset purchases and sales, capital expenditures, borrowings, issuances of additional partnership securities and the establishment of reserves, each of which can affect the amount of cash

available for distribution to our unitholders.

As a result, we may make cash distributions during periods when we record losses and may not make cash distributions during periods when we record net income.

Restrictions in our credit facility could prevent us from making distributions to our unitholders.

Restrictions in our debt instruments could prevent us from making distributions to our unitholders or limit our ability to pursue opportunities that would increase our distributions to unitholders.

The payment of principal and interest on our indebtedness reduces the cash available for distribution to our unitholders.

In addition, we are prohibited by our credit facility from making cash distributions during a default or an event of default under our credit facility or if the payment of a distribution would cause a default or an event of default thereunder.

Our leverage and various limitations in our credit facility may reduce our ability to incur additional debt, engage in certain transactions, and capitalize on acquisition or other business opportunities that could increase cash flows and distributions to our unitholders.

In addition, our credit facility and the indentures governing our secured notes severely restrict our ability to make distributions until our total leverage ratio (as defined in the applicable debt instruments) is less than 3.75 to 1.0.

After deleveraging, the covenants in our debt instruments will continue to restrict our ability to make distributions, including a prohibition in our credit facility from making cash distributions during a default or an event of default under our credit facility

or if the payment of a distribution would cause a default or an event of default thereunder.

Our leverage and various limitations in our debt instruments may reduce our ability to incur additional debt, engage in certain transactions, and capitalize on acquisition or other business opportunities that could increase cash flows and distributions to our unitholders.

Demand for a portion of our terminalling and storage services is substantially dependent on the level of offshore oil and gas exploration, development and production activity.

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◦ the cost of offshore exploration for and production and transportation of oil and natural gas;

worldwide demand for oil and natural gas (e.g., the reduced demand following the recent coronavirus outbreaks);

◦ worldwide demand for oil and natural gas (e.g., the reduced demand following the recent COVID-19 pandemic;

◦ consolidation of oil and gas and oil service companies operating offshore;

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◦ the ability of oil and gas companies to generate or otherwise obtain funds for exploration and production

As a result of the decline in commodity prices that began in the second half of 2014, offshore development activity in the Gulf of Mexico declined substantially, diminishing demand for our terminalling and storage services.

As a result of the decline in commodity prices over the last several years, offshore development activity in the Gulf of Mexico declined substantially, diminishing demand for our terminalling and storage services.

We can offer no assurance whether or when those activity levels will improve.

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We have a significant amount of indebtedness.

Our leverage and debt service obligations may adversely affect our financial condition, results of operations and business prospects.

As of December 31, 2019, we had approximately $589.9 in principal amount of debt outstanding (including $201.0 million of secured debt outstanding under our revolving credit facility and $12.6 million of outstanding irrevocable letters of credit).

Our revolving credit facility matures on August 31, 2023 unless the 2021 Notes have not been refinanced on or before August 19, 2020.

See Note 16 of the notes to our consolidated financial statements included in this annual report on Form 10-K for further discussion of our long-term debt obligations.

The level of and terms and conditions governing our debt:

require us to dedicate a substantial portion of our cash flow from operations to service our existing debt obligations and could limit our flexibility in planning for or reacting to changes in our business and the industry in which we operate;

increase our vulnerability to the cyclical nature of our business, economic downturns or other adverse developments in our business;

could limit our ability to access capital markets, refinance our existing indebtedness, raise capital on favorable terms, or obtain additional financing for working capital, capital expenditures, acquisitions, debt service requirements, execution of our business strategy, or for other purposes;

expose us to the risk of increased interest rates as certain of our borrowings, including borrowings under our revolving credit facility, bear interest at floating rates;

place restrictions on our ability to obtain additional financing, make investments, lease equipment, sell assets and engage in business combinations;

place us at a competitive disadvantage relative to competitors with lower levels of indebtedness in relation to their overall size, or those that have less restrictive terms governing their indebtedness, thereby enabling competitors to take advantage of opportunities that our indebtedness may prevent us from pursuing;

limit management’s discretion in operating our business;

increase our cost of borrowing.

Any of the above listed factors could have a material adverse effect on our business, financial condition, cash flows and results of operations.

Our ability to pay our expenses and fund our working capital needs and debt obligations will depend on our future performance, which will be affected by financial, business, economic, regulatory and other factors.

We will not be able to control many of these factors, such as commodity prices, other economic conditions and governmental regulation.

In addition, we cannot be certain that our cash flow will be sufficient to allow us to pay the principal and interest on our debt and meet our other obligations.

If we are unable to service our indebtedness and other obligations, we may be required to restructure or refinance all or part of our existing debt, sell assets, reduce capital expenditures, borrow more money or raise equity, some or all of which may not be available to us on terms acceptable to us, if at all, or such alternative strategies may yield insufficient funds to make required payments on our indebtedness.

In addition, our ability to comply with the financial and other restrictive covenants in our indebtedness could be affected by our future performance and events or circumstances beyond our control.

Failure to comply with these covenants would result in an event of default under such indebtedness, the potential acceleration of our obligation to repay outstanding debt and the potential foreclosure on the collateral securing such debt, and could cause a cross-default under our other outstanding indebtedness.

We are currently seeking to refinance the 2021 Notes, although no assurance can be given that we will be able to refinance the 2021 Notes.

If we are unable to refinance the 2021 Notes and are unable to repay the outstanding borrowings under our revolving credit facility on August 19, 2020, we would be in default under our revolving credit facility.

An event of default under our revolving credit facility would allow the lenders to declare the balance outstanding thereunder due and payable in full, which could trigger cross-defaults under other agreements, which could also result in the acceleration of those obligations by the counterparties to those agreements.

Any of the above risks could materially adversely affect our business, financial condition, cash flows and results of operations.

We have significant capital needs, and our ability to access the capital and credit markets to raise capital on favorable terms is limited by our debt level and industry conditions.

As of December 31, 2019, we had $201.0 million of borrowings outstanding under our revolving credit facility.

Our revolving credit facility matures on August 31, 2023 unless the 2021 Notes have not been refinanced on or before August 19, 2020.

Accessing capital in the capital markets in recent months has been difficult for companies in the energy industry.

Disruptions in the capital and credit markets, in particular with respect to the energy sector, could limit our ability to access these markets or may significantly increase our cost to borrow.

If we are unable to access the capital and credit markets, we may not be able to refinance the 2021 Notes prior to August 19, 2020, at which time our revolving credit facility would mature and we would be required to repay all amounts borrowed thereunder.

Low commodity prices have caused and may continue to

cause lenders to increase interest rates, enact tighter lending standards, refuse to refinance existing debt around maturity on favorable terms or at all and may reduce or cease to provide funding to borrowers.

Our inability to access the capital or credit markets on favorable terms could have a material adverse effect on our business, financial condition, results of operations, cash flows and liquidity and our ability to repay or refinance our debt.

If we are unable to generate enough cash flow from operations to service our indebtedness or are unable to use future borrowings to refinance our indebtedness or fund other capital needs, we may have to undertake alternative financing plans, which may have onerous terms or may be unavailable.

Our primary sources of liquidity to meet operating expenses, service our indebtedness, pay distributions to our unitholders and fund capital expenditures have historically been provided by cash flows generated by our operations, borrowings under our revolving credit facility and access to the debt and equity capital markets.

Our ability to generate cash from operations will depend upon our future operating performance, which is subject to certain risks.

Our earnings and cash flow could vary significantly from year to year due to the volatility of our business.

As a result, the amount of debt that we can manage in some periods may not be appropriate for us in other periods.

Additionally, our future cash flow may be insufficient to meet our debt obligations and commitments.

A range of economic, competitive, business and industry factors will affect our future financial performance and, as a result, our ability to generate cash flow from operations and service our debt.

Factors that may cause us to generate cash flow that is insufficient to meet our debt obligations include the events and risks related to our business, many of which are beyond our control.

Any cash flow insufficiency would have a material adverse impact on our business, financial condition, results of operations, cash flows and liquidity and our ability to repay or refinance our debt.

In addition, while our revolving credit facility has $400.0 million in lender commitments, the amount we are able to borrow is limited by the financial covenants contained therein, including covenants that limit the amount we may borrow based on our trailing four quarter consolidated EBITDA ("Compliance EBITDA").

As of December 31, 2019, we had the ability to borrow approximately $51.5 million under our revolving credit facility due to such financial covenants.

As our Compliance EBITDA has declined over the last five years, the amount we are permitted to borrow has likewise declined, and further decreases in our Compliance EBITDA will further limit our borrowing capacity.

As a result, we may have limited ability to obtain the capital necessary to sustain our operations.

If we do not generate sufficient cash flow from operations to service our outstanding indebtedness, or if future borrowings are not available to us in an amount sufficient to enable us to pay or refinance our indebtedness, we may be required to undertake various alternative financing plans, which may include:

refinancing or restructuring all or a portion of our debt;

seeking alternative financing or additional capital investment;

selling strategic assets;

reducing or delaying capital investments;

revising or delaying our strategic plans.

We cannot assure you that we would be able to implement any of the above alternative financing plans, if necessary, on commercially reasonable terms or at all.

If we are unable to generate sufficient cash flow to satisfy our debt obligations or to obtain alternative financing, our business, financial condition, results of operations, cash flows, ability to pay distributions to our unitholders, and liquidity could be materially and adversely affected.

Any failure to make scheduled payments of interest and principal on our outstanding indebtedness would likely result in a reduction of our credit rating, which could significantly harm our ability to incur additional indebtedness on acceptable terms.

Further, if for any reason we are unable to meet our debt service and repayment obligations, we would be in default under the terms of the agreements governing our debt, which would allow our creditors under those agreements to declare all outstanding indebtedness thereunder to be due and payable (which would in turn trigger cross-acceleration or cross-default rights between the relevant agreements), the lenders under our revolving credit facility could terminate their commitments to extend credit, and the lenders could foreclose against our assets securing their borrowings and we could be forced into bankruptcy or liquidation.

In addition, the lenders under our revolving credit facility could compel us to apply our available cash to repay our borrowings.

If the amounts outstanding under our revolving credit facility or any of our other significant indebtedness were to be accelerated, we cannot assure you that our assets would be sufficient to repay in full the amounts owed to the lenders or to our other debt holders.

Debt we owe or incur in the future could limit our flexibility to obtain financing, pursue other business opportunities, and to pay distributions to our unitholders.

Debt we owe or incur in the future could limit our flexibility to obtain financing, to pursue other business opportunities, and to pay distributions to our unitholders.

As of December 31, 2020, we had approximately $525.5 million in principal amount of debt outstanding (including $148.0 million outstanding under our revolving credit facility).

Our indebtedness could have important consequences, including the following:

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• we may be more vulnerable to competitive pressures or a downturn in our business or the economy generally;

• we may be placed at a competitive disadvantage relative to competitors with lower levels of indebtedness in relation to their overall size, or those that have less restrictive terms governing their indebtedness, thereby enabling competitors to take advantage of opportunities that our indebtedness may prevent us from pursuing;

• our flexibility in responding to changing business and economic conditions may be limited.

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Further, agreements we may enter into in the future governing our indebtedness could further restrict our ability to make quarterly distributions to our unitholders.

Fluctuations in interest rates could materially affect our financial results.

We have significant capital needs, and our ability to access the capital and credit markets to raise capital on favorable terms is limited by our debt level, industry conditions, and financial covenants in our debt instruments.

Accessing capital in the capital markets has become difficult for many companies in the energy industry, in particular leveraged companies similar to us.

Low and volatile commodity prices have also caused and may continue to cause lenders to increase interest rates, enact tighter lending standards, refuse to refinance existing debt around maturity on favorable terms or at all and may reduce or cease to provide funding to borrowers.

The covenants in our debt instruments restrict our ability to incur additional indebtedness.

For instance, while our revolving credit facility has $300.0 million in lender commitments, the amount we are able to borrow is limited by the financial covenants contained therein.

As of December 31, 2020, we had the ability to borrow approximately $20.5 million under our revolving credit facility due to such financial covenants.

Fluctuations in interest rates could materially affect our financial results, and the phase-out of LIBOR may adversely affect interest expense related to our floating rate debt.

Borrowings under our revolving credit facility are at variable rates and include a LIBOR floor of 1.00%.

Because a significant portion of our debt bears interest at variable rates, increases in interest rates could materially increase our interest expense.

Based on our debt outstanding as of December 31, 2019, if interest rates were to increase by 100 basis points, the corresponding increase in interest expense on our variable rate debt would decrease future earnings and cash flows by approximately $2.0 million per year.

Further, LIBOR and certain other interest rate "benchmarks" are the subject of recent national, international, and other regulatory guidance and proposals for reform.

Based on our debt outstanding as of December 31, 2020, if LIBOR exceeds the 1.00% floor the impact of a 100 basis point increase in interest rates on this amount of debt would result in an increase in interest expense and a corresponding decrease in net income of approximately $1.5 million annually.

Further, the U.S.

Dollar London Interbank Offered Rate ("LIBOR") and certain other interest rate "benchmarks" are the subject of recent national, international, and other regulatory guidance and proposals for reform.

These reforms may cause such benchmarks to perform differently than in the past or have other consequences which cannot be predicted.

On July 27, 2017, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, publicly announced that it intends to stop persuading or compelling banks to submit LIBOR rates after 2021.

It is expected that a transition away from the widespread use of LIBOR to alternative rates will occur over the course of the next several years.

As a result of this transition, LIBOR may disappear entirely or perform differently than in the past.

At this time, it is not possible to predict the effect any discontinuance, modification or other reforms to LIBOR or any other reference rate, or the establishment of alternative reference rates will have on us.

However, if LIBOR ceases to exist or if the methods of calculating LIBOR change from their current form, our borrowing costs on our variable rate indebtedness may be adversely affected.

We are exposed to counterparty risk in our credit facility and related interest rate protection agreements.

On November 30, 2020, ICE Benchmark Administration, the current administrator of LIBOR, announced that it intends to cease publication of 1-week and 2-month LIBOR at the end of 2021 and, subject to compliance with applicable regulations, including as to representativeness, it does not intend to cease publication of the remaining LIBOR tenors until June 30, 2023.

It is uncertain whether LIBOR will be available as a benchmark for pricing our floating rate indebtedness until, or after, June 30, 2023.

Our revolving credit facility includes a mechanism to amend the facility to reflect the establishment of an alternative rate of interest upon the occurrence of certain events related to the phase-out of LIBOR.

However, we have not yet pursued any technical amendment or other contractual alternative to address this matter and are currently evaluating the impact of the potential replacement of LIBOR.

If no such amendment or other contractual alternative is established on or prior to the phase-out of LIBOR, interest under our revolving credit facility will bear interest at higher rates based on the prime rate until such amendment or other contractual amendment is established.

Even where we have entered into interest rate swaps or other derivative instruments for purposes of managing our interest rate exposure, our hedging strategies may not be effective as a result of the replacement or phasing out of LIBOR, and our earnings may be subject to volatility.

In addition, the overall financial markets may be disrupted as a result of the phase-out or replacement of LIBOR.

The potential increase in our interest expense as a result of the phase-out of LIBOR and uncertainty as to the nature of such potential phase-out and alternative references rates or disruption in the financial market could have an adverse effect on our financial condition, results of operations and cash flows.

We are exposed to counterparty risk in our credit facility and related interest rate protection agreements and we may not be able to access funds under our credit facility if there is a default.

We rely on our credit facility to assist in financing a significant portion of our working capital, acquisitions and capital expenditures.

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Alternative sources of liquidity may not be available on acceptable terms, if at all.

If the cash generated from our operations or the funds we are able to obtain under our credit facility

or other sources of liquidity are not sufficient to meet our capital requirements, then we may need to delay or abandon capital projects or other business opportunities, which could have a material adverse effect on our business, financial condition and results of operations.

If the cash generated from our operations or the funds we are able to obtain under our credit facility or other sources of liquidity are not sufficient to meet our capital requirements, then we may need to delay or abandon capital projects or other business opportunities, which could have a material adverse effect on our business, financial condition and results of operations.

In addition, we have from time to time entered into interest rate protection agreements to manage our interest rate risk exposure by fixing a portion of the interest expense we pay on our long-term debt under our credit facility.

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In addition, nonperformance by suppliers or vendors who have committed to provide us with critical products or services could raise our costs or interfere with our ability to successfully conduct our business.

Our recent and future acquisitions may not be successful, may substantially increase our indebtedness and contingent liabilities and may create integration difficulties.

We may not be able to successfully integrate recent or any future acquisitions into our existing operations or achieve the desired profitability from such acquisitions.

Our future acquisitions may not be successful, may substantially increase our indebtedness and contingent liabilities and may create integration difficulties.

We may not be able to successfully integrate any future acquisitions into our existing operations or achieve the desired profitability from such acquisitions.

These acquisitions may require substantial capital expenditures and the incurrence of additional indebtedness.

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◦ an unexpected diversion of our management's attention from other operations.

If recent or any future acquisitions are unsuccessful or result in unanticipated events or if we are unable to successfully integrate acquisitions into our existing operations, such acquisitions could adversely affect our results of operations, cash flow and ability to make distributions to our unitholders.

If any future acquisitions are unsuccessful or result in unanticipated events or if we are unable to successfully integrate acquisitions into our existing operations, such acquisitions could adversely affect our results of operations, cash flow and ability to make distributions to our unitholders.

Our and our customers’ operations are subject to a series of risks arising out of the threat of climate change that could result in increased operating costs and reduced demand for our services.

The threat of climate change continues to attract considerable attention in the United States and in foreign countries.

Numerous proposals have been made and could continue to be made at the international, national, regional, and state levels to monitor and limit existing emissions of greenhouse gases ("GHGs") as well as to restrict or eliminate such future emissions.

Numerous proposals have been made and could continue to be made at the international, national, regional, and state levels to monitor and limit existing emissions of GHGs as well as to restrict or eliminate such future emissions.

As a result, our operations, as well as the operations of our customers, are subject to a series of regulatory, political, financial, and litigation risks associated with the processing, terminalling, storage, and transportation of fossil fuels, petroleum products, and emission of GHGs.

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However, the EPA has adopted rules that, among other things, establish construction and operating permit reviews for GHG emissions from certain large stationary sources, require the monitoring and annual reporting of GHG emissions from certain petroleum and natural gas system sources in the United States, and implement New Source Performance Standards directing the reduction of methane from certain new, modified, or reconstructed facilities in the oil and natural gas sector, including midstream sources.

However, while many states continue to implement regulations to control emissions of methane, the future of federal regulation of methane emissions is in doubt as a result of recent actions by the EPA.

Despite potential changes with respect to the federal regulation of GHGs, various states and groups of states have adopted or are considering adopting legislation, regulations, or other regulatory initiatives that are focused on such areas as GHG cap and trade programs, carbon taxes, reporting and tracking programs, and various other measures that would restrict emissions of GHGs from different industrial sectors.

At the international level, pursuant to the non-binding United Nations-sponsored Paris Agreement, over 180 nations have committed to limit their GHG emissions through individually-determined reduction goals every five years after 2020, although the United States has announced its withdrawal from such agreement, effective November 4, 2020.

Such state, federal, and international regulatory measures have the potential to increase our operating costs through direct regulation of GHG emissions resulting from our operations, and could also indirectly adversely affect our operations by decreasing demand for our services and products.

At the international level, pursuant to the Paris Agreement, over 190 countries have committed to limiting their GHG emissions through individually-determined reduction goals every five years after 2020.

In November 2020, the United States formally withdrew from the Paris Agreement.

However, on January 20, 2021, President Biden signed an “Acceptance on Behalf of the United States of America” that will allow the U.S.

to rejoin the Paris Agreement.

The newly signed acceptance, deposited with the United Nations on January 20, 2021, reverses the prior withdrawal.

The United States will officially rejoin the Paris Agreement on February 19, 2021.

State, federal, and international regulatory measures have the potential to increase our operating costs through direct regulation of GHG emissions resulting from our operations, and could also indirectly adversely affect our operations by decreasing demand for our services and products.

Additionally, there are increasing potential financial risks for fossil fuel energy companies as environmental activists concerned about the potential effects of climate change are focusing intensive lobbying efforts on institutional lenders, including financial institutions and institutional investors, not to provide funding to such companies.

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Weather in these regions is sometimes severe (including tropical storms and hurricanes) and can be a major factor in our day-to-day operations.

Our marine transportation operations can be significantly delayed,

impaired or postponed by adverse weather conditions, such as fog in the winter and spring months and certain river conditions.

Our marine transportation operations can be significantly delayed, impaired or postponed by adverse weather conditions, such as fog in the winter and spring months and certain river conditions.

Additionally, our marine transportation operations and our assets in the Gulf of Mexico, including our barges, push boats, tugboats and terminals, can be adversely impacted or damaged by hurricanes, tropical storms, tidal waves or other related events.

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National weather conditions have a substantial impact on the demand for our products.

Unusually warm weather during the winter months can cause a significant decrease in the demand for NGL products.

Likewise, extreme weather conditions (either wet or dry) has in recent years decreased the demand for fertilizer.

Extreme weather conditions (either wet or dry) has in recent years decreased the demand for fertilizer.

For example, an unusually wet spring can delay planting of seeds, which can leave insufficient time to apply fertilizer at the planting stage.

Conversely, drought conditions can kill or severely stunt the growth of crops, thus eliminating the need to nurture plants with fertilizer.

Likewise, unusually warm weather during the winter months can cause a significant decrease in the demand for NGL products.

Any of these or similar conditions could result in a decline in our net income and cash flow, which would reduce our ability to make distributions to our unitholders.

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Changes in the insurance markets attributable to the effects of hurricanes and their aftermath may make some types of insurance more difficult or expensive for us to obtain.

As a result, we may be unable to secure the levels and types of insurance we would otherwise have secured prior to such events.

As a result, we may be unable to secure the levels and types of insurance

we would otherwise have secured prior to such events.

Moreover, the insurance that may be available to us may be significantly more expensive than our existing insurance coverage.

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A sustained decline in commodity prices could result in a decrease in activity in the areas served by certain of our terminalling and storage and marine transportation assets resulting in reduced utilization of these assets.

For example, due to the economic impacts of the COVID-19 pandemic in 2020, the markets experienced a decline in oil prices in response to oil demand concerns.

These concerns were further exacerbated by the price war among members of the OPEC and other non-OPEC producer nations during the first quarter of 2020 and global storage considerations.

Travel restrictions and stay-at-home orders implemented by governments in many regions and countries across the globe, including the United States, have greatly impacted the demand for refined products resulting in a significant reduction in refinery utilization, which has impacted our 2020 performance.

This impact started in February of 2020 and continued through the end of the year, during which time we have seen unfavorable trends in certain key metrics across several of our business lines compared to historical periods.

The significant reduction in refinery utilization as a result of reduced refined products demand significantly impacted our Transportation and NGL segments.

As the volume of products produced or purchased by refineries has been reduced, demand for our services has decreased.

Our NGL and sulfur-based fertilizer products are subject to seasonal demand and could cause our revenues to vary.

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and imposing substantial liabilities on us for pollution resulting from our operations.

Numerous governmental authorities, such as the U.S.

EPA and analogous state agencies, have the power to enforce compliance with these laws and regulations and the permits issued under them, oftentimes requiring difficult and costly actions.

Numerous governmental authorities, such as the EPA and analogous state agencies, have the power to enforce compliance with these laws and regulations and the permits issued under them, oftentimes requiring difficult and costly actions.

Many environmental laws and regulations can impose joint and several strict liability, and any failure to comply with environmental laws, regulations and permits may result in the assessment of administrative, civil and criminal penalties, the imposition of investigatory and remedial obligations and, in some circumstances, the issuance of injunctions that can limit or prohibit our operations.

The clear trend in environmental regulation is to place more restrictions and limitations on activities that may affect the environment, and, thus, any changes in environmental laws and regulations that result in more stringent and costly waste handling, storage, transport, disposal or remediation requirements could have a material adverse effect on our operations and financial position.

The continuing trend in environmental regulation is to place more restrictions and limitations on activities that may affect the environment, and, thus, any changes in environmental laws and regulations that result in more stringent and costly waste handling, storage, transport, disposal or remediation requirements could have a material adverse effect on our operations and financial position.

The loss or insufficient attention of key personnel could negatively impact our results of operations and ability to make distributions to our unitholders.

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The trucking industry is subject to possible regulatory and legislative changes that may impact our operations, such as changes in fuel emissions limits, hours of service regulations that govern the amount of time a driver may drive or work in any specific period, and limits on vehicle weight and size.

As the federal government continues to develop and propose regulations relating to fuel quality, engine efficiency and greenhouse gas emissions, we may experience an increase in costs related to truck purchases and maintenance, impairment of equipment productivity, a decrease in the residual value of vehicles, and an increase in operating expenses.

As the federal government continues to develop and propose regulations relating to fuel quality, engine efficiency and GHG emissions, we may experience an increase in costs related to truck purchases and

maintenance, impairment of equipment productivity, a decrease in the residual value of vehicles, and an increase in operating expenses.

Increased truck traffic may contribute to deteriorating road conditions in some areas where we operate.

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Some of our competitors are large oil, natural gas and petrochemical companies that have greater financial resources and access to supplies of NGLs than we do.

customers who produce NGLs may develop their own systems to transport NGLs in lieu of using ours.

Our customers who produce NGLs may develop their own systems to transport NGLs in lieu of using ours.

Our ability to renew or replace existing contracts with our customers at rates sufficient to maintain current revenues and cash flows could be adversely affected by the activities of our competitors and our customers.

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Any successful breach of security could result in the spread of inaccurate or confidential information, disruption of operations, environmental harm, endangerment of employees, damage to our assets, and increased costs to respond.

Any of these instances could have a negative impact on cash flows, litigation status and/or our reputation, which could have a material adverse affect on our business, financial conditions and operations.

Any of these instances could have a negative impact on cash flows, litigation status and/or our reputation, which could have a material adverse effect on our business, financial conditions and operations.

While we make significant investments in technology security and we carefully evaluate the security of selected cloud system providers and cloud storage providers, there can be no guarantee that information security efforts will be totally effective.

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In connection with any registration of this kind, we will indemnify each unitholder participating in the registration and its officers, directors, and controlling persons from and against any liabilities under the Securities Act or any applicable state securities laws arising from the registration statement or prospectus.

Except as described below, the general partner and its affiliates may sell their units in private transactions at any

time, subject to compliance with applicable laws.

Except as described below, the general partner and its affiliates may sell their units in private transactions at any time, subject to compliance with applicable laws.

Our general partner and its affiliates, with our concurrence, have granted comparable registration rights to their bank group to which their partnership units have been pledged.

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Our Partnership Agreement requires our general partner to deduct from operating surplus cash reserves that it determines in its reasonable discretion to be necessary to fund our future operating expenditures.

In addition, our partnership agreement permits our general partner to reduce available cash by establishing cash reserves for the proper conduct of our business, to comply with applicable law or agreements to which we are a party, or to provide funds for future distributions to partners.

In addition, our Partnership Agreement permits our general partner to reduce available cash by establishing cash reserves for the proper conduct of our

business, to comply with applicable law or agreements to which we are a party, or to provide funds for future distributions to partners.

These cash reserves will affect the amount of cash available for distribution to our unitholders.

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Section 404 of the Sarbanes-Oxley Act requires annual management assessments of the effectiveness of our internal controls over financial reporting addressing these assessments.

During the course of our testing we may identify deficiencies, which we may not be able to address in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of Section 404.

During the course of our testing we may identify deficiencies, which we may not be able to address in time to meet the deadline imposed by the Sarbanes-Oxley Act for

compliance with the requirements of Section 404.

In addition, if we fail to maintain the adequacy of our internal controls, as such standards are modified, supplemented or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act.

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Although we intend to meet this gross income requirement, we may not find it possible, regardless of our efforts, to meet this gross income requirement or may inadvertently fail to meet this gross income requirement.

If we do not meet this gross income requirement for any taxable year and the IRS does not determine that such failure was inadvertent, we would be treated as a corporation for such taxable year and each taxable year thereafter.

If we do not meet this

gross income requirement for any taxable year and the IRS does not determine that such failure was inadvertent, we would be treated as a corporation for such taxable year and each taxable year thereafter.

If we were treated as a corporation for federal income tax purposes, we would owe federal income tax on our income at the corporate tax rate, which is currently a maximum of 21%, and would likely owe state income tax at varying rates.

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In addition, the costs of any contest with the IRS will be borne directly or indirectly by all of our unitholders, debt security holders and our general partner.

If the IRS makes audit adjustments to our income tax returns for tax years beginning after December 31, 2017, it may assess and collect any taxes (including any applicable penalties and interest) resulting from such audit adjustment directly from us, in which case our cash available for distribution to our unitholders might be substantially reduced.

Pursuant to the Bipartisan Budget Act of 2015, for taxable years beginning after December 31, 2017, if the IRS makes audit adjustments to our income tax returns, it may assess and collect any taxes (including any applicable penalties and interest) resulting from such audit adjustment directly from us.

If the IRS makes audit adjustments to our income tax returns, it may assess and collect any taxes (including any applicable penalties and interest) resulting from such audit adjustment directly from us, in which case our cash available for distribution to our unitholders might be substantially reduced.

Similarly, for such taxable years, if the IRS makes audit adjustments to income tax returns filed by an entity in which we are a member or partner, the IRS may assess and collect any taxes (including penalties and interest) resulting from such audit adjustment directly from such entity.

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These rules are not applicable to us for tax years beginning on or prior to December 31, 2017.

Additionally, pursuant to the Bipartisan Budget Act of 2015, we are no longer required to designate a "tax matters partner." Instead, for taxable years beginning after December 31, 2017, we are required to designate a partner, or other person, with a substantial presence in the United States as the partnership representative ("Partnership Representative").

Additionally, we are required to designate a partner, or other person, with a substantial presence in the United States as the partnership representative ("Partnership Representative").

The Partnership Representative will have the sole authority to act on our behalf for purposes of, among other things, U.S.

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Unitholders may not receive cash distributions from us equal to their share of our taxable income or even the tax liability that results from the taxation of their share of our taxable income.

We may engage in transactions to delever the partnership and manage our liquidity that may result in income to our unitholders without a corresponding cash distribution.

A unitholder’s share of our taxable income, and its relationship to any distributions we make, may be affected by a variety of factors, including our economic performance, which may be affected by numerous business, economic, regulatory, legislative, competitive and political uncertainties beyond our control.

Additionally, we may engage in transactions to delever the partnership and manage our liquidity that may result in income to our unitholders without a corresponding cash distribution.

For example, if we sell assets and use the proceeds to repay existing debt or fund capital expenditures, you may be allocated taxable income and gain resulting from the sale without receiving a cash distribution.

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However, under the Tax Cuts and Jobs Act, for taxable years beginning after December 31, 2017, the deduction for "business interest" is limited to the sum of the Partnership’s business interest income and 30% of its "adjusted taxable income." For the purposes of this limitation, the Partnership’s adjusted taxable income is computed without regard to any business interest expense or business interest income, and in the case of taxable years beginning before January 1, 2022, any deduction allowable for depreciation, amortization, or depletion to the extent such depreciation, amortization, or depletion is not capitalized into cost of goods sold with respect to inventory.

For our 2020 taxable year, the Coronavirus Aid, Relief, and Economic Security Act increases the 30% adjusted taxable income limitation to 50%, unless we elect not to apply such increase, and for purposes of determining our 50% adjusted taxable income limitation, we may elect to substitute our 2020 adjusted taxable income with our 2019 adjusted taxable income.

If the Partnership’s "business interest" is subject to limitation under these rules, unitholders will be limited in their ability to deduct their share of any interest expense that has been allocated to them.

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persons raises issues unique to them.

For example, virtually all of our income allocated to organizations exempt from federal income tax, including IRAs and other retirement plans, will be unrelated business income and will be taxable to them.

For example, virtually all of our income allocated to organizations exempt from federal income tax, including IRAs and other retirement plans, will be unrelated business taxable income (“UBTI”) and will be taxable to them.

An exempt organization is required to independently compute its UBTI from each separate unrelated trade or business which may prevent an exempt organization from utilizing losses we allocate to the organization against the organization’s UBTI from other sources and vice versa.

Distributions to non-U.S.

persons will be reduced by withholding taxes at the highest applicable effective tax rate, and non-U.S persons will be required to file U.S.

persons will be reduced by withholding taxes at the highest applicable effective tax rate, and non-U.S.

persons will be required to file U.S.

federal income tax returns and pay tax on their share of our taxable income.

In addition, a withholding tax may apply on the amount realized on the disposition of a partnership interest by a foreign person if any gain on the transfer of such interest would be treated as giving rise to effectively connected income.

Such withholding tax obligation is currently suspended in the case of a disposition of certain publicly traded partnership interests, but such suspension would end if proposed Treasury regulations become final.

Tax-exempt entities, non-U.S.

persons and other unique investors should consult their tax advisor regarding their investment in our common units.

In addition,.

under the Tax Cuts and Jobs Act, if a unitholder sells or otherwise disposes of a unit, the transferee is required to withhold 10% of the amount realized by the transferor unless the transferor certifies that it is not a foreign person, and we are required to deduct and withhold from the transferee amounts that should have been withheld by the transferee but were not withheld.

However, the U.S.

Treasury and the IRS have suspended these rules for transfers of certain publicly traded partnership interests, including transfers of our common units, that occur before January 1, 2022.

Under recently finalized Treasury Regulations, in the case of transfers of our common units occurring on or after January 1, 2022, such withholding will be required on open market transactions, but in the case of a transfer made through a broker, the obligation to withhold will be imposed on the broker instead of the transferee (and we will generally not be required to withhold from the transferee amounts that should have been withheld by the transferee but were not withheld).

We treat a purchaser of our common units as having the same tax benefits without regard to the seller's identity.

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It also could affect the timing of these tax benefits or the amount of gain from the sale of common units and could have a negative impact on the value of our common units or result in audit adjustments to our unitholders' tax returns.

Entity level taxes on income from C corporation subsidiaries will reduce cash available for distribution, and an individual unitholder’s share of dividend and interest income from such subsidiaries would constitute portfolio income that could not be offset by the unitholder’s share of our other losses or deductions.

A portion of our taxable income is earned through Martin Transport Inc.(“MTI”), which is a C corporation for federal tax purposes.

C corporations are subject to federal income tax on their taxable income at the corporate tax rate, which is currently 21%, and will likely pay state (and possibly local) income tax at varying rates on their taxable income.

Any such entity level taxes will reduce the cash available for distribution to our unitholders.

Distributions from any such C corporation are generally taxed again to unitholders as dividend income to the extent of current and accumulated earnings and profits of such C corporation.

As of December 31, 2020, the maximum federal income tax rate applicable to such qualified dividend income that is allocable to individuals was 20% (plus a 3.8% net investment income tax that applies to certain net investment income earned by individuals, estates and trusts).

An individual unitholders’ share of dividend and interest income from MTI or other C corporation subsidiaries would constitute portfolio income that could not be offset by the unitholders’ share of our other losses or deductions.

Unitholders may be subject to state, local and foreign taxes and return filing requirements as a result of investing in our common units.

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therefore, unitholders desiring to assure their status as partners and avoid the risk of gain recognition from a loan to a short seller are urged to modify any applicable brokerage account agreements to prohibit their brokers from borrowing their units.

We have adopted certain valuation methodologies and monthly conventions for U.S.

federal income tax purposes that may result in a shift of income, gain, loss and deduction among our unitholders.

The IRS may challenge this treatment, which could adversely affect the value of our units.

When we issue additional units or engage in certain other transactions, we will determine the fair market value of our assets.

Although we may from time to time consult with professional appraisers regarding valuation matters, we make many fair market value estimates using a methodology based on the market value of our units as a means to measure the fair market value of our assets.

The IRS may challenge these valuation methods and the resulting allocations of income, gain, loss and deduction.

A successful IRS challenge to these methods or allocations could adversely affect the amount, character and timing of taxable income or loss being allocated to our unitholders.

It also could affect the amount of taxable gain from our unitholders' sale of units and could have a negative impact on the value of the units or result in audit adjustments to our unitholders' tax returns without the benefit of additional deductions.

Unresolved Staff Comments

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors