What changed in this filing

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Item 1. Financial Statements

2021-10-25 compared with 2021-07-26 · 247 added, 175 removed, 702 unchanged (38% of the section changed)

3 unchanged sentences

(Dollars in thousands)

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

(Unaudited) (Audited)

30 unchanged sentences

Partners’ capital (deficit) ( 58,157 ) ( 46,871 )

Accumulated other comprehensive loss ( 5,999 ) —

Total partners’ capital (deficit) ( 64,156 ) ( 46,871 )

4 unchanged sentences

(Dollars and units in thousands, except per unit amounts)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

20 unchanged sentences

Other operating income (loss), net 61 23 ( 610 ) 2,548

Gain on involuntary conversion of property, plant and equipment 186 4,522 186 4,522

Operating income 8,153 11,013 31,472 34,573

2 unchanged sentences

Gain on retirement of senior unsecured notes — — — 3,484

Loss on exchange of senior unsecured notes — ( 8,516 ) — ( 8,516 )

Other, net — — ( 1 ) 7

Total other expense ( 14,110 ) ( 21,459 ) ( 40,373 ) ( 37,270 )

Net income (loss) before taxes ( 5,677 ) ( 1,413 ) ( 2,944 ) 7,749

Net loss before taxes ( 5,957 ) ( 10,446 ) ( 8,901 ) ( 2,697 )

Income tax expense ( 954 ) ( 373 ) ( 2,111 ) ( 1,510 )

Net income (loss) ( 6,612 ) ( 2,203 ) ( 4,101 ) 6,612

Less general partner's interest in net (income) loss 132 44 82 ( 132 )

Less (income) loss allocable to unvested restricted units 20 10 10 ( 45 )

Limited partners' interest in net income (loss) $ ( 6,460 ) $ ( 2,149 ) $ ( 4,009 ) $ 6,435

Net income (loss) per unit attributable to limited partners - basic $ ( 0.17 ) $ ( 0.06 ) $ ( 0.10 ) $ 0.17

Net income (loss) per unit attributable to limited partners - diluted $ ( 0.17 ) $ ( 0.06 ) $ ( 0.10 ) $ 0.17

Net loss ( 6,911 ) ( 10,819 ) ( 11,012 ) ( 4,207 )

Less general partner's interest in net loss 138 216 220 84

Less loss allocable to unvested restricted units 20 53 30 8

Limited partners' interest in net loss $ ( 6,753 ) $ ( 10,550 ) $ ( 10,762 ) $ ( 4,115 )

Net loss per unit attributable to limited partners - basic $ ( 0.17 ) $ ( 0.27 ) $ ( 0.28 ) $ ( 0.11 )

Net loss per unit attributable to limited partners - diluted $ ( 0.17 ) $ ( 0.27 ) $ ( 0.28 ) $ ( 0.11 )

Weighted average limited partner units - basic 38,687,874 38,661,852 38,689,434 38,654,891

6 unchanged sentences

* Related Party Transactions Included Above

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

11 unchanged sentences

MARTIN MIDSTREAM PARTNERS L.P.

CONSOLIDATED AND CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Dollars and units in thousands, except per unit amounts)

Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

Net loss $ ( 6,911 ) $ ( 10,819 ) $ ( 11,012 ) $ ( 4,207 )

Changes in fair values of commodity cash flow hedges ( 5,999 ) — ( 5,999 ) —

Comprehensive loss $ ( 12,910 ) $ ( 10,819 ) $ ( 17,011 ) $ ( 4,207 )

See accompanying notes to consolidated and condensed financial statements.

MARTIN MIDSTREAM PARTNERS L.P.

CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL (DEFICIT)

1 unchanged sentence

Partners’ Capital (Deficit)

Common Limited General Partner Amount

Common Limited General Partner Amount Accumulated Other Comprehensive Income (Loss)

Units Amount Total

Balances - January 1, 2020 38,863,389 $ ( 38,342 ) $ 2,146 $ — $ ( 36,196 )

Net income — 6,480 132 6,612

Issuance of common units, net — — — —

Net loss — ( 4,123 ) ( 84 ) — ( 4,207 )

Issuance of restricted units 81,000 — — — —

Forfeiture of restricted units ( 84,134 ) — — — —

General partner contribution — — — —

Cash distributions — ( 5,019 ) ( 102 ) — ( 5,121 )

1 unchanged sentence

Purchase of treasury units ( 7,748 ) ( 9 ) — — ( 9 )

Balances - June 30, 2020 38,852,507 $ ( 35,987 ) $ 2,180 $ ( 33,807 )

Balances - September 30, 2020 38,852,507 $ ( 46,423 ) $ 1,960 $ — $ ( 44,463 )

Balances - January 1, 2021 38,851,174 $ ( 48,776 ) $ 1,905 $ — $ ( 46,871 )

4 unchanged sentences

Unit-based compensation — 336 — — 336

Changes in fair values of commodity cash flow hedges — — — ( 5,999 ) ( 5,999 )

Purchase of treasury units ( 7,156 ) ( 17 ) — — ( 17 )

Balances - June 30, 2021 38,802,750 $ ( 52,912 ) $ 1,815 $ ( 51,097 )

Balances - September 30, 2021 38,802,750 $ ( 59,830 ) $ 1,673 $ ( 5,999 ) $ ( 64,156 )

See accompanying notes to consolidated and condensed financial statements.

2 unchanged sentences

(Dollars in thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

Net income (loss) $ ( 4,101 ) $ 6,612

Adjustments to reconcile net income to net cash provided by operating activities:

Net loss $ ( 11,012 ) $ ( 4,207 )

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization 42,862 45,858

3 unchanged sentences

Loss on sale of property, plant and equipment, net 610 153

Gain on involuntary conversion of property, plant and equipment ( 186 ) ( 4,522 )

Non-cash impact related to exchange of senior unsecured notes — ( 749 )

Gain on retirement of senior unsecured notes — ( 3,484 )

1 unchanged sentence

Net cash received (paid) for commodity derivatives ( 2,982 ) 539

Unit-based compensation 288 709

Non cash unit-based compensation 336 1,070

Change in current assets and liabilities, excluding effects of acquisitions and dispositions:

Accounts and other receivables ( 22,924 ) 30,012

Product exchange receivables — ( 212 )

Inventories ( 44,353 ) ( 15,184 )

7 unchanged sentences

Change in other non-current assets and liabilities 203 ( 692 )

Net cash provided by operating activities 6,085 44,626

Net cash provided by (used in) operating activities ( 12,406 ) 19,150

Cash flows from investing activities:

11 unchanged sentences

Cash distributions paid ( 593 ) ( 5,121 )

Net cash used in financing activities ( 601 ) ( 34,283 )

Net decrease in cash ( 4,277 ) ( 2,804 )

Net cash provided by (used in) financing activities 27,860 ( 7,397 )

Net increase (decrease) in cash 1,825 ( 994 )

Cash at beginning of period 4,958 2,856

5 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

June 30, 2021

September 30, 2021

NATURE OF OPERATIONS AND BASIS OF PRESENTATION

24 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

June 30, 2021

September 30, 2021

The following table disaggregates our revenue by major source:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

33 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

June 30, 2021

September 30, 2021

Sulfur Services Segment

20 unchanged sentences

Total $ 15,778 $ 63,607 $ 63,411 $ 50,471 $ 51,744 $ 298,813 $ 543,824

Components of inventories at June 30, 2021 and December 31, 2020 were as follows:

Components of inventories at September 30, 2021 and December 31, 2020 were as follows:

September 30,

2021 December 31,

7 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

June 30, 2021

At June 30, 2021 and December 31, 2020, long-term debt consisted of the following:

September 30, 2021

At September 30, 2021 and December 31, 2020, long-term debt consisted of the following:

September 30,

2021 December 31,

$ 300,000 Revolving credit facility at variable interest rate ( 5.00 % 1 weighted average at June 30, 2021), due August 2023 4 secured by substantially all of the Partnership’s assets, including, without limitation, inventory, accounts receivable, vessels, equipment, fixed assets and the interests in the Partnership’s operating subsidiaries, net of unamortized debt issuance costs of $ 3,392 and $ 3,826 , respectively 2

$ 275,000 Revolving credit facility at variable interest rate ( 5.00 % 1 weighted average at September 30, 2021), due August 2023 secured by substantially all of the Partnership’s assets, including, without limitation, inventory, accounts receivable, vessels, equipment, fixed assets and the interests in the Partnership’s operating subsidiaries, net of unamortized debt issuance costs of $ 3,004 and $ 3,826 , respectively 2

$ 205,496 $ 144,174

$ 400,000 Senior notes, 7.25 % interest, net of unamortized debt issuance costs of $ — and $ — , respectively, including unamortized premium of $ — and $ — , respectively, issued $ 250,000 February 2013 and $ 150,000 April 2014, $ 26,200 repurchased during 2015, $ 9,344 repurchased during 2020, $ 335,666 refinanced as part of the August 2020 Exchange offer, $ 28,790 repaid at maturity in February 2021, unsecured 2,3,4

$ 53,750 Senior notes, 10.0 % interest, net of unamortized debt issuance costs of $ 3,005 and $ 3,577 , respectively, due February 2024, secured 2,3

$ 53,750 Senior notes due February 2024, 10.0 % interest, net of unamortized debt issuance costs of $ 2,719 and $ 3,577 , respectively, secured 2,3

51,031 50,173

$ 291,970 Senior notes, 11.5 % interest, net of unamortized debt issuance costs of $ 1,512 and $ 1,720 , respectively, due February 2025, secured 2,3

$ 291,970 Senior notes due February 2025, 11.5 % interest, net of unamortized debt issuance costs of $ 1,407 and $ 1,720 , respectively, secured 2,3

290,563 290,250

5 unchanged sentences

Total finance lease obligations $ 348 $ 2,996

1 Interest rate fluctuates based on LIBOR or the base prime rate (set on the date of each advance) plus an applicable margin.

1 Interest rate fluctuates based on LIBOR (set on the date of each advance) or the base prime rate plus an applicable margin.

The margin is set every three months.

All amounts outstanding at December 31, 2020 and June 30, 2021 were at LIBOR plus an applicable margin with LIBOR having a floor of 1.0 % per annum.

All amounts outstanding at December 31, 2020 and September 30, 2021 were at LIBOR plus an applicable margin with LIBOR having a floor of 1.00 % per annum.

The applicable margin for revolving loans that are LIBOR loans currently ranges from 2.75 % to 4.00 %, and the applicable margin for revolving loans that are base prime rate loans currently ranges from 1.75 % to 3.00 %.

The applicable margin for LIBOR borrowings at June 30, 2021 is 4.00 %.

The applicable margin for LIBOR borrowings at September 30, 2021 is 4.00 %.

The credit facility contains various covenants that limit the Partnership’s ability to make distributions;

4 unchanged sentences

The credit facility was amended on July 16, 2021 to, among other things, reduce the commitments thereunder from $ 300,000 to $ 275,000 .

2 The Partnership is in compliance with all debt covenants as of June 30, 2021 and December 31, 2020, respectively.

2 The Partnership was in compliance with all debt covenants as of September 30, 2021 and December 31, 2020, respectively.

3 The indentures for each of the outstanding series of senior notes restrict the Partnership’s ability to sell assets;

4 unchanged sentences

4 On February 15, 2021, the 2021 Notes matured and the Partnership retired the outstanding balance of $ 28,790 using funds borrowed under its revolving credit facility.

The Partnership paid cash interest, net of capitalized interest, in the amount of $ 2,648 and $ 2,376 for the three months ended June 30, 2021 and 2020, respectively.

The Partnership paid cash interest, net of capitalized interest, in the amount of $ 25,995 and $ 19,113 for the six months ended June 30, 2021 and 2020, respectively.

Capitalized interest was $ 0 and $ 6 for the three months ended June 30, 2021 and 2020, respectively.

Capitalized interest was $ 0 and $ 9 for the six months ended June 30, 2021 and 2020, respectively.

The Partnership paid cash interest, net of capitalized interest, in the amount of $ 22,635 and $ 15,698 for the three months ended September 30, 2021 and 2020, respectively.

The Partnership paid cash interest, net of capitalized interest, in the amount of $ 48,630 and $ 34,811 for the nine months ended September 30, 2021 and 2020, respectively.

Capitalized interest was $ 0 and $ 16 for the three months ended September 30, 2021 and 2020, respectively.

Capitalized interest was $ 0 and $ 26 for the nine months ended September 30, 2021 and 2020, respectively.

MARTIN MIDSTREAM PARTNERS L.P.

1 unchanged sentence

(Dollars in thousands, except where otherwise indicated)

June 30, 2021

September 30, 2021

The Partnership has numerous operating leases primarily for terminal facilities and transportation and other equipment.

5 unchanged sentences

The Partnership includes extension periods and excludes termination periods from its lease term if, at commencement, it is reasonably likely that the Partnership will exercise the option.

The components of lease expense for the three and six months ended June 30, 2021 and 2020 were as follows:

Three Months Ended June 30, Six Months Ended June 30,

The components of lease expense for the three and nine months ended September 30, 2021 and 2020 were as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

6 unchanged sentences

Total lease cost $ 4,867 $ 6,195 $ 15,140 $ 20,082

Supplemental balance sheet information related to leases at June 30, 2021 and December 31, 2020 was as follows:

Supplemental balance sheet information related to leases at September 30, 2021 and December 31, 2020 was as follows:

September 30,

2021 December 31, 2020

14 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

June 30, 2021

The Partnership’s future minimum lease obligations as of June 30, 2021 consist of the following:

September 30, 2021

The Partnership’s future minimum lease obligations as of September 30, 2021 consist of the following:

Operating Leases Finance Leases

9 unchanged sentences

The Partnership has non-cancelable revenue arrangements that are under the scope of ASC 842 whereby we have committed certain terminalling and storage assets in exchange for a minimum fee.

Future minimum revenues the Partnership expects to receive under these non-cancelable arrangements as of June 30, 2021 are as follows:

Future minimum revenues the Partnership expects to receive under these non-cancelable arrangements as of September 30, 2021 are as follows:

2021 - $ 6,139 ;

7 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

June 30, 2021

September 30, 2021

SUPPLEMENTAL BALANCE SHEET INFORMATION

Components of "Other accrued liabilities" were as follows:

September 30,

2021 December 31, 2020

7 unchanged sentences

The schedule below summarizes the changes in our asset retirement obligations:

June 30, 2021

September 30, 2021

Beginning asset retirement obligations $ 8,759

10 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

June 30, 2021

September 30, 2021

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

1 unchanged sentence

In an effort to manage its exposure to these risks, the Partnership periodically enters into various derivative instruments, including commodity and interest rate hedges.

All derivatives and hedging instruments are non-hedge derivatives and are included on the balance sheet as an asset or a liability measured at fair value, and changes in fair value are recognized as gains and losses in the earnings of the periods in which they occur.

At the time derivative contracts are entered into, the Partnership assesses whether the nature of the instrument qualifies for hedge accounting treatment according to the requirements of ASC 815 – Derivatives and Hedging .

For those transactions designated as hedging instruments for accounting purposes, the Partnership documents all relationships between hedging instruments and hedged items, as well as our risk-management objective and strategy for undertaking the various hedge transactions.

The Partnership also assesses, both at the hedge’s inception and on an ongoing basis, whether the derivatives used in hedging transactions are highly effective in offsetting changes in cash flows or fair value of hedged items.

All derivatives and hedging instruments are included on the balance sheet as an asset or a liability measured at fair value.

Changes in fair value for hedging instruments are recognized on the balance sheet through Accumulated Other Comprehensive Income ("AOCI").

Settlements related to effective hedging relationships will be reclassified from AOCI to earnings during the term at which the hedged transactions are reflected on the income statement.

From time to time, derivatives designated for hedge accounting may be closed prior to contract expiration.

The accounting treatment of closed positions depends on whether the closure occurred due to the hedged transaction occurring early or if the hedged transaction is still expected to occur as originally forecasted.

For hedged transactions that occur early, the closure results in the realized gain or loss from closure being recognized in the same period the accelerated hedged transaction affects earnings.

For hedged transactions that are still expected to occur as originally forecasted, the closure results in the realized gain or loss being deferred until the hedged transaction affects earnings.

If it is determined that hedged transactions associated with cash flow hedges are no longer probable of occurring, the gain or loss associated with the instrument is recognized immediately into earnings.

From time to time, we may have derivative financial instruments for which we do not elect hedge accounting.

Changes in fair value for derivatives not designated as hedges are recognized as gains and losses in the earnings of the periods in which they occur.

(a) Commodity Derivative Instruments

3 unchanged sentences

In addition, the Partnership has focused on utilizing counterparties for these transactions whose financial condition is appropriate for the credit risk involved in each specific transaction.

The Partnership has entered into hedging transactions as of June 30, 2021, to protect a portion of its commodity price risk exposure.

The Partnership has entered into hedging transactions as of September 30, 2021, to protect a portion of its commodity price risk exposure.

These hedging arrangements are in the form of swaps for NGLs.

At June 30, 2021, the Partnership had instruments totaling a gross notional quantity of 390,000 barrels settling during the period from July 31, 2021 through December 31, 2021.

At September 30, 2021, the Partnership had instruments totaling a gross notional quantity of 400,000 barrels settling during the period from October 31, 2021 through December 31, 2021.

At December 31, 2020, the Partnership had instruments totaling a gross notional quantity of 137,000 barrels settling during the period from January 31, 2021 through February 28, 2021.

These instruments settle against the applicable pricing source for each grade and location.

For information regarding gains and losses on interest rate derivative instruments, see "Tabular Presentation of Gains and Losses on Derivative Instruments" below.

For information regarding gains and losses on commodity derivative instruments, see "Tabular Presentation of Gains and Losses on Derivative Instruments" below.

(b) Tabular Presentation of Gains and Losses on Derivative Instruments

The following table summarizes the fair value and classification of the Partnership’s derivative instruments in its Consolidated and Condensed Balance Sheets:

Fair Values of Derivative Instruments in the Consolidated and Condensed Balance Sheets

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

Derivative Assets Derivative Liabilities

1 unchanged sentence

Balance Sheet Location

June 30, 2021 December 31, 2020 Balance Sheet Location

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020 Balance Sheet Location

September 30, 2021 December 31, 2020

Derivatives designated as hedging instruments:

Commodity contracts Fair value of derivatives $ — $ — Fair value of derivatives $ 5,049 $ —

Derivatives not designated as hedging instruments:

Commodity contracts Fair value of derivatives $ — $ — Fair value of derivatives $ — $ 207

Total derivatives not designated as hedging instruments

The following table summarizes the loss recognized in AOCI at September 30, 2021 and the gain (loss) reclassified from accumulated other comprehensive loss into earnings during the three months ended September 30, 2021 for derivative financial instruments designated as cash flow hedges:

Amount of Gain (Loss) Recognized in AOCI Location of Gain (Loss)

Reclassified from AOCI into Income Amount of Gain (Loss) Reclassified from AOCI into Income

2021 2020 2021 2020

Commodity contracts $ ( 5,999 ) $ — Cost of products sold $ — $ —

Total $ ( 5,999 ) $ — $ — $ —

The following table summarizes the loss recognized in AOCI at September 30, 2021 and the gain (loss) reclassified from accumulated other comprehensive loss into earnings during the nine months ended September 30, 2021 for derivative financial instruments designated as cash flow hedges:

Amount of Gain (Loss) Recognized in AOCI Location of Gain (Loss)

Reclassified from AOCI into Income Amount of Gain (Loss) Reclassified from AOCI into Income

2021 2020 2021 2020

Commodity contracts $ ( 5,999 ) $ — Cost of products sold $ — $ —

Total $ ( 5,999 ) $ — $ — $ —

MARTIN MIDSTREAM PARTNERS L.P.

1 unchanged sentence

(Dollars in thousands, except where otherwise indicated)

June 30, 2021

Effect of Derivative Instruments on the Consolidated and Condensed Statements of Operations

For the Three Months Ended June 30, 2021 and 2020

September 30, 2021

The following tables summarize the loss recognized in earnings for derivative instruments not designated as hedging instruments during the three months ended September 30, 2021:

Location of Gain (Loss)

5 unchanged sentences

Total effect of derivatives not designated as hedging instruments $ ( 941 ) $ ( 134 )

Effect of Derivative Instruments on the Consolidated and Condensed Statements of Operations

For the Six Months Ended June 30, 2021 and 2020

The following tables summarize the loss recognized in earnings for derivative instruments not designated as hedging instruments during the nine months ended September 30, 2021:

Location of Gain (Loss)

6 unchanged sentences

PARTNERS' CAPITAL

As of June 30, 2021, Partners’ capital consisted of 38,802,750 common limited partner units, representing a 98 % partnership interest, and a 2 % general partner interest.

As of September 30, 2021, Partners’ capital consisted of 38,802,750 common limited partner units, representing a 98 % partnership interest, and a 2 % general partner interest.

Martin Resource Management Corporation, through subsidiaries, owns 6,114,532 of the Partnership's common limited partner units representing approximately 15.8 % of the Partnership's outstanding common limited partner units.

12 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

June 30, 2021

September 30, 2021

Incentive Distribution Rights

2 unchanged sentences

The Partnership is required to distribute all of its available cash from operating surplus, as defined in the Partnership Agreement.

The general partner was allocated no incentive distributions during the six months ended June 30, 2021 and 2020.

The target distribution levels entitle the general partner to receive 2 % of quarterly cash distributions from the minimum of $ 0.50 per unit up to $ 0.55 per unit, 15 % of quarterly cash distributions in excess of $ 0.55 per unit until all unitholders have received $ 0.625 per unit, 25 % of quarterly cash distributions in excess of $ 0.625 per unit until all unitholders have received $ 0.75 per unit and 50 % of quarterly cash distributions in excess of $ 0.75 per unit.

The general partner was allocated no incentive distributions during the nine months ended September 30, 2021 and 2020.

Distributions of Available Cash

17 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

June 30, 2021

Three Months Ended June 30, Six Months Ended June 30,

September 30, 2021

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Net income (loss) $ ( 6,612 ) $ ( 2,203 ) $ ( 4,101 ) $ 6,612

Less general partner’s interest in net income (loss):

Net loss $ ( 6,911 ) $ ( 10,819 ) $ ( 11,012 ) $ ( 4,207 )

Less general partner’s interest in net loss:

Distributions payable on behalf of general partner interest 4 4 12 57

General partner interest in undistributed income (loss)

( 136 ) ( 48 ) ( 90 ) 79

Less income (loss) allocable to unvested restricted units ( 20 ) ( 10 ) ( 10 ) 45

Limited partners’ interest in net income (loss) $ ( 6,460 ) $ ( 2,149 ) $ ( 4,009 ) $ 6,435

General partner interest in undistributed loss ( 142 ) ( 220 ) ( 232 ) ( 141 )

Less loss allocable to unvested restricted units ( 20 ) ( 53 ) ( 30 ) ( 8 )

Limited partners’ interest in net loss $ ( 6,753 ) $ ( 10,550 ) $ ( 10,762 ) $ ( 4,115 )

The following are the unit amounts used to compute the basic and diluted earnings per limited partner unit for the periods presented:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

5 unchanged sentences

All outstanding units were included in the computation of diluted earnings per unit and weighted based on the number of days such units were outstanding during the periods presented.

All common unit equivalents were antidilutive for the three and six months ended June 30, 2021 and the three months ended June 30, 2020 because the limited partners were allocated a net loss in this period.

All common unit equivalents were antidilutive for the three and nine months ended September 30, 2021 and 2020 because the limited partners were allocated a net loss in this period.

UNIT BASED AWARDS

The Partnership recognizes compensation cost related to unit-based awards to both employees and non-employees in its consolidated and condensed financial statements in accordance with certain provisions of ASC 718.

Amounts recognized in selling, general, and administrative expense in the consolidated and condensed financial statements with respect to these plans are as follows:

Three Months Ended June 30, Six Months Ended June 30,

Amounts recognized in operating expense and selling, general, and administrative expense in the consolidated and condensed financial statements with respect to these plans are as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Restricted unit Awards

Employees $ — $ 305 $ 194 $ 907

Non-employee directors 48 56 142 163

Phantom unit Awards

Employees 181 — 181 —

Non-employee directors — — — —

Total unit-based compensation expense $ 229 $ 361 $ 517 $ 1,070

All of the Partnership's outstanding awards at June 30, 2021 met the criteria to be treated under equity classification.

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

Long-Term Incentive Plans

The Partnership's general partner has a long-term incentive plan for employees and directors of the general partner and its affiliates who perform services for the Partnership.

The Partnership's general partner has long-term incentive plans for employees and directors of the general partner and its affiliates who perform services for the Partnership.

Phantom Unit Plan

On July 21, 2021, the board of directors of the general partner of the Partnership and the Compensation Committee approved the Martin Midstream Partners L.P.

2021 Phantom Unit Plan (the “Plan”), effective as of the same date.

The Plan permits the awards of phantom units and phantom unit appreciation rights (collectively, "phantom unit awards") to any employee or non-employee director of the Partnership, including its executive officers.

The awards may be time-based or performance-based and will be paid, if at all, in cash.

The award of a phantom unit entitles the participant to a cash payment equal to the value of the phantom unit on the vesting date or dates, which value is the fair market value of a common unit of the Partnership (a “Unit”) on such vesting date or dates.

The award of a phantom unit appreciation right entitles the recipient to a cash payment equal to the difference between the value of a phantom unit on the vesting date or dates in excess of the value assigned by the Compensation Committee to the phantom unit as of the grant date.

Phantom units and phantom unit appreciation rights granted to participants do not confer upon participants any right to a Unit.

On July 21, 2021, the Compensation Committee approved forms of time-based award agreements for phantom units and phantom unit appreciation rights, both of which awards vest in full on the third anniversary of the grant date.

The grant date value of a phantom unit under a phantom unit appreciation right award is equal to the average of the closing price for a Unit during the 20 trading days immediately preceding the grant date of the award.

Generally, vesting of an award is subject to a participant remaining continuously employed with the Partnership through the vesting date.

However, if prior to the vesting date (i) a participant is terminated without cause (as defined in the award agreement) or terminates employment after the participant has attained both the age of 65 and ten years of employment (“retirement-eligible”), a prorated portion of the award will vest and be paid in cash no later than the 30 th day following such termination date (subject to a six-month delay in payment for certain retirement-eligible participants) or (ii) there is a change in control of the Partnership (as defined in the Plan), the award will vest in full and be paid in cash no later than the 30 th day following the date of the change of control;

provided, that the participant has been in continuous employment through the termination or change in control date, as applicable.

On July 21, 2021, 620,000 phantom units and 1,245,000 phantom unit appreciation rights were granted to employees of the general partner and its affiliates who perform services for the Partnership.

Phantom unit awards are recorded in operating expense and selling, general and administrative expense based on the fair value of the vested portion of the awards on the balance sheet date.

The fair value of these awards is updated at each balance sheet date and changes in the fair value of the vested portions of the awards are recorded as increases or decreases to compensation expense within operating expense and selling, general and administrative expense in the Consolidated and Condensed Statements of Operations.

All of the Partnership's outstanding phantom unit awards at September 30, 2021 met the criteria to be treated under liability classification in accordance with ASC 718, given that these awards will settle in cash on the vesting date.

Compensation expense for the phantom awards is based on the fair value of the units as of the balance sheet date as further discussed below, and such costs are recognized ratably over the service period of the awards.

As the fair value of liability awards is required to be re-measured each period end, stock compensation expense amounts recognized in future periods for these awards will vary.

The estimated future cash payments of these awards are presented as liabilities within "Other current liabilities" and "Other long-term obligations" in the Consolidated and Condensed Balance Sheets.As of September 30, 2021, there was a total of $ 2,021 of unrecognized compensation costs related to non-vested phantom unit awards.

These costs are expected to be recognized over a remaining life of 2.81 years.

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

The fair value of the phantom unit awards was estimated using a Monte Carlo valuation model as of the balance sheet date.

The Monte Carlo valuation model is based on random projections of stock price paths and must be repeated numerous times to achieve a probabilistic assessment.

Expected volatility was calculated based on the historical volatility of the Partnership’s common units as well as set of peer companies.

Restricted Unit Plan

On May 26, 2017, the unitholders of the Partnership approved the Martin Midstream Partners L.P.

2 unchanged sentences

The 2017 LTIP is administered by the compensation committee of the general partner’s board of directors (the "Compensation Committee").

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

June 30, 2021

A restricted unit is a unit that is granted to grantees with certain vesting restrictions, which may be time-based and/or performance-based.

12 unchanged sentences

Restricted units issued to employees generally vest in equal annual installments over three years of service.

All of the Partnership's outstanding restricted unit awards at September 30, 2021 met the criteria to be treated under equity classification.

In February 2021, the Partnership issued 14,056 TBRUs to each of the Partnership's three independent directors under the 2017 LTIP.

These restricted common units vest in equal installments of 3,514 units on January 24, 2022, 2023, 2024, and 2025.

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

The restricted units are valued at their fair value at the date of grant, which is equal to the market value of common units on such date.

A summary of the restricted unit activity for the six months ended June 30, 2021 is provided below:

A summary of the restricted unit activity for the nine months ended September 30, 2021 is provided below:

Number of Units Weighted Average Grant-Date Fair Value Per Unit

5 unchanged sentences

Aggregate intrinsic value, end of period $ 368

A summary of the restricted units’ aggregate intrinsic value (market value at vesting date) and fair value of units vested (market value at date of grant) during the three and six months ended June 30, 2021 and 2020 is provided below:

Three Months Ended June 30, Six Months Ended June 30,

A summary of the restricted units’ aggregate intrinsic value (market value at vesting date) and fair value of units vested (market value at date of grant) during the three and nine months ended September 30, 2021 and 2020 is provided below:

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

1 unchanged sentence

Fair value of units vested — — 1,418 1,427

As of June 30, 2021, there was $ 344 of unrecognized compensation cost related to non-vested restricted units.

As of September 30, 2021, there was $ 296 of unrecognized compensation cost related to non-vested restricted units.

That cost is expected to be recognized over a weighted-average period of 2.69 years.

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

June 30, 2021

RELATED PARTY TRANSACTIONS

As of June 30, 2021, Martin Resource Management Corporation owns 6,114,532 of the Partnership’s common units representing approximately 15.8 % of the Partnership’s outstanding limited partner units.

As of September 30, 2021, Martin Resource Management Corporation owns 6,114,532 of the Partnership’s common units representing approximately 15.8 % of the Partnership’s outstanding limited partner units.

Martin Resource Management Corporation controls the Partnership's general partner by virtue of its 51 % voting interest in Holdings, the sole member of the Partnership's general partner.

The Partnership’s general partner, MMGP, owns a 2 % general partner interest in the Partnership and the Partnership’s IDRs.

The Partnership’s general partner’s ability, as general partner, to manage and operate the Partnership, and Martin Resource Management Corporation’s ownership as of June 30, 2021, effectively gives Martin Resource Management Corporation the ability to veto some of the Partnership’s actions and to control the Partnership’s management.

The Partnership’s general partner’s ability, as general partner, to manage and operate the Partnership, and Martin Resource Management Corporation’s ownership as of September 30, 2021, effectively gives Martin Resource Management Corporation the ability to veto some of the Partnership’s actions and to control the Partnership’s management.

The following is a description of the Partnership’s material related party agreements and transactions:

4 unchanged sentences

The Omnibus Agreement was amended further on October 1, 2012, to permit the Partnership to provide certain lubricant packaging products and services to Martin Resource Management Corporation.

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

Non-Competition Provisions .

13 unchanged sentences

◦ operating an environmental consulting company;

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

June 30, 2021

◦ supplying employees and services for the operation of the Partnership's business;

6 unchanged sentences

The Omnibus Agreement requires the Partnership to reimburse Martin Resource Management Corporation for all direct expenses it incurs or payments it makes on the Partnership’s behalf or in connection with the operation of the Partnership’s business.

There is no monetary limitation on the amount the Partnership is required to reimburse Martin Resource Management Corporation for direct expenses.

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

monetary limitation on the amount the Partnership is required to reimburse Martin Resource Management Corporation for direct expenses.

In addition to the direct expenses, under the Omnibus Agreement, the Partnership is required to reimburse Martin Resource Management Corporation for indirect general and administrative and corporate overhead expenses.

Effective January 1, 2021, through December 31, 2021, the Conflicts Committee approved an annual reimbursement amount for indirect expenses of $ 14,386 .

The Partnership reimbursed Martin Resource Management Corporation for $ 3,652 and $ 4,103 of indirect expenses for the three months ended June 30, 2021 and 2020, respectively.

The Partnership reimbursed Martin Resource Management Corporation for $ 7,193 and $ 8,261 of indirect expenses for the six months ended June 30, 2021 and 2020, respectively.

The Partnership reimbursed Martin Resource Management Corporation for $ 3,597 and $ 4,103 of indirect expenses for the three months ended September 30, 2021 and 2020, respectively.

The Partnership reimbursed Martin Resource Management Corporation for $ 10,790 and $ 12,364 of indirect expenses for the nine months ended September 30, 2021 and 2020, respectively.

The Conflicts Committee will review and approve future adjustments in the reimbursement amount for indirect expenses, if any, annually.

9 unchanged sentences

The Omnibus Agreement may be amended by written agreement of the parties;

provided, however, that it may not be amended without the approval of the Conflicts Committee if such amendment would

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

June 30, 2021

adversely affect the unitholders.

provided, however, that it may not be amended without the approval of the Conflicts Committee if such amendment would adversely affect the unitholders.

The Omnibus Agreement was first amended on November 25, 2009, to permit the Partnership to provide refining services to Martin Resource Management Corporation.

14 unchanged sentences

MTI has agreed to indemnify Martin Resource Management Corporation against all claims arising out of the negligence or willful misconduct of MTI and its officers, employees, agents, representatives and subcontractors.

Martin Resource Management Corporation has agreed to indemnify MTI against all claims arising out of the negligence or willful misconduct of Martin Resource Management Corporation and its officers, employees, agents, representatives and subcontractors.

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

subcontractors.

In the event a claim is the result of the joint negligence or misconduct of MTI and Martin Resource Management Corporation, indemnification obligations will be shared in proportion to each party’s allocable share of such joint negligence or misconduct.

13 unchanged sentences

The term of this agreement is currently evergreen and it will continue on a month to month basis until terminated by either party by giving 60 days’ written notice.

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

June 30, 2021

Miscellaneous Terminal Services Agreements.

19 unchanged sentences

Certain of our directors or officers are owners of East Texas Mack, including entities affiliated with Ruben Martin, who owns approximately 46 % of the issued and outstanding stock of East Texas Mack.

Amounts paid to East Texas Mack for tractor and trailer lease payments and lease residuals for the three months ended June 30, 2021 and 2020 were $ 282 and $ 154 , respectively.

Amounts paid to East Texas Mack for tractor and trailer lease payments and lease residuals for the six months ended June 30, 2021 and 2020 were $ 518 and $ 259 , respectively.

Amounts paid to East Texas Mack for tractor and trailer lease payments and lease residuals for the three months ended September 30, 2021 and 2020 were

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

$ 283 and $ 173 , respectively.

Amounts paid to East Texas Mack for tractor and trailer lease payments and lease residuals for the nine months ended September 30, 2021 and 2020 were $ 801 and $ 432 , respectively.

Other Miscellaneous Agreements.

3 unchanged sentences

The impact of related party revenues from sales of products and services is reflected in the consolidated and condensed financial statements as follows:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

6 unchanged sentences

$ 21,498 $ 21,485 $ 61,457 $ 64,718

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

June 30, 2021

The impact of related party cost of products sold is reflected in the consolidated and condensed financial statements as follows:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

4 unchanged sentences

The impact of related party operating expenses is reflected in the consolidated and condensed financial statements as follows:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

5 unchanged sentences

$ 20,088 $ 18,915 $ 58,046 $ 60,126

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

The impact of related party selling, general and administrative expenses is reflected in the consolidated and condensed financial statements as follows:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

13 unchanged sentences

The Partnership evaluates the performance of its reportable segments based on operating income.

There is no allocation of administrative expenses or interest expense.

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

June 30, 2021

Three Months Ended June 30, 2021 Operating Revenues Intersegment Revenues Eliminations Operating Revenues after Eliminations Depreciation and Amortization Operating Income (Loss) after Eliminations Capital Expenditures and Plant Turnaround Costs

There is no allocation of interest expense.

Three Months Ended September 30, 2021 Operating Revenues Intersegment Revenues Eliminations Operating Revenues after Eliminations Depreciation and Amortization Operating Income (Loss) after Eliminations Capital Expenditures and Plant Turnaround Costs

Terminalling and storage 51,226 ( 1,648 ) 49,578 7,049 3,269 2,087

4 unchanged sentences

Total $ 216,395 $ ( 5,137 ) $ 211,258 $ 13,945 $ 8,153 $ 4,297

Three Months Ended June 30, 2020 Operating Revenues Intersegment Revenues Eliminations Operating Revenues after Eliminations Depreciation and Amortization Operating Income (Loss) after Eliminations Capital Expenditures and Plant Turnaround Costs

Three Months Ended September 30, 2020 Operating Revenues Intersegment Revenues Eliminations Operating Revenues after Eliminations Depreciation and Amortization Operating Income (Loss) after Eliminations Capital Expenditures and Plant Turnaround Costs

Terminalling and storage 48,188 ( 1,823 ) 46,365 7,294 6,426 1,863

4 unchanged sentences

Total $ 158,130 $ ( 5,597 ) $ 152,533 $ 15,276 $ 11,013 $ 5,214

Six Months Ended June 30, 2021 Operating Revenues Intersegment Revenues Eliminations Operating Revenues after Eliminations Depreciation and Amortization Operating Income (Loss) after Eliminations Capital Expenditures and Plant Turnaround Costs

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

Nine Months Ended September 30, 2021 Operating Revenues Intersegment Revenues Eliminations Operating Revenues after Eliminations Depreciation and Amortization Operating Income (Loss) after Eliminations Capital Expenditures and Plant Turnaround Costs

Terminalling and storage $ 136,584 $ ( 4,918 ) $ 131,666 $ 21,150 $ 8,153 $ 6,258

5 unchanged sentences

Total $ 612,509 $ ( 15,984 ) $ 596,525 $ 42,862 $ 31,472 $ 14,409

Six Months Ended June 30, 2020 Operating Revenues Intersegment Revenues Eliminations Operating Revenues after Eliminations Depreciation and Amortization Operating Income (Loss) after Eliminations Capital Expenditures and Plant Turnaround Costs

Nine Months Ended September 30, 2020 Operating Revenues Intersegment Revenues Eliminations Operating Revenues after Eliminations Depreciation and Amortization Operating Income (Loss) after Eliminations Capital Expenditures and Plant Turnaround Costs

Terminalling and storage $ 146,298 $ ( 5,091 ) $ 141,207 $ 22,022 $ 10,153 $ 8,885

5 unchanged sentences

Total $ 510,944 $ ( 18,890 ) $ 492,054 $ 45,858 $ 34,573 $ 21,983

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

June 30, 2021

The Partnership's assets by reportable segment as of June 30, 2021 and December 31, 2020, are as follows:

June 30, 2021 December 31, 2020

The Partnership's assets by reportable segment as of September 30, 2021 and December 31, 2020, are as follows:

September 30, 2021 December 31, 2020

Total assets:

11 unchanged sentences

Accordingly, on January 7, 2016, the Partnership filed a Complaint for Declaratory Judgment in the Chancery Court of Davidson County, Tennessee requesting a judicial determination that the Partnership does not owe the customer the demanded defense and indemnity obligations.

The lawsuits against the customer have been transferred to the United States District Court for the Western District of Missouri for consolidated pretrial proceedings.

The lawsuits against the customer have been transferred to the United States

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

District Court for the Western District of Missouri for consolidated pretrial proceedings.

On March 1, 2017, at the request of the parties, the Chancery Court of Davidson County, Tennessee administratively closed the Partnership's lawsuit pending rulings in the United States District Court for the Western District of Missouri.

15 unchanged sentences

Unobservable inputs that reflect the entity's own assumptions and are not corroborated by market data.

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

June 30, 2021

Assets and liabilities measured at fair value on a recurring basis are summarized below:

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Commodity derivative contracts, net $ ( 5,049 ) $ ( 207 )

8 unchanged sentences

The estimated fair value of the 2021 Notes, 2024 Notes, and 2025 Notes (collectively, the "Senior Notes") is considered Level 1, as the fair value is based on quoted market prices in active markets.

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Value Carrying

4 unchanged sentences

CONDENSED CONSOLIDATED FINANCIAL INFORMATION

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

The Partnership's operations are conducted by its operating subsidiaries as it has no independent assets or operations.

4 unchanged sentences

Substantially all of the Partnership's operating subsidiaries are subsidiary guarantors of its Senior Notes and any subsidiaries other than the subsidiary guarantors are minor.

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

2 unchanged sentences

MTI, a wholly owned subsidiary of the Partnership, is subject to income taxes due to its corporate structure (the "Taxable Subsidiary").

Total income tax expense of $ 874 and $ 590 , related to the operation of the Taxable Subsidiary, for the three months ended June 30, 2021 and 2020, resulted in an effective income tax rate ("ETR") of 40.22 % and ( 472.00 )%, respectively.

Total income tax expense of $ 977 and $ 937 , related to the operation of the Taxable Subsidiary, for the six months ended June 30, 2021 and 2020, resulted in an ETR of 38.73 % and 98.32 %, respectively.

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

June 30, 2021

The increase in the effective income tax rate during the three months ended June 30, 2021 compared to the three months ended June 30, 2020 was primarily due to pretax income recorded for the three months ended June 30, 2021 compared to pretax losses recorded for the similar period in 2020.

The decrease in the effective income tax rate during the six months ended June 30, 2021, compared to the six months ended June 30, 2020, was primarily due to a decrease in permanent differences in the current period.

The increase in the provision for income taxes for the three and six months ended June 30, 2021, compared to similar periods in 2020, was primarily due to an increase in income before income taxes in the current period.

A current federal income tax expense (benefit) of $ 108 and $( 307 ), related to the operation of the Taxable Subsidiary, was recorded for the three months ended June 30, 2021 and 2020, respectively.

A current federal income tax expense (benefit) of $ 123 and $( 174 ), related to the operation of the Taxable Subsidiary, was recorded for the six months ended June 30, 2021 and 2020, respectively.

A current state income tax expense of $ 83 and $ 164 , related to the operation of the Taxable Subsidiary, was recorded for the three months ended June 30, 2021 and 2020, respectively.

A current state income tax expense of $ 96 and $ 93 , related to the operation of the Taxable Subsidiary, was recorded for the six months ended June 30, 2021 and 2020, respectively.

Total income tax expense of $ 895 and $ 225 , related to the operation of the Taxable Subsidiary, for the three months ended September 30, 2021 and 2020, resulted in an effective income tax rate ("ETR") of 23.42 % and 45.72 %, respectively.

Total income tax expense of $ 1,871 and $ 1,162 , related to the operation of the Taxable Subsidiary, for the nine months ended September 30, 2021 and 2020, resulted in an ETR of 29.51 % and 80.42 %, respectively.

The decrease in the ETR for the income taxes during the three and nine months ended September 30, 2021, was primarily due to significantly larger pretax income recorded for both the three and nine months ended September 30, 2021 compared to the similar periods in 2020.

The increase in the provision for income taxes for the three and nine months ended September 30, 2021, compared to similar periods in 2020, was primarily due to an increase in income before income taxes in the current period.

A current federal income tax expense (benefit) of $ 153 and $ 0 , related to the operation of the Taxable Subsidiary, was recorded for the three months ended September 30, 2021 and 2020, respectively.

A current federal income tax expense (benefit) of $ 276 and $( 174 ), related to the operation of the Taxable Subsidiary, was recorded for the nine months ended September 30, 2021 and 2020, respectively.

A current state income tax expense of $ 81 and $ 41 , related to the operation of the Taxable Subsidiary, was recorded for the three months ended September 30, 2021 and 2020, respectively.

A current state income tax expense of $ 177 and $ 134 , related to the operation of the Taxable Subsidiary, was recorded for the nine months ended September 30, 2021 and 2020, respectively.

With respect to MTI, income taxes are accounted for under the asset and liability method pursuant to the provisions of ASC 740 related to income taxes.

2 unchanged sentences

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

A deferred tax expense related to the MTI temporary differences of $ 683 and $ 733 was recorded for the three months ended June 30, 2021 and 2020, respectively.

A deferred tax expense related to the MTI temporary differences of $ 758 and $ 1,018 was recorded for the six months ended June 30, 2021 and 2020, respectively.

A net deferred tax asset of $ 21,495 and $ 22,253 , related to the cumulative book and tax temporary differences, existed at June 30, 2021 and December 31, 2020, respectively.

A deferred tax expense related to the MTI temporary differences of $ 661 and $ 183 was recorded for the three months ended September 30, 2021 and 2020, respectively.

A deferred tax expense related to the MTI temporary differences of $ 1,419 and $ 1,202 was recorded for the nine months ended September 30, 2021 and 2020, respectively.

A net deferred tax asset of $ 20,834 and $ 22,253 , related to the cumulative book and tax temporary differences, existed at September 30, 2021 and December 31, 2020, respectively.

All income tax positions taken for all open years are more likely than not to be sustained based upon their technical merit under applicable tax laws.

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

SUBSEQUENT EVENTS

Amendment to Revolving Credit Facility.

On July 16, 2021, the Partnership amended its revolving credit facility to, among other things, reduce the commitments thereunder from $ 300,000 to $ 275,000 , and modify the financial covenants.

Management’s Discussion and Analysis of Financial Condition and Results of Operations – Significant Recent Developments – Amendment to Revolving Credit Facility” for more information regarding this amendment.

2021 Phantom Unit Plan.

On July 21, 2021, the board of directors of the general partner of the Partnership and the Compensation Committee approved the Martin Midstream Partners L.P.

2021 Phantom Unit Plan (the “Plan”), effective as of the same date.

The Plan permits the awards of phantom units and phantom unit appreciation rights to any employee or non-employee director of the Partnership, including its executive officers.

The awards may be time-based or performance-based and will be paid, if at all, in cash.

See “Part II – Item 5.

Other Information” for more information regarding the Plan.

Quarterly Distribution.

On July 22, 2021, the Partnership declared a quarterly cash distribution of $ 0.005 per common unit for the second quarter of 2021, or $ 0.020 per common unit on an annualized basis, which will be paid on August 13, 2021 to unitholders of record as of August 6, 2021.

On October 20, 2021, the Partnership declared a quarterly cash distribution of $ 0.005 per common unit for the third quarter of 2021, or $ 0.020 per common unit on an annualized basis, which will be paid on November 12, 2021 to unitholders of record as of November 5, 2021.

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-Q

Item 1. Financial Statements