What changed in this filing

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Item 1. Financial Statements

2022-04-26 compared with 2021-10-25 · 165 added, 238 removed, 711 unchanged (36% of the section changed)

3 unchanged sentences

(Dollars in thousands)

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

(Unaudited) (Audited)

4 unchanged sentences

Due from affiliates 20,925 14,409

Fair value of derivatives 175 —

Other current assets 10,403 12,908

14 unchanged sentences

Income taxes payable 925 385

Fair value of derivatives 5,049 207

Other accrued liabilities 18,719 29,850

7 unchanged sentences

Partners’ capital (deficit) ( 37,539 ) ( 48,853 )

Accumulated other comprehensive loss ( 5,999 ) —

Accumulated other comprehensive income (loss) ( 440 ) 816

Total partners’ capital (deficit) ( 37,979 ) ( 48,037 )

4 unchanged sentences

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

Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

Three Months Ended

Terminalling and storage * $ 19,413 $ 18,378

19 unchanged sentences

Other operating income (loss), net 14 ( 760 )

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

Operating income 25,449 15,686

1 unchanged sentence

Interest expense, net ( 12,429 ) ( 12,953 )

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

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

Other, net ( 1 ) —

Total other expense ( 12,430 ) ( 12,953 )

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

Net income before taxes 13,019 2,733

Income tax expense ( 1,541 ) ( 222 )

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 )

Net income 11,478 2,511

Less general partner's interest in net income ( 229 ) ( 50 )

Less income allocable to unvested restricted units ( 30 ) ( 10 )

Limited partners' interest in net income $ 11,219 $ 2,451

Net income per unit attributable to limited partners - basic $ 0.29 $ 0.06

Net income per unit attributable to limited partners - diluted $ 0.29 $ 0.06

Weighted average limited partner units - basic 38,722,246 38,692,609

6 unchanged sentences

* Related Party Transactions Included Above

Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

Three Months Ended

Terminalling and storage $ 16,204 $ 15,306

12 unchanged sentences

(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 )

Three Months Ended

Net income $ 11,478 $ 2,511

Changes in fair values of commodity cash flow hedges ( 440 ) —

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

Comprehensive income $ 11,038 $ 2,511

See accompanying notes to consolidated and condensed financial statements.

6 unchanged sentences

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

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

Net income — 2,461 50 — 2,511

Issuance of restricted units 42,168 — — — —

3 unchanged sentences

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

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

Balances - March 31, 2021 38,802,750 $ ( 46,285 ) $ 1,951 $ — $ ( 44,334 )

Balances - January 1, 2022 38,802,750 $ ( 50,741 ) $ 1,888 $ 816 $ ( 48,037 )

Net loss — ( 10,792 ) ( 220 ) — ( 11,012 )

Net income — 11,249 229 — 11,478

Issuance of restricted units 34,200 — — — —

Forfeiture of restricted units ( 83,436 ) — — — —

Cash distributions — ( 194 ) ( 4 ) — ( 198 )

Unit-based compensation — 34 — — 34

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

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

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

Gain reclassified from AOCI into income on commodity cash flow hedges — — — ( 816 ) ( 816 )

Loss recognized in AOCI on commodity cash flow hedges — — — ( 440 ) ( 440 )

Balances - March 31, 2022 38,836,950 $ ( 39,652 ) $ 2,113 $ ( 440 ) $ ( 37,979 )

See accompanying notes to consolidated and condensed financial statements.

2 unchanged sentences

(Dollars in thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities:

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

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

Net income $ 11,478 $ 2,511

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

Depreciation and amortization 14,486 14,434

Amortization of deferred debt issuance costs 783 755

Amortization of premium on notes payable — ( 191 )

Deferred income tax expense 921 75

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 )

(Gain) loss on sale of property, plant and equipment, net ( 14 ) 760

Derivative (income) loss ( 816 ) 1,436

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

Net cash paid for commodity derivatives ( 615 ) ( 1,655 )

Non cash unit-based compensation 34 240

1 unchanged sentence

Accounts and other receivables 136 ( 12,484 )

Product exchange receivables — ( 212 )

Inventories 7,842 15,070

7 unchanged sentences

Change in other non-current assets and liabilities ( 821 ) 88

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

Net cash provided by operating activities 28,375 3,854

Cash flows from investing activities:

1 unchanged sentence

Payments for plant turnaround costs ( 1,435 ) ( 1,674 )

Proceeds from involuntary conversion of property, plant and equipment 274 7,203

Proceeds from sale of property, plant and equipment 297 3

7 unchanged sentences

Cash distributions paid ( 198 ) ( 197 )

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

Net cash used in financing activities ( 16,761 ) ( 3,515 )

Net increase (decrease) in cash 260 ( 3,846 )

6 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

March 31, 2022

NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Martin Midstream Partners L.P.

(the "Partnership") is a publicly traded limited partnership with a diverse set of operations focused primarily in the United States ("U.S.") Gulf Coast region.

(the "Partnership") is a publicly traded limited partnership with a diverse set of operations focused primarily in the Gulf Coast region of the United States ("U.S.").

Its four primary business lines include:

2 unchanged sentences

sulfur and sulfur-based products processing, manufacturing, marketing and distribution;

and (4) natural gas liquids marketing, distribution, and transportation services.

and NGL marketing, distribution, and transportation services.

The Partnership’s unaudited consolidated and condensed financial statements have been prepared in accordance with the requirements of Form 10-Q and U.S.

16 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

March 31, 2022

The following table disaggregates our revenue by major source:

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

2021 2020 2021 2020

Three Months Ended March 31,

Terminalling and storage segment

32 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

March 31, 2022

Sulfur Services Segment

20 unchanged sentences

Total $ 49,910 $ 64,591 $ 63,469 $ 52,425 $ 50,476 $ 252,771 $ 533,642

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

September 30,

Components of inventories at March 31, 2022 and December 31, 2021 were as follows:

2022 December 31,

Natural gas liquids $ 11,588 $ 20,034

Sulfur 892 612

Fertilizer 14,634 13,005

5 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

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

September 30,

March 31, 2022

At March 31, 2022 and December 31, 2021, long-term debt consisted of the following:

2022 December 31,

$ 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

$ 275,000 Credit facility at variable interest rate ( 4.50 % 1 weighted average at March 31, 2022), 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 $ 2,224 and $ 2,613 , respectively 2

$ 140,776 $ 156,887

$ 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 due February 2024, 10.0 % interest, net of unamortized debt issuance costs of $ 2,146 and $ 2,433 , respectively, secured 2,3

10 unchanged sentences

The margin is set every three months.

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.

All amounts outstanding at December 31, 2021 and March 31, 2022 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 September 30, 2021 is 4.00 %.

The applicable margin for LIBOR borrowings at March 31, 2022 is 3.50 %.

The applicable margin for LIBOR borrowings effective April 20, 2022 is 3.25 %.

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

2 The Partnership was in compliance with all debt covenants as of March 31, 2022 and December 31, 2021, respectively.

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

3 unchanged sentences

and consolidate, merge or transfer all or substantially all of its assets.

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 $ 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.

4 On April 14, 2022, the Partnership completed the payment of an aggregate principal amount of approximately $ 589 , or approximately 0.20 %, of its 11.50 % Senior Secured Second Lien Notes due 2025 (the “2025 Notes”), pursuant to its cash tender offer (the “Excess Cash Flow Offer”) to purchase up to $ 9,305 aggregate principal amount of the 2025 Notes.

See “Note 17 – Subsequent Events” for more information on the Excess Cash Flow Offer.

The Partnership paid cash interest in the amount of $ 21,851 and $ 23,347 for the three months ended March 31, 2022 and 2021, respectively.

There was no capitalized interest for the three months ended March 31, 2022 and 2021, respectively.

MARTIN MIDSTREAM PARTNERS L.P.

1 unchanged sentence

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

March 31, 2022

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 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

The components of lease expense for the three months ended March 31, 2022 and 2021 were as follows:

Three Months Ended March 31,

Operating lease cost $ 2,271 $ 2,302

5 unchanged sentences

Total lease cost $ 4,962 $ 5,543

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

September 30,

Supplemental balance sheet information related to leases at March 31, 2022 and December 31, 2021 was as follows:

2022 December 31, 2021

14 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

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

March 31, 2022

The Partnership’s future minimum lease obligations as of March 31, 2022 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 September 30, 2021 are as follows:

Future minimum revenues the Partnership expects to receive under these non-cancelable arrangements as of March 31, 2022 are as follows:

2022 - $ 14,018 ;

7 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

March 31, 2022

SUPPLEMENTAL BALANCE SHEET INFORMATION

Components of "Other accrued liabilities" were as follows:

September 30,

2022 December 31, 2021

4 unchanged sentences

Operating lease liabilities 6,764 6,600

Other 418 969

$ 18,719 $ 29,850

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

September 30, 2021

March 31, 2022

Beginning asset retirement obligations $ 9,072

10 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

March 31, 2022

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

19 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 September 30, 2021, to protect a portion of its commodity price risk exposure.

The Partnership has entered into hedging transactions as of March 31, 2022, to protect a portion of its commodity price risk exposure.

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

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.

At March 31, 2022, the Partnership had instruments totaling a gross notional quantity of 80,000 barrels settling during the period from April 30, 2022 through May 31, 2022.

At December 31, 2021, the Partnership had instruments totaling a gross notional quantity of 0 barrels.

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

5 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

March 31, 2022

Derivative Assets Derivative Liabilities

1 unchanged sentence

Balance Sheet Location

September 30, 2021 December 31, 2020 Balance Sheet Location

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021 Balance Sheet Location

March 31, 2022 December 31, 2021

Derivatives designated as hedging instruments:

Commodity contracts Fair value of derivatives $ 175 $ — Fair value of derivatives $ — $ —

Derivatives not designated as hedging instruments:

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

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:

The following table summarizes the loss recognized in AOCI at March 31, 2022 and December 31, 2021, respectively, and the gain (loss) reclassified from accumulated other comprehensive loss into earnings during the three months ended March 31, 2022 and 2021, respectively, for derivative financial instruments designated as cash flow hedges:

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

3 unchanged sentences

Total $ ( 440 ) $ 816 $ 816 $ —

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

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)

Recognized in Income on

Derivatives Amount of Gain (Loss) Recognized in

Income on Derivatives

Derivatives not designated as hedging instruments:

Commodity contracts Cost of products sold $ ( 941 ) $ ( 134 )

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

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:

The following tables summarize the loss recognized in earnings for derivative instruments not designated as hedging instruments during the three months ended March 31, 2022 and 2021, respectively:

Location of Gain (Loss)

5 unchanged sentences

Total effect of derivatives not designated as hedging instruments $ — $ ( 1,436 )

PARTNERS' CAPITAL

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.

PARTNERS' CAPITAL (DEFICIT)

As of March 31, 2022, Partners’ capital consisted of 38,836,950 common limited partner units, representing a 98 % partnership interest, and a 2 % general partner interest.

Martin Resource Management Corporation, through subsidiaries, owned 6,114,532 of the Partnership's common limited partner units representing approximately 15.7 % of the Partnership's outstanding common limited partner units.

Martin Midstream GP LLC ("MMGP"), the Partnership's general partner, owns the 2 % general partnership interest.

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

The partnership agreement of the Partnership (the "Partnership Agreement") contains specific provisions for the allocation of net income and losses to each of the partners for purposes of maintaining their respective partner capital accounts.

Impact on Partners' Capital (Deficit) Related to Transactions Between Entities Under Common Control

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

March 31, 2022

Under ASC 805, assets and liabilities transferred between entities under common control are accounted for at the historical cost of those entities' ultimate parent, in a manner similar to a pooling of interests.

4 unchanged sentences

This excess of the purchase price over the historical cost of the net assets received has resulted in cumulative distributions of $ 289,084 reflected as reductions to Partners' capital.

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

Incentive Distribution Rights

MMGP holds a 2 % general partner interest and certain incentive distribution rights ("IDRs") in the Partnership.

MMGP holds a 2 % general partner interest and, until November 23, 2021, MMGP held certain incentive distribution rights ("IDRs") in the Partnership.

IDRs are a separate class of non-voting limited partner interest that may be transferred or sold by the general partner under the terms of the Partnership Agreement, and represent the right to receive an increasing percentage of cash distributions after the minimum quarterly distribution and any cumulative arrearages on common units once certain target distribution levels have been achieved.

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

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.

On November 23, 2021, MMGP contributed to the Partnership all of the outstanding IDRs for no consideration, whereupon the IDRs were cancelled and cease to exist (the “IDR Elimination”).

Until the IDR Elimination, the Partnership was required to distribute all of its available cash from operating surplus, as previously defined in the Partnership Agreement.

The general partner was allocated no incentive distributions during the three months ended March 31, 2022 and 2021.

Distributions of Available Cash

7 unchanged sentences

Undistributed earnings are allocated to the general partner and limited partners utilizing the contractual terms of the Partnership Agreement.

Distributions to the general partner pursuant to the IDRs are limited to available cash that will be distributed as defined in the Partnership Agreement.

Accordingly, the Partnership does not allocate undistributed earnings to the general partner for the IDRs because the general partner's share of available cash is the maximum amount that the general partner would be contractually entitled to receive if all earnings for the period were distributed.

When current period distributions are in excess of earnings, the excess distributions for the period are to be allocated to the general partner and limited partners based on their respective sharing of income and losses specified in the Partnership Agreement.

6 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

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

2021 2020 2021 2020

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

Less general partner’s interest in net loss:

March 31, 2022

Three Months Ended March 31,

Net income $ 11,478 $ 2,511

Less general partner’s interest in net income:

Distributions payable on behalf of general partner interest 4 4

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 )

General partner interest in undistributed earnings 225 46

Less income allocable to unvested restricted units 30 10

Limited partners’ interest in net income $ 11,219 $ 2,451

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 September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

Basic weighted average limited partner units outstanding

1 unchanged sentence

Dilutive effect of restricted units issued

16,597 13,032

Total weighted average limited partner diluted units outstanding

1 unchanged sentence

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 nine months ended September 30, 2021 and 2020 because the limited partners were allocated a net loss in this period.

UNIT BASED AWARDS

UNIT BASED AWARDS - LONG-TERM INCENTIVE PLANS

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 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

Three Months Ended March 31,

Restricted unit Awards

8 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

March 31, 2022

Long-Term Incentive Plans

1 unchanged sentence

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.

On July 21, 2021, the board of directors of the general partner of the Partnership and the compensation committee of the general partner's board of directors (the "Compensation Committee") approved the Martin Midstream Partners L.P.

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

12 unchanged sentences

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.

All of the Partnership's outstanding phantom unit awards at March 31, 2022 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.

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 March 31, 2022, there was a total of $ 3,251 of unrecognized compensation costs related to non-vested phantom unit awards.

These costs are expected to be recognized over a remaining life of 2.31 years.

2 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

March 31, 2022

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

1 unchanged sentence

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

On April 20, 2022, the board of directors of the general partner of the Partnership and the Compensation Committee approved the First Amendment to the Plan, effective as of the same date, which amendment increased the total number of phantom units available for grant under the Plan from 2,000,000 units to 5,000,000 units.

Restricted Unit Plan

2 unchanged sentences

The 2017 LTIP currently permits the grant of awards covering an aggregate of 3,000,000 common units, all of which can be awarded in the form of restricted units.

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

The 2017 LTIP is administered by the Compensation Committee.

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

Once these restrictions lapse, the grantee is entitled to full ownership of the unit without restrictions.

The Compensation Committee may determine to make grants under the plan containing such terms as the Compensation Committee shall determine under the plan.

The Compensation Committee may determine to make grants under the 2017 LTIP containing such terms as the Compensation Committee shall determine under the 2017 LTIP.

With respect to time-based restricted units ("TBRUs"), the Compensation Committee will determine the time period over which restricted units granted to employees and directors will vest.

9 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.

All of the Partnership's outstanding restricted unit awards at March 31, 2022 met the criteria to be treated under equity classification.

In February 2022, the Partnership issued 11,400 TBRUs to each of the Partnership's three independent directors under the 2017 LTIP.

These restricted common units vest in equal installments of 3,800 units on January 24, 2023, 2024, 2025, and 2026.

In April 2022, the Partnership issued 13,800 TBRUs to each of the Partnership's three independent directors under the 2017 LTIP.

These restricted common units vest in equal installments of 4,600 units on January 24, 2023, 2024, 2025, and 2026.

MARTIN MIDSTREAM PARTNERS L.P.

1 unchanged sentence

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

March 31, 2022

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 nine months ended September 30, 2021 is provided below:

A summary of the restricted unit activity for the three months ended March 31, 2022 is provided below:

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

5 unchanged sentences

Aggregate intrinsic value, end of period $ 464

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

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 months ended March 31, 2022 and 2021 is provided below:

Three Months Ended March 31,

Aggregate intrinsic value of units vested $ 188 $ 257

Fair value of units vested 92 1,418

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

As of March 31, 2022, there was $ 318 of unrecognized compensation cost related to non-vested restricted units.

That cost is expected to be recognized over a weighted-average period of 2.81 years.

RELATED PARTY TRANSACTIONS

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 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.

As of March 31, 2022, Martin Resource Management Corporation owns 6,114,532 of the Partnership’s common units representing approximately 15.7 % of the Partnership’s outstanding limited partner units.

Martin Resource Management Corporation controls the Partnership's general partner by virtue of its 100 % voting interest in MMGP Holdings, LLC ("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.

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 March 31, 2022 of approximately 15.7 % of the Partnership’s outstanding limited partnership units, 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:

7 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

March 31, 2022

Non-Competition Provisions .

14 unchanged sentences

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

◦ operating, solely for the Partnership's account, the asphalt facilities in Omaha, Nebraska, Port Neches, Texas, and South Houston, Texas.

◦ operating, solely for our account, the asphalt facilities in each of Hondo, South Houston and Port Neches, Texas and Omaha, Nebraska.

• any business that Martin Resource Management Corporation acquires or constructs that has a fair market value of less than $ 5,000 ;

7 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

March 31, 2022

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

1 unchanged sentence

Effective January 1, 2022, through December 31, 2022, the Conflicts Committee approved an annual reimbursement amount for indirect expenses of $ 13,491 .

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 Partnership reimbursed Martin Resource Management Corporation for $ 3,373 and $ 3,542 of indirect expenses for the three months ended March 31, 2022 and 2021, respectively.

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

26 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

In the event a claim is the result of the joint negligence or misconduct of MTI and Martin Resource

MARTIN MIDSTREAM PARTNERS L.P.

1 unchanged sentence

(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.

March 31, 2022

Management Corporation, indemnification obligations will be shared in proportion to each party’s allocable share of such joint negligence or misconduct.

Marine Agreements

10 unchanged sentences

At such time, the per-gallon throughput fee the Partnership charged under this agreement was increased when compared to the previous agreement and may be adjusted annually based on a price index.

This agreement was further amended on January 1, 2017, October 1, 2017, April 1, 2019, and January 1, 2020 to modify its minimum throughput requirements and throughput fees.

This agreement was further amended on April 1, 2019 and January 1, 2020 to modify its minimum throughput requirements and throughput fees.

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.

20 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 September 30, 2021 and 2020 were

Amounts paid to East Texas Mack for tractor and trailer lease payments and lease residuals for the three months ended March 31, 2022 and 2021 were $ 310 and $ 236 , respectively.

MARTIN MIDSTREAM PARTNERS L.P.

1 unchanged sentence

(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.

March 31, 2022

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 September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

Terminalling and storage $ 16,204 $ 15,306

4 unchanged sentences

$ 22,813 $ 19,430

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

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

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

2021 2020 2021 2020

Three Months Ended March 31,

Cost of products sold:

3 unchanged sentences

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

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

2021 2020 2021 2020

Three Months Ended March 31,

Operating expenses:

7 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

September 30, 2021

March 31, 2022

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

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

2021 2020 2021 2020

Three Months Ended March 31,

Selling, general and administrative:

13 unchanged sentences

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

Transportation 42,568 ( 3,489 ) 39,079 3,710 430 1,086

Sulfur services 30,837 — 30,837 2,594 4,534 1,104

Natural gas liquids 91,764 — 91,764 592 3,994 20

Indirect selling, general and administrative — — — — ( 4,074 ) —

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

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

Three Months Ended March 31, 2022 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 $ 54,383 $ ( 1,578 ) $ 52,805 $ 7,606 $ 2,867 $ 3,945

3 unchanged sentences

Indirect selling, general and administrative

— — — — ( 4,122 ) —

Total $ 285,969 $ ( 6,768 ) $ 279,201 $ 14,486 $ 25,449 $ 9,935

2 unchanged sentences

(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

Transportation 114,886 ( 11,066 ) 103,820 12,039 ( 7,782 ) 2,702

Sulfur services 103,958 — 103,958 7,882 21,136 4,968

Natural gas liquids 257,081 — 257,081 1,791 21,738 481

Indirect selling, general and administrative

— — — — ( 11,773 ) —

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

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

March 31, 2022

Three Months Ended March 31, 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 $ 39,834 $ ( 1,595 ) $ 38,239 $ 7,105 $ 2,308 $ 2,665

5 unchanged sentences

Total $ 206,723 $ ( 5,749 ) $ 200,974 $ 14,434 $ 15,686 $ 6,575

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

The Partnership's assets by reportable segment as of March 31, 2022 and December 31, 2021, are as follows:

March 31, 2022 December 31, 2021

Total assets:

8 unchanged sentences

In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Partnership.

On December 31, 2015, the Partnership received a demand from a customer in its lubricants packaging business for defense and indemnity in connection with lawsuits filed against it in various United States District Courts, which generally allege that the customer engaged in unlawful and deceptive business practices in connection with its marketing and advertising of its private label motor oil.

The Partnership disputes that it has any obligation to defend or indemnify the customer for its conduct.

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

On December 31, 2015, the Partnership received a demand from a customer in its lubricants packaging business for defense and indemnity in connection with various lawsuits filed against it, which generally alleged that the customer engaged in unlawful and deceptive business practices in connection with its marketing and advertising of its private label motor oil (the “Marketing Lawsuits”).

The Partnership disputed and continues to dispute that it has any obligation to defend or indemnify the customer for the customer’s conduct.

Accordingly, on January 7, 2016, the Partnership filed a Complaint for Declaratory Judgment in the Chancery Court of Davidson County, Tennessee (the “Tennessee Court”), under Case No.

16-0018-BC, requesting a judicial determination that the Partnership did not owe the customer the demanded defense and indemnity obligations (the “Declaratory Judgment Action”).

The Marketing Lawsuits pending in federal court against the customer were transferred to the U.S.

District Court for the Western District of Missouri under the consolidated case MDL No.

2709 for pretrial proceedings (the “Consolidated Lawsuits”).

On March 1, 2017, at the joint request of the customer and the Partnership, the Tennessee Court administratively closed the Declaratory Judgment Action.

Recently, the customer settled the Consolidated Lawsuits.

On December 17, 2021, at the request of the customer, the Tennessee Court reopened the Declaratory Judgment Action and the customer asserted various counterclaims against the Partnership seeking, among other things, to recover its costs of defending and settling the Consolidated Lawsuits.

At this time, we are unable to determine what ultimate exposure we may have in this matter, if any.

The Partnership intends to vigorously defend the counterclaims asserted by the customer in the Declaratory Judgment Action.

MARTIN MIDSTREAM PARTNERS L.P.

1 unchanged sentence

(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.

In the event that either party moves the Chancery Court of Davidson County, Tennessee to reopen the case, we expect the Court would grant such motion and reopen the case.

Further, the same customer has made a claim under the Partnership’s insurance policy.

The insurer has denied the claim.

However, in the event that the customer is successful in pursuing the claim, such action would negatively impact the Partnership because the Partnership may have certain reimbursement obligations it would owe the insurance company.

If the case is reopened or the insurance claim by the customer is successful, we are currently unable to determine the exposure we may have in this matter, if any.

March 31, 2022

FAIR VALUE MEASUREMENTS

10 unchanged sentences

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

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Commodity derivative contracts, net $ 175 $ —

6 unchanged sentences

• Current and non-current portion of long-term debt:

The carrying amount of the revolving credit facility approximates fair value due to the debt having a variable interest rate and is in Level 2.

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.

September 30, 2021 December 31, 2020

The carrying amount of the credit facility approximates fair value due to the debt having a variable interest rate and is in Level 2.

The estimated fair value of the 2021 Notes, 2024 Notes, and 2025 Notes (collectively, the "senior notes") is considered Level 2, as the fair value is based upon quoted prices for identical liabilities in markets that are not active.

March 31, 2022 December 31, 2021

Value Carrying

1 unchanged sentence

2025 Notes $ 290,771 $ 302,774 $ 290,667 $ 307,146

2025 Notes $ 290,563 $ 302,797 $ 290,250 $ 288,692

Total $ 342,375 $ 357,569 $ 341,984 $ 362,366

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 September 30, Nine Months Ended September 30,

2021 2020 2021 2020

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

March 31, 2022

Three Months Ended March 31,

Provision for income taxes $ 1,541 $ 222

The operations of a partnership are generally not subject to income taxes, except for Texas margin tax, because its income is taxed directly to its partners.

Current state income taxes attributable to the Texas margin tax relating to the operation of the Partnership of $ 176 and $ 120 were recorded in income tax expense for the three months ended March 31, 2022 and 2021, respectively.

Deferred taxes applicable to the Texas margin tax relating to the operation of the Partnership are immaterial.

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 $ 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.

Total income tax expense of $ 1,365 and $ 102 , related to the operation of the Taxable Subsidiary, for the three months ended March 31, 2022 and 2021, resulted in an effective income tax rate ("ETR") of 22.03 % and 29.32 %, respectively.

The decrease in the ETR for the income taxes during the three months ended March 31, 2022 was primarily due to significantly larger pretax income recorded for the three months ended March 31, 2022, compared to the same period in 2021.

The increase in the provision for income taxes for the three months ended March 31, 2022, compared to the same period in 2021, was primarily due to an increase in income before income taxes in the current period.

A current federal income tax expense of $ 320 and $ 15 , related to the operation of the Taxable Subsidiary, was recorded for the three months ended March 31, 2022 and 2021, respectively.

A current state income tax expense of $ 124 and $ 12 , related to the operation of the Taxable Subsidiary, was recorded for the three months ended March 31, 2022 and 2021, 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 $ 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.

A deferred tax expense related to the MTI temporary differences of $ 921 and $ 75 was recorded for the three months ended March 31, 2022 and 2021, respectively.

A net deferred tax asset of $ 18,900 and $ 19,821 , related to the cumulative book and tax temporary differences, existed at March 31, 2022 and December 31, 2021, 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

Excess Cash Flow Offer.

On April 14, 2022, the Partnership completed the payment of an aggregate principal amount of approximately $ 589 , or approximately 0.20 %, of its 2025 Notes, pursuant to its Excess Cash Flow Offer to purchase up to $ 9,305 aggregate principal amount of its outstanding 2025 Notes.

The purchase price for the tendered 2025 Notes was 100 % of the aggregate principal amount thereof, plus accrued and unpaid interest to, but not including, the purchase date.

Quarterly Distribution.

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.

On April 20, 2022, the Partnership declared a quarterly cash distribution of $ 0.005 per common unit for the first quarter of 2022, or $ 0.020 per common unit on an annualized basis, which will be paid on May 13, 2022 to unitholders of record as of May 6, 2022.

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