What changed in this filing

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Item 1A. Risk Factors

2024-02-21 compared with 2023-03-02 · 50 added, 49 removed, 663 unchanged (13% of the section changed)

20 unchanged sentences

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

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

Adverse weather conditions, including droughts, hurricanes, tropical storms, ice storms, extreme cold weather and other severe weather, exacerbated by climate change, could reduce our results of operations and ability to make distributions to our unitholders.

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

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

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

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

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

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

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

As a result, we may make

cash distributions during periods when we record losses and may not make cash distributions during periods when we record net income.

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

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

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

• worldwide demand for oil and natural gas

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

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If our operating results are not sufficient to service any current or future indebtedness, we will be forced to take actions such as further reducing distributions, reducing or delaying our business activities, acquisitions, investments or capital expenditures, selling assets or seeking additional equity capital.

We may not be able to effect any of these actions on satisfactory terms or at all.

We may not be able to undertake any of these actions on satisfactory terms or at all.

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

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

The United States Environmental Protection Agency has proposed strict new methane emission regulations for certain oil and gas facilities and the IRA establishes a charge on methane emissions above certain limits from the same facilities.

In December 2023, the United States Environmental Protection Agency announced final strict new methane emission regulations for certain oil and gas facilities and the IRA established a charge on methane emissions above certain limits from the same facilities.

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

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would commit to a 50 to 52 percent reduction from 2005 levels of GHG emissions by 2030 and set the goal of reaching net-zero GHG emissions by 2050.

In December 2023, the United Nations Climate Change Conference ("COP 28") held in Dubai issued its first global stocktake agreement, which called on parties, including the United States, to contribute to the transitioning away from fossil fuels, reduction of methane emissions, and increase in renewable energy capacity to achieve net zero emissions by 2050.

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

For example, our business could be impacted by initiatives to address greenhouse gases and climate change and incentives to conserve energy or use alternative energy sources.

Our business could be impacted by initiatives to address greenhouse gases and climate change and incentives to conserve energy or use alternative energy sources.

For example, the IRA, signed into law in August 2022 by President Biden, includes incentives to increase renewable energy, such as wind and solar electric generation, and encourages consumers to use these alternative energy sources.

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Moreover, societal pressures or political or other factors may shape the success of such claims, without regard to the company’s causation of or contribution to the asserted damage, or to other mitigating factors.

The adoption and implementation of new or more stringent international, federal, or state legislation, regulations, or other regulatory initiatives that impose more stringent standards for GHG emissions from oil and natural gas producers or their midstream services providers such as ourselves could result in increased costs of compliance or costs of consuming, and thereby reduce demand for or erode value for, the petroleum products and by-products that we process, store and transport.

The adoption and implementation of new or more stringent international, federal, or state legislation, regulations, or other regulatory initiatives that impose more stringent standards for GHG emissions from oil and natural gas producers or their midstream services providers such as us could result in increased costs of compliance or costs of consuming, and thereby reduce demand for or erode value for, the petroleum products and by-products that we process, store and transport.

Additionally, political, financial, and litigation risks may result in our customers restricting or cancelling oil and natural gas production activities, which could result in reduced demand for our services.

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Such costs could adversely affect our business, financial condition, results of operations, and cash flows.

Our distribution network and operations are primarily concentrated in the Gulf Coast region of the U.S.

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In addition, our assets are vulnerable to winter storms and extreme cold weather.

For example, in February 2021, we experienced Winter Storm Uri ("Uri"), an unprecedented storm bringing extreme cold temperatures to Texas and the surrounding areas, which resulted in gulf coast refineries running at reduced rates or halting operations entirely.

For example, in February 2021, we experienced Winter Storm Uri ("Uri"), an unprecedented storm bringing extreme cold temperatures and freezing precipitation to Texas and the surrounding areas, which resulted in Gulf Coast refineries running at reduced rates or halting operations entirely.

The majority of the impact we experienced was centered around our transportation and sulfur services segments, where we saw reduced activity due to Uri's impact on Gulf Coast refinery utilization.

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

We purchase petroleum products and by-products, such as molten sulfur, fuel oils, NGLs (including normal butane), lubricants, and other bulk liquids and sell these products to wholesale and bulk customers and to other end users.

We purchase petroleum products and by-products, such as molten sulfur, fuel oils, NGLs, lubricants, and other bulk liquids and sell these products to wholesale and bulk customers and to other end users.

We also generate revenues through the terminalling and storage of certain products for third parties.

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Decreasing energy prices could adversely affect our results of operations.

and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions between Ukraine and Russia, which has devolved into military conflict.

Commodity prices also have been impacted by political instability in China and the Middle East (including the

conflict in Israel).

If commodity prices remain weak for a sustained period, our terminalling throughput volumes may be negatively impacted, particularly as producers are curtailing or redirecting drilling, adversely affecting our results of operations.

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For example, in 2020, the markets experienced a decline in oil prices in response to oil demand concerns due to the economic impacts of the COVID-19 pandemic, greatly impacting the demand for refined products resulting in a significant reduction in refinery utilization.

The significant reduction in refinery utilization as a result of reduced refined products demand

significantly impacted our Transportation and NGL segments.

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

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

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

The natural decline in production in our operating regions and in other regions from which we source NGL supplies means our long-term success depends on our ability to obtain new sources of supplies of natural gas, NGLs and crude oil, which depends on certain factors beyond our control.

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

The demand for our sulfur-based fertilizer products experience an increase in demand during the spring, which increases the revenue generated by this business line in this period compared to other periods.

The demand for our sulfur-based fertilizer products generally experiences an increase in demand during the spring, which increases the revenue generated by this business line in this period compared to other periods.

The seasonality of the revenue from these products may cause our results of operations to vary on a quarter-to-quarter basis and thus could cause our cash available for quarterly distributions to fluctuate from period to period.

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

Numerous governmental authorities, such as the EPA and analogous state agencies, have the power to enforce compliance with these laws and regulations and the permits

issued under them, oftentimes requiring difficult and costly actions.

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

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

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

Our operations are dependent upon our terminalling and storage facilities and various means of transportation.

Our operations are dependent upon our terminalling and storage facilities and various modes of transportation.

We are also dependent upon the uninterrupted operations of certain facilities owned or operated by our suppliers and customers.

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• labor difficulties;

• disruptions in the supply of our products to our facilities or means of transportation.

• disruptions in the supply of our products to our facilities or modes of transportation.

Additionally, terrorist attacks and acts of sabotage could target oil and gas production facilities, refineries, processing plants, terminals and other infrastructure facilities.

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We depend upon third-party pipelines, storage and other facilities that provide delivery options to and from our terminals.

Since we do not own or operate these pipelines or other facilities, their continuing operation in their current manner is not within our control.

Since we do not own or operate these pipelines, storage, or other facilities, their continuing operation in their current manner is not within our control.

If any of these third-party facilities become partially or fully unavailable, or if the quality specifications for their facilities change so as to restrict our ability to utilize them, our revenues could be adversely affected.

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flagged vessels under the Jones Act and cargo preference laws.

If the Jones Act were to be modified to permit foreign competition that would not be subject to the same U.S.

If the Jones Act were to be modified or eliminated to permit foreign competition that would not be subject to the same U.S.

government-imposed costs, we may need to lower the prices we charge for our services in order to compete with foreign competitors, which would adversely affect our cash flow and ability to make distributions to our unitholders.

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

Due to COVID-19 protocols, many of our employees and those of our service providers, vendors and customers have been accessing computer systems remotely where their cybersecurity protections may be less robust and our cybersecurity procedures and safeguards may be less effective.

Many of our employees and those of our service providers, vendors and customers may access computer systems remotely where their cybersecurity protections may be less robust and our cybersecurity procedures and safeguards may be less effective.

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

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Unlike the holders of common stock in a corporation, unitholders have only limited voting rights on matters affecting our business and therefore limited ability to influence management's decisions regarding our business.

Unitholders did not elect our general partner or its directors and will have no right to elect our general partner or its directors on an annual or other continuing basis.

Unitholders did not elect

our general partner or its directors and will have no right to elect our general partner or its directors on an annual or other continuing basis.

Holdings, the sole member of MMGP, elects the board of directors of our general partner.

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• provides that our general partner is entitled to make other decisions in its "reasonable discretion," which may reduce the obligations to which our general partner would otherwise be held;

• generally provides that affiliated transactions and resolutions of conflicts of interest not involving a required vote of unitholders must be "fair and reasonable" to us and that, in determining whether a transaction or resolution is "fair and reasonable," our general partner may consider the interests of all parties involved, including its own;

• provides that affiliated transactions and resolutions of conflicts of interest not involving a required vote of unitholders must be "fair and reasonable" to us and that, in determining whether a transaction or resolution is "fair and reasonable," our general partner may consider the interests of all parties involved, including its own;

• provides that our general partner and its officers and directors will not be liable for monetary damages to us, our limited partners or assignees for errors of judgment or for any acts or omissions if our general partner and those other persons acted in good faith.

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Unitholders may also incur a tax liability upon a sale of their units.

No provision in our Partnership Agreement, or

in any other agreement we have with our general partner or Martin Resource Management Corporation, prohibits our general partner or its affiliates from acquiring more than 80% of our common units.

No provision in our Partnership Agreement, or in any other agreement we have with our general partner or Martin Resource Management Corporation, prohibits our general partner or its affiliates from acquiring more than 80% of our common units.

For additional information about this call right and unitholders' potential tax liability, please see "Risk Factors-Tax Risks-Tax gain or loss on the disposition of our common units could be different than expected."

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• The audit committee of our general partner retains our independent auditors;

• In some instances, our general partner may cause us to borrow funds to permit us to pay cash distributions, even if the purpose or effect of the borrowing is to make incentive distributions;

• In some instances, our general partner may cause us to borrow funds to permit us to pay cash distributions;

• Our general partner has broad discretion to establish financial reserves for the proper conduct of our business.

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In addition, either a judgment against Martin Resource Management Corporation or a bankruptcy filing by or against Martin Resource Management Corporation could independently result in an event of default under our credit facility if it could reasonably be expected to have a material adverse effect on us.

If our lenders do declare us in default and accelerate repayment, we may be required to refinance our debt on unfavorable terms, which could negatively impact our results of operations and our ability to make distributions to our unitholders.

If our lenders do declare us in default and accelerate repayment,

we may be required to refinance our debt on unfavorable terms, which could negatively impact our results of operations and our ability to make distributions to our unitholders.

A bankruptcy filing by or against Martin Resource Management Corporation could also result in the termination or material breach of some or all of the various commercial contracts between us and Martin Resource Management Corporation, which could have a material adverse impact on our results of operations, cash flow and ability to make distributions to our unitholders.

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Any such changes could negatively impact the value of an investment in our common units.

On January 24, 2017, the U.S.

Department of the Treasury issued final regulations (the "Final Regulations") regarding qualifying income under Section 7704(d)(1)(E) of the Code which relates to the qualifying income exception upon which we rely for partnership tax treatment.

The Final Regulations apply to income earned in a taxable year beginning on or after January 19, 2017.

The Final Regulations include "reserved" paragraphs for fertilizer and hedging, which the U.S.

Department of the Treasury plans to address in future proposed and final Treasury regulations ("Treasury regulations").

In 2017, the U.S.

Department of the Treasury issued final regulations (the "QI Regulations") regarding qualifying income under Section 7704(d)(1)(E) of the Code which relates to the qualifying income exception upon which we rely for

partnership tax treatment.

The QI Regulations include "reserved" paragraphs for fertilizer and hedging, which the U.S.

Department of the Treasury plans to address in future proposed and final Treasury regulations.

We are unable to predict how such future regulations may treat fertilizer or hedging activities, but such regulations could impact our ability to treat certain activities as generating qualifying income.

The Final Regulations provide for a ten year transition period during which certain taxpayers that either obtained a favorable private letter ruling or treated income under a reasonable interpretation of the statute or prior proposed regulations as qualifying income may continue to treat such income as qualifying income.

We have obtained favorable private letter rulings from the IRS in the past as to what constitutes "qualifying income" within the meaning

of Section 7704(d)(1)(E) of the Code and we expect to rely upon these private letter rulings for purposes of the ten year transition rule contained in the Final Regulations.

With respect to some of these private letter rulings, the income that we derived from certain affected activities will be treated as qualifying income only until the end of the ten year transition period.

Thus, at this time and through the transition period, we believe that the Final Regulations will not significantly impact the amount of our gross income that we are able to treat as qualifying income.

The QI Regulations provide for a ten-year transition period during which certain taxpayers that either obtained a favorable private letter ruling or treated income under a reasonable interpretation of the statute or prior proposed regulations as qualifying income may continue to treat such income as qualifying income.

We have obtained favorable private letter rulings from the IRS in the past as to what constitutes "qualifying income" within the meaning of Section 7704(d)(1)(E) of the Code and we expect to rely upon these private letter rulings for purposes of the ten-year transition rule contained in the QI Regulations.

Thus, at this time and through the end of 2027, we believe that the QI Regulations will not significantly impact the amount of our gross income that we are able to treat as qualifying income.

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

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Unitholders may be allocated COD income, and income tax liabilities arising therefrom may exceed cash distributions or the value of the units.

The ultimate effect of any such allocations will depend on the unitholder's individual tax position with

respect to its units.

The ultimate effect of any such allocations will depend on the unitholder's individual tax position with respect to its units.

Unitholders are encouraged to consult their tax advisor with respect to the consequences to them of COD income.

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Under the Treasury Regulations, such withholding will be required on open market transactions, but in the case of a transfer made through a broker, a partner’s share of liabilities will be excluded from the amount realized.

In addition, the obligation to withhold will be imposed on the broker instead of the transferee (and we will generally not be required to withhold from the transferee amounts that should have been withheld by the transferee but were not withheld).

In addition, the obligation to withhold will be imposed on the broker instead of the transferee (and we will generally not be required to withhold from the transferee amounts that should have

been withheld by the transferee but were not withheld).

These withholding obligations will apply to transfers of our common units occurring on or after January 1, 2023.

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

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

In addition to federal income taxes, unitholders may be subject to other taxes, such as state, local and foreign income taxes, unincorporated business taxes and estate, inheritance, or intangible taxes that are imposed by the various jurisdictions in which we do business or own property.

Unitholders may be required to file state, local and foreign income tax returns and pay state and local income taxes in some or all of the various jurisdictions in which we do business or own property and may be subject to penalties for failure to comply with those requirements.

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

In addition to federal income taxes, unitholders may be subject to other taxes, such as state and local income taxes, unincorporated business taxes and estate, inheritance, or intangible taxes that are imposed by the various jurisdictions in which we do business or own property.

Unitholders may be required to file state and local income tax returns and pay state and local income taxes in some or all of the various jurisdictions in which we do business or own property and may be subject to penalties for failure to comply with those requirements.

We own property and/or conduct business in several states, many of which impose a personal income tax and also impose income taxes on corporations and other entities.

We may do business or own property in other states or foreign countries in the future.

It is the unitholder's responsibility to file all federal, state, local and foreign tax returns.

We may do business or own property in other states in the future.

It is the unitholder's responsibility to file all federal, state and local tax returns.

Our counsel has not rendered an opinion on the state, local or foreign tax consequences of an investment in our common units.

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

Treasury regulations permit publicly traded partnerships to use a monthly simplifying convention that is similar to

ours, but they do not specifically authorize all aspects of the proration method we have adopted.

Treasury regulations permit publicly traded partnerships to use a monthly simplifying convention that is similar to ours, but they do not specifically authorize all aspects of the proration method we have adopted.

Therefore, the use of our proration method may not be permitted under existing Treasury regulations, and, accordingly, our counsel is unable to opine as to the validity of such method.

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

Unresolved Staff Comments

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

What changed 10-K

Item 1A. Risk Factors