What changed in this filing

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Item 1. Financial Statements

2024-07-23 compared with 2024-04-23 · 177 added, 97 removed, 677 unchanged (29% of the section changed)

3 unchanged sentences

(Dollars in thousands)

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(Unaudited) (Audited)

11 unchanged sentences

Right-of-use assets 63,768 60,359

Investment in DSM Semichem LLC 7,938 —

Deferred income taxes, net 10,174 10,200

2 unchanged sentences

Liabilities and Partners’ Capital (Deficit)

Current installments of long-term debt and finance lease obligations $ 14 $ —

Trade and other accounts payable 51,874 51,653

5 unchanged sentences

Long-term debt, net 439,397 421,173

Finance lease obligations 62 —

Operating lease liabilities 47,187 45,684

8 unchanged sentences

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

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2024 2023 2024 2023

Terminalling and storage * $ 22,375 $ 21,684 $ 44,892 $ 42,542

30 unchanged sentences

Limited partners' interest in net income (loss) $ 3,688 $ 1,055 $ 6,884 $ ( 3,913 )

Net income (loss) per unit attributable to limited partners - basic $ 0.08 $ ( 0.13 )

Net income (loss) per unit attributable to limited partners - diluted $ 0.08 $ ( 0.13 )

Net income (loss) per unit attributable to limited partners - basic and diluted $ 0.09 $ 0.03 $ 0.18 $ ( 0.10 )

Weighted average limited partner units - basic 38,832,222 38,772,266 38,833,039 38,771,037

6 unchanged sentences

* Related Party Transactions Included Above

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2024 2023 2024 2023

Terminalling and storage $ 18,078 $ 18,077 $ 36,627 $ 35,579

16 unchanged sentences

Units Amount Total

Balances - March 31, 2024 39,001,086 $ ( 63,115 ) $ 1,619 $ ( 61,496 )

Net income — 3,704 76 3,780

Cash distributions — ( 195 ) ( 4 ) ( 199 )

Unit-based compensation — 49 — 49

Balances - June 30, 2024 39,001,086 ( 59,557 ) 1,691 ( 57,866 )

Balances - December 31, 2023 38,914,806 $ ( 66,182 ) $ 1,558 $ ( 64,624 )

Net loss — ( 4,984 ) ( 102 ) ( 5,086 )

Net income — 6,912 141 7,053

Issuance of restricted units 86,280 — — —

1 unchanged sentence

Unit-based compensation — 103 — 103

Balances - March 31, 2023 38,914,806 $ ( 66,236 ) $ 1,559 $ ( 64,677 )

Balances - June 30, 2024 39,001,086 $ ( 59,557 ) $ 1,691 $ ( 57,866 )

Partners’ Capital (Deficit)

1 unchanged sentence

Units Amount Total

Balances - December 31, 2023 38,914,806 $ ( 66,182 ) $ 1,558 $ ( 64,624 )

Balances - March 31, 2023 38,914,806 $ ( 66,236 ) $ 1,559 $ ( 64,677 )

Net income — 1,059 22 1,081

Cash distributions — ( 195 ) ( 4 ) ( 199 )

Unit-based compensation — 38 — 38

Balances - June 30, 2023 38,914,806 ( 65,334 ) 1,577 ( 63,757 )

Balances - December 31, 2022 38,850,750 $ ( 61,110 ) $ 1,665 $ ( 59,445 )

Net loss — ( 3,925 ) ( 80 ) ( 4,005 )

Issuance of restricted units 64,056 — — —

1 unchanged sentence

Unit-based compensation — 90 — 90

Balances - March 31, 2024 39,001,086 $ ( 63,115 ) $ 1,619 $ ( 61,496 )

Balances - June 30, 2023 38,914,806 $ ( 65,334 ) $ 1,577 $ ( 63,757 )

See accompanying notes to consolidated and condensed financial statements.

2 unchanged sentences

(Dollars in thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

23 unchanged sentences

Payments for plant turnaround costs ( 6,705 ) ( 661 )

Investment in DSM Semichem LLC ( 6,938 ) —

Proceeds from sale of property, plant and equipment 738 4,275

7 unchanged sentences

Net cash provided by (used in) financing activities 15,163 ( 85,352 )

Net increase (decrease) in cash — 12

Net increase in cash 1 12

Cash at beginning of period 54 45

1 unchanged sentence

Non-cash additions to property, plant and equipment $ 2,641 $ 1,679

Non-cash contribution of land to DSM Semichem LLC $ 1,000 $ —

See accompanying notes to consolidated and condensed financial statements.

2 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

March 31, 2024

June 30, 2024

NATURE OF OPERATIONS AND BASIS OF PRESENTATION

18 unchanged sentences

NEW ACCOUNTING PRONOUNCEMENTS

There were no new accounting pronouncements applicable to the Partnership during the three months ended March 31, 2024.

There were no new accounting pronouncements applicable to the Partnership during the six months ended June 30, 2024.

EXIT OF BUTANE OPTIMIZATION BUSINESS

6 unchanged sentences

The butane optimization business has historically been included in the Partnership's Specialty Products operating segment.

Three Months Ended March 31,

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

Products revenue $ 13,650 $ 70,539

1 unchanged sentence

Selling, general and administrative expenses 140 512

$ ( 2,564 ) $ ( 2,255 )

MARTIN MIDSTREAM PARTNERS L.P.

1 unchanged sentence

(Dollars in thousands, except where otherwise indicated)

March 31, 2024

June 30, 2024

The following table disaggregates our revenue by major source:

Three Months Ended March 31,

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

2024 2023 2024 2023

Terminalling and storage segment

31 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

March 31, 2024

June 30, 2024

Revenue related to marine transportation is recognized for time charters based on a per day rate.

21 unchanged sentences

Total $ 35,149 $ 71,453 $ 69,084 $ 48,447 $ 49,662 $ 157,964 $ 431,759

Components of inventories at March 31, 2024 and December 31, 2023 were as follows:

Components of inventories at June 30, 2024 and December 31, 2023, were as follows:

2024 December 31,

8 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

March 31, 2024

At March 31, 2024 and December 31, 2023, long-term debt consisted of the following:

June 30, 2024

At June 30, 2024 and December 31, 2023, long-term debt consisted of the following:

2024 December 31,

$ 175,000 Credit facility at variable interest rate ( 8.68 % 1 weighted average at March 31, 2024), due February 2027 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 $ 3,039 and $ 3,292 , respectively 2

$ 150,000 Credit facility at variable interest rate ( 8.72 % 1 weighted average at June 30, 2024), due February 2027 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 $ 2,771 and $ 3,292 , respectively 2

$ 55,229 $ 39,208

6 unchanged sentences

The margin is set every three months.

All amounts outstanding at March 31, 2024 were at Adjusted Term SOFR plus an applicable margin.

All amounts outstanding at June 30, 2024 were at Adjusted Term SOFR plus an applicable margin.

The applicable margin for revolving loans that are SOFR loans currently ranges from 2.75 % to 3.75 %, and the applicable margin for revolving loans that are alternate base rate loans currently ranges from 1.75 % to 2.75 %.

The applicable margin for SOFR borrowings at March 31, 2024 is 3.25 %.

The applicable margin for SOFR borrowings effective April 17, 2024 is 3.25 %.

The applicable margin for SOFR borrowings at June 30, 2024 is 3.25 %.

The applicable margin for SOFR borrowings effective July 17, 2024, is 3.25 %.

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

3 unchanged sentences

and make certain amendments to the Partnership's omnibus agreement with Martin Resource Management Corporation (the "Omnibus Agreement").

2 The Partnership was in compliance with all debt covenants as of March 31, 2024 and December 31, 2023, respectively.

The Partnership paid cash interest in the amount of $ 24,653 and $ 22,177 for the three months ended March 31, 2024 and 2023, respectively.

Capitalized interest was $ 142 and $ 4 for the three months ended March 31, 2024 and 2023, respectively.

2 The Partnership was in compliance with all debt covenants as of June 30, 2024 and December 31, 2023.

The Partnership paid cash interest in the amount of $ 1,585 and $ 2,632 for the three months ended June 30, 2024 and 2023, respectively.

The Partnership paid cash interest in the amount of $ 26,238 and $ 24,808 for the six months ended June 30, 2024 and 2023, respectively.

Capitalized interest was $ 291 and $ 7 for the three months ended June 30, 2024 and 2023, respectively.

Capitalized interest was $ 443 and $ 11 for the six months ended June 30, 2024 and 2023, respectively.

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

4 unchanged sentences

Our leases have remaining lease terms of 1 year to 12 years, some of which include options to extend the leases for up to 5 years, and some of which include options to terminate the leases within 1 year.

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

The Partnership includes extension periods in its lease term if, at commencement, it is reasonably likely that the Par tnership will exercise the extension options.

MARTIN MIDSTREAM PARTNERS L.P.

1 unchanged sentence

(Dollars in thousands, except where otherwise indicated)

March 31, 2024

The components of lease expense for the three months ended March 31, 2024 and 2023 were as follows:

Three Months Ended March 31,

June 30, 2024

The components of lease expense for the three and six months ended June 30, 2024 and 2023, were as follows:

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

2024 2023 2024 2023

Operating lease cost $ 5,181 $ 3,604 $ 10,120 $ 6,791

5 unchanged sentences

Total lease cost $ 6,559 $ 5,013 $ 12,710 $ 9,966

Supplemental balance sheet information related to leases at March 31, 2024 and December 31, 2023 was as follows:

Supplemental balance sheet information related to leases at June 30, 2024 and December 31, 2023, was as follows:

2024 December 31, 2023

4 unchanged sentences

Total operating lease liabilities $ 63,988 $ 60,585

For the three months ended March 31, 2024, the Partnership incurred new operating leases, primarily related to land and marine transportation assets and renewed existing operating leases set to expire, primarily related to marine transportation assets.

The Partnership’s future minimum lease obligations as of March 31, 2024 consist of the following:

Finance Leases

Property, plant and equipment, at cost $ 77 $ —

Accumulated depreciation ( 3 ) —

Property, plant and equipment, net $ 74 $ —

Current installments of finance lease obligations $ 14 $ —

Finance lease obligations 62 —

Total finance lease obligations $ 76 $ —

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

June 30, 2024

For the six months ended June 30, 2024, the Partnership incurred new operating leases, primarily related to land and marine transportation assets and renewed existing operating leases set to expire, primarily related to marine transportation assets.

The Partnership’s future minimum lease obligations as of June 30, 2024, consist of the following:

Operating Leases

7 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 March 31, 2024 are as follows:

Future minimum revenues the Partnership expects to receive under these non-cancelable arrangements as of June 30, 2024, are as follows:

2024 - $ 13,269 ;

7 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

March 31, 2024

June 30, 2024

SUPPLEMENTAL BALANCE SHEET INFORMATION

8 unchanged sentences

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

March 31, 2024

June 30, 2024

Asset retirement obligations as of December 31, 2023 $ 5,182

10 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

March 31, 2024

June 30, 2024

PARTNERS' CAPITAL (DEFICIT)

As of March 31, 2024, Partners’ capital (deficit) consisted of 39,001,086 common limited partner units, representing a 98 % partnership interest, and a 2 % general partner interest.

As of June 30, 2024, Partners’ capital (deficit) consisted of 39,001,086 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.

25 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

March 31, 2024

Three Months Ended March 31,

June 30, 2024

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

2024 2023 2024 2023

Net income (loss) $ 3,780 $ 1,081 $ 7,053 $ ( 4,005 )

5 unchanged sentences

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 March 31,

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

2024 2023 2024 2023

Basic weighted average limited partner units outstanding

1 unchanged sentence

Dilutive effect of restricted units issued

59,153 5,334 39,153 —

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 months ended March 31, 2023 because the limited partners were allocated a net loss in this period.

All common unit equivalents were antidilutive for the three months ended June 30, 2023, because the limited partners were allocated a net loss in this period.

UNIT BASED AWARDS - LONG-TERM INCENTIVE PLANS

1 unchanged sentence

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 March 31,

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

2024 2023 2024 2023

Restricted unit Awards

8 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

March 31, 2024

June 30, 2024

Long-Term Incentive Plans

19 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 March 31, 2024 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 June 30, 2024, 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.

3 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

March 31, 2024

June 30, 2024

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 March 31, 2024, there was a total of $ 3,722 of unrecognized compensation costs related to non-vested phantom unit awards.

As of June 30, 2024, there was a total of $ 3,543 of unrecognized compensation costs related to non-vested phantom unit awards.

These costs are expected to be recognized over a remaining life of 1.90 years.

19 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 March 31, 2024 met the criteria to be treated under equity classification.

All of the Partnership's outstanding restricted unit awards at June 30, 2024, met the criteria to be treated under equity classification.

In February 2024, the Partnership issued 28,760 TBRUs to each of the Partnership's three independent directors under the 2017 LTIP.

3 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

March 31, 2024

June 30, 2024

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 three months ended March 31, 2024 is provided below:

A summary of the restricted unit activity for the six months ended June 30, 2024, is provided below:

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

5 unchanged sentences

Aggregate intrinsic value, end of period $ 545

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, 2024 and 2023 is provided below:

Three Months Ended March 31,

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, 2024 and 2023, is provided below:

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

2024 2023 2024 2023

Aggregate intrinsic value of units vested $ — $ — $ 46 $ 89

Fair value of units vested — — 168 178

As of March 31, 2024, there was $ 425 of unrecognized compensation cost related to non-vested restricted units.

As of June 30, 2024, there was $ 377 of unrecognized compensation cost related to non-vested restricted units.

That cost is expected to be recognized over a weighted-average period of 2.76 years.

RELATED PARTY TRANSACTIONS

As of March 31, 2024, 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.

As of June 30, 2024, 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, 2024 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 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, 2024, 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)

March 31, 2024

June 30, 2024

Non-Competition Provisions .

24 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

March 31, 2024

June 30, 2024

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

1 unchanged sentence

Effective January 1, 2024, through December 31, 2024, the Conflicts Committee approved an annual reimbursement amount for indirect expenses of $ 13,508 .

The Partnership reimbursed Martin Resource Management Corporation for $ 3,377 and $ 3,496 of indirect expenses for the three months ended March 31, 2024 and 2023, respectively.

The Partnership reimbursed Martin Resource Management Corporation for $ 3,377 and $ 3,496 of indirect expenses for the three months ended June 30, 2024 and 2023, respectively.

The Partnership reimbursed Martin Resource Management Corporation for $ 6,754 and $ 6,991 of indirect expenses for the six months ended June 30, 2024 and 2023, 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 subcontractors.

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)

March 31, 2024

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

June 30, 2024

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.

Marine Agreements

30 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 March 31, 2024 and 2023 were $ 938 and $ 623 , respectively.

Amounts paid to East Texas Mack for tractor and trailer lease payments and lease residuals for the three months ended June 30, 2024 and 2023, were $ 1,118 and $ 785 , respectively.

Amounts paid to East Texas Mack for tractor and trailer lease payments and lease residuals for the six months ended June 30, 2024 and 2023, were $ 2,055 and $ 1,409 , respectively.

MARTIN MIDSTREAM PARTNERS L.P.

1 unchanged sentence

(Dollars in thousands, except where otherwise indicated)

March 31, 2024

June 30, 2024

Storage and Services Agreement.

The Partnership is a party to a storage and services agreement with Martin Butane, a division of Martin Product Sales LLC (a subsidiary of Martin Resource Management Corporation), dated May 1, 2023, under which the Partnership provides storage and other services for NGLs at the Partnership's Arcadia, Louisiana, underground storage facility.

The primary term of the agreement expires on April 30, 2024, but will continue on a year to year basis until terminated by either party by giving at least 90 days’ written notice prior to the end of any term.

The primary term of the agreement expired on April 30, 2024, but will continue on a year to year basis until terminated by either party by giving at least 90 days’ written notice prior to the end of any term.

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 March 31,

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

2024 2023 2024 2023

Terminalling and storage $ 18,078 $ 18,077 $ 36,627 $ 35,579

4 unchanged sentences

123 7,497 252 8,422

$ 26,519 $ 32,851 $ 53,798 $ 56,789

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

Three Months Ended March 31,

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

2024 2023 2024 2023

Cost of products sold:

6 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

March 31, 2024

June 30, 2024

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

Three Months Ended March 31,

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

2024 2023 2024 2023

Operating expenses:

4 unchanged sentences

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

Three Months Ended March 31,

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

2024 2023 2024 2023

Selling, general and administrative:

10 unchanged sentences

The operating income of these segments is reviewed by the chief operating decision maker to assess performance and make business decisions.

Effective January 1, 2023, the Partnership reorganized its Terminalling and Storage and Natural Gas Liquids operating segments.

The underground NGL storage division of the Partnership's Natural Gas Liquids operating segment was moved to the Terminalling and Storage operating segment.

Further, the Partnership's packaged lubricants and grease businesses were moved from the Terminalling and Storage operating segment to the Specialty Products operating segment (formerly named the Natural Gas Liquids segment).

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

There is no allocation of interest expense.

Three Months Ended March 31, 2024 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 June 30, 2024 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 $ 24,402 $ ( 2,027 ) $ 22,375 $ 5,729 $ 1,316 $ 2,075

7 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

March 31, 2024

Three Months Ended March 31, 2023 Operating Revenues Intersegment Revenues Eliminations Operating Revenues after Eliminations Depreciation and Amortization Operating Income (Loss) after Eliminations Capital Expenditures and Plant Turnaround Costs

June 30, 2024

Three Months Ended June 30, 2023 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 $ 23,906 $ ( 2,222 ) $ 21,684 $ 5,195 $ 2,236 $ 3,324

4 unchanged sentences

Total $ 201,529 $ ( 5,893 ) $ 195,636 $ 12,547 $ 17,329 $ 9,795

The Partnership's assets by reportable segment as of March 31, 2024 and December 31, 2023, are as follows:

March 31, 2024 December 31, 2023

Six Months Ended June 30, 2024 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 $ 48,687 $ ( 3,795 ) $ 44,892 $ 11,124 $ 3,273 $ 9,125

Transportation 123,509 ( 7,526 ) 115,983 6,857 10,268 4,625

Sulfur services 70,874 ( 1 ) 70,873 5,760 17,901 14,897

Specialty products 133,663 ( 50 ) 133,613 1,595 14,035 1,950

Indirect selling, general and administrative — — — — ( 7,655 ) —

Total $ 376,733 $ ( 11,372 ) $ 365,361 $ 25,336 $ 37,822 $ 30,597

Six Months Ended June 30, 2023 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 $ 47,825 $ ( 5,283 ) $ 42,542 $ 10,794 $ 2,300 $ 7,109

Transportation 120,334 ( 9,861 ) 110,473 7,522 8,524 3,999

Sulfur services 76,009 — 76,009 5,433 15,897 5,708

Specialty products 211,175 ( 34 ) 211,141 1,699 16,205 599

Indirect selling, general and administrative — — — — ( 8,092 ) —

Total $ 455,343 $ ( 15,178 ) $ 440,165 $ 25,448 $ 34,834 $ 17,415

The Partnership's assets by reportable segment as of June 30, 2024 and December 31, 2023, are as follows:

June 30, 2024 December 31, 2023

Total assets:

4 unchanged sentences

Total assets $ 535,078 $ 509,375

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

June 30, 2024

COMMITMENTS AND CONTINGENCIES

14 unchanged sentences

The Partnership intends to vigorously defend the counterclaims asserted by the customer in the Litigation.

The trial for the Litigation is expected to be held in the first quarter of 2025.

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

March 31, 2024

The trial for the Litigation is expected to be held in the second half of 2025.

FAIR VALUE MEASUREMENTS

17 unchanged sentences

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 2024 Notes, 2025 and 2028 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, 2024 December 31, 2023

The estimated fair value of the 2028 Notes is considered Level 2, as the fair value is based upon quoted prices for identical liabilities in markets that are not active.

June 30, 2024 December 31, 2023

Value Carrying

1 unchanged sentence

Total $ 384,168 $ 432,751 $ 381,965 $ 414,453

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

June 30, 2024

INVESTMENT IN DSM SEMICHEM LLC

On October 19, 2022, Martin ELSA Investment LLC, the Partnership's affiliate, entered into definitive agreements with Samsung C&T America, Inc.

and Dongjin USA, Inc., an affiliate of Dongjin Semichem Co., Ltd., to form DSM Semichem LLC (“DSM”).

DSM will produce and distribute electronic level sulfuric acid (“ELSA”).

By leveraging the Partnership's existing assets located in Plainview, Texas and installing additional facilities (the “ELSA Facility”) as required, DSM will produce ELSA that meets the strict quality standards required by the recent advances in semiconductor manufacturing.

In addition to owning a 10 % non-controlling interest in DSM, the Partnership will be the exclusive provider of feedstock to the ELSA Facility.

The Partnership, through its affiliate MTI, will also provide land transportation services for the ELSA produced by DSM.

On April 1, 2024, the Partnership contributed $ 6,500 in cash to DSM, which represents the cash contributions required pursuant to DSM's limited liability agreement for the Partnership's 10 % non-controlling interest.

Also, in conjunction with the formation of DSM, we contributed approximately 22 acres of land.

The Partnership recognizes its 10 % interest in DSM as "Investment in DSM Semichem LLC" on its Consolidated and Condensed Balance Sheets.

The Partnership accounts for its ownership interest in DSM under the equity method of accounting.

CONDENSED CONSOLIDATED FINANCIAL INFORMATION

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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 March 31,

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

2024 2023 2024 2023

Provision for income taxes $ 1,772 $ 996 $ 2,568 $ 2,831

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 $ 80 and $ 120 were recorded in income tax expense for the three months ended March 31, 2024 and 2023, respectively.

Current state income taxes attributable to the Texas margin tax relating to the operation of the Partnership of $ 470 and $ 80 were recorded in income tax expense for the three months ended June 30, 2024 and 2023, respectively.

Current state income taxes attributable to the Texas margin tax relating to the operation of the Partnership of $ 550 and $ 200 were recorded in income tax expense for the six months ended June 30, 2024 and 2023, 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 $ 1,302 and $ 916 , related to the operation of the Taxable Subsidiary, for the three months ended June 30, 2024 and 2023, resulted in an effective income tax rate ("ETR") of 30.68 % and 26.60 %, respectively.

Total income tax expense of $ 2,018 and $ 2,631 , related to the operation of the Taxable Subsidiary, for the six months ended June 30, 2024 and 2023, resulted in an ETR of 22.94 % and 25.16 %, respectively.

The increase in the provision for income taxes and the ETR for the income taxes during the three months ended June 30, 2024, was primarily due to an increase in the Texas margin tax, as the more favorable wholesaler/retailer rate is no longer applicable on a combined reporting basis with the Partnership, and an increase in permanent differences, compared to the same period in 2023.

The decrease in the provision for income taxes and the ETR for the income taxes during the six months ended June 30, 2024, was primarily due to a favorable true-up to state net operating loss carryforwards, compared to the same period in 2023.

A current federal income tax expense of $ 786 and $ 162 , related to the operation of the Taxable Subsidiary, was recorded for the three months ended June 30, 2024 and 2023, respectively.

A current federal income tax expense of $ 1,576 and $ 487 , related to the operation of the Taxable Subsidiary, was recorded for the six months ended June 30, 2024 and 2023,

MARTIN MIDSTREAM PARTNERS L.P.

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(Dollars in thousands, except where otherwise indicated)

March 31, 2024

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 $ 716 and $ 1,715 , related to the operation of the Taxable Subsidiary, for the three months ended March 31, 2024 and 2023, respectively, resulted in an effective income tax rate ("ETR") of 15.73 % and 24.43 %, respectively.

The decrease in the provision for income taxes and the ETR for the income taxes during the three months ended March 31, 2024 was primarily due to a favorable true-up to state net operating loss carryforwards, compared to the same period in 2023.

A current federal income tax expense of $ 791 and $ 325 , related to the operation of the Taxable Subsidiary, was recorded for the three months ended March 31, 2024 and 2023, respectively.

A current state income tax expense of $ 251 and $ 213 , related to the operation of the Taxable Subsidiary, was recorded for the three months ended March 31, 2024 and 2023, respectively.

June 30, 2024

respectively.

A current state income tax expense of $ 165 and $ 64 , related to the operation of the Taxable Subsidiary, was recorded for the three months ended June 30, 2024 and 2023, respectively.

A current state income tax expense of $ 416 and $ 277 , related to the operation of the Taxable Subsidiary, was recorded for the six months ended June 30, 2024 and 2023, 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 (benefit) related to the MTI temporary differences of $( 326 ) and $ 1,177 was recorded for the three months ended March 31, 2024 and 2023, respectively.

A net deferred tax asset of $ 10,526 and $ 10,200 , related to the cumulative book and tax temporary differences, existed at March 31, 2024 and December 31, 2023, respectively.

A deferred tax expense related to the MTI temporary differences of $ 351 and $ 690 was recorded for the three months ended June 30, 2024 and 2023, respectively.

A deferred tax expense related to the MTI temporary differences of $ 26 and $ 1,867 was recorded for the six months ended June 30, 2024 and 2023, respectively.

A net deferred tax asset of $ 10,174 and $ 10,200 , related to the cumulative book and tax temporary differences, existed at June 30, 2024 and December 31, 2023, 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.

1 unchanged sentence

Quarterly Distribution.

On April 17, 2024, the Partnership declared a quarterly cash distribution of $ 0.005 per common unit for the first quarter of 2024, or $ 0.020 per common unit on an annualized basis, which will be paid on May 15, 2024 to unitholders of record as of May 8, 2024.

On July 17, 2024, the Partnership declared a quarterly cash distribution of $ 0.005 per common unit for the second quarter of 2024, or $ 0.020 per common unit on an annualized basis, which will be paid on August 14, 2024, to unitholders of record as of August 7, 2024.

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