What changed in this filing

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Item 1. Financial Statements

2024-10-21 compared with 2024-07-23 · 146 added, 124 removed, 730 unchanged (27% of the section changed)

3 unchanged sentences

(Dollars in thousands)

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

(Unaudited) (Audited)

35 unchanged sentences

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

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

18 unchanged sentences

Total costs and expenses 158,442 162,804 487,142 568,420

Other operating income (loss), net 953 673 1,161 285

Gain on disposition or sale of property, plant and equipment 159 811 1,320 1,096

Operating income 12,651 14,704 50,473 49,538

2 unchanged sentences

Loss on extinguishment of debt — — — ( 5,121 )

Equity in earnings (loss) of DSM Semichem LLC ( 314 ) — ( 314 ) —

Other, net 2 17 20 50

15 unchanged sentences

* Related Party Transactions Included Above

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

17 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

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

Net loss — ( 3,253 ) ( 66 ) ( 3,319 )

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

Unit-based compensation — 42 — 42

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

Balances - September 30, 2024 39,001,086 ( 62,963 ) 1,621 ( 61,342 )

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

3 unchanged sentences

Unit-based compensation — 145 — 145

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

Balances - September 30, 2024 39,001,086 $ ( 62,963 ) $ 1,621 $ ( 61,342 )

Partners’ Capital (Deficit)

1 unchanged sentence

Units Amount Total

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

Net income — 1,059 22 1,081

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

Net loss — ( 1,040 ) ( 21 ) ( 1,061 )

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

Unit-based compensation — 37 — 37

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

Balances - September 30, 2023 38,914,806 ( 66,531 ) 1,552 ( 64,979 )

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

3 unchanged sentences

Unit-based compensation — 127 — 127

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

Balances - September 30, 2023 38,914,806 $ ( 66,531 ) $ 1,552 $ ( 64,979 )

See accompanying notes to consolidated and condensed financial statements.

2 unchanged sentences

(Dollars in thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

7 unchanged sentences

Loss on extinguishment of debt — 5,121

Equity in (earnings) loss of DSM Semichem LLC 314 —

Non cash unit-based compensation 145 127

33 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

June 30, 2024

September 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 six months ended June 30, 2024.

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures ("ASU 2023-07").

ASU 2023-07 requires annual and interim disclosures that are expected to improve reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses.

The provisions of ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Partnership will adopt ASU 2023-07 and its expanded segment disclosure requirements in compliance with the required adoption guidelines.

EXIT OF BUTANE OPTIMIZATION BUSINESS

During the second quarter of 2023, the Partnership completed its previously announced exit from its butane optimization business at the conclusion of the butane selling season.

This exit did not qualify as discontinued operations in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 205.

This exit did not qualify as discontinued operations in accordance with FASB Accounting Standards Codification ("ASC") Topic 205.

Going forward, with respect to butane, the Partnership will operate as a fee-based butane logistics business, primarily continuing to utilize its north Louisiana underground storage assets, which have both truck and rail capability.

3 unchanged sentences

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

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

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

September 30, 2024

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

Products revenue $ — $ 70,539

2 unchanged sentences

$ — $ ( 2,255 )

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

June 30, 2024

The following table disaggregates our revenue by major source:

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

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

2024 2023 2024 2023

22 unchanged sentences

For throughput contracts, revenue is recognized based on the volume moved through the Partnership’s terminals at the contracted rate.

For storage and throughput contracts at the Partnership's underground NGL storage facility, revenue is recognized based on the volume stored and moved through the facility at the contracted rate.

For storage and throughput contracts at the Partnership's underground NGL storage facility, revenue is recognized based on the volume stored

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

September 30, 2024

and moved through the facility at the contracted rate.

For the Partnership’s tolling agreement, revenue is recognized based on the contracted monthly reservation fee and throughput volumes moved through the facility.

4 unchanged sentences

The performance of the service is invoiced as the transaction occurs and is generally paid within a month.

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

June 30, 2024

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

21 unchanged sentences

Total $ 18,085 $ 73,493 $ 71,094 $ 48,644 $ 49,662 $ 157,964 $ 418,942

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

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

September 30, 2024

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

September 30,

2024 December 31,

5 unchanged sentences

$ 43,037 $ 43,822

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

June 30, 2024

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

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

September 30,

2024 December 31,

$ 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

$ 150,000 Credit facility at variable interest rate ( 8.44 % 1 weighted average at September 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 $ 2,503 and $ 3,292 , respectively 2

$ 83,997 $ 39,208

6 unchanged sentences

The margin is set every three months.

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

All amounts outstanding at September 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 June 30, 2024 is 3.25 %.

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

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

The applicable margin for SOFR borrowings effective October 16, 2024, is 3.50 %.

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 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.

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

The Partnership paid cash interest in the amount of $ 24,805 and $ 25,291 for the three months ended September 30, 2024 and 2023, respectively.

The Partnership paid cash interest in the amount of $ 51,043 and $ 50,099 for the nine months ended September 30, 2024 and 2023, respectively.

Capitalized interest was $ 373 and $ 18 for the three months ended September 30, 2024 and 2023, respectively.

Capitalized interest was $ 806 and $ 29 for the nine months ended September 30, 2024 and 2023, respectively.

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

September 30, 2024

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

5 unchanged sentences

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.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

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,

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

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

2024 2023 2024 2023

6 unchanged sentences

Total lease cost $ 7,066 $ 5,906 $ 19,776 $ 15,873

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

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

September 30,

2024 December 31, 2023

14 unchanged sentences

(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:

September 30, 2024

For the nine months ended September 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 September 30, 2024, consist of the following:

Operating Leases

2 unchanged sentences

Year 3 14,770

Year 4 10,342

Thereafter 4,425

2 unchanged sentences

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

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

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

2024 - $ 6,557 ;

7 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

June 30, 2024

September 30, 2024

SUPPLEMENTAL BALANCE SHEET INFORMATION

Components of "Other accrued liabilities" were as follows:

September 30,

2024 December 31, 2023

6 unchanged sentences

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

June 30, 2024

September 30, 2024

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

10 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

June 30, 2024

September 30, 2024

PARTNERS' CAPITAL (DEFICIT)

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.

As of September 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.

7 unchanged sentences

The consideration transferred totaling $ 552,058 exceeds the historical cost of the net assets received.

This excess of the purchase price over the historical cost of the net assets received has resulted in cumulative distributions of $ 289,019 reflected as reductions to Partners' capital.

This excess of the purchase price over the historical cost of the net assets received has resulted in cumulative deemed distributions of $ 289,019 reflected as reductions to Partners' capital.

Distributions of Available Cash

15 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

June 30, 2024

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

September 30, 2024

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

2024 2023 2024 2023

6 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 June 30, Six Months Ended June 30,

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

2024 2023 2024 2023

2 unchanged sentences

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 June 30, 2023, because the limited partners were allocated a net loss in this period.

All common unit equivalents were antidilutive for the three and nine months ended September 30, 2023 and the three months ended September 30, 2024 because the limited partners were allocated a net loss in these periods.

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 June 30, Six Months Ended June 30,

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

2024 2023 2024 2023

9 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

June 30, 2024

September 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 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.

All of the Partnership's outstanding phantom unit awards at September 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)

June 30, 2024

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

As of September 30, 2024, there was a total of $ 3,493 of unrecognized compensation costs related to non-vested phantom unit awards.

These costs are expected to be recognized over a remaining life of 1.69 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 June 30, 2024, met the criteria to be treated under equity classification.

All of the Partnership's outstanding restricted unit awards at September 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)

June 30, 2024

September 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 six months ended June 30, 2024, is provided below:

A summary of the restricted unit activity for the nine months ended September 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 $ 616

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,

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, 2024 and 2023, is provided below:

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

2024 2023 2024 2023

1 unchanged sentence

Fair value of units vested — — 168 178

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

As of September 30, 2024, there was $ 335 of unrecognized compensation cost related to non-vested restricted units.

That cost is expected to be recognized over a weighted-average period of 2.57 years.

RELATED PARTY TRANSACTIONS

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.

As of September 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 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 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, 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)

June 30, 2024

September 30, 2024

Non-Competition Provisions .

24 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

June 30, 2024

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

The Partnership reimbursed Martin Resource Management Corporation for $ 10,131 and $ 10,487 of indirect expenses for the nine months ended September 30, 2024 and 2023, respectively.

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

14 unchanged sentences

The Omnibus Agreement, other than the indemnification provisions and the provisions limiting the amount for which the Partnership will reimburse Martin Resource Management Corporation for general and administrative services performed on its behalf, will terminate if the Partnership is no longer an affiliate of Martin Resource Management Corporation.

Merger Agreement

On October 3, 2024, the Partnership entered into a Merger Agreement with Martin Resource Management Corporation.

Refer to Note 18 – Subsequent Events included herein for more information.

Master Transportation Services Agreement

8 unchanged sentences

Department of Energy’s national diesel price list.

Indemnification.

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

MARTIN MIDSTREAM PARTNERS L.P.

1 unchanged sentence

(Dollars in thousands, except where otherwise indicated)

June 30, 2024

subcontractors.

September 30, 2024

Indemnification.

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.

30 unchanged sentences

MTI leases equipment, including tractors and trailers, from East Texas Mack Sales ("East Texas Mack").

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

Amounts paid to East Texas Mack for tractor and trailer lease payments and lease residuals for the three months ended June 30, 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.

Certain of our directors or officers are owners of East Texas Mack, including entities affiliated with Ruben

MARTIN MIDSTREAM PARTNERS L.P.

1 unchanged sentence

(Dollars in thousands, except where otherwise indicated)

June 30, 2024

September 30, 2024

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, 2024 and 2023, were $ 1,374 and $ 952 , respectively.

Amounts paid to East Texas Mack for tractor and trailer lease payments and lease residuals for the nine months ended September 30, 2024 and 2023, were $ 3,429 and $ 2,361 , respectively.

Storage and Services Agreement.

6 unchanged sentences

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

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

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

2024 2023 2024 2023

7 unchanged sentences

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

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

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

2024 2023 2024 2023

7 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

June 30, 2024

September 30, 2024

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

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

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

2024 2023 2024 2023

5 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 June 30, Six Months Ended June 30,

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

2024 2023 2024 2023

13 unchanged sentences

There is no allocation of interest expense.

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

Three Months Ended September 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 $ 24,414 $ ( 1,852 ) $ 22,562 $ 5,695 $ 914 $ 2,193

7 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

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

September 30, 2024

Three Months Ended September 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 $ 23,973 $ ( 1,771 ) $ 22,202 $ 5,102 $ 1,357 $ 2,684

4 unchanged sentences

Total $ 181,811 $ ( 5,114 ) $ 176,697 $ 12,223 $ 14,704 $ 10,666

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

Nine Months Ended September 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 $ 73,101 $ ( 5,647 ) $ 67,454 $ 16,819 $ 4,187 $ 11,318

4 unchanged sentences

Total $ 553,228 $ ( 16,933 ) $ 536,295 $ 37,944 $ 50,473 $ 43,132

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

Nine Months Ended September 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 $ 71,798 $ ( 7,054 ) $ 64,744 $ 15,896 $ 3,657 $ 9,793

4 unchanged sentences

Total $ 637,154 $ ( 20,292 ) $ 616,862 $ 37,671 $ 49,538 $ 28,081

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

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

September 30, 2024 December 31, 2023

Total assets:

7 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

June 30, 2024

September 30, 2024

COMMITMENTS AND CONTINGENCIES

35 unchanged sentences

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

September 30, 2024 December 31, 2023

Value Carrying

4 unchanged sentences

(Dollars in thousands, except where otherwise indicated)

June 30, 2024

September 30, 2024

INVESTMENT IN DSM SEMICHEM LLC

15 unchanged sentences

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

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

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

2024 2023 2024 2023

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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 $ 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.

Current state income taxes attributable to the Texas margin tax relating to the operation of the Partnership of $ 270 and $ 120 were recorded in income tax expense for the three months ended September 30, 2024 and 2023, respectively.

Current state income taxes attributable to the Texas margin tax relating to the operation of the Partnership of $ 820 and $ 320 were recorded in income tax expense for the nine months ended September 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,

Total income tax expense of $ 796 and $ 668 , related to the operation of the Taxable Subsidiary, for the three months ended September 30, 2024 and 2023, resulted in an effective income tax rate ("ETR") of 33.36 % and 23.96 %, respectively.

Total income tax expense of $ 2,814 and $ 3,299 , related to the operation of the Taxable Subsidiary, for the nine months ended September 30, 2024 and 2023, resulted in an ETR of 25.17 % and 24.88 %, respectively.

The increase in the provision for income taxes and the ETR for the income taxes during the three months ended September 30, 2024, was primarily due to an increase in permanent differences, compared to the same period in 2023.

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

The increase in the ETR for the income taxes during the nine months ended September 30, 2024, was primarily due to a decrease in income before income taxes in the current period, compared to the same period in 2023.

A current federal income tax expense of $ 471 and $ 179 , related to the operation of the Taxable Subsidiary, was recorded for the three months ended September 30, 2024 and 2023, respectively.

A current federal income tax expense of $ 2,047 and $ 666 , related to the operation of the Taxable Subsidiary, was recorded for the nine months ended September 30, 2024 and 2023, respectively.

A current state income tax expense of $ 194 and $ 33 , related to the operation of the Taxable

MARTIN MIDSTREAM PARTNERS L.P.

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(Dollars in thousands, except where otherwise indicated)

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.

September 30, 2024

Subsidiary, was recorded for the three months ended September 30, 2024 and 2023, respectively.

A current state income tax expense of $ 610 and $ 311 , related to the operation of the Taxable Subsidiary, was recorded for the nine months ended September 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.

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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 $ 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.

A deferred tax expense related to the MTI temporary differences of $ 131 and $ 456 was recorded for the three months ended September 30, 2024 and 2023, respectively.

A deferred tax expense related to the MTI temporary differences of $ 157 and $ 2,322 was recorded for the nine months ended September 30, 2024 and 2023, respectively.

A net deferred tax asset of $ 10,043 and $ 10,200 , related to the cumulative book and tax temporary differences, existed at September 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.

SUBSEQUENT EVENTS

Merger Agreement.

On May 24, 2024, Martin Resource Management Corporation filed an amendment to its Schedule 13D (the “13D Amendment”) with the SEC disclosing that Martin Resource Management Corporation made a non-binding proposal to the Board, pursuant to which Martin Resource Management Corporation would acquire all the outstanding common units of the Partnership not already owned by Martin Resource Management Corporation and its subsidiaries.

On October 3, 2024, Martin Resource Management Corporation, MRMC Merger Sub LLC, a Delaware limited liability company and wholly owned subsidiary of Parent (“Merger Sub”), the Partnership, and MMGP entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which Merger Sub will merge with and into the Partnership, with the Partnership surviving as a wholly owned subsidiary of Martin Resource Management Corporation (the “Merger”).

Under the terms of the Merger Agreement, at the effective time of the Merger, each issued and outstanding common unit representing a limited partner interest in the Partnership (each, a “Common Unit”) other than common units owned by Martin Resource Management Corporation and its subsidiaries, including MMGP (each, a “Public Common Unit”), will be converted into the right to receive $ 4.02 in cash without any interest thereon (the “Merger Consideration”).

In connection with the Merger, (i) MMGP’s non-economic general partner interest in the Partnership and (ii) the common units owned by Martin Resource Management Corporation and its subsidiaries, in each case, shall not be cancelled, shall not be converted into the right to receive the Merger Consideration and shall remain outstanding following the Merger.

Immediately prior to the effective time of the Merger, all restricted units, phantom units and phantom unit appreciation rights outstanding immediately prior to the effective time will fully vest, and each holder of such units and appreciation rights will receive an amount equal to the Merger Consideration with respect to each such unit or appreciation right that becomes vested pursuant to the terms of the Merger Agreement.

The Merger is subject to customary closing conditions, including regulatory approval and approval of the unitholders.

Quarterly Distribution.

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.

On October 16, 2024, the Partnership declared a quarterly cash distribution of $ 0.005 per common unit for the third quarter of 2024, or $ 0.020 per common unit on an annualized basis, which will be paid on November 14, 2024, to unitholders of record as of November 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