MARTIN MIDSTREAM PARTNERS L.P. 10-Q

Item 1. Financial Statements MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED BALANCE SHEETS (Dollars in thousands) March 31, 2025 December 31, 2024 (Unaudited) (Audited) Assets Cash $ 52 $ 55 Accounts and other receivables, less allowance for doubtful accounts of $ 1,245 and $ 940 , respectively 64,405 53,569 Inventories 44,418 51,707 Due from affiliates 9,640 13,694 Other current assets 11,131 11,454 Total current assets 129,646 130,479 Property, plant and equipment, at cost 957,515 954,059 Accumulated depreciation ( 657,576 ) ( 648,609 ) Property, plant and equipment, net 299,939 305,450 Goodwill 16,671 16,671 Right-of-use assets 68,658 67,140 Investment in DSM Semichem LLC 7,106 7,314 Deferred income taxes, net 10,160 9,946 Other assets, net 1,230 1,509 Total assets $ 533,410 $ 538,509 Liabilities and Partners’ Capital (Deficit) Current installments of long-term debt and finance lease obligations $ 14 $ 14 Trade and other accounts payable 57,852 61,599 Product exchange payables 572 798 Due to affiliates 2,418 4,927 Income taxes payable 2,552 1,283 Other accrued liabilities 32,828 46,880 Total current liabilities 96,236 115,501 Long-term debt, net 451,449 437,635 Finance lease obligations 51 55 Operating lease liabilities 48,430 47,815 Other long-term obligations 8,872 7,942 Total liabilities 605,038 608,948 Commitments and contingencies Partners’ capital (deficit) ( 71,628 ) ( 70,439 ) Total liabilities and partners' capital (deficit) $ 533,410 $ 538,509 See accompanying notes to consolidated and condensed financial statements. 4 MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS (Unaudited) (Dollars and units in thousands, except per unit amounts) Three Months Ended March 31, 2025 2024 Revenues: Terminalling and storage * $ 21,549 $ 22,517 Transportation * 52,985 58,307 Sulfur services 4,223 3,477 Product sales: * Specialty products 69,305 66,325 Sulfur services 44,481 30,204 113,786 96,529 Total revenues 192,543 180,830 Costs and expenses: Cost of products sold: (excluding depreciation and amortization) Specialty products * 60,494 57,230 Sulfur services * 29,082 20,399 Terminalling and storage * — 18 89,576 77,647 Expenses: Operating expenses * 64,454 63,934 Selling, general and administrative * 11,774 8,913 Depreciation and amortization 12,816 12,649 Total costs and expenses 178,620 163,143 Gain on disposition or sale of property, plant and equipment 479 208 Operating income 14,402 17,895 Other income (expense): Interest expense, net ( 14,107 ) ( 13,842 ) Equity in loss of DSM Semichem LLC ( 209 ) — Other, net ( 2 ) 16 Total other expense ( 14,318 ) ( 13,826 ) Net income before taxes 84 4,069 Income tax expense ( 1,117 ) ( 796 ) Net income (loss) ( 1,033 ) 3,273 Less general partner's interest in net income (loss) 21 ( 65 ) Less income (loss) allocable to unvested restricted units 4 ( 12 ) Limited partners' interest in net income (loss) $ ( 1,008 ) $ 3,196 Net income (loss) per unit attributable to limited partners - basic $ ( 0.03 ) $ 0.08 Net income (loss) per unit attributable to limited partners - diluted $ ( 0.03 ) $ 0.08 Weighted average limited partner units - basic 38,882,982 38,828,737 Weighted average limited partner units - diluted 38,882,982 38,836,165 See accompanying notes to consolidated and condensed financial statements. *Related Party Transactions Shown Below 5 MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS (Unaudited) (Dollars and units in thousands, except per unit amounts) * Related Party Transactions Included Above Three Months Ended March 31, 2025 2024 Revenues:* Terminalling and storage $ 17,262 $ 18,549 Transportation 7,970 8,601 Product Sales 1,300 129 Costs and expenses:* Cost of products sold: (excluding depreciation and amortization) Specialty products 6,010 6,573 Sulfur services 3,121 2,993 Terminalling and storage — 18 Expenses: Operating expenses 27,565 26,423 Selling, general and administrative 7,892 6,863 See accompanying notes to consolidated and condensed financial statements. 6 MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL (DEFICIT) (Unaudited) (Dollars in thousands) Partners’ Capital (Deficit) Common Limited General Partner Amount Units Amount Total Balances - December 31, 2024 39,001,086 $ ( 71,877 ) $ 1,438 $ ( 70,439 ) Net loss — ( 1,012 ) ( 21 ) ( 1,033 ) Issuance of restricted units 54,000 — — — Cash distributions — ( 195 ) ( 4 ) ( 199 ) Unit-based compensation — 43 — 43 Balances - March 31, 2025 39,055,086 $ ( 73,041 ) $ 1,413 $ ( 71,628 ) Partners’ Capital (Deficit) Common Limited General Partner Amount Units Amount Total Balances - December 31, 2023 38,914,806 $ ( 66,182 ) $ 1,558 $ ( 64,624 ) Net income — 3,208 65 3,273 Issuance of restricted units 86,280 — — — Cash distributions — ( 195 ) ( 4 ) ( 199 ) Unit-based compensation — 54 — 54 Balances - March 31, 2024 39,001,086 $ ( 63,115 ) $ 1,619 $ ( 61,496 ) See accompanying notes to consolidated and condensed financial statements. 7 MARTIN MIDSTREAM PARTNERS L.P. CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) Three Months Ended March 31, 2025 2024 Cash flows from operating activities: Net income (loss) $ ( 1,033 ) $ 3,273 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 12,816 12,649 Amortization of deferred debt issuance costs 777 766 Amortization of debt discount 600 600 Deferred income tax expense ( 214 ) ( 326 ) Gain on disposition or sale of property, plant and equipment, net ( 479 ) ( 208 ) Equity in loss of DSM Semichem LLC 209 — Non cash unit-based compensation 43 54 Change in current assets and liabilities, excluding effects of acquisitions and dispositions: Accounts and other receivables ( 10,836 ) ( 4,726 ) Inventories 7,289 2,412 Due from affiliates 4,054 1,889 Other current assets ( 1,080 ) 705 Trade and other accounts payable ( 2,658 ) 7,579 Product exchange payables ( 226 ) ( 173 ) Due to affiliates ( 2,509 ) ( 332 ) Income taxes payable 1,269 1,063 Other accrued liabilities ( 14,913 ) ( 15,365 ) Change in other non-current assets and liabilities 872 249 Net cash provided by (used in) operating activities ( 6,019 ) 10,109 Cash flows from investing activities: Payments for property, plant and equipment ( 5,875 ) ( 11,670 ) Payments for plant turnaround costs ( 822 ) ( 5,960 ) Proceeds from sale of property, plant and equipment 479 235 Net cash used in investing activities ( 6,218 ) ( 17,395 ) Cash flows from financing activities: Payments of long-term debt ( 42,500 ) ( 57,500 ) Payments under finance lease obligations ( 4 ) — Proceeds from long-term debt 55,000 65,000 Payment of debt issuance costs ( 63 ) ( 15 ) Cash distributions paid ( 199 ) ( 199 ) Net cash provided by (used in) financing activities 12,234 7,286 Net increase in cash ( 3 ) — Cash at beginning of period 55 54 Cash at end of period $ 52 $ 54 Non-cash additions to property, plant and equipment $ 1,572 $ 2,706 See accompanying notes to consolidated and condensed financial statements. 8 MARTIN MIDSTREAM PARTNERS L.P. NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS (Dollars in thousands, except where otherwise indicated) March 31, 2025 (Unaudited) NOTE 1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION Martin Midstream Partners L.P. (the "Partnership") is a publicly traded limited partnership with a diverse set of operations focused primarily in the Gulf Coast region of the United States ("U.S."). Its four primary business lines include: terminalling, processing, and storage services for petroleum products and by-products; land and marine transportation services for petroleum products and by-products, chemicals, and specialty products; sulfur and sulfur-based products processing, manufacturing, marketing and distribution; and marketing, distribution, and transportation services for natural gas liquids ("NGL") and blending and packaging services for specialty lubricants and grease. The Partnership’s unaudited consolidated and condensed financial statements have been prepared in accordance with the requirements of Form 10-Q and U.S. Generally Accepted Accounting Principles ("U.S. GAAP") for interim financial reporting. Accordingly, these financial statements have been condensed and do not include all of the information and footnotes required by U.S. GAAP for annual audited financial statements of the type contained in the Partnership’s annual reports on Form 10-K. In the opinion of the management of Martin Midstream GP LLC ("MMGP" or the “general partner"), the Partnership’s general partner, all adjustments and elimination of significant intercompany balances necessary for a fair presentation of the Partnership’s financial position, results of operations, and cash flows for the periods shown have been made. All such adjustments are of a normal recurring nature. Results for such interim periods are not necessarily indicative of the results of operations for the full year. These financial statements should be read in conjunction with the Partnership’s audited consolidated financial statements and notes thereto included in the Partnership’s annual report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 24, 2025. Management has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated and condensed financial statements in conformity with U.S. GAAP. Actual results could differ from those estimates. NOTE 2. NEW ACCOUNTING PRONOUNCEMENTS 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 adopted ASU 2023-07 and its expanded segment disclosure requirements in compliance with the required adoption guidelines. In December 2023, the FASB issued Accounting Standards Update No. 2023-09, “Improvements to Income Tax Disclosures” ("ASU 2023-09"), which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The provisions of ASU 2023-09 are effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted and can be applied on either a prospective or retroactive basis. Once adopted, the Partnership will include the additional disclosure required by ASU 2023-09 in it's consolidated financial statements. 9 MARTIN MIDSTREAM PARTNERS L.P. NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS (Dollars in thousands, except where otherwise indicated) March 31, 2025 (Unaudited) NOTE 3. REVENUE The following table disaggregates our revenue by major source: Three Months Ended March 31, 2025 2024 Terminalling and storage segment Throughput and storage $ 21,549 $ 22,517 $ 21,549 $ 22,517 Transportation segment Land transportation $ 38,679 $ 42,743 Inland marine transportation 12,002 14,323 Offshore marine transportation 2,304 1,241 $ 52,985 $ 58,307 Sulfur services segment Sulfur product sales $ 9,712 $ 5,683 Fertilizer product sales 34,769 24,521 Sulfur services 4,223 3,477 $ 48,704 $ 33,681 Specialty products segment Natural gas liquids product sales $ 42,120 $ 38,131 Lubricant product sales 27,185 28,194 $ 69,305 $ 66,325 Revenue is measured based on a consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties where the Partnership is acting as an agent. The Partnership recognizes revenue when the Partnership satisfies a performance obligation, which typically occurs when the Partnership transfers control over a product to a customer or as the Partnership delivers a service. The following is a description of the principal activities - separated by reportable segments - from which the Partnership generates revenue. Terminalling and Storage Segment Revenue is recognized for storage contracts based on the contracted monthly tank fixed fee. 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 the Partnership’s tolling agreement, revenue is recognized based on the contracted monthly reservation fee and throughput volumes moved through the facility. Throughput and storage revenue in the table above includes non-cancelable revenue arrangements that are under the scope of ASC 842, whereby the Partnership has committed certain Terminalling and Storage assets in exchange for a minimum fee. Transportation Segment Revenue related to land transportation is recognized for line hauls based on a mileage rate. For contracted trips, revenue is recognized upon completion of the particular trip. The performance of the service is invoiced as the transaction occurs and is generally paid within a month. 10 MARTIN MIDSTREAM PARTNERS L.P. NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS (Dollars in thousands, except where otherwise indicated) March 31, 2025 (Unaudited) Revenue related to marine transportation is recognized for time charters based on a per day rate. For contracted trips, revenue is recognized upon completion of the particular trip. The performance of the service is invoiced as the transaction occurs and is generally paid within a month. Sulfur Services Segment Revenue from sulfur and fertilizer product sales is recognized when the customer takes title to the product. Delivery of product is invoiced as the transaction occurs and is generally paid within a month. Revenue from sulfur services is recognized as services are performed during each monthly period. The performance of the service is invoiced as the transaction occurs and is generally paid within a month. Specialty Products Segment NGL revenue is recognized when title is transferred, which is generally when the product is delivered by truck, rail, or pipeline to the Partnership's NGL customers or when the customer picks up the product from our facilities. When lubricants are sold by truck or rail, revenue is recognized when title is transferred, which is generally when the product leaves the Partnership's facility, but can vary based on the specific terms of the contract. Delivery of product is invoiced as the transaction occurs and is generally paid within a month. The table below includes estimated minimum revenue expected to be recognized in the future related to performance obligations that are unsatisfied at the end of the reporting period. The Partnership applies the practical expedient in ASC 606-10-50-14(a) and does not disclose information about remaining performance obligations that have original expected durations of one year or less. 2025 2026 2027 2028 2029 Thereafter Total Terminalling and storage Throughput and storage $ 33,654 $ 46,117 $ 47,500 $ 48,990 $ 50,393 $ 105,367 $ 332,021 Sulfur services Product sales 10,678 14,237 14,237 — — — 39,152 Service revenues 7,762 9,374 3,153 2,655 2,655 39,161 64,760 Specialty Products NGL product sales 5,016 3,867 — — — — 8,883 Total $ 57,110 $ 73,595 $ 64,890 $ 51,645 $ 53,048 $ 144,528 $ 444,816 In addition, 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, 2025, are as follows: 2025 - $ 16,538 ; 2026 - $ 13,582 ; 2027 - $ 12,620 ; 2028 - $ 12,165 ; 2029 - $ 9,860 ; subsequent years - $ 8,538 . NOTE 4. INVENTORIES Components of inventories at March 31, 2025 and December 31, 2024, were as follows: March 31, 2025 December 31, 2024 Natural gas liquids $ 821 $ 2,814 Lubricants 21,841 23,227 Sulfur 556 1,440 Fertilizer 15,607 18,463 Other 5,593 5,763 $ 44,418 $ 51,707 11 MARTIN MIDSTREAM PARTNERS L.P. NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS (Dollars in thousands, except where otherwise indicated) March 31, 2025 (Unaudited) NOTE 5. DEBT At March 31, 2025 and December 31, 2024, long-term debt consisted of the following: March 31, 2025 December 31, 2024 $ 150,000 Credit facility at variable interest rate ( 7.84 % 1 weighted average at March 31, 2025), 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 $ 2,032 and $ 2,242 , respectively 2 $ 63,968 $ 51,258 $ 400,000 Senior notes, 11.5 % interest, net of unamortized debt issuance costs of $ 5,719 and $ 6,223 , respectively, including unamortized premium of $ 6,800 and $ 7,400 , respectively, due February 2028, secured 2 387,481 386,377 Total 451,449 437,635 Less: current portion — — Total long-term debt, net of current portion $ 451,449 $ 437,635 1 The interest rate fluctuates based on Adjusted Term SOFR (set on the date of each advance) or the alternate base rate plus an applicable margin. The margin is set every three months. All amounts outstanding at March 31, 2025 were at Adjusted Term SOFR plus an applicable margin of 3.25 %. The applicable margin for revolving loans that are SOFR loans ranges from 2.75 % to 3.75 %, and the applicable margin for revolving loans that are alternate base rate loans ranges from 1.75 % to 2.75 %. The applicable margin for SOFR borrowings effective April 16, 2025, is 3.50 %. The credit facility contains various covenants that limit the Partnership’s ability to make distributions; make certain investments and acquisitions; enter into certain agreements; incur indebtedness; sell assets; and make certain amendments to the Partnership's omnibus agreement with Martin Resource Management Corporation (as amended, the "Omnibus Agreement"). 2 The Partnership was in compliance with all debt covenants as of March 31, 2025 and December 31, 2024. The Partnership paid cash interest in the amount of $ 24,725 and $ 24,653 for the three months ended March 31, 2025 and 2024, respectively. Capitalized interest was $ 0 and $ 142 for the three months ended March 31, 2025 and 2024, respectively. NOTE 6. LEASES The Partnership has numerous operating leases primarily for terminal facilities and transportation and other equipment. The leases generally provide that all expenses related to the facilities and equipment are to be paid by the lessee. Operating lease Right-of-Use assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. Because most of the Partnership's leases do not provide an implicit rate of return, the Partnership uses its imputed collateralized rate based on the information available at commencement date in determining the present value of lease payments. The estimated rate is based on a risk-free rate plus a risk-adjusted margin. 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 in its lease term if, at commencement, it is reasonably likely that the Par tnership will exercise the extension options. 12 MARTIN MIDSTREAM PARTNERS L.P. NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS (Dollars in thousands, except where otherwise indicated) March 31, 2025 (Unaudited) The components of lease expense for the three months ended March 31, 2025 and 2024, were as follows: Three Months Ended March 31, 2025 2024 Operating lease cost $ 6,134 $ 4,939 Finance lease cost: Amortization of right-of-use assets 4 0 Interest on lease liabilities 1 — Short-term lease cost 1,498 1,166 Variable lease cost 44 47 Total lease cost $ 7,681 $ 6,152 Supplemental balance sheet information related to leases at March 31, 2025 and December 31, 2024, was as follows: March 31, 2025 December 31, 2024 Operating Leases Operating lease right-of-use assets $ 68,658 $ 67,140 Current portion of operating lease liabilities included in "Other accrued liabilities" $ 20,568 $ 19,707 Operating lease liabilities 48,430 47,815 Total operating lease liabilities $ 68,998 $ 67,522 Finance Leases Property, plant and equipment, at cost $ 77 $ 77 Accumulated depreciation ( 14 ) ( 10 ) Property, plant and equipment, net $ 63 $ 67 Current installments of finance lease obligations $ 14 $ 14 Finance lease obligations 51 55 Total finance lease obligations $ 65 $ 69 13 MARTIN MIDSTREAM PARTNERS L.P. NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS (Dollars in thousands, except where otherwise indicated) March 31, 2025 (Unaudited) For the three months ended March 31, 2025, the Partnership incurred new operating leases, primarily related to land transportation assets, operating equipment, and renewed existing operating leases set to expire, primarily related to leased land and facilities. The Partnership’s future minimum lease obligations as of March 31, 2025, consist of the following: Operating Leases Year 1 $ 24,969 Year 2 21,263 Year 3 16,429 Year 4 9,128 Year 5 3,647 Thereafter 4,035 Total 79,471 Less amounts representing interest costs ( 10,473 ) Total lease liability $ 68,998 14 MARTIN MIDSTREAM PARTNERS L.P. NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS (Dollars in thousands, except where otherwise indicated) March 31, 2025 (Unaudited) NOTE 7. SUPPLEMENTAL BALANCE SHEET INFORMATION Components of "Other accrued liabilities" were as follows: March 31, 2025 December 31, 2024 Accrued interest $ 5,908 $ 17,899 Property and other taxes payable 1,862 4,043 Accrued payroll 4,461 5,187 Operating lease liabilities 20,568 19,707 Other 29 44 $ 32,828 $ 46,880 The schedule below summarizes the changes in our asset retirement obligations: March 31, 2025 Asset retirement obligations as of December 31, 2024 $ 5,313 Additions to asset retirement obligations — Accretion expense 34 Liabilities settled — Ending asset retirement obligations 5,347 Current portion of asset retirement obligations 1 — Long-term portion of asset retirement obligations 2 $ 5,347 1 The current portion of asset retirement obligations is included in "Other accrued liabilities" on the Partnership's Consolidated and Condensed Balance Sheets. 2 The non-current portion of asset retirement obligations is included in "Other long-term obligations" on the Partnership's Consolidated and Condensed Balance Sheets. 15 MARTIN MIDSTREAM PARTNERS L.P. NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS (Dollars in thousands, except where otherwise indicated) March 31, 2025 (Unaudited) NOTE 8. PARTNERS' CAPITAL (DEFICIT) As of March 31, 2025, Partners’ capital (deficit) consisted of 39,055,086 common limited partner units, representing a 98 % partnership interest, and a 2 % general partner interest. Martin Resource Management Corporation, through subsidiaries, owned 6,372,252 of the Partnership's common limited partner units representing approximately 16.3 % of the Partnership's outstanding common limited partner units. MMGP, the Partnership's general partner, owns the 2 % general partnership interest. The partnership agreement of the Partnership (the "Partnership Agreement") contains specific provisions for the allocation of net income and losses to each of the partners for purposes of maintaining their respective partner capital accounts. Impact on Partners' Capital (Deficit) Related to Transactions Between Entities Under Common Control Under ASC 805, assets and liabilities transferred between entities under common control are accounted for at the historical cost of those entities' ultimate parent, in a manner similar to a pooling of interests. Any difference in the amount paid by the transferee versus the historical cost of the assets transferred is recorded as an adjustment to equity (contribution or distribution) by the transferee. This is in contrast with a business combination between unrelated parties, where assets and liabilities are recorded at their fair values at the acquisition date, with any excess of amounts paid over the fair value representing goodwill. From time to time, the most recent being in 2019, the Partnership has entered into common control acquisitions from Martin Resource Management Corporation. 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 deemed distributions of $ 289,019 reflected as reductions to Partners' capital. Distributions of Available Cash The Partnership distributes all of its available cash (as defined in the Partnership Agreement) within 45 days after the end of each quarter to unitholders of record and to the general partner. Available cash is generally defined as all cash and cash equivalents of the Partnership on hand at the end of each quarter less the amount of cash reserves its general partner determines in its reasonable discretion is necessary or appropriate to: (i) provide for the proper conduct of the Partnership’s business; (ii) comply with applicable law, any debt instruments or other agreements; or (iii) provide funds for distributions to unitholders and the general partner for any one or more of the next four quarters, plus all cash on the date of determination of available cash for the quarter resulting from working capital borrowings made after the end of the quarter. Net Income per Unit The Partnership follows the provisions of the FASB ASC 260-10 related to earnings per share, which addresses the application of the two-class method in determining income per unit for master limited partnerships having multiple classes of securities that may participate in partnership distributions accounted for as equity distributions. Undistributed earnings are allocated to the general partner and limited partners utilizing the contractual terms of the Partnership Agreement. When current period distributions are in excess of earnings, the excess distributions for the period are to be allocated to the general partner and limited partners based on their respective sharing of income and losses specified in the Partnership Agreement. Additionally, as required under FASB ASC 260-10-45-61A, unvested share-based payments that entitle employees to receive non-forfeitable distributions are considered participating securities, as defined in FASB ASC 260-10-20, for earnings per unit calculations. For purposes of computing diluted net income per unit, the Partnership uses the more dilutive of the two-class and if-converted methods. Under the if-converted method, the weighted-average number of subordinated units outstanding for the period is added to the weighted-average number of common units outstanding for purposes of computing basic net income per unit and the resulting amount is compared to the diluted net income per unit computed using the two-class method. The following is a reconciliation of net income allocated to the general partner and limited partners for purposes of calculating net income attributable to limited partners per unit: 16 MARTIN MIDSTREAM PARTNERS L.P. NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS (Dollars in thousands, except where otherwise indicated) March 31, 2025 (Unaudited) Three Months Ended March 31, 2025 2024 Net income (loss) $ ( 1,033 ) $ 3,273 Less general partner’s interest in net income (loss): Distributions payable on behalf of general partner interest 4 4 General partner interest in undistributed income (loss) ( 25 ) 61 Less income (loss) allocable to unvested restricted units ( 4 ) 12 Limited partners’ interest in net income (loss) $ ( 1,008 ) $ 3,196 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, 2025 2024 Basic weighted average limited partner units outstanding 38,882,982 38,828,737 Dilutive effect of restricted units issued — 7,428 Total weighted average limited partner diluted units outstanding 38,882,982 38,836,165 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, 2025 because the limited partners were allocated a net loss in this period. NOTE 9. UNIT BASED AWARDS - LONG-TERM INCENTIVE PLANS The Partnership recognizes compensation cost related to unit-based awards to both employees and non-employees in its consolidated and condensed financial statements in accordance with certain provisions of ASC 718. Amounts recognized in operating expense and selling, general, and administrative expense in the consolidated and condensed financial statements with respect to these plans are as follows: Three Months Ended March 31, 2025 2024 Restricted unit Awards Non-employee directors $ 43 $ 54 Phantom unit Awards Employees 793 ( 174 ) Total unit-based compensation expense $ 836 $ ( 120 ) 17 MARTIN MIDSTREAM PARTNERS L.P. NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS (Dollars in thousands, except where otherwise indicated) March 31, 2025 (Unaudited) Long-Term Incentive Plans The Partnership's general partner has long-term incentive plans for employees and directors of the general partner and its affiliates who perform services for the Partnership. 2021 Phantom Unit Plan On July 21, 2021, the board of directors of the general partner of the Partnership (the "Board") and the compensation committee of the Board (the "Compensation Committee") approved the Martin Midstream Partners L.P. 2021 Phantom Unit Plan (the “Plan”), effective as of the same date. The Plan permits the awards of phantom units and phantom unit appreciation rights (collectively, "phantom unit awards") to any employee or non-employee director of the Partnership, including its executive officers. The awards may be time-based or performance-based and will be paid, if at all, in cash. The award of a phantom unit entitles the participant to a cash payment equal to the value of the phantom unit on the vesting date or dates, which value is the fair market value of a common unit of the Partnership (a “Unit”) on such vesting date or dates. The award of a phantom unit appreciation right entitles the recipient to a cash payment equal to the difference between the value of a phantom unit on the vesting date or dates in excess of the value assigned by the Compensation Committee to the phantom unit as of the grant date. Phantom units and phantom unit appreciation rights granted to participants do not confer upon participants any right to a Unit. On July 21, 2021, the Compensation Committee approved forms of time-based award agreements for phantom units and phantom unit appreciation rights, both of which awards vest in full on the third anniversary of the grant date. The grant date value of a phantom unit under a phantom unit appreciation right award is equal to the average of the closing price for a Unit during the 20 trading days immediately preceding the grant date of the award. Generally, vesting of an award is subject to a participant remaining continuously employed with the Partnership through the vesting date. However, if prior to the vesting date (i) a participant is terminated without cause (as defined in the award agreement) or terminates employment after the participant has attained both the age of 65 and ten years of employment (“retirement-eligible”), a prorated portion of the award will vest and be paid in cash no later than the 30 th day following such termination date (subject to a six-month delay in payment for certain retirement-eligible participants) or (ii) there is a change in control of the Partnership (as defined in the Plan), the award will vest in full and be paid in cash no later than the 30 th day following the date of the change of control; provided, that the participant has been in continuous employment through the termination or change in control date, as applicable. On April 20, 2022, the Board and the Compensation Committee approved the First Amendment to the Plan, effective as of the same date, which amendment increased the total number of phantom units available for grant under the Plan from 2,000,000 units to 5,000,000 units. On April 20, 2022, 365,000 phantom units and 1,097,500 phantom unit appreciation rights were granted to employees of the general partner and its affiliates who perform services for the Partnership. On July 19, 2023, 1,179,500 phantom units and 505,500 phantom unit appreciation rights were granted to employees of the general partner and its affiliates who perform services for the Partnership. 2025 Phantom Unit Plan On February 11, 2025, the Board and the Compensation Committee approved the Martin Midstream Partners L.P. 2025 Phantom Unit Plan (the “2025 Plan”) to supersede the 2021 Plan, effective as of the same date. The 2025 Plan contains substantially the same terms and conditions as the 2021 Plan. On February 11, 2025, 1,210,000 phantom units and 425,000 phantom unit appreciation rights were granted to employees of the general partner and its affiliates who perform services for the Partnership. The 2025 Plan permits the awards of phantom units and phantom unit appreciation rights to any employee or non-employee director of the Partnership, including its executive officers. The awards may be time-based or performance-based and will be paid, if at all, in cash. Phantom unit awards are recorded in operating expense and selling, general and administrative expense based on the fair value of the vested portion of the awards on the balance sheet date. The fair value of these awards is updated at each balance sheet date and changes in the fair value of the vested portions of the awards are recorded as increases or decreases to 18 MARTIN MIDSTREAM PARTNERS L.P. NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS (Dollars in thousands, except where otherwise indicated) March 31, 2025 (Unaudited) compensation expense within operating expense and selling, general and administrative expense in the Consolidated and Condensed Statements of Operations. All of the Partnership's phantom unit awards outstanding as of March 31, 2025 met the criteria to be treated under liability classification in accordance with ASC 718, given that these awards will settle in cash on the vesting date. Compensation expense for the phantom awards is based on the fair value of the units as of the balance sheet date as further discussed below, and such costs are recognized ratably over the service period of the awards. As the fair value of liability awards is required to be re-measured each period end, stock compensation expense amounts recognized in future periods for these awards will vary. The estimated future cash payments of these awards are presented as liabilities within "Other current liabilities" and "Other long-term obligations" in the Consolidated and Condensed Balance Sheets. As of March 31, 2025, there was a total of $ 6,611 of unrecognized compensation costs related to non-vested phantom unit awards. These costs are expected to be recognized over a remaining life of 1.94 years. The fair value of the phantom unit awards was estimated using a Monte Carlo valuation model as of the balance sheet date. The Monte Carlo valuation model is based on random projections of stock price paths and must be repeated numerous times to achieve a probabilistic assessment. Expected volatility was calculated based on the historical volatility of the Partnership’s common units as well as set of peer companies. Restricted Unit Plan On May 26, 2017, the unitholders of the Partnership approved the Martin Midstream Partners L.P. 2017 Restricted Unit Plan (the "2017 LTIP"). The 2017 LTIP currently permits the grant of awards covering an aggregate of 3,000,000 common units, all of which can be awarded in the form of restricted units. The 2017 LTIP is administered by the Compensation Committee. A restricted unit is a unit that is granted to grantees with certain vesting restrictions, which may be time-based and/or performance-based. Once these restrictions lapse, the grantee is entitled to full ownership of the unit without restrictions. The Compensation Committee may determine to make grants under the 2017 LTIP containing such terms as the Compensation Committee shall determine under the 2017 LTIP. With respect to time-based restricted units ("TBRUs"), the Compensation Committee will determine the time period over which restricted units granted to employees and directors will vest. The Compensation Committee may also award a percentage of restricted units with vesting requirements based upon the achievement of specified pre-established performance targets ("Performance Based Restricted Units" or "PBRUs"). The performance targets may include, but are not limited to, the following: revenue and income measures, cash flow measures, net income before interest expense and income tax expense ("EBIT"), net income before interest expense, income tax expense, and depreciation and amortization ("EBITDA"), distribution coverage metrics, expense measures, liquidity measures, market measures, corporate sustainability metrics, and other measures related to acquisitions, dispositions, operational objectives and succession planning objectives. PBRUs are earned only upon our achievement of an objective performance measure for the performance period. PBRUs which vest are payable in common units. Unvested units granted under the 2017 LTIP may or may not participate in cash distributions depending on the terms of each individual award agreement. The restricted units issued to directors generally vest in equal annual installments over a four-year period. 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, 2025, met the criteria to be treated under equity classification. On February 11, 2025, the Partnership issued 18,000 TBRUs to each of the Partnership's three independent directors under the 2017 LTIP. These restricted common units vest in equal installments of 6,000 units on January 24, 2026, 2027, 2028, and 2029. 19 MARTIN MIDSTREAM PARTNERS L.P. NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS (Dollars in thousands, except where otherwise indicated) March 31, 2025 (Unaudited) 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, 2025, is provided below: Number of Units Weighted Average Grant-Date Fair Value Per Unit Non-vested, beginning of period 168,864 $ 2.65 Granted (TBRU) 54,000 $ 3.62 Vested ( 60,126 ) $ 2.75 Forfeited — $ — Non-Vested, end of period 162,738 $ 2.93 Aggregate intrinsic value, end of period $ 586 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, 2025 and 2024, is provided below: Three Months Ended March 31, 2025 2024 Aggregate intrinsic value of units vested $ 55 $ 46 Fair value of units vested 165 168 As of March 31, 2025, there was $ 445 of unrecognized compensation cost related to non-vested restricted units. That cost is expected to be recognized over a weighted-average period of 2.89 years. NOTE 10. RELATED PARTY TRANSACTIONS As of March 31, 2025, Martin Resource Management Corporation owns 6,372,252 of the Partnership’s common units representing approximately 16.3 % 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, 2025, of approximately 16.3 % 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: Omnibus Agreement Omnibus Agreement . The Partnership and its general partner are parties to the Omnibus Agreement dated November 1, 2002, with Martin Resource Management Corporation that governs, among other things, potential competition and indemnification obligations among the parties to the agreement, related party transactions, the provision of general administration and support services by Martin Resource Management Corporation and the Partnership’s use of certain Martin Resource Management Corporation trade names and trademarks. The Omnibus Agreement was amended on (i) November 25, 2009, to include processing crude oil into finished products including naphthenic lubricants, distillates, asphalt and other intermediate cuts, (ii) October 1, 2012, to permit the Partnership to provide certain lubricant packaging products and services to Martin Resource Management Corporation and (iii) October 17, 2023 to include lubricants and packing in the Partnership’s definition of business. 20 MARTIN MIDSTREAM PARTNERS L.P. NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS (Dollars in thousands, except where otherwise indicated) March 31, 2025 (Unaudited) Non-Competition Provisions . Martin Resource Management Corporation has agreed for so long as it controls the general partner of the Partnership, not to engage in the business of: • providing terminalling and storage services for petroleum products and by-products including the refining, blending and packaging of finished lubricants; • providing land and marine transportation of petroleum products, by-products, and chemicals; and • manufacturing and selling sulfur-based fertilizer products and other sulfur-related products. This restriction does not apply to: • the ownership and/or operation on the Partnership’s behalf of any asset or group of assets owned by it or its affiliates; • any business operated by Martin Resource Management Corporation, including the following: ◦ distributing asphalt, marine fuel and other liquids; ◦ providing shore-based marine services in Texas, Louisiana, Mississippi and Alabama; ◦ operating a crude oil gathering business in Stephens, Arkansas; ◦ providing crude oil gathering and marketing services of base oils, asphalt and distillate products in Smackover, Arkansas; ◦ providing crude oil marketing and transportation from the well head to the end market; • operating an environmental consulting company; • operating a butane optimization business; • supplying employees and services for the operation of the Partnership's business; and • operating, solely for our account, the asphalt facilities owned by the Partnership in each of Hondo, South Houston and Port Neches, Texas and Omaha, Nebraska. • any business that Martin Resource Management Corporation acquires or constructs that has a fair market value of less than $ 5,000 ; • any business that Martin Resource Management Corporation acquires or constructs that has a fair market value of $ 5,000 or more if the Partnership has been offered the opportunity to purchase the business for fair market value and the Partnership declines to do so with the concurrence of the conflicts committee of the Board (the "Conflicts Committee"); and • any business that Martin Resource Management Corporation acquires or constructs where a portion of such business includes a restricted business and the fair market value of the restricted business is $ 5,000 or more and represents less than 20 % of the aggregate value of the entire business to be acquired or constructed; provided that, following completion of the acquisition or construction, the Partnership will be provided the opportunity to purchase the restricted business. Services. Under the Omnibus Agreement, Martin Resource Management Corporation provides the Partnership with corporate staff, support services, and administrative services necessary to operate the Partnership’s business. The Omnibus Agreement requires the Partnership to reimburse Martin Resource Management Corporation for all direct expenses it incurs or payments it makes on the Partnership’s behalf or in connection with the operation of the Partnership’s business. There is no 21 MARTIN MIDSTREAM PARTNERS L.P. NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS (Dollars in thousands, except where otherwise indicated) March 31, 2025 (Unaudited) monetary limitation on the amount the Partnership is required to reimburse Martin Resource Management Corporation for direct expenses. In addition to the direct expenses, under the Omnibus Agreement, the Partnership is required to reimburse Martin Resource Management Corporation for indirect general and administrative and corporate overhead expenses. Effective January 1, 2025, through December 31, 2025, the Conflicts Committee approved an annual reimbursement amount for indirect expenses of $ 13,536 . The Partnership reimbursed Martin Resource Management Corporation for $ 3,384 and $ 3,377 of indirect expenses for the three months ended March 31, 2025 and 2024, respectively. The Conflicts Committee will review and approve future adjustments in the reimbursement amount for indirect expenses, if any, annually. These indirect expenses are intended to cover the centralized corporate functions Martin Resource Management Corporation provides to the Partnership, such as accounting, treasury, clerical, engineering, legal, billing, information technology, administration of insurance, general office expenses and employee benefit plans and other general corporate overhead functions the Partnership shares with Martin Resource Management Corporation retained businesses. The provisions of the Omnibus Agreement regarding Martin Resource Management Corporation’s services will terminate if Martin Resource Management Corporation ceases to control the general partner of the Partnership. Related-Party Transactions . The Omnibus Agreement prohibits the Partnership from entering into any material agreement with Martin Resource Management Corporation without the prior approval of the Conflicts Committee. For purposes of the Omnibus Agreement, the term "material agreements" means any agreement between the Partnership and Martin Resource Management Corporation that requires aggregate annual payments in excess of the then-applicable agreed upon reimbursable amount of indirect general and administrative expenses. Please read "Services" above. License Provisions. Under the Omnibus Agreement, Martin Resource Management Corporation has granted the Partnership a nontransferable, nonexclusive, royalty-free right and license to use certain of its trade names and marks, as well as the trade names and marks used by some of its affiliates. Amendment and Termination. The Omnibus Agreement may be amended by written agreement of the parties; provided, however, that it may not be amended without the approval of the Conflicts Committee if such amendment would adversely affect the unitholders. The Omnibus Agreement was amended on (i) November 25, 2009, to permit the Partnership to provide refining services to Martin Resource Management Corporation, (ii) October 1, 2012, to permit the Partnership to provide certain lubricant packaging products and services to Martin Resource Management Corporation and (iii) October 17, 2023 to include lubricants and packaging in the Partnership’s definition of business. Such amendments were approved by the Conflicts Committee. 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. Master Transportation Services Agreement Master Transportation Services Agreement. Martin Transport, Inc. ("MTI"), a wholly owned subsidiary of the Partnership, is a party to a master transportation services agreement effective January 1, 2019, with certain wholly owned subsidiaries of Martin Resource Management Corporation. Under the agreement, MTI agreed to transport Martin Resource Management Corporation's petroleum products and by-products. Term and Pricing. The agreement will continue unless either party terminates the agreement by giving at least 30 days' written notice to the other party. The rates under the agreement are subject to any adjustments which are mutually agreed upon or in accordance with a price index. Additionally, shipping charges are also subject to fuel surcharges determined on a weekly basis in accordance with the U.S. 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 subcontractors. In the event a claim is the result of the joint negligence or misconduct of MTI and Martin Resource 22 MARTIN MIDSTREAM PARTNERS L.P. NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS (Dollars in thousands, except where otherwise indicated) March 31, 2025 (Unaudited) Management Corporation, indemnification obligations will be shared in proportion to each party’s allocable share of such joint negligence or misconduct. Marine Agreements Marine Transportation Agreement. The Partnership is a party to a marine transportation agreement effective January 1, 2006, as amended, under which the Partnership provides marine transportation services to Martin Resource Management Corporation on a spot-contract basis at applicable market rates. Effective each January 1, this agreement automatically renews for consecutive one year periods unless either party terminates the agreement by giving written notice to the other party at least 60 days prior to the expiration of the then applicable term. The fees the Partnership charges Martin Resource Management Corporation are based on applicable market rates. Marine Fuel. The Partnership is a party to an agreement with Martin Resource Management Corporation dated November 1, 2002, under which Martin Resource Management Corporation provides the Partnership with marine fuel from its locations in the Gulf of Mexico at a fixed rate in excess of the Platt’s U.S. Gulf Coast Index for #2 Fuel Oil. Under this agreement, the Partnership agreed to purchase all of its marine fuel requirements that occur in the areas serviced by Martin Resource Management Corporation. Terminal Services Agreements Diesel Fuel Terminal Services Agreement. Effective October 1, 2022, the Partnership entered into a third amended and restated terminalling services agreement under which it provides terminal services to Martin Energy Services LLC (“MES”), a wholly owned subsidiary of Martin Resource Management Corporation, for fuel distribution utilizing marine shore based terminals owned by the Partnership. This agreement amended the existing arrangement between the Partnership and MES by eliminating any minimum throughput volume requirements and increasing the per gallon throughput fee. The primary term of this agreement expired on December 31, 2023, 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. Effective January 1, 2024, this agreement was amended to increase the throughput rate and to establish a minimum throughput volume. Miscellaneous Terminal Services Agreements. The Partnership is currently party to several terminal services agreements and from time to time the Partnership may enter into other terminal service agreements for the purpose of providing terminal services to related parties. Individually, each of these agreements is immaterial but when considered in the aggregate they could be deemed material. These agreements are throughput based with a minimum volume commitment. Generally, the fees due under these agreements are adjusted annually based on a price index. Other Agreements Cross Tolling Agreement. The Partnership is a party to an amended and restated tolling agreement with Cross Oil Refining and Marketing, Inc. ("Cross") dated October 28, 2014, under which the Partnership processes crude oil into finished products, including naphthenic lubricants, distillates, asphalt and other intermediate cuts for Cross. The tolling agreement expires November 25, 2031. Under this tolling agreement, Cross agreed to process a minimum of 6,500 barrels per day of crude oil at the facility at a fixed price per barrel. Any additional barrels are processed at a modified price per barrel. In addition, Cross agreed to pay a monthly reservation fee and a periodic fuel surcharge fee based on certain parameters specified in the tolling agreement. Further, certain capital improvements, to the extent requested by Cross, are reimbursed through a capital recovery fee. All of these fees (other than the fuel surcharge) are subject to escalation annually based upon the greater of 3 % or the increase in the Consumer Price Index for a specified annual perio d. East Texas Mack Leases. 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 47 % 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, 2025 and 2024, were $ 1,690 and $ 938 , respectively. 23 MARTIN MIDSTREAM PARTNERS L.P. NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS (Dollars in thousands, except where otherwise indicated) March 31, 2025 (Unaudited) 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 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. From time to time the Partnership enters into other miscellaneous agreements with Martin Resource Management Corporation for the provision of other services or the purchase of other goods. The tables below summarize the related party transactions that are included in the related financial statement captions on the face of the Partnership’s Consolidated and Condensed Statements of Operations. The revenues, costs and expenses reflected in these tables are tabulations of the related party transactions that are recorded in the corresponding captions of the consolidated and condensed financial statements and do not reflect a statement of profits and losses for related party transactions. 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, 2025 2024 Revenues: Terminalling and storage $ 17,262 $ 18,549 Transportation 7,970 8,601 Product sales: Specialty products 381 101 Sulfur services 919 28 1,300 129 $ 26,532 $ 27,279 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, 2025 2024 Cost of products sold: Specialty products $ 6,010 $ 6,573 Sulfur services 3,121 2,993 Terminalling and storage — 18 $ 9,131 $ 9,584 24 MARTIN MIDSTREAM PARTNERS L.P. NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS (Dollars in thousands, except where otherwise indicated) March 31, 2025 (Unaudited) The impact of related party operating expenses is reflected in the consolidated and condensed financial statements as follows: Three Months Ended March 31, 2025 2024 Operating expenses: Transportation $ 20,491 $ 19,773 Sulfur services 1,397 1,322 Terminalling and storage 5,677 5,328 $ 27,565 $ 26,423 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, 2025 2024 Selling, general and administrative: Transportation $ 2,096 $ 1,827 Specialty products 1,037 736 Sulfur services 960 776 Terminalling and storage 303 ( 58 ) Indirect, including overhead allocation 3,496 3,582 $ 7,892 $ 6,863 NOTE 11. BUSINESS SEGMENTS The Chief Operating Decision Maker ("CODM") is a group of executives, comprised of the Chief Executive Officer, Chief Financial Officer and Chief Operating Officer of the Partnership's general partner. The CODM may use different operating measures to assess operating results and allocate resources among the Partnership's four segments (outlined below), however the measure that is most consistent with the amounts included in the consolidated financial statements is operating income. The CODM utilizes this measure to evaluate the current financial performance and project the future financial performance of each segment to determine the allocation of capital resources. The Partnership's four reportable segments are comprised of (1) Terminalling and Storage, (2) Transportation, (3) Sulfur Services and (4) Specialty Products. The operating segments within each of our reportable segments have been aggregated based on the similarity of their economic and other characteristics, including different product type and services. The Terminalling and Storage segment generates revenue by providing terminalling, processing, and storage services for petroleum products and by-products. Storage revenue is earned through contracted monthly tank fixed fees, while throughput revenue is based on the volume moved through the Partnership’s terminals at contracted rates. Tolling revenue is derived from contracted monthly reservation fees and throughput volumes processed at the facility. The Transportation segment earns revenue by offering land and marine transportation services for petroleum products, by-products, chemicals, and specialty products. Land transportation revenue is based on mileage rates for line hauls or completion of contracted trips. Marine transportation revenue comes from time charters, calculated on a per-day basis, or from the completion of contracted trips. The Sulfur Services segment generates revenue by providing processing, manufacturing, marketing, and distribution services for sulfur and sulfur-based products. Revenue from sulfur and fertilizer product sales is recognized when the customer takes title to the product. Revenue from sulfur services is earned as services are performed during each monthly period. 25 MARTIN MIDSTREAM PARTNERS L.P. NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS (Dollars in thousands, except where otherwise indicated) March 31, 2025 (Unaudited) The Specialty Products segment earns revenue by providing marketing, distribution, and transportation services for NGLs as well as blending and packaging services for specialty lubricants and greases. NGL revenue is recognized upon the sale of products via truck, rail, or pipeline. For lubricants and greases, revenue is recognized upon their sale by truck or rail. The following tables present selected financial information with respect to the Partnership's operating segments for the three months ended March 31, 2025 and 2024. Terminalling and Storage Transportation Sulfur Services Specialty Products Indirect selling, general and administrative Total Three Months Ended March 31, 2025: Operating revenues from external customers $ 21,549 $ 52,985 $ 48,704 $ 69,305 $ — $ 192,543 Intersegment operating revenues 1,865 4,490 — 23 — 6,378 Total segment revenues 23,414 57,475 48,704 69,328 — 198,921 Reconciliation of revenues: Elimination of intersegment revenues ( 1,865 ) ( 4,490 ) — ( 23 ) — ( 6,378 ) Total consolidated revenues 21,549 52,985 48,704 69,305 — 192,543 Less: cost of products sold: Direct product costs — — 26,819 57,627 — 84,446 Manufacturing costs (plant, labor, transportation, and other) — — 5,183 5,418 — 10,601 Segment gross margin 23,414 57,475 16,702 6,283 — 103,874 Less: Employment related expenses 2 6,552 15,254 2,163 1,452 3,094 28,515 Driver pay — 12,081 — — — 12,081 Pass-through expenses — 6,097 864 — — 6,961 Utilities, materials, and supplies 3,634 609 255 27 — 4,525 Repairs and maintenance 1,399 4,494 208 1 — 6,102 Insurance related expenses 1,471 3,950 160 34 89 5,704 Lease expenses 1,156 4,636 125 22 — 5,939 Other segment expenses 1 1,524 2,394 1,654 244 1,492 7,308 Depreciation and amortization 5,569 2,932 3,557 758 — 12,816 (Gain) loss on sale or disposition of property, plant and equipment ( 1 ) ( 478 ) — — — ( 479 ) 21,304 51,969 8,986 2,538 4,675 89,472 Operating income (loss) $ 2,110 $ 5,506 $ 7,716 $ 3,745 $ ( 4,675 ) $ 14,402 Segment assets - as of March 31, 2025 $ 166,644 $ 169,819 $ 131,702 $ 65,245 $ — $ 533,410 Capital expenditures and plant turnaround costs $ 922 $ 2,822 $ 1,741 $ 123 $ — $ 5,608 1 Other segment expenses include outside services, property taxes, terminalling fees, regulatory expenses, professional fees, communications expenses, and many other less significant expense categories used in operations. 2 These employment expenses include allocated overhead from Martin Resource Management Corporation and exclude those that are part of our manufacturing operations. Payroll expenses in our manufacturing operations are included in cost of products sold. 26 MARTIN MIDSTREAM PARTNERS L.P. NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS (Dollars in thousands, except where otherwise indicated) March 31, 2025 (Unaudited) Terminalling and Storage Transportation Sulfur Services Specialty Products Indirect selling, general and administrative Total Three Months Ended March 31, 2024: Operating revenues from external customers $ 22,517 $ 58,307 $ 33,681 $ 66,325 $ — $ 180,830 Intersegment operating revenues 1,768 3,735 — 21 — 5,524 Total segment revenues 24,285 62,042 33,681 66,346 — 186,354 Reconciliation of revenues: Elimination of intersegment revenues ( 1,768 ) ( 3,735 ) — ( 21 ) — ( 5,524 ) Total consolidated revenues 22,517 58,307 33,681 66,325 — 180,830 — Less: cost of products sold: Direct product costs — — 18,444 54,185 — 72,629 Manufacturing costs (plant, labor, transportation, and other) 18 — 4,326 5,459 — 9,803 Segment gross margin 24,267 62,042 10,911 6,702 — 103,922 Less: Employment related expenses 2 5,580 14,741 1,835 1,021 3,130 26,307 Driver pay — 12,698 — — — 12,698 Pass-through expenses — 7,173 697 — — 7,870 Utilities, materials, and supplies 4,067 512 209 31 — 4,819 Repairs and maintenance 1,387 4,460 141 3 — 5,991 Insurance related expenses 1,496 3,195 171 26 — 4,888 Lease expenses 966 3,872 87 38 — 4,963 Other segment expenses 1 1,821 2,189 1,104 229 706 6,049 Depreciation and amortization 5,395 3,476 2,982 796 — 12,649 (Gain) loss on sale or disposition of property, plant and equipment ( 102 ) ( 105 ) — — — ( 207 ) 20,610 52,211 7,226 2,144 3,836 86,027 Operating income (loss) $ 3,657 $ 9,831 $ 3,685 $ 4,558 $ ( 3,836 ) $ 17,895 Segment assets - as of March 31, 2024 $ 171,078 $ 158,127 $ 107,519 $ 75,353 $ — $ 512,077 Capital expenditures and plant turnaround costs $ 7,050 $ 2,855 $ 6,336 $ 1,152 $ — $ 17,393 1 Other segment expenses include outside services, property taxes, terminalling fees, regulatory expenses, professional fees, communications expenses, and many other less significant expense categories used in operations. 2 These employment expenses include allocated overhead from Martin Resource Management Corporation and exclude those that are part of our manufacturing operations. Payroll expenses in our manufacturing operations are included in cost of products sold. 27 MARTIN MIDSTREAM PARTNERS L.P. NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS (Dollars in thousands, except where otherwise indicated) March 31, 2025 (Unaudited) NOTE 12. COMMITMENTS AND CONTINGENCIES Contingencies From time to time, the Partnership is subject to various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Partnership. On December 31, 2015, the Partnership received a demand from a customer in its lubricants packaging business for defense and indemnity in connection with various lawsuits filed against it, which generally alleged that the customer engaged in unlawful and deceptive business practices in connection with its marketing and advertising of its private label motor oil (the “Marketing Lawsuits”). The Partnership disputed and continues to dispute that it has any obligation to defend or indemnify the customer for the customer’s conduct. Accordingly, on January 7, 2016, the Partnership filed a Complaint for Declaratory Judgment in the Chancery Court of Davidson County, Tennessee (the “Tennessee Court”), under Case No. 16-0018-BC, requesting a judicial determination that the Partnership did not owe the customer the demanded defense and indemnity obligations (the “Litigation”). The Marketing Lawsuits pending in federal court against the customer were transferred to the U.S. District Court for the Western District of Missouri under the consolidated case MDL No. 2709 for pretrial proceedings (the “Consolidated Lawsuits”). On March 1, 2017, at the joint request of the customer and the Partnership, the Tennessee Court administratively closed the Litigation. In 2021, the customer settled the Consolidated Lawsuits. On December 17, 2021, at the request of the customer, the Tennessee Court reopened the Litigation and the customer asserted various counterclaims against the Partnership seeking, among other things, to recover its costs of defending and settling the Consolidated Lawsuits. At this time, we are unable to determine what ultimate exposure we may have in this matter, if any. The Partnership intends to vigorously defend the counterclaims asserted by the customer in the Litigation. The trial for the Litigation is expected to be held in the first half of 2026. NOTE 13. FAIR VALUE MEASUREMENTS The Partnership uses a valuation framework based upon inputs that market participants use in pricing certain assets and liabilities. These inputs are classified into two categories: observable inputs and unobservable inputs. Observable inputs represent market data obtained from independent sources. Unobservable inputs represent the Partnership's own market assumptions. Unobservable inputs are used only if observable inputs are unavailable or not reasonably available without undue cost and effort. The two types of inputs are further prioritized into the following hierarchy: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that reflect the entity's own assumptions and are not corroborated by market data. The Partnership is required to disclose estimated fair values for its financial instruments. Fair value estimates are set forth below for these financial instruments. The following methods and assumptions were used to estimate the fair value of each class of financial instrument: • Accounts and other receivables, trade and other accounts payable, accrued interest payable, other accrued liabilities, income taxes payable and due from/to affiliates: The carrying amounts approximate fair value due to the short maturity and highly liquid nature of these instruments, and as such these have been excluded from the table below. There is negligible credit risk associated with these instruments. • Current and non-current portion of long-term debt: 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 2028 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, 2025 December 31, 2024 Carrying Value Fair Value Carrying Value Fair Value 2028 Notes $ 387,481 $ 425,363 $ 386,377 $ 436,172 Total $ 387,481 $ 425,363 $ 386,377 $ 436,172 28 MARTIN MIDSTREAM PARTNERS L.P. NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS (Dollars in thousands, except where otherwise indicated) March 31, 2025 (Unaudited) NOTE 14. 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. Selected financial information for DSM is as follows: As of March 31, Three Months Ended March 31, Total Assets Long-Term Debt Members' Equity/Partners' Capital Revenues Net Income (Loss) 2025 DSM Semichem LLC $ 103,352 $ 31,734 $ 66,677 $ — $( 2,090 ) As of December 31, Three Months Ended March 31, Total Assets Long-Term Debt Members' Equity/Partners' Capital Revenues Net Income (Loss) 2024 DSM Semichem LLC $ 105,773 $ 31,700 $ 68,513 $ — $( 6,240 ) NOTE 15. CONDENSED CONSOLIDATED FINANCIAL INFORMATION The Partnership's operations are conducted by its operating subsidiaries as it has no independent assets or operations. The Operating Partnership, the Partnership’s wholly-owned subsidiary, and the Partnership's other operating subsidiaries have issued in the past, and may issue in the future, unconditional guarantees of senior or subordinated debt securities of the Partnership. The guarantees that have been issued are full, irrevocable and unconditional and joint and several. In addition, the Operating Partnership may also issue senior or subordinated debt securities which, if issued, will be fully, irrevocably and unconditionally guaranteed by the Partnership. 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. NOTE 16. INCOME TAXES Three Months Ended March 31, 2025 2024 Provision for income taxes $ 1,117 $ 796 29 MARTIN MIDSTREAM PARTNERS L.P. NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS (Dollars in thousands, except where otherwise indicated) March 31, 2025 (Unaudited) 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 $ 417 and $ 80 were recorded in income tax expense for the three months ended March 31, 2025 and 2024, 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 $ 700 and $ 716 , related to the operation of the Taxable Subsidiary, for the three months ended March 31, 2025 and 2024, resulted in an effective income tax rate ("ETR") of 32.86 % and 15.73 %, respectively. The decrease in the provision for income taxes during the three months ended March 31, 2025, compared to the same period in 2024, was primarily due to a decrease in income before taxes in the current period. The increase in the ETR during the three months ended March 31, 2025, compared to the same period in 2024, was primarily due to a favorable true-up to state net operating loss carryforwards in the prior period. A current federal income tax expense of $ 722 and $ 791 , related to the operation of the Taxable Subsidiary, was recorded for the three months ended March 31, 2025 and 2024, respectively. A current state income tax expense of $ 192 and $ 251 , related to the operation of the Taxable Subsidiary, was recorded for the three months ended March 31, 2025 and 2024, 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. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. 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 $( 214 ) and $( 326 ) was recorded for the three months ended March 31, 2025 and 2024, respectively. A net deferred tax asset of $ 10,160 and $ 9,946 , related to the cumulative book and tax temporary differences, existed at March 31, 2025 and December 31, 2024, 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. NOTE 17. SUBSEQUENT EVENTS Quarterly Distribution. On April 16, 2025, the Partnership declared a quarterly cash distribution of $ 0.005 per common unit for the first quarter of 2025, or $ 0.020 per common unit on an annualized basis, which will be paid on May 15, 2025, to unitholders of record as of May 8, 2025. 30