Item 2. Management’s Discussion and Analysis
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion of our financial condition and results of operations in conjunction with the consolidated and condensed financial statements and the notes thereto included elsewhere in this quarterly report.
Overview
We are a publicly traded limited partnership with a diverse set of operations focused primarily in the Gulf Coast region of the U.S. Our 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 NGLs and blending and packaging services for specialty lubricants and grease.
The petroleum products and by-products we collect, transport, store and market are produced primarily by major and independent oil and gas companies who often turn to third parties, such as us, for the transportation and disposition of these products. In addition to these major and independent oil and gas companies, our primary customers include independent refiners, large chemical companies, and other wholesale purchasers of these products. We operate primarily in the Gulf Coast region of the U.S. This region is a major hub for petroleum refining, natural gas gathering and processing, and support services for the exploration and production industry.
We were formed in 2002 by Martin Resource Management Corporation, a privately-held company whose initial predecessor was incorporated in 1951 as a supplier of products and services to drilling rig contractors. Since then, Martin Resource Management Corporation has expanded its operations through acquisitions and internal expansion initiatives as its management identified and capitalized on the needs of producers and purchasers of petroleum products and by-products and other bulk liquids. Martin Resource Management Corporation is an important supplier and customer of ours. As of September 30, 2025, Martin Resource Management Corporation owned 19.6% of our total outstanding common limited partner units and 100% of MMGP Holdings, LLC ("Holdings"), which is the sole member of Martin Midstream GP LLC ("MMGP"), our general partner. MMGP owns a 2.0% general partner interest in us.
We entered into the Omnibus Agreement 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 our use of certain of Martin Resource Management Corporation’s trade names and trademarks. Under the terms of the Omnibus Agreement, the employees of Martin Resource Management Corporation are responsible for conducting our business and operating our assets.
Martin Resource Management Corporation has operated our business since our inception in 2002. Martin Resource Management Corporation began operating our NGL business in the 1950s and our sulfur business in the 1960s. It began our land transportation business in the early 1980s and our marine transportation business in the late 1980s. It entered into our fertilizer and terminalling and storage businesses in the early 1990s.
Significant Recent Developments
Amendment to Credit Facility . On September 24, 2025, we entered into the Second Amendment to the Credit Agreement to, among other things:
• extend the maturity date of amounts outstanding and the lenders’ commitments under the Credit Agreement from February 8, 2027 to November 16, 2027;
• decrease the amount available for us to borrow under the Credit Agreement on a revolving credit basis from $150.0 million to $130.0 million; and
• adjust the financial covenants as described in more detail below:
▪ require us to maintain a minimum Interest Coverage Ratio (as defined in the Credit Agreement) of at least 1.75 to 1.00 for the fiscal quarter ended March 31, 2025 and each fiscal quarter thereafter;
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▪ require us to maintain a maximum Total Leverage Ratio (as defined in the Credit Agreement) of not more than 4.50 to 1.00 for the fiscal quarters ended March 31, 2025 and June 30, 2025, and stepping up to 4.75 to 1.00 for the fiscal quarter ending September 30, 2025 and each fiscal quarter thereafter; and
▪ require us to maintain a maximum First Lien Leverage Ratio (as defined in the Credit Agreement) of not more than 1.25 to 1.00 for the fiscal quarter ended March 31, 2025 and each fiscal quarter thereafter.
Tariffs and Trading Relationships. In April 2025, the U.S. government announced a baseline tariff of 10% on products imported from all countries and an additional individualized reciprocal tariff on the countries with which the United States has the largest trade deficits, including China. Increased tariffs by the United States have led and may continue to lead to the imposition of retaliatory tariffs by foreign jurisdictions. Additionally, the U.S. government has announced and rescinded multiple tariffs on several foreign jurisdictions, which has increased uncertainty regarding the ultimate effect of the tariffs on economic conditions. Current uncertainties about tariffs and their effects on trading relationships may affect costs for and availability of raw materials or contribute to inflation in the markets in which we operate. Although we are continuing to monitor the economic effects of such announcements, as well as opportunities to mitigate their related impacts, costs and other effects associated with the tariffs remain uncertain.
Subsequent Events
Quarterly Distribution. On October 15, 2025, we declared a quarterly cash distribution of $0.005 per common unit for the third quarter of 2025, or $0.020 per common unit on an annualized basis, which will be paid on November 14, 2025, to unitholders of record as of November 7, 2025.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations are based on the historical consolidated and condensed financial statements included elsewhere herein. We prepared these financial statements in conformity with U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances. We routinely evaluate these estimates, utilizing historical experience, consultation with experts and other methods we consider reasonable in the particular circumstances. Our results may differ from these estimates, and any effects on our business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the facts that give rise to the revision become known. Changes in these estimates could materially affect our financial position, results of operations or cash flows. See the "Critical Accounting Policies and Estimates" section in "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 2, "Significant Accounting Policies" in Notes to Consolidated Financial Statements included within our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 24, 2025.
Our Relationship with Martin Resource Management Corporation
Martin Resource Management Corporation is engaged in the following principal business activities:
• 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 our business; and
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• operating, solely for our account, the asphalt facilities owned by us in each of Hondo, South Houston and Port Neches, Texas, and Omaha, Nebraska.
We are and will continue to be closely affiliated with Martin Resource Management Corporation as a result of the following relationships.
Ownership
Martin Resource Management Corporation owns approximately 19.6% of the outstanding limited partner units and indirectly owns 100% of MMGP, our general partner, through its 100% interest in Holdings, which is the sole member of MMGP. MMGP owns a 2% general partner interest in us.
Management
Martin Resource Management Corporation directs our business operations through its ownership interests in and control of our general partner. We benefit from our relationship with Martin Resource Management Corporation through access to a significant pool of management expertise and established relationships throughout the energy industry. We do not have employees. Martin Resource Management Corporation employees are responsible for conducting our business and operating our assets on our behalf.
Related Party Agreements
The Omnibus Agreement requires us to reimburse Martin Resource Management Corporation for all direct expenses it incurs or payments it makes on our behalf or in connection with the operation of our business. We reimbursed Martin Resource Management Corporation for $42.9 million of direct costs and expenses for the three months ended September 30, 2025, compared to $46.2 million for the three months ended September 30, 2024. We reimbursed Martin Resource Management Corporation for $126.8 million of direct costs and expenses for the nine months ended September 30, 2025, compared to $128.4 million for the nine months ended September 30, 2024. There is no monetary limitation on the amount we are required to reimburse Martin Resource Management Corporation for direct expenses.
In addition to the direct expenses, under the Omnibus Agreement, we are required to reimburse Martin Resource Management Corporat ion for indirect general and administrative and corporate overhead expenses. In each of the three months ended September 30, 2025 and 2024, the Conflicts Committee approved reimbursement amounts of $3.4 million. In each of the nine months ended September 30, 2025 and 2024, the Conflicts Committee approved reimbursement amounts of $10.2 million and $10.1 million. The Conflicts Committee will review and approve future adjustments in the reimbursement amount for indirect expenses, if any, annually. These indirect expenses covered the centralized corporate functions Martin Resource Management Corporation provides for us, su ch 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 we share with Martin R esource Management Corporation’s retained businesses. The Omnibus Agreement also contains significant non-compete provisions and indemnity obligations. Martin Resource Management Corporation also licenses certain of its trademarks and trade names to us under the Omnibus Agreement.
These additional related party agreements include, but are not limited to, a master transportation services agreement, marine transportation agreements, terminal services agreements, and a tolling agreement. Pursuant to the terms of the Omnibus Agreement, we are prohibited from entering into certain material agreements with Martin Resource Management Corporation without the approval of the Conflicts Committee.
For a more comprehensive discussion concerning the Omnibus Agreement and the other agreements that we have entered into with Martin Resource Management Corporation, please refer to "Item 13. Certain Relationships and Related Transactions, and Director Independence" set forth in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 24, 2025.
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Commercial
We have been and anticipate that we will continue to be both a significant customer and supplier of products and services offered by Martin Resource Management Corporation. In the aggregate, the impact of related party transactions included in total costs and expenses accounted for approximately 29% and 31% of our total costs and expenses during the three months ended September 30, 2025 and 2024, respectively. In the aggregate, the impact of related party transactions included in total costs and expenses accounted for approximately 27% and 29% of our total costs and expenses during the nine months ended September 30, 2025 and 2024, respectively.
Correspondingly, Martin Resource Management Corporation is one of our significant customers. Our sales to Martin Resource Management Corporation accounted for approximately 15% and 15% of our total revenues for the three months ended September 30, 2025 and 2024, respectively. Our sales to Martin Resource Management Corporation accounted for approximately 15% and 15% of our total revenues for the nine months ended September 30, 2025 and 2024, respectively.
For a more comprehensive discussion concerning the agreements that we have entered into with Martin Resource Management Corporation, please refer to "Item 13. Certain Relationships and Related Transactions, and Director Independence" set forth in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 24, 2025.
Approval and Review of Related Party Transactions
If we contemplate entering into a transaction, other than a routine or in the ordinary course of business transaction, in which a related person will have a direct or indirect material interest, the proposed transaction is submitted for consideration to the Board or to our management, as appropriate. If the Board is involved in the approval process, it determines whether to refer the matter to the Conflicts Committee, as constituted under our limited partnership agreement. If a matter is referred to the Conflicts Committee, the Conflicts Committee obtains information regarding the proposed transaction from management and determines whether to engage independent legal counsel or an independent financial advisor to advise the members of the committee regarding the transaction. If the Conflicts Committee retains such counsel or financial advisor, it considers such advice and, in the case of a financial advisor, such advisor’s opinion as to whether the transaction is fair and reasonable to us and to our unitholders.
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Non-GAAP Financial Measures
To assist management in assessing our business, we use the following non-GAAP financial measures: earnings before interest, taxes, and depreciation and amortization ("EBITDA"), Adjusted EBITDA (as defined below), distributable cash flow available to common unitholders (“Distributable Cash Flow”), and free cash flow after growth capital expenditures and principal payments under finance lease obligations ("Adjusted Free Cash Flow"). Our management uses a variety of financial and operational measurements other than our financial statements prepared in accordance with U.S. GAAP to analyze our performance.
Certain items excluded from EBITDA and Adjusted EBITDA are significant components in understanding and assessing an entity's financial performance, such as cost of capital and historical costs of depreciable assets.
Adjusted EBITDA . We define Adjusted EBITDA as EBITDA before unit-based compensation expenses, gains and losses on the disposition of property, plant and equipment, impairment and other similar non-cash adjustments, and transaction costs associated with business combination, merger, and divestiture activities. Adjusted EBITDA is used as a supplemental performance and liquidity measure by our management and by external users of our financial statements, such as investors, commercial banks, research analysts, and others, to assess:
• the financial performance of our assets without regard to financing methods, capital structure, or historical cost basis;
• the ability of our assets to generate cash sufficient to pay interest costs, support our indebtedness, and make cash distributions to our unitholders; and
• our operating performance and return on capital as compared to those of other companies in the midstream energy sector, without regard to financing methods or capital structure.
The GAAP measures most directly comparable to Adjusted EBITDA is net income (loss) and net cash provided by (used in) operating activities. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income (loss), operating income (loss), net cash provided by (used in) operating activities, or any other measure of financial performance presented in accordance with GAAP. Adjusted EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate Adjusted EBITDA in the same manner.
Adjusted EBITDA does not include interest expense, income tax expense, and depreciation and amortization. Because we have borrowed money to finance our operations, interest expense is a necessary element of our costs and our ability to generate cash available for distribution. Because we have capital assets, depreciation and amortization are also necessary elements of our costs. Therefore, any measures that exclude these elements have material limitations. To compensate for these limitations, we believe that it is important to consider net income (loss) and net cash provided by (used in) operating activities as determined under GAAP, as well as Adjusted EBITDA, to evaluate our overall performance.
Distributable Cash Flow. We define Distributable Cash Flow as Net Cash Provided by (Used in) Operating Activities less cash received (plus cash paid) for closed commodity derivative positions included in Accumulated Other Comprehensive Income (Loss), plus changes in operating assets and liabilities which (provided) used cash, less maintenance capital expenditures and plant turnaround costs. Distributable Cash Flow is a significant performance measure used by our management and by external users of our financial statements, such as investors, commercial banks and research analysts, to compare basic cash flows generated by us to the cash distributions we expect to pay unitholders. Distributable Cash Flow is also an important financial measure for our unitholders since it serves as an indicator of our success in providing a cash return on investment. Specifically, this financial measure indicates to investors whether or not we are generating cash flow at a level that can sustain or support an increase in our quarterly distribution rates. Distributable Cash Flow is also a quantitative standard used throughout the investment community with respect to publicly-traded partnerships because the value of a unit of such an entity is generally determined by the unit's yield, which in turn is based on the amount of cash distributions the entity pays to a unitholder.
Adjusted Free Cash Flow. We define Adjusted Free Cash Flow as Distributable Cash Flow less growth capital expenditures and principal payments under finance lease obligations. Adjusted Free Cash Flow is a significant performance measure used by our management and by external users of our financial statements and represents how much cash flow a business generates during a specified time period after accounting for all capital expenditures, including expenditures for growth and maintenance capital projects. We believe that Adjusted Free Cash Flow is important to investors, lenders, commercial banks and research analysts since it reflects the amount of cash available for reducing debt, investing in additional capital projects, paying distributions, and similar matters. Our calculation of Adjusted Free Cash Flow may or may not be comparable to similarly titled measures used by other entities.
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The GAAP measure most directly comparable to Distributable Cash Flow and Adjusted Free Cash Flow is Net Cash Provided by (Used in) Operating Activities. Distributable Cash Flow and Adjusted Free Cash Flow should not be considered alternatives to, or more meaningful than, Net Income (Loss), Operating Income (Loss), Net Cash Provided by (Used in) Operating Activities, or any other measure of liquidity presented in accordance with GAAP. Distributable Cash Flow and Adjusted Free Cash Flow have important limitations because they exclude some items that affect Net Income (Loss), Operating Income (Loss), and Net Cash Provided by (Used in) Operating Activities. Distributable Cash Flow and Adjusted Free Cash Flow may not be comparable to similarly titled measures of other companies because other companies may not calculate these non-GAAP metrics in the same manner. To compensate for these limitations, we believe that it is important to consider Net Cash Provided by (Used in) Operating Activities determined under GAAP, as well as Distributable Cash Flow and Adjusted Free Cash Flow, to evaluate our overall liquidity.
The following tables reconcile the non-GAAP financial measurements used by management to our most directly comparable GAAP measures for the three and nine months ended September 30, 2025 and 2024, which represents EBITDA, Adjusted EBITDA, Distributable Cash Flow, and Adjusted Free Cash Flow:
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
(in thousands) (in thousands)
Net income (loss) $ (8,412) $ (3,319) $ (11,852) $ 3,734
Adjustments:
Interest expense 14,614 14,592 43,329 42,811
Income tax expense 715 1,066 3,916 3,634
Depreciation and amortization 12,336 12,608 37,790 37,944
EBITDA 19,253 24,947 73,183 88,123
Adjustments:
Gain on disposition or sale of property, plant and equipment (395) (159) (1,487) (1,320)
Transaction expenses related to the terminated merger with Martin Resource Management Corporation 194 — 1,021 —
Equity in (earnings) loss of DSM Semichem LLC (20) 314 805 314
Non-cash contractual revenue adjustment 175 — 571 —
Unit-based compensation 66 42 156 145
Adjusted EBITDA $ 19,273 $ 25,144 $ 74,249 $ 87,262
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Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA, Distributable Cash Flow, and Adjusted Free Cash Flow
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
(in thousands) (in thousands)
Net cash provided by (used in) operating activities $ (1,213) $ (15,753) $ 23,683 $ 6,184
Interest expense 1
13,037 13,220 38,996 38,700
Current income tax expense (130) 935 3,225 3,477
Transaction expenses related to the terminated merger with Martin Resource Management Corporation 194 — 1,021 —
Non-cash contractual revenue adjustment 175 — 571 —
Changes in operating assets and liabilities which (provided) used cash:
Accounts and other receivables, inventories, and other current assets (6,074) 22,489 (12,071) 32,128
Trade, accounts and other payables, and other current liabilities 11,013 4,032 18,037 7,474
Other 2,271 221 787 (701)
Adjusted EBITDA 19,273 25,144 74,249 87,262
Adjustments:
Interest expense (14,614) (14,592) (43,329) (42,811)
Income tax expense (715) (1,066) (3,916) (3,634)
Deferred income taxes 845 131 691 157
Amortization of debt discount 600 600 1,800 1,800
Amortization of deferred debt issuance costs 977 772 2,533 2,311
Payments for plant turnaround costs (4,197) (2,894) (5,996) (9,599)
Maintenance capital expenditures (5,574) (5,738) (13,677) (17,949)
Distributable Cash Flow (3,405) 2,357 12,355 17,537
Principal payments under finance lease obligations (3) (4) (10) (5)
Investment in DSM Semichem LLC — — — (6,938)
Expansion capital expenditures (1,273) (3,903) (2,994) (15,584)
Adjusted Free Cash Flow $ (4,681) $ (1,550) $ 9,351 $ (4,990)
1 Net of amortization of debt issuance costs and discount, which are included in interest expense but not included in net cash provided by operating activities.
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Results of Operations
The results of operations for the three and nine months ended September 30, 2025 and 2024, have been derived from our consolidated and condensed financial statements.
We evaluate segment performance on the basis of operating income, which is derived by subtracting cost of products sold, operating expenses, selling, general and administrative expenses, and depreciation and amortization expense from revenues. The following table sets forth our operating revenues and operating income by segment for the three and nine months ended September 30, 2025 and 2024. The results of operations for these interim periods are not necessarily indicative of the results of operations which might be expected for the entire year.
Our consolidated and condensed results of operations are presented on a comparative basis below. There are certain items of income and expense which we do not allocate on a segment basis. These items, including interest expense and indirect selling, general and administrative expenses, are discussed following the comparative discussion of our results within each segment.
Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024
Operating Revenues Intersegment Revenues Eliminations Operating Revenues
after Eliminations Operating Income (Loss) Operating Income (Loss) Intersegment Eliminations Operating
Income (Loss)
after
Eliminations
Three Months Ended September 30, 2025 (In thousands)
Terminalling and storage $ 25,799 $ (1,869) $ 23,930 $ 4,577 $ (1,782) $ 2,795
Transportation 53,790 (4,081) 49,709 2,788 (4,122) (1,334)
Sulfur services 32,635 — 32,635 195 3,933 4,128
Specialty products 62,482 (39) 62,443 3,201 1,971 5,172
Indirect selling, general and administrative
— — — (3,867) — (3,867)
Total $ 174,706 $ (5,989) $ 168,717 $ 6,894 $ — $ 6,894
Operating Revenues Intersegment Revenues Eliminations Operating Revenues
after Eliminations Operating Income (Loss) Operating Income (Loss) Intersegment Eliminations Operating
Income (Loss)
after
Eliminations
Three Months Ended September 30, 2024 (In thousands)
Terminalling and storage $ 24,414 $ (1,852) $ 22,562 $ 2,675 $ (1,761) $ 914
Transportation 60,196 (3,690) 56,506 8,583 (3,725) 4,858
Sulfur services 24,660 — 24,660 1,254 3,465 4,719
Specialty products 67,225 (19) 67,206 3,881 2,021 5,902
Indirect selling, general and administrative
— — — (3,742) — (3,742)
Total $ 176,495 $ (5,561) $ 170,934 $ 12,651 $ — $ 12,651
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Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024
Operating Revenues Intersegment Revenues Eliminations Operating Revenues
after Eliminations Operating Income (Loss) Operating Income (Loss) Intersegment Eliminations Operating
Income (Loss)
after
Eliminations
Nine Months Ended September 30, 2025 (In thousands)
Terminalling and storage $ 73,441 $ (5,558) $ 67,883 $ 9,687 $ (5,375) $ 4,312
Transportation 168,966 (12,446) 156,520 14,511 (12,548) 1,963
Sulfur services 125,467 — 125,467 13,880 11,538 25,418
Specialty products 192,151 (85) 192,066 10,580 6,385 16,965
Indirect selling, general and administrative
— — — (12,479) — (12,479)
Total $ 560,025 $ (18,089) $ 541,936 $ 36,179 $ — $ 36,179
Operating Revenues Intersegment Revenues Eliminations Operating Revenues
after Eliminations Operating Income (Loss) Operating Income (Loss) Intersegment Eliminations Operating
Income (Loss)
after
Eliminations
Nine Months Ended September 30, 2024 (In thousands)
Terminalling and storage $ 73,101 $ (5,647) $ 67,454 $ 9,634 $ (5,447) $ 4,187
Transportation 183,705 (11,216) 172,489 26,450 (11,324) 15,126
Sulfur services 95,534 (1) 95,533 12,402 10,218 22,620
Specialty products 200,888 (69) 200,819 13,384 6,553 19,937
Indirect selling, general and administrative
— — — (11,397) — (11,397)
Total $ 553,228 $ (16,933) $ 536,295 $ 50,473 $ — $ 50,473
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Terminalling and Storage Segment
Comparative Results of Operations for the Three Months Ended September 30, 2025 and 2024
Three Months Ended September 30, Variance Percent Change
2025 2024
(In thousands, except BBL per day)
Revenues $ 25,799 $ 24,414 $ 1,385 6 %
Cost of products sold — 23 (23) (100) %
Operating expenses 15,341 14,857 484 3 %
Selling, general and administrative expenses 736 1,130 (394) (35) %
Depreciation and amortization 5,143 5,695 (552) (10) %
4,579 2,709 1,870 69 %
Loss on disposition or sale of property, plant and equipment (2) (34) 32 94 %
Operating income $ 4,577 $ 2,675 $ 1,902 71 %
Shore-based throughput volumes (gallons) 43,555 42,242 1,313 3 %
Smackover refinery throughput volumes (guaranteed minimum BBL per day) 6,500 6,500 — — %
Revenues. Revenues increased $1.4 million. Revenue at our underground storage terminal increased $1.4 million primarily as a result of increased storage volume. Revenue at our Smackover refinery increased $0.4 million primarily due to increases in throughput revenue and reservation fees. Revenue at our specialty terminals decreased $0.4 million, primarily as a result of decreased storage and service revenue. Our shore-based terminals decreased $0.2 million due to decreased space rent.
Operating expenses. Operating expenses increased primarily due to increases at our Smackover refinery in natural gas utilities of $0.2 million and employee-related expenses of $0.5 million. These increases were offset by a lower repairs and maintenance at our shore-based terminals of $0.2 million.
Selling, general and administrative expenses. Selling, general and administrative expenses decreased primarily due to lower employee-related expenses.
Depreciation and amortization. The decrease in depreciation and amortization is primarily the result of assets being fully depreciated and disposals, offset by capital expenditures.
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Comparative Results of Operations for the Nine Months Ended September 30, 2025 and 2024
Nine Months Ended September 30, Variance Percent Change
2025 2024
(In thousands, except BBL per day)
Revenues $ 73,441 $ 73,101 $ 340 — %
Cost of products sold — 65 (65) (100) %
Operating expenses 45,233 45,414 (181) — %
Selling, general and administrative expenses 2,405 2,232 173 8 %
Depreciation and amortization 16,123 16,819 (696) (4) %
9,680 8,571 1,109 13 %
Gain on disposition or sale of property, plant and equipment 7 1,063 (1,056) (99) %
Operating income $ 9,687 $ 9,634 $ 53 1 %
Shore-based throughput volumes (gallons) 129,245 130,502 (1,257) (1) %
Smackover refinery throughput volumes (guaranteed minimum) (BBL per day) 6,500 6,500 — — %
Revenues. Revenues increased $0.3 million. Revenue at our underground storage terminal increased $0.4 million primarily as a result of higher storage volume of $1.4 million, offset by decreased throughput revenue of $1.0 million. Revenue at our Smackover refinery increased $0.4 million primarily as a result of increased reservation fess. Our shore-based terminals decreased $0.2 million due to decreased space rent of $0.4 million, offset by increased throughput revenue of $0.2 million. Revenue at our specialty terminals decreased $0.2 million primarily as a result of decreased service revenue, offset by an increase in storage revenue of $0.1 million.
Operating expenses. Operating expenses decreased primarily as a result of insurance claims of $1.7 million (primarily crude pipeline spill that occurred in 2024). This decrease was offset by increases in employee-related expenses of $1.0 million and insurance premiums of $0.5 million (higher rates) across all terminals.
Selling, general and administrative expenses. Selling, general and administrative expenses increased primarily due to higher employee-related expenses.
Depreciation and amortization. The decrease in depreciation and amortization is primarily the result of assets being fully depreciated and disposals, offset by capital expenditures.
Transportation Segment
Comparative Results of Operations for the Three Months Ended September 30, 2025 and 2024
Three Months Ended September 30, Variance Percent Change
2025 2024
(In thousands)
Revenues $ 53,790 $ 60,196 $ (6,406) (11) %
Operating expenses 47,012 45,138 1,874 4 %
Selling, general and administrative expenses 1,465 3,423 (1,958) (57) %
Depreciation and amortization 2,907 3,182 (275) (9) %
2,406 8,453 (6,047) (72) %
Gain on disposition or sale of property, plant and equipment 382 130 252 194 %
Operating income $ 2,788 $ 8,583 $ (5,795) (68) %
Revenues . Revenues decreased $6.4 million. In our marine transportation division, inland revenues decreased $4.7 million, primarily related to a decrease in utilization associated with weaker demand and downtime experienced from
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equipment repairs and regulatory inspections combined, lower transportation rates. Offshore revenues increased $0.3 million, primarily related to higher transportation rates. Pass-through revenue (primarily fuel) increased $0.3 million. In our land transportation division, freight revenue decreased $1.6 million, primarily due to a 4% decrease in total miles. Ancillary revenue decreased $0.7 million.
Operating expenses . The increase in operating expenses is primarily a result of lease expense of $1.1 million and insurance premiums of $0.6 million. The increase in lease expense is related to the replacement of tractors and trailers in our land transportation division.
Selling, general and administrative expenses . Selling, general and administrative expenses decreased primarily due to a reduction in the allowance for uncollectible accounts receivable of $1.2 million and employee-related expenses of $0.7 million.
Depreciation and amortization. The decrease in depreciation and amortization is primarily the result of asset disposals, offset by capital expenditures.
Comparative Results of Operations for the Nine Months Ended September 30, 2025 and 2024
Nine Months Ended September 30, Variance Percent Change
2025 2024
(In thousands)
Revenues $ 168,966 $ 183,705 $ (14,739) (8) %
Operating expenses 140,058 139,562 496 — %
Selling, general and administrative expenses 7,102 8,150 (1,048) (13) %
Depreciation and amortization 8,755 10,039 (1,284) (13) %
$ 13,051 $ 25,954 $ (12,903) (50) %
Gain on disposition or sale of property, plant and equipment 1,460 496 964 194 %
Operating income $ 14,511 $ 26,450 $ (11,939) (45) %
Revenues. Revenues decreased $14.7 million. In our marine transportation division, inland revenues decreased $6.7 million, primarily related to a decrease in utilization associated with weaker demand and downtime experienced from equipment repairs and regulatory inspections combined with lower transportation rates. Offshore revenues increased $1.6 million, primarily related to higher transportation rates and utilization. In our land transportation division, freight revenue decreased $7.0 million, primarily due to a 5% decrease in total miles. Ancillary revenue decreased $2.6 million.
Operating expenses. The increase in operating expenses is primarily a result of lease expense of $3.1 million and insurance premiums of $2.0 million. Offsetting these increases were decreases in employee-related expenses of $2.4 million, repairs and maintenance of $1.2 million, pass-through expenses of $0.6 million and insurance claims of $0.6 million. The decrease in repairs and maintenance, as well as the increase in lease expense are related to the replacement of tractors and trailers in our land transportation division.
Selling, general and administrative expenses. Selling, general and administrative expenses decreased primarily due to a reduction in the allowance for uncollectible accounts receivable of $0.6 million and higher employee-related expenses of $0.3 million .
Depreciation and amortization. The decrease in depreciation and amortization is primarily the result of asset disposals, offset by capital expenditures.
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Sulfur Services Segment
Comparative Results of Operations for the Three Months Ended September 30, 2025 and 2024
Three Months Ended September 30, Variance Percent Change
2025 2024
(In thousands)
Revenues:
Services $ 4,073 $ 3,477 $ 596 17 %
Products 28,562 21,183 7,379 35 %
Total revenues 32,635 24,660 7,975 32 %
Cost of products sold 24,115 15,292 8,823 58 %
Operating expenses 3,265 3,089 176 6 %
Selling, general and administrative expenses 1,531 2,091 (560) (27) %
Depreciation and amortization 3,531 2,937 594 20 %
193 1,251 (1,058) (85) %
Gain on disposition or sale of property, plant and equipment 2 3 (1) (33) %
Operating income $ 195 $ 1,254 $ (1,059) (84) %
Sulfur (long tons) 157 113 44 39 %
Fertilizer (long tons) 44 29 15 52 %
Total sulfur services volumes (long tons) 201 142 59 42 %
Services revenues. Services revenues increased $0.6 million largely associated with reservation fee revenue from the ELSA joint venture beginning in the fourth quarter of 2024. Additional increases were the result of a contractually prescribed, index-based fee adjustment.
Products revenues. Product revenues increased $7.4 million. Product revenues increased by $8.4 million, as a result of a 42% increase in sales volumes, primarily related to a 52% increase in fertilizer volumes, which increase was offset by a decrease of $1.0 million due to a 5% reduction in average sulfur services sales prices.
Cost of products sold. Cost of products sold increased $8.8 million. A 42% increase in sales volumes impacted cost of products sold by $7.1 million. An 11% increase in product cost impacted cost of products sold by $1.7 million, resulting from increased commodity prices. Margin per ton decreased $19.36, or 47%.
Operating expenses. Operating expenses increased due to an increase of $0.1 million in marine operating expenses and $0.1 million in insurance-related costs.
Selling, general and administrative expenses. Selling, general and administrative expenses decreased primarily due to lower employee-related expenses.
Depreciation and amortization. Depreciation and amortization increased due to the amortization of higher turnaround spend as well as certain assets being placed into service.
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Comparative Results of Operations for the Nine Months Ended September 30, 2025 and 2024
Nine Months Ended September 30, Variance Percent Change
2025 2024
(In thousands)
Revenues:
Services $ 12,369 $ 10,431 $ 1,938 19 %
Products 113,098 85,103 27,995 33 %
Total revenues 125,467 95,534 29,933 31 %
Cost of products sold 85,428 60,246 25,182 42 %
Operating expenses 10,752 8,773 1,979 23 %
Selling, general and administrative expenses 4,766 5,111 (345) (7) %
Depreciation and amortization 10,644 8,697 1,947 22 %
13,877 12,707 1,170 9 %
Gain (loss) on disposition or sale of property, plant and equipment 3 (305) 308 101 %
Operating income $ 13,880 $ 12,402 $ 1,478 12 %
Sulfur (long tons) 434 296 138 47 %
Fertilizer (long tons) 209 165 44 27 %
Total sulfur services volumes (long tons) 643 461 182 39 %
Services revenues. Services revenues increased $1.9 million largely associated with reservation fee revenue from the ELSA joint venture beginning in the fourth quarter 2024. Additional increases were the result of a contractually prescribed, index-based fee adjustment.
Products revenues. Products revenues increased $28.0 million. Product Revenues increased by $32.0 million related to a 39% increase in sales volume, primarily a 47% increase in sulfur volumes, which increase was offset by a decrease of $4.0 million primarily due to a 5% reduction in average sulfur products sales prices.
Cost of products sold. Cost of products sold increased $25.2 million. A 39% increase in sales volumes resulted in an increase in cost of products sold of $24.2 million. A 2% increase in product cost impacted cost of products sold by $1.0 million, resulting from higher commodity prices. Margin per ton decreased $10.89, or 20%.
Operating expenses. Operating expenses increased $2.0 million due to $0.8 million in outside services, $0.4 million in marine operating expenses, $0.3 million in marine pass-through expenses, $0.2 million in repairs and maintenance, $0.1 million in insurance-related costs, $0.1 million in utilities, and $0.1 million in employment expenses.
Selling, general and administrative expenses. Selling, general and administrative expenses decreased primarily due to lower employee-related expenses.
Depreciation and amortization. Depreciation and amortization increased due to the amortization of higher turnaround costs as well as certain assets being placed into service.
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Specialty Products Segment
Comparative Results of Operations for the Three Months Ended September 30, 2025 and 2024
Three Months Ended September 30, Variance Percent Change
2025 2024
(In thousands)
Products revenues $ 62,482 $ 67,225 $ (4,743) (7) %
Cost of products sold 56,852 60,445 (3,593) (6) %
Operating expenses — 30 (30) (100) %
Selling, general and administrative expenses 1,687 2,135 (448) (21) %
Depreciation and amortization 755 794 (39) (5) %
3,188 3,821 (633) (17) %
Gain on disposition or sale of property, plant and equipment 13 60 (47) (78) %
Operating income $ 3,201 $ 3,881 $ (680) (18) %
NGL sales volumes (Bbls) 608 582 26 4 %
Other specialty products volumes (Bbls) 100 91 9 10 %
Total specialty products volumes (Bbls) 708 673 35 5 %
Products Revenues. Products revenues decreased $4.7 million. Sales volumes increased 5%, increasing revenues by $3.1 million, primarily related to a 10% increase in other specialty sales volumes. Our average sales price per barrel decreased $11.64, resulting in a $7.8 million decrease to revenue.
Cost of products sold . Cost of products sold decreased $3.6 million. The increase in sales volumes of 5% resulted in a $2.8 million increase to cost of products sold. Our average cost per barrel decreased $9.51, or 11%, decreasing cost of products sold by $6.4 million. Our margins decreased $2.12 per barrel, or 21%, during the period.
Operating expenses. Operating expenses remained relatively consistent.
Selling, general and administrative expenses . Selling, general and administrative decreased $0.5 million primarily due to lower employee-related expenses.
Depreciation and amortization. Depreciation and amortization decreased as a result of capital expenditures offset by recent disposals.
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Comparative Results of Operations for the Nine Months Ended September 30, 2025 and 2024
Nine Months Ended September 30, Variance Percent Change
2025 2024
(In thousands)
Products revenues $ 192,151 $ 200,888 $ (8,737) (4) %
Cost of products sold 174,063 179,800 (5,737) (3) %
Operating expenses — 81 (81) (100) %
Selling, general and administrative expenses 5,257 5,300 (43) (1) %
Depreciation and amortization 2,268 2,389 (121) (5) %
10,563 13,318 (2,755) (21) %
Gain on disposition or sale of property, plant and equipment 17 66 (49) (74) %
Operating income $ 10,580 $ 13,384 $ (2,804) (21) %
NGL sales volumes (Bbls) 1,843 1,744 99 6 %
Other specialty products volumes (Bbls) 271 263 8 3 %
Total specialty products volumes (Bbls) 2,114 2,007 107 5 %
Products Revenues. Product revenues decreased by $8.7 million. A 5% rise in sales volumes increased revenue by $9.7 million, primarily driven by a 6% increase in NGL sales volumes. This was offset by a 9% decline in average specialty product sales prices, which reduced revenue by $18.5 million.
Cost of products sold . Cost of products sold decreased $5.7 million. A 5% increase in sales volumes resulted in an increase in cost of products sold of $8.8 million. An 8% decline in average product cost impacted cost of products sold by $14.5 million, resulting from reduced commodity prices. Our margins decreased $1.95 per barrel, or 19%, during the period.
Operating expenses. Operating expenses remained relatively consistent.
Selling, general and administrative expenses . Selling, general and administrative expenses remained relatively consistent.
Depreciation and amortization. Depreciation and amortization decreased as a result of capital expenditures offset by recent disposals.
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Interest Expense
Comparative Components of Interest Expense, Net for the Three Months Ended September 30, 2025 and 2024
Three Months Ended September 30, Variance Percent Change
2025 2024
(In thousands)
Credit facility $ 1,251 $ 1,874 $ (623) (33) %
Senior notes 11,628 11,500 128 1 %
Amortization of deferred debt issuance costs 977 772 205 27 %
Amortization of debt discount 600 600 — — %
Other 192 219 (27) (12) %
Finance leases 2 — 2
Capitalized interest (36) (373) 337 90 %
Total interest expense, net $ 14,614 $ 14,592 $ 22 — %
Comparative Components of Interest Expense, Net for the Nine Months Ended September 30, 2025 and 2024
Nine Months Ended September 30, Variance Percent Change
2025 2024
(In thousands)
Credit facility $ 4,105 $ 4,442 $ (337) (8) %
Senior notes 34,244 34,244 — — %
Amortization of deferred debt issuance costs 2,533 2,311 222 10 %
Amortization of debt discount 1,800 1,800 — — %
Other 724 820 (96) (12) %
Finance leases 4 — 4
Capitalized interest (81) (806) 725 90 %
Total interest expense, net $ 43,329 $ 42,811 $ 518 1 %
Indirect Selling, General and Administrative Expenses
Three Months Ended September 30, Variance Percent Change Nine Months Ended September 30, Variance Percent Change
2025 2024 2025 2024
(In thousands) (In thousands)
Indirect selling, general and administrative expenses $ 3,860 $ 3,742 $ 118 3 % $ 12,472 $ 11,397 $ 1,075 9 %
Indirect selling, general and administrative expenses increased for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to transaction expenses associated with the terminated merger with Martin Resource Management Corporation.
Indirect selling, general and administrative expenses increased for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily due to transaction expenses associated with the terminated merger with Martin Resource Management Corporation.
Martin Resource Management Corporation allocates to us a portion of its indirect selling, general and administrative expenses for services such as accounting, legal, treasury, clerical, billing, information technology, administration of insurance, engineering, general office expense and employee benefit plans and other general corporate overhead functions we share with Martin Resource Management Corporation retained businesses. This allocation is based on the percentage of time spent by Martin Resource Management Corporation personnel that provide such centralized services. GAAP also permits other methods for
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allocation of these expenses, such as basing the allocation on the percentage of revenues contributed by a segment. The allocation of these expenses between Martin Resource Management Corporation and us is subject to a number of judgments and estimates, regardless of the method used. We can provide no assurances that our method of allocation, in the past or in the future, is or will be the most accurate or appropriate method of allocation for these expenses. Other methods could result in a higher allocation of selling, general and administrative expenses to us, which would reduce our net income.
Under the Omnibus Agreement, we are required to reimburse Martin Resource Management Corporation for indirect general and administrative and corporate overhead expenses. The Conflicts Committee of our general partner approved the following reimbursement amounts during the three and nine months ended September 30, 2025 and 2024:
Three Months Ended September 30, Variance Percent Change Nine Months Ended September 30, Variance Percent Change
2025 2024 2025 2024
(In thousands) (In thousands)
Conflicts Committee approved reimbursement amount
$ 3,384 $ 3,377 $ 7 — % $ 10,152 $ 10,131 $ 21 — %
The amounts reflected above represent our allocable share of such expenses. The Conflicts Committee will review and approve future adjustments in the reimbursement amount for indirect expenses, if any, annually.
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Liquidity and Capital Resources
General
Our primary sources of liquidity to meet operating expenses, service our indebtedness, fund capital expenditures and pay distributions to our unitholders have historically been cash flows generated by our operations, borrowings under our credit facility and access to debt and equity capital markets, both public and private. Set forth below is a description of our cash flows for the periods indicated.
Cash Flows - Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024
The following table details the cash flow changes between the nine months ended September 30, 2025 and 2024:
Nine Months Ended September 30, Variance Percent Change
2025 2024
(In thousands)
Net cash provided by (used in):
Operating activities $ 23,683 $ 6,184 $ 17,499 283 %
Investing activities (22,405) (49,642) 27,237 55 %
Financing activities (1,284) 43,460 (44,744) (103) %
Net increase (decrease) in cash and cash equivalents $ (6) $ 2 $ (8) (400) %
Net cash provided by operating activities. The increase in net cash provided by operating activities for the nine months ended September 30, 2025, includes a decrease in operating results and other non-cash charges of $14.6 million, offset by a favorable variance in cash flows associated with changes in working capital of $32.1 million.
Net cash used in investing activities. Net cash used in investing activities for the nine months ended September 30, 2025, decreased $27.2 million. A decrease in cash used of $19.8 million resulted from lower payments for capital expenditures and plant turnaround costs in 2025. Investments in DSM Semichem LLC decreased $6.9 million. Additionally, net proceeds from the sale of property, plant and equipment increased $0.5 million.
Net cash (used in) provided by financing activities. Net cash provided by (used in) financing activities for the nine months ended September 30, 2025, decreased primarily as a result of an increase in repayments of long-term debt of $4.0 million, coupled with a decrease in borrowings of long-term debt of $40.1 million. Additionally, we incurred additional debt issuance costs of $0.7 million.
Total Contractual Obligations
A summary of our total contractual cash obligations as of September 30, 2025, is as follows:
Payments due by period
Type of Obligation Total
Obligation Less than
One Year 1-3
Years 3-5
Years Due
Thereafter
Credit facility $ 53,500 $ — $ 53,500 $ — $ —
11.5% senior secured notes, due 2028 400,000 — 400,000 — —
Operating leases 79,437 25,680 37,645 12,706 3,406
Finance lease obligations 58 15 33 10 —
Interest payable on finance lease obligations 7 3 4 — —
Interest payable on fixed long-term debt obligations 108,426 46,000 62,426 — —
Total contractual cash obligations $ 641,428 $ 71,698 $ 553,608 $ 12,716 $ 3,406
The interest payable under our credit facility is not reflected in the above table because such amounts depend on the outstanding balances and interest rates, which vary from time to time.
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Letters of Credit . At September 30, 2025, we had outstanding irrevocable letters of credit in the amount of $0.6 million, which were issued under our credit facility.
Off-Balance Sheet Arrangements. We do not have any off-balance sheet financing arrangements.
Description of Our Indebtedness
Credit Facility
At September 30, 2025, we maintained a $130.0 million credit facility that matures on November 16, 2027. As of September 30, 2025, we had $53.5 million outstanding under the credit facility and $0.6 million of outstanding irrevocable letters of credit, leaving a maximum amount available to be borrowed under our credit facility for future revolving credit borrowings and letters of credit of $75.9 million. After giving effect to our then current borrowings, letters of credit, and the financial covenants contained in our credit facility, we had the ability to borrow approximately $11.4 million in additional amounts thereunder as of September 30, 2025.
The credit facility is used for ongoing working capital needs and general partnership purposes, and to finance permitted investments, acquisitions and capital expenditures. The level of outstanding draws on our credit facility from January 1, 2025 through September 30, 2025 ranged from a low of $41.0 million to a high of $87.0 million.
The applicable margin for Adjusted Term SOFR borrowings at September 30, 2025 is 3.50%. The applicable margin for Adjusted Term SOFR borrowings effective October 15, 2025 is 3.75%.
On September 24, 2025, we entered into the Second Amendment to the Credit Agreement to, among other things:
• extend the maturity date of amounts outstanding and the lenders’ commitments under the Credit Agreement from February 8, 2027 to November 16, 2027;
• decrease the amount available for us to borrow under the Credit Agreement on a revolving credit basis from $150.0 million to $130.0 million; and
• adjust the financial covenants as described in more detail below:
▪ require us to maintain a minimum Interest Coverage Ratio (as defined in the Credit Agreement) of at least 1.75 to 1.00 for the fiscal quarter ended March 31, 2025 and each fiscal quarter thereafter;
▪ require us to maintain a maximum Total Leverage Ratio (as defined in the Credit Agreement) of not more than 4.50 to 1.00 for the fiscal quarters ended March 31, 2025 and June 30, 2025, and stepping up to 4.75 to 1.00 for the fiscal quarter ending September 30, 2025 and each fiscal quarter thereafter; and
▪ require us to maintain a maximum First Lien Leverage Ratio (as defined in the Credit Agreement) of not more than 1.25 to 1.00 for the fiscal quarter ended March 31, 2025 and each fiscal quarter thereafter.
For a description of our credit facility, see “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Description of Our Long-Term Debt" in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 24, 2025.
2028 Notes
For a description of our 2028 Notes, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Description of Our Long-Term Debt" in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 24, 2025.
Capital Resources and Liquidity
Historically, we have generally satisfied our working capital requirements and funded our debt service obligations and capital expenditures with cash generated from operations and borrowings under our credit facility.
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On September 30, 2025, we had cash and cash equivalents of $0.05 million and available borrowing capacity of $75.9 million under our credit facility with $53.5 million of borrowings outstanding. After giving effect to our then current borrowings, letters of credit, and the financial covenants contained in our credit facility, we had the ability to borrow approximately $11.4 million in additional amounts thereunder as of September 30, 2025.
We expect that our primary sources of liquidity to meet operating expenses, service our indebtedness, pay distributions to our unitholders and fund capital expenditures will be provided by cash flows generated by our operations, borrowings under our credit facility and access to the debt and equity capital markets. Our ability to generate cash from operations will depend upon our future operating performance, which is subject to certain risks. For a discussion of such risks, please read "Item 1A. Risk Factors" of our Form 10-K for the year ended December 31, 2024, filed with the SEC on February 24, 2025. In addition, due to the covenants in our credit facility, our financial and operating performance impacts the amount we are permitted to borrow under that facility.
We are in compliance with all debt covenants as of September 30, 2025, and expect to be in compliance for the next twelve months.
Interest Rate Risk
We are subject to interest rate risk on our credit facility due to the variable interest rate and may enter into interest rate swaps to reduce this variable rate risk.
Seasonality
A substantial portion of our revenues is dependent on sales prices of products, particularly NGLs and fertilizers, which fluctuate in part based on winter and spring weather conditions. The demand for NGLs is strongest during the winter heating season. The demand for fertilizers is strongest during the early spring planting season. However, our Terminalling and Storage and Transportation business segments and the molten sulfur business are typically not impacted by seasonal fluctuations and a significant portion of our net income is derived from our Terminalling and Storage, Sulfur Services and Transportation business segments. Further, extraordinary weather events, such as hurricanes, have in the past, and could in the future, impact our Terminalling and Storage, Sulfur Services, and Transportation business segments.
Impact of Inflation
Inflation did not have a material impact on our results of operations for the nine months ended September 30, 2025 or 2024. Inflation may increase the cost to acquire or replace property, plant and equipment. It may also increase the costs of labor and supplies. In the future, increasing energy prices for products consumed by our operations, such as diesel fuel, natural gas, chemicals, and other supplies, could adversely affect our results of operations. An increase in price of these products would increase our operating expenses which could adversely affect net income. We cannot provide assurance that we will be able to pass along increased operating expenses to our customers.
Environmental Matters
Our operations are subject to environmental laws and regulations adopted by various governmental authorities in the jurisdictions in which these operations are conducted.
On June 15, 2024, the Partnership experienced a spill of less than 2,500 barrels of crude oil from its transfer pipeline connecting the Sandyland Terminal to the refinery in Smackover, Union County, Arkansas. The Partnership promptly coordinated with the U.S Environmental Protection Agency (the “EPA”), Arkansas Department of Energy and Environment (the “ADEE”), and Arkansas Game and Fish Commission, dedicating the necessary resources, equipment, and personnel to expedite oil recovery and cleanup activities. In October 2024, the EPA transitioned the Partnership’s response from emergency response status to remediation status under ADEE oversight. On October 11, 2024, the ADEE notified the Partnership that documentation, observations, and data indicated the Partnership completed all remedial actions to the maximum practical extent. No further remediation is required at this time. The Partnership submitted a claim related to the spill, which was accepted by its insurance carriers, subject to a reservation of rights. The Partnership’s deductibles under the applicable insurance policies total $1.5 million and such deductible expense was recorded by the Partnership in the Consolidated and Condensed Statements of Operations for the nine months ended September 30, 2024. As of October 20, 2025, no fines or penalties have been assessed in relation to the spill.
We incurred no material environmental costs, liabilities or expenditures to mitigate or eliminate environmental contamination during the nine months ended September 30, 2025.
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On March 6, 2024, the SEC adopted final rules that require the registrants to disclose certain climate-related information in registration statements and annual reports. Litigation challenging the new rule was filed by multiple parties in multiple jurisdictions, which was consolidated and assigned to the U.S. Court of Appeals for the Eighth Circuit. On April 4, 2024, the SEC announced it was voluntarily delaying the implementation of the climate disclosure regulations while the U.S. Court of Appeals considered the litigation. On March 27, 2025, the SEC voted to end the defense of the rules in the litigation. On September 12, 2025, the U.S. Court of Appeals issued an order to hold the petitions challenging the climate disclosure rules in abeyance pending further action by the SEC.
On July 4, 2025, Congress enacted the OBBBA, which, among other things, postpones the U.S. EPA’s imposition of the methane Waste Emissions Charge to 2034, lowers royalties on federal onshore oil and gas leases, and repeals a royalty imposed on waste methane produced from federal oil and gas leases.
On July 29, 2025, the EPA issued an interim final rule extending several compliance deadlines associated with the strict new methane rules for the oil and gas industry that were published in March 2024 and took effect in May 2024. On July 29, 2025, the EPA released a pre-publication proposed rule which would rescind the EPA’s 2009 final rule under the Clean Air Act finding that greenhouse gases (“GHGs”) endanger the public health and welfare of current and future generations and that emissions of GHGs from new motor vehicles contribute to GHG pollution that threatens the public health and welfare. On September 16, 2025, the EPA announced a proposal to end the Greenhouse Gas Reporting Program (“GHGRP”) for all sectors except petroleum and natural gas systems (excluding reporting for natural gas distribution). Reporting for petroleum and natural gas systems under the GHGRP would be deferred until 2034 under the proposal.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.