Martin Midstream Partners L.P. (NASDAQ:MMLP) Q4 2023 Earnings Conference Call February 15, 2024 9:00 AM ET Company Participants Sharon Taylor - Chief Financial Officer Bob Bondurant - Chief Executive Officer Randy Tauscher - Chief Operating Officer Conference Call Participants Kyle May - Sidoti & Company Selman Akyol - Stifel Patrick Fitzgerald - Baird Operator Good morning. My name is Audra and I will be your conference operator today. At this time, I would like to welcome everyone to the MMLP Fourth Quart ...

February 14, 2024 Sulfur Services 4Q23E 4Q23A Butane Optimization - - | --- | --- | |------------------------------|-------| | | | | Fourth Quarter and Full Year | | | 2023 Earnings Summary and | | | 2024 Financial Guidance | | | MARTIN MIDSTREAM PARTNERS | | Unallocated SG&A $(4.3) $(4.1) Total Adjusted EBITDA $26.9 $29.2 Total Sulfur Services $6.0 $7.4 | --- | --- | --- | --- | --- | --- | --- | --- | |------------------------------------------------------------------|----------------|-------------------- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ☒ For the quarterly period ended September 30, 2023 OR TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission File Number 000-50056 MARTIN MIDSTREAM PARTNERS L.P. (Exact name of registrant as specified in its charter) (State or other jur ...

Third Quarter 2023 Earnings Summary CORACABO | --- | --- | --- | --- | --- | --- | --- | --- | |-----------------------------------------------------------------|-------|-------|-------|--------------------------------------------------|---------|--------|--------| | Transportation | 2023E | 3Q23E | 3Q23A | Specialty Products | 2023E | 3Q23E | 3Q23A | | Land | $36.2 | $8.5 | $6.7 | Lubricants | $9.0 | $2.4 | $3.6 | | Marine | $13.5 | $3.5 | $2.8 | Grease | $8.6 | $2.3 | $2.8 | | Total Transportation | $49.7 ...

Martin Midstream Partners L.P. (NASDAQ:MMLP) Q3 2023 Earnings Conference Call October 19, 2023 9:00 AM ET Company Participants Sharon Taylor - Chief Financial Officer Bob Bondurant - Chief Executive Officer Randy Tauscher - Chief Operating Officer David Cannon - Controller Danny Cavin - Director, FP&A Conference Call Participants Kyle May - Sidoti & Company Tim Howard - Stifel Operator Good morning. My name is Audra, and I will be your conference operator today. At this time, I would like to welcome everyon ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission File Number 000-50056 MARTIN MIDSTREAM PARTNERS L.P. (Exact name of registrant as specified in its charter) (State or other jurisdicti ...

Financial Data and Key Metrics Changes - For Q2 2023, the company reported adjusted EBITDA of $31.8 million, slightly below the guidance of $32.2 million, representing a 1% difference [9] - The total long-term debt outstanding was $460.5 million, a reduction of $39.5 million from the previous quarter [24] - Distributable cash flow for the quarter was $9.7 million, and free cash flow was $7.8 million [27] Business Line Data and Key Metrics Changes - The transportation segment generated adjusted EBITDA of $12.1 million, exceeding guidance of $11.6 million, with the marine transportation business achieving $3.5 million against a forecast of $2.8 million [10][12] - The terminalling and storage segment had adjusted EBITDA of $9.6 million, surpassing guidance of $8.3 million, primarily due to reduced operating costs [13] - The sulfur services segment reported adjusted EBITDA of $8 million, below guidance of $10.6 million, mainly due to underperformance in the fertilizer group [15] - The specialty products segment achieved adjusted EBITDA of $5.9 million, slightly below guidance of $6 million, with strength in NGL and propane groups but weakness in packaged lubricants [19] Market Data and Key Metrics Changes - The company noted a 17% decline in forecasted sales volumes for the fertilizer group due to poor weather conditions impacting farmer demand [16] - Fertilizer prices continued to fall throughout Q2, negatively affecting margins as the company destocked higher-cost inventory [16] Company Strategy and Development Direction - The company plans to continue operating its underground NGL storage facility in North Louisiana, utilizing a fee-based volume-driven business model [8] - The exit from the butane optimization business is expected to lead to less volatile future earnings and significant reductions in working capital needs [62] - The company is focused on strengthening its balance sheet by paying down debt and lowering leverage to below 3.75x [57] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the agriculture market recovering, potentially starting in Q4 2023, contingent on favorable weather conditions [23][50] - The company anticipates continued strength in transportation and terminalling segments, offsetting challenges in sulfur and specialty products due to agricultural market headwinds [29] Other Important Information - Capital expenditures for the quarter totaled $9.8 million, with $7.9 million for maintenance and $1.9 million for growth [27] - The ELSA facility is expected to be online in Q1 2024, with a total investment of approximately $20 million [28][45] Q&A Session Summary Question: What is the outlook for transportation rates and production? - Management indicated strong rates in truck transportation and increased sulfur production, averaging over 3,500 tons per day, with expectations for continued high refinery utilization [36][37] Question: Are there any long-term contracts being secured for barges? - Management confirmed that there are contracts being locked in for longer durations at higher rates, reflecting confidence in rising market conditions [39][40] Question: What is the expected timeline for the ELSA project to ramp up? - The project is expected to ramp up in the second half of the year, with distributions from the joint venture anticipated in Q3 [46][49] Question: When can improvements in the agriculture market be expected? - Management suggested that while improvements may be seen in Q4, a more significant recovery is anticipated for the following year, depending on weather conditions [50] Question: What is the plan for free cash flow and leverage management? - The company plans to use free cash flow to reduce leverage below 3.75x before considering increasing distributions [55][60]

PART I – FINANCIAL INFORMATION [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Q1 2023 saw a **$5.1 million** net loss, down from **$11.5 million** net income, due to lower revenues and debt extinguishment [Consolidated and Condensed Balance Sheets](index=5&type=section&id=Consolidated%20and%20Condensed%20Balance%20Sheets) | | March 31, 2023 (Unaudited, in thousands) | December 31, 2022 (Audited, in thousands) | | :--- | :--- | :--- | | **Total current assets** | $161,872 | $211,127 | | **Total assets** | $542,875 | $598,851 | | **Total current liabilities** | $95,664 | $110,925 | | **Long-term debt, net** | $475,237 | $512,871 | | **Total liabilities** | $607,552 | $658,296 | | **Total partners' capital (deficit)** | $(64,677) | $(59,445) | - Total assets decreased from **$598.9 million** at the end of 2022 to **$542.9 million** as of March 31, 2023, driven by a decrease in current assets, particularly inventories which fell from **$109.8 million** to **$76.6 million**[15](index=15&type=chunk) [Consolidated and Condensed Statements of Operations](index=6&type=section&id=Consolidated%20and%20Condensed%20Statements%20of%20Operations) | Metric | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :--- | :--- | :--- | | **Total revenues** | $244,529 | $279,201 | | **Operating income (loss)** | $17,505 | $25,449 | | **Net income (loss)** | $(5,086) | $11,478 | | **Limited partners' interest in net income (loss)** | $(4,968) | $11,219 | | **Net income (loss) per unit - basic & diluted** | $(0.13) | $0.29 | - The company reported a **net loss of $5.1 million** for Q1 2023, compared to a **net income of $11.5 million** in Q1 2022. The decline was driven by lower total revenues (down to **$244.5 million** from **$279.2 million**) and a **$5.1 million loss on extinguishment of debt**[17](index=17&type=chunk) [Consolidated and Condensed Statements of Cash Flows](index=10&type=section&id=Consolidated%20and%20Condensed%20Statements%20of%20Cash%20Flows) | Cash Flow Activity | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $49,264 | $28,375 | | **Net cash used in investing activities** | $(4,218) | $(11,354) | | **Net cash used in financing activities** | $(45,034) | $(16,761) | - Net cash from operating activities increased to **$49.3 million** in Q1 2023 from **$28.4 million** in Q1 2022, primarily due to a significant positive change in inventories. Net cash used in financing activities increased substantially to **$45.0 million** due to debt refinancing activities, including **$13.6 million** in debt issuance costs[26](index=26&type=chunk) [Notes to Consolidated and Condensed Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20and%20Condensed%20Financial%20Statements) Key notes detail a **$400 million** debt refinancing, segment reorganization, and a **$0.005** per unit cash distribution - On February 8, 2023, the Partnership issued **$400 million** in 11.500% senior secured second lien notes due 2028. The proceeds were used to repurchase its 2024 and 2025 notes, resulting in a **$5.1 million loss on debt extinguishment**[43](index=43&type=chunk) - Effective January 1, 2023, the Partnership **reorganized its segments**. The underground NGL storage division was moved to the Terminalling and Storage segment, and the packaged lubricants and grease businesses were moved to the Specialty Products segment. Prior period information has been revised to reflect these changes[107](index=107&type=chunk) - On April 19, 2023, the Partnership declared a quarterly cash distribution of **$0.005 per common unit** for the first quarter of 2023, payable on May 15, 2023[123](index=123&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Operating income declined to **$17.5 million** due to segment performance, alongside debt refinancing and strategic business changes [Significant Recent Developments](index=34&type=section&id=Significant%20Recent%20Developments) - In February 2023, the company **refinanced its debt** by issuing **$400 million** of 2028 Notes, using the proceeds to tender for and redeem its 2024 and 2025 notes and extend its credit facility maturity to 2027[129](index=129&type=chunk) - The company announced its **planned exit from the butane optimization business**, expected to conclude in the second quarter of 2023[130](index=130&type=chunk) - The company entered a **joint venture**, DSM Semichem LLC, to produce electronic level sulfuric acid (ELSA), with an expected capital expenditure of approximately **$20.0 million** in 2023 and 2024[131](index=131&type=chunk) [Non-GAAP Financial Measures](index=37&type=section&id=Non-GAAP%20Financial%20Measures) | Metric | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :--- | :--- | :--- | | **Net income (loss)** | $(5,086) | $11,478 | | **EBITDA** | $25,307 | $39,934 | | **Adjusted EBITDA** | $21,735 | $39,954 | | **Distributable cash flow** | $9,460 | $15,160 | | **Adjusted free cash flow** | $8,697 | $12,000 | [Results of Operations by Segment](index=40&type=section&id=Results%20of%20Operations) Overall operating income decreased to **$17.5 million**, with mixed segment performance driven by commodity price impacts | Segment | Operating Income (Loss) Q1 2023 (in thousands) | Operating Income (Loss) Q1 2022 (in thousands) | | :--- | :--- | :--- | | **Terminalling and storage** | $3,108 | $(112) | | **Transportation** | $9,442 | $6,982 | | **Sulfur services** | $4,553 | $12,652 | | **Specialty products** | $4,600 | $10,049 | [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) The company held **$0.05 million** cash and **$39.6 million** effective borrowing capacity after a major debt refinancing - As of March 31, 2023, the company had **$100.0 million** outstanding under its **$200.0 million** credit facility, with an available borrowing capacity of **$80.8 million**. Factoring in financial covenants, the actual borrowing ability was approximately **$39.6 million**[188](index=188&type=chunk)[202](index=202&type=chunk) - The credit facility was **amended** on February 8, 2023, reducing commitments to **$200.0 million** (with scheduled step-downs) and **extending the maturity to February 8, 2027**[189](index=189&type=chunk) | Type of Obligation | Total Obligation (in thousands) | | :--- | :--- | | Credit facility | $100,000 | | 11.5% senior secured notes, due 2028 | $400,000 | | Operating leases | $47,113 | | Interest payable on fixed long-term debt | $223,426 | | **Total contractual cash obligations** | **$770,542** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces commodity and interest rate risks; a **100 basis point** rate increase would raise annual interest expense by **$1.0 million** - The company has **no outstanding commodity hedging positions** as of March 31, 2023[211](index=211&type=chunk) - The company is exposed to **interest rate risk** on its credit facility. A **100 basis point increase** in interest rates would result in an approximate **$1.0 million annual increase** in interest expense based on debt levels at March 31, 2023[213](index=213&type=chunk) [Item 4. Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirmed effective disclosure controls and procedures, with no material changes to internal controls during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective** as of March 31, 2023[216](index=216&type=chunk) - **No material changes** to internal controls over financial reporting occurred during the first quarter of 2023[217](index=217&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ongoing legal proceedings, including a customer dispute over defense and indemnity obligations - The company is involved in **ongoing litigation** with a customer from its lubricants packaging business regarding defense and indemnity obligations. The trial is expected in 2024, and the ultimate exposure, if any, is currently **indeterminable**[111](index=111&type=chunk)[112](index=112&type=chunk) [Item 1A. Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors were reported since the prior annual filing - **No material changes** to the company's risk factors were reported for the period[220](index=220&type=chunk) [Item 6. Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section incorporates by reference the Index to Exhibits, detailing all documents filed as part of the quarterly report - The report includes **various exhibits**, such as organizational documents, debt agreements, and officer certifications, as detailed in the Index to Exhibits[221](index=221&type=chunk)[223](index=223&type=chunk)

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $30.6 million for Q1 2023, which was in line with the guidance of $31.4 million, representing a 2% difference [4] - For the trailing 12 months, adjusted EBITDA was $117.6 million after accounting for the exit of the butane optimization business [5] - Total long-term debt outstanding was $500 million, a reduction of $16 million from the previous quarter [30] Business Line Data and Key Metrics Changes - The transportation segment generated adjusted EBITDA of $13.2 million, exceeding guidance of $11.6 million, driven by line haul revenue exceeding forecasts by $1 million [5] - The marine transportation business achieved adjusted EBITDA of $2.6 million, surpassing guidance of $2.1 million, with day rate revenue exceeding forecasts by $0.5 million [6][7] - The Terminalling and Storage business had adjusted EBITDA of $9.1 million, compared to guidance of $8.4 million, benefiting from lower operating costs [9] - The Sulfur Services segment reported adjusted EBITDA of $7.2 million, missing guidance of $9.6 million, primarily due to underperformance in the fertilizer group [10] - The Specialty Products segment had adjusted EBITDA of $5.2 million, below guidance of $6.1 million, driven by lower lubricant sales volume [17] Market Data and Key Metrics Changes - The company experienced a 27% miss in fertilizer volume forecasts due to unfavorable weather impacting agricultural demand [10] - Increased fertilizer demand was noted in April compared to March, with expectations to meet second quarter volume forecasts [11] Company Strategy and Development Direction - The company is focused on further debt reduction to achieve a leverage goal of 3.75 times [27] - The exit from the butane optimization business is expected to improve financial metrics and leverage ratios [28] - The company is optimistic about the performance of its land and marine transportation businesses despite potential economic slowdowns [6][41] Management Comments on Operating Environment and Future Outlook - Management acknowledged the possibility of a recession but remains optimistic about achieving annual guidance in the land transportation business [6] - The company expects to see improved performance in the Terminalling and Storage business starting in May [43] - Management is confident in the financial results for the year and the progress made in strengthening the balance sheet [20] Other Important Information - The company liquidated approximately 730,000 barrels of butane inventory in Q1 and expects to collect around $20 million from this liquidation [13] - Capital expenditures for Q1 were below expectations, with $6.6 million in maintenance CapEx and $800,000 in gross CapEx [31] - The company received permits for the construction of the ELSA production facility and is on schedule with capital expenditures for this project [32][33] Q&A Session Summary Question: Update on underground storage and contracting - Management indicated that interest in third-party contracting has been slight to moderate, with an expected contract between the MLP and the general partner in the next 30 to 45 days [22] Question: Performance of sulfur services - Management noted that volumes were better than anticipated, with over 3200 tons a day processed through terminals, contributing to better-than-expected performance [24] Question: Liquidation of butane and debt reduction expectations - Management confirmed expectations for debt reduction between $70 million to $80 million for the year, aligning with the liquidation of butane [25]

PART I [Business](index=5&type=section&id=Item%201.%20Business) The company is a publicly traded limited partnership providing midstream energy services across four segments in the U.S. Gulf Coast [Overview](index=5&type=section&id=Overview) The company operates four primary fee-based midstream business lines in the U.S. Gulf Coast, with its sponsor MRMC holding significant ownership * The company's four primary business lines are: Terminalling, processing, storage and packaging; Land and marine transportation; Sulfur and sulfur-based products; and Natural Gas Liquids (NGL) marketing and distribution[16](index=16&type=chunk) * A significant amount of cash flow is generated from **fee-based businesses**, with sponsor Martin Resource Management Corporation (MRMC) assuming significant working capital demands and margin risk[17](index=17&type=chunk) * As of December 31, 2022, **MRMC owned 15.7% of the Partnership's common units** and indirectly owns **100% of the general partner, MMGP**[18](index=18&type=chunk) [Primary Business Segments](index=6&type=section&id=Primary%20Business%20Segments) The company's operations are divided into four segments: Terminalling and Storage, Transportation, Sulfur Services, and Natural Gas Liquids, each with specialized assets and services Segment Asset Overview | Segment | Key Assets/Operations | | :--- | :--- | | **Terminalling and Storage** | 14 marine shore-based terminals, 13 specialty terminals, **2.7 million barrels** aggregate storage capacity | | **Transportation** | **~700 trucks**, **~1,200 tank trailers**, **27 inland marine tank barges**, **15 inland push boats** | | **Sulfur Services** | Integrated system for processing, manufacturing, marketing, and distributing sulfur and sulfur-based fertilizers | | **Natural Gas Liquids** | Marketing, distribution, and transportation of NGLs with **~2.2 million barrels** of underground storage capacity | [Significant Recent Developments](index=7&type=section&id=Significant%20Recent%20Developments) Recent strategic actions include debt refinancing, exiting the butane optimization business, and a joint venture for electronic level sulfuric acid production * In February 2023, the company issued **$400.0 million of 11.50% senior secured second lien notes due 2028** to refinance existing debt and amend its credit facility, extending maturity to 2027[23](index=23&type=chunk) * Announced the exit of its **butane optimization business** in January 2023 to transition to a fee-based butane logistics model, aiming to eliminate commodity risk and reduce working capital[24](index=24&type=chunk) * Entered a joint venture to produce **electronic level sulfuric acid (ELSA)** for the semiconductor industry, expecting to fund approximately **$20.0 million** in related capital expenditures in 2023 and 2024[26](index=26&type=chunk) [Our Growth Strategy and Competitive Strengths](index=8&type=section&id=Our%20Growth%20Strategy%20and%20Competitive%20Strengths) The company's growth strategy focuses on strategic alliances and organic expansion, leveraging its Gulf Coast assets, specialized equipment, and fee-based contracts * Growth strategy is centered on establishing strategic alliances, attracting new customers, expanding services to existing customers, and pursuing organic growth projects[30](index=30&type=chunk) * Competitive strengths include **strategically located assets near Gulf Coast refineries**, specialized equipment for handling products like molten sulfur and asphalt, and a strong industry reputation[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) * A significant amount of cash flow is generated from **fee-based contracts**, many with minimum fee arrangements, which reduces cash flow volatility[32](index=32&type=chunk) [Our Relationship with Martin Resource Management Corporation](index=17&type=section&id=Our%20Relationship%20with%20Martin%20Resource%20Management%20Corporation) The Partnership has a critical relationship with its sponsor, MRMC, which owns the general partner and provides all personnel, involving significant financial and commercial transactions * **MRMC owns 15.7% of outstanding limited partner units** and **100% of the general partner**, directing the Partnership's business operations[93](index=93&type=chunk) * The Partnership has **no employees** and relies on MRMC employees to conduct its business and operate its assets[94](index=94&type=chunk) Financial Relationship with MRMC (FY 2022) | Transaction Type | Amount/Percentage | Direction | | :--- | :--- | :--- | | **Reimbursements to MRMC** | | | | Direct Costs & Expenses | **$161.6 million** | MMLP to MRMC | | Indirect G&A Expenses | **$13.5 million** | MMLP to MRMC | | **Commercial Transactions** | | | | Purchases from MRMC | **17% of MMLP's total costs** | MMLP to MRMC | | Sales to MRMC | **9% of MMLP's total revenues** | MRMC to MMLP | [Environmental and Regulatory Matters](index=21&type=section&id=Environmental%20and%20Regulatory%20Matters) Operations are subject to extensive environmental and safety regulations, including climate change risks and specific rules for marine and trucking transportation * Operations are subject to numerous environmental laws (e.g., CERCLA, RCRA, Clean Air Act, Clean Water Act) that can impose significant compliance costs and liabilities for pollution[109](index=109&type=chunk) * Climate change presents regulatory risks from potential GHG emission restrictions and physical risks from severe weather, which could damage facilities and disrupt operations[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) * Marine transportation is subject to the **Jones Act**, requiring U.S.-built, owned, and manned vessels for domestic trade, which increases operating costs compared to foreign-flagged competitors[125](index=125&type=chunk) [Risk Factors](index=27&type=section&id=Item%201A.%20Risk%20Factors) The company faces business, operational, environmental, relationship, investment, and tax risks that could materially affect its financial condition and distributions * **Business Risks:** Significant indebtedness, restrictions in debt instruments limiting distributions, dependence on offshore E&P activity, counterparty credit risk, and potential for asset impairment[133](index=133&type=chunk)[141](index=141&type=chunk)[145](index=145&type=chunk) * **Operational & Environmental Risks:** Adverse weather (hurricanes, storms), potential for uninsured liabilities from accidents or spills, compliance costs with environmental laws, and risks associated with climate change regulations and physical impacts[133](index=133&type=chunk)[165](index=165&type=chunk)[182](index=182&type=chunk) * **Relationship Risks:** Potential conflicts of interest with parent Martin Resource Management Corporation, which controls the general partner and may favor its own interests[134](index=134&type=chunk)[229](index=229&type=chunk) * **Investment & Tax Risks:** Limited unitholder voting rights, potential for the IRS to treat the partnership as a corporation for tax purposes, and the possibility that unitholders may be required to pay taxes on income even without receiving cash distributions[134](index=134&type=chunk)[136](index=136&type=chunk)[211](index=211&type=chunk)[234](index=234&type=chunk) [Unresolved Staff Comments](index=59&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC * None[264](index=264&type=chunk) [Properties](index=59&type=section&id=Item%202.%20Properties) The company believes it holds satisfactory title to its assets, with no material adverse effects expected from unobtained consents or existing encumbrances * A detailed description of the company's properties is located in "Item 1. Business"[265](index=265&type=chunk) * The company believes it has satisfactory title to its assets and that any unobtained third-party consents, permits, or existing encumbrances will not materially and adversely affect business operations[266](index=266&type=chunk) [Legal Proceedings](index=59&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, but management does not anticipate a material adverse impact on its financial position * The company is subject to legal proceedings in the ordinary course of business but does not expect them to have a material adverse impact[267](index=267&type=chunk) * A detailed description of legal proceedings is available in Note 19 to the consolidated financial statements[267](index=267&type=chunk) [Mine Safety Disclosures](index=59&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company * Not applicable[268](index=268&type=chunk) PART II [Market for Our Common Equity, Related Unitholder Matters and Issuer Purchases of Equity Securities](index=60&type=section&id=Item%205.%20Market%20for%20Our%20Common%20Equity%2C%20Related%20Unitholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Common units trade on NASDAQ under MMLP, with a policy to distribute available cash quarterly, subject to debt covenants * Common units are traded on NASDAQ under the symbol **"MMLP"**[271](index=271&type=chunk) * The partnership's policy is to distribute all available cash within 45 days after the end of each quarter, subject to debt covenants and the general partner's discretion to establish cash reserves[272](index=272&type=chunk) * A quarterly cash distribution of **$0.005 per common unit** for Q4 2022 was declared on January 23, 2023, and paid on February 14, 2023[273](index=273&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=61&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes financial performance, liquidity, and capital resources, highlighting debt refinancing and segment-specific operating results [Results of Operations](index=68&type=section&id=Results%20of%20Operations) Total revenues increased to $1.019 billion in 2022, but operating income decreased, driven by a significant rise in Transportation and a decline in Natural Gas Liquids Operating Income (Loss) by Segment (after eliminations) | Segment | 2022 (in thousands) | 2021 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Terminalling and storage | **$14,893** | **$10,785** | **$4,108** | | Natural gas liquids | **$(1,853)** | **$38,098** | **$(39,951)** | | Sulfur services | **$34,146** | **$32,972** | **$1,174** | | Transportation | **$20,991** | **$(8,446)** | **$29,437** | | **Total Operating Income** | **$51,263** | **$57,280** | **$(6,017)** | * The Transportation segment's operating income increased by **$29.4 million** year-over-year, primarily due to higher utilization, increased transportation rates, and a **25% increase in land transportation load count**[316](index=316&type=chunk)[317](index=317&type=chunk) * The Natural Gas Liquids segment experienced a significant decline in operating income, driven by a **58% decrease in margin per barrel ($3.15/bbl)** despite higher market prices[326](index=326&type=chunk)[327](index=327&type=chunk) [Non-GAAP Financial Measures](index=64&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP metrics like Adjusted EBITDA, Distributable Cash Flow, and Adjusted Free Cash Flow to evaluate performance Key Non-GAAP Financial Metrics | Metric (in thousands) | 2022 | 2021 | | :--- | :--- | :--- | | **Adjusted EBITDA** | **$114,880** | **$114,542** | | **Distributable Cash Flow** | **$37,934** | **$44,630** | | **Adjusted Free Cash Flow** | **$30,772** | **$37,218** | [Liquidity and Capital Resources](index=74&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is primarily from operations and credit facility, with net cash from operations decreasing in 2022 and debt refinanced post-year-end * Net cash provided by operating activities decreased by **55% to $16.1 million** in 2022 from **$35.7 million** in 2021, primarily due to lower operating results and unfavorable changes in working capital[335](index=335&type=chunk) Contractual Obligations as of Dec 31, 2022 | Type of Obligation | Total Obligation (in thousands) | | :--- | :--- | | Credit facility | **$171,000** | | 11.5% senior secured notes, due 2025 | **$291,381** | | 10.0% senior secured notes, due 2024 | **$53,750** | | Operating leases | **$45,756** | | **Total (including others)** | **$642,114** | * Subsequent to year-end, on February 8, 2023, the company amended its credit facility, extending the maturity to February 8, 2027, and reducing commitments from **$275.0 million to $200.0 million** (with further scheduled reductions)[342](index=342&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=83&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to commodity price and interest rate risks, with a 100 basis point rate increase impacting annual interest expense by $1.7 million * The company is exposed to commodity price risk but had **no outstanding commodity derivative positions** as of December 31, 2022[377](index=377&type=chunk)[378](index=378&type=chunk) * The company is exposed to interest rate risk on its variable-rate credit facility; a **100 basis point increase** in rates would result in an approximate **$1.7 million increase in annual interest expense**[379](index=379&type=chunk) [Financial Statements and Supplementary Data](index=84&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section includes audited consolidated financial statements and KPMG's unqualified opinion, noting a critical audit matter regarding long-lived asset recoverability [Report of Independent Registered Public Accounting Firm](index=85&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) KPMG LLP issued unqualified opinions on the financial statements and internal controls, identifying long-lived asset recoverability as a critical audit matter * **KPMG LLP issued an unqualified opinion**, stating the financial statements are presented fairly in all material respects in conformity with U.S. GAAP[384](index=384&type=chunk) * KPMG LLP also issued an **unqualified opinion on the effectiveness of the Partnership's internal control over financial reporting** as of December 31, 2022[385](index=385&type=chunk)[395](index=395&type=chunk) * A critical audit matter was identified regarding the evaluation of the recoverability of certain long-lived assets in the transportation segment, specifically noting the subjective nature of forecasting future revenue[390](index=390&type=chunk) [Consolidated Financial Statements](index=88&type=section&id=Consolidated%20Financial%20Statements) The financial statements show total assets of $598.9 million, a net loss of $10.3 million in 2022, and net cash from operations of $16.1 million Consolidated Balance Sheet Data (as of Dec 31) | Account (in thousands) | 2022 | 2021 | | :--- | :--- | :--- | | Total Current Assets | **$211,127** | **$173,688** | | Property, plant and equipment, net | **$319,290** | **$345,470** | | **Total Assets** | **$598,851** | **$579,861** | | Total Current Liabilities | **$110,925** | **$104,087** | | Long-term debt, net | **$512,871** | **$498,871** | | **Total Liabilities** | **$658,296** | **$627,898** | | **Total Partners' Capital (Deficit)** | **$(59,445)** | **$(48,037)** | Consolidated Statement of Operations Data (Year Ended Dec 31) | Account (in thousands) | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Total Revenues | **$1,018,878** | **$882,431** | **$672,142** | | Operating Income | **$51,263** | **$57,280** | **$46,502** | | Interest Expense, net | **$(53,665)** | **$(54,107)** | **$(46,210)** | | **Net Loss** | **$(10,334)** | **$(211)** | **$(6,771)** | [Notes to Consolidated Financial Statements](index=94&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, segment information, debt, and related party transactions, including the butane optimization exit and 2023 debt refinancing * **Note 4:** The Partnership announced its exit from the butane optimization business, expected in Q2 2023, to shift to a fee-based logistics model. It also closed on the sale of its Stockton Sulfur Terminal for net proceeds of approximately **$5.25 million** in October 2022[461](index=461&type=chunk)[462](index=462&type=chunk) * **Note 12:** Details the extensive relationship with Martin Resource Management Corporation (MRMC), which owns the general partner. The Partnership reimbursed MRMC **$13.5 million** for indirect expenses in 2022. MRMC is also a major customer and supplier[505](index=505&type=chunk)[513](index=513&type=chunk) * **Note 14 & Subsequent Events:** As of Dec 31, 2022, long-term debt included a **$171 million credit facility balance** and senior notes. In February 2023, the company issued **$400 million in new 2028 notes** to refinance the existing 2024 and 2025 notes and amended its credit facility, extending the maturity to 2027[542](index=542&type=chunk)[593](index=593&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=126&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting or financial disclosure matters * None[595](index=595&type=chunk) [Controls and Procedures](index=126&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management and KPMG LLP concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2022 * Management concluded that **disclosure controls and procedures were effective** as of December 31, 2022[596](index=596&type=chunk) * Management concluded that **internal control over financial reporting was effective** as of December 31, 2022. This assessment was audited by KPMG LLP, which concurred[599](index=599&type=chunk) [Other Information](index=127&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item * None[601](index=601&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=128&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The Partnership is managed by its general partner, with independent directors on key committees, and all operational personnel provided by MRMC * The Partnership is managed by its general partner, Martin Midstream GP LLC. All operational personnel are employees of Martin Resource Management Corporation[604](index=604&type=chunk)[608](index=608&type=chunk) * The board of the general partner has standing Conflicts, Audit, Compensation, and Nominating committees, each composed of independent directors: James M. Collingsworth, C. Scott Massey, and Byron R. Kelley[605](index=605&type=chunk)[606](index=606&type=chunk)[607](index=607&type=chunk) Key Executive Officers | Name | Position with the General Partner | | :--- | :--- | | Ruben S. Martin | Chairman of the Board of Directors | | Robert D. Bondurant | President and Chief Executive Officer and Director | | Randall L. Tauscher | Executive Vice President and Chief Operating Officer | | Chris H. Booth | Executive Vice President, Chief Legal Officer, General Counsel and Secretary | | Sharon L. Taylor | Executive Vice President and Chief Financial Officer | [Executive Compensation](index=132&type=section&id=Item%2011.%20Executive%20Compensation) Executive officers are compensated by MRMC, with the Partnership reimbursing allocated costs, including base salary, cash awards, and long-term incentives * The Partnership has **no employees**; executive officers are employed and compensated by Martin Resource Management Corporation (MRMC), and the Partnership reimburses MRMC for an allocated portion of these costs[629](index=629&type=chunk) Summary Compensation Table (2022 Allocated to MMLP) | Name and Principal Position | Salary | Discretionary Annual Awards | Phantom Unit Awards (Grant Date Value) | Total Compensation | | :--- | :--- | :--- | :--- | :--- | | Robert D. Bondurant, President and CEO | **$575,000** | **$775,000** | **$243,250** | **$1,593,250** | | Randall L. Tauscher, EVP and COO | **$367,500** | **$—** | **$217,000** | **$584,500** | | Sharon L. Taylor, EVP and CFO | **$189,000** | **$—** | **$185,500** | **$374,500** | | Chris H. Booth, EVP, General Counsel | **$252,000** | **$—** | **$185,500** | **$437,500** | | Scot A. Shoup, SVP of Operations | **$365,750** | **$—** | **$92,750** | **$458,500** | * Long-term incentive compensation is provided through the **2021 Phantom Unit Plan** (cash-settled) and the **2017 Restricted Unit Plan** (equity-settled)[647](index=647&type=chunk)[652](index=652&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=144&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Significant beneficial owners include Invesco (18.5%), MRMC ESOP Trust (15.7%), and Ruben S. Martin (23.9%), with all directors and executive officers owning 25.5% Beneficial Ownership of Common Units (as of March 2, 2023) | Name of Beneficial Owner | Common Units Beneficially Owned | Percentage of Common Units | | :--- | :--- | :--- | | Invesco Ltd. | **7,216,779** | **18.5%** | | MRMC ESOP Trust | **6,114,532** | **15.7%** | | Senterfitt Holdings Inc. | **3,025,445** | **7.8%** | | Ruben S. Martin | **9,290,016** | **23.9%** | | All directors and executive officers as a group | **9,928,390** | **25.5%** | * The **MRMC ESOP Trust is the controlling shareholder of Martin Resource Management Corporation**, owning **89.38% of its voting common stock**[694](index=694&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=147&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) This section details significant related party transactions with MRMC, governed by agreements like the Omnibus Agreement, and approved by the Conflicts Committee * The Omnibus Agreement governs services provided by MRMC, reimbursement of direct and indirect expenses, and non-competition clauses. The Partnership reimbursed MRMC **$13.5 million** for indirect expenses in 2022[701](index=701&type=chunk)[706](index=706&type=chunk) * Other key agreements include a Master Transportation Services Agreement with MTI (a subsidiary), various terminal services agreements, and marine transportation and fuel agreements with MRMC affiliates[711](index=711&type=chunk)[714](index=714&type=chunk)[716](index=716&type=chunk) * The Partnership has a tolling agreement with Cross Oil Refining and Marketing, Inc. (an MRMC subsidiary) for its Smackover refinery, which includes a minimum processing volume of **6,500 barrels per day**[718](index=718&type=chunk) * Material related party transactions are reviewed and approved by the **Conflicts Committee** of the board of directors to ensure they are fair and reasonable to the Partnership[725](index=725&type=chunk) [Principal Accounting Fees and Services](index=153&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) KPMG LLP served as the independent auditor, with total fees of $1.333 million in 2022, primarily for audit services, all pre-approved by the Audit Committee Fees Paid to KPMG LLP | Fee Type | 2022 | 2021 | | :--- | :--- | :--- | | Audit fees | **$1,238,000** | **$1,060,000** | | Tax fees | **$95,100** | **$107,000** | | All other fees | **$—** | **$7,000** | | **Total fees** | **$1,333,100** | **$1,174,000** | * All audit and non-audit services provided by KPMG LLP were **pre-approved by the Audit Committee**[727](index=727&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=154&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists financial statements, schedules, and exhibits, including organizational documents, debt indentures, and required certifications * Financial statements are located in Part II, Item 8 of the report[731](index=731&type=chunk) * An index of exhibits is provided, listing key corporate and operational agreements, debt instruments, and required certifications[733](index=733&type=chunk) [Form 10-K Summary](index=157&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to the company * Not applicable[736](index=736&type=chunk)