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Martin Midstream Partners(MMLP) - 2024 Q4 - Annual Report
MMLPMartin Midstream Partners(MMLP)2025-02-24 21:08

Financial Agreements and Amendments - The company entered into a credit facility amendment on February 13, 2025, adjusting interest coverage and first lien leverage ratios for fiscal quarters ending March 31, June 30, and September 30, 2025[29]. - As of December 31, 2024, the company had a weighted-average interest rate of 8.18% on its credit facility, with a potential 0.5millionincreaseininterestexpensefroma100basispointrateincrease[390].−Theestimatedfairvalueofthe2028Noteswas0.5 million increase in interest expense from a 100 basis point rate increase[390]. - The estimated fair value of the 2028 Notes was 436.2 million, with a potential 9.1milliondecreaseinfairvaluefroma100basispointincreaseininterestrates[391].EmployeeCompensationandPlans−The2025PhantomUnitPlanwasapprovedonFebruary11,2025,allowingforawardsofphantomunitsandappreciationrightstoemployeesanddirectors,withpotentialcashpayments[29].OperationalOverview−ThecompanyhasstrategicallylocatedassetsalongtheU.S.GulfCoast,generatingsignificantcashflowfromservicestotheoilrefiningindustry[30].−Thecompanyoperatesnineterminallingfacilities,enhancingitsintegratedservicesinstorage,handling,andtransportationofpetroleumproducts[37].−TheundergroundNGLstorageterminalhasacapacityof2.3millionbarrels,supportingNGLmarketingefforts[49].−Asignificantportionofcashflowisgeneratedfromfee−basedcontracts,whichincludereservationchargesthatreducecashflowvolatility[33].−Thecompanyaimstoexpanditscustomerbaseandserviceofferingstodriveorganicgrowthinrevenuesandcashflow[31].−Thecompanyhasestablishedlong−termrelationshipswithsuppliersandcustomers,enhancingitsreputationasareliableserviceprovider[32].−ThecompanyownsasphaltterminalsinTexasandNebraska,dedicatedtoasubsidiaryofMartinResourceManagementCorporationunderthroughputagreements[40].−Thecompanycompeteseffectivelyduetothestrategiclocationofitsterminals,integratedtransportationservices,andthequalityofitsspecializedservices[52].−Thecompanyoperatesafleetofapproximately600trucksand1,275tanktrailersforlandtransportation,servingmajorcustomersintheenergyandpetrochemicalsectors[54].−Themarinetransportationsegmentutilizesafleetthatincludes5inlandtankbargeswithcapacitiesrangingfromunder20,000barrelsto31,000barrels,and1offshoretankbargewithacapacityof59,000barrels[59].−ThesulfurformingfacilityinBeaumont,Texashasadailyprocessingcapacityof5,500metrictonsofmoltensulfur,convertingitintosolidformforagriculturalmarkets[66].−Thecompanyproducesapproximately400tonsperdayofammoniumsulfate,primarilyservingagriculturalandindustrialmarkets[69].−TheNGLstorageterminalinArcadia,Louisianahasacapacityof2,300,000barrels,supportingthecompany′sNGLoperations[77].−Thecompanymaintainslong−termrelationshipswithcustomersthroughfee−basedtransportationagreements,ensuringstablerevenuestreams[56].−ThemarinetransportationagreementwithMartinResourceManagementCorporationisonaspotcontractbasis,automaticallyrenewingannuallyunlessterminated[60].FinancialRelationshipswithMartinResourceManagementCorporation−MartinResourceManagementCorporationownedapproximately15.79.1 million decrease in fair value from a 100 basis point increase in interest rates[391]. Employee Compensation and Plans - The 2025 Phantom Unit Plan was approved on February 11, 2025, allowing for awards of phantom units and appreciation rights to employees and directors, with potential cash payments[29]. Operational Overview - The company has strategically located assets along the U.S. Gulf Coast, generating significant cash flow from services to the oil refining industry[30]. - The company operates nine terminalling facilities, enhancing its integrated services in storage, handling, and transportation of petroleum products[37]. - The underground NGL storage terminal has a capacity of 2.3 million barrels, supporting NGL marketing efforts[49]. - A significant portion of cash flow is generated from fee-based contracts, which include reservation charges that reduce cash flow volatility[33]. - The company aims to expand its customer base and service offerings to drive organic growth in revenues and cash flow[31]. - The company has established long-term relationships with suppliers and customers, enhancing its reputation as a reliable service provider[32]. - The company owns asphalt terminals in Texas and Nebraska, dedicated to a subsidiary of Martin Resource Management Corporation under throughput agreements[40]. - The company competes effectively due to the strategic location of its terminals, integrated transportation services, and the quality of its specialized services[52]. - The company operates a fleet of approximately 600 trucks and 1,275 tank trailers for land transportation, serving major customers in the energy and petrochemical sectors[54]. - The marine transportation segment utilizes a fleet that includes 5 inland tank barges with capacities ranging from under 20,000 barrels to 31,000 barrels, and 1 offshore tank barge with a capacity of 59,000 barrels[59]. - The sulfur forming facility in Beaumont, Texas has a daily processing capacity of 5,500 metric tons of molten sulfur, converting it into solid form for agricultural markets[66]. - The company produces approximately 400 tons per day of ammonium sulfate, primarily serving agricultural and industrial markets[69]. - The NGL storage terminal in Arcadia, Louisiana has a capacity of 2,300,000 barrels, supporting the company's NGL operations[77]. - The company maintains long-term relationships with customers through fee-based transportation agreements, ensuring stable revenue streams[56]. - The marine transportation agreement with Martin Resource Management Corporation is on a spot contract basis, automatically renewing annually unless terminated[60]. Financial Relationships with Martin Resource Management Corporation - Martin Resource Management Corporation owned approximately 15.7% of the outstanding limited partnership units as of December 31, 2024[80]. - The company reimbursed Martin Resource Management Corporation for 175.8 million and 165.6millionofdirectcostsandexpensesfortheyearsendedDecember31,2024and2023,respectively[82].−PurchasesfromMartinResourceManagementCorporationaccountedforapproximately27165.6 million of direct costs and expenses for the years ended December 31, 2024 and 2023, respectively[82]. - Purchases from Martin Resource Management Corporation accounted for approximately 27% and 23% of total costs and expenses for the years ended December 31, 2024 and 2023, respectively[86]. - Sales to Martin Resource Management Corporation accounted for approximately 15% and 14% of total revenues for the years ended December 31, 2024 and 2023, respectively[87]. Insurance and Liability - The company's property program provides 40.0 million per occurrence and annual aggregate for named windstorm events, including business interruption coverage[89]. - The deductible for onshore physical damage resulting from named windstorms is 5% of the total value of affected properties, with minimum deductible ranges from 1.0millionto1.0 million to 5.0 million[89]. - The company has various pollution liability policies, which provide coverages ranging from remediation of property to third-party liability[91]. - The company’s insurance covers up to $1.0 billion of liability per accident or occurrence for marine claims[93]. Regulatory and Environmental Compliance - The company’s operations are subject to various federal, state, and local laws and regulations governing environmental matters, which could impose significant liabilities[95]. - The company is subject to complex federal, state, and local environmental laws that can impair operations and may require substantial capital expenditures for compliance[96]. - Climate change may adversely affect operations due to severe weather, increased operational costs, and potential insurance coverage issues[105]. - The company is in substantial compliance with the Clean Water Act, but future regulatory changes could increase costs and delays[106]. - The Oil Pollution Act imposes liability for oil spills, and any legislative changes could materially affect operations[107]. - The company is subject to stringent safety regulations and believes it is in substantial compliance with current safety requirements[108]. Corporate Structure and Support - The company relies on Martin Resource Management Corporation for corporate support, which has approximately 1,679 employees[115]. Commodity Price Management - The company uses derivatives to manage commodity price fluctuations, but abnormal price volatility could influence operating income[386][387].