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What changed in MARTIN MIDSTREAM PARTNERS L.P.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of MARTIN MIDSTREAM PARTNERS L.P.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+325 added−294 removedSource: 10-K (2025-02-24) vs 10-K (2024-02-21)

Top changes in MARTIN MIDSTREAM PARTNERS L.P.'s 2024 10-K

325 paragraphs added · 294 removed · 261 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

84 edited+22 added−14 removed141 unchanged
Biggest changeWe typically enter into annual contracts with independent retail propane distributors to deliver their estimated annual volume requirements based on prevailing market prices. Dependable delivery is very important to these customers and in some cases may be more important than price.
Biggest changeWe transport NGLs using MTI's land transportation fleet or by contracting with common carriers, owner-operators and railroad tank car transportation companies. Our NGL customers consist of major domestic oil refiners, industrial processors, and retail propane distributors. We typically enter into annual sales contracts with independent retail propane distributors to deliver their estimated annual volume requirements based on prevailing market prices.
Fuel and Lubricant Terminals. We own or operate nine fuel and lubricant terminals located in the Gulf Coast region of the U.S. that provide storage and handling services for lubricants and fuel oil.
We own or operate nine fuel and lubricant terminals located in the Gulf Coast region of the U.S. that provide storage and handling services for lubricants and fuel oil.
Gulf Coast storage terminals (including our terminal in Beaumont, Texas) under third-party marine transportation agreements: Class of Equipment Number in Class Capacity/Horsepower Products Transported Offshore tank barge 1 10,500 long tons Molten sulfur Offshore tugboat 1 5,100 horsepower N/A Inland push boat 1 1,200 horsepower N/A Inland tank barge 2 2,500 long tons Molten sulfur We operate the following sulfur forming facility as part of our sulfur services business: Terminal Location Daily Production Capacity Products Stored Neches Beaumont, Texas 5,500 metric tons per day Molten, prilled and granulated sulfur 10 We own the following manufacturing plants as part of our sulfur services business: Facility Location Annual Capacity Description Fertilizer plant Plainview, Texas 150,000 tons Fertilizer production Fertilizer plant Beaumont, Texas 146,000 tons Liquid sulfur fertilizer production Fertilizer plant Odessa, Texas 35,000 tons Dry sulfur fertilizer production Fertilizer plant Seneca, Illinois 36,000 tons Dry sulfur fertilizer production Fertilizer plant Cactus, Texas 20,000 tons Dry sulfur fertilizer production Industrial sulfur plant Nash, Texas 18,000 tons Emulsified sulfur production Sulfuric acid plant Plainview, Texas 150,000 tons Sulfuric acid production Competition.
Gulf Coast storage terminals (including our terminal in Beaumont, Texas) under third-party marine transportation agreements: Class of Equipment Number in Class Capacity/Horsepower Products Transported Offshore tank barge 1 10,500 long tons Molten sulfur Offshore tugboat 1 5,100 horsepower N/A Inland push boat 1 1,200 horsepower N/A Inland tank barge 2 2,500 long tons Molten sulfur We operate the following sulfur forming facility as part of our sulfur services business: Terminal Location Daily Production Capacity Products Stored Neches Beaumont, Texas 5,500 metric tons per day Molten, prilled and granulated sulfur We own the following manufacturing plants as part of our sulfur services business: Facility Location Annual Capacity Description Fertilizer plant Plainview, Texas 150,000 tons Fertilizer production Fertilizer plant Beaumont, Texas 146,000 tons Liquid sulfur fertilizer production Fertilizer plant Odessa, Texas 35,000 tons Dry sulfur fertilizer production Fertilizer plant Seneca, Illinois 36,000 tons Dry sulfur fertilizer production Fertilizer plant Cactus, Texas 20,000 tons Dry sulfur fertilizer production Industrial sulfur plant Nash, Texas 18,000 tons Emulsified sulfur production Sulfuric acid plant Plainview, Texas 150,000 tons Sulfuric acid production Competition.
The following is a summary description of our shore-based specialty terminals: Terminal Location Aggregate Capacity (in barrels) Products Description Tampa 1 Tampa, Florida 662,000 Asphalt, crude oil, and diesel Marine terminal, loading/unloading for vessels, barges, railcars and trucks Stanolind Beaumont, Texas 620,000 Asphalt, crude oil, sulfur, and sulfuric acid Marine terminal, marine dock for loading/unloading of vessels, barges, railcars and trucks Neches 2 Beaumont, Texas 526,000 Molten sulfur, formed sulfur, ammonia, asphalt, fuel oil, crude oil and sulfur-based fertilizer Marine terminal, loading/unloading for vessels, barges, railcars and trucks 1 The terminal is located on land owned by the Tampa Port Authority that was leased to us under a lease that expires in December 2026. 5 2 The Neches terminal is a deep water marine terminal located near Beaumont, Texas, on approximately 50 acres of land owned by us, and an additional 96 acres leased to us under terms of a 20-year lease that commenced on May 1, 2014 with three five-year options.
The following is a summary description of our shore-based specialty terminals: Terminal Location Aggregate Capacity (in barrels) Products Description Tampa 1 Tampa, Florida 662,000 Asphalt, crude oil, and diesel Marine terminal, loading/unloading for vessels, barges, railcars and trucks Stanolind Beaumont, Texas 620,000 Asphalt, crude oil, sulfur, and sulfuric acid Marine terminal, marine dock for loading/unloading of vessels, barges, railcars and trucks Neches 2 Beaumont, Texas 526,000 Molten sulfur, formed sulfur, ammonia, asphalt, fuel oil, crude oil and sulfur-based fertilizer Marine terminal, loading/unloading for vessels, barges, railcars and trucks 1 The terminal is located on land owned by the Tampa Port Authority that was leased to us under a lease that expires in December 2026. 2 The Neches terminal is a deep water marine terminal located near Beaumont, Texas, on approximately 50 acres of land owned by us, and an additional 96 acres leased to us under terms of a 20-year lease that commenced on May 1, 2014 with three five-year options.
In addition, Martin Resource Management Corporation, through terminalling service agreements, pays us for terminalling and storage of fuels and lubricants at these terminal facilities and includes a provision for minimum volume throughput requirements. Our marine shore-based terminal operations are divided into two classes of terminals: (i) full service terminals and (ii) fuel and lubricant terminals. Full Service Terminals.
In addition, Martin Resource Management Corporation, through terminalling service agreements, pays us for terminalling and storage of fuels and lubricants at these terminal facilities and includes a provision for minimum volume throughput requirements. 6 Our marine shore-based terminal operations are divided into two classes of terminals: (i) full service terminals and (ii) fuel and lubricant terminals. Full Service Terminals.
Moreover, various legislative proposals are occasionally introduced, including proposals to increase federal, state, or local taxes on motor fuels, among other things, which may increase our costs or adversely impact the recruitment of drivers. We cannot predict whether, or in what form, any increase in such taxes applicable to us will be enacted.
Moreover, various legislative proposals are occasionally introduced, including proposals to increase federal, state, or local taxes 18 on motor fuels, among other things, which may increase our costs or adversely impact the recruitment of drivers. We cannot predict whether, or in what form, any increase in such taxes applicable to us will be enacted.
We currently own or lease, and have in the past owned or leased, properties that have been used for the manufacturing, processing, transportation and storage of petroleum products and by-products. Solid waste disposal practices within oil and gas 15 related industries have improved over the years with the passage and implementation of various environmental laws and regulations.
We currently own or lease, and have in the past owned or leased, properties that have been used for the manufacturing, processing, transportation and storage of petroleum products and by-products. Solid waste disposal practices within oil and gas related industries have improved over the years with the passage and implementation of various environmental laws and regulations.
Our marine transportation assets include 27 inland marine tank barges, 15 inland push boats and one articulated offshore tug and barge unit that primarily operate coastwise 2 along the Gulf of Mexico and on the U.S. inland waterway system, primarily between domestic ports along the Gulf of Mexico, the Intracoastal Waterway, the Mississippi River system and the Tennessee-Tombigbee Waterway system.
Our marine transportation assets include 27 inland marine tank barges, 15 inland push boats and one articulated offshore tug and barge unit that primarily operate coastwise along the Gulf of Mexico and on the U.S. inland waterway system, primarily between domestic ports along the Gulf of Mexico, the Intracoastal Waterway, the Mississippi River system and the Tennessee-Tombigbee Waterway system.
We have various pollution liability policies, which provide coverages ranging from remediation of our property to third-party liability. The limits of these policies vary based on our assessments of exposure at each location. Loss of, or damage to, our vessels and cargo is insured through hull and cargo insurance policies.
We have various pollution liability policies, which provide coverages ranging from remediation of our property to third-party liability. The limits of these policies vary based on our assessments of exposure at each location. 14 Loss of, or damage to, our vessels and cargo is insured through hull and cargo insurance policies.
Any such changes in law affecting areas where we conduct business could materially affect our operations. Safety Regulation The Partnership’s marine transportation operations are subject to regulation by the U.S. Coast Guard, federal laws, state laws and certain international treaties.
Any such changes in law affecting areas where we conduct business could materially affect our operations. 17 Safety Regulation The Partnership’s marine transportation operations are subject to regulation by the U.S. Coast Guard, federal laws, state laws and certain international treaties.
We conduct our land transportation services under fee-based transportation agreements with customers in which we have long-term relationships. We are party to a master transportation services agreement under which we provide land transportation services to Martin Resource Management Corporation on a demand basis at applicable market rates.
We conduct our land transportation services under fee-based transportation agreements with customers in which we have long-term relationships. 8 We are party to a master transportation services agreement under which we provide land transportation services to Martin Resource Management Corporation on a demand basis at applicable market rates.
Certain Relationships and Related Transactions, and Director Independence." 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 or as permitted under the Omnibus Agreement, in which a related person will have a direct or indirect material interest, the proposed transaction is submitted for consideration to the board of directors of our general partner or to our management, as appropriate.
Certain Relationships and Related Transactions, and Director Independence." 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 or as permitted under the Omnibus Agreement, in which a related person will have a direct or indirect material interest, the proposed transaction is submitted for consideration to the Board of Directors or to our management, as appropriate.
We also provide barge transportation and tank storage services to large producers and consumers of sulfur under contracts with remaining terms from one to five years in duration. We operate a sulfur forming facility in Beaumont, Texas, which is used to convert molten sulfur into solid form (prills/granules).
We also provide barge transportation and tank storage services to large producers and consumers of sulfur under agreements with remaining terms from one to five years in duration. We operate a sulfur forming facility in Beaumont, Texas, which is used to convert molten sulfur into solid form (prills/granules).
The EPA regulates GHG emissions under existing provisions of the federal CAA. Further, under the Paris Agreement, the U.S. has committed to a 50 to 52 percent reduction from 2005 levels of GHG emissions by 2030 and set the goal of reaching net-zero GHG emissions by 2050.
The EPA regulates GHG emissions under existing provisions of the federal CAA. Under the Paris Agreement, the U.S. committed to a 50 to 52 percent reduction from 2005 levels of GHG emissions by 2030 and set the goal of reaching net-zero GHG emissions by 2050.
Risk Factors - Risks Related to our Business." Overview We are a publicly traded limited partnership with a diverse set of operations focused primarily in the Gulf Coast region of the United States ("U.S.").
Risk Factors - Risks Relating to our Business." Overview We are a publicly traded limited partnership with a diverse set of operations focused primarily in the Gulf Coast region of the United States ("U.S.").
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 of our general partner ("Conflicts Committee"). 13 For a more comprehensive discussion concerning the Omnibus Agreement and the other agreements that we have entered into with Martin Resource Management Corporation, please see "Item 13.
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 see "Item 13.
We transport asphalt, fuel oil, gasoline, sulfur and other bulk liquids. 8 The following is a summary description of the marine vessels we use in our marine transportation business: Class of Equipment Number in Class Capacity/Horsepower Products Transported Inland tank barges 5 Under 20,000 barrels Diesel fuel Inland tank barges 22 20,000 - 31,000 barrels Asphalt, crude oil, fuel oil and gasoline Inland push boats 15 800 - 2,650 horsepower N/A Offshore tank barge 1 59,000 barrels Diesel fuel Offshore tugboat 1 7,100 horsepower N/A Our largest marine transportation customers include major and independent oil and gas refining companies, petroleum marketing companies and Martin Resource Management Corporation.
The following is a summary description of the marine vessels we use in our marine transportation business: Class of Equipment Number in Class Capacity/Horsepower Products Transported Inland tank barges 5 Under 20,000 barrels Diesel fuel Inland tank barges 22 20,000 - 31,000 barrels Asphalt, crude oil, fuel oil and gasoline Inland push boats 15 800 - 2,650 horsepower N/A Offshore tank barge 1 59,000 barrels Diesel fuel Offshore tugboat 1 7,100 horsepower N/A Our largest marine transportation customers include major and independent oil and gas refining companies, petroleum marketing companies and Martin Resource Management Corporation.
Our sales to Martin Resource Management Corporation accounted for approximately 14% and 9% of our total revenues for each of the years ended December 31, 2023 and 2022, respectively. For a more comprehensive discussion concerning the Omnibus Agreement and the other agreements that we have entered into with Martin Resource Management Corporation, please see "Item 13.
Our sales to Martin Resource Management Corporation accounted for approximately 15% and 14% of our total revenues for each of the years ended December 31, 2024 and 2023, respectively. For a more comprehensive discussion concerning the Omnibus Agreement and the other agreements that we have entered into with Martin Resource Management Corporation, please see "Item 13.
In Beaumont, Texas, we own a terminal ("Spindletop Terminal") where we receive natural gasoline via pipeline, store the natural gasoline in above ground tanks, and then ship the product to our customers via other pipelines to which the facility is connected.
In Beaumont, Texas, we own a terminal ("Spindletop Terminal") where we receive natural gasoline via pipeline, store the natural gasoline in our above-ground tank, and then ship the product to our customers via other pipelines to which the 5 facility is connected.
Transportation Segment Land Transportation Operations We operate a fleet of land transportation assets comprising approximately 760 trucks and 1,425 tank trailers that transport petroleum products and by-products, petrochemicals, and chemicals. Our land transportation assets operate out of 25 strategically located terminals throughout the U.S. Gulf Coast and Southeastern U.S.
Transportation Segment Land Transportation Operations We operate a fleet of land transportation assets comprising approximately 600 trucks and 1,275 tank trailers that transport petroleum products and by-products, petrochemicals, and chemicals. Our land transportation assets operate out of 25 strategically located terminals throughout the U.S. Gulf Coast and Southeastern U.S.
As of December 31, 2023, Martin Resource Management Corporation owned 15.7% of our total outstanding common limited partner units.
As of December 31, 2024, Martin Resource Management Corporation owned 15.7% of our total outstanding common limited partner units.
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 marine bunkering and other shore-based marine services in Texas, Louisiana, Mississippi, Alabama, and Florida; • operating a crude oil gathering business in Stephens, Arkansas; 12 • providing crude oil gathering, refining, and marketing services of base oils, asphalt, and distillate products in Smackover, Arkansas; • providing crude oil marketing and transportation from the wellhead 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 • operating, solely for our account, the asphalt facilities owned by us in Hondo, South Houston and Port Neches, Texas, and Omaha, Nebraska.
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 marine bunkering and other shore-based marine services in Texas, Louisiana, Mississippi, Alabama, and Florida; • 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 • operating, solely for our account, the asphalt facilities in Hondo, South Houston and Port Neches, Texas, and Omaha, Nebraska.
These indirect expenses covered the centralized corporate functions Martin Resource Management Corporation provides for us, such as accounting, treasury, clerical, engineering, legal, billing, information technology, administration of insurance, environmental and safety compliance, general office expenses and employee benefit plans and other general corporate overhead functions we share with Martin Resource Management Corporation’s retained businesses.
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, environmental and safety compliance, general office expenses and employee benefit plans and other general corporate overhead functions we share with Martin R esource Management Corporation’s retained businesses.
Experienced Management Team and Operational Expertise . Members of our executive management team and the heads of our principal business lines have a significant amount of experience in the industries in which we operate. Our management team's experience and familiarity with our industry and businesses are important assets that assist us in 4 implementing our business strategies.
Members of our executive management team and the heads of our principal business lines have a significant amount of experience in the industries in which we operate. Our management team's experience and familiarity with our industry and businesses are important assets that assist us in implementing our business strategies.
We operate a fleet of both land transportation and marine transportation assets that transport petroleum products and by-products, petrochemicals, and chemicals. Our land transportation assets include approximately 760 trucks and 1,425 tank trailers which are based across 25 terminals strategically located throughout the U.S. Gulf Coast and southeastern U.S.
We operate a fleet of both land transportation and marine transportation assets that transport petroleum products and by-products, petrochemicals, and chemicals. Our land transportation assets include approximately 600 trucks and 1,275 tank trailers which are based across 25 terminals strategically located 2 throughout the U.S. Gulf Coast and southeastern U.S.
The continuing trend in environmental regulation is to place more restrictions and limitations on activities that may affect the environment, and, thus, any changes in environmental laws and regulations that result in more stringent and costly pollutant control or waste handling, storage, transport, disposal, or remediation requirements could have a material adverse effect on our operations and financial position.
The trend in environmental regulation in previous years has been to place more restrictions and limitations on activities that may affect the environment, and, thus, any changes in environmental laws and regulations that result in more stringent and costly pollutant control or waste handling, storage, transport, disposal, or remediation requirements could have a material adverse effect on our operations and financial position.
Strong Industry Reputation and Established Relationships with Suppliers and Customers. We have established a reputation in our industry as a reliable and cost-effective supplier of services to our customers and have a track record of safe and efficient operations at our facilities. Our management has also established long-term relationships with many of our suppliers and customers.
We have established a reputation in our industry as a reliable and cost-effective supplier of services to our customers and have a track record of safe and efficient operations at our facilities. Our management has also established long-term relationships with many of our suppliers and customers. We benefit from our management’s reputation and track record and from these long-term relationships.
We reimbursed Martin Resource Management Corporation for $165.6 million and $161.6 million of direct costs and expenses for the years ended December 31, 2023 and 2022, respectively. There is no monetary limitation on the amount we are required to reimburse Martin Resource Management Corporation for direct expenses.
We reimbursed Martin Resource Management Corporation for $175.8 million and $165.6 million of direct costs and expenses for the years ended December 31, 2024 and 2023, respectively. There is no monetary limitation on the amount we are required to reimburse Martin Resource Management Corporation for direct expenses.
We gather molten sulfur from refiners, primarily located on the U.S. Gulf Coast. We transport sulfur by inland and offshore barges, railcars and trucks. In the U.S., recovered sulfur is mainly kept in liquid form from production to usage at a temperature of approximately 275 degrees Fahrenheit.
We gather molten sulfur from refiners, primarily located on the U.S. Gulf Coast, and transport it by inland and offshore barges, railcars and trucks. In the U.S., recovered sulfur is mainly kept in liquid form from the point of production to the point of usage at an 9 elevated temperature of approximately 275 degrees Fahrenheit.
Our fees for the use of this facility are based on the volume of barrels shipped from the terminal under an arrangement that includes a provision for minimum volume throughput requirements.
Our fees for the use of this facility are based on the volume of barrels shipped from the terminal under a take-or-pay arrangement that includes a provision for minimum volume throughput requirements.
In Houston, Texas, we own and operate a plant that specializes in the production and distribution of commercial and industrial greases. In Phoenix, Arizona, we lease and operate a plant that specializes in the production and distribution of commercial and industrial greases.
In Houston, Texas, we own and operate a plant that specializes in the production and distribution of commercial and industrial greases.
Martin Resource Management Corporation has approximately 1,619 employees of which 1,245 individuals, including 58 individuals represented by labor unions, provide direct support to our operations as of December 31, 2023. Martin Resource Management Corporation employees are responsible for conducting our business and operating our assets on our behalf.
Martin Resource Management Corporation has approximately 1,679 employees of which 1,160 individuals, including 58 individuals represented by labor unions, provide direct support to our operations as of December 31, 2024. Martin Resource Management Corporation employees are responsible for conducting our business and operating our assets on our behalf.
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 15.7% of the outstanding limited partnership units.
We are and will continue to be closely affiliated with Martin Resource Management Corporation as a result of the following relationships. Ownership As of December 31, 2024, Martin Resource Management Corporation owned approximately 15.7% of the outstanding limited partnership units.
Normal butane is used as a petrochemical feedstock, as a blend stock for motor gasoline and as a component in aerosol propellants. Normal butane can also be made into iso butane through isomerization. Iso butane is used in the production of motor gasoline, alkylation and as a component in aerosol propellants.
Natural gasoline is used as a component of motor gasoline, as a petrochemical feedstock and as a diluent. Normal butane is used as a petrochemical feedstock, as a blend stock for motor gasoline and as a component in aerosol propellants. Normal butane can also be made into iso butane through isomerization.
In the aggregate, our purchases from Martin Resource Management Corporation accounted for approximately 23% and 17% of our total costs and expenses during for the years ended December 31, 2023 and 2022, respectively. Correspondingly, Martin Resource Management Corporation is one of our significant customers.
In the aggregate, our purchases from Martin Resource Management Corporation accounted for approximately 27% and 23% of our total costs and expenses for each of the years ended December 31, 2024 and 2023, respectively. Correspondingly, Martin Resource Management Corporation is one of our significant customers.
We own or operate 12 marine shore-based terminal facilities and 9 specialty terminal facilities located primarily in the Gulf Coast region of the U.S. with aggregate storage capacity of 2.6 million barrels. Further, we own approximately 2.3 million barrels of underground storage capacity for NGLs.
We own or operate 12 marine shore-based terminal facilities and 8 specialty terminal facilities located primarily in the Gulf Coast region of the U.S. with aggregate storage capacity of 2.6 million barrels.
Vertically Integrated Services Provided for U.S. Gulf Coast-Centric Asset and Operational Footprint. We own and operate a diversified asset base that enables us to offer our customers an integrated distribution network consisting of terminalling, storage, packaging and other midstream logistical services for petroleum products and by-products in one of the world’s most active refining and petrochemical regions.
We own and operate a diversified asset base that enables us to offer our customers an integrated distribution network consisting of terminalling, storage, packaging and other midstream logistical services for petroleum products and by-products in one of the world’s most active refining and petrochemical regions. Experienced Management Team and Operational Expertise .
The following is a summary description of our owned NGL facilities: NGL Facility Location Capacity Description Wholesale terminals Arcadia, Louisiana 2,300,000 barrels Underground and above ground NGL storage terminal Rail terminal Arcadia, Louisiana 24 railcars per day Railcar loading and unloading facility Spindletop storage facility Beaumont, Texas 91,000 barrels Above ground storage tank and pipeline connections Our NGL customers consist of industrial processors and retail propane distributors.
The following is a summary description of our owned NGL facilities, assets held in the Terminalling and Storage segment: NGL Facility Location Capacity Description Wholesale terminals Arcadia, Louisiana 2,300,000 barrels Underground and above ground NGL storage terminal Rail terminal Arcadia, Louisiana 24 railcars per day Railcar loading and unloading facility Spindletop storage facility Beaumont, Texas 91,000 barrels Above ground storage tank and pipeline connections Seasonality.
This results in lower shipyard costs both for new vessels and repairs than those paid by U.S.-flagged vessel owners. The U.S. Coast Guard and American Bureau of Shipping maintain a stringent regimen of vessel inspections, which tends to result in higher regulatory compliance costs for U.S.-flagged operators than for owners of vessels registered under foreign flags of convenience.
Coast Guard and American Bureau of Shipping maintain a stringent regimen of vessel inspections, which tends to result in higher regulatory compliance costs for U.S.-flagged operators than for owners of vessels registered under foreign flags of convenience.
The following is a summary description of our fuel and lubricant terminals at: Terminal Location Aggregate Capacity (barrels) End of Lease (Including Options) Amelia Amelia, Louisiana 13,000 August 2028 Dock 193 2 Gueydan, Louisiana 11,000 May 2024 Fourchon Fourchon, Louisiana 80,900 May 2027 Fourchon 16 Fourchon, Louisiana 15,200 July 2048 Galveston T 1 Galveston, Texas 10,500 Own Jennings Bulk Plant Jennings, Louisiana 7,600 Own Lake Charles T Lake Charles, Louisiana 1,000 February 2028 Port Arthur Port Arthur, Texas 16,400 November 2028 Sabine Pass 1 Sabine Pass, Texas 16,000 September 2036 1 This terminal is currently in caretaker status. 2 A portion of this terminal is owned.
The following is a summary description of our fuel and lubricant terminals at: Terminal Location Aggregate Capacity (barrels) End of Lease (Including Options) Amelia Amelia, Louisiana 13,000 August 2028 Dock 193 2 Gueydan, Louisiana 11,000 May 2029 Fourchon Fourchon, Louisiana 80,900 May 2027 Fourchon 16 Fourchon, Louisiana 15,200 July 2048 Galveston T 1 Galveston, Texas 10,500 Own Jennings Bulk Plant Jennings, Louisiana 7,600 Own Lake Charles T Lake Charles, Louisiana 1,000 February 2028 Port Arthur Port Arthur, Texas 16,400 November 2028 Sabine Pass 1 Sabine Pass, Texas 16,000 September 2036 1 This terminal is currently in caretaker status. 2 A portion of this terminal is owned. 7 Underground NGL Storage Terminal Operations Our underground NGL terminalling assets have storage and logistics capabilities for NGLs purchased primarily from major domestic oil refiners and natural gas processors.
This website address is intended to be an inactive, textual reference only, and none of the material on this website is part of this report. These documents may also be found at the SEC’s website at www.sec.gov.
These documents are provided as soon as is reasonably practicable after their filing with the SEC. This website address is intended to be an inactive, textual reference only, and none of the material on this website is part of this report. These documents may also be found at the SEC’s website at www.sec.gov.
Terminal Location Aggregate Capacity Products Description Martin Lubricants Smackover, Arkansas 4.0 million gallons bulk storage Agricultural, automotive, and industrial lubricants and grease Lubricants packaging facility Martin Specialty Products 1 Kansas City, Missouri 14 million pounds of production capacity Automotive, commercial and industrial greases Grease manufacturing and packaging facility Martin Specialty Products Houston, Texas 16 million pounds of production capacity Commercial and industrial greases Grease manufacturing and packaging facility Martin Specialty Products 2 Phoenix, Arizona 6 million pounds of production capacity Commercial and industrial greases Grease manufacturing and packaging facility 1 This terminal contains a warehouse owned by third parties and leased under a lease that expires in December 2025 and can be extended by us for one five-year period. 2 This terminal contains a warehouse owned by third parties and leased under a lease that expires in October 2024 and can be extended by us for one five-year period. 11 Natural Gas Liquids Operations NGLs are produced through natural gas processing and as a by-product of crude oil refining.
In Phoenix, Arizona, we lease and operate a plant that specializes in the production and distribution of commercial and industrial greases. 11 Terminal Location Aggregate Capacity Products Description Martin Lubricants Smackover, Arkansas 4.0 million gallons bulk storage Agricultural, automotive, and industrial lubricants and grease Lubricants packaging facility Martin Specialty Products 1 Kansas City, Missouri 20 million pounds of production capacity Automotive, commercial and industrial greases Grease manufacturing and packaging facility Martin Specialty Products Houston, Texas 16 million pounds of production capacity Commercial and industrial greases Grease manufacturing and packaging facility Martin Specialty Products 2 Phoenix, Arizona 6 million pounds of production capacity Commercial and industrial greases Grease manufacturing and packaging facility 1 This terminal contains a warehouse owned by third parties and leased under a lease that expires in December 2025 and can be extended by us for one five-year period. 2 This terminal contains a warehouse owned by third parties and leased under a lease that expires in October 2029.
Although certain hydrocarbons are not subject to CERCLA’s reach because "petroleum" is excluded from CERCLA’s definition of a "hazardous substance," in the course of our ordinary operations we will generate wastes that may fall within the definition of a "hazardous substance." In addition, some state counterparts to CERCLA tie liability to a broader set of substances than does CERCLA.
Although certain hydrocarbons are not subject to CERCLA’s reach because "petroleum" is excluded from CERCLA’s definition of a "hazardous substance," in the course of our ordinary operations we will generate wastes that may fall within the definition of a "hazardous substance." In addition, some state counterparts to CERCLA tie liability to a broader set of substances than does CERCLA. 15 Solid Waste We generate both hazardous and nonhazardous solid wastes, which are subject to requirements of the federal Resource Conservation and Recovery Act, as amended ("RCRA") and comparable state statutes.
We successfully compete for terminal customers because of the strategic location of our terminals along the U.S. Gulf Coast, our integrated transportation services, our reputation, the prices we charge for our services and the quality and versatility of our services.
All of these services must be in compliance with applicable environmental and other regulations. We successfully compete for terminal customers because of the strategic location of our terminals along the U.S. Gulf Coast, our integrated transportation services, our reputation, the prices we charge for our services and the quality and versatility of our services.
Shore base rental contracts are generally long-term contracts and provide more protection from competition. Our primary competitors for both lubricants and shore bases include several independent operators as well as major companies that maintain their own similarly equipped marine terminals, shore bases and fuel and lubricant supply sources.
Our primary competitors for both lubricants and shore bases include several independent operators as well as major companies that maintain their own similarly equipped marine terminals, shore bases and fuel and lubricant supply sources.
Since we engage in maritime transportation between locations in the U.S., we are subject to the provisions of the law. As a result, we are responsible for monitoring the ownership of our subsidiaries that engage in maritime transportation and for taking any remedial action necessary to ensure that no violation of the Jones Act ownership restrictions occurs.
As a result, we are responsible for monitoring the ownership of our subsidiaries that engage in maritime transportation and for taking any remedial action necessary to ensure that no violation of the Jones Act ownership restrictions occurs. The Jones Act also requires that all U.S.-flagged vessels be manned by U.S. citizens.
We store and transport NGLs for wholesale deliveries to industrial NGL users and propane retailers in the southeastern U.S. Significant Recent Developments Electronic Level Sulfuric Acid Joint Venture.
We store and transport NGLs for wholesale deliveries to industrial NGL users and propane retailers in the southeastern U.S. Significant Recent Developments Termination of Merger Agreement.
NGLs include propane, natural gasoline, normal butane, iso butane and ethane. Propane is used as a petrochemical feedstock in the production of ethylene and propylene, as a fuel for heating, for industrial applications, as motor fuel and as a refrigerant. Natural gasoline is used as a component of motor gasoline, as a petrochemical feedstock and as a diluent.
Natural Gas Liquids Operations NGLs are produced through natural gas processing and as a by-product of crude oil refining. NGLs include propane, natural gasoline, normal butane, iso butane and ethane. Propane is used as a petrochemical feedstock in the production of ethylene and propylene, as a fuel for heating, for industrial applications, as motor fuel and as a refrigerant.
We produce industrial sulfur products such as elemental pastille sulfur, industrial ground sulfur products, and emulsified sulfur. We produce elemental pastille sulfur at our Odessa, Texas and Seneca, Illinois facilities. Elemental pastille sulfur is used to increase the efficiency of the coal-fired precipitators in the power industry.
We produce elemental pastille sulfur at our Odessa and Cactus, Texas and Seneca, Illinois facilities. Elemental pastille sulfur is used to increase the efficiency of the coal-fired precipitators in the power industry. The industrial ground sulfur products are also used in a variety of dusting and wettable sulfur applications such as rubber manufacturing, fungicides, sugar and animal feeds.
The Jones Act also requires that all U.S.-flagged vessels be manned by U.S. citizens. Foreign-flagged seamen generally receive lower wages and benefits than those received by U.S. citizen seamen. This requirement significantly increases operating costs of U.S.-flagged vessel operations compared to foreign-flagged vessel operations. Certain foreign governments subsidize their nations’ shipyards.
Foreign-flagged seamen generally receive lower wages and benefits than those received by U.S. citizen seamen. This requirement significantly increases operating costs of U.S.-flagged vessel operations compared to foreign-flagged vessel operations. Certain foreign governments subsidize their nations’ shipyards. This results in lower shipyard costs both for new vessels and repairs than those paid by U.S.-flagged vessel owners. The U.S.
On January 23, 2024, we declared a quarterly cash distribution of $0.005 per common unit for the fourth quarter of 2023, or $0.02 per common unit on an annualized basis, which was paid on February 14, 2024 to unitholders of record as of February 7, 2024. 3 Our Growth Strategy The key components of our growth strategy are: • Establish Strategic Commercial Alliances .
On January 21, 2025, we declared a quarterly cash distribution of $0.005 per common unit for the fourth quarter of 2024, or $0.02 per common unit on an annualized basis, which was paid on February 14, 2025 to unitholders of record as of February 7, 2025. Amendment to Credit Facility.
In addition, following its acquisition of the remaining 49% voting interest (50% economic interest) in Holdings, which is the sole member of MMGP, Martin Resource Management Corporation indirectly owns 100% of MMGP, our general partner. MMGP owns a 2% general partner interest in us.
In addition, Martin Resource Management Corporation indirectly owns, through its wholly owned subsidiary, Martin Resource LLC, 100% of Holdings, which is the sole member of MMGP. As a result, Martin Resource Management Corporation indirectly owns 100% of MMGP, our general partner. MMGP owns a 2% general partner interest in us.
Financial Information about Segments Information regarding our operating revenues and identifiable assets attributable to each of our segments is presented in Note 18 to our consolidated financial statements included in this annual report on Form 10-K. 18 Access to Public Filings We provide public access to our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to these reports filed with the U.S.
Financial Information about Segments Information regarding our operating revenues and identifiable assets attributable to each of our segments is presented in Note 18 to our consolidated financial statements included in this Annual Report on Form 10-K.
We produce plant nutrient and agricultural ground sulfur products at our facilities in Odessa, Texas, Seneca, Illinois and Cactus, Texas. Our plant nutrient sulfur product is a 90% degradable sulfur product marketed under the Disper-Sul® trade name and sold throughout the U.S. to direct application agricultural markets. • Industrial sulfur products.
Our plant nutrient sulfur product is a 90% and 85% degradable sulfur product marketed under the Disper-Sul® trade name and sold throughout the U.S. to direct application agricultural markets. • Industrial sulfur products. We produce industrial sulfur products such as elemental pastille sulfur, ground sulfur products, AMS, 40% AMS solution, and emulsified sulfur (AS-7).
Some of these specialty products require treatment across a wide range of temperatures (between approximately -30 to +400 degrees Fahrenheit) to remain in liquid form, which our facilities are designed to accommodate. These capabilities help us enhance relationships with our customers by offering them specialized services to handle their unique product requirements.
Some of these specialty products require treatment across a wide range of temperatures (between approximately -30 to +400 degrees Fahrenheit) to remain in liquid form, which our facilities are designed to accommodate.
Many of our customers prefer to contract with independent terminal operators rather than terminal operators owned by integrated energy and chemical companies that may have refining or marketing interests that compete with them. Independent terminal owners generally compete on the basis of the location and versatility of terminals, service and price.
We compete with independent terminal operators and major energy and chemical companies that own their own terminalling and storage facilities. Many of our customers prefer to contract with independent terminal operators rather than terminal operators owned by integrated energy and chemical companies that may have refining or marketing interests that compete with them.
Terms for our standard purchase and sales contracts typically range from one to two years in length with prices that are usually tied to a published market indicator and fluctuate according to the price movement of the indicator.
We have the necessary assets and expertise to handle the unique requirements for transportation and storage of molten sulfur. Our standard purchase and sale agreements have terms that typically range from one to two years in duration with prices that are usually tied to a published market indicator and fluctuate according to the price movement of the indicator.
This product serves as a liquid plant nutrient used directly through spray rigs or irrigation systems. It is also blended with other nitrogen phosphorus potassium liquids or suspensions as well. Our market is predominantly the Mid-South U.S. and Coastal Bend area of Texas. • Plant nutrient sulfur products.
This agricultural sulfur product is a clear liquid containing 12% nitrogen and 26% sulfur. This product serves as a liquid plant nutrient used directly through spray rigs or irrigation systems. It is also blended with other nitrogen phosphorus potassium liquids or suspensions as well.
We compete with large integrated NGL producers and marketers as well as small local independent marketers, primarily with respect to location, rates, terms and flexibility of service and supply.
Abnormally cold weather can put extra upward pressure on propane prices during the winter. 12 Competition. We compete with large integrated NGL producers and marketers as well as small local independent marketers, primarily with respect to location, rates, terms and flexibility of service and supply.
Our ammonium sulfate plant produces approximately 400 tons per day of quality ammonium sulfate and is marketed to our customers throughout the U.S. • Liquid sulfur products. We produce ammonium thiosulfate at our Neches terminal facility in Beaumont, Texas. This agricultural sulfur product is a clear liquid containing 12% nitrogen and 26% sulfur.
We package these custom grade products under both proprietary and private labels and sell them to major distributors and retail customers. Our ammonium sulfate plant produces approximately 400 tons per day of quality ammonium sulfate and is marketed to our customers throughout the U.S. • Liquid sulfur products. We produce ammonium thiosulfate at our Neches terminal facility in Beaumont, Texas.
Customers of our full service terminals are primarily oil and gas exploration and production companies, oilfield service companies such as drilling fluids companies, marine transportation companies and offshore construction companies. 6 The following is a summary description of our full service terminals: Terminal Location Aggregate Capacity (barrels) End of Lease (Including Options) Harbor Island 1 Port Aransas, Texas 5,200 December 2039 Pelican Island Galveston, Texas 83,000 Own Theodore Theodore, Alabama 19,900 Own 1 A portion of this terminal is owned.
The following is a summary description of our full service terminals: Terminal Location Aggregate Capacity (barrels) End of Lease (Including Options) Harbor Island 1 Port Aransas, Texas 5,200 December 2039 Pelican Island Galveston, Texas 81,200 Own Theodore Theodore, Alabama 20,100 Own 1 A portion of this terminal is owned. Fuel and Lubricant Terminals.
We produce Sulfuric acid at our Plainview, Texas facility. This facility processes molten sulfur to produce a dedicated supply of raw material sulfuric acid to our ammonium sulfate production plant. The sulfuric acid produced and not consumed by the captive ammonium sulfate production is sold to third parties.
This facility processes molten sulfur to produce a dedicated supply of raw material sulfuric acid to our ammonium sulfate production plant.
We may not be able to recover through insurance some or any of the damages, losses or costs that may result from potential physical effects of climate change. 16 Clean Water Act The Federal Water Pollution Control Act of 1972, as amended, also known the Clean Water Act and comparable state laws impose restrictions and strict controls regarding the discharge of pollutants, including hydrocarbon-bearing wastes, into state waters and waters of the U.S.
Clean Water Act The Federal Water Pollution Control Act of 1972, as amended, also known the Clean Water Act and comparable state laws impose restrictions and strict controls regarding the discharge of pollutants, including hydrocarbon-bearing wastes, into state waters and waters of the U.S.
Solid Waste We generate both hazardous and nonhazardous solid wastes, which are subject to requirements of the federal Resource Conservation and Recovery Act, as amended ("RCRA") and comparable state statutes. From time to time, the U.S. Environmental Protection Agency ("EPA") has considered making changes in nonhazardous waste standards that would result in stricter disposal requirements for these wastes.
From time to time, the U.S. Environmental Protection Agency ("EPA") has considered making changes in nonhazardous waste standards that would result in stricter disposal requirements for these wastes.
We transport our fertilizer and industrial sulfur products to our customers using third-party common carriers. We utilize barge and rail shipments for large volume and long-distance shipments where available. 9 We manufacture and market the following sulfur-based fertilizer and related sulfur products: • Ammonium sulfate products.
Our industrial sulfur products are marketed throughout the U.S. via distributors. The sales price of our industrial sulfur products vary based on the product and geographic region. We transport our fertilizer and industrial sulfur products to our customers using third-party common carriers. We utilize barge and rail shipments for large volume and long-distance shipments where available.
In general, we expect to increase our expenditures relating to compliance with likely higher industry and regulatory safety standards such as those described above.
In general, we expect to increase our expenditures relating to compliance with likely higher industry and regulatory safety standards such as those described above. These expenditures cannot be accurately estimated at this time, but we do not expect them to have a material adverse effect on our business.
Additionally, while some companies have significantly more terminalling and storage capacity than us, not all terminalling and storage facilities located in the markets we serve are equipped to properly handle specialty products such as asphalt, sulfur and anhydrous ammonia. 7 The principal competitive factors affecting our terminals, which provide fuel and lubricants distribution and marketing, as well as shore bases at certain terminals, are the locations of the facilities, availability of competing logistical support services and the experience of personnel and dependability of service.
Additionally, while some companies have significantly more terminalling and storage capacity than us, not all terminalling and storage facilities located in the markets we serve are equipped to properly handle specialty products such as asphalt, sulfur and anhydrous ammonia.
We generate a significant amount of our cash flow from fee-based contracts with our customers, many of which are major and independent oil and gas companies with whom we have long-standing customer relationships. A majority of our fee-based contracts consist of reservation charges or minimum fee arrangements, which reduce the volatility of our cash flows due to volume fluctuations.
We provide specialized value-added services to our customers and believe we have become an integral part of their value chain. Fee-Based Contracts. We generate a significant amount of our cash flow from fee-based contracts with our customers, many of which are major and independent oil and gas companies with whom we have long-standing customer relationships.
However, there can be no assurance that all risks are adequately insured against, that any particular claim will be paid by the insurer, or that we will be able to procure adequate insurance coverage at commercially reasonable rates in the future. 14 Environmental and Regulatory Matters Our activities are subject to various federal, state and local laws and regulations, as well as orders of regulatory bodies, governing a wide variety of matters, including marketing, production, pricing, community right-to-know, protection of the environment, safety and other matters.
Environmental and Regulatory Matters Our activities are subject to various federal, state and local laws and regulations, as well as orders of regulatory bodies, governing a wide variety of matters, including marketing, production, pricing, community right-to-know, protection of the environment, safety and other matters.
The majority of our NGL volumes are sold to refiners and industrial processors. Seasonality. The level of NGL supply and demand is subject to changes in domestic production, weather, inventory levels and other factors. While production is not seasonal, residential, refinery, and wholesale demand is highly seasonal.
The level of NGL supply and demand is subject to changes in domestic production, weather, inventory levels and other factors. While production is not seasonal, residential, refinery, and wholesale demand is highly seasonal. This imbalance can cause increases in inventories during summer months when consumption is low and decreases in inventories during winter months when consumption is high.
In addition to the direct expenses, under the Omnibus Agreement, we are required to reimburse Martin Resource Management Corporation for indirect general and administrative and corporate overhead expenses.
In addition to the direct expenses, under the Omnibus Agreement, we are required to reimburse Martin Resource Management Corporation for indirect general and administrative and corporate overhead expenses. For the years ended December 31, 2024 and 2023, the Board of Directors approved reimbursement amounts of $13.5 million and $14.0 million, respectively, reflecting our allocable share of such expenses.
Still, new legislation or regulatory programs that restrict emissions of GHGs in areas in which we conduct business could adversely affect our operations and demand for our services. Moreover, climate change could have an effect on the severity of weather (including hurricanes and floods), sea levels, the arability of farmland, and water availability and quality.
To date, such requirements have not had a substantial effect upon our operations. Still, new legislation or regulatory programs that restrict emissions of GHGs in areas in which we conduct business could adversely affect our operations and demand for our services.
These industrial ground sulfur products are also used in a variety of dusting and wettable sulfur applications such as rubber manufacturing, fungicides, sugar and animal feeds. We produce emulsified sulfur at our Nash, Texas facility. Emulsified sulfur is primarily used to control the sulfur content in the pulp and paper manufacturing processes. • Sulfuric acid.
AMS dry products and 40% solutions manufactured in Plainview, Texas, are used in animal feed, water treatment, tanneries, and fire retardants. We produce emulsified sulfur at our Nash, Texas facility. Emulsified sulfur is primarily used to control the sulfur content in the pulp and paper manufacturing processes. • Sulfuric acid. We produce Sulfuric acid at our Plainview, Texas facility.
Underground NGL Storage Terminal Operations Our underground NGL terminalling assets have storage and logistics capabilities for NGLs purchased primarily from major domestic oil refiners and natural gas processors. This facility has a capacity of 2.3 million barrels for NGLs along with a railcar facility with the capacity to handle up to 24 railcars per day.
This facility has a capacity of 2.3 million barrels for NGLs along with a railcar facility with the capacity to handle up to 24 railcars per day. These operations support the NGL marketing efforts in our specialty products division and at Martin Resource Management Corporation. Competition in our Terminalling and Storage Segment.
These expenditures cannot be accurately estimated at this time, but we do not expect them to have a material adverse effect on our business. 17 Jones Act The Jones Act is a federal law that restricts maritime transportation between locations in the U.S. to vessels built and registered in the U.S. and owned and manned by U.S. citizens.
Jones Act The Jones Act is a federal law that restricts maritime transportation between locations in the U.S. to vessels built and registered in the U.S. and owned and manned by U.S. citizens. Since we engage in maritime transportation between locations in the U.S., we are subject to the provisions of the law.
A favorably located terminal has access to various cost-effective transportation modes, both to and from the terminal, such as waterways, railroads, roadways and pipelines. Terminal versatility depends upon the operator’s ability to handle diverse products, some of which have complex or specialized handling and storage requirements.
Independent terminal owners generally compete on the basis of the location and versatility of terminals, service and price. A favorably located terminal has access to various cost-effective transportation modes, both to and from the terminal, such as waterways, railroads, roadways and pipelines.
Several states and local governments have also stated their commitment to the principles of the Paris Agreement in their effectuation of policy and regulations.
Several states and local governments have stated their commitment to the principles of the Paris Agreement in their effectuation of policy and regulations. On January 20, 2025, however, President Trump signed an executive order to withdraw the United States from the Paris Agreement, marking a significant shift in federal climate policy.
Ethane is almost entirely used as a petrochemical feedstock in the production of ethylene and propylene. We purchase NGLs primarily from major domestic oil refiners and natural gas processors. We transport NGLs using MTI's land transportation fleet or by contracting with common carriers, owner-operators and railroad tank car transportation companies.
Iso butane is used in the production of motor gasoline, alkylation and as a component in aerosol propellants. Ethane is almost entirely used as a petrochemical feedstock in the production of ethylene and propylene. We purchase NGLs, primarily propane and natural gasoline, from and provide NGL storage for major domestic oil refiners and natural gas processors.
The United States Environmental Protection Agency announced strict new methane emission regulations for certain oil and gas facilities in December 2023 and the Inflation Reduction Act of 2022 (“IRA”) established a charge on methane emissions above certain limits from the same facilities. To date, such requirements have not had a substantial effect upon our operations.
The United States Environmental Protection Agency published strict new methane emission regulations for certain oil and gas facilities in March 2024 and the tax legislation enacted in 2022 established a charge on methane emissions above certain limits from the same facilities, which rule was finalized in November 2024.
Securities and Exchange Commission (the "SEC") under the Exchange Act. These documents may be accessed free of charge on our website at the following address: www.MMLP.com. These documents are provided as soon as is reasonably practicable after their filing with the SEC.
Access to Public Filings We provide public access to our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to these reports filed with the U.S. Securities and Exchange Commission (the "SEC") under the Exchange Act. These documents may be accessed free of charge on our website at the following address: www.MMLP.com.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAdditionally, we provide terminalling and storage, processing and marine transportation services to Martin Resource Management Corporation to support its businesses under various commercial contracts. The loss of Martin Resource Management Corporation as a customer could have a material adverse impact on our results of operations, cash flow and ability to make distributions to our unitholders.
Biggest changeThe loss of any of these services and products provided by Martin Resource Management Corporation could have a material adverse impact on our results of operations, cash flow and ability to make distributions to our unitholders. Additionally, we provide terminalling and storage, processing and marine transportation services to Martin Resource Management Corporation to support its businesses under various commercial contracts.
If we incur material liabilities that are not fully covered by insurance, such as liabilities resulting from accidents on rivers or at sea, spills, fires or explosions, our results of operations and ability to make distributions to our unitholders could be adversely affected.
If we incur material liabilities that are not fully covered by insurance, such as liabilities resulting from accidents on rivers or at sea, spills, fires or explosions, our results of operations and ability to make distributions to our unitholders could be adversely affected.
The natural decline in production in our operating regions and in other regions from which we source NGL supplies means our long-term success depends on our ability to obtain new sources of supplies of natural gas, NGLs and crude oil, which depends on certain factors beyond our control.
The natural decline in production in our operating regions and in other regions from which we source NGL supplies means our long-term success depends on our ability to obtain new sources of supplies of natural gas, NGLs and crude oil, which depends on certain factors beyond our control.
NASDAQ does not require a publicly traded partnership like us to comply with certain of its corporate governance requirements, and therefore, unitholders do not have the same protections afforded to shareholders of corporations subject to all NASDAQ requirements.
NASDAQ does not require a publicly traded partnership like us to comply with certain of its corporate governance requirements, and therefore, unitholders do not have the same protections afforded to shareholders of corporations subject to all NASDAQ requirements.
Our general partner may also cause us to issue an unlimited number of additional common units or other equity securities of equal rank with the common units, without unitholder approval, in a number of circumstances such as: • the issuance of common units in additional public offerings or in connection with acquisitions that increase cash flow from operations on a pro forma, per unit basis; • the conversion of subordinated units into common units; • the conversion of units of equal rank with the common units into common units under some circumstances; or • the conversion of our general partner's general partner interest in us as a result of the withdrawal of our general partner.
Our general partner may also cause us to issue an unlimited number of additional common units or other equity securities of equal rank with the common units, without unitholder approval, in a number of circumstances such as: • the issuance of common units in additional public offerings or in connection with acquisitions that increase cash flow from operations on a pro forma, per unit basis; • the conversion of subordinated units into common units; • the conversion of units of equal rank with the common units into common units under some circumstances; or • the conversion of our general partner's general partner interest in us as a result of the withdrawal of our general partner.
A successful IRS contest of the federal income tax positions we take could adversely affect the market for our common units and the costs of any contest will be borne by our unitholders, debt security holders and our general partner.
A successful IRS contest of the federal income tax positions we take could adversely affect the market for our common units and the costs of any contest will be borne by our unitholders, debt security holders and our general partner.
Entity level taxes on income from C corporation subsidiaries will reduce cash available for distribution, and an individual unitholder’s share of dividend and interest income from such subsidiaries would constitute portfolio income that could not be offset by the unitholder’s share of our other losses or deductions.
Entity level taxes on income from C corporation subsidiaries will reduce cash available for distribution, and an individual unitholder’s share of dividend and interest income from such subsidiaries would constitute portfolio income that could not be offset by the unitholder’s share of our other losses or deductions.
We prorate our items of income, gain, loss and deduction between transferors and transferees of our units each month based upon the ownership of our units on the first day of each month, instead of on the basis of the date a particular unit is transferred.
We prorate our items of income, gain, loss and deduction between transferors and transferees of our units each month based upon the ownership of our units on the first day of each month, instead of on the basis of the date a particular unit is transferred.
We have adopted certain valuation methodologies and monthly conventions for U.S. federal income tax purposes that may result in a shift of income, gain, loss and deduction among our unitholders. The IRS may challenge this treatment, which could adversely affect the value of our units.
We have adopted certain valuation methodologies and monthly conventions for U.S. federal income tax purposes that may result in a shift of income, gain, loss and deduction among our unitholders. The IRS may challenge this treatment, which could adversely affect the value of our units.
The level of activity is subject to large fluctuations in response to relatively minor changes in a variety of factors that are beyond our control, including: • prevailing oil and natural gas prices and expectations about future prices and price volatility; • the ability of exploration and production companies to drill in other basins that have more attractive rates of return; • the cost of offshore exploration for and production and transportation of oil and natural gas; • worldwide demand for oil and natural gas • consolidation of oil and gas and oil service companies operating offshore; • availability and rate of discovery of new oil and natural gas reserves in offshore areas; • local and international political and economic conditions and policies; • technological advances affecting energy production and consumption; • weather conditions; • climate change; • environmental regulation; and • the ability of oil and gas companies to generate or otherwise obtain funds for exploration and production As a result of the decline in commodity prices over the last several years, offshore development activity in the Gulf of Mexico declined substantially, diminishing demand for our terminalling and storage services.
The level of activity is subject to large fluctuations in response to relatively minor changes in a variety of factors that are beyond our control, including: • prevailing oil and natural gas prices and expectations about future prices and price volatility; • the ability of exploration and production companies to drill in other basins that have more attractive rates of return; 22 • the cost of offshore exploration for and production and transportation of oil and natural gas; • worldwide demand for oil and natural gas • consolidation of oil and gas and oil service companies operating offshore; • availability and rate of discovery of new oil and natural gas reserves in offshore areas; • local and international political and economic conditions and policies; • technological advances affecting energy production and consumption; • weather conditions; • climate change; • environmental regulation; and • the ability of oil and gas companies to generate or otherwise obtain funds for exploration and production As a result of the decline in commodity prices over the last several years, offshore development activity in the Gulf of Mexico declined substantially, diminishing demand for our terminalling and storage services.
Martin Resource Management Corporation's directors and officers have a fiduciary duty to make these decisions in the best interests of the shareholders of Martin Resource Management Corporation without regard to the best interests of the unitholders; • Martin Resource Management Corporation may engage in limited competition with us; • Our general partner is allowed to take into account the interests of parties other than us, such as Martin Resource Management Corporation, in resolving conflicts of interest, which has the effect of reducing its fiduciary duty to our unitholders; • Under our Partnership Agreement, our general partner may limit its liability and reduce its fiduciary duties, while also restricting the remedies available to our unitholders for actions that, without the limitations and reductions, might constitute breaches of fiduciary duty.
Martin Resource 37 Management Corporation's directors and officers have a fiduciary duty to make these decisions in the best interests of the shareholders of Martin Resource Management Corporation without regard to the best interests of the unitholders; • Martin Resource Management Corporation may engage in limited competition with us; • Our general partner is allowed to take into account the interests of parties other than us, such as Martin Resource Management Corporation, in resolving conflicts of interest, which has the effect of reducing its fiduciary duty to our unitholders; • Under our Partnership Agreement, our general partner may limit its liability and reduce its fiduciary duties, while also restricting the remedies available to our unitholders for actions that, without the limitations and reductions, might constitute breaches of fiduciary duty.
Potential conflicts of interest between us, Martin Resource Management Corporation and our general partner could occur in many of our day-to-day operations including, among others, the following situations: • Officers of Martin Resource Management Corporation who provide services to us also devote significant time to the businesses of Martin Resource Management Corporation and are compensated by Martin Resource Management Corporation for that time; 36 • Neither our Partnership Agreement nor any other agreement requires Martin Resource Management Corporation to pursue a business strategy that favors us or utilizes our assets or services.
Potential conflicts of interest between us, Martin Resource Management Corporation and our general partner could occur in many of our day-to-day operations including, among others, the following situations: • Officers of Martin Resource Management Corporation who provide services to us also devote significant time to the businesses of Martin Resource Management Corporation and are compensated by Martin Resource Management Corporation for that time; • Neither our Partnership Agreement nor any other agreement requires Martin Resource Management Corporation to pursue a business strategy that favors us or utilizes our assets or services.
These hazards and risks, many of which are beyond our control, include: 26 • accidents on rivers or at sea and other hazards that could result in releases, spills and other environmental damages, personal injuries, loss of life and suspension of operations; • leakage of NGLs and other petroleum products and by-products; • fires and explosions; • damage to transportation, terminalling and storage facilities and surrounding properties caused by natural disasters; and • terrorist attacks or sabotage.
These hazards and risks, many of which are beyond our control, include: • accidents on rivers or at sea and other hazards that could result in releases, spills and other environmental damages, personal injuries, loss of life and suspension of operations; • leakage of NGLs and other petroleum products and by-products; • fires and explosions; • damage to transportation, terminalling and storage facilities and surrounding properties caused by natural disasters; and • terrorist attacks or sabotage.
Ratings are subject to revision or withdrawal at any time by the rating agencies, and we cannot assure you that we will maintain our current credit ratings. The industry in which we operate is highly competitive and increased competitive pressure could adversely affect our business and operating results. We compete with similar enterprises in our respective areas of operation.
Ratings are subject to revision or withdrawal at any time by the rating agencies, and we cannot assure you that we will maintain our current credit ratings. The industry in which we operate is highly competitive and increased competitive pressure could adversely affect our business and operating results. 32 We compete with similar enterprises in our respective areas of operation.
Current and prospective non-U.S. unitholders should consult their tax advisors regarding the impact of these rules on an investment in our common units. We treat a purchaser of our common units as having the same tax benefits without regard to the seller's identity. The IRS may challenge this treatment, which could adversely affect the value of the common units.
Current and prospective non-U.S. unitholders should consult their tax advisors regarding the impact of these rules on an investment in our common units. 41 We treat a purchaser of our common units as having the same tax benefits without regard to the seller's identity. The IRS may challenge this treatment, which could adversely affect the value of the common units.
For example, our Partnership Agreement: • permits our general partner to make a number of decisions in its "sole discretion." This entitles our general partner to consider only the interests and factors that it desires, and it has no duty or obligation to give any consideration to any interest of, or factors affecting, us, our affiliates or any limited partner; 34 • provides that our general partner is entitled to make other decisions in its "reasonable discretion," which may reduce the obligations to which our general partner would otherwise be held; • provides that affiliated transactions and resolutions of conflicts of interest not involving a required vote of unitholders must be "fair and reasonable" to us and that, in determining whether a transaction or resolution is "fair and reasonable," our general partner may consider the interests of all parties involved, including its own; and • provides that our general partner and its officers and directors will not be liable for monetary damages to us, our limited partners or assignees for errors of judgment or for any acts or omissions if our general partner and those other persons acted in good faith.
For example, our Partnership Agreement: • permits our general partner to make a number of decisions in its "sole discretion." This entitles our general partner to consider only the interests and factors that it desires, and it has no duty or obligation to give any consideration to any interest of, or factors affecting, us, our affiliates or any limited partner; • provides that our general partner is entitled to make other decisions in its "reasonable discretion," which may reduce the obligations to which our general partner would otherwise be held; 35 • provides that affiliated transactions and resolutions of conflicts of interest not involving a required vote of unitholders must be "fair and reasonable" to us and that, in determining whether a transaction or resolution is "fair and reasonable," our general partner may consider the interests of all parties involved, including its own; and • provides that our general partner and its officers and directors will not be liable for monetary damages to us, our limited partners or assignees for errors of judgment or for any acts or omissions if our general partner and those other persons acted in good faith.
Many of these laws and regulations are subject to change and uncertain interpretation, and could result in claims, increased cost of operations, or otherwise harm our business. 32 The regulatory environment surrounding data privacy and protection is constantly evolving and can be subject to significant change. New data protection laws pose increasingly complex compliance challenges and potentially elevate our costs.
Many of these laws and regulations are subject to change and uncertain interpretation, and could result in claims, increased cost of operations, or otherwise harm our business. The regulatory environment surrounding data privacy and protection is constantly evolving and can be subject to significant change. New data protection laws pose increasingly complex compliance challenges and potentially elevate our costs.
Commodity prices also have been impacted by political instability in China and the Middle East (including the 27 conflict in Israel). If commodity prices remain weak for a sustained period, our terminalling throughput volumes may be negatively impacted, particularly as producers are curtailing or redirecting drilling, adversely affecting our results of operations.
Commodity prices also have been impacted by political instability in China and the Middle East (including the conflict in Israel). If commodity prices remain weak for a sustained period, our terminalling throughput volumes may be negatively impacted, particularly as producers are curtailing or redirecting drilling, adversely affecting our results of operations.
Any decrease in supplies of natural gas, NGLs or crude oil could adversely affect our business and operating results. Our NGL and sulfur-based fertilizer products are subject to seasonal demand and could cause our revenues to vary. 19 The highly competitive nature of our industry could adversely affect our results of operations and ability to make distributions to our unitholders.
Any decrease in supplies of natural gas, NGLs or crude oil could adversely affect our business and operating results. Our NGL and sulfur-based fertilizer products are subject to seasonal demand and could cause our revenues to vary. The highly competitive nature of our industry could adversely affect our results of operations and ability to make distributions to our unitholders.
Our and our subsidiaries’ ability to access capital markets could also be limited by a downgrade of our credit ratings. 31 Credit rating agencies perform independent analysis when assigning credit ratings. The analysis includes a number of criteria including, but not limited to, business composition, market and operational risks, as well as various financial tests.
Our and our subsidiaries’ ability to access capital markets could also be limited by a downgrade of our credit ratings. Credit rating agencies perform independent analysis when assigning credit ratings. The analysis includes a number of criteria including, but not limited to, business composition, market and operational risks, as well as various financial tests.
A bankruptcy filing by or against Martin Resource Management Corporation could also result in the termination or material breach of some or all of the various commercial contracts between us and Martin Resource Management Corporation, which could have a material adverse impact on our results of operations, cash flow and ability to make distributions to our unitholders.
A bankruptcy filing by or against Martin Resource Management Corporation could also result in the termination or material breach of some or all of the various commercial contracts between us and Martin 38 Resource Management Corporation, which could have a material adverse impact on our results of operations, cash flow and ability to make distributions to our unitholders.
Therefore, the use of our proration method may not be permitted under existing Treasury regulations, and, accordingly, our counsel is unable to opine as to the validity of such method. If the IRS were to challenge our proration method, we may be required to change the allocation of items of income, gain, loss and deduction among our unitholders.
Therefore, the use of our 42 proration method may not be permitted under existing Treasury regulations, and, accordingly, our counsel is unable to opine as to the validity of such method. If the IRS were to challenge our proration method, we may be required to change the allocation of items of income, gain, loss and deduction among our unitholders.
Our general partner's discretion in determining the level of our cash reserves may adversely affect our ability to make cash distributions to our unitholders. Unitholders may not have limited liability if a court finds that we have not complied with applicable statutes or that unitholder action constitutes control of our business.
Our general partner's discretion in determining the level of our cash reserves may adversely affect our ability to make cash distributions to our unitholders. 20 Unitholders may not have limited liability if a court finds that we have not complied with applicable statutes or that unitholder action constitutes control of our business.
As a result, we may make 21 cash distributions during periods when we record losses and may not make cash distributions during periods when we record net income. Restrictions in our debt instruments could prevent us from making distributions to our unitholders or limit our ability to pursue opportunities that would increase our distributions to unitholders.
As a result, we may make cash distributions during periods when we record losses and may not make cash distributions during periods when we record net income. Restrictions in our debt instruments could prevent us from making distributions to our unitholders or limit our ability to pursue opportunities that would increase our distributions to unitholders.
Department of the Treasury issued final regulations (the "QI Regulations") regarding qualifying income under Section 7704(d)(1)(E) of the Code which relates to the qualifying income exception upon which we rely for 38 partnership tax treatment. The QI Regulations include "reserved" paragraphs for fertilizer and hedging, which the U.S.
Department of the Treasury issued final regulations (the "QI Regulations") regarding qualifying income under Section 7704(d)(1)(E) of the Code which relates to the qualifying income exception upon which we rely for partnership tax treatment. The QI Regulations include "reserved" paragraphs for fertilizer and hedging, which the U.S.
Department of the Treasury plans to address in future proposed and final Treasury regulations. We are unable to predict how such future regulations may treat fertilizer or hedging activities, but such regulations could impact our ability to treat certain activities as generating qualifying income.
Department of the Treasury plans to address in future proposed and final Treasury regulations. We are unable to predict how such future regulations may treat fertilizer or hedging activities, but such regulations could impact our ability to treat certain 39 activities as generating qualifying income.
Fluctuations in interest rates could materially affect our financial results We are exposed to counterparty risk in our credit facility and hedging agreements and we may not be able to access funds under our credit facility if there is a default. We are exposed to counterparty credit risk.
Fluctuations in interest rates could materially affect our financial results We are exposed to counterparty risk in our credit facility and hedging agreements and we may not be able to access funds under our credit facility if there is a default. 19 We are exposed to counterparty credit risk.
Our liquidity and revenues have been adversely affected by this volatility during periods of decreasing prices because of the reduction in the value and resale price of our inventory. In addition, our liquidity and costs have been adversely affected during periods of increasing prices because of the increased costs associated with our purchase of petroleum products and by-products.
Our liquidity and revenues have been adversely affected by this volatility during periods of decreasing prices because of the reduction in the value and resale price of our inventory. In addition, our liquidity 27 and costs have been adversely affected during periods of increasing prices because of the increased costs associated with our purchase of petroleum products and by-products.
If our lenders do declare us in default and accelerate repayment, 37 we may be required to refinance our debt on unfavorable terms, which could negatively impact our results of operations and our ability to make distributions to our unitholders.
If our lenders do declare us in default and accelerate repayment, we may be required to refinance our debt on unfavorable terms, which could negatively impact our results of operations and our ability to make distributions to our unitholders.
Further, taking advantage of opportunities to reduce our existing debt, such as debt exchanges, debt repurchases, or modifications of our existing debt could result in "cancellation of indebtedness income" (also referred to as "COD income") being allocated to our unitholders as taxable income.
Further, taking advantage of opportunities to reduce our existing debt, such as debt exchanges, debt repurchases, or modifications of our existing debt could result in 40 "cancellation of indebtedness income" (also referred to as "COD income") being allocated to our unitholders as taxable income.
Some individuals and groups, including criminal organizations and state-sponsored groups, have attempted to gain unauthorized access to computer networks of U.S. businesses and mounted so-called “cyberattacks” to disable or disrupt computer systems, disrupt operations, and steal funds or data including through so-called “phishing” schemes, which are attempts to obtain unauthorized access by targeted acts of deception against individuals with legitimate access to physical locations or information.
Some individuals and groups, including criminal organizations and state-sponsored groups, have attempted to gain unauthorized access to computer networks of U.S. businesses and mounted so-called “cyberattacks” to disable or disrupt computer systems, disrupt operations, and steal funds or data including through so-called “phishing” or social engineering schemes, which are attempts to obtain unauthorized access by targeted acts of deception against individuals with legitimate access to physical locations or information.
As part of rejoining the Paris Agreement, President Biden announced that the U.S. would commit to a 50 to 52 percent reduction from 2005 levels of GHG emissions by 2030 and set the goal of reaching net-zero GHG emissions by 2050.
As part of rejoining the Paris Agreement, the former President announced that the U.S. would commit to a 50 to 52 percent reduction from 2005 levels of GHG emissions by 2030 and set the goal of reaching net-zero GHG emissions by 2050.
As of December 31, 2023, the maximum federal income tax rate applicable to such qualified dividend income that is allocable to individuals was 20% (plus a 3.8% net investment income tax that applies to certain net investment income earned by individuals, estates and trusts).
As of December 31, 2024, the maximum federal income tax rate applicable to such qualified dividend income that is allocable to individuals was 20% (plus a 3.8% net investment income tax that applies to certain net investment income earned by individuals, estates and trusts).
It also could affect the amount of taxable gain from our unitholders' sale of units and could have a negative impact on the value of the units or result in audit adjustments to our unitholders' tax returns without the benefit of additional deductions. 42
It also could affect the amount of taxable gain from our unitholders' sale of units and could have a negative impact on the value of the units or result in audit adjustments to our unitholders' tax returns without the benefit of additional deductions. 43
As of December 31, 2023, Martin Resource Management Corporation owned 15.7% of our total outstanding common limited partner units and 100% of the ownership interests in MMGP. MMGP owns a 2% general partnership interest in us.
As of December 31, 2024, Martin Resource Management Corporation owned 15.7% of our total outstanding common limited partner units and 100% of the ownership interests in MMGP. MMGP owns a 2% general partnership interest in us.
For instance, while our credit facility had $175.0 million in lender commitments at December 31, 2023, the amount we were able to borrow was limited by the financial covenants contained therein. Fluctuations in interest rates could materially affect our financial results Borrowings under our credit facility are at variable rates.
For instance, while our credit facility had $150.0 million in lender commitments at December 31, 2024, the amount we were able to borrow was limited by the financial covenants contained therein. Fluctuations in interest rates could materially affect our financial results Borrowings under our credit facility are at variable rates.
Any failure, or perceived failure, by us to comply with applicable data protection laws could result in proceedings or actions against us by governmental entities or others, subject us to significant fines, penalties, judgments, and negative publicity, require us to change our business practices, increase the costs and complexity of compliance, and adversely affect our business.
Any failure, or perceived failure, by us to adequately address privacy and cybersecurity concerns or comply with applicable data protection laws could result in 33 proceedings or actions against us by governmental entities or others, subject us to significant fines, penalties, judgments, and negative publicity, require us to change our business practices, increase the costs and complexity of compliance, or adversely affect our business.
At the international level, pursuant to the Paris Agreement, over 190 countries have committed to limiting their GHG emissions through individually-determined reduction goals every five years after 2020. In November 2020, the U.S. formally withdrew from the Paris Agreement.
At the international level, pursuant to the Paris Agreement, over 190 countries have committed to limiting their GHG emissions through individually-determined reduction goals every five years after 2020. In November 2020, the U.S. formally withdrew from the Paris Agreement. However, the U.S. rejoined the Paris Agreement on February 19, 2021.
Debt we owe or incur in the future could limit our flexibility to obtain financing, to pursue other business opportunities, and to pay distributions to our unitholders. 22 As of December 31, 2023, we had approximately $442.5 million in principal amount of debt outstanding (including $42.5 million outstanding under our credit facility).
Debt we owe or incur in the future could limit our flexibility to obtain financing, to pursue other business opportunities, and to pay distributions to our unitholders. As of December 31, 2024, we had approximately $453.5 million in principal amount of debt outstanding (including $53.5 million outstanding under our credit facility).
Unitholders have less power to elect or remove management of our general partner than holders of common stock in a corporation. It is unlikely that our common unitholders will have sufficient voting power to elect or remove our general partner without consent of Martin Resource Management Corporation and its affiliates.
It is unlikely that our common unitholders will have sufficient voting power to elect or remove our general partner without consent of Martin Resource Management Corporation and its affiliates.
If any of our vessels are purchased or requisitioned for an extended period of time by the U.S. government, such transactions could have a material adverse effect on our results of operations, cash flow and ability to make distributions to our unitholders. Changes in transportation regulations may increase our costs and negatively impact our results of operations.
If any of our vessels are purchased or requisitioned for an extended period of time by the U.S. government, such transactions could have a material adverse effect on our results of operations, cash flow and ability to make distributions to our unitholders.
If at any time our general partner and its affiliates own more than 80% of the common units, our general partner will have the right, but not the obligation, which it may assign to any of its affiliates or to us, to acquire all, but not less than all, of the remaining common units held by unaffiliated persons at a price not less than the then-current market price.
Our general partner has a limited call right that may require unitholders to sell their common units at an undesirable time or price. 36 If at any time our general partner and its affiliates own more than 80% of the common units, our general partner will have the right, but not the obligation, which it may assign to any of its affiliates or to us, to acquire all, but not less than all, of the remaining common units held by unaffiliated persons at a price not less than the then-current market price.
Our business could be impacted by initiatives to address greenhouse gases and climate change and incentives to conserve energy or use alternative energy sources. For example, the IRA, signed into law in August 2022 by President Biden, includes incentives to increase renewable energy, such as wind and solar electric generation, and encourages consumers to use these alternative energy sources.
Our business could be impacted by initiatives to address greenhouse gases and climate change and incentives to conserve energy or use alternative energy sources. For example, the federal tax legislation enacted in 2022, includes incentives to increase renewable energy, such as wind and solar electric generation, and encourages consumers to use these alternative energy sources.
Companies that do not adapt to or comply with investor or stakeholder expectations and standards, which are evolving, or which are perceived to have not responded appropriately to the growing concern for ESG issues, regardless of whether there is a legal requirement to do so, may suffer from reputational damage and the business, financial condition, and/or stock price of such a company could be materially and adversely affected.
Companies that do not adapt to or comply with investor or stakeholder expectations and standards, which are evolving, or which are perceived to have not responded appropriately to the growing concern for ESG issues, regardless of whether there is a legal requirement to do so, may suffer from reputational damage and the business, financial condition, and/or stock price of such a company could be materially and adversely affected. 29 Our stakeholders may require us to implement ESG procedures or standards in order to remain invested in us or before they may make further investments in us.
In addition, we have no control over producers or their drilling, completion or production decisions, which are affected by, among other things, prevailing and projected energy prices, demand for hydrocarbons, the level of reserves, geological considerations, governmental regulations, the availability of drilling rigs, other production and development costs and the availability and cost of capital.
In addition, we have no control over producers or their drilling, completion or production decisions, which are affected by, among other things, prevailing and projected energy prices, demand for hydrocarbons, the level of reserves, geological considerations, governmental regulations, the availability of drilling rigs, other production and development costs and the availability and cost of capital. 28 Fluctuations in energy prices can greatly affect production rates and investments by third parties in the development of new oil and natural gas reserves.
State, federal, and international regulatory measures have the potential to increase our operating costs through direct regulation of GHG emissions resulting from our operations and could also indirectly adversely affect our operations by decreasing demand for our services and products.
State and local GHG initiatives may continue despite the U.S. withdrawal from the Paris Agreement. State, local, and international regulatory measures continue to have the potential to increase our operating costs through direct regulation of GHG emissions resulting from our operations and could also indirectly adversely affect our operations by decreasing demand for our services and products.
Operations at our facilities and at the facilities owned or operated by our suppliers and customers could be partially or completely shut down, temporarily or permanently, as the result of any number of circumstances that are not within our control, such as: • catastrophic events, including hurricanes; • environmental remediation; • labor difficulties; and • disruptions in the supply of our products to our facilities or modes of transportation.
Operations at our facilities and at the facilities owned or operated by our suppliers and customers could be partially or completely shut down, temporarily or permanently, as the result of any number of circumstances that are not within our control, such as: • catastrophic events, including hurricanes; • environmental remediation; • labor difficulties; and • disruptions in the supply of our products to our facilities or modes of transportation. 30 Additionally, terrorist attacks and acts of sabotage could target oil and gas production facilities, refineries, processing plants, terminals and other infrastructure facilities.
Our business could be adversely affected if operations at our transportation, terminalling and storage and distribution facilities experienced significant interruptions. Our business could also be adversely affected if the operations of our customers and suppliers experienced significant interruptions. Our operations are dependent upon our terminalling and storage facilities and various modes of transportation.
Our business could also be adversely affected if the operations of our customers and suppliers experienced significant interruptions. Our operations are dependent upon our terminalling and storage facilities and various modes of transportation. We are also dependent upon the uninterrupted operations of certain facilities owned or operated by our suppliers and customers.
Moreover, societal pressures or political or other factors may shape the success of such claims, without regard to the company’s causation of or contribution to the asserted damage, or to other mitigating factors. 25 The adoption and implementation of new or more stringent international, federal, or state legislation, regulations, or other regulatory initiatives that impose more stringent standards for GHG emissions from oil and natural gas producers or their midstream services providers such as us could result in increased costs of compliance or costs of consuming, and thereby reduce demand for or erode value for, the petroleum products and by-products that we process, store and transport.
The adoption and implementation of new or more stringent international, federal, or state legislation, regulations, or other regulatory initiatives that impose more stringent standards for GHG emissions from oil and natural gas producers or their midstream services providers such as us could result in increased costs of compliance or costs of consuming, and thereby reduce demand for or erode value for, the petroleum products and by-products that we process, store and transport.
If the IRS makes audit adjustments to our income tax returns, it may assess and collect any taxes (including any applicable penalties and interest) resulting from such audit adjustment directly from us, in which case our cash available for distribution to our unitholders might be substantially reduced. 20 Unitholders may be required to pay taxes on income from us, including their share of income from the cancellation of debt, even if they do not receive any cash distributions from us.
If the IRS makes audit adjustments to our income tax returns, it may assess and collect any taxes (including any applicable penalties and interest) resulting from such audit adjustment directly from us, in which case our cash available for distribution to our unitholders might be substantially reduced.
The IRS may challenge this treatment, which could change the allocation of items of income, gain, loss and deduction among our unitholders. 41 We prorate our items of income, gain, loss and deduction between transferors and transferees of our units each month based upon the ownership of our units on the first day of each month, instead of on the basis of the date a particular unit is transferred.
We prorate our items of income, gain, loss and deduction between transferors and transferees of our units each month based upon the ownership of our units on the first day of each month, instead of on the basis of the date a particular unit is transferred.
We are subject to various transportation regulations by the U.S. Department of Transportation and analogous state agencies, whose regulations include certain permit requirements of highway and safety authorities.
Changes in transportation regulations may increase our costs and negatively impact our results of operations. We are subject to various transportation regulations by the U.S. Department of Transportation and analogous state agencies, whose regulations include certain permit requirements of highway and safety authorities.
Dependence on automated systems may increase the risks related to operational systems failures and breaches of critical operational or financial controls, and tampering or deliberate manipulation of such systems may result in losses that are difficult to detect. While we take the utmost precautions, we cannot guarantee safety from all threats and attacks.
Dependence on automated systems may increase the risks related to operational systems failures and breaches of critical operational or financial controls, and tampering or deliberate manipulation of such systems may result in losses that are difficult to detect.
We may lose customers and future business opportunities to our competitors and any such losses could adversely affect our results of operations and ability to make distributions to our unitholders. 28 Our business is subject to compliance with environmental laws and regulations that could expose us to significant costs and liabilities and adversely affect our results of operations and ability to make distributions to our unitholders.
Our business is subject to compliance with environmental laws and regulations that could expose us to significant costs and liabilities and adversely affect our results of operations and ability to make distributions to our unitholders.
Unitholders did not elect 33 our general partner or its directors and will have no right to elect our general partner or its directors on an annual or other continuing basis. Holdings, the sole member of MMGP, elects the board of directors of our general partner.
Unitholders did not elect our general partner or its directors and will have no right to elect our general partner or its directors on an annual or other continuing basis.
The IRA and similar state or federal initiatives to incentivize a shift away from fossil fuels could reduce demand for hydrocarbons, thereby reducing demand for our products and services and negatively impacting our business.
Disbursements under the IRA, however, have been paused by the Trump Administration. Such federal tax legislation and similar state or federal initiatives to incentivize a shift away from fossil fuels could reduce demand for hydrocarbons, thereby reducing demand for our products and services and negatively impacting our business.
Additionally, we may engage in transactions to delever the partnership and manage our liquidity that may result in income to our unitholders without a corresponding cash distribution. 39 For example, if we sell assets and use the proceeds to repay existing debt or fund capital expenditures, you may be allocated taxable income and gain resulting from the sale without receiving a cash distribution.
For example, if we sell assets and use the proceeds to repay existing debt or fund capital expenditures, you may be allocated taxable income and gain resulting from the sale without receiving a cash distribution.
If these officers and employees do not or cannot devote sufficient attention to the management and operation of our business, our results of operations and ability to make distributions to our unitholders may be reduced. 29 Our loss of significant commercial relationships with Martin Resource Management Corporation could adversely impact our results of operations and ability to make distributions to our unitholders.
If these officers and employees do not or cannot devote sufficient attention to the management and operation of our business, our results of operations and ability to make distributions to our unitholders may be reduced.
We may not be able to successfully integrate any future acquisitions into our existing operations or achieve the desired profitability from such acquisitions. These acquisitions may require substantial capital expenditures and the incurrence of additional indebtedness. If we make acquisitions, our capitalization and results of operations may change significantly.
Our future acquisitions may not be successful, may substantially increase our indebtedness and contingent liabilities and may create integration difficulties. We may not be able to successfully integrate any future acquisitions into our existing operations or achieve the desired profitability from such acquisitions. These acquisitions may require substantial capital expenditures and the incurrence of additional indebtedness.
Under the terms of our Partnership Agreement, we must pay our general partner's expenses and set aside any cash reserve amounts before making a distribution to our unitholders.
We may not have sufficient available cash each quarter in the future to pay distributions on our units. Under the terms of our Partnership Agreement, we must pay our general partner's expenses and set aside any cash reserve amounts before making a distribution to our unitholders.
Additionally, our marine transportation operations and our assets in the Gulf of Mexico, including our barges, push boats, tugboats and terminals, can be adversely impacted or damaged by hurricanes, tropical storms, tidal waves or other related events.
Our marine transportation operations can be significantly delayed, impaired or postponed by adverse weather conditions, such as fog in the winter and spring months and certain river conditions. 26 Additionally, our marine transportation operations and our assets in the Gulf of Mexico, including our barges, push boats, tugboats and terminals, can be adversely impacted or damaged by hurricanes, tropical storms, tidal waves or other related events.
Our primary sources of liquidity to meet operating expenses, service our indebtedness, pay distributions to our unitholders and fund capital expenditures have historically been provided by cash flows generated by our operations, borrowings under our credit facility and access to the debt and equity capital markets.
We have significant capital needs, and our ability to access the capital and credit markets to raise capital on favorable terms is limited by our debt level, industry conditions, and financial covenants in our debt instruments. 23 Our primary sources of liquidity to meet operating expenses, service our indebtedness, pay distributions to our unitholders and fund capital expenditures have historically been provided by cash flows generated by our operations, borrowings under our credit facility and access to the debt and equity capital markets.
Tax gain or loss on the disposition of our common units could be different than expected. Unitholders may be subject to limitations on their ability to deduct interest expenses incurred by us. Tax-exempt entities and non-U.S. persons face unique tax issues from owning common units that may result in adverse tax consequences to them.
Unitholders may be subject to limitations on their ability to deduct interest expenses incurred by us. Tax-exempt entities and non-U.S. persons face unique tax issues from owning common units that may result in adverse tax consequences to them. We treat a purchaser of our common units as having the same tax benefits without regard to the seller's identity.
In addition, the obligation to withhold will be imposed on the broker instead of the transferee (and we will generally not be required to withhold from the transferee amounts that should have 40 been withheld by the transferee but were not withheld). These withholding obligations will apply to transfers of our common units occurring on or after January 1, 2023.
In addition, the obligation to withhold will be imposed on the broker instead of the transferee (and we will generally not be required to withhold from the transferee amounts that should have been withheld by the transferee but were not withheld).
In the event that any of our customers was to enter into bankruptcy, we could lose all or a portion of the amounts owed to us by such customer, and we may be forced to cancel all or a portion of our contracts with such customer at significant expense to us.
In the event that any of our customers was to enter into bankruptcy, we could lose all or a portion of the amounts owed to us by such customer, and we may be forced to cancel all or a portion of our contracts with such customer at significant expense to us. 24 In addition, nonperformance by suppliers or vendors who have committed to provide us with critical products or services could raise our costs or interfere with our ability to successfully conduct our business.
If we fail to comply with these requirements, our vessels lose their eligibility to engage in coastwise trade within U.S. domestic waters. 30 The requirements that our vessels be U.S. built and manned by U.S. citizens, the crewing requirements and material requirements of the Coast Guard and the application of U.S. labor and tax laws significantly increase the costs of U.S. flagged vessels when compared with foreign-flagged vessels.
The requirements that our vessels be U.S. built and manned by U.S. citizens, the crewing requirements and material requirements of the Coast Guard and the application of U.S. labor and tax laws significantly increase the costs of U.S. flagged vessels when compared with foreign-flagged vessels.
Martin Resource Management Corporation provides us with various services and products pursuant to various commercial contracts. The loss of any of these services and products provided by Martin Resource Management Corporation could have a material adverse impact on our results of operations, cash flow and ability to make distributions to our unitholders.
Our loss of significant commercial relationships with Martin Resource Management Corporation could adversely impact our results of operations and ability to make distributions to our unitholders. Martin Resource Management Corporation provides us with various services and products pursuant to various commercial contracts.
The Jones Act is a federal law that restricts domestic marine transportation in the U.S. to vessels built and registered in the U.S. Furthermore, the Jones Act requires that the vessels be manned and owned by U.S. citizens.
The Jones Act is a federal law that restricts domestic marine transportation in the U.S. to vessels built and registered in the U.S. Furthermore, the Jones Act requires that the vessels be manned and owned by U.S. citizens. If we fail to comply with these requirements, our vessels lose their eligibility to engage in coastwise trade within U.S. domestic waters.
Further, any acquisition could result in: • post-closing discovery of material undisclosed liabilities of the acquired business or assets; • the unexpected loss of key employees or customers from the acquired businesses; • difficulties resulting from our integration of the operations, systems and management of the acquired business; and • an unexpected diversion of our management's attention from other operations. 24 If any future acquisitions are unsuccessful or result in unanticipated events or if we are unable to successfully integrate acquisitions into our existing operations, such acquisitions could adversely affect our results of operations, cash flow and ability to make distributions to our unitholders.
Further, any acquisition could result in: • post-closing discovery of material undisclosed liabilities of the acquired business or assets; • the unexpected loss of key employees or customers from the acquired businesses; • difficulties resulting from our integration of the operations, systems and management of the acquired business; and • an unexpected diversion of our management's attention from other operations.
In December 2023, the United States Environmental Protection Agency announced final strict new methane emission regulations for certain oil and gas facilities and the IRA established a charge on methane emissions above certain limits from the same facilities.
In March 2024, the United States Environmental Protection Agency published strict new methane emission regulations for certain oil and gas facilities and the federal tax legislation enacted in 2022 established a charge on methane emissions above certain limits from the same facilities, which rule was finalized in November 2024.
However, the deduction for "business interest" is limited to the sum of the Partnership’s business interest income and 30% of its "adjusted taxable income." For the purposes of this limitation, the Partnership’s adjusted taxable income is computed without regard to any business interest expense or business interest income.
However, the deduction for "business interest" is limited to the sum of the Partnership’s business interest income and 30% of its "adjusted taxable income." For the purposes of this limitation, the Partnership’s adjusted taxable income is computed without regard to any business interest expense or business interest income and by taking into account any deduction allowable for depreciation, amortization, or depletion to the extent such depreciation, amortization, or depletion is not capitalized into cost of goods sold with respect to inventory.
If we do not meet our stakeholders’ expectations, our business, ability to access capital, and/or our common unit price could be harmed.
Additionally, we may face reputational challenges in the event our ESG procedures or standards do not meet the standards set by certain constituencies. If we do not meet our stakeholders’ expectations, our business, ability to access capital, and/or our common unit price could be harmed.
Consequently, even if new natural gas or crude oil reserves are discovered in areas served by our assets, producers may choose not to develop those reserves.
Drilling and production activity generally decreases as crude oil and natural gas prices decrease. Prices of crude oil and natural gas have been historically volatile, and we expect this volatility to continue. Consequently, even if new natural gas or crude oil reserves are discovered in areas served by our assets, producers may choose not to develop those reserves.
All of these competitive pressures could have a material adverse effect on our business, results of operations, financial condition and ability to make cash distributions to our unitholders. Information technology systems present potential targets for cyber security attacks, which could adversely affect our business. We are reliant on technology to improve efficiency in our business.
All of these competitive pressures could have a material adverse effect on our business, results of operations, financial condition and ability to make cash distributions to our unitholders.
Based on our floating rate debt outstanding as of December 31, 2023, a 100 basis point increase in interest rates on this amount of debt would result in an increase in interest expense and a corresponding decrease in net income of approximately $0.4 million annually. 23 We are exposed to counterparty risk in our credit facility and hedging agreements, and we may not be able to access funds under our credit facility if there is a default.
Based on our floating rate debt outstanding as of December 31, 2024, a 100 basis point increase in interest rates on this amount of debt would result in an increase in interest expense and a corresponding decrease in net income of approximately $0.5 million annually.
As of December 31, 2023, Martin Resource Management Corporation owned 15.7% of our total outstanding common limited partner units and all of the ownership interests in MMGP, our general partner.
Our general partner generally may not be removed except upon the vote of the holders of at least 66 2/3% of the outstanding units voting together as a single class. As of December 31, 2024, Martin Resource Management Corporation owned 15.7% of our total outstanding common limited partner units and all of the ownership interests in MMGP, our general partner.
We rely on our credit facility to assist in financing a significant portion of our working capital, acquisitions and capital expenditures.
We are exposed to counterparty risk in our credit facility and hedging agreements, and we may not be able to access funds under our credit facility if there is a default. We rely on our credit facility to assist in financing a significant portion of our working capital, acquisitions and capital expenditures.
Weather in these regions is sometimes severe (including tropical storms and hurricanes) and can be a major factor in our day-to-day operations. Our marine transportation operations can be significantly delayed, impaired or postponed by adverse weather conditions, such as fog in the winter and spring months and certain river conditions.
Weather in these regions is sometimes severe (including tropical storms and hurricanes) and can be a major factor in our day-to-day operations.
A new owner of our general partner could replace the directors and officers of our general partner with its own designees and control the decisions taken by our general partner. 35 Our general partner has a limited call right that may require unitholders to sell their common units at an undesirable time or price.
A new owner of our general partner could replace the directors and officers of our general partner with its own designees and control the decisions taken by our general partner.
We may not have sufficient cash after the establishment of cash reserves and payment of our general partner's expenses to enable us to pay a distribution each quarter. We may not have sufficient available cash each quarter in the future to pay distributions on our units.
Additional risks that we do not yet know of or that we currently think are immaterial may also impair our business operations, financial condition and results of operations. 21 We may not have sufficient cash after the establishment of cash reserves and payment of our general partner's expenses to enable us to pay a distribution each quarter.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeItem 1C. Cybersecurity 43 Item 2. Properties 44 Item 3. Legal Proceedings 44 Item 4. Mine Safety Disclosures 45 PART II 46 Item 5. Market for Our Common Equity, Related Unitholder Matters and Issuer Purchases of Equity Securities 46 Item 6. [Reserved] 46 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 47 Item 7A.
Biggest changeItem 1C. Cybersecurity 44 Item 2. Properties 45 Item 3. Legal Proceedings 45 Item 4. Mine Safety Disclosures 46 PART II 47 Item 5. Market for Our Common Equity, Related Unitholder Matters and Issuer Purchases of Equity Securities 47 Item 6. [Reserved] 47 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 48 Item 7A.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 120 Item 13. Certain Relationships and Related Transactions, and Director Independence 123 Item 14 . Principal Accounting Fees and Services 128 PART IV 129 Item 15. Exhibits, Financial Statement Schedules 129 Item 16. Form 10-K Summary 132 i PART I
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 125 Item 13. Certain Relationships and Related Transactions, and Director Independence 128 Item 14 . Principal Accounting Fees and Services 133 PART IV 134 Item 15. Exhibits, Financial Statement Schedules 134 Item 16. Form 10-K Summary 137 i PART I
Quantitative and Qualitative Disclosures about Market Risk 64 Item 8. Financial Statements and Supplementary Data 65 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 104 Item 9A. Controls and Procedures 104 Item 9B. Other Information 105 PART III 106 Item 10. Directors, Executive Officers and Corporate Governance 106 Item 11. Executive Compensation 110 Item 12.
Quantitative and Qualitative Disclosures about Market Risk 66 Item 8. Financial Statements and Supplementary Data 67 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 109 Item 9A. Controls and Procedures 109 Item 9B. Other Information 110 PART III 111 Item 10. Directors, Executive Officers and Corporate Governance 111 Item 11. Executive Compensation 115 Item 12.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeA description of our legal proceedings is included in "Item 8. Financial Statements and Supplementary Data, Note 19. Commitments and Contingencies" and is incorporated herein by reference. 44
Biggest changeA description of our legal proceedings is included in "Item 8. Financial Statements and Supplementary Data, Note 19. Commitments and Contingencies" and is incorporated herein by reference. 45

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeOn January 23, 2024, we declared a quarterly cash distribution of $0.005 per common unit for the fourth quarter of 2023, or $0.02 per common unit on an annualized basis, which was paid on February 14, 2024 to unitholders of record as of February 7, 2024.
Biggest changeOn January 21, 2025, we declared a quarterly cash distribution of $0.005 per common unit for the fourth quarter of 2024, or $0.02 per common unit on an annualized basis, which was paid on February 14, 2025 to unitholders of record as of February 7, 2025.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Description of Our Credit Facility." Quarterly Distribution.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Description of Our Indebtedness - Credit Facility." Quarterly Distribution.
Item 5. Market for Our Common Equity, Related Unitholder Matters and Issuer Purchases of Equity Securities Market Information and Holders Our common units are traded on the NASDAQ under the symbol "MMLP." As of February 21, 2024, there were approximately 186 holders of record and approximately 8,500 beneficial owners of our common units.
Item 5. Market for Our Common Equity, Related Unitholder Matters and Issuer Purchases of Equity Securities Market Information and Holders Our common units are traded on the NASDAQ under the symbol "MMLP." As of February 24, 2025, there were approximately 167 holders of record and approximately 7,200 beneficial owners of our common units.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeNon-GAAP Financial Measures The following tables reconcile the non-GAAP financial measurements used by management to our most directly comparable GAAP measures for the years ended December 31, 2023 and 2022, which represents EBITDA, adjusted EBITDA, adjusted EBITDA after giving effect to the exit of the butane optimization business, distributable cash flow, and adjusted free cash flow: Reconciliation of Net Loss to EBITDA, Adjusted EBITDA, and Adjusted EBITDA After Giving Effect to the Exit of the Butane Optimization Business Year Ended December 31, 2023 2022 (in thousands) Net loss $ (4,549) $ (10,334) Adjustments: Interest expense 60,290 53,665 Income tax expense 5,918 7,927 Depreciation and amortization 49,895 56,280 EBITDA 111,554 107,538 Adjustments: Gain on disposition of property, plant and equipment (1,373) (5,669) Loss on extinguishment of debt 5,121 — Lower of cost or net realizable value and other non-cash adjustments (12,850) 12,850 Unit-based compensation 163 161 Adjusted EBITDA 102,615 114,880 Adjustments: Plus: net loss associated with butane optimization business 2,256 20,015 Plus: lower of cost or net realizable value and other non-cash adjustments 12,850 (12,850) Adjusted EBITDA after giving effect to the exit of the butane optimization business $ 117,721 $ 122,045 51 Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA, Adjusted EBITDA After Giving Effect to the Exit of the Butane Optimization Business, Distributable Cash Flow, and Adjusted Free Cash Flow Year Ended December 31, 2023 2022 (in thousands) Net cash provided by operating activities $ 137,468 $ 16,148 Interest expense 1 54,112 50,513 Current income tax expense 1,732 2,183 Lower of cost or market and other non-cash adjustments (12,850) 12,850 Commodity cash flow hedging gains reclassified to earnings — 901 Net cash received for closed commodity derivative positions included in AOCI — (85) Changes in operating assets and liabilities which (provided) used cash: Accounts and other receivables, inventories, and other current assets (97,149) 38,179 Trade, accounts and other payables, and other current liabilities 16,891 (4,428) Other 2,411 (1,381) Adjusted EBITDA 102,615 114,880 Plus: net loss associated with butane optimization business 2,256 20,015 Plus: lower of cost or net realizable value and other non-cash adjustments 12,850 (12,850) Adjusted EBITDA after giving effect to the exit of the butane optimization business 117,721 122,045 Adjustments: Interest expense (60,290) (53,665) Income tax expense (5,918) (7,927) Deferred income taxes 4,186 5,744 Amortization of deferred debt issuance costs 3,978 3,152 Amortization of discount on notes payable 2,200 — Payments for plant turnaround costs (4,825) (5,176) Maintenance capital expenditures (24,277) (19,074) Distributable Cash Flow 32,775 45,099 Principal payments under finance lease obligations (9) (279) Expansion capital expenditures (11,034) (6,883) Adjusted Free Cash Flow $ 21,732 $ 37,937 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. 52 Results of Operations The results of operations for the years ended December 31, 2023 and 2022 have been derived from our consolidated financial statements.
Biggest changeThe following tables reconcile the non-GAAP financial measurements used by management to our most directly comparable GAAP measures for the years ended December 31, 2024 and 2023, which represents EBITDA, Adjusted EBITDA, Credit Adjusted EBITDA, Distributable Cash Flow, and Adjusted Free Cash Flow: Reconciliation of Net Loss to EBITDA, Adjusted EBITDA, and Credit Adjusted EBITDA Year Ended December 31, 2024 2023 (in thousands) Net loss $ (5,207) $ (4,549) Adjustments: Interest expense 57,706 60,290 Income tax expense 4,197 5,918 Depreciation and amortization 50,787 49,895 EBITDA 107,483 111,554 Adjustments: Gain on disposition of property, plant and equipment (1,584) (1,373) Loss on extinguishment of debt — 5,121 Transaction expenses related to the terminated Merger with Martin Resource Management Corporation 3,674 — Equity in loss of DSM Semichem LLC 624 — Non-cash contractual revenue deferral adjustment 221 — Lower of cost or net realizable value and other non-cash adjustments — (12,850) Unit-based compensation 187 163 Adjusted EBITDA 110,605 102,615 Adjustments: Pro-forma adjustment related to ELSA project 2,655 — Capitalized interest 1,153 310 Net loss associated with butane optimization business — 2,256 Lower of cost or net realizable value and other non-cash adjustments — 12,850 Credit Adjusted EBITDA $ 114,413 $ 118,031 52 Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA, Credit Adjusted EBITDA, Distributable Cash Flow, and Adjusted Free Cash Flow Year Ended December 31, 2024 2023 (in thousands) Net cash provided by operating activities $ 48,351 $ 137,468 Interest expense 1 52,221 54,112 Current income tax expense 3,943 1,732 Transaction expenses related to the terminated Merger with Martin Resource Management Corporation 3,674 — Non-cash contractual revenue deferral adjustment 221 — Lower of cost or market and other non-cash adjustments — (12,850) Changes in operating assets and liabilities which (provided) used cash: Accounts and other receivables, inventories, and other current assets 14,037 (97,149) Trade, accounts and other payables, and other current liabilities (10,424) 16,891 Other (1,418) 2,411 Adjusted EBITDA 110,605 102,615 Pro-forma adjustment related to ELSA project 2,655 — Capitalized interest 1,153 310 Net loss associated with butane optimization business — 2,256 Lower of cost or net realizable value and other non-cash adjustments — 12,850 Credit Adjusted EBITDA 114,413 118,031 Adjustments: Interest expense (57,706) (60,290) Income tax expense (4,197) (5,918) Deferred income taxes 254 4,186 Amortization of deferred debt issuance costs 3,085 3,978 Amortization of discount on notes payable 2,400 2,200 Payments for plant turnaround costs (10,897) (4,825) Maintenance capital expenditures (23,233) (24,277) Distributable Cash Flow 24,119 33,085 Principal payments under finance lease obligations (9) (9) Investment in DSM Semichem LLC (6,938) — Expansion capital expenditures (18,493) (11,034) Adjusted Free Cash Flow $ (1,321) $ 22,042 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. 53 Results of Operations The results of operations for the years ended December 31, 2024 and 2023 have been derived from our consolidated financial statements.
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. EBITDA and Adjusted EBITDA .
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.
Seasonality A substantial portion of our revenues is dependent on sales prices of products, particularly fertilizers and NGLs, which fluctuate in part based on spring and winter weather conditions. The demand for fertilizers is strongest during the early spring planting season. The demand for NGLs is strongest during the winter heating season.
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.
In addition, the amended credit facility contains various covenants, which, among other things, limit our and our subsidiaries’ ability to: (i) grant or assume liens; (ii) make investments (including investments in our joint ventures) and acquisitions; (iii) enter into certain types of hedging agreements; (iv) incur or assume indebtedness; (v) sell, transfer, assign or convey assets; (vi) repurchase our equity, make distributions (including a limit on our ability to make quarterly distributions to unitholders in excess of $0.005 per unit unless our Total Leverage Ratio is below 3.75:1:00, pro forma first lien leverage is less than 1.00 to 1.00, and our pro forma liquidity is greater than or equal to 35% of the commitments under our amended credit facility) and certain other restricted payments; (vii) change the nature of our business; (viii) engage in transactions with affiliates; (ix) enter into certain burdensome agreements; (x) make certain amendments to the Omnibus Agreement and our material agreements; and (xi) permit our joint ventures to incur indebtedness or grant certain liens.
In addition, the credit facility contains various covenants, which, among other things, limit our and our subsidiaries’ ability to: (i) grant or assume liens; (ii) make investments (including investments in our joint ventures) and acquisitions; (iii) enter into certain types of hedging agreements; (iv) incur or assume indebtedness; (v) sell, transfer, assign or convey assets; (vi) repurchase our equity, make distributions (including a limit on our ability to make quarterly distributions to unitholders in excess of $0.005 per unit unless our Total Leverage Ratio is below 3.75:1:00, pro forma first lien leverage is less than 1.00 to 1.00, and our pro forma liquidity is greater than or equal to 35% of the commitments under our credit facility) and certain other restricted payments; (vii) change the nature of our business; (viii) engage in transactions with affiliates; (ix) enter into certain burdensome agreements; (x) make certain amendments to the Omnibus Agreement and our material agreements; and (xi) permit our joint ventures to incur indebtedness or grant certain liens.
The amended credit facility contains customary events of default, including, without limitation: (i) failure to pay any principal, interest, fees, expenses or other amounts when due; (ii) failure to meet the quarterly financial covenants; (iii) failure to observe any other agreement, obligation, or covenant in the amended credit facility or any related loan document, subject to cure periods for certain failures; (iv) the failure of any representation or warranty to be materially true and correct when made; (v) our, or any of our subsidiaries’ default under other indebtedness that exceeds a threshold amount; (vi) bankruptcy or other insolvency events involving us or any of our subsidiaries; (vii) judgments against us or any of our subsidiaries, in excess of a threshold amount; (viii) certain ERISA events involving us or any of our subsidiaries, in excess of a threshold amount; (ix) a change in control (as defined in the amended credit facility); and (x) the invalidity of any of the loan documents or the failure of any of the collateral documents to create a lien on the collateral.
The credit facility contains customary events of default, including, without limitation: (i) failure to pay any principal, interest, fees, expenses or other amounts when due; (ii) failure to meet the quarterly financial covenants; (iii) failure to observe any other agreement, obligation, or covenant in the credit facility or any related loan document, subject to cure periods for certain failures; (iv) the failure of any representation or warranty to be materially true and correct when made; (v) our, or any of our subsidiaries’ default under other indebtedness that exceeds a threshold amount; (vi) bankruptcy or other insolvency events involving us or any of our subsidiaries; (vii) judgments against us or any of our subsidiaries, in excess of a threshold amount; (viii) certain ERISA events involving us or any of our subsidiaries, in excess of a threshold amount; (ix) a change in control (as defined in the credit facility); and (x) the invalidity of any of the loan documents or the failure of any of the collateral documents to create a lien on the collateral.
The commitments under the amended credit facility can be increased from time to time upon our request, subject to certain conditions (including the consent of the increasing lenders), up to an additional $50.0 million. The amended credit facility is used for ongoing working capital needs and general partnership purposes, including to finance permitted investments, acquisitions and capital expenditures.
The commitments under the credit facility can be increased from time to time upon our request, subject to certain conditions (including the consent of the increasing lenders), up to an additional $50.0 million. The credit facility is used for ongoing working capital needs and general partnership purposes, including to finance permitted investments, acquisitions and capital expenditures.
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 and Adjusted Free Cash Flow.
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.
Indebtedness under the credit facility bears interest at our option at the Adjusted Term SOFR (as defined in the amended credit facility), plus an applicable margin, or the Alternate Base Rate (the highest of the Federal Funds Rate plus 0.50%, the one-month Adjusted Term SOFR plus 1.0%, or the administrative agent’s prime rate) plus an applicable margin.
Indebtedness under the credit facility bears interest at our option at the Adjusted Term SOFR (as defined in the credit facility), plus an applicable margin, or the Alternate Base Rate (the highest of the Federal Funds Rate plus 0.50%, the one-month Adjusted Term SOFR plus 1.0%, or the administrative agent’s prime rate) plus an applicable margin.
Obligations under the amended credit facility are secured by first priority liens on substantially all of our assets and those of the guarantors, including, without limitation, inventory, accounts receivable, bank accounts, marine vessels, equipment, fixed assets and the interests in certain subsidiaries.
Obligations under the credit facility are secured by first priority liens on substantially all of our assets and those of the guarantors, including, without limitation, inventory, accounts receivable, bank accounts, marine vessels, equipment, fixed assets and the interests in certain subsidiaries.
We may prepay all amounts outstanding under the amended credit facility at any time without premium or penalty (other than customary breakage costs associated with Term SOFR (as defined in the amended credit facility), subject to certain notice requirements.
We may prepay all amounts outstanding under the credit facility at any time without premium or penalty (other than customary breakage costs associated with Term SOFR (as defined in the credit facility), subject to certain notice requirements.
The amended credit facility also contains certain default provisions relating to Martin Resource Management Corporation. If Martin Resource Management Corporation no longer controls our general partner, the lenders under the amended credit facility may declare all amounts outstanding thereunder immediately due and payable.
The credit facility also contains certain default provisions relating to Martin Resource Management Corporation. If Martin Resource Management Corporation no longer controls our general partner, the lenders under the credit facility may declare all amounts outstanding thereunder immediately due and payable.
In addition, an event of default by Martin Resource Management Corporation under its credit facility could independently result in an event of default under our amended credit facility if it is deemed to have a material adverse effect on us.
In addition, an event of default by Martin Resource Management Corporation under its credit facility could independently result in an event of default under our credit facility if it is deemed to have a material adverse effect on us.
If an event of default relating to bankruptcy or other insolvency events occurs with respect to us or any of our subsidiaries, all indebtedness under our amended credit facility will immediately become due and payable.
If an event of default relating to bankruptcy or other insolvency events occurs with respect to us or any of our subsidiaries, all indebtedness under our credit facility will immediately become due and payable.
If any other event of default exists under our amended credit facility, the lenders may terminate their commitments to lend us money, accelerate the maturity of the indebtedness outstanding under the amended credit facility and exercise other rights and remedies.
If any other event of default exists under our credit facility, the lenders may terminate their commitments to lend us money, accelerate the maturity of the indebtedness outstanding under the credit facility and exercise other rights and remedies.
The 2028 Notes and the guarantees thereof rank effectively senior to all of the Issuers’ existing and future unsecured indebtedness to the extent of the value of the collateral securing the 2028 Notes and such guarantees. 61 Maturity and Interest The 2028 Notes will mature on February 15, 2028.
The 2028 Notes and the guarantees thereof rank effectively senior to all of the Issuers’ existing and future unsecured indebtedness to the extent of the value of the collateral securing the 2028 Notes and such guarantees. Maturity and Interest The 2028 Notes will mature on February 15, 2028.
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.
Adjusted EBITDA and Credit 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.
The amended credit facility requires mandatory prepayments of amounts outstanding thereunder with excess cash that exceeds $25.0 million and the net proceeds of certain asset sales.
The credit facility requires mandatory prepayments of amounts outstanding thereunder with excess cash that exceeds $25.0 million and the net proceeds of certain asset sales.
In addition, if any event of default exists under our amended credit facility, the lenders may commence foreclosure or other actions against the collateral. 2028 Senior Secured Notes and Indenture General On February 8, 2023, the Issuers issued $400.0 million aggregate principal amount of their 11.50% senior secured second lien notes due 2028 (the "2028 Notes").
In addition, if any event of default exists under our credit facility, the lenders may commence foreclosure or other actions against the collateral. 62 2028 Senior Secured Notes and Indenture General On February 8, 2023, the Issuers issued $400.0 million aggregate principal amount of their 11.50% senior secured second lien notes due 2028 (the "2028 Notes").
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 in 2023, 2022 or 2021. Inflation may increase the cost to acquire or replace property, plant and equipment.
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 in 2024, 2023 or 2022. Inflation may increase the cost to acquire or replace property, plant and equipment.
The GAAP measures most directly comparable to adjusted EBITDA are net income (loss) and net cash provided by (used in) operating activities.
The GAAP measures most directly comparable to Adjusted EBITDA and Credit Adjusted EBITDA are net income (loss) and net cash provided by (used in) operating activities.
We pay a per annum fee on all letters of credit issued under the amended credit facility, and we pay a commitment fee per annum on the unused revolving credit commitments under the amended credit facility.
We pay a per annum fee on all letters of credit issued under the credit facility, and we pay a commitment fee per annum on the unused revolving credit commitments under the credit facility.
Discussions of the year ended December 31, 2021 that are not included in this Annual Report on Form 10-K and year-to-year comparisons of the year ended December 31, 2022 and the year ended December 31, 2021 can be found in “Management’s Discussion and Analysis of Financial Condition and the Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022.
Discussions of the year ended December 31, 2022 that are not included in this Annual Report on Form 10-K and year-to-year comparisons of the year ended December 31, 2023 and the year ended December 31, 2022 can be found in “Management’s Discussion and Analysis of Financial Condition and the Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023.
Our impairment analyses require management to use judgment in estimating future cash flows and useful lives, as well as assessing the probability of different outcomes. Applying this impairment review methodology, no impairment was recorded during the years ended December 31, 2023 or 2022.
Our impairment analyses require management to use judgment in estimating future cash flows and useful lives, as well as assessing the probability of different outcomes. Applying this impairment review methodology, no impairment was recorded during the years ended December 31, 2024 or 2023.
The board of directors of our general partner will review and approve future adjustments in the reimbursement amount for indirect expenses, if any, annually. 58 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.
The Board of Directors will review and approve future adjustments in the reimbursement amount for indirect expenses, if any, annually. 59 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.
The letter of credit fee, the commitment fee and the applicable margins for our interest rate vary quarterly based on our Total Leverage Ratio (as defined in the amended credit facility, being generally computed as the ratio of total funded debt to consolidated earnings before interest, taxes, depreciation, amortization and certain other non-cash charges) and are as follows: Leverage Ratio ABR Loans Term SOFR Rate Loans and Letters of Credit Less than 3.00 to 1.00 1.75 % 2.75 % Greater than or equal to 3.00 to 1.00 and less than 3.50 to 1.00 2.00 % 3.00 % Greater than or equal to 3.50 to 1.00 and less than 4.00 to 1.00 2.25 % 3.25 % Greater than or equal to 4.00 to 1.00 and less than 4.50 to 1.00 2.50 % 3.50 % Greater than or equal to 4.50 to 1.00 2.75 % 3.75 % The applicable margin for Adjusted Term SOFR borrowings at December 31, 2023 was 3.25%.
The letter of credit fee, the commitment fee and the applicable margins for our interest rate vary quarterly based on our Total Leverage Ratio (as defined in the credit facility, being generally computed as the ratio of total funded debt to consolidated earnings before interest, taxes, depreciation, amortization and certain other non-cash charges) and are as follows: 61 Leverage Ratio ABR Loans Term SOFR Rate Loans and Letters of Credit Less than 3.00 to 1.00 1.75 % 2.75 % Greater than or equal to 3.00 to 1.00 and less than 3.50 to 1.00 2.00 % 3.00 % Greater than or equal to 3.50 to 1.00 and less than 4.00 to 1.00 2.25 % 3.25 % Greater than or equal to 4.00 to 1.00 and less than 4.50 to 1.00 2.50 % 3.50 % Greater than or equal to 4.50 to 1.00 2.75 % 3.75 % The applicable margin for Adjusted Term SOFR borrowings at December 31, 2024 was 3.50%.
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 and Credit 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.
Effective February 8, 2023, in connection with the completion of our sale of the 2028 Notes, we amended our credit facility (the “amended credit facility”) to, among other things, reduce the commitments thereunder from $275.0 million to $200.0 million (with further scheduled reductions to $175.0 million on June 30, 2023 and $150.0 million on June 30, 2024) and extend the scheduled maturity date of the amended credit facility to February 8, 2027.
Effective February 8, 2023, in connection with the completion of our sale of the 2028 Notes, we amended our credit facility (as further amended from time to time, the "credit facility”) to, among other things, reduce the commitments thereunder from $275.0 million to $200.0 million (with further scheduled reductions to $175.0 million on June 30, 2023 and $150.0 million on June 30, 2024) and extend the scheduled maturity date of the credit facility to February 8, 2027.
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.
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. 51 Adjusted Free Cash Flow.
We conduct impairment testing using present economic conditions, as well as future expectations. Based upon the most recent annual review as of August 31, 2023, no goodwill impairment exists within our reporting units for the years ended December 31, 2023. No goodwill impairment was recorded during the year ended December 31, 2022.
We conduct impairment testing using present economic conditions, as well as future expectations. Based upon the most recent annual review as of August 31, 2024, no goodwill impairment exists within our reporting units for the year ended December 31, 2024. No goodwill impairment was recorded during the year ended December 31, 2023.
The following table evaluates the potential impact of estimates utilized during the periods ended December 31, 2023 and 2022: 48 Description Judgments and Uncertainties Effect if Actual Results Differ from Estimates and Assumptions Impairment of Long-Lived Assets We periodically evaluate whether the carrying value of long-lived assets has been impaired when circumstances indicate the carrying value of the assets may not be recoverable.
The following table evaluates the potential impact of estimates utilized during the periods ended December 31, 2024 and 2023: 49 Description Judgments and Uncertainties Effect if Actual Results Differ from Estimates and Assumptions Impairment of Long-Lived Assets We periodically evaluate whether the carrying value of long-lived assets has been impaired when circumstances indicate the carrying value of the assets may not be recoverable.
By leveraging our existing assets located in Plainview, Texas and installing additional facilities (the “ELSA Facility”) as required, DSM will produce ELSA that meets the strict quality standards required by the recent advances in semiconductor manufacturing. In addition to owning a 10% non-controlling interest in DSM, we will be the exclusive provider of feedstock to the ELSA Facility.
By leveraging our existing assets located in Plainview, Texas and installing the ELSA Facility as required, DSM will produce ELSA that meets the strict quality standards required by the recent advances in semiconductor manufacturing. In addition to owning a 10% non-controlling interest in DSM, we will be the exclusive provider of feedstock to the ELSA Facility.
For the years ended December 31, 2023 and 2022, the board of directors of our general partner approved reimbursement amounts of $14.0 million and $13.5 million, respectively, reflecting our allocable share of such expenses. The board of directors of our general partner will review and approve future adjustments in the reimbursement amount for indirect expenses, if any, annually.
For the years ended December 31, 2024 and 2023, the Board of Directors approved reimbursement amounts of $13.5 million and $14.0 million, respectively, reflecting our allocable share of such expenses. The Board of Directors will review and approve future adjustments in the reimbursement amount for indirect expenses, if any, annually.
The following table sets forth our operating revenues and operating income by segment for the years ended December 31, 2023 and 2022.
The following table sets forth our operating revenues and operating income by segment for the years ended December 31, 2024 and 2023.
As of December 31, 2023, we have funded approximately $8.6 million toward ELSA related project costs. 47 For more information about the potential physical effects of climate change and environmental regulation on our business, see our environmental and climate change related risk factors in Section 1A “Risk Factors.” Subsequent Events Quarterly Distribution.
As of December 31, 2024, we have funded approximately $27.6 million toward ELSA related project costs. For more information about the potential physical effects of climate change and environmental regulation on our business, see our environmental and climate change related risk factors in Section 1A “Risk Factors.” 48 Subsequent Events Quarterly Distribution.
Certain Relationships and Related Transactions, and Director Independence." 49 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), adjusted EBITDA after giving effect to the exit of the butane optimization business, 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").
Certain Relationships and Related Transactions, and Director Independence." 50 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), Credit 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").
As of December 31, 2023, we had $42.5 million outstanding under the credit facility and $9.2 million of outstanding irrevocable letters of credit, leaving a maximum amount available to be borrowed under our credit facility for future borrowings and letters of credit of $123.3 million.
As of December 31, 2024, we had $53.5 million outstanding under the credit facility and $9.2 million of outstanding irrevocable letters of credit, leaving a maximum amount available to be borrowed under our credit facility for future borrowings and letters of credit of $87.3 million.
After giving effect to our then current borrowings, outstanding letters of credit and the financial covenants contained in our credit facility, we had the ability to borrow approximately $109.0 million in additional amounts thereunder as of December 31, 2023.
After giving effect to our then current borrowings, outstanding letters of credit and the financial covenants contained in our credit facility, we had the ability to borrow approximately $80.7 million in additional amounts thereunder as of December 31, 2024.
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 $109.0 million in additional amounts thereunder as of December 31, 2023.
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 $80.7 million in additional amounts thereunder as of December 31, 2024.
On January 23, 2024, we declared a quarterly cash distribution of $0.005 per common unit for the fourth quarter of 2023, or $0.02 per common unit on an annualized basis, which was paid on February 14, 2024 to unitholders of record as of February 7, 2024.
On January 21, 2025, we declared a quarterly cash distribution of $0.005 per common unit for the fourth quarter of 2024, or $0.02 per common unit on an annualized basis, which was paid on February 14, 2025 to unitholders of record as of February 7, 2025. Amendment to Credit Facility .
Electronic Level Sulfuric Acid Joint Venture. On October 19, 2022, Martin ELSA Investment LLC, our affiliate, entered into definitive agreements with Samsung C&T America, Inc. and Dongjin USA, Inc., an affiliate of Dongjin Semichem Co., Ltd., to form DSM Semichem LLC (“DSM”). DSM will produce and distribute electronic level sulfuric acid (“ELSA”).
On October 19, 2022, Martin ELSA Investment LLC, our affiliate, entered into definitive agreements with Samsung C&T America, Inc. and Dongjin USA, Inc., an affiliate of Dongjin Semichem Co., Ltd., to form DSM. DSM will produce and distribute ELSA.
At December 31, 2023, we had cash and cash equivalents of $0.05 million and available borrowing capacity of $123.3 million under our credit facility with $42.5 million of borrowings outstanding.
At December 31, 2024, we had cash and cash equivalents of $0.05 million and available borrowing capacity of $87.3 million under our credit facility with $53.5 million of borrowings outstanding.
Letters of Credit . At December 31, 2023, we had outstanding irrevocable letters of credit in the amount of $9.2 million, which were issued under our credit facility. Off Balance Sheet Arrangements.
Letters of Credit . At December 31, 2024, we had outstanding irrevocable letters of credit in the amount of $9.2 million, which were issued under our credit facility. Off Balance Sheet Arrangements. We do not have any off-balance sheet financing arrangements.
Selling, general and administrative expenses . Selling, general and administrative expenses increased primarily due to increased employee-related expenses. Depreciation and amortization . Depreciation and amortization increased as a result of recent capital expenditures, offset by recent disposals. Other operating income, net.
Selling, general and administrative expenses increased primarily as a result of increased employee-related expenses. Depreciation and amortization. The increase in depreciation and amortization is primarily the result of capital expenditures, offset by recent disposals. Other operating income (loss), net.
The board of directors of our general partner approved the following reimbursement amounts: Year Ended December 31, Variance Percent Change 2023 2022 (In thousands) Board approved reimbursement amount $ 13,982 $ 13,491 $ 491 4% The amounts reflected above represent our allocable share of such expenses.
The Board of Directors approved the following reimbursement amounts: Year Ended December 31, Variance Percent Change 2024 2023 (In thousands) Board of Directors approved reimbursement amount $ 13,508 $ 13,982 $ (474) (3)% The amounts reflected above represent our allocable share of such expenses.
The amended credit facility includes financial covenants that are tested on a quarterly basis, based on the rolling four quarter period that ends on the last day of each fiscal quarter, that require maintenance of: 60 • a minimum Interest Coverage Ratio (as defined in the amended credit facility) of at least 2.00:1.00; • a maximum Total Leverage Ratio of not more than 4.75:1.00, stepping down to 4.50:1.00 on March 31, 2025; and • a maximum First Lien Leverage Ratio (as defined in the amended credit facility) of not more than 1.50:1.00.
The credit facility amendment includes financial covenants that are tested on a quarterly basis, based on the rolling four quarter period that ends on the last day of each fiscal quarter, that require maintenance of: • a minimum Interest Coverage Ratio (as defined in the credit facility) of at least 2.00:1.00 for the fiscal quarter ended December 31, 2024, stepping down to 1.75:1.00 for the fiscal quarters ending March 31, 2025, June 30, 2025 and September 30, 2025, and stepping back up to 2.00:1.00 for the fiscal quarter ending December 31, 2025 and each fiscal quarter thereafter; • a maximum First Lien Leverage Ratio (as defined in the credit facility) of not more than 1.50:1.00 for the fiscal quarter ended December 31, 2024, stepping down to 1.25:1.00 for the fiscal quarters ending March 31, 2025, June 30, 2025 and September 30, 2025, and stepping back up to 1.50:1.00 for the fiscal quarter ending December 31, 2025 and each fiscal quarter thereafter.
Cost of products sold . Cost of products sold decreased $118.4 million due to the exit of the butane optimization business in the second quarter 2023. For the remaining products, the decrease in sales volumes of 19% resulted in a $56.2 million reduction to cost of products sold.
Cost of products sold . Cost of products sold decreased $72.3 million due to the exit of the butane optimization business in the second quarter 2023. For the remaining products, the decrease in sales volumes of 3% resulted in a $6.8 million reduction to cost of products sold.
From February 8, 2023 through December 31, 2023, the level of outstanding draws on our amended credit facility ranged from a low of $42.5 million to a high of $138.0 million. The amended credit facility is guaranteed by substantially all of our subsidiaries, other than Martin ELSA Investment LLC.
The level of outstanding draws on our credit facility from January 1, 2024 through December 31, 2024, ranged from a low of $40.5 million to a high of $102.5 million. The credit facility is guaranteed by substantially all of our subsidiaries, other than Martin ELSA Investment LLC.
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.
Adjusted EBITDA and Credit 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.
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.
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.
Revenue at our Smackover refinery decreased $1.8 million as a result of decreased pipeline revenue of $4.6 million, offset by increases in throughput revenue of $1.1 million, reservation fees of $1.1 million and natural gas surcharge of $0.8 million. Cost of products sold. Cost of products sold remained relatively consistent. Operating expenses.
Revenue at our Smackover refinery decreased $3.2 million as a result of decreases in natural gas surcharge of $3.3 million due to a reduction in usage, throughput revenue of $0.2 million and pipeline revenue of $0.1 million, offset by an increase in reservation fees of $0.3 million. Cost of products sold. Cost of products sold remained relatively consistent. Operating expenses.
Product revenues decreased $102.2 million due to the exit of the butane optimization business in the second quarter 2023. For the remaining products, sales volumes decreased 19%, lowering revenues by $62.9 million, primarily related to a 20% decrease in NGL sales volume. Our average sales price per barrel decreased $8.56, or 8%, decreasing revenues by $28.7 million.
Product revenues decreased $70.5 million due to the exit of the butane optimization business in the second quarter 2023. For the remaining products, sales volumes decreased 3%, lowering revenues by $7.6 million, primarily related to a 6% decrease in other specialty products sales volume. Our average sales price per barrel decreased $1.37, or 1%, decreasing revenues by $3.7 million.
Total Contractual Obligations A summary of our total contractual cash obligations as of December 31, 2023 is as follows (dollars in thousands): Payments due by period Type of Obligation Total Obligation Less than One Year 1-3 Years 3-5 Years Due Thereafter Credit facility $ 42,500 $ — $ — $ 42,500 $ — 11.5% senior secured notes, due 2028 400,000 — — 400,000 — Operating leases 70,054 18,345 30,542 15,734 5,433 Interest payable on fixed long-term debt obligations 188,926 46,000 92,000 50,926 — Total contractual cash obligations $ 701,480 $ 64,345 $ 122,542 $ 509,160 $ 5,433 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.
Total Contractual Obligations A summary of our total contractual cash obligations as of December 31, 2024 is as follows (dollars in thousands): 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 78,479 24,137 36,698 13,289 4,355 Finance leases 69 14 31 24 — Interest payable on finance lease obligations 9 4 5 — — Interest payable on fixed long-term debt obligations 142,926 46,000 92,000 4,926 — Total contractual cash obligations $ 674,983 $ 70,155 $ 182,234 $ 418,239 $ 4,355 60 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.
Additionally, ancillary revenue decreased $9.8 million . Operating expenses . The increase in operating expenses is primarily a result of increased employee-related expenses of $5.2 million, lease expense of $5.1 million, insurance premiums of $3.0 million, shop expenses of $0.7 million and outside towing of $0.7 million, offset by a decrease in pass through expenses (primarily fuel) of $6.6 million.
The increase in operating expenses is primarily a result of increased lease expense of $5.1 million related to new equipment, employee-related expenses of $1.2 million, insurance premiums and claims of $1.2 million, and outside hauls and towing of $0.5 million, offset by decreases in repairs and maintenance of $4.0 million and pass through expenses (primarily fuel) of $2.8 million.
Our calculation of Adjusted Free Cash Flow may or may not be comparable to similarly titled measures used by other entities. 50 The GAAP measure most directly comparable to Distributable Cash Flow and Adjusted Free Cash Flow is Net Cash Provided by (Used in) Operating Activities.
The GAAP measure most directly comparable to Distributable Cash Flow and Adjusted Free Cash Flow is Net Cash Provided by (Used in) Operating Activities.
Other operating income (loss), net represents gains and losses from the disposition of property, plant and equipment. 57 Interest Expense Comparative Components of Interest Expense, Net for the Years Ended December 31, 2023 and 2022 Year Ended December 31, Variance Percent Change 2023 2022 (In thousands) Credit facility $ 7,587 $ 9,654 $ (2,067) (21)% Senior notes 45,352 38,903 6,449 17% Amortization of deferred debt issuance costs 3,978 3,152 826 26% Amortization of debt discount 2,200 — 2,200 Other 1,483 1,948 (465) (24)% Finance leases 1 8 (8) (100)% Capitalized interest (310) — (310) Total interest expense, net $ 60,290 $ 53,665 $ 6,625 12% Indirect Selling, General and Administrative Expenses Year Ended December 31, Variance Percent Change 2023 2022 (In thousands) Indirect selling, general and administrative expenses $ 16,030 $ 16,914 $ (884) (5)% Indirect selling, general and administrative expenses decreased primarily due to decreases in employee-related expenses of $1.4 million, offset by a $0.9 million increase in the indirect expenses allocated from Martin Resource Management Corporation.
Other operating income (loss), net represents gains and losses from the disposition of property, plant and equipment. 58 Interest Expense Comparative Components of Interest Expense, Net for the Years Ended December 31, 2024 and 2023 Year Ended December 31, Variance Percent Change 2024 2023 (In thousands) Credit facility $ 6,332 $ 7,587 $ (1,255) (17)% Senior notes 46,000 45,352 648 1% Amortization of deferred debt issuance costs 3,085 3,978 (893) (22)% Amortization of debt discount 2,400 2,200 200 9% Other 1,042 1,483 (441) (30)% Finance leases 4 1 — (100)% Capitalized interest (1,153) (310) (843) (272)% Total interest expense, net $ 57,706 $ 60,290 $ (2,584) (4)% Indirect Selling, General and Administrative Expenses Year Ended December 31, Variance Percent Change 2024 2023 (In thousands) Indirect selling, general and administrative expenses $ 19,556 $ 16,030 $ 3,526 22% Indirect selling, general and administrative expenses increased primarily due to transaction expenses associated with the terminated Merger with Martin Resource Management Corporation of $3.7 million and increased insurance claims expense of $0.8 million, offset by a $0.5 million decrease in the indirect expenses allocated from Martin Resource Management Corporation.
Selling, general and administrative expenses decreased primarily due to the exit of the butane optimization business in the second quarter of 2023. Depreciation and amortization. Depreciation and amortization decreased due to certain assets becoming fully depreciated during the fourth quarter of 2022. Other operating income (loss), net.
Depreciation and amortization decreased due to certain assets becoming fully depreciated during the third quarter of 2023. Other operating income (loss), net.
Generally, if an event of default occurs and is not cured within the time periods specified, the trustee under the 2028 Notes Indenture or the holders of at least 25% in principal amount of the 2028 Notes may declare all the 2028 Notes to be due and payable immediately.
Generally, if an event of default occurs and is not cured within the time periods specified, the trustee under the 2028 Notes Indenture or the holders of at least 25% in principal amount of the 2028 Notes may declare all the 2028 Notes to be due and payable immediately. 63 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 revolving credit facility.
Net cash provided by (used in) financing activities. Net cash (used in) provided by financing activities for the year ended December 31, 2023 decreased $112.3 million primarily as a result of a $99.3 million decrease in net borrowings from long-term debt combined with increased debt issuance costs of $14.2 million.
Net cash provided by financing activities for the year ended December 31, 2024 increased $114.1 million primarily as a result of the 2023 period, including net pay downs of long-term debt of $88.7 million, primarily resulting from the exit of the butane optimization business, combined with decreased debt issuance costs of $14.3 million.
Cash Flows - Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 The following table details the cash flow changes between the years ended December 31, 2023 and 2022: Year Ended December 31, Variance Percent Change 2023 2022 (In thousands) Net cash provided by (used in): Operating activities $ 137,468 $ 16,148 $ 121,320 751% Investing activities (33,660) (24,644) (9,016) (37)% Financing activities (103,799) 8,489 (112,288) (1,323)% Net increase (decrease) in cash and cash equivalents $ 9 $ (7) $ 16 229% Net cash provided by operating activities.
Cash Flows - Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 The following table details the cash flow changes between the years ended December 31, 2024 and 2023: Year Ended December 31, Variance Percent Change 2024 2023 (In thousands) Net cash provided by (used in): Operating activities $ 48,351 $ 137,468 $ (89,117) (65)% Investing activities (58,601) (33,660) (24,941) (74)% Financing activities 10,251 (103,799) 114,050 110% Net increase (decrease) in cash and cash equivalents $ 1 $ 9 $ (8) (89)% Net cash provided by operating activities.
Net cash provided by operating activities for the year ended December 31, 2023 increased $121.3 million, primarily as a result of a favorable variance in changes in working capital of $114.0 million combined with an increase in operating results and non-cash items of $11.1 million. Net cash used in investing activities.
Net cash provided by operating activities for the year ended December 31, 2024 decreased $89.1 million, primarily as a result of an unfavorable variance in changes in working capital of $80.0 million, primarily resulting from the exit of the butane optimization business in May of 2023, combined with a decrease in operating results and non-cash items of $9.1 million.
We do not have any off-balance sheet financing arrangements. 59 Description of Our Indebtedness Credit Facility At December 31, 2023, we maintained a $175.0 million credit facility that matures February 8, 2027.
Description of Our Indebtedness Credit Facility At December 31, 2024, we maintained a $150.0 million credit facility that matures February 8, 2027.
Net cash used in investing activities for the year ended December 31, 2023 increased $9.0 million. An increase in cash used of $6.7 million resulted from higher payments for capital expenditures and plant turnaround costs in 2023 combined with a decrease of $2.3 million in net proceeds received from the sale of property, plant and equipment.
An increase in cash used of $13.8 million resulted from higher payments for capital expenditures and plant turnaround costs, cash used to make the initial contribution in DSM of $6.9 million, and a decrease of $4.2 million in net proceeds received from the sale of property, plant and equipment. Net cash provided by (used in) financing activities.
Service revenues increased $2.8 million. Revenue at our shore-based terminals increased $2.6 million, including $2.4 million in fuel throughput and $0.4 million in drilling fluids commission, offset by a reduction in space rent of $0.2 million.
Revenues increased $1.1 million. Revenue at our shore-based terminals increased $2.7 million, including $1.9 million in fuel throughput and $0.8 million in space rent. In addition, revenue at our specialty terminals increased $1.8 million primarily as a result of higher throughput and service revenue.
Our average cost per barrel decreased $9.63, or 10%, decreasing cost of products sold by $32.3 million. Our margins increased $1.07 per barrel, or 11%, during the period. Operating expenses . Operating expenses remained relatively consistent. Selling, general and administrative expenses .
Our average cost per barrel decreased $0.98, or 1%, decreasing cost of products sold by $2.7 million. Our margins decreased $0.39 per barrel, or 4%, during the period. Operating expenses . Operating expenses remained relatively consistent. Selling, general and administrative expenses . Selling, general and administrative expenses increased primarily due to higher employee-related costs. Depreciation and amortization.
Other operating loss, net represents gains and losses from the disposition of property, plant and equipment. 54 Transportation Segment Comparative Results of Operations for the Years Ended December 31, 2023 and 2022 Year Ended December 31, Variance Percent Change 2023 2022 (In thousands) Revenues $ 240,926 $ 239,275 $ 1,651 1% Operating expenses 184,334 176,198 8,136 5% Selling, general and administrative expenses 9,787 8,215 1,572 19% Depreciation and amortization 14,879 14,567 312 2% 31,926 40,295 (8,369) (21)% Other operating income, net 1,775 1,062 713 67% Operating income $ 33,701 $ 41,357 $ (7,656) (19)% Marine Transportation Revenues .
Other operating income (loss), net represents gains and losses from the disposition of property, plant and equipment. 55 Transportation Segment Comparative Results of Operations for the Years Ended December 31, 2024 and 2023 Year Ended December 31, Variance Percent Change 2024 2023 (In thousands) Revenues $ 239,807 $ 240,926 $ (1,119) —% Operating expenses 185,813 184,334 1,479 1% Selling, general and administrative expenses 11,496 9,787 1,709 17% Depreciation and amortization 13,027 14,879 (1,852) (12)% 29,471 31,926 (2,455) (8)% Other operating income, net 713 1,775 (1,062) (60)% Operating income $ 30,184 $ 33,701 $ (3,517) (10)% Revenues .
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.
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. The Partnership is in compliance with all debt covenants as of December 31, 2024 and expects to be in compliance for the next twelve months.
This region is a major hub for petroleum refining, natural gas gathering and processing, and support services for the exploration and production industry. Significant Recent Developments Exit from Butane Optimization Business. In the second quarter of 2023, we completed the previously announced exit of our butane optimization business at the conclusion of the butane selling season.
This region is a major hub for petroleum refining, natural gas gathering and processing, and support services for the exploration and production industry. Significant Recent Developments Termination of Merger Agreement.
The Partnership is in compliance with all debt covenants as of December 31, 2023 and expects to be in compliance for the next twelve months. 62 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.
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.
Operating Revenues Revenues Intersegment Eliminations Operating Revenues after Eliminations Operating Income (loss) Operating Income Intersegment Eliminations Operating Income (loss) after Eliminations (In thousands) Year Ended December 31, 2023: Terminalling and storage $ 95,459 $ (8,945) $ 86,514 $ 14,532 $ (8,856) $ 5,676 Specialty products 346,863 (86) 346,777 17,109 13,226 30,335 Sulfur services 140,995 — 140,995 17,412 13,024 30,436 Transportation 240,926 (17,249) 223,677 33,701 (17,394) 16,307 Indirect selling, general and administrative — — — (16,030) — (16,030) Total $ 824,243 $ (26,280) $ 797,963 $ 66,724 $ — $ 66,724 Year Ended December 31, 2022: Terminalling and storage $ 92,612 $ (12,419) $ 80,193 $ 1,189 $ (12,291) $ (11,102) Specialty products 540,636 (123) 540,513 1,445 22,697 24,142 Sulfur services 179,164 — 179,164 24,186 9,960 34,146 Transportation 239,275 (20,267) 219,008 41,357 (20,366) 20,991 Indirect selling, general and administrative — — — (16,914) — (16,914) Total $ 1,051,687 $ (32,809) $ 1,018,878 $ 51,263 $ — $ 51,263 53 Terminalling and Storage Segment Comparative Results of Operations for the Years Ended December 31, 2023 and 2022 Year Ended December 31, Variance Percent Change 2023 2022 (In thousands) Revenues $ 95,459 $ 92,612 $ 2,847 3% Cost of products sold 75 19 56 295% Operating expenses 57,393 63,177 (5,784) (9)% Selling, general and administrative expenses 2,070 1,967 103 5% Depreciation and amortization 21,030 26,094 (5,064) (19)% 14,891 1,355 13,536 999% Other operating loss, net (359) (166) (193) (116)% Operating income $ 14,532 $ 1,189 $ 13,343 1,122% Shore-based throughput volumes (gallons) 162,363 85,017 77,346 91% Smackover refinery throughput volumes (guaranteed minimum BBL per day) 6,500 6,500 — —% Services revenues.
Operating Revenues Revenues Intersegment Eliminations Operating Revenues after Eliminations Operating Income (loss) Operating Income Intersegment Eliminations Operating Income (loss) after Eliminations (In thousands) Year Ended December 31, 2024: Terminalling and storage $ 96,555 $ (7,488) $ 89,067 $ 11,098 $ (7,213) $ 3,885 Specialty products 264,945 (95) 264,850 17,038 8,736 25,774 Sulfur services 129,772 (1) 129,771 18,531 14,491 33,022 Transportation 239,807 (15,873) 223,934 30,184 (16,014) 14,170 Indirect selling, general and administrative — — — (19,556) — (19,556) Total $ 731,079 $ (23,457) $ 707,622 $ 57,295 $ — $ 57,295 Year Ended December 31, 2023: Terminalling and storage $ 95,459 $ (8,945) $ 86,514 $ 14,532 $ (8,856) $ 5,676 Specialty products 346,863 (86) 346,777 17,109 13,226 30,335 Sulfur services 140,995 — 140,995 17,412 13,024 30,436 Transportation 240,926 (17,249) 223,677 33,701 (17,394) 16,307 Indirect selling, general and administrative — — — (16,030) — (16,030) Total $ 824,243 $ (26,280) $ 797,963 $ 66,724 $ — $ 66,724 54 Terminalling and Storage Segment Comparative Results of Operations for the Years Ended December 31, 2024 and 2023 Year Ended December 31, Variance Percent Change 2024 2023 (In thousands) Revenues $ 96,555 $ 95,459 $ 1,096 1% Cost of products sold 72 75 (3) (4)% Operating expenses 60,409 57,393 3,016 5% Selling, general and administrative expenses 3,324 2,070 1,254 61% Depreciation and amortization 22,757 21,030 1,727 8% 9,993 14,891 (4,898) (33)% Other operating income (loss), net 1,105 (359) 1,464 408% Operating income $ 11,098 $ 14,532 $ (3,434) (24)% Shore-based throughput volumes (gallons) 170,407 162,363 8,044 5% Smackover refinery throughput volumes (guaranteed minimum BBL per day) 6,500 6,500 — —% Revenues.
Other operating income, net represents gains from the disposition of property, plant and equipment. 56 Specialty Products Segment Comparative Results of Operations for the Years Ended December 31, 2023 and 2022 Year Ended December 31, Variance Percent Change 2023 2022 (In thousands) Products revenues $ 346,863 $ 540,636 (193,773) (36)% Cost of products sold 319,200 526,043 (206,843) (39)% Operating expenses 78 118 (40) (34)% Selling, general and administrative expenses 7,120 8,728 (1,608) (18)% Depreciation and amortization 3,296 4,520 (1,224) (27)% 17,169 1,227 15,942 1,299% Other operating income (loss), net (60) 218 (278) (128)% Operating income $ 17,109 $ 1,445 $ 15,664 1,084% NGL sales volumes (Bbls) 3,681 5,791 (2,110) (36) % Other specialty products volumes (Bbls) 367 391 (24) (6) % Total specialty products volumes (Bbls) 4,048 6,182 (2,134) (35) % Products revenues.
Other operating income (loss), net represents gains and losses from the disposition of property, plant and equipment. 57 Specialty Products Segment Comparative Results of Operations for the Years Ended December 31, 2024 and 2023 Year Ended December 31, Variance Percent Change 2024 2023 (In thousands) Products revenues $ 264,945 $ 346,863 (81,918) (24)% Cost of products sold 237,403 319,200 (81,797) (26)% Operating expenses 102 78 24 31% Selling, general and administrative expenses 7,232 7,120 112 2% Depreciation and amortization 3,234 3,296 (62) (2)% 16,974 17,169 (195) (1)% Other operating income (loss), net 64 (60) 124 207% Operating income $ 17,038 $ 17,109 $ (71) —% NGL sales volumes (Bbls) 2,307 3,681 (1,374) (37) % Other specialty products volumes (Bbls) 346 367 (21) (6) % Total specialty products volumes (Bbls) 2,653 4,048 (1,395) (34) % Products revenues.
Other operating income, net represents gains from the disposition of property, plant and equipment. 55 Sulfur Services Segment Comparative Results of Operations for the Years Ended December 31, 2023 and 2022 Year Ended December 31, Variance Percent Change 2023 2022 (In thousands) Revenues: Services $ 13,430 $ 12,337 $ 1,093 9% Products 127,565 166,827 (39,262) (24)% Total revenues 140,995 179,164 (38,169) (21)% Cost of products sold 93,842 127,018 (33,176) (26)% Operating expenses 13,143 15,335 (2,192) (14)% Selling, general and administrative expenses 5,925 6,081 (156) (3)% Depreciation and amortization 10,690 11,099 (409) (4)% 17,395 19,631 (2,236) (11)% Other operating income, net 17 4,555 (4,538) (100)% Operating income $ 17,412 $ 24,186 $ (6,774) (28)% Sulfur (long tons) 478.0 452.0 26.0 6% Fertilizer (long tons) 254.0 211.0 43.0 20% Sulfur services volumes (long tons) 732.0 663.0 69.0 10% Services revenues.
Other operating income, net represents gains from the disposition of property, plant and equipment. 56 Sulfur Services Segment Comparative Results of Operations for the Years Ended December 31, 2024 and 2023 Year Ended December 31, Variance Percent Change 2024 2023 (In thousands) Revenues: Services $ 14,572 $ 13,430 $ 1,142 9% Products 115,200 127,565 (12,365) (10)% Total revenues 129,772 140,995 (11,223) (8)% Cost of products sold 79,984 93,842 (13,858) (15)% Operating expenses 12,178 13,143 (965) (7)% Selling, general and administrative expenses 7,012 5,925 1,087 18% Depreciation and amortization 11,769 10,690 1,079 10% 18,829 17,395 1,434 8% Other operating income (loss), net (298) 17 (315) (1,853)% Operating income $ 18,531 $ 17,412 $ 1,119 6% Sulfur (long tons) 407.0 478.0 (71.0) (15)% Fertilizer (long tons) 223.0 254.0 (31.0) (12)% Sulfur services volumes (long tons) 630.0 732.0 (102.0) (14)% Services revenues.
Selling, general and administrative expenses. Selling, general and administrative expenses remained relatively consistent. Depreciation and amortization. Depreciation and amortization decreased as a result of the sale of Stockton assets in the third quarter of 2022, offset by recent capital expenditures. Other operating income, net.
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 recent disposals, offset by capital expenditures. Other operating income, net.
Cost of products sold. A 33% decrease in product cost impacted cost of products sold by $42.0 million, resulting from reduced commodity prices. A 10% increase in sales volumes resulted in an offsetting increase in cost of products sold of $8.8 million. Margin per ton decreased $13.97, or 23%. Operating expenses.
Products revenues increased an offsetting $6.3 million due to a 5% rise in average sales prices. Cost of products sold. A 14% decrease in sales volumes resulted in a decrease in cost of products sold of $12.9 million. A 1% decrease in product cost impacted cost of products sold by $0.9 million, resulting from reduced commodity prices.
Inland revenues increased $7.4 million primarily related to transportation rates. Revenue was also impacted by a decrease in pass-through revenue (primarily fuel) of $2.9 million. Land Transportation Revenues. Freight revenue increased primarily due to a 25% increase in load count combined with a 1% increase in total miles, which resulted in a $7.0 million increase.
Pass-through revenue (primarily fuel) decreased $1.1 million. In our land transportation division, freight revenue increased $4.2 million, primarily due to a 3% increase in total miles. Ancillary revenue (primarily fuel) decreased $6.9 million. Operating expenses .
The applicable margin for Adjusted Term SOFR borrowings at February 21, 2024 is 3.25%.
The applicable margin for Adjusted Term SOFR borrowings at February 24, 2025 is 3.25%. Effective February 13, 2025, we entered into the credit facility amendment to modify the financial covenants in our credit facility.
Services revenues increased as a result of a contractually prescribed, index-based fee adjustment. Products revenues. Products revenues decreased $51.3 million as a result of a 31% drop in average sulfur services sales prices. Products revenues increased an offsetting $12.0 million due to a 10% rise in sales volumes, primarily related to a 20% increase in fertilizer volumes.
Services revenues increased $0.7 million associated with reservation 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 decreased $18.7 million as a result of a 14% drop in sales volumes, primarily related to a 15% decrease in sulfur volumes.
Operating expenses decreased due to a decrease in outside towing of $1.1 million, marine fuel expense of $0.7 million, insurance premiums and claims of $0.3 million, contract labor of $0.3 million, and repairs and maintenance of marine assets of $0.3 million. Offsetting these decreases, employment expenses increased $0.4 million combined with a $0.1 million increase in utilities expense.
Margin per ton increased $9.83, or 21%. Operating expenses. Operating expenses decreased due to reductions of $0.7 million in marine pass-through expense, $0.4 million in utilities expenses, $0.2 million in outside services, $0.1 million in contract labor, and $0.1 million in marine operating expense.
We, through our affiliate MTI, will also provide land transportation services of the ELSA produced by DSM. We expect to fund approximately $25.5 million in aggregate capital expenditures in connection with this joint venture.
We, through our affiliate MTI, will also provide land transportation services for the ELSA produced by DSM. On April 1, 2024, we contributed $6.5 million to DSM, which represents the cash contribution required pursuant to DSM's limited liability agreement for our 10% non-controlling interest. Also, in conjunction with the formation of DSM, we contributed approximately 22 acres of land.
Removed
Going forward, with respect to butane, we will operate as a fee-based butane logistics business, primarily utilizing our north Louisiana underground storage assets, which have both truck and rail capability. This logistics business will also utilize our truck transportation assets for fee-based product movements.
Added
On October 3, 2024, the Partnership, Martin Resource Management Corporation, MMGP, and Merger Sub, entered into the Merger Agreement pursuant to which Merger Sub agreed to merge with and into the Partnership, with the Partnership surviving as a wholly owned subsidiary of Parent (the “Merger”).

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeMarket risk is estimated as the potential decrease in fair value of our long-term debt resulting from a hypothetical increase of a 100 basis point increase in interest rates. Such an increase in interest rates at December 31, 2023 would result in a $12.2 million decrease in the fair value of our 2028 Notes. 64
Biggest changeMarket risk is estimated as the potential decrease in fair value of our long-term debt resulting from a hypothetical increase of a 100 basis point increase in interest rates. Such an increase in interest rates at December 31, 2024 would result in a $9.1 million decrease in the fair value of our 2028 Notes. 66
At December 31, 2023, we had no outstanding hedge positions. See Note 11, "Derivative Instruments and Hedging Activities," in Item 8 for further information on our outstanding derivatives. All outstanding commodity derivative positions were closed prior to December 31, 2023. Interest Rate Risk.
At December 31, 2024, we had no outstanding hedge positions. See Note 11, "Derivative Instruments and Hedging Activities," in Item 8 for further information on our outstanding derivatives. All outstanding commodity derivative positions were closed prior to December 31, 2024. Interest Rate Risk.
Based on the amount of unhedged floating rate debt owed by us on December 31, 2023, the impact of a 100 basis point increase in interest rates on this amount of debt would result in an increase in interest expense and a corresponding decrease in net income of approximately $0.4 million annually.
Based on the amount of unhedged floating rate debt owed by us on December 31, 2024, the impact of a 100 basis point increase in interest rates on this amount of debt would result in an increase in interest expense and a corresponding decrease in net income of approximately $0.5 million annually.
We are not exposed to changes in interest rates with respect to our 2028 Notes as these obligations are at a fixed rate. Based on the quoted prices for identical liabilities in markets that are not active at December 31, 2023, the estimated fair value of the 2028 Notes was $414.5 million.
We are not exposed to changes in interest rates with respect to our 2028 Notes as these obligations are at a fixed rate. Based on the quoted prices for identical liabilities in markets that are not active at December 31, 2024, the estimated fair value of the 2028 Notes was $436.2 million.
We are exposed to changes in interest rates as a result of our credit facility, which had a weighted-average interest rate of 8.80% as of December 31, 2023.
We are exposed to changes in interest rates as a result of our credit facility, which had a weighted-average interest rate of 8.18% as of December 31, 2024.

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