MARTIN MIDSTREAM PARTNERS L.P. - Quarter Report: 2022 March (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒						QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022


☐						TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File Number

000-50056

MARTIN MIDSTREAM PARTNERS L.P.

(Exact name of registrant as specified in its charter)


Delaware						05-0527861
(State or other jurisdiction of incorporation or organization)						(IRS Employer Identification No.)

4200 Stone Road

Kilgore, Texas 75662

(Address of principal executive offices, zip code)

Registrant’s telephone number, including area code: (903) 983-6200

Securities registered pursuant to Section 12(b) of the Act


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Units representing limited partnership interests	MMLP	The NASDAQ Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


Yes			☒			No			☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).


Yes			☒			No			☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of "large accelerated filer," "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Yes			☐			No			☒

The number of the registrant’s Common Units outstanding at April 26, 2022, was 38,850,750.

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Statements included in this quarterly report that are not historical facts (including any statements concerning plans and objectives of management for future operations or economic performance, or assumptions or forecasts related thereto), including, without limitation, the information set forth in Management’s Discussion and Analysis of Financial Condition and Results of Operations, are forward-looking statements. These statements can be identified by the use of forward-looking terminology including "forecast," "may," "believe," "will," "expect," "anticipate," "estimate," "continue," or other similar words. These statements discuss future expectations, contain projections of results of operations or of financial condition or state other "forward-looking" information. We and our representatives may from time to time make other oral or written statements that are also forward-looking statements.

These forward-looking statements are made based upon management’s current plans, expectations, estimates, assumptions and beliefs concerning future events impacting us and therefore involve a number of risks and uncertainties. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements.

Because these forward-looking statements involve risks and uncertainties, actual results could differ materially from those expressed or implied by these forward-looking statements for a number of important reasons, including those discussed under "Item 1A. Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission (the "SEC") on March 1, 2022, and as may be updated and supplemented from time to time in our future Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.


			Page

PART I – FINANCIAL INFORMATION			4

Item 1. Financial Statements			4
Consolidated and Condensed Balance Sheets as of March 31 , 202 2 (unaudited) and December 31, 202 1 (audited)			4
Consolidated and Condensed Statements of Operations for the Three Months Ended March 31 , 202 2 and 202 1 (unaudited)			5
Consolidated and Condensed Statements of Comprehensive Income (Loss) for the Three M onths Ended March 31 , 202 2 and 202 1 (unaudited)			7
Consolidated and Condensed Statements of Capital (Deficit) for the Three Months Ended March 31 , 202 2 and 202 1 (unaudited)			8
Consolidated and Condensed Statements of Cash Flows for the Three Months Ended March 31 , 202 2 and 202 1 (unaudited)			9
Notes to Consolidated and Condensed Financial Statements (unaudited)			10

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			32

Item 3. Quantitative and Qualitative Disclosures About Market Risk			49

Item 4. Controls and Procedures			50

PART II. OTHER INFORMATION			51

Item 1. Legal Proceedings			51

Item 1A. Risk Factors			51

Item 6. Exhibits			51

PART I – FINANCIAL INFORMATION


Item 1.			Financial Statements

MARTIN MIDSTREAM PARTNERS L.P.

CONSOLIDATED AND CONDENSED BALANCE SHEETS

(Dollars in thousands)


	March 31, 2022		December 31, 2021
	(Unaudited)		(Audited)
Assets
Cash	$	312	$	52
Accounts and other receivables, less allowance for doubtful accounts of $272 and $311, respectively	84,063		84,199

Inventories	54,278		62,120
Due from affiliates	20,925		14,409
Fair value of derivatives	175		—
Other current assets	10,403		12,908

Total current assets	170,156		173,688

Property, plant and equipment, at cost	903,095		898,770
Accumulated depreciation	(562,485)		(553,300)
Property, plant and equipment, net	340,610		345,470

Goodwill	16,823		16,823
Right-of-use assets	25,238		21,861
Deferred income taxes, net	18,900		19,821
Other assets, net	2,381		2,198
Total assets	$	574,108	$	579,861

Liabilities and Partners’ Capital (Deficit)
Current installments of long-term debt and finance lease obligations	$	226	$	280
Trade and other accounts payable	77,276		70,342
Product exchange payables	685		1,406
Due to affiliates	3,400		1,824
Income taxes payable	925		385

Other accrued liabilities	18,719		29,850
Total current liabilities	101,231		104,087

Long-term debt, net	483,151		498,871
Finance lease obligations	3		9
Operating lease liabilities	18,841		15,704
Other long-term obligations	8,861		9,227
Total liabilities	612,087		627,898

Commitments and contingencies
Partners’ capital (deficit)	(37,539)		(48,853)
Accumulated other comprehensive income (loss)	(440)		816
Total partners’ capital (deficit)	(37,979)		(48,037)
Total liabilities and partners' capital (deficit)	$	574,108	$	579,861

See accompanying notes to consolidated and condensed financial statements.

MARTIN MIDSTREAM PARTNERS L.P.

CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars and units in thousands, except per unit amounts)


	Three Months Ended
	March 31,
		2022		2021
Revenues:
Terminalling and storage *		$	19,413	$	18,378
Transportation *		46,710		29,815
Sulfur services		3,084		2,950
Product sales: *
Natural gas liquids		120,563		98,085
Sulfur services		56,039		31,885
Terminalling and storage		33,392		19,861
		209,994		149,831
Total revenues		279,201		200,974

Costs and expenses:
Cost of products sold: (excluding depreciation and amortization)
Natural gas liquids *		107,098		79,135
Sulfur services *		37,785		21,214
Terminalling and storage *		26,699		14,502
		171,582		114,851
Expenses:
Operating expenses *		56,495		44,634
Selling, general and administrative *		11,203		10,609


Depreciation and amortization		14,486		14,434
Total costs and expenses		253,766		184,528

Other operating income (loss), net		14		(760)

Operating income		25,449		15,686

Other income (expense):
Interest expense, net		(12,429)		(12,953)



Other, net		(1)		—
Total other expense		(12,430)		(12,953)

Net income before taxes		13,019		2,733
Income tax expense		(1,541)		(222)


Net income		11,478		2,511
Less general partner's interest in net income		(229)		(50)

Less income allocable to unvested restricted units		(30)		(10)
Limited partners' interest in net income		$	11,219	$	2,451

Net income per unit attributable to limited partners - basic		$	0.29	$	0.06
Net income per unit attributable to limited partners - diluted		$	0.29	$	0.06
Weighted average limited partner units - basic		38,722,246		38,692,609
Weighted average limited partner units - diluted		38,738,843		38,705,641

See accompanying notes to consolidated and condensed financial statements.

*Related Party Transactions Shown Below

MARTIN MIDSTREAM PARTNERS L.P.

CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars and units in thousands, except per unit amounts)

*Related Party Transactions Included Above


	Three Months Ended
	March 31,
		2022		2021
Revenues:*
Terminalling and storage		$	16,204	$	15,306
Transportation		6,288		4,010

Product Sales		321		114
Costs and expenses:*
Cost of products sold: (excluding depreciation and amortization)

Sulfur services		2,676		2,535
Terminalling and storage		9,651		4,568
Expenses:
Operating expenses		21,380		18,368
Selling, general and administrative		8,808		8,680

See accompanying notes to consolidated and condensed financial statements.

MARTIN MIDSTREAM PARTNERS L.P.

CONSOLIDATED AND CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(Dollars and units in thousands, except per unit amounts)


	Three Months Ended
	March 31,
		2022		2021

Net income		$	11,478	$	2,511
Changes in fair values of commodity cash flow hedges		(440)		—

Comprehensive income		$	11,038	$	2,511

See accompanying notes to consolidated and condensed financial statements.

MARTIN MIDSTREAM PARTNERS L.P.

CONSOLIDATED AND CONDENSED STATEMENTS OF CAPITAL (DEFICIT)

(Unaudited)

(Dollars in thousands)


		Partners’ Capital (Deficit)
		Common Limited				General Partner Amount		Accumulated Other Comprehensive Income (Loss)
	Units		Amount							Total
Balances - January 1, 2021		38,851,174		$	(48,776)	$	1,905	$	—		$	(46,871)
Net income		—		2,461		50		—			2,511

Issuance of restricted units		42,168		—		—		—			—
Forfeiture of restricted units		(83,436)		—		—		—			—

Cash distributions		—		(193)		(4)		—			(197)
Unit-based compensation		—		240		—		—			240
Purchase of treasury units		(7,156)		(17)		—		—			(17)


Balances - March 31, 2021		38,802,750		$	(46,285)	$	1,951	$	—		$	(44,334)

Balances - January 1, 2022		38,802,750		$	(50,741)	$	1,888	$	816		$	(48,037)
Net income		—		11,249		229		—			11,478

Issuance of restricted units		34,200		—		—		—			—


Cash distributions		—		(194)		(4)		—			(198)
Unit-based compensation		—		34		—		—			34
Gain reclassified from AOCI into income on commodity cash flow hedges		—		—		—		(816)			(816)
Loss recognized in AOCI on commodity cash flow hedges		—		—		—		(440)			(440)



Balances - March 31, 2022		38,836,950		$	(39,652)	$	2,113	$	(440)		$	(37,979)

See accompanying notes to consolidated and condensed financial statements.

MARTIN MIDSTREAM PARTNERS L.P.

CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)


	Three Months Ended
	March 31,
	2022		2021
Cash flows from operating activities:
Net income	$	11,478	$	2,511
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	14,486		14,434
Amortization of deferred debt issuance costs	783		755


Deferred income tax expense	921		75
(Gain) loss on sale of property, plant and equipment, net	(14)		760





Derivative (income) loss	(816)		1,436
Net cash paid for commodity derivatives	(615)		(1,655)
Non cash unit-based compensation	34		240
Change in current assets and liabilities, excluding effects of acquisitions and dispositions:
Accounts and other receivables	136		(12,484)

Inventories	7,842		15,070
Due from affiliates	(6,516)		(7,406)
Other current assets	2,434		633
Trade and other accounts payable	8,650		1,984
Product exchange payables	(721)		(136)
Due to affiliates	1,576		779
Income taxes payable	540		140
Other accrued liabilities	(11,002)		(13,370)
Change in other non-current assets and liabilities	(821)		88
Net cash provided by operating activities	28,375		3,854



Cash flows from investing activities:
Payments for property, plant and equipment	(10,216)		(2,514)

Payments for plant turnaround costs	(1,435)		(1,674)

Proceeds from sale of property, plant and equipment	297		3


Net cash used in investing activities	(11,354)		(4,185)

Cash flows from financing activities:
Payments of long-term debt	(120,000)		(87,790)
Payments under finance lease obligations	(59)		(2,431)
Proceeds from long-term debt	103,500		87,000


Purchase of treasury units	—		(17)

Payment of debt issuance costs	(4)		(80)

Cash distributions paid	(198)		(197)
Net cash used in financing activities	(16,761)		(3,515)

Net increase (decrease) in cash	260		(3,846)
Cash at beginning of period	52		4,958
Cash at end of period	$	312	$	1,112
Non-cash additions to property, plant and equipment	$	1,514	$	2,855

See accompanying notes to consolidated and condensed financial statements.

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

March 31, 2022

(Unaudited)

NOTE 1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Martin Midstream Partners L.P. (the "Partnership") is a publicly traded limited partnership with a diverse set of operations focused primarily in the Gulf Coast region of the United States ("U.S."). Its four primary business lines include: terminalling, processing, storage and packaging services for petroleum products and by-products including the refining of naphthenic crude oil; land and marine transportation services for petroleum products and by-products, chemicals, and specialty products; sulfur and sulfur-based products processing, manufacturing, marketing and distribution; and NGL marketing, distribution, and transportation services.

The Partnership’s unaudited consolidated and condensed financial statements have been prepared in accordance with the requirements of Form 10-Q and U.S. Generally Accepted Accounting Principles ("U.S. GAAP") for interim financial reporting. Accordingly, these financial statements have been condensed and do not include all of the information and footnotes required by U.S. GAAP for annual audited financial statements of the type contained in the Partnership’s annual reports on Form 10-K. In the opinion of the management of the Partnership’s general partner, all adjustments and elimination of significant intercompany balances necessary for a fair presentation of the Partnership’s financial position, results of operations, and cash flows for the periods shown have been made. All such adjustments are of a normal recurring nature. Results for such interim periods are not necessarily indicative of the results of operations for the full year. These financial statements should be read in conjunction with the Partnership’s audited consolidated financial statements and notes thereto included in the Partnership’s annual report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 1, 2022.

Management has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated and condensed financial statements in conformity with U.S. GAAP. Actual results could differ from those estimates.

NOTE 2. NEW ACCOUNTING PRONOUNCEMENTS

On January 1, 2021, the Partnership adopted Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2019-12, Income Taxes (Accounting Standards Codification ("ASC") Topic 740): Simplifying the Accounting for Income Taxes, which removes certain exceptions to general principles in ASC 740 and clarifies and amends existing guidance within U.S. GAAP. Adoption of the new standard did not have a material impact on the Partnership’s consolidated financial statements.

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

March 31, 2022

(Unaudited)

NOTE 3. REVENUE

The following table disaggregates our revenue by major source:


	Three Months Ended March 31,
		2022		2021
Terminalling and storage segment
Lubricant product sales		$	33,392	$	19,861
Throughput and storage		19,413		18,378
		$	52,805	$	38,239
Natural gas liquids segment
Natural gas liquids product sales		$	120,563	$	98,085
		$	120,563	$	98,085
Sulfur services segment
Sulfur product sales		$	10,069	$	7,068
Fertilizer product sales		45,970		24,817
Sulfur services		3,084		2,950
		$	59,123	$	34,835
Transportation segment
Land transportation		$	35,505	$	22,956
Inland transportation		9,419		6,724
Offshore transportation		1,786		135
		$	46,710	$	29,815

Revenue is measured based on a consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties where the Partnership is acting as an agent. The Partnership recognizes revenue when the Partnership satisfies a performance obligation, which typically occurs when the Partnership transfers control over a product to a customer or as the Partnership delivers a service.

The following is a description of the principal activities - separated by reportable segments - from which the Partnership generates revenue.

Terminalling and Storage Segment

Revenue is recognized for storage contracts based on the contracted monthly tank fixed fee. For throughput contracts, revenue is recognized based on the volume moved through the Partnership’s terminals at the contracted rate. For the Partnership’s tolling agreement, revenue is recognized based on the contracted monthly reservation fee and throughput volumes moved through the facility. When lubricants and drilling fluids are sold by truck or rail, revenue is recognized when title is transferred, which is either upon delivering product to the customer or when the product leaves the Partnership's facility, depending on the specific terms of the contract. Delivery of product is invoiced as the transaction occurs and is generally paid within a month. Throughput and storage revenue in the table above includes non-cancelable revenue arrangements that are under the scope of ASC 842, whereby the Partnership has committed certain Terminalling and Storage assets in exchange for a minimum fee.

Natural Gas Liquids Segment

Natural Gas Liquids ("NGL") revenue is recognized when product is delivered by truck, rail, or pipeline to the Partnership's NGL customers. Revenue is recognized on title transfer of the product to the customer. Delivery of product is invoiced as the transaction occurs and is generally paid within a month.

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

March 31, 2022

(Unaudited)

Sulfur Services Segment

Revenue from sulfur and fertilizer product sales is recognized when the customer takes title to the product. Delivery of product is invoiced as the transaction occurs and is generally paid within a month. Revenue from sulfur services is recognized as services are performed during each monthly period. The performance of the service is invoiced as the transaction occurs and is generally paid within a month.

Transportation Segment

Revenue related to land transportation is recognized for line hauls based on a mileage rate. For contracted trips, revenue is recognized upon completion of the particular trip. The performance of the service is invoiced as the transaction occurs and is generally paid within a month.

Revenue related to marine transportation is recognized for time charters based on a per day rate. For contracted trips, revenue is recognized upon completion of the particular trip. The performance of the service is invoiced as the transaction occurs and is generally paid within a month.

The table below includes estimated minimum revenue expected to be recognized in the future related to performance obligations that are unsatisfied at the end of the reporting period. The Partnership applies the practical expedient in ASC 606-10-50-14(a) and does not disclose information about remaining performance obligations that have original expected durations of one year or less.


	2022		2023		2024		2025		2026		Thereafter		Total
Terminalling and storage
Throughput and storage	$	32,192	$	42,247	$	43,571	$	44,878	$	46,164	$	252,476	$	461,528
Natural Gas Services
Natural Gas Liquids	4,440		5,391		5,405		5,391		3,131		—		23,758
Sulfur services
Sulfur product sales	13,278		16,953		14,493		2,156		1,181		295		48,356
Total	$	49,910	$	64,591	$	63,469	$	52,425	$	50,476	$	252,771	$	533,642

NOTE 4. INVENTORIES

Components of inventories at March 31, 2022 and December 31, 2021 were as follows:


	March 31, 2022		December 31, 2021
Natural gas liquids	$	11,588	$	20,034
Sulfur	892		612
Fertilizer	14,634		13,005
Lubricants	22,506		23,876
Other	4,658		4,593
	$	54,278	$	62,120

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

March 31, 2022

(Unaudited)

NOTE 5. DEBT

At March 31, 2022 and December 31, 2021, long-term debt consisted of the following:


	March 31, 2022		December 31, 2021
$275,000 Credit facility at variable interest rate (4.50%1 weighted average at March 31, 2022), due August 2023 secured by substantially all of the Partnership’s assets, including, without limitation, inventory, accounts receivable, vessels, equipment, fixed assets and the interests in the Partnership’s operating subsidiaries, net of unamortized debt issuance costs of $2,224 and $2,613, respectively 2	$	140,776	$	156,887
$53,750 Senior notes due February 2024, 10.0% interest, net of unamortized debt issuance costs of $2,146 and $2,433, respectively, secured 2,3	51,604		51,317
$291,970 Senior notes due February 2025, 11.5% interest, net of unamortized debt issuance costs of $1,199 and $1,303, respectively, secured 2,3,4	290,771		290,667
Total	483,151		498,871
Less: current portion	—		—
Total long-term debt, net of current portion	$	483,151	$	498,871

Current installments of finance lease obligations	$	226	$	280
Finance lease obligations	3		9
Total finance lease obligations	$	229	$	289

1 Interest rate fluctuates based on LIBOR (set on the date of each advance) or the base prime rate plus an applicable margin. The margin is set every three months. All amounts outstanding at December 31, 2021 and March 31, 2022 were at LIBOR plus an applicable margin with LIBOR having a floor of 1.00% per annum. The applicable margin for revolving loans that are LIBOR loans currently ranges from 2.75% to 4.00%, and the applicable margin for revolving loans that are base prime rate loans currently ranges from 1.75% to 3.00%. The applicable margin for LIBOR borrowings at March 31, 2022 is 3.50%. The applicable margin for LIBOR borrowings effective April 20, 2022 is 3.25%. The credit facility contains various covenants that limit the Partnership’s ability to make distributions; make certain investments and acquisitions; enter into certain agreements; incur indebtedness; sell assets; and make certain amendments to the Partnership's omnibus agreement with Martin Resource Management Corporation (the "Omnibus Agreement"). The credit facility was amended on July 16, 2021 to, among other things, reduce the commitments thereunder from $300,000 to $275,000.

2 The Partnership was in compliance with all debt covenants as of March 31, 2022 and December 31, 2021, respectively.

3 The indentures for each of the outstanding series of senior notes restrict the Partnership’s ability to sell assets; pay distributions or repurchase units or redeem or repurchase subordinated debt; make investments; incur or guarantee additional indebtedness or issue preferred units; and consolidate, merge or transfer all or substantially all of its assets.

4 On April 14, 2022, the Partnership completed the payment of an aggregate principal amount of approximately $589, or approximately 0.20%, of its 11.50% Senior Secured Second Lien Notes due 2025 (the “2025 Notes”), pursuant to its cash tender offer (the “Excess Cash Flow Offer”) to purchase up to $9,305 aggregate principal amount of the 2025 Notes. See “Note 17 – Subsequent Events” for more information on the Excess Cash Flow Offer.

The Partnership paid cash interest in the amount of $21,851 and $23,347 for the three months ended March 31, 2022 and 2021, respectively. There was no capitalized interest for the three months ended March 31, 2022 and 2021, respectively.

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

March 31, 2022

(Unaudited)

NOTE 6. LEASES

The Partnership has numerous operating leases primarily for terminal facilities and transportation and other equipment. The leases generally provide that all expenses related to the equipment are to be paid by the lessee.

Operating lease Right-of-Use assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. Because most of the Partnership's leases do not provide an implicit rate of return, the Partnership uses its imputed collateralized rate based on the information available at commencement date in determining the present value of lease payments. The estimated rate is based on a risk-free rate plus a risk-adjusted margin.

Our leases have remaining lease terms of 1 year to 14 years, some of which include options to extend the leases for up to 5 years, and some of which include options to terminate the leases within 1 year. The Partnership includes extension periods and excludes termination periods from its lease term if, at commencement, it is reasonably likely that the Partnership will exercise the option.

The components of lease expense for the three months ended March 31, 2022 and 2021 were as follows:


	Three Months Ended March 31,
	2022		2021
Operating lease cost	$	2,271	$	2,302
Finance lease cost:
Amortization of right-of-use assets	$	25	90
Interest on lease liabilities	$	4	10
Short-term lease cost	$	2,618	3,108
Variable lease cost	$	44	$	33
Total lease cost	$	4,962	$	5,543

Supplemental balance sheet information related to leases at March 31, 2022 and December 31, 2021 was as follows:


	March 31, 2022		December 31, 2021
Operating Leases
Operating lease right-of-use assets	$	25,238	$	21,861

Current portion of operating lease liabilities included in "Other accrued liabilities"	$	6,764	$	6,600
Operating lease liabilities	$	18,841	15,704
Total operating lease liabilities	$	25,605	$	22,304

Finance Leases
Property, plant and equipment, at cost	$	1,071	$	1,071
Accumulated depreciation	$	(389)	(364)
Property, plant and equipment, net	$	682	$	707

Current installments of finance lease obligations	$	226	$	280
Finance lease obligations	$	3	9
Total finance lease obligations	$	229	$	289

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

March 31, 2022

(Unaudited)

The Partnership’s future minimum lease obligations as of March 31, 2022 consist of the following:


	Operating Leases		Finance Leases
Year 1	$	7,917	$	231
Year 2	5,272		3
Year 3	4,021		—
Year 4	3,220		—
Year 5	2,349		—
Thereafter	7,607		—
Total	$	30,386	$	234
Less amounts representing interest costs	(4,781)		(5)
Total lease liability	$	25,605	$	229

The Partnership has non-cancelable revenue arrangements that are under the scope of ASC 842 whereby we have committed certain terminalling and storage assets in exchange for a minimum fee. Future minimum revenues the Partnership expects to receive under these non-cancelable arrangements as of March 31, 2022 are as follows: 2022 - $14,018; 2023 - $14,848; 2024 - $14,441; 2025 - $13,874; 2026 - $8,173; subsequent years - $30,670.

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

March 31, 2022

(Unaudited)

NOTE 7. SUPPLEMENTAL BALANCE SHEET INFORMATION

Components of "Other accrued liabilities" were as follows:


	March 31, 2022		December 31, 2021
Accrued interest	$	4,930	$	15,135
Asset retirement obligations	—		261
Property and other taxes payable	2,347		4,631
Accrued payroll	4,582		2,973
Operating lease liabilities	6,764		6,600
Other	96		250
	$	18,719	$	29,850

The schedule below summarizes the changes in our asset retirement obligations:


	March 31, 2022

Beginning asset retirement obligations	$	9,072

Additions to asset retirement obligations	—
Accretion expense	95
Liabilities settled	(1,634)
Ending asset retirement obligations	7,533
Current portion of asset retirement obligations1	—
Long-term portion of asset retirement obligations2	$	7,533

1The current portion of asset retirement obligations is included in "Other accrued liabilities" on the Partnership's Consolidated and Condensed Balance Sheets.

2The non-current portion of asset retirement obligations is included in "Other long-term obligations" on the Partnership's Consolidated and Condensed Balance Sheets.

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

March 31, 2022

(Unaudited)

NOTE 8. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Partnership’s results of operations could be materially impacted by changes in commodity prices and interest rates. In an effort to manage its exposure to these risks, the Partnership periodically enters into various derivative instruments, including commodity and interest rate hedges. At the time derivative contracts are entered into, the Partnership assesses whether the nature of the instrument qualifies for hedge accounting treatment according to the requirements of ASC 815 – Derivatives and Hedging. For those transactions designated as hedging instruments for accounting purposes, the Partnership documents all relationships between hedging instruments and hedged items, as well as our risk-management objective and strategy for undertaking the various hedge transactions. The Partnership also assesses, both at the hedge’s inception and on an ongoing basis, whether the derivatives used in hedging transactions are highly effective in offsetting changes in cash flows or fair value of hedged items. All derivatives and hedging instruments are included on the balance sheet as an asset or a liability measured at fair value. Changes in fair value for hedging instruments are recognized on the balance sheet through Accumulated Other Comprehensive Income ("AOCI"). Settlements related to effective hedging relationships will be reclassified from AOCI to earnings during the term at which the hedged transactions are reflected on the income statement.

From time to time, derivatives designated for hedge accounting may be closed prior to contract expiration. The accounting treatment of closed positions depends on whether the closure occurred due to the hedged transaction occurring early or if the hedged transaction is still expected to occur as originally forecasted. For hedged transactions that occur early, the closure results in the realized gain or loss from closure being recognized in the same period the accelerated hedged transaction affects earnings. For hedged transactions that are still expected to occur as originally forecasted, the closure results in the realized gain or loss being deferred until the hedged transaction affects earnings.

If it is determined that hedged transactions associated with cash flow hedges are no longer probable of occurring, the gain or loss associated with the instrument is recognized immediately into earnings.

From time to time, we may have derivative financial instruments for which we do not elect hedge accounting. Changes in fair value for derivatives not designated as hedges are recognized as gains and losses in the earnings of the periods in which they occur.

(a) Commodity Derivative Instruments

The Partnership from time to time has used derivatives to manage the risk of commodity price fluctuation. Commodity risk is the adverse effect on the value of a liability or future purchase that results from a change in commodity price. The Partnership has established a hedging policy and monitors and manages the commodity market risk associated with potential commodity risk exposure. In addition, the Partnership has focused on utilizing counterparties for these transactions whose financial condition is appropriate for the credit risk involved in each specific transaction. The Partnership has entered into hedging transactions as of March 31, 2022, to protect a portion of its commodity price risk exposure. These hedging arrangements are in the form of swaps for NGLs. At March 31, 2022, the Partnership had instruments totaling a gross notional quantity of 80,000 barrels settling during the period from April 30, 2022 through May 31, 2022. At December 31, 2021, the Partnership had instruments totaling a gross notional quantity of 0 barrels. These instruments settle against the applicable pricing source for each grade and location.

For information regarding gains and losses on commodity derivative instruments, see "Tabular Presentation of Gains and Losses on Derivative Instruments" below.

(b) Tabular Presentation of Gains and Losses on Derivative Instruments

The following table summarizes the fair value and classification of the Partnership’s derivative instruments in its Consolidated and Condensed Balance Sheets:

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

March 31, 2022

(Unaudited)

Derivative Assets

Derivative Liabilities

Fair Values

Balance Sheet Location

March 31, 2022

December 31, 2021

Balance Sheet Location

March 31, 2022

December 31, 2021

Derivatives designated as hedging instruments:

Current:

Commodity contracts

Fair value of derivatives

175

—

Fair value of derivatives

—

The following table summarizes the loss recognized in AOCI at March 31, 2022 and December 31, 2021, respectively, and the gain (loss) reclassified from accumulated other comprehensive loss into earnings during the three months ended March 31, 2022 and 2021, respectively, for derivative financial instruments designated as cash flow hedges:


	Amount of Gain (Loss) Recognized in AOCI				Location of Gain (Loss) Reclassified from AOCI into Income	Amount of Gain (Loss) Reclassified from AOCI into Income
	2022		2021			2022		2021
Commodity contracts	$	(440)	$	816	Cost of products sold	$	816	$	—
Total	$	(440)	$	816		$	816	$	—

The following tables summarize the loss recognized in earnings for derivative instruments not designated as hedging instruments during the three months ended March 31, 2022 and 2021, respectively:


	Location of Gain (Loss) Recognized in Income on Derivatives	Amount of Gain (Loss) Recognized in Income on Derivatives
		2022		2021
Derivatives not designated as hedging instruments:
Commodity contracts	Cost of products sold	$	—	$	(1,436)
Total effect of derivatives not designated as hedging instruments		$	—	$	(1,436)

NOTE 9. PARTNERS' CAPITAL (DEFICIT)

As of March 31, 2022, Partners’ capital consisted of 38,836,950 common limited partner units, representing a 98% partnership interest, and a 2% general partner interest. Martin Resource Management Corporation, through subsidiaries, owned 6,114,532 of the Partnership's common limited partner units representing approximately 15.7% of the Partnership's outstanding common limited partner units. Martin Midstream GP LLC ("MMGP"), the Partnership's general partner, owns the 2% general partnership interest.

The partnership agreement of the Partnership (the "Partnership Agreement") contains specific provisions for the allocation of net income and losses to each of the partners for purposes of maintaining their respective partner capital accounts.

Impact on Partners' Capital (Deficit) Related to Transactions Between Entities Under Common Control

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

March 31, 2022

(Unaudited)

Under ASC 805, assets and liabilities transferred between entities under common control are accounted for at the historical cost of those entities' ultimate parent, in a manner similar to a pooling of interests. Any difference in the amount paid by the transferee versus the historical cost of the assets transferred is recorded as an adjustment to equity (contribution or distribution) by the transferee. This is in contrast with a business combination between unrelated parties, where assets and liabilities are recorded at their fair values at the acquisition date, with any excess of amounts paid over the fair value representing goodwill. From time to time, the most recent being in 2019, the Partnership has entered into common control acquisitions from Martin Resource Management Corporation. The consideration transferred totaling $552,123 exceeds the historical cost of the net assets received. This excess of the purchase price over the historical cost of the net assets received has resulted in cumulative distributions of $289,084 reflected as reductions to Partners' capital.

Incentive Distribution Rights

MMGP holds a 2% general partner interest and, until November 23, 2021, MMGP held certain incentive distribution rights ("IDRs") in the Partnership. IDRs are a separate class of non-voting limited partner interest that may be transferred or sold by the general partner under the terms of the Partnership Agreement, and represent the right to receive an increasing percentage of cash distributions after the minimum quarterly distribution and any cumulative arrearages on common units once certain target distribution levels have been achieved. On November 23, 2021, MMGP contributed to the Partnership all of the outstanding IDRs for no consideration, whereupon the IDRs were cancelled and cease to exist (the “IDR Elimination”). Until the IDR Elimination, the Partnership was required to distribute all of its available cash from operating surplus, as previously defined in the Partnership Agreement.

The general partner was allocated no incentive distributions during the three months ended March 31, 2022 and 2021.

Distributions of Available Cash

The Partnership distributes all of its available cash (as defined in the Partnership Agreement) within 45 days after the end of each quarter to unitholders of record and to the general partner. Available cash is generally defined as all cash and cash equivalents of the Partnership on hand at the end of each quarter less the amount of cash reserves its general partner determines in its reasonable discretion is necessary or appropriate to: (i) provide for the proper conduct of the Partnership’s business; (ii) comply with applicable law, any debt instruments or other agreements; or (iii) provide funds for distributions to unitholders and the general partner for any one or more of the next four quarters, plus all cash on the date of determination of available cash for the quarter resulting from working capital borrowings made after the end of the quarter.

Net Income per Unit

The Partnership follows the provisions of the FASB ASC 260-10 related to earnings per share, which addresses the application of the two-class method in determining income per unit for master limited partnerships having multiple classes of securities that may participate in partnership distributions accounted for as equity distributions. Undistributed earnings are allocated to the general partner and limited partners utilizing the contractual terms of the Partnership Agreement. When current period distributions are in excess of earnings, the excess distributions for the period are to be allocated to the general partner and limited partners based on their respective sharing of income and losses specified in the Partnership Agreement. Additionally, as required under FASB ASC 260-10-45-61A, unvested share-based payments that entitle employees to receive non-forfeitable distributions are considered participating securities, as defined in FASB ASC 260-10-20, for earnings per unit calculations.

For purposes of computing diluted net income per unit, the Partnership uses the more dilutive of the two-class and if-converted methods. Under the if-converted method, the weighted-average number of subordinated units outstanding for the period is added to the weighted-average number of common units outstanding for purposes of computing basic net income per unit and the resulting amount is compared to the diluted net income per unit computed using the two-class method. The following is a reconciliation of net income allocated to the general partner and limited partners for purposes of calculating net income attributable to limited partners per unit:

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

March 31, 2022

(Unaudited)


	Three Months Ended March 31,
		2022		2021

Net income		$	11,478	$	2,511

Less general partner’s interest in net income:

Distributions payable on behalf of general partner interest		4		4
General partner interest in undistributed earnings		225		46
Less income allocable to unvested restricted units		30		10
Limited partners’ interest in net income		$	11,219	$	2,451

The following are the unit amounts used to compute the basic and diluted earnings per limited partner unit for the periods presented:


	Three Months Ended March 31,
		2022	2021
Basic weighted average limited partner units outstanding		38,722,246	38,692,609
Dilutive effect of restricted units issued		16,597	13,032
Total weighted average limited partner diluted units outstanding		38,738,843	38,705,641

All outstanding units were included in the computation of diluted earnings per unit and weighted based on the number of days such units were outstanding during the periods presented.

NOTE 10. UNIT BASED AWARDS - LONG-TERM INCENTIVE PLANS

The Partnership recognizes compensation cost related to unit-based awards to both employees and non-employees in its consolidated and condensed financial statements in accordance with certain provisions of ASC 718. Amounts recognized in operating expense and selling, general, and administrative expense in the consolidated and condensed financial statements with respect to these plans are as follows:


	Three Months Ended March 31,
		2022		2021
Restricted unit Awards
Employees		$	—	$	194
Non-employee directors		34		46
Phantom unit Awards
Employees		904		—
Non-employee directors		—		—
Total unit-based compensation expense		$	938	$	240

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

March 31, 2022

(Unaudited)

Long-Term Incentive Plans

The Partnership's general partner has long-term incentive plans for employees and directors of the general partner and its affiliates who perform services for the Partnership.

Phantom Unit Plan

On July 21, 2021, the board of directors of the general partner of the Partnership and the compensation committee of the general partner's board of directors (the "Compensation Committee") approved the Martin Midstream Partners L.P. 2021 Phantom Unit Plan (the “Plan”), effective as of the same date. The Plan permits the awards of phantom units and phantom unit appreciation rights (collectively, "phantom unit awards") to any employee or non-employee director of the Partnership, including its executive officers. The awards may be time-based or performance-based and will be paid, if at all, in cash.

The award of a phantom unit entitles the participant to a cash payment equal to the value of the phantom unit on the vesting date or dates, which value is the fair market value of a common unit of the Partnership (a “Unit”) on such vesting date or dates. The award of a phantom unit appreciation right entitles the recipient to a cash payment equal to the difference between the value of a phantom unit on the vesting date or dates in excess of the value assigned by the Compensation Committee to the phantom unit as of the grant date. Phantom units and phantom unit appreciation rights granted to participants do not confer upon participants any right to a Unit.

On July 21, 2021, the Compensation Committee approved forms of time-based award agreements for phantom units and phantom unit appreciation rights, both of which awards vest in full on the third anniversary of the grant date. The grant date value of a phantom unit under a phantom unit appreciation right award is equal to the average of the closing price for a Unit during the 20 trading days immediately preceding the grant date of the award.

Generally, vesting of an award is subject to a participant remaining continuously employed with the Partnership through the vesting date. However, if prior to the vesting date (i) a participant is terminated without cause (as defined in the award agreement) or terminates employment after the participant has attained both the age of 65 and ten years of employment (“retirement-eligible”), a prorated portion of the award will vest and be paid in cash no later than the 30th day following such termination date (subject to a six-month delay in payment for certain retirement-eligible participants) or (ii) there is a change in control of the Partnership (as defined in the Plan), the award will vest in full and be paid in cash no later than the 30th day following the date of the change of control; provided, that the participant has been in continuous employment through the termination or change in control date, as applicable.

On July 21, 2021, 620,000 phantom units and 1,245,000 phantom unit appreciation rights were granted to employees of the general partner and its affiliates who perform services for the Partnership.

Phantom unit awards are recorded in operating expense and selling, general and administrative expense based on the fair value of the vested portion of the awards on the balance sheet date. The fair value of these awards is updated at each balance sheet date and changes in the fair value of the vested portions of the awards are recorded as increases or decreases to compensation expense within operating expense and selling, general and administrative expense in the Consolidated and Condensed Statements of Operations. All of the Partnership's outstanding phantom unit awards at March 31, 2022 met the criteria to be treated under liability classification in accordance with ASC 718, given that these awards will settle in cash on the vesting date.

Compensation expense for the phantom awards is based on the fair value of the units as of the balance sheet date as further discussed below, and such costs are recognized ratably over the service period of the awards. As the fair value of liability awards is required to be re-measured each period end, stock compensation expense amounts recognized in future periods for these awards will vary. The estimated future cash payments of these awards are presented as liabilities within "Other current liabilities" and "Other long-term obligations" in the Consolidated and Condensed Balance Sheets. As of March 31, 2022, there was a total of $3,251 of unrecognized compensation costs related to non-vested phantom unit awards. These costs are expected to be recognized over a remaining life of 2.31 years.

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

March 31, 2022

(Unaudited)

The fair value of the phantom unit awards was estimated using a Monte Carlo valuation model as of the balance sheet date. The Monte Carlo valuation model is based on random projections of stock price paths and must be repeated numerous times to achieve a probabilistic assessment. Expected volatility was calculated based on the historical volatility of the Partnership’s common units as well as set of peer companies.

On April 20, 2022, the board of directors of the general partner of the Partnership and the Compensation Committee approved the First Amendment to the Plan, effective as of the same date, which amendment increased the total number of phantom units available for grant under the Plan from 2,000,000 units to 5,000,000 units.

Restricted Unit Plan

On May 26, 2017, the unitholders of the Partnership approved the Martin Midstream Partners L.P. 2017 Restricted Unit Plan (the "2017 LTIP"). The 2017 LTIP currently permits the grant of awards covering an aggregate of 3,000,000 common units, all of which can be awarded in the form of restricted units. The 2017 LTIP is administered by the Compensation Committee.

A restricted unit is a unit that is granted to grantees with certain vesting restrictions, which may be time-based and/or performance-based. Once these restrictions lapse, the grantee is entitled to full ownership of the unit without restrictions. The Compensation Committee may determine to make grants under the 2017 LTIP containing such terms as the Compensation Committee shall determine under the 2017 LTIP. With respect to time-based restricted units ("TBRUs"), the Compensation Committee will determine the time period over which restricted units granted to employees and directors will vest. The Compensation Committee may also award a percentage of restricted units with vesting requirements based upon the achievement of specified pre-established performance targets ("Performance Based Restricted Units" or "PBRUs"). The performance targets may include, but are not limited to, the following: revenue and income measures, cash flow measures, net income before interest expense and income tax expense ("EBIT"), net income before interest expense, income tax expense, and depreciation and amortization ("EBITDA"), distribution coverage metrics, expense measures, liquidity measures, market measures, corporate sustainability metrics, and other measures related to acquisitions, dispositions, operational objectives and succession planning objectives. PBRUs are earned only upon our achievement of an objective performance measure for the performance period. PBRUs which vest are payable in common units. Unvested units granted under the 2017 LTIP may or may not participate in cash distributions depending on the terms of each individual award agreement.

The performance conditions related to the PBRUs awarded on March 1, 2018 were not achieved and the Partnership treated these units as forfeited at expiration on March 31, 2021. As such, the Partnership did not recognize compensation expense related to these units.

The restricted units issued to directors generally vest in equal annual installments over a four-year period. Restricted units issued to employees generally vest in equal annual installments over three years of service. All of the Partnership's outstanding restricted unit awards at March 31, 2022 met the criteria to be treated under equity classification.

In February 2022, the Partnership issued 11,400 TBRUs to each of the Partnership's three independent directors under the 2017 LTIP. These restricted common units vest in equal installments of 3,800 units on January 24, 2023, 2024, 2025, and 2026.

In April 2022, the Partnership issued 13,800 TBRUs to each of the Partnership's three independent directors under the 2017 LTIP. These restricted common units vest in equal installments of 4,600 units on January 24, 2023, 2024, 2025, and 2026.

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

March 31, 2022

(Unaudited)

The restricted units are valued at their fair value at the date of grant, which is equal to the market value of common units on such date. A summary of the restricted unit activity for the three months ended March 31, 2022 is provided below:


	Number of Units		Weighted Average Grant-Date Fair Value Per Unit
Non-vested, beginning of period	114,876		$	3.65
Granted (TBRU)	34,200		$	3.11

Vested	(38,514)		$	4.76
Forfeited	—		$	—
Non-Vested, end of period	110,562		$	3.10

Aggregate intrinsic value, end of period	$	464

A summary of the restricted units’ aggregate intrinsic value (market value at vesting date) and fair value of units vested (market value at date of grant) during the three months ended March 31, 2022 and 2021 is provided below:


	Three Months Ended March 31,
		2022		2021
Aggregate intrinsic value of units vested		$	188	$	257
Fair value of units vested		92		1,418

As of March 31, 2022, there was $318 of unrecognized compensation cost related to non-vested restricted units. That cost is expected to be recognized over a weighted-average period of 2.81 years.

NOTE 11. RELATED PARTY TRANSACTIONS

As of March 31, 2022, Martin Resource Management Corporation owns 6,114,532 of the Partnership’s common units representing approximately 15.7% of the Partnership’s outstanding limited partner units. Martin Resource Management Corporation controls the Partnership's general partner by virtue of its 100% voting interest in MMGP Holdings, LLC ("Holdings"), the sole member of the Partnership's general partner. The Partnership’s general partner, MMGP, owns a 2% general partner interest in the Partnership. The Partnership’s general partner’s ability, as general partner, to manage and operate the Partnership, and Martin Resource Management Corporation’s ownership as of March 31, 2022 of approximately 15.7% of the Partnership’s outstanding limited partnership units, effectively gives Martin Resource Management Corporation the ability to veto some of the Partnership’s actions and to control the Partnership’s management.

The following is a description of the Partnership’s material related party agreements and transactions:

Omnibus Agreement

Omnibus Agreement. The Partnership and its general partner are parties to the Omnibus Agreement dated November 1, 2002, with Martin Resource Management Corporation that governs, among other things, potential competition and indemnification obligations among the parties to the agreement, related party transactions, the provision of general administration and support services by Martin Resource Management Corporation and the Partnership’s use of certain Martin Resource Management Corporation trade names and trademarks. The Omnibus Agreement was amended on November 25, 2009, to include processing crude oil into finished products including naphthenic lubricants, distillates, asphalt and other intermediate cuts. The Omnibus Agreement was amended further on October 1, 2012, to permit the Partnership to provide certain lubricant packaging products and services to Martin Resource Management Corporation.

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

March 31, 2022

(Unaudited)

Non-Competition Provisions. Martin Resource Management Corporation has agreed for so long as it controls the general partner of the Partnership, not to engage in the business of:

•providing terminalling and storage services for petroleum products and by-products including the refining, blending and packaging of finished lubricants;

•providing land and marine transportation of petroleum products, by-products, and chemicals;

•distributing NGLs; and

•manufacturing and selling sulfur-based fertilizer products and other sulfur-related products.

This restriction does not apply to:

•the ownership and/or operation on the Partnership’s behalf of any asset or group of assets owned by it or its affiliates;

•any business operated by Martin Resource Management Corporation, including the following:

◦distributing asphalt, marine fuel and other liquids;

◦providing shore-based marine services in Texas, Louisiana, Mississippi, and Alabama;

◦operating a crude oil gathering business in Stephens, Arkansas;

◦providing crude oil gathering and marketing services of base oils, asphalt, and distillate products in Smackover, Arkansas;

◦providing crude oil marketing and transportation from the well head to the end market;

◦operating an environmental consulting company;

◦supplying employees and services for the operation of the Partnership's business; and

◦operating, solely for our account, the asphalt facilities in each of Hondo, South Houston and Port Neches, Texas and Omaha, Nebraska.

•any business that Martin Resource Management Corporation acquires or constructs that has a fair market value of less than $5,000;

•any business that Martin Resource Management Corporation acquires or constructs that has a fair market value of $5,000 or more if the Partnership has been offered the opportunity to purchase the business for fair market value and the Partnership declines to do so with the concurrence of the conflicts committee of the board of directors of the general partner of the Partnership (the "Conflicts Committee"); and

•any business that Martin Resource Management Corporation acquires or constructs where a portion of such business includes a restricted business and the fair market value of the restricted business is $5,000 or more and represents less than 20% of the aggregate value of the entire business to be acquired or constructed; provided that, following completion of the acquisition or construction, the Partnership will be provided the opportunity to purchase the restricted business.

Services. Under the Omnibus Agreement, Martin Resource Management Corporation provides the Partnership with corporate staff, support services, and administrative services necessary to operate the Partnership’s business. The Omnibus Agreement requires the Partnership to reimburse Martin Resource Management Corporation for all direct expenses it incurs or payments it makes on the Partnership’s behalf or in connection with the operation of the Partnership’s business. There is no

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

March 31, 2022

(Unaudited)

monetary limitation on the amount the Partnership is required to reimburse Martin Resource Management Corporation for direct expenses. In addition to the direct expenses, under the Omnibus Agreement, the Partnership is required to reimburse Martin Resource Management Corporation for indirect general and administrative and corporate overhead expenses.

Effective January 1, 2022, through December 31, 2022, the Conflicts Committee approved an annual reimbursement amount for indirect expenses of $13,491. The Partnership reimbursed Martin Resource Management Corporation for $3,373 and $3,542 of indirect expenses for the three months ended March 31, 2022 and 2021, respectively. The Conflicts Committee will review and approve future adjustments in the reimbursement amount for indirect expenses, if any, annually.

These indirect expenses are intended to cover the centralized corporate functions Martin Resource Management Corporation provides to the Partnership, such as accounting, treasury, clerical, engineering, legal, billing, information technology, administration of insurance, general office expenses and employee benefit plans and other general corporate overhead functions the Partnership shares with Martin Resource Management Corporation retained businesses. The provisions of the Omnibus Agreement regarding Martin Resource Management Corporation’s services will terminate if Martin Resource Management Corporation ceases to control the general partner of the Partnership.

Related Party Transactions. The Omnibus Agreement prohibits the Partnership from entering into any material agreement with Martin Resource Management Corporation without the prior approval of the Conflicts Committee. For purposes of the Omnibus Agreement, the term "material agreements" means any agreement between the Partnership and Martin Resource Management Corporation that requires aggregate annual payments in excess of the then-applicable agreed upon reimbursable amount of indirect general and administrative expenses. Please read "Services" above.

License Provisions. Under the Omnibus Agreement, Martin Resource Management Corporation has granted the Partnership a nontransferable, nonexclusive, royalty-free right and license to use certain of its trade names and marks, as well as the trade names and marks used by some of its affiliates.

Amendment and Termination. The Omnibus Agreement may be amended by written agreement of the parties; provided, however, that it may not be amended without the approval of the Conflicts Committee if such amendment would adversely affect the unitholders. The Omnibus Agreement was first amended on November 25, 2009, to permit the Partnership to provide refining services to Martin Resource Management Corporation. The Omnibus Agreement was amended further on October 1, 2012, to permit the Partnership to provide certain lubricant packaging products and services to Martin Resource Management Corporation. Such amendments were approved by the Conflicts Committee. The Omnibus Agreement, other than the indemnification provisions and the provisions limiting the amount for which the Partnership will reimburse Martin Resource Management Corporation for general and administrative services performed on its behalf, will terminate if the Partnership is no longer an affiliate of Martin Resource Management Corporation.

Master Transportation Services Agreement

Master Transportation Agreement. Martin Transport, Inc. ("MTI"), a wholly owned subsidiary of the Partnership, is a party to a master transportation services agreement effective January 1, 2019, with certain wholly owned subsidiaries of Martin Resource Management Corporation. Under the agreement, MTI agreed to transport Martin Resource Management Corporation's petroleum products and by-products.

Term and Pricing. The agreement will continue unless either party terminates the agreement by giving at least 30 days' written notice to the other party. The rates under the agreement are subject to any adjustments which are mutually agreed upon or in accordance with a price index. Additionally, shipping charges are also subject to fuel surcharges determined on a weekly basis in accordance with the U.S. Department of Energy’s national diesel price list.

Indemnification. MTI has agreed to indemnify Martin Resource Management Corporation against all claims arising out of the negligence or willful misconduct of MTI and its officers, employees, agents, representatives and subcontractors. Martin Resource Management Corporation has agreed to indemnify MTI against all claims arising out of the negligence or willful misconduct of Martin Resource Management Corporation and its officers, employees, agents, representatives and subcontractors. In the event a claim is the result of the joint negligence or misconduct of MTI and Martin Resource

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

March 31, 2022

(Unaudited)

Management Corporation, indemnification obligations will be shared in proportion to each party’s allocable share of such joint negligence or misconduct.

Marine Agreements

Marine Transportation Agreement. The Partnership is a party to a marine transportation agreement effective January 1, 2006, as amended, under which the Partnership provides marine transportation services to Martin Resource Management Corporation on a spot-contract basis at applicable market rates. Effective each January 1, this agreement automatically renews for consecutive one year periods unless either party terminates the agreement by giving written notice to the other party at least 60 days prior to the expiration of the then applicable term. The fees the Partnership charges Martin Resource Management Corporation are based on applicable market rates.

Marine Fuel. The Partnership is a party to an agreement with Martin Resource Management Corporation dated November 1, 2002, under which Martin Resource Management Corporation provides the Partnership with marine fuel from its locations in the Gulf of Mexico at a fixed rate in excess of the Platt’s U.S. Gulf Coast Index for #2 Fuel Oil. Under this agreement, the Partnership agreed to purchase all of its marine fuel requirements that occur in the areas serviced by Martin Resource Management Corporation.

Terminal Services Agreements

Diesel Fuel Terminal Services Agreement. Effective January 1, 2016, the Partnership entered into a second amended and restated terminalling services agreement under which the Partnership provides terminal services to Martin Resource Management Corporation for marine fuel distribution. At such time, the per-gallon throughput fee the Partnership charged under this agreement was increased when compared to the previous agreement and may be adjusted annually based on a price index. This agreement was further amended on April 1, 2019 and January 1, 2020 to modify its minimum throughput requirements and throughput fees. The term of this agreement is currently evergreen and it will continue on a month to month basis until terminated by either party by giving 60 days’ written notice.

Miscellaneous Terminal Services Agreements. The Partnership is currently party to several terminal services agreements and from time to time the Partnership may enter into other terminal service agreements for the purpose of providing terminal services to related parties. Individually, each of these agreements is immaterial but when considered in the aggregate they could be deemed material. These agreements are throughput based with a minimum volume commitment. Generally, the fees due under these agreements are adjusted annually based on a price index.

Other Agreements

Cross Tolling Agreement. The Partnership is a party to an amended and restated tolling agreement with Cross Oil Refining and Marketing, Inc. ("Cross") dated October 28, 2014, under which the Partnership processes crude oil into finished products, including naphthenic lubricants, distillates, asphalt and other intermediate cuts for Cross. The tolling agreement expires November 25, 2031. Under this tolling agreement, Cross agreed to process a minimum of 6,500 barrels per day of crude oil at the facility at a fixed price per barrel. Any additional barrels are processed at a modified price per barrel. In addition, Cross agreed to pay a monthly reservation fee and a periodic fuel surcharge fee based on certain parameters specified in the tolling agreement. Further, certain capital improvements, to the extent requested by Cross, are reimbursed through a capital recovery fee. As of December 31, 2019, the annual capital recovery fee reimbursement of $2,088 expired. An additional $2,586 of capital recovery fee reimbursement expired on December 31, 2020. All of these fees (other than the fuel surcharge and capital recovery fee) are subject to escalation annually based upon the greater of 3% or the increase in the Consumer Price Index for a specified annual period. Also, the Partnership renegotiated a crude transportation contract set to expire in the first half of 2022, resulting in a reduction in revenue of $2,145 annually beginning January 1, 2020.

East Texas Mack Leases. MTI leases equipment, including tractors and trailers, from East Texas Mack Sales ("East Texas Mack"). Certain of our directors or officers are owners of East Texas Mack, including entities affiliated with Ruben Martin, who owns approximately 46% of the issued and outstanding stock of East Texas Mack. Amounts paid to East Texas Mack for tractor and trailer lease payments and lease residuals for the three months ended March 31, 2022 and 2021 were $310 and $236, respectively.

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

March 31, 2022

(Unaudited)

Other Miscellaneous Agreements. From time to time the Partnership enters into other miscellaneous agreements with Martin Resource Management Corporation for the provision of other services or the purchase of other goods.

The tables below summarize the related party transactions that are included in the related financial statement captions on the face of the Partnership’s Consolidated and Condensed Statements of Operations. The revenues, costs and expenses reflected in these tables are tabulations of the related party transactions that are recorded in the corresponding captions of the consolidated and condensed financial statements and do not reflect a statement of profits and losses for related party transactions.

The impact of related party revenues from sales of products and services is reflected in the consolidated and condensed financial statements as follows:


	Three Months Ended March 31,
		2022		2021
Revenues:
Terminalling and storage		$	16,204	$	15,306
Transportation		6,288		4,010

Product sales:

Sulfur services		29		30
Terminalling and storage		289		84
		321		114
		$	22,813	$	19,430

The impact of related party cost of products sold is reflected in the consolidated and condensed financial statements as follows:


	Three Months Ended March 31,
		2022		2021
Cost of products sold:
Sulfur services		$	2,676	$	2,535
Terminalling and storage		9,651		4,568
		$	12,327	$	7,103

The impact of related party operating expenses is reflected in the consolidated and condensed financial statements as follows:


	Three Months Ended March 31,
		2022		2021
Operating expenses:
Transportation		$	15,263	$	13,059
Natural gas liquids		510		464
Sulfur services		1,245		743
Terminalling and storage		4,362		4,102
		$	21,380	$	18,368

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

March 31, 2022

(Unaudited)

The impact of related party selling, general and administrative expenses is reflected in the consolidated and condensed financial statements as follows:


	Three Months Ended March 31,
		2022		2021
Selling, general and administrative:
Transportation		$	1,965	$	1,670
Natural gas liquids		1,339		1,808
Sulfur services		996		771
Terminalling and storage		1,058		820
Indirect, including overhead allocation		3,450		3,611
		$	8,808	$	8,680

NOTE 12. BUSINESS SEGMENTS

The Partnership has four reportable segments: (1) terminalling and storage, (2) transportation, (3) sulfur services and (4) natural gas liquids. The Partnership’s reportable segments are strategic business units that offer different products and services. The operating income of these segments is reviewed by the chief operating decision maker to assess performance and make business decisions.

The accounting policies of the operating segments are the same as those described in Note 2 in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 1, 2022. The Partnership evaluates the performance of its reportable segments based on operating income. There is no allocation of interest expense.


Three Months Ended March 31, 2022	Operating Revenues		Intersegment Revenues Eliminations		Operating Revenues after Eliminations		Depreciation and Amortization		Operating Income (Loss) after Eliminations		Capital Expenditures and Plant Turnaround Costs
Terminalling and storage	$	54,383	$	(1,578)	$	52,805	$	7,606	$	2,867	$	3,945
Transportation	51,897		(5,187)		46,710		3,573		1,788		3,581
Sulfur services	59,123		—		59,123		2,709		14,837		1,962
Natural gas liquids	120,566		(3)		120,563		598		10,079		447
Indirect selling, general and administrative	—		—		—		—		(4,122)		—
Total	$	285,969	$	(6,768)	$	279,201	$	14,486	$	25,449	$	9,935

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

March 31, 2022

(Unaudited)


Three Months Ended March 31, 2021	Operating Revenues		Intersegment Revenues Eliminations		Operating Revenues after Eliminations		Depreciation and Amortization		Operating Income (Loss) after Eliminations		Capital Expenditures and Plant Turnaround Costs
Terminalling and storage	$	39,834	$	(1,595)	$	38,239	$	7,105	$	2,308	$	2,665
Transportation	33,969		(4,154)		29,815		3,998		(5,503)		525
Sulfur services	34,835		—		34,835		2,720		8,353		3,064
Natural gas liquids	98,085		—		98,085		611		14,447		321
Indirect selling, general and administrative	—		—		—		—		(3,919)		—
Total	$	206,723	$	(5,749)	$	200,974	$	14,434	$	15,686	$	6,575

The Partnership's assets by reportable segment as of March 31, 2022 and December 31, 2021, are as follows:


	March 31, 2022		December 31, 2021
Total assets:
Terminalling and storage	$	251,461	$	248,194
Transportation	150,265		145,177
Sulfur services	118,428		108,007
Natural gas liquids	53,954		78,483
Total assets	$	574,108	$	579,861

NOTE 13. COMMITMENTS AND CONTINGENCIES

Contingencies

From time to time, the Partnership is subject to various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Partnership.

On December 31, 2015, the Partnership received a demand from a customer in its lubricants packaging business for defense and indemnity in connection with various lawsuits filed against it, which generally alleged that the customer engaged in unlawful and deceptive business practices in connection with its marketing and advertising of its private label motor oil (the “Marketing Lawsuits”). The Partnership disputed and continues to dispute that it has any obligation to defend or indemnify the customer for the customer’s conduct. Accordingly, on January 7, 2016, the Partnership filed a Complaint for Declaratory Judgment in the Chancery Court of Davidson County, Tennessee (the “Tennessee Court”), under Case No. 16-0018-BC, requesting a judicial determination that the Partnership did not owe the customer the demanded defense and indemnity obligations (the “Declaratory Judgment Action”). The Marketing Lawsuits pending in federal court against the customer were transferred to the U.S. District Court for the Western District of Missouri under the consolidated case MDL No. 2709 for pretrial proceedings (the “Consolidated Lawsuits”). On March 1, 2017, at the joint request of the customer and the Partnership, the Tennessee Court administratively closed the Declaratory Judgment Action. Recently, the customer settled the Consolidated Lawsuits. On December 17, 2021, at the request of the customer, the Tennessee Court reopened the Declaratory Judgment Action and the customer asserted various counterclaims against the Partnership seeking, among other things, to recover its costs of defending and settling the Consolidated Lawsuits. At this time, we are unable to determine what ultimate exposure we may have in this matter, if any. The Partnership intends to vigorously defend the counterclaims asserted by the customer in the Declaratory Judgment Action.

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

March 31, 2022

(Unaudited)

NOTE 14. FAIR VALUE MEASUREMENTS

The Partnership uses a valuation framework based upon inputs that market participants use in pricing certain assets and liabilities. These inputs are classified into two categories: observable inputs and unobservable inputs. Observable inputs represent market data obtained from independent sources. Unobservable inputs represent the Partnership's own market assumptions. Unobservable inputs are used only if observable inputs are unavailable or not reasonably available without undue cost and effort. The two types of inputs are further prioritized into the following hierarchy:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that reflect the entity's own assumptions and are not corroborated by market data.

Assets and liabilities measured at fair value on a recurring basis are summarized below:


	Level 2
	March 31, 2022		December 31, 2021
Commodity derivative contracts, net	$	175	$	—

The Partnership is required to disclose estimated fair values for its financial instruments. Fair value estimates are set forth below for these financial instruments. The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

•Accounts and other receivables, trade and other accounts payable, accrued interest payable, other accrued liabilities, income taxes payable and due from/to affiliates: The carrying amounts approximate fair value due to the short maturity and highly liquid nature of these instruments, and as such these have been excluded from the table below. There is negligible credit risk associated with these instruments.

•Current and non-current portion of long-term debt: The carrying amount of the credit facility approximates fair value due to the debt having a variable interest rate and is in Level 2. The estimated fair value of the 2021 Notes, 2024 Notes, and 2025 Notes (collectively, the "senior notes") is considered Level 2, as the fair value is based upon quoted prices for identical liabilities in markets that are not active.


	March 31, 2022				December 31, 2021
	Carrying Value		Fair Value		Carrying Value		Fair Value
2024 Notes	$	51,604	$	54,795	$	51,317	$	55,220
2025 Notes	$	290,771	$	302,774	$	290,667	$	307,146
Total	$	342,375	$	357,569	$	341,984	$	362,366

NOTE 15. CONDENSED CONSOLIDATED FINANCIAL INFORMATION

The Partnership's operations are conducted by its operating subsidiaries as it has no independent assets or operations. Martin Operating Partnership L.P. (the "Operating Partnership"), the Partnership’s wholly-owned subsidiary, and the Partnership's other operating subsidiaries have issued in the past, and may issue in the future, unconditional guarantees of senior or subordinated debt securities of the Partnership. The guarantees that have been issued are full, irrevocable and unconditional and joint and several. In addition, the Operating Partnership may also issue senior or subordinated debt securities which, if issued, will be fully, irrevocably and unconditionally guaranteed by the Partnership. Substantially all of the Partnership's operating subsidiaries are subsidiary guarantors of its Senior Notes and any subsidiaries other than the subsidiary guarantors are minor.

MARTIN MIDSTREAM PARTNERS L.P.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(Dollars in thousands, except where otherwise indicated)

March 31, 2022

(Unaudited)

NOTE 16. INCOME TAXES


	Three Months Ended March 31,
		2022		2021
Provision for income taxes		$	1,541	$	222

The operations of a partnership are generally not subject to income taxes, except for Texas margin tax, because its income is taxed directly to its partners. Current state income taxes attributable to the Texas margin tax relating to the operation of the Partnership of $176 and $120 were recorded in income tax expense for the three months ended March 31, 2022 and 2021, respectively. Deferred taxes applicable to the Texas margin tax relating to the operation of the Partnership are immaterial. MTI, a wholly owned subsidiary of the Partnership, is subject to income taxes due to its corporate structure (the "Taxable Subsidiary"). Total income tax expense of $1,365 and $102, related to the operation of the Taxable Subsidiary, for the three months ended March 31, 2022 and 2021, resulted in an effective income tax rate ("ETR") of 22.03% and 29.32%, respectively.

The decrease in the ETR for the income taxes during the three months ended March 31, 2022 was primarily due to significantly larger pretax income recorded for the three months ended March 31, 2022, compared to the same period in 2021. The increase in the provision for income taxes for the three months ended March 31, 2022, compared to the same period in 2021, was primarily due to an increase in income before income taxes in the current period.

A current federal income tax expense of $320 and $15, related to the operation of the Taxable Subsidiary, was recorded for the three months ended March 31, 2022 and 2021, respectively. A current state income tax expense of $124 and $12, related to the operation of the Taxable Subsidiary, was recorded for the three months ended March 31, 2022 and 2021, respectively.

With respect to MTI, income taxes are accounted for under the asset and liability method pursuant to the provisions of ASC 740 related to income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

A deferred tax expense related to the MTI temporary differences of $921 and $75 was recorded for the three months ended March 31, 2022 and 2021, respectively. A net deferred tax asset of $18,900 and $19,821, related to the cumulative book and tax temporary differences, existed at March 31, 2022 and December 31, 2021, respectively.

All income tax positions taken for all open years are more likely than not to be sustained based upon their technical merit under applicable tax laws.

NOTE 17. SUBSEQUENT EVENTS

Excess Cash Flow Offer. On April 14, 2022, the Partnership completed the payment of an aggregate principal amount of approximately $589, or approximately 0.20%, of its 2025 Notes, pursuant to its Excess Cash Flow Offer to purchase up to $9,305 aggregate principal amount of its outstanding 2025 Notes. The purchase price for the tendered 2025 Notes was 100% of the aggregate principal amount thereof, plus accrued and unpaid interest to, but not including, the purchase date.

Quarterly Distribution. On April 20, 2022, the Partnership declared a quarterly cash distribution of $0.005 per common unit for the first quarter of 2022, or $0.020 per common unit on an annualized basis, which will be paid on May 13, 2022 to unitholders of record as of May 6, 2022.


Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion of our financial condition and results of operations in conjunction with the consolidated and condensed financial statements and the notes thereto included elsewhere in this quarterly report.

Overview

We are a publicly traded limited partnership with a diverse set of operations focused primarily in the Gulf Coast region of the U.S. Our four primary business lines include:

•Terminalling, processing, storage and packaging services for petroleum products and by-products including the refining of naphthenic crude oil;

•Land and marine transportation services for petroleum products and by-products, chemicals, and specialty products;

•Sulfur and sulfur-based products processing, manufacturing, marketing, and distribution; and

•NGL marketing, distribution, and transportation services.

The petroleum products and by-products we collect, transport, store and market are produced primarily by major and independent oil and gas companies who often turn to third parties, such as us, for the transportation and disposition of these products. In addition to these major and independent oil and gas companies, our primary customers include independent refiners, large chemical companies, and other wholesale purchasers of these products. We operate primarily in the Gulf Coast region of the U.S. This region is a major hub for petroleum refining, natural gas gathering and processing, and support services for the exploration and production industry.

We were formed in 2002 by Martin Resource Management Corporation, a privately-held company whose initial predecessor was incorporated in 1951 as a supplier of products and services to drilling rig contractors. Since then, Martin Resource Management Corporation has expanded its operations through acquisitions and internal expansion initiatives as its management identified and capitalized on the needs of producers and purchasers of petroleum products and by-products and other bulk liquids. Martin Resource Management Corporation is an important supplier and customer of ours. As of March 31, 2022, Martin Resource Management Corporation owned 15.7% of our total outstanding common limited partner units. Furthermore, on December 28, 2021, Martin Resource Management Corporation indirectly acquired, through its wholly owned subsidiary, Martin Resource LLC, the remaining 49% voting interest (50% economic interest) in MMGP Holdings, LLC ("Holdings"), which is the sole member of Martin Midstream GP LLC ("MMGP"), our general partner. Such interests were previously held by certain affiliated investment funds managed by Alinda Capital Partners, which sold the interests to Senterfitt Holdings Inc. (“Senterfitt”) on November 23, 2021. At such time, Senterfitt granted Martin Resource LLC the right to purchase such interests for a period of ten years, which right was exercised on December 28, 2021. As a result, Martin Resource Management Corporation indirectly owns 100% of MMGP. Martin Resource Management Corporation directs our business operations through its ownership of our general partner. MMGP owns a 2.0% general partner interest in us, and, until November 23, 2021, MMGP owned all of our incentive distribution rights. On November 23, 2021, MMGP contributed to us all of our incentive distribution rights for no consideration, whereupon the incentive distribution rights were cancelled and cease to exist.

We entered into the Omnibus Agreement that governs, among other things, potential competition and indemnification obligations among the parties to the agreement, related party transactions, the provision of general administration and support services by Martin Resource Management Corporation and our use of certain of Martin Resource Management Corporation’s trade names and trademarks. Under the terms of the Omnibus Agreement, the employees of Martin Resource Management Corporation are responsible for conducting our business and operating our assets.

Martin Resource Management Corporation has operated our business since our inception in 2002. Martin Resource Management Corporation began operating our NGL business in the 1950s and our sulfur business in the 1960s. It began our land transportation business in the early 1980s and our marine transportation business in the late 1980s. It entered into our fertilizer and terminalling and storage businesses in the early 1990s.

Significant Recent Developments

Subsequent Events

Excess Cash Flow Offer. On April 14, 2022, we completed the payment of an aggregate principal amount of approximately $0.6 million, or approximately 0.20%, of our 2025 Notes, pursuant to the Excess Cash Flow Offer. See “Note 17 – Subsequent Events” for more information on the Excess Cash Flow Offer.

Quarterly Distribution. On April 20, 2022, we declared a quarterly cash distribution of $0.005 per common unit for the first quarter of 2022, or $0.020 per common unit on an annualized basis, which will be paid on May 13, 2022 to unitholders of record as of May 6, 2022.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based on the historical consolidated and condensed financial statements included elsewhere herein. We prepared these financial statements in conformity with U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances. We routinely evaluate these estimates, utilizing historical experience, consultation with experts and other methods we consider reasonable in the particular circumstances. Our results may differ from these estimates, and any effects on our business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the facts that give rise to the revision become known. Changes in these estimates could materially affect our financial position, results of operations or cash flows. See the "Critical Accounting Policies and Estimates" section in "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 2, "Significant Accounting Policies" in Notes to Consolidated Financial Statements included within our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 1, 2022.

Our Relationship with Martin Resource Management Corporation

Martin Resource Management Corporation is engaged in the following principal business activities:

•distributing fuel oil, 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, refining, 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;

•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.

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 partner units. 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.

Management

Martin Resource Management Corporation directs our business operations through its ownership interests in and control of our general partner. We benefit from our relationship with Martin Resource Management Corporation through access to a significant pool of management expertise and established relationships throughout the energy industry. We do not have employees. Martin Resource Management Corporation employees are responsible for conducting our business and operating our assets on our behalf.

Related Party Agreements

The Omnibus Agreement requires us to reimburse Martin Resource Management Corporation for all direct expenses it incurs or payments it makes on our behalf or in connection with the operation of our business. We reimbursed Martin Resource Management Corporation for $39.1 million of direct costs and expenses for the three months ended March 31, 2022 compared to $30.5 million for the three months ended March 31, 2021. There is no monetary limitation on the amount we are required to reimburse Martin Resource Management Corporation for direct expenses.

In addition to the direct expenses, under the Omnibus Agreement, we are required to reimburse Martin Resource Management Corporation for indirect general and administrative and corporate overhead expenses. In each of the three months ended March 31, 2022 and 2021, the Conflicts Committee approved reimbursement amounts of $3.4 million and $3.5 million, respectively. The Conflicts Committee will review and approve future adjustments in the reimbursement amount for indirect expenses, if any, annually. These indirect expenses covered the centralized corporate functions Martin Resource Management Corporation provides for us, such as accounting, treasury, clerical, engineering, legal, billing, information technology, administration of insurance, general office expenses and employee benefit plans and other general corporate overhead functions we share with Martin Resource Management Corporation’s retained businesses. The Omnibus Agreement also contains significant non-compete provisions and indemnity obligations. Martin Resource Management Corporation also licenses certain of its trademarks and trade names to us under the Omnibus Agreement.

These additional related party agreements include, but are not limited to, a master transportation services agreement, marine transportation agreements, terminal services agreements, a tolling agreement, and a sulfuric acid sales agency agreement. Pursuant to the terms of the Omnibus Agreement, we are prohibited from entering into certain material agreements with Martin Resource Management Corporation without the approval of the Conflicts Committee.

For a more comprehensive discussion concerning the Omnibus Agreement and the other agreements that we have entered into with Martin Resource Management Corporation, please refer to "Item 13. Certain Relationships and Related Transactions, and Director Independence" set forth in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 1, 2022.

Commercial

We have been and anticipate that we will continue to be both a significant customer and supplier of products and services offered by Martin Resource Management Corporation. In the aggregate, the impact of related party transactions included in total costs and expenses accounted for approximately 17% and 19% of our total costs and expenses during the three months ended March 31, 2022 and 2021, respectively.

Correspondingly, Martin Resource Management Corporation is one of our significant customers. Our sales to Martin Resource Management Corporation accounted for approximately 8% and 10% of our total revenues for the three months ended March 31, 2022 and 2021, respectively.

For a more comprehensive discussion concerning the agreements that we have entered into with Martin Resource Management Corporation, please refer to "Item 13. Certain Relationships and Related Transactions, and Director Independence" set forth in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 1, 2022.

Approval and Review of Related Party Transactions

If we contemplate entering into a transaction, other than a routine or in the ordinary course of business transaction, in which a related person will have a direct or indirect material interest, the proposed transaction is submitted for consideration to the board of directors of our general partner or to our management, as appropriate. If the board of directors of our general partner is involved in the approval process, it determines whether to refer the matter to the Conflicts Committee of our general partner's board of directors, as constituted under our limited partnership agreement. If a matter is referred to the Conflicts Committee, the Conflicts Committee obtains information regarding the proposed transaction from management and determines whether to engage independent legal counsel or an independent financial advisor to advise the members of the committee regarding the transaction. If the Conflicts Committee retains such counsel or financial advisor, it considers such advice and, in the case of a financial advisor, such advisor’s opinion as to whether the transaction is fair and reasonable to us and to our unitholders.

Non-GAAP Financial Measures

To assist management in assessing our business, we use the following non-GAAP financial measures: earnings before interest, taxes, and depreciation and amortization ("EBITDA"), adjusted EBITDA (as defined below), distributable cash flow available to common unitholders (“Distributable Cash Flow”), and free cash flow after growth capital expenditures and principal payments under finance lease obligations ("Adjusted Free Cash Flow"). Our management uses a variety of financial and operational measurements other than our financial statements prepared in accordance with U.S. GAAP to analyze our performance.

Certain items excluded from EBITDA and Adjusted EBITDA are significant components in understanding and assessing an entity's financial performance, such as cost of capital and historical costs of depreciable assets.

EBITDA and 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. Adjusted EBITDA is used as a supplemental performance and liquidity measure by our management and by external users of our financial statements, such as investors, commercial banks, research analysts, and others, to assess:

•the financial performance of our assets without regard to financing methods, capital structure, or historical cost basis;

•the ability of our assets to generate cash sufficient to pay interest costs, support our indebtedness, and make cash distributions to our unitholders; and

•our operating performance and return on capital as compared to those of other companies in the midstream energy sector, without regard to financing methods or capital structure.

The GAAP measures most directly comparable to adjusted EBITDA are net income (loss) and net cash provided by operating activities. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income (loss), operating income (loss), net cash provided by operating activities, or any other measure of financial performance presented in accordance with GAAP. Adjusted EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate Adjusted EBITDA in the same manner.

Adjusted EBITDA does not include interest expense, income tax expense, and depreciation and amortization. Because we have borrowed money to finance our operations, interest expense is a necessary element of our costs and our ability to generate cash available for distribution. Because we have capital assets, depreciation and amortization are also necessary elements of our costs. Therefore, any measures that exclude these elements have material limitations. To compensate for these limitations, we believe that it is important to consider net income (loss) and net cash provided by operating activities as determined under GAAP, as well as adjusted EBITDA, to evaluate our overall performance.

Distributable Cash Flow. We define Distributable Cash Flow as Net Cash Provided by (Used in) Operating Activities less cash received (plus cash paid) for closed commodity derivative positions included in Accumulated Other Comprehensive Income (Loss), plus changes in operating assets and liabilities which (provided) used cash, less maintenance capital expenditures and plant turnaround costs. Distributable Cash Flow is a significant performance measure used by our management and by external users of our financial statements, such as investors, commercial banks and research analysts, to compare basic cash flows generated by us to the cash distributions we expect to pay unitholders. Distributable Cash Flow is also an important financial measure for our unitholders since it serves as an indicator of our success in providing a cash return on investment. Specifically, this financial measure indicates to investors whether or not we are generating cash flow at a level that can sustain or support an increase in our quarterly distribution rates. Distributable Cash Flow is also a quantitative standard used throughout the investment community with respect to publicly-traded partnerships because the value of a unit of such an entity is generally determined by the unit's yield, which in turn is based on the amount of cash distributions the entity pays to a unitholder.

Adjusted Free Cash Flow. We define Adjusted Free Cash Flow as Distributable Cash Flow less growth capital expenditures and principal payments under finance lease obligations. Adjusted Free Cash Flow is a significant performance measure used by our management and by external users of our financial statements and represents how much cash flow a business generates during a specified time period after accounting for all capital expenditures, including expenditures for growth and maintenance capital projects. We believe that Adjusted Free Cash Flow is important to investors, lenders, commercial banks and research analysts since it reflects the amount of cash available for reducing debt, investing in additional capital projects, paying distributions, and similar matters. Our calculation of Adjusted Free Cash Flow may or may not be comparable to similarly titled measures used by other entities.

The GAAP measure most directly comparable to Distributable Cash Flow and Adjusted Free Cash Flow is Net Cash Provided by (Used in) Operating Activities. Distributable Cash Flow and Adjusted Free Cash Flow should not be considered alternatives to, or more meaningful than, Net Income (Loss), Operating Income (Loss), Net Cash Provided by (Used in) Operating Activities , or any other measure of liquidity presented in accordance with GAAP. Distributable Cash Flow and Adjusted Free Cash Flow have important limitations because they exclude some items that affect Net Income (Loss), Operating Income (Loss), and Net Cash Provided by (Used in) Operating Activities. Distributable Cash Flow and Adjusted Free Cash Flow may not be comparable to similarly titled measures of other companies because other companies may not calculate these non-GAAP metrics in the same manner. To compensate for these limitations, we believe that it is important to consider Net Cash Provided by (Used in) Operating Activities determined under GAAP, as well as Distributable Cash Flow and Adjusted Free Cash Flow, to evaluate our overall liquidity.

The following tables reconcile the non-GAAP financial measurements used by management to our most directly comparable GAAP measures for the years ended March 31, 2022 and 2021, which represents EBITDA, Adjusted EBITDA, Distributable Cash Flow, and Adjusted Free Cash Flow:

Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA


	Three Months Ended March 31,

	2022		2021
	(in thousands)
Net income	$	11,478	$	2,511
Adjustments:
Interest expense	12,429		12,953
Income tax expense	1,541		222
Depreciation and amortization	14,486		14,434
EBITDA	39,934		30,120
Adjustments:
(Gain) loss on disposition of property, plant and equipment	(14)		760





Unrealized mark-to-market on commodity derivatives	—		(219)


Unit-based compensation	34		240
Adjusted EBITDA	39,954		30,901

Reconciliation of Net Cash provided by Operating Activities to Adjusted EBITDA, Distributable Cash Flow, and Adjusted Free Cash Flow


	Three Months Ended March 31,

	2022		2021
	(in thousands)
Net cash provided by operating activities	$	28,375	$	3,854
Interest expense 1	11,646		12,198
Current income tax expense	620		147




Commodity cash flow hedging gains reclassified to earnings	816		—
Net cash paid for closed commodity derivative positions included in AOCI	615		—
Changes in operating assets and liabilities which (provided) used cash:
Accounts and other receivables, inventories, and other current assets	(3,896)		4,187
Trade, accounts and other payables, and other current liabilities	957		10,603
Other	821		(88)
Adjusted EBITDA	39,954		30,901
Adjustments:
Interest expense	(12,429)		(12,953)
Income tax expense	(1,541)		(222)
Deferred income taxes	921		75

Amortization of deferred debt issuance costs	783		755
Payments for plant turnaround costs	(1,435)		(1,674)
Maintenance capital expenditures	(5,399)		(4,071)
Distributable Cash Flow	20,854		12,811
Principal payments under finance lease obligations	(59)		(2,431)
Expansion capital expenditures	(3,101)		(830)
Adjusted Free Cash Flow	$	17,694	$	9,550

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.

Results of Operations

The results of operations for the three months ended March 31, 2022 and 2021 have been derived from our consolidated and condensed financial statements.

We evaluate segment performance on the basis of operating income, which is derived by subtracting cost of products sold, operating expenses, selling, general and administrative expenses, and depreciation and amortization expense from revenues. The following table sets forth our operating revenues and operating income by segment for the three months ended March 31, 2022 and 2021. The results of operations for these interim periods are not necessarily indicative of the results of operations which might be expected for the entire year.

Our consolidated and condensed results of operations are presented on a comparative basis below. There are certain items of income and expense which we do not allocate on a segment basis. These items, including interest expense and indirect selling, general and administrative expenses, are discussed following the comparative discussion of our results within each segment.

Three Months Ended March 31, 2022 Compared to the Three Months Ended March 31, 2021


	Operating Revenues		Intersegment Revenues Eliminations		Operating Revenues after Eliminations		Operating Income (Loss)		Operating Income (Loss) Intersegment Eliminations		Operating Income (Loss) after Eliminations
Three Months Ended March 31, 2022	(in thousands)
Terminalling and storage	$	54,383	$	(1,578)	$	52,805	$	3,914	$	(1,047)	$	2,867
Transportation	51,897		(5,187)		46,710		6,981		(5,193)		1,788
Sulfur services	59,123		—		59,123		12,652		2,185		14,837
Natural gas liquids	120,566		(3)		120,563		6,024		4,055		10,079
Indirect selling, general and administrative	—		—		—		(4,122)		—		(4,122)
Total	$	285,969	$	(6,768)	$	279,201	$	25,449	$	—	$	25,449


	Operating Revenues		Intersegment Revenues Eliminations		Operating Revenues after Eliminations		Operating Income (Loss)		Operating Income (Loss) Intersegment Eliminations		Operating Income (Loss) after Eliminations
Three Months Ended March 31, 2021	(in thousands)
Terminalling and storage	$	39,834	$	(1,595)	$	38,239	$	3,430	$	(1,122)	$	2,308
Transportation	33,969		(4,154)		29,815		(1,337)		(4,166)		(5,503)
Sulfur services	34,835		—		34,835		6,442		1,911		8,353
Natural gas liquids	98,085		—		98,085		11,070		3,377		14,447
Indirect selling, general and administrative	—		—		—		(3,919)		—		(3,919)
Total	$	206,723	$	(5,749)	$	200,974	$	15,686	$	—	$	15,686

Terminalling and Storage Segment

Comparative Results of Operations for the Three Months Ended March 31, 2022 and 2021


	Three Months Ended March 31,				Variance		Percent Change
	2022		2021
	(In thousands, except BBL per day)
Revenues:
Services	$	20,956	$	19,959	$	997	5	%
Products	33,427		19,875		13,552		68	%
Total revenues	54,383		39,834		14,549		37	%

Cost of products sold	27,197		14,941		12,256		82	%
Operating expenses	13,912		12,793		1,119		9	%
Selling, general and administrative expenses	1,711		1,499		212		14	%
Depreciation and amortization	7,606		7,105		501		7	%
	3,957		3,496		461		13	%
Other operating loss, net	(43)		(66)		23		35	%

Operating income	$	3,914	$	3,430	$	484	14	%

Shore-based throughput volumes (guaranteed minimum) (gallons)	20,000		20,000		—		—	%
Smackover refinery throughput volumes (guaranteed minimum) (BBL per day)	6,500		6,500		—		—	%

Services revenues. Services revenues increased $1.0 million. The revenue from the Smackover refinery increased $0.6 primarily due to $0.2 million in contractually prescribed, index-based fee adjustments, $0.2 million in throughput fees and $0.2 million in natural gas surcharge. In addition, the revenue from our shore-based terminals increased $0.2 million related to space rent, and specialty terminals increased related to throughput revenue of $0.1 million.

Products revenues. A 44% increase in average sales price and a 16% rise in sales volumes at our blending and packaging facilities resulted in a $13.5 million increase to products revenues.

Cost of products sold. A 55% increase in average cost per gallon and a 16% rise in sales volumes at our blending and packaging facilities resulted in a $12.2 million increase in cost of products sold.

Operating expenses. Operating expenses increased primarily as a result of an increase in utilities expense of $1.1 million.

Selling, general and administrative expenses. Selling, general and administrative expenses increased primarily as a result of employee related expenses.

Depreciation and amortization. The increase in depreciation and amortization is primarily the result of capital expenditures, offset by asset disposals.

Other operating loss, net. Other operating loss, net represents gains and losses from the disposition of property, plant and equipment.

Transportation Segment

Comparative Results of Operations for the Three Months Ended March 31, 2022 and 2021


	Three Months Ended March 31,				Variance		Percent Change
	2022		2021
	(In thousands)
Revenues	$	51,897	$	33,969	$	17,928	53	%
Operating expenses	39,202		29,504		9,698		33	%
Selling, general and administrative expenses	2,170		1,800		370		21	%


Depreciation and amortization	3,573		3,998		(425)		(11)	%
	$	6,952	$	(1,333)	$	8,285	622	%
Other operating income (loss), net	29		(4)		33		825	%
Operating income	$	6,981	$	(1,337)	$	8,318	622	%

Marine Transportation Revenues. Inland revenues increased $1.9 million, primarily related to higher utilization and transportation rates. Offshore revenues increased $1.2 million primarily due to higher utilization and transportation rates. Additionally, ancillary revenue increased $1.2 million.

Land Transportation Revenues. Freight revenue increased primarily due to a 23% increase in load count combined with a 3% increase in total miles, which resulted in a $8.9 million increase. Additionally, fuel surcharge increased $4.7 million.

Operating expenses. The increase in operating expenses is primarily a result of compensation expense of $5.0 million, pass through expenses of $3.3 million, recruitment expenses of $0.3 million, outside towing of $0.3 million and insurance premiums of $0.3 million.

Selling, general and administrative expenses. Selling, general and administrative expenses increased primarily due to higher employee related expenses.

Depreciation and amortization. Depreciation and amortization decreased as a result of disposals, offset by capital expenditures.

Other operating income (loss), net. Other operating income (loss), net represents losses from the disposition of property, plant and equipment.

Sulfur Services Segment

Comparative Results of Operations for the Three Months Ended March 31, 2022 and 2021


	Three Months Ended March 31,				Variance		Percent Change
	2022		2021
	(In thousands)
Revenues:
Services	$	3,084	$	2,950	$	134	5	%
Products	56,039		31,885		24,154		76	%
Total revenues	59,123		34,835		24,288		70	%

Cost of products sold	39,258		22,423		16,835		75	%
Operating expenses	3,028		2,009		1,019		51	%
Selling, general and administrative expenses	1,504		1,241		263		21	%
Depreciation and amortization	2,709		2,720		(11)		—	%
	12,624		6,442		6,182		96	%
Other operating income, net	28		—		28

Operating income	$	12,652	$	6,442	$	6,210	96	%

Sulfur (long tons)	114		73		41		56	%
Fertilizer (long tons)	84		95		(11)		(12)	%
Total sulfur services volumes (long tons)	198		168		30		18	%

Services revenues. Services revenues increased slightly as a result of a contractually prescribed, index-based fee adjustment.

Products revenues. Products revenues increased $15.7 million as a result of a 49% rise in average sulfur services sales prices. Products revenues increased $8.5 million due to an 18% increase in sales volumes, primarily related to a 56% increase in sulfur volumes.

Cost of products sold. A 49% increase in product cost impacted cost of products sold by $10.9 million, resulting from a rise in commodity prices. An 18% increase in sales volumes resulted in an additional increase in cost of products sold of $5.9 million.

Operating expenses. Operating expenses increased primarily due to higher marine fuel expense.

Selling, general and administrative expenses. Selling, general and administrative expenses increased primarily due to higher employee related expenses.

Depreciation and amortization. Depreciation and amortization remained consistent.

Other operating income, net. Other operating income, net represents gains and losses from the disposition of property, plant and equipment.

Natural Gas Liquids Segment

Comparative Results of Operations for the Three Months Ended March 31, 2022 and 2021


	Three Months Ended March 31,				Variance		Percent Change
	2022		2021
	(In thousands)
Products revenues	$	120,566	$	98,085	$	22,481	23	%
Cost of products sold	111,156		82,512		28,644		35	%
Operating expenses	1,066		995		71		7	%
Selling, general and administrative expenses	1,722		2,207		(485)		(22)	%
Depreciation and amortization	598		611		(13)		(2)	%
	6,024		11,760		(5,736)		(49)	%
Other operating loss, net	—		(690)		690		100	%
Operating income	$	6,024	$	11,070	$	(5,046)	(46)	%

NGL sales volumes (Bbls)	1,597		2,145		(548)		(26)	%

Products Revenues. Our average sales price per barrel increased $29.77, or 65%, increasing revenues by $63.9 million. The increase in average sales price per barrel was due to a rise in commodity prices. Sales volumes decreased 26%, lowering revenues by $41.4 million.

Cost of products sold. Our average cost per barrel increased $31.14, or 81%, increasing cost of products sold by $66.8 million. The increase in average cost per barrel was the result of an increase in market prices. The decrease in sales volume of 26% resulted in a $38.1 million reduction to cost of products sold.

Operating expenses. Operating expenses remained relatively consistent.

Selling, general and administrative expenses. Selling, general and administrative decreased primarily as a result of lower employee related expenses.

Depreciation and amortization. Depreciation and amortization remained relatively consistent.

Other operating loss, net. Other operating income, net represents gains and losses from the disposition of property, plant and equipment.

Interest Expense, Net

Comparative Components of Interest Expense, Net for the Three Months Ended March 31, 2022 and 2021


	Three Months Ended March 31,				Variance		Percent Change
	2022		2021
	(In thousands)
Credit facility	$	1,923	$	2,091	$	(168)	(8)	%
Senior notes	9,305		9,657		(352)		(4)	%
Amortization of deferred debt issuance costs	783		755		28		4	%

Other	415		441		(26)		(6)	%
Finance leases	3		9		(6)		(67)	%


Total interest expense, net	$	12,429	$	12,953	$	(524)	(4)	%

Indirect Selling, General and Administrative Expenses


		Three Months Ended March 31,			Variance		Percent Change
		2022	2021
	(In thousands)
Indirect selling, general and administrative expenses			$	4,122	$	3,919	$	203	5	%

Indirect selling, general and administrative expenses increased for the three months ended March 31, 2022 compared to the three months ended March 31, 2021 primarily due to an increase in employee related expenses of $0.4 million, offset by a $0.2 million decrease in the indirect expenses allocated from Martin Resource Management Corporation.

Martin Resource Management Corporation allocates to us a portion of its indirect selling, general and administrative expenses for services such as accounting, legal, treasury, clerical, billing, information technology, administration of insurance, engineering, general office expense and employee benefit plans and other general corporate overhead functions we share with Martin Resource Management Corporation retained businesses. This allocation is based on the percentage of time spent by Martin Resource Management Corporation personnel that provide such centralized services. GAAP also permits other methods for allocation of these expenses, such as basing the allocation on the percentage of revenues contributed by a segment. The allocation of these expenses between Martin Resource Management Corporation and us is subject to a number of judgments and estimates, regardless of the method used. We can provide no assurances that our method of allocation, in the past or in the future, is or will be the most accurate or appropriate method of allocation for these expenses. Other methods could result in a higher allocation of selling, general and administrative expense to us, which would reduce our net income.

Under the Omnibus Agreement, we are required to reimburse Martin Resource Management Corporation for indirect general and administrative and corporate overhead expenses. The Conflicts Committee of our general partner approved the following reimbursement amounts during the three months ended March 31, 2022 and 2021:


		Three Months Ended March 31,			Variance		Percent Change
		2022	2021
	(In thousands)
Conflicts Committee approved reimbursement amount			$	3,373	$	3,542	$	(169)	(5)	%

The amounts reflected above represent our allocable share of such expenses. The Conflicts Committee will review and approve future adjustments in the reimbursement amount for indirect expenses, if any, annually.

Liquidity and Capital Resources

General

Our primary sources of liquidity to meet operating expenses, service our indebtedness, fund capital expenditures and pay distributions to our unitholders have historically been cash flows generated by our operations, borrowings under our credit facility and access to debt and equity capital markets, both public and private. Set forth below is a description of our cash flows for the periods indicated.

Cash Flows - Three Months Ended March 31, 2022 Compared to Three Months Ended March 31, 2021

The following table details the cash flow changes between the three months ended March 31, 2022 and 2021:


	Three Months Ended March 31,				Variance		Percent Change
	2022		2021
	(In thousands)
Net cash provided by (used in):
Operating activities	$	28,375	$	3,854	$	24,521	636	%
Investing activities	(11,354)		(4,185)		(7,169)		(171)	%
Financing activities	(16,761)		(3,515)		(13,246)		(377)	%
Net increase (decrease) in cash and cash equivalents	$	260	$	(3,846)	$	4,106	107	%

Net cash provided by operating activities. The increase in net cash provided by operating activities for the three months ended March 31, 2022 includes an increase in operating results of $9.0 million and a favorable variance in working capital of $17.7 million. Offsetting this increase was a $1.3 million decrease in other non-cash charges and an unfavorable variance in other non-current assets and liabilities of $0.9 million.

Net cash used in investing activities. Net cash used in investing activities for the three months ended March 31, 2022 increased $7.2 million. A rise in cash used of $7.5 million resulted from higher payments for capital expenditures and plant turnaround costs in 2022. Net proceeds from the sale of property, plant and equipment increased $0.3 million.

Net cash used in financing activities. Net cash used in financing activities for the three months ended March 31, 2022 increased primarily as a result of a $15.7 million increase in net payments of long-term borrowings. Offsetting, payments of finance lease obligations decreased $2.4 million.

Total Contractual Obligations

A summary of our total contractual cash obligations as of March 31, 2022, is as follows:


	Payments due by period
Type of Obligation	Total Obligation		Less than One Year		1-3 Years		3-5 Years		Due Thereafter
Credit facility	$	143,000	$	—	$	143,000	$	—	$	—
11.5% senior secured notes, due 2025	291,970		—		291,970		—		—
10.0% senior secured notes, due 2024	53,750		—		53,750		—		—
Throughput commitment	3,119		3,119		—		—		—
Operating leases	30,386		7,917		9,293		5,569		7,607
Finance lease obligations	230		227		3		—		—
Interest payable on finance lease obligations	5		5		—		—		—
Interest payable on fixed long-term debt obligations	108,234		38,952		69,282		—		—
Total contractual cash obligations	$	630,694	$	50,220	$	567,298	$	5,569	$	7,607

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.

Letters of Credit. At March 31, 2022, we had outstanding irrevocable letters of credit in the amount of $25.4 million, which were issued under our credit facility.

Off Balance Sheet Arrangements. We do not have any off-balance sheet financing arrangements.

Description of Our Indebtedness

Credit Facility

At March 31, 2022, we maintained a $275.0 million credit facility that matures on August 31, 2023. As of March 31, 2022, we had $143.0 million outstanding under the credit facility and $25.4 million of outstanding irrevocable letters of credit, leaving a maximum available amount to be borrowed under our credit facility for future revolving credit borrowings and letters of credit of $106.6 million. After giving effect to our then current borrowings, letters of credit, and the financial covenants contained in our credit facility, we had the ability to borrow approximately $106.6 million in additional amounts thereunder as of March 31, 2022.

The credit facility is used for ongoing working capital needs and general partnership purposes, and to finance permitted investments, acquisitions and capital expenditures. During the three months ended March 31, 2022, the level of outstanding draws on our credit facility has ranged from a low of $143.0 million to a high of $177.0 million.

The credit facility is guaranteed by substantially all of our 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 our subsidiaries.

We may prepay all amounts outstanding under the credit facility at any time without premium or penalty (other than customary LIBOR breakage costs), subject to certain notice requirements. 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, equity issuances and debt incurrences.

Indebtedness under the credit facility bears interest at our option at the Eurodollar Rate (LIBOR), with a floor for LIBOR of 1%, plus an applicable margin, or the Base Rate (the highest of the Federal Funds Rate plus 0.50%, the 30-day Eurodollar Rate plus 1.0%, or the administrative agent’s prime rate) plus an applicable margin. 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. 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 as of March 31, 2022:


Leverage Ratio	Base Rate Loans		Eurodollar Rate Loans		Letters of Credit
Less than 3.00 to 1.00	1.75	%	2.75	%	2.75	%
Greater than or equal to 3.00 to 1.00 and less than 3.50 to 1.00	2.00	%	3.00	%	3.00	%
Greater than or equal to 3.50 to 1.00 and less than 4.00 to 1.00	2.25	%	3.25	%	3.25	%
Greater than or equal to 4.00 to 1.00 and less than 4.50 to 1.00	2.50	%	3.50	%	3.50	%
Greater than or equal to 4.50 to 1.00 and less than 5.00 to 1.00	2.75	%	3.75	%	3.75	%
Greater than or equal to 5.00 to 1.00	3.00	%	4.00	%	4.00	%

The applicable margin for LIBOR borrowings at March 31, 2022 is 3.50%, with a 1% floor for LIBOR. The applicable margin for LIBOR borrowings effective April 20, 2022 is 3.25%. The 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.

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) 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 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 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 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 credit facility will immediately become due and payable. 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. In addition, if any event of default exists under our credit facility, the lenders may commence foreclosure or other actions against the collateral.

Senior Secured Notes due 2025 and 2024

For a description of our 11.50% senior secured second lien notes due 2025 and 10.00% senior secured 1.5 lien notes due 2024, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Description of Our Long-Term Debt" in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 1, 2022.

Capital Resources and Liquidity

Historically, we have generally satisfied our working capital requirements and funded our debt service obligations and capital expenditures with cash generated from operations and borrowings under our credit facility.

On March 31, 2022, we had cash and cash equivalents of $0.3 million and available borrowing capacity of $106.6 million under our credit facility with $143.0 million of borrowings outstanding. After giving effect to our then current borrowings, letters of credit, and the financial covenants contained in our credit facility, we had the ability to borrow approximately $106.6 million in additional amounts thereunder as of March 31, 2022. Our credit facility matures on August 31, 2023.

We expect that our primary sources of liquidity to meet operating expenses, service our indebtedness, pay distributions to our unitholders and fund capital expenditures will be provided by cash flows generated by our operations, borrowings under our credit facility and access to the debt and equity capital markets. Our ability to generate cash from operations will depend upon our future operating performance, which is subject to certain risks. For a discussion of such risks, please read "Item 1A. Risk Factors" of our Form 10-K for the year ended December 31, 2021, filed with the SEC on March 1, 2022. In addition, due to the covenants in our credit facility, our financial and operating performance impacts the amount we are permitted to borrow under that facility.

We are in compliance with all debt covenants as of March 31, 2022 and expect to be in compliance for the next twelve months.

Interest Rate Risk

We are subject to interest rate risk on our credit facility due to the variable interest rate and may enter into interest rate swaps to reduce this variable rate risk.

Seasonality

A substantial portion of our revenues is dependent on sales prices of products, particularly NGLs and fertilizers, which fluctuate in part based on winter and spring weather conditions. The demand for NGLs is strongest during the winter heating season and refinery blending season. The demand for fertilizers is strongest during the early spring planting season. However, our Terminalling and Storage and Transportation business segments and the molten sulfur business are typically not impacted by seasonal fluctuations and a significant portion of our net income is derived from our Terminalling and Storage, Sulfur Services and Transportation business segments. Further, extraordinary weather events, such as hurricanes, have in the past, and could in the future, impact our Terminalling and Storage, Sulfur Services, and Transportation business segments.

Impact of Inflation

Inflation did not have a material impact on our results of operations for the three months ended March 31, 2022 or 2021. Inflation may increase the cost to acquire or replace property, plant and equipment. It may also increase the costs of labor and supplies. In the future, increasing energy prices could adversely affect our results of operations. Diesel fuel, natural gas, chemicals and other supplies are recorded in operating expenses. An increase in price of these products would increase our operating expenses which could adversely affect net income. We cannot provide assurance that we will be able to pass along increased operating expenses to our customers.

Environmental Matters

Our operations are subject to environmental laws and regulations adopted by various governmental authorities in the jurisdictions in which these operations are conducted. We incurred no material environmental costs, liabilities or expenditures to mitigate or eliminate environmental contamination during the three months ended March 31, 2022 or 2021.


Item 3.			Quantitative and Qualitative Disclosures about Market Risk

The Partnership is exposed to commodity risk and interest rate risk in its normal business activities. The following disclosures about market risk provide an update to, and should be read in conjunction with, “Item 7A. Quantitative and Qualitative Disclosures about Market Risk” set forth in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 1, 2022.

Commodity Risk. The Partnership from time to time uses derivatives to manage the risk of commodity price fluctuation. Commodity risk is the adverse effect on the value of a liability or future purchase that results from a change in commodity price. We have established a hedging policy and monitor and manage the commodity market risk associated with potential commodity risk exposure. In addition, we focus on utilizing counterparties for these transactions whose financial condition is appropriate for the credit risk involved in each specific transaction.

We have entered into hedging transactions as of March 31, 2022 to protect a portion of our commodity price risk exposure. These hedging arrangements are in the form of swaps and options for NGLs. We have instruments totaling a gross notional quantity of 80,000 barrels settling during the period from April 30, 2022 through May 31, 2022. These instruments settle against the applicable pricing source for each grade and location. These instruments are recorded on our Consolidated and Condensed Balance Sheets at March 31, 2022 in "Fair value of derivatives" as a current asset of $0.2 million. Based on the current net notional volume hedged as of March 31, 2022, a $0.10 change in the expected settlement price of these contracts would result in an impact to our net income of approximately $0.3 million.

Our hedging strategy is designed to protect us from excessive pricing volatility. However, since we do not typically hedge 100% of our exposure, abnormal price volatility in any of these commodity markets could influence operating income.

For derivatives designated in cash flow hedging relationships, we record the gains and losses from the use of these instruments in accumulated other comprehensive income (loss) on the consolidated balance sheets and subsequently recognize the accumulated gains and losses into cost of products sold in the same period when the associated underlying transactions occur. At March 31, 2022, accumulated other comprehensive income (loss) included $0.4 million in unrealized losses for these derivative instruments. All other commodity derivatives are marked-to-market and recognized into cost of products sold with the offset recognized as an asset or accrued liability. See Note 8 of the consolidated financial statements for further information on our outstanding derivatives.

Interest Rate Risk. We are exposed to changes in interest rates as a result of our credit facility, which had a weighted-average interest rate of 4.50% as of March 31, 2022. Based on the amount of unhedged floating rate debt owed by us on March 31, 2022, 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 $1.4 million annually.

We are not exposed to changes in interest rates with respect to our 2024 Notes and 2025 Notes as these obligations are fixed rate. Based on the quoted prices for identical liabilities in markets that are not active at March 31, 2022, the estimated fair value of the 2024 Notes and 2025 Notes was $54.8 million and $302.8 million, respectively. Market 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 March 31, 2022, would result in a $0.6 million decrease in the fair value of our 2024 Notes and a $2.6 million decrease in the fair value of our 2025 Notes.


Item 4.			Controls and Procedures

Evaluation of disclosure controls and procedures. In accordance with Rules 13a-15 and 15d-15 of the Exchange Act, we, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer of our general partner, carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer of our general partner concluded that our disclosure controls and procedures were effective, as of the end of the period covered by this report, to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

There were no changes in our internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION


Item 1.			Legal Proceedings

From time to time, we are subject to certain legal proceedings, claims and disputes that arise in the ordinary course of our business. Although we cannot predict the outcomes of these legal proceedings, these actions, in the aggregate, could have a material adverse impact on our financial position, results of operations or liquidity. A description of our legal proceedings is included in "Item 1. Financial Statements, Note 13. Commitments and Contingencies", and is incorporated herein by reference.


Item 1A.			Risk Factors

There have been no material changes to the Partnership's risk factors since our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 1, 2022.


Item 5.			Other Information

Disclosure Pursuant to Item 5.02 of Form 8-K – Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers

On April 20, 2022, the board of directors of the general partner of the Partnership and the Compensation Committee approved the First Amendment to the Plan (the “First Amendment”), effective as of the same date, which amendment increased the total number of phantom units available for grant under the Plan from 2,000,000 units to 5,000,000 units. The foregoing description of the First Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the First Amendment, a copy of which is filed herewith as Exhibit 10.1 and incorporated herein by reference.


Item 6.			Exhibits

The information required by this Item 6 is set forth in the Index to Exhibits accompanying this quarterly report and is incorporated herein by reference.

INDEX TO EXHIBITS


Exhibit Number						Exhibit Name

3.1						Certificate of Limited Partnership of Martin Midstream Partners L.P. (the "Partnership"), dated June 21, 2002 (filed as Exhibit 3.1 to the Partnership's Registration Statement on Form S-1 (Reg. No. 333-91706), filed July 1, 2002, and incorporated herein by reference).
3.2						Third Amended and Restated Agreement of Limited Partnership of the Partnership, dated November 23, 2021 (filed as Exhibit 3.1 to the Partnership's Current Report on Form 8-K (SEC File No. 000-50056), filed November 29, 2021, and incorporated herein by reference).
3.3						Certificate of Limited Partnership of Martin Operating Partnership L.P. (the "Operating Partnership"), dated June 21, 2002 (filed as Exhibit 3.3 to the Partnership's Registration Statement on Form S-1 (Reg. No. 333-91706), filed July 1, 2002, and incorporated herein by reference).
3.4						Amended and Restated Agreement of Limited Partnership of the Operating Partnership, dated November 6, 2002 (filed as Exhibit 3.2 to the Partnership's Current Report on Form 8-K (SEC File No. 000-50056), filed November 19, 2002, and incorporated herein by reference).
3.5						Certificate of Formation of Martin Midstream GP LLC (the "General Partner"), dated June 21, 2002 (filed as Exhibit 3.5 to the Partnership's Registration Statement on Form S-1 (Reg. No. 333-91706), filed July 1, 2002, and incorporated herein by reference).
3.6						Second Amended and Restated Limited Liability Company Agreement of the General Partner, dated November 23, 2021 (filed as Exhibit 3.1 to the Partnership's Current Report on Form 8-K (Reg. No. 000-50056), filed November 29, 2021, and incorporated herein by reference).
3.7						Certificate of Formation of Martin Operating GP LLC (the "Operating General Partner"), dated June 21, 2002 (filed as Exhibit 3.7 to the Partnership's Registration Statement on Form S-1 (Reg. No. 333-91706), filed July 1, 2002, and incorporated herein by reference).
3.8						Limited Liability Company Agreement of the Operating General Partner, dated June 21, 2002 (filed as Exhibit 3.8 to the Partnership's Registration Statement on Form S-1 (Reg. No. 333-91706), filed July 1, 2002, and incorporated herein by reference).
3.9						Certificate of Formation of Redbird Gas Storage LLC, dated May 24, 2011 (filed as Exhibit 3.27 to the Partnership's Annual Report on Form 10-K (SEC File No. 000-50056), filed March 2, 2015, and incorporation herein by reference).
3.10						Certificate of Merger of Cardinal Gas Storage Partners LLC with and into Redbird Gas Storage LLC, dated October 27, 2014 (filed as Exhibit 3.27 to the Partnership’s Quarterly Report on Form 10-Q (SEC File No. 000-50056), filed October 29, 2014, and incorporated herein by reference).
3.11						Third Amended and Restated Limited Liability Company Agreement of Redbird Gas Storage LLC (F/K/A Cardinal Gas Storage Partners LLC) dated October 27, 2014 (filed as Exhibit 3.26 to the Partnership’s Quarterly Report on Form 10-Q (SEC File No. 000-50056), filed October 29, 2014, and incorporated herein by reference).
10.1*						First Amendment to Martin Midstream Partners L.P. 2021 Phantom Unit Plan, effective as of April 20, 2022
31.1*						Certifications of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*						Certifications of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*						Certification of Chief Executive Officer pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Pursuant to SEC Release 34-47551, this Exhibit is furnished to the SEC and shall not be deemed to be "filed."
32.2*						Certification of Chief Financial Officer pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Pursuant to SEC Release 34-47551, this Exhibit is furnished to the SEC and shall not be deemed to be "filed."
101						Inline Interactive Data: the following financial information from Martin Midstream Partners L.P.’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2022, formatted in Extensible Business Reporting Language: (1) the Consolidated and Condensed Balance Sheets; (2) the Consolidated and Condensed Statements of Income; (3) the Consolidated and Condensed Statements of Comprehensive Income (4) the Consolidated and Condensed Statements of Cash Flows; (5) the Consolidated and Condensed Statements of Capital; and (6) the Notes to Consolidated and Condensed Financial Statements.
104						Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document (contained in Exhibit 101).

* Filed or furnished herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

Martin Midstream Partners L.P.

By:

Martin Midstream GP LLC

Its General Partner

April 26, 2022

By:

/s/ Sharon L. Taylor

Sharon L. Taylor

Vice President and Chief Financial Officer