MARTIN MIDSTREAM PARTNERS LP
For the period ended Dec 31, 2024. Filed Feb 24, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 24, 2025
MMLP$2.03+3.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-21.
0001176334-24-000040
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-24.
0001176334-25-000040
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 131 previous paragraphs and 128 current paragraphs.
73 unchanged; 41 reworded; 14 added; 15 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 15 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
Termination of Merger Agreement. On October 3, 2024, the Partnership, Martin Resource Management Corporation, MMGP, and Merger Sub, entered into the Merger Agreement pursuant to which Merger Sub agreed to merge with and into the Partnership, with the Partnership surviving as a wholly owned subsidiary of Parent (the “Merger”).
Current report
On December 26, 2024, Martin Resource Management Corporation and the Partnership (with the approval of the Conflicts Committee) entered into the Termination Agreement, pursuant to which the Merger Agreement was terminated. As a result, the Merger Agreement has no further force and effect. As a result of the termination of the Merger Agreement, the special meeting of the unitholders of the Partnership, which was to be held on December 30, 2024 for the purpose of voting on the Merger Agreement and the Merger, was cancelled.
Current report
Amendment to Credit Facility. On February 13, 2025, we entered into an amendment (the “credit facility amendment”) to the credit facility (as defined below) to amended the interest coverage ratio and first lien leverage ratios for the fiscal quarters ending March 31, 2025, June 30, 2025 and September 30, 2025. See “Liquidity and Capital Resources — Description of Our Indebtedness — Credit Facility” below.
Current report
2025 Phantom Unit Plan. On February 11, 2025, the Board of Directors and the Compensation Committee approved the 2025 Plan, effective as of the same date. The 2025 Plan permits the awards of phantom units and phantom unit appreciation rights 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.
Current report
We define Credit Adjusted EBITDA as Adjusted EBITDA excluding net income (loss) and the lower of cost or net realizable value and other non-cash adjustments associated with the butane optimization business, which we exited during the second quarter of 2023. Credit 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 provide additional information regarding the calculation of, and compliance with, certain financial covenants in the Partnership’s Third Amended and Restated Credit Agreement.
Current report
Operating expenses. Operating expenses increased $3.0 million. Expenses at our specialty terminals increased $3.6 million due to increases in insurance premiums of $1.1 million (higher rates), employee-related expenses of $1.0 million, repairs and maintenance of $1.0 million and hurricane expenses of $0.2 million. Expenses at our Smackover refinery decreased $0.4 million, primarily due to a decrease in natural gas utilities of $3.7 million due to a reduction in usage. This was offset by increases in insurance claims of $1.5 million (crude pipeline spill), operating supplies of $0.7 million, repairs and maintenance of $0.5 million, lease expense of $0.3 million related to operating equipment, and insurance premiums of $0.2 million (higher rates).
Current report
Revenues. Revenues decreased $1.1 million. In our marine transportation division, inland revenues increased $2.0 million, primarily related to higher transportation rates, offset by a decrease in utilization associated with equipment repairs and regulatory inspections. Offshore revenues increased $0.8 million, primarily related to higher transportation rates, offset by a decrease in utilization associated with regulatory inspections. Pass-through revenue (primarily fuel) decreased $1.1 million. In our land transportation division, freight revenue increased $4.2 million, primarily due to a 3% increase in total miles. Ancillary revenue (primarily fuel) decreased $6.9 million.
Current report
Selling, general and administrative expenses. Selling, general and administrative expenses increased primarily due to higher employee-related expenses.
Current report
Depreciation and amortization. The decrease in depreciation and amortization is primarily the result of recent disposals, offset by capital expenditures.
Current report
Operating expenses. Operating expenses decreased due to reductions of $0.7 million in marine pass-through expense, $0.4 million in utilities expenses, $0.2 million in outside services, $0.1 million in contract labor, and $0.1 million in marine operating expense. These reductions were offset by an increase of $0.4 million in repairs and maintenance and $0.2 million in employment expenses.
Current report
Selling, general and administrative expenses. Selling, general and administrative expenses increased $1.1 million due to higher employee-related costs.
Current report
Depreciation and amortization. Depreciation and amortization increased $1.1 million largely due to the amortization of higher turnaround costs offset by lower depreciation associated with certain assets becoming fully depreciated.
Current report
Selling, general and administrative expenses. Selling, general and administrative expenses increased primarily due to higher employee-related costs.
Current report
On June 15, 2024, the Partnership experienced a spill of less than 2,500 barrels of crude oil from its transfer pipeline connecting the Sandyland Terminal to the refinery in Smackover, Union County, Arkansas. The Partnership promptly coordinated with the U.S Environmental Protection Agency (the “EPA”), Arkansas Department of Energy and Environment (the “ADEE”), and Arkansas Game and Fish Commission, dedicating the necessary resources, equipment, and personnel to expedite oil recovery and cleanup activities. In October 2024, the EPA transitioned the Partnership’s response from emergency response status to remediation status under ADEE oversight. On October 11, 2024, the ADEE notified the Partnership that documentation, observations, and data indicated the Partnership completed all remedial actions to the maximum practical extent, apart from providing additional water samples. No further remediation is required at this time. The Partnership submitted a claim related to the spill, which was accepted by its insurance carriers, subject to a reservation of rights. The Partnership’s deductibles under the applicable insurance policies total $1.5 million and such deductible expense has been recorded by the Partnership in the Consolidated Statements of Operations for the year ended December 31, 2024. As of February 24, 2025, no fines or penalties have been assessed in relation to the spill.
Removed paragraphs (15)
Previous report
Exit from Butane Optimization Business. In the second quarter of 2023, we completed the previously announced exit of our butane optimization business at the conclusion of the butane selling season. Going forward, with respect to butane, we will operate as a fee-based butane logistics business, primarily utilizing our north Louisiana underground storage assets, which have both truck and rail capability. This logistics business will also utilize our truck transportation assets for fee-based product movements. As a result of this new business model, we will no longer carry butane inventory going forward, enabling us to reduce commodity risk exposure, cash flow and earnings volatility, and working capital requirements.
Previous report
The following revenues and costs, which are included in the historical financial results for the years ended December 31, 2023 and 2022 will not be incurred under the new fee-based butane logistics business model.
Previous report
Issuance of 2028 Notes to Refinance Existing Secured Notes. On February 8, 2023, we completed the sale of $400.0 million in aggregate principal amount of our 2028 Notes. We used the proceeds of the 2028 Notes to complete the tender offers for substantially all of our 2024 Notes and 2025 Notes, redeem all 2024 Notes and 2025 Notes that were not validly tendered, repay a portion of the indebtedness under our credit facility, and pay fees and expenses in connection with the foregoing. Simultaneously with the issuance of the 2028 Notes we amended our credit facility to, among other things, reduce the commitments thereunder from $275.0 million to $200.0 million (with further scheduled reductions to $175.0 million on June 30, 2023 and $150.0 million on June 30, 2024) and extend the scheduled maturity date of the credit facility to February 8, 2027.
Previous report
Non-GAAP Financial Measures
Previous report
Operating expenses. Operating expenses decreased primarily as a result of lease expense of $4.9 million and natural gas utilities of $1.1 million.
Previous report
Depreciation and amortization. Depreciation and amortization decreased primarily as a result of assets being fully depreciated, offset by recent capital expenditures.
Previous report
Other operating loss, net. Other operating loss, net represents gains and losses from the disposition of property, plant and equipment.
Previous report
Marine Transportation Revenues. Inland revenues increased $7.4 million primarily related to transportation rates. Revenue was also impacted by a decrease in pass-through revenue (primarily fuel) of $2.9 million.
Previous report
Land Transportation Revenues. Freight revenue increased primarily due to a 25% increase in load count combined with a 1% increase in total miles, which resulted in a $7.0 million increase. Additionally, ancillary revenue decreased $9.8 million.
Previous report
Selling, general and administrative expenses. Selling, general and administrative expenses increased primarily due to increased employee-related expenses.
Previous report
Operating expenses. Operating expenses decreased due to a decrease in outside towing of $1.1 million, marine fuel expense of $0.7 million, insurance premiums and claims of $0.3 million, contract labor of $0.3 million, and repairs and maintenance of marine assets of $0.3 million. Offsetting these decreases, employment expenses increased $0.4 million combined with a $0.1 million increase in utilities expense.
Previous report
Depreciation and amortization. Depreciation and amortization decreased as a result of the sale of Stockton assets in the third quarter of 2022, offset by recent capital expenditures.
Previous report
Selling, general and administrative expenses. Selling, general and administrative expenses decreased primarily due to the exit of the butane optimization business in the second quarter of 2023.
Previous report
Other operating income (loss), net. Other operating income (loss), net represents gains and losses from the disposition of property, plant and equipment.
Previous report
• a maximum Total Leverage Ratio of not more than 4.75:1.00, stepping down to 4.50:1.00 on March 31, 2025; and
Reworded paragraphs (41)
Previous wording
Electronic Level Sulfuric Acid Joint Venture. On October 19, 2022, Martin ELSA Investment LLC, our affiliate, entered into definitive agreements with Samsung C&T America, Inc. and Dongjin USA, Inc., an affiliate of Dongjin Semichem Co., Ltd., to form DSM Semichem LLC (“DSM”). DSM will produce and distribute electronic level sulfuric acid (“ELSA”). By leveraging our existing assets located in Plainview, Texas and installing additional facilities (the “ELSA Facility”) as required, DSM will produce ELSA that meets the strict quality standards required by the recent advances in semiconductor manufacturing. In addition to owning a 10% non-controlling interest in DSM, we will be the exclusive provider of feedstock to the ELSA Facility. We, through our affiliate MTI, will also provide land transportation services of the ELSA produced by DSM. We expect to fund approximately $25.5 million in aggregate capital expenditures in connection with this joint venture. As of December 31, 2023, we have funded approximately $8.6 million toward ELSA related project costs.
Current wording
Electronic Level Sulfuric Acid Joint Venture. On October 19, 2022, Martin ELSA Investment LLC, our affiliate, entered into definitive agreements with Samsung C&T America, Inc. and Dongjin USA, Inc., an affiliate of Dongjin Semichem Co., Ltd., to form DSM. DSM will produce and distribute ELSA. By leveraging our existing assets located in Plainview, Texas and installing the ELSA Facility as required, DSM will produce ELSA that meets the strict quality standards required by the recent advances in semiconductor manufacturing. In addition to owning a 10% non-controlling interest in DSM, we will be the exclusive provider of feedstock to the ELSA Facility. We, through our affiliate MTI, will also provide land transportation services for the ELSA produced by DSM. On April 1, 2024, we contributed $6.5 million to DSM, which represents the cash contribution required pursuant to DSM's limited liability agreement for our 10% non-controlling interest. Also, in conjunction with the formation of DSM, we contributed approximately 22 acres of land. As of December 31, 2024, we have funded approximately $27.6 million toward ELSA related project costs.
Previous wording
Martin Resource Management Corporation directs our business operations through its ownership of our general partner and under the Omnibus Agreement. In addition to the direct expenses payable to Martin Resource Management Corporation under the Omnibus Agreement, we are required to reimburse Martin Resource Management Corporation for indirect general and administrative and corporate overhead expenses. For the years ended December 31, 2023 and 2022, the board of directors of our general partner approved reimbursement amounts of $14.0 million and $13.5 million, respectively, reflecting our allocable share of such expenses. The board of directors of our general partner will review and approve future adjustments in the reimbursement amount for indirect expenses, if any, annually.
Current wording
Martin Resource Management Corporation directs our business operations through its ownership of our general partner and under the Omnibus Agreement. In addition to the direct expenses payable to Martin Resource Management Corporation under the Omnibus Agreement, we are required to reimburse Martin Resource Management Corporation for indirect general and administrative and corporate overhead expenses. For the years ended December 31, 2024 and 2023, the Board of Directors approved reimbursement amounts of $13.5 million and $14.0 million, respectively, reflecting our allocable share of such expenses. The Board of Directors will review and approve future adjustments in the reimbursement amount for indirect expenses, if any, annually.
Previous wording
To assist management in assessing our business, we use the following non-GAAP financial measures: earnings before interest, taxes, and depreciation and amortization ("EBITDA"), adjusted EBITDA (as defined below), adjusted EBITDA after giving effect to the exit of the butane optimization business, distributable cash flow available to common unitholders (“Distributable Cash Flow”), and free cash flow after growth capital expenditures and principal payments under finance lease obligations ("Adjusted Free Cash Flow"). 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.
Current wording
To assist management in assessing our business, we use the following non-GAAP financial measures: earnings before interest, taxes, and depreciation and amortization ("EBITDA"), Adjusted EBITDA (as defined below), Credit Adjusted EBITDA (as defined below), distributable cash flow available to common unitholders (“Distributable Cash Flow”), and free cash flow after growth capital expenditures and principal payments under finance lease obligations ("Adjusted Free Cash Flow"). 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.
Previous wording
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:
Current wording
Adjusted EBITDA and Credit Adjusted EBITDA. We define Adjusted EBITDA as EBITDA before unit-based compensation expenses, gains and losses on the disposition of property, plant and equipment, impairment and other similar non-cash adjustments, and transaction costs associated with business combination, merger, and divestiture activities. 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:
Previous wording
The GAAP measures most directly comparable to adjusted EBITDA are net income (loss) and net cash provided by (used in) operating activities. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income (loss), operating income (loss), net cash provided by (used in) operating activities, or any other measure of financial performance presented in accordance with GAAP. Adjusted EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate Adjusted EBITDA in the same manner.
Current wording
The GAAP measures most directly comparable to Adjusted EBITDA and Credit Adjusted EBITDA are net income (loss) and net cash provided by (used in) operating activities. Adjusted EBITDA and Credit Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income (loss), operating income (loss), net cash provided by (used in) operating activities, or any other measure of financial performance presented in accordance with GAAP. Adjusted EBITDA and Credit Adjusted EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate Adjusted EBITDA in the same manner.
Previous wording
Distributable Cash Flow and Adjusted Free 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.
Current wording
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.
Previous wording
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.
Current wording
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.
Previous wording
The following tables reconcile the non-GAAP financial measurements used by management to our most directly comparable GAAP measures for the years ended December 31, 2023 and 2022, which represents EBITDA, adjusted EBITDA, adjusted EBITDA after giving effect to the exit of the butane optimization business, distributable cash flow, and adjusted free cash flow:
Current wording
The following tables reconcile the non-GAAP financial measurements used by management to our most directly comparable GAAP measures for the years ended December 31, 2024 and 2023, which represents EBITDA, Adjusted EBITDA, Credit Adjusted EBITDA, Distributable Cash Flow, and Adjusted Free Cash Flow:
Previous wording
Reconciliation of Net Loss to EBITDA, Adjusted EBITDA, and Adjusted EBITDA After Giving Effect to the Exit of the Butane Optimization Business
Current wording
Reconciliation of Net Loss to EBITDA, Adjusted EBITDA, and Credit Adjusted EBITDA
Previous wording
Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA, Adjusted EBITDA After Giving Effect to the Exit of the Butane Optimization Business, Distributable Cash Flow, and Adjusted Free Cash Flow
Current wording
Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA, Credit Adjusted EBITDA, Distributable Cash Flow, and Adjusted Free Cash Flow
Previous wording
Services revenues. Service revenues increased $2.8 million. Revenue at our shore-based terminals increased $2.6 million, including $2.4 million in fuel throughput and $0.4 million in drilling fluids commission, offset by a reduction in space rent of $0.2 million. In addition, revenue at our specialty terminals increased $1.9 million primarily as a result of higher throughput and storage revenue attributable to contractually prescribed, index-based fee adjustments. Revenue at our Smackover refinery decreased $1.8 million as a result of decreased pipeline revenue of $4.6 million, offset by increases in throughput revenue of $1.1 million, reservation fees of $1.1 million and natural gas surcharge of $0.8 million.
Current wording
Revenues. Revenues increased $1.1 million. Revenue at our shore-based terminals increased $2.7 million, including $1.9 million in fuel throughput and $0.8 million in space rent. In addition, revenue at our specialty terminals increased $1.8 million primarily as a result of higher throughput and service revenue. Revenue at our Smackover refinery decreased $3.2 million as a result of decreases in natural gas surcharge of $3.3 million due to a reduction in usage, throughput revenue of $0.2 million and pipeline revenue of $0.1 million, offset by an increase in reservation fees of $0.3 million.
Previous wording
Depreciation and amortization. Depreciation and amortization increased as a result of recent capital expenditures, offset by recent disposals.
Current wording
Depreciation and amortization. The increase in depreciation and amortization is primarily the result of capital expenditures, offset by recent disposals.
Previous wording
Operating expenses. The increase in operating expenses is primarily a result of increased employee-related expenses of $5.2 million, lease expense of $5.1 million, insurance premiums of $3.0 million, shop expenses of $0.7 million and outside towing of $0.7 million, offset by a decrease in pass through expenses (primarily fuel) of $6.6 million.
Current wording
Operating expenses. The increase in operating expenses is primarily a result of increased lease expense of $5.1 million related to new equipment, employee-related expenses of $1.2 million, insurance premiums and claims of $1.2 million, and outside hauls and towing of $0.5 million, offset by decreases in repairs and maintenance of $4.0 million and pass through expenses (primarily fuel) of $2.8 million.
Previous wording
Services revenues. Services revenues increased as a result of a contractually prescribed, index-based fee adjustment.
Current wording
Services revenues. Services revenues increased $0.7 million associated with reservation revenue from the ELSA joint venture beginning in the fourth quarter 2024. Additional increases were the result of a contractually prescribed, index-based fee adjustment.
Previous wording
Products revenues. Products revenues decreased $51.3 million as a result of a 31% drop in average sulfur services sales prices. Products revenues increased an offsetting $12.0 million due to a 10% rise in sales volumes, primarily related to a 20% increase in fertilizer volumes.
Current wording
Products revenues. Products revenues decreased $18.7 million as a result of a 14% drop in sales volumes, primarily related to a 15% decrease in sulfur volumes. Products revenues increased an offsetting $6.3 million due to a 5% rise in average sales prices.
Previous wording
Cost of products sold. A 33% decrease in product cost impacted cost of products sold by $42.0 million, resulting from reduced commodity prices. A 10% increase in sales volumes resulted in an offsetting increase in cost of products sold of $8.8 million. Margin per ton decreased $13.97, or 23%.
Current wording
Cost of products sold. A 14% decrease in sales volumes resulted in a decrease in cost of products sold of $12.9 million. A 1% decrease in product cost impacted cost of products sold by $0.9 million, resulting from reduced commodity prices. Margin per ton increased $9.83, or 21%.
Previous wording
Products revenues. Product revenues decreased $102.2 million due to the exit of the butane optimization business in the second quarter 2023. For the remaining products, sales volumes decreased 19%, lowering revenues by $62.9 million, primarily related to a 20% decrease in NGL sales volume. Our average sales price per barrel decreased $8.56, or 8%, decreasing revenues by $28.7 million.
Current wording
Products revenues. Product revenues decreased $70.5 million due to the exit of the butane optimization business in the second quarter 2023. For the remaining products, sales volumes decreased 3%, lowering revenues by $7.6 million, primarily related to a 6% decrease in other specialty products sales volume. Our average sales price per barrel decreased $1.37, or 1%, decreasing revenues by $3.7 million.
Previous wording
Cost of products sold. Cost of products sold decreased $118.4 million due to the exit of the butane optimization business in the second quarter 2023. For the remaining products, the decrease in sales volumes of 19% resulted in a $56.2 million reduction to cost of products sold. Our average cost per barrel decreased $9.63, or 10%, decreasing cost of products sold by $32.3 million. Our margins increased $1.07 per barrel, or 11%, during the period.
Current wording
Cost of products sold. Cost of products sold decreased $72.3 million due to the exit of the butane optimization business in the second quarter 2023. For the remaining products, the decrease in sales volumes of 3% resulted in a $6.8 million reduction to cost of products sold. Our average cost per barrel decreased $0.98, or 1%, decreasing cost of products sold by $2.7 million. Our margins decreased $0.39 per barrel, or 4%, during the period.
Previous wording
Depreciation and amortization. Depreciation and amortization decreased due to certain assets becoming fully depreciated during the fourth quarter of 2022.
Current wording
Depreciation and amortization. Depreciation and amortization decreased due to certain assets becoming fully depreciated during the third quarter of 2023.
Previous wording
Indirect selling, general and administrative expenses decreased primarily due to decreases in employee-related expenses of $1.4 million, offset by a $0.9 million increase in the indirect expenses allocated from Martin Resource Management Corporation.
Current wording
Indirect selling, general and administrative expenses increased primarily due to transaction expenses associated with the terminated Merger with Martin Resource Management Corporation of $3.7 million and increased insurance claims expense of $0.8 million, offset by a $0.5 million decrease in the indirect expenses allocated from Martin Resource Management Corporation.
Previous wording
Under the Omnibus Agreement, we are required to reimburse Martin Resource Management Corporation for indirect general and administrative and corporate overhead expenses. The board of directors of our general partner approved the following reimbursement amounts:
Current wording
Under the Omnibus Agreement, we are required to reimburse Martin Resource Management Corporation for indirect general and administrative and corporate overhead expenses. The Board of Directors approved the following reimbursement amounts:
Previous wording
The amounts reflected above represent our allocable share of such expenses. The board of directors of our general partner will review and approve future adjustments in the reimbursement amount for indirect expenses, if any, annually.
Current wording
The amounts reflected above represent our allocable share of such expenses. The Board of Directors will review and approve future adjustments in the reimbursement amount for indirect expenses, if any, annually.
Previous wording
Net cash provided by operating activities. Net cash provided by operating activities for the year ended December 31, 2023 increased $121.3 million, primarily as a result of a favorable variance in changes in working capital of $114.0 million combined with an increase in operating results and non-cash items of $11.1 million.
Current wording
Net cash provided by operating activities. Net cash provided by operating activities for the year ended December 31, 2024 decreased $89.1 million, primarily as a result of an unfavorable variance in changes in working capital of $80.0 million, primarily resulting from the exit of the butane optimization business in May of 2023, combined with a decrease in operating results and non-cash items of $9.1 million.
Previous wording
Net cash used in investing activities. Net cash used in investing activities for the year ended December 31, 2023 increased $9.0 million. An increase in cash used of $6.7 million resulted from higher payments for capital expenditures and plant turnaround costs in 2023 combined with a decrease of $2.3 million in net proceeds received from the sale of property, plant and equipment.
Current wording
Net cash used in investing activities. Net cash used in investing activities for the year ended December 31, 2024 increased $24.9 million. An increase in cash used of $13.8 million resulted from higher payments for capital expenditures and plant turnaround costs, cash used to make the initial contribution in DSM of $6.9 million, and a decrease of $4.2 million in net proceeds received from the sale of property, plant and equipment.
Previous wording
Net cash provided by (used in) financing activities. Net cash (used in) provided by financing activities for the year ended December 31, 2023 decreased $112.3 million primarily as a result of a $99.3 million decrease in net borrowings from long-term debt combined with increased debt issuance costs of $14.2 million.
Current wording
Net cash provided by (used in) financing activities. Net cash provided by financing activities for the year ended December 31, 2024 increased $114.1 million primarily as a result of the 2023 period, including net pay downs of long-term debt of $88.7 million, primarily resulting from the exit of the butane optimization business, combined with decreased debt issuance costs of $14.3 million.
Previous wording
At December 31, 2023, we maintained a $175.0 million credit facility that matures February 8, 2027. As of December 31, 2023, we had $42.5 million outstanding under the credit facility and $9.2 million of outstanding irrevocable letters of credit, leaving a maximum amount available to be borrowed under our credit facility for future borrowings and letters of credit of $123.3 million. After giving effect to our then current borrowings, outstanding letters of credit and the financial covenants contained in our credit facility, we had the ability to borrow approximately $109.0 million in additional amounts thereunder as of December 31, 2023.
Current wording
At December 31, 2024, we maintained a $150.0 million credit facility that matures February 8, 2027. As of December 31, 2024, we had $53.5 million outstanding under the credit facility and $9.2 million of outstanding irrevocable letters of credit, leaving a maximum amount available to be borrowed under our credit facility for future borrowings and letters of credit of $87.3 million. After giving effect to our then current borrowings, outstanding letters of credit and the financial covenants contained in our credit facility, we had the ability to borrow approximately $80.7 million in additional amounts thereunder as of December 31, 2024.
Previous wording
Effective February 8, 2023, in connection with the completion of our sale of the 2028 Notes, we amended our credit facility (the “amended credit facility”) to, among other things, reduce the commitments thereunder from $275.0 million to $200.0 million (with further scheduled reductions to $175.0 million on June 30, 2023 and $150.0 million on June 30, 2024) and extend the scheduled maturity date of the amended credit facility to February 8, 2027. The commitments under the amended credit facility can be increased from time to time upon our request, subject to certain conditions (including the consent of the increasing lenders), up to an additional $50.0 million.
Current wording
Effective February 8, 2023, in connection with the completion of our sale of the 2028 Notes, we amended our credit facility (as further amended from time to time, the "credit facility”) to, among other things, reduce the commitments thereunder from $275.0 million to $200.0 million (with further scheduled reductions to $175.0 million on June 30, 2023 and $150.0 million on June 30, 2024) and extend the scheduled maturity date of the credit facility to February 8, 2027. The commitments under the credit facility can be increased from time to time upon our request, subject to certain conditions (including the consent of the increasing lenders), up to an additional $50.0 million.
Previous wording
The amended credit facility is used for ongoing working capital needs and general partnership purposes, including to finance permitted investments, acquisitions and capital expenditures. Prior to the credit facility amendment, the level of outstanding draws on our credit facility from January 1, 2023 through February 8, 2023 ranged from a low of $148.5 million to a high of $184.0 million. From February 8, 2023 through December 31, 2023, the level of outstanding draws on our amended credit facility ranged from a low of $42.5 million to a high of $138.0 million.
Current wording
The credit facility is used for ongoing working capital needs and general partnership purposes, including to finance permitted investments, acquisitions and capital expenditures. The level of outstanding draws on our credit facility from January 1, 2024 through December 31, 2024, ranged from a low of $40.5 million to a high of $102.5 million.
Previous wording
The amended credit facility is guaranteed by substantially all of our subsidiaries, other than Martin ELSA Investment LLC. Obligations under the amended credit facility are secured by first priority liens on substantially all of our assets and those of the guarantors, including, without limitation, inventory, accounts receivable, bank accounts, marine vessels, equipment, fixed assets and the interests in certain subsidiaries.
Current wording
The credit facility is guaranteed by substantially all of our subsidiaries, other than Martin ELSA Investment LLC. Obligations under the credit facility are secured by first priority liens on substantially all of our assets and those of the guarantors, including, without limitation, inventory, accounts receivable, bank accounts, marine vessels, equipment, fixed assets and the interests in certain subsidiaries.
Previous wording
We may prepay all amounts outstanding under the amended credit facility at any time without premium or penalty (other than customary breakage costs associated with Term SOFR (as defined in the amended credit facility), subject to certain notice requirements. The amended credit facility requires mandatory prepayments of amounts outstanding thereunder with excess cash that exceeds $25.0 million and the net proceeds of certain asset sales.
Current wording
We may prepay all amounts outstanding under the credit facility at any time without premium or penalty (other than customary breakage costs associated with Term SOFR (as defined in the credit facility), subject to certain notice requirements. The 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.
Previous wording
Indebtedness under the credit facility bears interest at our option at the Adjusted Term SOFR (as defined in the amended credit facility), plus an applicable margin, or the Alternate Base Rate (the highest of the Federal Funds Rate plus 0.50%, the one-month Adjusted Term SOFR plus 1.0%, or the administrative agent’s prime rate) plus an applicable margin. We pay a per annum fee on all letters of credit issued under the amended credit facility, and we pay a commitment fee per annum on the unused revolving credit commitments under the amended credit facility. The letter of credit fee, the commitment fee and the applicable margins for our interest rate vary quarterly based on our Total Leverage Ratio (as defined in the amended credit facility, being generally computed as the ratio of total funded debt to consolidated earnings before interest, taxes, depreciation, amortization and certain other non-cash charges) and are as follows:
Current wording
Indebtedness under the credit facility bears interest at our option at the Adjusted Term SOFR (as defined in the credit facility), plus an applicable margin, or the Alternate Base Rate (the highest of the Federal Funds Rate plus 0.50%, the one-month Adjusted Term SOFR plus 1.0%, or the administrative agent’s prime rate) plus an applicable margin. 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:
Previous wording
The applicable margin for Adjusted Term SOFR borrowings at December 31, 2023 was 3.25%. The applicable margin for Adjusted Term SOFR borrowings at February 21, 2024 is 3.25%.
Current wording
The applicable margin for Adjusted Term SOFR borrowings at December 31, 2024 was 3.50%. The applicable margin for Adjusted Term SOFR borrowings at February 24, 2025 is 3.25%.
Previous wording
The amended credit facility includes financial covenants that are tested on a quarterly basis, based on the rolling four quarter period that ends on the last day of each fiscal quarter, that require maintenance of:
Current wording
Effective February 13, 2025, we entered into the credit facility amendment to modify the financial covenants in our credit facility. The credit facility amendment includes financial covenants that are tested on a quarterly basis, based on the rolling four quarter period that ends on the last day of each fiscal quarter, that require maintenance of:
Previous wording
• a minimum Interest Coverage Ratio (as defined in the amended credit facility) of at least 2.00:1.00;
Current wording
• a minimum Interest Coverage Ratio (as defined in the credit facility) of at least 2.00:1.00 for the fiscal quarter ended December 31, 2024, stepping down to 1.75:1.00 for the fiscal quarters ending March 31, 2025, June 30, 2025 and September 30, 2025, and stepping back up to 2.00:1.00 for the fiscal quarter ending December 31, 2025 and each fiscal quarter thereafter;
Previous wording
• a maximum First Lien Leverage Ratio (as defined in the amended credit facility) of not more than 1.50:1.00.
Current wording
• a maximum First Lien Leverage Ratio (as defined in the credit facility) of not more than 1.50:1.00 for the fiscal quarter ended December 31, 2024, stepping down to 1.25:1.00 for the fiscal quarters ending March 31, 2025, June 30, 2025 and September 30, 2025, and stepping back up to 1.50:1.00 for the fiscal quarter ending December 31, 2025 and each fiscal quarter thereafter.
Previous wording
In addition, the amended credit facility contains various covenants, which, among other things, limit our and our subsidiaries’ ability to: (i) grant or assume liens; (ii) make investments (including investments in our joint ventures) and acquisitions; (iii) enter into certain types of hedging agreements; (iv) incur or assume indebtedness; (v) sell, transfer, assign or convey assets; (vi) repurchase our equity, make distributions (including a limit on our ability to make quarterly distributions to unitholders in excess of $0.005 per unit unless our Total Leverage Ratio is below 3.75:1:00, pro forma first lien leverage is less than 1.00 to 1.00, and our pro forma liquidity is greater than or equal to 35% of the commitments under our amended credit facility) and certain other restricted payments; (vii) change the nature of our business; (viii) engage in transactions with affiliates; (ix) enter into certain burdensome agreements; (x) make certain amendments to the Omnibus Agreement and our material agreements; and (xi) permit our joint ventures to incur indebtedness or grant certain liens.
Current wording
In addition, the credit facility contains various covenants, which, among other things, limit our and our subsidiaries’ ability to: (i) grant or assume liens; (ii) make investments (including investments in our joint ventures) and acquisitions; (iii) enter into certain types of hedging agreements; (iv) incur or assume indebtedness; (v) sell, transfer, assign or convey assets; (vi) repurchase our equity, make distributions (including a limit on our ability to make quarterly distributions to unitholders in excess of $0.005 per unit unless our Total Leverage Ratio is below 3.75:1:00, pro forma first lien leverage is less than 1.00 to 1.00, and our pro forma liquidity is greater than or equal to 35% of the commitments under our credit facility) and certain other restricted payments; (vii) change the nature of our business; (viii) engage in transactions with affiliates; (ix) enter into certain burdensome agreements; (x) make certain amendments to the Omnibus Agreement and our material agreements; and (xi) permit our joint ventures to incur indebtedness or grant certain liens.
Previous wording
The amended credit facility contains customary events of default, including, without limitation: (i) failure to pay any principal, interest, fees, expenses or other amounts when due; (ii) failure to meet the quarterly financial covenants; (iii) failure to observe any other agreement, obligation, or covenant in the amended credit facility or any related loan document, subject to cure periods for certain failures; (iv) the failure of any representation or warranty to be materially true and correct when made; (v) our, or any of our subsidiaries’ default under other indebtedness that exceeds a threshold amount; (vi) bankruptcy or other insolvency events involving us or any of our subsidiaries; (vii) judgments against us or any of our subsidiaries, in excess of a threshold amount; (viii) certain ERISA events involving us or any of our subsidiaries, in excess of a threshold amount; (ix) a change in control (as defined in the amended credit facility); and (x) the invalidity of any of the loan documents or the failure of any of the collateral documents to create a lien on the collateral.
Current wording
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.
Previous wording
The amended credit facility also contains certain default provisions relating to Martin Resource Management Corporation. If Martin Resource Management Corporation no longer controls our general partner, the lenders under the amended credit facility may declare all amounts outstanding thereunder immediately due and payable. In addition, an event of default by Martin Resource Management Corporation under its credit facility could independently result in an event of default under our amended credit facility if it is deemed to have a material adverse effect on us.
Current wording
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.
Previous wording
If an event of default relating to bankruptcy or other insolvency events occurs with respect to us or any of our subsidiaries, all indebtedness under our amended credit facility will immediately become due and payable. If any other event of default exists under our amended credit facility, the lenders may terminate their commitments to lend us money, accelerate the maturity of the indebtedness outstanding under the amended credit facility and exercise other rights and remedies. In addition, if any event of default exists under our amended credit facility, the lenders may commence foreclosure or other actions against the collateral.
Current wording
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.
Previous wording
At December 31, 2023, we had cash and cash equivalents of $0.05 million and available borrowing capacity of $123.3 million under our credit facility with $42.5 million of borrowings outstanding. After giving effect to our then current borrowings, letters of credit, and the financial covenants contained in our credit facility, we had the ability to borrow approximately $109.0 million in additional amounts thereunder as of December 31, 2023.
Current wording
At December 31, 2024, we had cash and cash equivalents of $0.05 million and available borrowing capacity of $87.3 million under our credit facility with $53.5 million of borrowings outstanding. After giving effect to our then current borrowings, letters of credit, and the financial covenants contained in our credit facility, we had the ability to borrow approximately $80.7 million in additional amounts thereunder as of December 31, 2024.
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Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Selling, general and administrative expenses. Selling, general and administrative expenses remained relatively consistent.
Previous report — wording carried elsewhere
Other operating income, net. Other operating income, net represents gains from the disposition of property, plant and equipment.