47 slides from Martin Midstream Partners L.p's conference presentation, Apr 15, 2011
Slide 1: Martin Midstream Partners, LP Presentation to High Yield Conference
Exhibit 99 Martin Midstream Partners, LP Presentation to High Yield Conference May 2011
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements included 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), are forward-looking statements. These statements can be id
Slide 3: Management Team
Management Team • Ruben Martin Chief Executive Officer, General Partner – Has served as Chief Executive Officer and a member of the Board of Directors since June 2002 – President of Martin Resource Management Corporation (“MRMC” or the “Parent”) since 1981 and joined MRMC in 1974 • Bob Bondurant Exe
Slide 4: Partnership Overview
MIDSTREAMPARTNERS Partnership Overview
Slide 5: Differentiated by Diversity
Differentiated by Diversity 32% 24% Terminalling and Storage Natural Gas Services Started in early 1990s Started in 1950s Sulfur Services NASDAQ: MMLP Marine Transportation Started in 1960s Unit price: $39.08 Started in 1980s Market Cap: $800 million Distribution / Yield: $3.04 / 7.8% (as of April 1
Slide 6: Attractive Operating Footprint
Attractive Operating Footprint • Strategic operations across ~50 locations in 10 states, primarily in the Gulf Coast Region of the U.S., provide cost-efficient operations in areas of high customer activity – Shore bases acr0ss the Gulf Coast – Lubricant distributors and marketers – Favorable proximi
Slide 7: Acquisitions + Equity - A Pattern Repeated
Acquisitions + Equity - A Pattern Repeated Public Equity High Yield Offering: Public Equity Public Equity Offering: $50.6MM $200.0MM Offering: $28.1MM Offering: $70.7MM (1) 2010 2011 $28.7MM Drop-downs $20MM Acquisition $25MM Acquisition of $36.5MM Drop-down of Shore-based Gas Gathering of Assets Ga
Slide 8: Strong General Partner Support
Strong General Partner Support Private Company: Martin Management Resource 28.5% Owned by MRMC is fully committed to the success of the Partnership Management / Corporation ESOP* 100% • MRMC developed the infrastructure and brand Martin Resources` reputation for the Partnership’s business segments o
Slide 9: High Quality, Stable Customer Base
High Quality, Stable Customer Base • Integrated and complementary business segments uniquely position Martin and are a key driver of long-term customer relationships – Aligned with customers to address logistical and transportation issues and/or achieve operational synergies through strategic allian
Slide 10: Business Segment Overviews
MIDSTREAMPARTNERS Business Segment Overviews
Slide 11: Terminalling & Storage
MIDSTREAMPARTNERS Terminalling & Storage
Slide 12: Terminalling & Storage: Asset Overview
Terminalling & Asset Overview Storage: • Partnership’s largest segment by cash flow • Stable fee-based contracts • Business driven by 3 types of terminals – Full Service Marine Terminals – Fuel and Lubricant Marine Terminals – Specialty Petroleum Terminals Marine Terminals • One of the largest opera
Slide 13: Shore-based Terminalling Asset Drop-down Acquisitions
Shore-based Terminalling Asset Drop-down Acquisitions • In August 2010, acquisition of two shore-based marine terminals in Mississippi and Alabama from MRMC for $11.7 million – Theodore, AL terminal has approximately 20,000 barrels of storage capacity and Pascagoula, MS terminal has approximately 12
Slide 14: Significantly Expanded Marine Terminal Assets
Terminalling & Storage: Significantly Expanded Marine Terminal Assets Full Service Terminals Fuel & Lubricant Terminals • Shore bases offering services including logistical • Terminals dedicated to providing storage, support, lubricant distribution and marketing and fuel handling, distribution and m
Slide 15: Our Proven Performer - Specialty Terminals
Our Proven Performer - Specialty Terminals Specialty Petroleum Terminals • Highest margin business (40 - 50%) given unique products and lack of competition equipped to provide specialty services – Requisite equipment and experience necessary to handle difficult materials (e.g. molten sulfur, sulfuri
Slide 16: Cross Refinery Asset Detail
Terminalling & Storage: Cross Refinery Asset Detail Business Overview: • 7,500 bpd naphthenic lube refinery in Smackover, AR • Approximately 10% of total U.S. market share in specialized refining capacity • Profitability drivers include: – Refinery efficiency (utilization / lube yield maximization)
Slide 17: Terminalling & Storage: Continued Performance
Terminalling & Continued Performance Storage: Revenue Adjusted EBITDA 1 Reflects Revenue pro forma for Cross acquisition • Business Outlook – Our largest and fastest growing segment producing nearly 100% fee-based cash flows – Expanded shore base market penetration through recent L&L acquisition – C
Slide 18: Natural Gas Services
MIDSTREAMPARTNERS Natural Gas Services
Slide 19: Natural Gas Services: Snapshot
Natural Gas Snapshot Services: • Prism’s key assets include: Breakdown of 2010 EBITDA Contribution – 706 miles of gathering and transmission pipelines § Woodlawn - ~142 miles of gathering pipe, ~33 miles of transport pipe – Solid processing capabilities § Waskom - 285 MMcf/d natural gas processing p
Slide 20: Velocity Midstream Acquisition
Velocity Midstream Acquisition • In November 2010, Prism acquired certain East Texas natural gas gathering assets from Velocity Midstream for $25 million, the “Darko Acquisition” Gas Gathering Assets • Approximately 20 miles of natural gas gathering pipelines that are connected to Harrison County Ga
Slide 21: Natural Gas Services: Integrated with Attractive Contract Mix
Natural Gas Services: Integrated with Attractive Contract Mix Solutions • The Natural Gas Services segment provides an integrated distribution channel for gas producers – Gathering and processing facilities collect the wet gas and separate liquids under fee-based, percent of proceeds or percent of l
Slide 22: Natural Gas Services - Integrated Solutions
Natural Gas Services - Integrated Solutions Liquids separated under fee-based POP or POL pricing Third party purchasers arrangements NGLs MTI. Belvieu Locked-in, higher Wet Gas (Pipelines, indexed pricing priced winter sales trucks) Martin storage facilities Third party purchasers MTI. Belvieu index
Slide 23: Natural Gas Value Chain
Natural Gas Value Chain Liquids END USERS: Dry Natural Gas (principally methane with ethane) Power Generation Industrial Fuel EAST TEXAS PRODUCTION COTTON VALLEY AND HAYNESVILLE SHALE Residential Fuel NATURAL GAS WASKOM PROCESSING NATURAL GAS NATURAL GAS GATHERING PIPELINES PLANT PIPELINES STORAGE M
Slide 24: Natural Gas Services: Growth in 2010 = Increased Performance
Natural Gas Services: Growth in 2010 = Increased Performance Revenue Adjusted EBITDA 1 Reflects EBITDA pro forma for Crosstex acquisitions Volume • Business Outlook – Multi-year dedicated acreage contracts (up to life of reserves) provide access to Cotton Valley and Haynesville gas – Cold winter sea
Slide 25: Sulfur Services
Sulfur Services
Slide 26: Sulfur Services: Snapshot
Sulfur Services: Snapshot • Engaged in the gathering of molten sulfur (270o F) from refiners and natural gas processing plants • Integrated suite of specialized assets designed to gather, transport, store and process sulfur • In addition to fees generated from gathering and storing, Martin is strate
Slide 27: Sulfur Services: Intermodal Logistics
Sulfur Services: Intermodal Logistics • Martin is able to capture fees at five points along the integrated system, which the Partnership has developed over 30 years Molten Form Fertilizer ($ Fee) Production * Martin can take physical delivery at this point MMLP purchases ($ Fee) Tampa, FL sulfur ($
Slide 28: Full Service Logistical & Consistent Fertilizer Provider
Full Service Logistical & Consistent Fertilizer Provider Results Molten Sulfur Overview • Sales contracts typically last 1 to 5 years • Contracts priced as a margin over a published market indicator – Both sales and purchase prices are tied to a market published index (products/commodities are simul
Slide 29: Sulfur Services: Performance
Sulfur Performance Services: Revenue Adjusted EBITDA • Business Outlook Volume – Additional prilling capacity and new reservation fee contracts added for 2011 – Expected demand in 2011 fueled by emerging markets, particularly as China continues to require mass quantities – Consistent performance fro
Slide 30: Marine Transportation
MIDSTREAMPARTNERS Marine Transportation
Slide 31: Marine Transportation: Asset Base Well Positioned
Marine Transportation: Asset Base Well Positioned • Martin remains a “term market player” for inland transportation services – Goal is to keep fleet 100% contracted on a long-term basis, as historically achieved – Contract tenor has shortened, however, strengthening economy will improve contract str
Slide 32: Marine Asset Drop-down Acquisition
Marine Asset Drop-down Acquisition • In December 2010, acquisition of a 60,000 barrel offshore barge from MRMC for $17 million – The M6000, a 60,000 barrel barge carrying clean product (diesel fuel) for MFS, servicing the shore-based terminals owned by MMLP and currently paired with the MMLP tug LaF
Slide 33: Marine Transportation: Solid Performance
Marine Solid Performance Transportation: Revenue Adjusted EBITDA • Business Outlook – Maintain high utilization rates, with a goal of restoring longer term contracts – Rates have reached market bottom, providing significant upside as demand rebounds – Continued industry capacity reduction as older f
Slide 34: Financial Overview
MIDSTREAMPARTNERS Financial Overview
Slide 35: Current Capitalization
Current Capitalization • MMLP issued $70.7 million in common equity units in February 2011 • MMLP is currently in the process of upsizing and extending its revolving credit facility from $275MM to $350MM- expected closing 4/15/2011 35
Slide 36: Financial Strategy: No Change in our Discipline
Financial Strategy: No Change in our Discipline • Target Leverage: – 3.0x - 3.5x • Distribution Policy: – Conservative approach to LP distributions – The Partnership and BoD will consider distribution increases once a comfortable DCR has been achieved (target of 1.15x) • Risk Management: – Hedging p
Slide 37: Heavily Weighted Fee-Based Contract Mix
Heavily Weighted Fee-Based Contract Mix • Terminalling and Storage: – Cornerstone of the Partnership’s stable, fee-based cash flows as the largest segment by cash flow contribution – Strength in tenor (1 - 12 years), product and geographic diversity; specialized products in niche markets allowing fo
Slide 38: Active Commodity Risk Management
Active Commodity Risk Management • Established hedging policy to manage commodity risk exposure – Swaps for crude oil, natural gas, natural gasoline – Careful monitoring of counterparty risk • Hedging focused in the Natural Gas Services segment – 45% of volumes hedged for 2011 and 20% for 2012 – A $
Slide 39: Attractive Growth Across Business Segments
Attractive Growth Across Business Segments Opportunities • Multiple lines of business provide the opportunity to direct capital strategically to multiple segments – Focus on highest value projects • Cross Refinery growth opportunities with tire industry demand – $50 million of investment over 2 year
Slide 40: Closing Key Investment Considerations
Closing Key Investment Considerations Fully Integrated à Four fully integrated and complementary business units spanning the midstream Service Provider value chain Diversified Business à Diverse products and services, with specialized equipment and assets to process, Mix transport and store hard-to-
Slide 41: Question & Answer
MIDSTREAMPARTNERS Question & Answer
Slide 42: Non-GAAP Reconciliation
MIDSTREAMPARTNERS Non-GAAP Reconciliation
Slide 43: Adjusted EBITDA Reconciliation - 2010
Adjusted EBITDA Reconciliation - 2010 43
Slide 44: Adjusted EBITDA Reconciliation - 2009
Adjusted EBITDA Reconciliation - 2009 44
Slide 45: Adjusted EBITDA Reconciliation - 2008
Adjusted EBITDA Reconciliation - 2008 45
Slide 46: Adjusted EBITDA Reconciliation - 2007
Adjusted EBITDA Reconciliation - 2007 46
Slide 47: Martin Midstream Partners, LP Presentation to High Yield Conference
Martin Midstream Partners, LP Presentation to High Yield Conference May 2011