Martin Midstream Partners L.p. · NASDAQ:MMLP
Martin Midstream Partners L.p — Investor Presentation (May 2010)
35 slides from Martin Midstream Partners L.p's investor presentation, May 14, 2010
Slide 1: Martin Midstream Partners L.P. Presentation May 2010
Martin Midstream Partners L.P. Presentation to May 2010
Slide 2: Forward-Looking Statements
Forward-Looking Statements 2 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
Slide 3: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures 3 This presentation includes certain non-GAAP financial measures, such as EBITDA, Adjusted EBITDA and Distributable Cash Flow. These non-GAAP financial measures are not meant to be considered in isolation or as a substitute for results prepared in accordance with a
Slide 4: Presenters
Presenters 4 Ruben Martin - President & Chief Executive Officer Joe McCreery - Vice President, Finance / Head of Investor Relations
Slide 5: Partnership Overview
Partnership Overview
Slide 6: Partnership Snapshot
Sulfur Services Marine Transportation Terminalling and Storage Natural Gas Services ~35% ~21% ~17% Partnership Snapshot 6 ~27% Note: Percentages represent approximate Adjusted EBITDA contribution. Market capitalization as of market close on May 10, 2010 1 Adjusted EBITDA reconciliation is found at t
Slide 7: Investment Considerations
7 Investment Considerations Four fully integrated and complementary business segments that span the midstream value chain Proven Management Consistently conservative leverage profile (3.0x - 3.5x) with sustained growth Majority of cash flows are fee-based with minimal commodity exposure High quality
Slide 8: Stable, Fee-Based Cash Flow Concentration
8 Terminalling and Storage: Multi-year, fee-based Specialized products have fee minimums Natural Gas Services: Stable, margin-based wholesale NGLs Multi-year up to life of reserves for gathering and processing Sulfur Services: Take-or-pay prilling Stable, margin-based molten sulfur Stable, margin-ba
Slide 9: Fully Integrated Service Provider
Fully Integrated Service Provider 9 One of the broadest providers of products and services in energy-focused regions through: Specialized equipment and facilities to store and transport hard-to-handle products Lubricant distributors and marketers Marine service terminals Coast-to-coast integrated su
Slide 10: Attractive Operating Footprint
Strategic operations across ~ 40 locations in 10 states primarily in the Gulf Coast Region Favorable proximity to major refining regions of the U.S. Coast-to-coast integrated sulfur infrastructure, including access to export markets 10 Attractive Operating Footprint Marine service terminals providin
Slide 11: High Quality, Stable Customer Base
11 Aligned with customers to address logistical and transportation issues and/or achieve operational synergies through strategic alliances and partnerships Many relationships span decades, with additional services added in recent years Unique assets and capabilities (particularly for hard-to-handle
Slide 12: Stable, Predictable Cash Flows
12 Stable, Predictable Cash Flows Historical EBITDA Growth Note: EBITDA calculated on a pro forma basis to reflect completed acquisitions 1 2008 EBITDA reflects $18 million of one-time extraordinary profits related to previous sulfur pricing mechanism PF EBITDA from acquisitions Excess EBITDA from e
Slide 13: Consistently Conservative Leverage Profile
13 Consistently Conservative Leverage Profile Historical Pro Forma Leverage Profile 1 Reflects $100 million equity issuance in January 2006 following November 2005 Prism acquisition Note: Leverage calculated on a pro forma basis to reflect completed acquisitions 2 Pro forma to include the effect of
Slide 14: Disciplined Acquisitions on Multiple Growth Platforms
Key Acquisition Criteria Modest size (less than $100MM) Strongly prefer non-competitive, "under the radar" situations Substantial prior knowledge of each acquired entity (as customer or supplier) Consistent use of equity to finance acquisitions within target leverage (3.0x - 3.5x) 14 Disciplined Acq
Slide 15: Strong General Partner Support
15 Developed infrastructure and brand reputation for the Partnership's business segments over the past 50 years Structured to support the Partnership Maintains distinct set of assets and business units Demonstrated historical support Over $100MM invested through unit purchases to support acquisition
Slide 16: Business Segment Overview
Business Segment Overview
Slide 17: Terminalling & Storage - Snapshot
Terminalling & Storage - Snapshot Fee-based marine and inland terminal services in key industry locations Marine Shore-Based Terminals One of largest operators of marine service terminals in the Gulf Coast region 12 terminals, ~ 2.6MM bbls of storage capacity Substantially all fee-based contracts Sp
Slide 18: Terminalling & Storage - Cross Oil Processing Assets
Specialized refinery that converts crude oil into naphthenic lubricants for high quality, customized industrial uses November 2009 drop-down from a subsidiary of MRMC for $45MM in MMLP units 7,500 bpd capacity in Smackover, AR ~ 10% total U.S. market share 12-year Tolling Agreement with MRMC Quarter
Slide 19: Natural Gas Services - Snapshot
Natural Gas Services - Snapshot Primarily operate in Cotton Valley and Haynesville Shale regions Waskom Processing Plant 50% interest (partner is CenterPoint) Only natural gas plant in East Texas with full fractionation capability Woodlawn Plant & Gathering System Integrated natural gas gathering an
Slide 20: Natural Gas Services - Integrated Solutions
Locked-in, higher Natural Gas Services - Integrated Solutions 20 Wet Gas Liquids separated under fee-based POP or POL pricing arrangements Third party purchasers (Pipelines, trucks) Martin storage facilities Third party purchasers NGLs Martin wholesale propane business Mt. Belvieu Propane retailers
Slide 21: Sulfur Services - Snapshot
Sulfur Services - Snapshot Integrated suite of specialized assets designed to gather, transport, store and process molten sulfur (275o F) Gathering and Storage Sulfuric Acid Production Fertilizer Manufacturing - specialized sulfur and sulfur-based fertilizer products Prilling - transformation of mol
Slide 22: Sulfur Services - Integrated System Developed Over Years
Sulfur Services - Integrated System Developed Over 30 Years 22 Refinery Gas Fertilizer Production Industrial Uses International Demand Beaumont, TX Stockton, CA Tampa, FL Truck, Barge, Rail Truck, Barge, Rail Barge Barge Prilling (take or pay) Molten Form China, Brazil, Morocco * Martin can take phy
Slide 23: Sulfur Services - Fee-Based Contracts with Minimal Price Risk
Sulfur Services - Fee-Based Contracts with Minimal Price Risk 1 - 5-year contracts Prilling: Take-or-Pay (reservation fees regardless of utilization) Molten: Buy/sell tied to market published index with simultaneous pricing Key customers: Exxon Mobil, Valero, Conoco (each for prilling), CF Industrie
Slide 24: Marine Transportation - Snapshot
Marine Transportation - Snapshot Fee-based (with fuel cost pass-through) marine transportation services for petroleum products and by-products Assets operating along U.S. inland waterway system and coastline Push boat/tugboat = power source; tank barge = freight capacity Primarily transport asphalt,
Slide 25: Marine Transportation - Asset Improvement Details
Marine Transportation - Asset Improvement Details Over 500 barges of a fleet of 3,000 barges in the U.S. are over 35 years old and are nearing retirement Nearly completed 4-year modernization initiative provides competitive advantage Average fleet age: 33 years in 2006 ? 22 years in February 2010 ?
Slide 26: Marine Transportation: Solid Foundation Despite Industry Cycle
Marine Transportation: Solid Foundation Despite Industry Cycle Term market player for inland transportation services Currently 94% contracted for 1 to 5 years 20% spot pricing at present, but pricing and contract length to improve with stronger economy and older fleet retirement All Jones Act vessel
Slide 27: Financial Overview
Financial Overview
Slide 28: Conservative Financial Strategy
28 Conservative Financial Strategy Target Leverage: Distribution Policy: Growth Opportunities: Capital Expenditures: 3.0x - 3.5x Conservative approach to LP distributions Predominantly organic growth in both natural gas services and terminalling and storage segments Acquisitions financed through deb
Slide 29: Pro Forma Capitalization
29 Pro Forma Capitalization Conservative Leverage with Significant Liquidity - Poised for Growth ($ in millions) Pro Forma For Pro Forma Acquisitions And As Adjusted 12/31/2009 Equity Offering 1 12/31/2009 Cash and Cash Equivalents $6 $6 $6 Revolving Credit Facility 2 $230 $199 $77 Term Loan Facilit
Slide 30: 2009 EBITDA Reconciliation
30 2009 EBITDA Reconciliation Adjusted EBITDA: Pro Forma Reconciliation
Slide 31: Amended Credit Facility Summary
31 Amended Credit Facility Summary Borrower: Martin Operating Partnership L.P. Facility: $275MM Revolving Credit Facility Maturity: March 15, 2013 Financial Covenants: Leverage Ratio: 4.50x Secured Leverage Ratio: 2.75x Interest Coverage: 3.00x Pricing: L + 350 bps at close (subject to leverage-base
Slide 32: March 2010 High Yield Offering Summary of Terms
32 March 2010 High Yield Offering Summary of Terms Co-Issuers: Martin Midstream Partners L.P. ("MMLP") Martin Midstream Finance Corp. ("Finance") Issue: $200 Million Senior Notes Maturity: 2018 Guarantors: All current wholly-owned subsidiaries of MMLP (except Finance) Use of Proceeds: Repay existing
Slide 33: Active Commodity Risk Management
Active Commodity Risk Management 33 Established hedging policy to manage limited commodity risk exposure Hedging policy supplements attractive contract mix Swaps for crude oil, natural gas, natural gasoline Generally hedge 50% of commodity-sensitive volumes at beginning of year, with preference for
Slide 34: Attractive Growth Opportunities Across Business Segments
34 Multiple lines of business provide the opportunity to direct capital in strategic manner Focus on highest value projects, with overall EBITDA multiple of < 5x Cross Refinery potential opportunities Increase yield of high viscosity lubes Produce additional non-carcinogenic lubes for tires Facilita
Slide 35: Investment Considerations - Closing Considerations
35 Investment Considerations Four fully integrated and complementary business units spanning the midstream value chain Proven Management Consistently conservative leverage profile (3.0x - 3.5x) with sustained growth Majority of cash flows are fee-based with minimal commodity exposure High quality, s
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