2014 Analyst and Investor Day March 25th NASDAQ: MMLP www.martinmidstream.com
MARTIN MIDSTREAM PARTNERS L.P. ANALYST & INVESTOR DAY 2014 Welcome & Partnership Overview Joe McCreery, Vice President - Finance & Head of Investor Relations Operational Excellence Terminalling & Storage Doug Towns, Vice President…
USE OF NON-GAAP FINANCIAL MEASURES This presentation includes certain non-GAAP financial measures such as EBITDA and Adjusted EBITDA. These non- GAAP financial measures are not meant to be considered in isolation or as a substitute for…
Partnership Overview Joe McCreery, Vice President Finance & Head of Investor Relations
MARTIN MIDSTREAM PARTNERS L.P. (MMLP) OVERVIEW NASDAQ Listed: MMLP Formed October 31, 2002 MMLP is a publically traded, diversified master limited partnership with operations including: Terminalling & Storage Natural Gas Services…
MARTIN RESOURCE MANAGEMENT (MRMC) OVERVIEW Based in Kilgore, TX, MRMC is a leading independent provider of integrated logistics solutions, storage, manufacturing, marketing, and distribution services to energy, petrochemical and other…
STRONG GENERAL PARTNER SUPPORT Ongoing MRMC businesses help support the Partnership Maintains distinct set of assets and business units that Martin Resource are complementary to MMLP Management Corporation Approximately 22% of…
KEY INVESTMENT HIGHLIGHTS Majority of cash flows generated from fee-based or fee-like contracts Fee-Based Contracts Significant portions consist of reservation charges or minimum fee arrangements Fully Integrated, Diversified asset…
SIGNIFICANT EVENTS SINCE 2011 51MM acquisition of 6 LPG pressure barges MRMC sold 49% non-controlling 60MM Monroe Gas 273MM divestiture 47MM marine and two inland push voting interest (50% economic) Storage acquisition of Prism…
MMLP UNIT PERFORMANCE 12.4% CAGR Total Return to Unit holders (including cash distributions) Since IPO (11/2002) 278.4% CAGR 12.4% Total Distribution Payout (since 2002) 30.05 Current Yield 7.5% As of March 21st, 2014…
OUR DIVERSIFIED OPERATING MIX Terminalling & Storage 2013 EBITDA By Segment Sulfur Services ( in millions) 67.1 34.0 21.9% 43.2% 12.4% 22.5% 155.2 Million Natural Gas Services Marine Transportation 34.9 (all values…
MMLP ASSET LOCATIONS ALL SEGMENTS 13
STABLE BUSINESSES/NO DIRECT COMMODITY EXPOSURE Terminalling & Storage Multi-year, fee-based contracts Specialty products and shore-based terminals have guaranteed throughput minimums Margin-based lubricant packaging Natural Gas…
HIGH QUALITY LONG TERM CUSTOMER BASE Integrated and complementary business segments uniquely position MMLP Long-term customer relationships are a key driver of our success Breadth, scale and brand recognition make MMLP a premier…
BUSINESS SEGMENT OVERVIEW
Terminalling & Storage Smackover & Martin Lubricants Doug Towns, Vice President Martin Lubricants
SEGMENT OVERVIEW TERMINALLING & STORAGE MMLP owns or operates 47 terminal facilities with 3.9 million barrels of aggregate storage capacity across the U.S. Gulf Coast region that provide storage, processing and handling services…
TERMINALLING & STORAGE - SMACKOVER REFINERY November 2009 drop-down from MRMC for 45 million in MMLP units 7,500 bpd nameplate capacity naphthenic lube refinery in Smackover, AR Approximately 10% of total US naphthenic lube market…
TERMINALLING & STORAGE - PACKAGING ASSETS October 2012 drop-down of specialty lubricant product blending and packaging assets in Smackover, AR for 122.7 million; entire platform rebranded as Martin Lubricants 235,000 sq. ft.…
TERMINALLING & STORAGE - PACKAGING ASSETS We believe the U.S. lubricants business is growing at approximately 2-5% per year while the U.S. grease business is growing at approximately 1-3% per year Expected Growth for Martin Lubricants…
TERMINALLING & STORAGE SHORE-BASED TERMINALS Strategically-located asset base well-positioned to benefit from the growing exploration and production activity in the Gulf of Mexico Fee-based contract structure provides stable cash…
TERMINALLING & STORAGE SPECIALITY TERMINALS 17 specialty terminal facilities with aggregate storage capacity of 3.2 million barrels Provide storage and handling services for a broad range of products including ammonia, asphalt,…
TERMINALLING & STORAGE - ASSET DESCRIPTION Subsegment Asset(s) Description Services Size (Total Capacity) Location Products Profitability Drivers Shore-Based Terminals 10 full service terminals Product storage and 224K Bbls storage TX,…
TERMINALLING & STORAGE CORPUS CHRISTI CRUDE TERMINAL (CCCT) Strategically located at the primary downstream delivery point for growing Eagle Ford Shale production (Terminal point of the Harvest Pipeline) Initial operations began in…
TERMINALLING & STORAGE - PROFITABILITY DRIVERS & OUTLOOK Shore-Based Terminals Gulf of Mexico exploration and production activity additional rigs anticipated in the region Specialty Terminals Unique collection of assets capable of…
Natural Gas Services Ruben Martin, Chief Executive Officer
SEGMENT OVERVIEW NATURAL GAS SERVICES MMLPs Natural Gas Services segment has significantly changed since 2012 April 2012 start-up of refinery grade butane logistics business July 2012 divestiture of East Texas and North Louisiana…
SEGMENT OVERVIEW NATURAL GAS SERVICES Business Overview MMLPs Natural Gas Services segment primarily consists of NGL transportation, logistics and marketing. The segment utilizes MRMCs land transportation fleet and underground storage…
SEGMENT OVERVIEW NATURAL GAS SERVICES (Redbird Joint Venture) Redbird Gas Storage Through its ownership interest in Redbird, MMLP invests in Cardinal Gas Storage Partners LLC, a joint venture with Energy Capital Partners, focused on…
SEGMENT OVERVIEW NATURAL GAS SERVICES (Redbird Joint Venture) Projects are strategically located in high volume physical flow areas across North Louisiana to the Perryville Hub Monroe asset value was written down to salvage value…
NATURAL GAS SERVICES NGL FLOATING STORAGE LPG Pressure Barge Acquisition February 2013 Operated by the Marine Transportation segment Facilitates storage and transloading of Eagle Ford Shale NGL volumes Integral part of Harbor Island…
NATURAL GAS SERVICES BUTANE OPTIMIZATION Butane Optimization MMLP utilizes a network of underground storage and transportation equipment owned by MRMC affiliates to facilitate butane optimization The EPA regulates the Reid Vapor…
NATURAL GAS SERVICES MARTIN ENERGY TRADING (MET) Martin Energy Trading LLC, formed in 2012, continues to build a natural gas trading business that is focused on optimizing third-party and Martin-affiliated gas storage and…
NATURAL GAS SERVICES - FINANCIALS Historical Segment Operating Results Natural Gas Services ( in thousands) 2011 2012 2013 Revenues: Marine transportation - - 3,028 NGLs 611,749 825,506 984,653 Total revenues 611,749 825,506 987,681…
NATURAL GAS SERVICES - BREAKDOWN 40
NATURAL GAS SERVICES - PROFITABILITY DRIVERS Legacy NGL Businesses (including propane) Drilling/Production activity Seasonal Demand/Storage capabilities Access to pipelines, processing and fractionation Volatility in commodity…
Sulfur Services Legacy Sulfur Mike Lawrence, Senior Vice President Sulfur Services
SEGMENT OVERVIEW LEGACY SULFUR Sulfur Marketing, Forming, and Transportation Marketing Markets molten sulfur using its highly-specialized distribution assets to phosphate fertilizer producers and other industrial costumers Forming…
SULFUR SERVICES LEGACY SULFUR INTEGRATED VALUE CHAIN Provides transportation, processing and marketing services necessary to move product from producer to consumer Intermodal transportation offers multiple fee opportunities for the…
SULFUR SERVICES LEGACY SULFUR GROWTH OUTLOOK Growth & Optimization Strategies Stanolind Terminal Potential expansion of throughput agreement for 2014 and beyond with key customer Neches Terminal Execute 15,000 LT Molten Storage Tank…
SULFUR SERVICES LEGACY SULFUR CONTRACTS AND DRIVERS Contracts / Margin / Customers Sulfur Services Business Segment Marketing Forming Transportation Contracts: Typically 1-3 years in duration Typically 3-5 year service Typically 1 year…
Sulfur Services - Fertilizer Bob Bondurant, Chief Financial Officer
SULFUR SERVICES - FERTILIZER Fertilizer MMLP manufactures and markets sulfur-based fertilizers and related sulfur products to wholesale fertilizer distributors and industrial users Natural extension of the legacy sulfur business The…
SULFUR SERVICES FERTILIZER PROFITABILITY DRIVERS U.S. Agricultural Prices Impacted by weather and seasonality Recent years have seen an increase in corn acres planted in the U.S., largely driven by biofuel Corn Acres Planted and…
Marine Transportation Ed Grimm III, Senior Vice President - Marine
SEGMENT OVERVIEW MARINE TRANSPORTATION Business overview Marine Transportation owns and/or operates a fleet of inland and offshore tows that provide marine transportation of bulk liquids Diverse geographic operations Segment operates…
MARINE TRANSPORTATION: ASSETS/CONTRACT STRUCTURE Asset(s) Description Services Size (Total Capacity) Location Products Profitability Drivers 56 inland marine tank barges Marine transportation of Inland barges - from under Inland - GICW…
MARINE TRANSPORTATION - PROFITABILITY DRIVERS & GROWTH OUTLOOK Profitability Drivers North American shale plays Distillate aggregation to export Stack emissions reductions potential distillate spike Asphalt, HSFO and cutters Growth…
Financial Foundation Joe McCreery, Vice President - Finance & Head of Investor Relations
BALANCE SHEET MANAGEMENT Recent Financing Activities Pro Forma Debt Portfolio MMLP amended and upsized its revolver in 7.00 8.00% 2013 and upsized again in 2014. Current 6.00 6.86% 7.00% 6.36% commitments of 637.5 million -…
COST OF CAPITAL IMPROVEMENT Cost of Equity Current Annualized Distribution / LP Unit 3.14 Unit Price 41.86 Distribution Yield 7.50% Total Cost of Equity including GP 8.47% Existing Cost of Debt Pro Forma Cost of Debt Debt…
PRO FORMA CAPITALIZATION Capitalization ( in millions) 12/31/2013 Adjustments Pro Forma 12/31/13(3) Cash 17 17 Debt 600MM RCF due 2018 235 35 270 Total Senior Secured Debt 235 35 270 200MM Senior Notes due 2018 175 (175) 0 250MM…
HISTORICAL LIQUIDITY & CAPITAL EXPENDITURES MMLP has conservatively and opportunistically utilized debt and equity capital markets in the past to finance growth capital expenditures and manage its balance sheet/liquidity as needed…
LIQUIDITY AND 2014 CAPITAL SPENDING Liquidity & Capital Resources MMLP is well-positioned to capitalize on accretive investment opportunities with approximately 384 million available under its revolver pro forma its impending bond…
CAPITAL MARKETS ACCESS 64
YIELD ANALYSIS An MMLP investment offers an above-average distribution yield relative to comparable midstream MLPs Yield based on 1Q14 annualized distribution and unit price as of 3/21/14 S&P/Moodys reflects corporate or family…
DISCIPLINED DISTRIBUTION GROWTH 3.14 current annualized rate 66
MMLP ADJUSTED EBITDA RECONCILIATION Total MMLP 2011 2012 2013 Income from continued operations 13,367 37,122 (13,354) Adjustments Interest Expense 26,781 30,665 42,495 Income tax expense 2,872 3,557 753 DD&A 40,276 42,063 52,240…
Growth Opportunities Bob Bondurant, Chief Financial Officer
GROWTH OUTLOOK Primary Growth Areas :Terminalling & Storage, Natural Gas Services, Martin Lubricants Terminalling & Storage: Opportunities to leverage MMLPs strategic asset footprint on the Gulf Coast, driven by robust drilling…
ARCADIA RAIL TERMINAL Drop-down of Martin Underground Storage (MUS) assets to the Partnership The Arcadia rail project involves the installation of a rail siding, multiple rail spurs, rail car unloading and loading facilities at…
CONDENSATE SPLITTER INVESTMENT RATIONALE Eagle Ford Shale production has increased greatly and is projected to continue growing over the next 5 years This production has flooded the Gulf Coast with light hydrocarbons (condensate),…
ALINDA CAPITAL PARTNERS OVERVIEW Alinda is one of the worlds largest independently-owned infrastructure investment firms Approximately 7.8 billion in equity commitments for infrastructure investments Investors are primarily pension…
ALINDAS STRATEGIC IMPORTANCE TO MMLP MRMC partnered with Alinda to take advantage of unprecedented midstream infrastructure needs in North America The partnership with Alinda has opened new doors for MMLP with respect to deal flow…
MMGP/MMGP HOLDINGS GOVERNANCE MMGP Board Structure MMGPs previous board of directors consisted of 5 directors Upon closing the transaction, the board of MMGP increased to 7 directors For a period of one year following closing of the…
SEPARATE BUT COMPLEMENTARY SEGMENTS TERMINALLING & STORAGE Shore based terminals Serviced by Marine Transportation segment assets Specialty terminals Serviced by Marine Transportation segment assets Handles and processes product on…
KEY INVESTMENT HIGHLIGHTS Majority of cash flows generated from fee-based or fee-like contracts Fee-Based Contracts Significant portion consists of reservation charges or minimum fee arrangements Fully Integrated, Diversified asset…
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