Good day, and welcome to the Martin Midstream Partners First Quarter 2012 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to the conference over to our host for today, Mr. Bob Bondurant. Sir, please go ahead.

Thank you, Carolina. And to let everyone know who's on the call today, we have Joe McCreery, Vice President of Finance and Head of investor Relations; Wes Martin, Vice President of Business Development; and Scott Schupp, Senior VP of Operations. Before we get started with the financial and operational results for the first quarter, I need to make this disclaimer. Certain statements made during this conference call may be forward-looking statements relating to financial forecast, future performance and our ability to make distributions to unitholders. The words anticipate, estimate, expect and similar expressions are intended to be among the statements that identify forward-looking statements made during the call. We report our financial results in accordance with Generally Accepted Accounting Principles and use certain non-GAAP financial measures within the meanings of the SEC Regulation G such as distributable cash flow, or DCF, and earnings before interest, taxes, depreciation and amortization, or EBITDA. We use these measures because we believe it provides users of our financial information with meaningful comparisons between current results and prior reported results, and it can be a meaningful measure of the partnership's cash available to pay distributions. Distributable cash flow should not be considered an alternative to cash flow from operating activities. Furthermore, distributable cash flow is not a measure of the financial performance or liquidity under GAAP and should not be considered in isolation as an indicator of our performance. We also included in our press release issued yesterday a reconciliation of distributable cash flow to the most comparable GAAP financial measure. Our earnings press release is available at our website, www.martinmidstream.com. Our first quarter 10-Q will be filed on May 7, 2012, and will be available at our website then. Now I'd like to discuss our strong first quarter performance. For the first quarter of…

Thanks, Bob. Let's start by walking through the debt components of the partnership's balance sheet. I'll then highlight our recent capital market activities for the quarter. At March 31, 2012, the partnership had total funded debt of approximately $434 million. This consisted of approximately $198 million of senior unsecured notes, $230 million drawn under our $375 million revolving credit facility and approximately $6 million of capitalized lease obligations. Thus, the partnership's available liquidity on March 31 was $145 million. For the first quarter ended March 31, our bank-compliant leverage ratios, as defined as senior secured indebtedness to adjusted EBITDA and total indebtedness to adjusted EBITDA, were 2.21x and 4.06x, respectively. Additionally, our bank-compliant interest coverage ratio, as defined by adjusted EBITDA to consolidated interest expense, was 4.54x. Looking at the balance sheet, our total funded debt to total capitalization was 54%. This was significantly improved when compared to the year-end December 31, 2011, primarily as a result of our follow-on equity issuance during the quarter. In all, at March 31, 2012, the partnership was in full compliance of all banking covenants, financial or otherwise. Now on to capital raises and debt retirement. Our only capital raised during the first quarter of 2012 was the successful placement of additional 2.645 million units in late January. This offering brought the total number of units outstanding to just over 23.1 million. Net proceeds to the partnership, after fees and expenses, were $91.4 million, which was used to repay indebtedness. During the second quarter, we decided to use $25 million of the equity offering to partially exercise the equity option, pursuant to the indenture of our senior notes. As you may be aware, we have the option to redeem up to 35% of the aggregate principal amount at redemption price of $108.875 of the principal amount, plus accrued interests, with certain proceeds of the equity offering. On April 24, 2012, we notified our bond trustee of our intention to partially redeem this exercise option. Accordingly, on May 24, 2012, we expect to redeem $25 million of the senior notes from various note holders using the proceeds from our common equity offering in January. The notional amount of $25 million coincides with the commitment amount we expect to receive from a new lender joining our banking credit facility in the near future. This makes our equity call back and partial redemption of our notes essentially liquidity-neutral in terms of availability under our credit facility. The addition of this new lender will bring our revolving credit line to $400 million. Finally, the partnership also elected to retire a long-term note payable in the first quarter in the amount of $6 million held against certain marine equipment. This high rate of interest note was paid off in full utilizing availability under our credit facility. Carolina, this concludes our prepared remarks this morning. We would now like to open the lines for question and answers. Thank you.

[Operator Instructions] We have a question from the line of Ethan Bellamy with Baird.

A few questions for you. First, which producers do you expect are going to be driving the volumes to fill the Waskom plant up?

Ethan, it's Joe. We've got a couple of insights clearly to some drilling programs that are out there. One is Devon that's announced some additional drilling in the Cotton Valley. Primarily, they are looking to come in to join our system sort of immediately on a pretty ambitious program, so they're the largest to get to the delta for the end of 2012.

Okay, that's helpful. Any plans to expand the offshore fleet as drilling picks up in the Gulf?

I will say currently, at this time, there is not. We should benefit from that on the shore-based side, but we aren't planning currently to expand the marine fleet.

Okay. With respect to the revolver and the new lender, how sensitive, if at all, is that to commodity price fluctuations, specifically gas, either directly or indirectly?

Are you going to use the working capital requirements or...

Yes, well, both. I mean I'm just trying to get a sense for liquidity relative to the natural gas environment, specifically, just thinking about the direct and indirect pass-through from gas processing specifically.

Yes, fair point. And I don't think we're looking at it necessarily with a strong of a correlation directly to natural gas processing. But I would say the banking environment continues to be favorable. And if we can access liquidity in these favorable conditions, we continue to do so. With the additional lender at $400 million, we would essentially have only another $25 million available through our accordion, so this will probably be the end of sort of the additional lenders coming in, I would think, for the near future.

[Operator Instructions] And our next question is from the line of TJ Schultz with RBC Capital Markets.

Just on the Marine segment, can you provide a little bit more color on why you accelerated the dry docks you mentioned there and just some of the market conditions that caused that and are there other potential moving parts on other dry docks that we may see that could impact results?

The biggest one was our offshore tow, the Poseidon and Orion. And in the month of February, the opportunities weren't there, but we were in communication with potential charters that they needed it in March going forward. And so it's scheduled in the summertime so we made a business decision that we have no work for it in February. Let's move it from June to February, do it then because we know this crude coming out of the Eagle Ford Shale is going to -- should keep it employed for the rest of the spring and through the summer. So that was a business decision there. The other one on the other inland, there was an inland barge that was timed in -- also in the summertime. But it's a similar situation. And with that background, we chose to move it up to February as well.

And it seems to have worked, TJ. I think we're cautiously optimistic on slightly improved day rates and overall conditions in the Marine Transportation segment, so we kind of got that -- our eye on that for improved performance for 2000 -- for the second quarter of 2012 and I think it's come to fruition, thus far.

And to touch on that a little bit, we've -- I believe we've inked a contract -- we're starting to see Utica Shale crude starting to need an inland barge transportation system to get from Ohio, West Virginia down to the Gulf Coast, down in New Orleans, Houston markets and that demand is now starting to show up.

Okay, great. Good color. So I guess just following up there, you've seen the day rate improvement. I guess the expectation then would be kind of the $4 million run rate that we saw in fourth quarter to -- you expect to get back there in the second quarter. But then are day rates improving to where you think you have a leverage to the upside from this, or is there kind of a ceiling to what you think you can capture?

Day rates are improving. That Utica Shale haul I just described, we are improving our day rate from where we were by about 12%.

And I think, kind of a guidance figure, if you will, with respect to -- for the year. I think we will recover our position. I think our guys still feel pretty good about their full year estimates for 2012.

Okay, good, that's helpful. Just from the 2 projects that are starting up here pretty soon, I guess close to $50 million of spend at 6 to 7x EBITDA. Is there a ramp period, or should we be modeling kind of that 6 to 7x right away?

Wes, you want to comment on that?

There is a ramp period. I would say probably 30 to 60 days would be a good number. I think with respect to the Corpus terminal, that's probably about, I'd say, 60 days plus of ramp-up time. So I wouldn't say it would be fully completed really until late June, early July.

Okay, great. Just lastly, maintenance CapEx. I guess what should we expect for the balance of the year? And I guess kind of ratably between the quarters, how do you envision that plan out?

We're estimating $12 million to $13 million. We spent $2 million, so there's about $10 million to spend over the last 3 quarters. I think it's pretty ratable.

[Operator Instructions] And our next question is from the line of James Spicer with Wells Fargo.

I was wondering if you could comment -- and I may have missed this, I apologize if I did, but comment on your contribution from your natural gas storage investments in Redbird and how you see that progressing over the remainder of the year?

Wes?

This is what I see. Where we stand currently in terms of contributions going forward for the rest of this year, we've got approximately $30, plus or minus, million of capital contributions that'll be going in fairly ratably over the next, call it, 9 months. And again, just from a bigger picture perspective, timing of some of these storage projects coming online, we have a pretty significant slug up over 30 BCF of storage that will be put into service summer of 2013. So there's a lag there in terms of cash flow being generated from the assets, a lag from our investment and then also there's, as a reminder, there's some project investment -- project financing at those investments as well. So about $30 million for the rest of this year is what we're looking to contribute.

Okay, and then if you look at CapEx budget for the whole year, I think you had mentioned $130 million in extension CapEx, is that still sort of the number you guys are targeting?

Yes, for the rest of this year in total, we're looking at plus or minus $80 million of growth CapEx of second, third and fourth quarter of this year. The vast, say, $45 million of that is in the Terminal segment and then again $30 million to $35 million of that's in the investments in natural gas storage.

[Operator Instructions] And I'm showing no other questions. At this time, I'd like to turn the call back to management for any closing comments.

Thank you, Carolina. And we appreciate everybody calling in and following us. Just to remind everybody, we have 2 new terminals coming online with the vacuum tower at Cross and the crude terminal at Corpus in the second quarter. We continue to expect softer to a bit strong in the second quarter, and we are seeing improved conditions in Marine Transportation. And we continue and we'll always continue to seek fee-based strategic alternatives among our assets. Thank you very much.

Ladies and gentlemen, thank you for your participation in the Martin Midstream Partners First Quarter 2012 Earnings Conference Call. This does conclude the program, and you may now disconnect. Thank you, and have a wonderful day.