markwest energy partners investor presentation feb 2015

21
FOURTH QUARTER 2014 CONFERENCE CALL PRESENTATION February 25, 2015

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Page 1: MarkWest Energy Partners Investor Presentation Feb 2015

FOURTH QUARTER 2014 CONFERENCE CALL PRESENTATION F e b r u a r y 2 5 , 2 0 1 5

Page 2: MarkWest Energy Partners Investor Presentation Feb 2015

F O RWA R D - L O O K I N G S TAT E M E N T S

T he statements inc lude d in th is presentat io n conta in “ forward- look in g statements ” with in the meaning o f the Secur i t ie s Act o f 1933 and the Secur i t ie s Exchange Act o f 1934, each as amended. These forward- look ing statements (which in many instances can be ident i f i e d by wo rds l ike “may,” “wi l l , ” “should,” “expects ,” “p lans ,” “bel ie ve s , ” and other comparable words) are based on the Partnershi p’s current expectat ions and bel iefs concerning future develop m en ts and their potent ia l ef fects on the Partnershi p, but are no t guarantees o f future perfo rmance, and invo lve r i sks and uncerta int i es . You are caut ioned not to p lace undue re l iance on forward-lo o k ing statements , as many o f these factors are beyond our abi l i ty to contro l or predic t , and which speak only as o f the date hereof . T he Partnership undertak es no o bl igat io n to publ ic ly update or rev ise any forward- lo ok in g statements a f ter the date they are made, whether as a resul t o f new informat ion, future events , o r o therwise. You are urged to carefu l ly rev iew and cons ider the caut ionary statements and o ther d isc lo sur es made in the Partnershi p’ s Annual Report on Form 10-K for f i sca l year 2014, inc ludi n g under the heading “R isk Facto rs ,” which ident i f y and d iscuss s igni f icant r i sks , uncerta int ie s , and var ious other factors that could cause actua l resul ts to vary s igni f icant l y f ro m tho se expected or impl i e d in the fo rward- look ing statements . Among the facto rs that could cause resul ts to d i f fer mater ia l l y are those r i sks d iscusse d in the per iodic reports f i led with the SEC, inc ludi n g MarkWest ’ s Annual Report o n Fo rm 10-K for the year ended December 31, 2014. You are urged to carefu l ly rev iew and co ns ider the caut io nary statement s and o ther d isc losure s , inc ludi n g those under the headin g “R isk Factors ,” made in those documents . I f any o f the uncerta int i es or r i sks develo p into actua l events or occurrences, or i f under l y i ng assumpt io ns prove incorrect , i t could cause actua l resul ts to vary s igni f icant l y f rom those expresse d in the presentat io n, and MarkWest ’ s bus ines s , f inanc ia l co ndit ion, or resul ts o f o perat ions could be mater ia l l y adverse l y a f fected. Key uncerta int i es and r i sks that may d i rect ly a f fect MarkWest ’s performance, future gro wth, resul ts o f operat ions , and f inanc ia l condit ion, inc lude, but are not l imit ed to :

• Fluctuat io n s and vo lat i l i ty o f natura l gas , NGL products , and o i l pr ices ;

• A reduct io n in natura l gas o r ref iner y o f f -gas product ion which MarkWest gathers , t ransports , processes , and/or f ract ionates;

• A reduct ion in the demand fo r the products MarkWest produces and se l l s ;

• Financ ia l c redi t r i sks / fa i lure o f customers to sat i s fy payment or o ther obl igat ion s under MarkWest ’ s contracts ;

• Ef fects o f MarkWest ’ s debt and other f inanc ia l obl igat io ns , access to capi ta l , o r i t s future f inanc ia l o r operat iona l f lex ib i l i t y o r l iqui d i ty ;

• Co nstruct io n, pro curemen t , and regulatory r i sks in our develo pm e nt pro jects ;

• Hurr icanes, f i res , and other natura l and acc identa l events impact ing MarkWest ’ s o perat ions , and adequate insurance co verage;

• Terro r ist a t tacks d i rected at MarkWest fac i l i t ies or re lated fac i l i t ies ;

• Changes in and impacts o f laws and regulat io n s a f fect ing MarkWest operat ions and r i sk management st rategy; and

• Fa i lure to integrate recent o r future acquis i t io ns .

2

Page 3: MarkWest Energy Partners Investor Presentation Feb 2015

N O N - G A A P M E A S U R E S

Distr ibu tab l e Cash F low (DCF) , Adjusted EBIT DA are non-GAAP F inanc ia l Measures , and should not be cons idered separate ly f rom or as a subst i tu t e for net income, income f rom o perat ions, or cash f low as ref lected in our f inanc ia l s tatements . The GAAP measure most d i rect ly co mparable to DCF and Adjuste d EBIT DA is net income ( loss) . In genera l , the Partnership def ine s DCF as net income ( loss) adjusted fo r ( i ) deprec iat io n, amo rt izat ion, impairme nt , and other no n-cash operat ing expense s; ( i i ) amort izat ion o f deferre d f inanc ing co sts and debt d isco unt ; ( i i i ) lo ss o n redempt io n o f debt , net o f tax benef i t ; ( iv ) impairme nt o f unconso l idat e d af f i l ia tes ; (v ) ga in on sa le o f unco nso l i dat e d af f i l ia te; (v i ) non-cash (earning s) loss f rom unconso l i dat e d af f i l ia tes ; (v i i ) d ist r ib ut io n s f rom (contr ibut io n s to ) unconso l i dat ed af f i l ia tes (net o f a f f i l ia tes ’ growth capi ta l expend it u re s) ; (v i i i ) non-cash compensat io n expense; ( ix ) non-cash der ivat i v e act iv i ty ; ( x ) lo sses (ga ins) o n the sa le o r d isposa l o f property , p lant and equipm e nt (“PP&E”) , net o f tax; ( x i ) prov is ion fo r deferred income taxes; ( x i i ) cash adjustment s for non-contro l l i ng interes t o f conso l idated subs id iar i e s ; ( x i i i ) revenue deferra l adjustment; ( x iv ) losses (ga ins) re lat ing to other miscel la n eo us non-cash amounts a f fect ing net income for the per iod; and (xv ) maintenanc e capi ta l expend it u r es , net o f jo int venture partner contr ibut io n s and proceeds f rom trade- in o f PP&E. The Partnership def ine s Adjusted EBITDA as net income ( loss) adjusted for ( i ) deprec iat io n, amort izat ion, impairm e nt , and other non-cash operat ing expense s; ( i i ) interes t expense ; ( i i i ) amort izat io n o f deferred f inanc in g costs and debt d iscount ; ( iv ) loss on redempt io n o f debt ; (v ) losses (ga ins) o n the sa le o r d isposa l o f PP&E; (v i ) impairm e nt o f unconso l i dat e d af f i l ia tes ; (v i i ) ga in on sa le o f unconso l idat e d af f i l ia te; (v i i i ) non-cash der ivat iv e act iv i ty ; ( i x ) non-cash compensat io n expense ; ( x) prov is ion for income taxes; ( x i ) adjustment s for cash f low f rom unconso l i dat ed af f i l ia tes ; and (x i i ) losses (ga ins) re lat in g to other miscel la neo u s non-cash amounts a f fect ing net income for the per iod. DCF i s a f inanc ia l performance measure used by management as a key component in the determi nat io n o f cash d ist r i b ut io ns pa id to uni tho l d er s . The Partnershi p bel ie ve s DCF i s an important f inanc ia l measure for uni tho l d er s as an indicator o f cash return on investm e nt and to eva luate whether the Partnershi p i s generat i n g suf f ic ient cash f low to support quarter ly d ist r ib u t io ns. In addit ion, DCF i s co mmo nly used by the investm e nt co mmunity because the market va lue o f publ ic l y t raded partnersh i ps i s based, in part , on DCF and cash d ist r ib u t io ns pa id to uni tho l d er s . Adjuste d EBITDA is a f inanc ia l perfo rmance measure used by manageme nt , industr y ana lysts , investors , lender s , and rat ing agenc ies to assess the f inanc ia l performance and o perat ing resul ts o f the Partnership ’s ongo ing bus ine ss operat ions. Addit io na l l y , the Partnershi p bel iev e s Adjusted EBIT DA prov ides useful informat io n to investors for t rendin g, ana lyz ing and benchmark i n g our o perat ing resul ts f rom per iod to per iod as co mpared to o ther companies that may have d i f fere nt f inanc ing and capi ta l s t ructures . Net Operat in g Margin i s a f inanc ia l perfo rmance measure used by manageme nt and investor s to eva luate the under l y i ng basel in e operat ing perfo rmance o f o ur co ntractua l arrangemen ts . Manageme nt a lso uses Net Operat ing Margin to eva luate the Partnershi p’s f inanc ia l performance fo r purpo ses o f p lanni n g and forecast ing.

P lease see the Appen d ix for reco nc i l ia t io n s o f D ist r ibuta b l e Cash F low, Adjuste d EBITDA, and Net Operat ing Margin to the most d i rect ly comparable GAAP measure.

3

Page 4: MarkWest Energy Partners Investor Presentation Feb 2015

F O U RT H Q U A RT E R 2 0 1 4 H I G H L I G H T S

• Record fourth quarter and full-year 2014 volumes: Total system volume of 5.0 Bcf/d for fourth quarter: 10% increase over the prior quarter; and 47% increase when comparing full-year 2013 to 2014

• Record Distributable Cash Flow (DCF) of $201.0 million for fourth quarter and $706.4 million for the full-year 2014, an increase of 46% over the full-year 2013

• Record Adjusted EBITDA of $243.0 million for fourth quarter and $874.3 million for the full-year 2014, an increase of 44% over the full-year 2013

• Increased fourth quarter 2014 distribution to 90 cents per common unit, while maintaining a coverage ratio of 1.20 times

• Completed six new facilities increasing processing capacity by 720 MMcf/d and fractionation capacity by 83,000 Bbl/d

• Announced new projects in Cana-Woodford, East Texas and Marcellus Shale

• 18 major infrastructure projects currently under construction; 10 to be completed during 2015. These new facilities will increase our processing capacity to 8.2 Bcf/d and fractionation capacity to over 600,000 Bbl/d

4

Page 5: MarkWest Energy Partners Investor Presentation Feb 2015

-

200

400

600

800

1,000

1,200

1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15F3Q15FGulf Coast SEOK WOK East Texas

• Commenced operations of fourth plant in East Texas during December 2014

• Announced Panola NGL Pipeline JV in East Texas with Enterprise and others

• Announced new agreement with Newfield for STACK play in the Cana-Woodford

• Average utilization of processing complexes was 85% during the fourth quarter 2014

S O U T H W E S T S E G M E N T O V E RV I E W

5

1Q15

thro

ugh

4Q15

Avg

.

Processed Volumes (MMcf/d)

Forecasted Avg. Increase from FY2014 to FY2015

~12%

Complex

4Q14 Average Capacity

(MMcf/d) *

4Q14 Average Volume

(MMcf/d)

Utilization (%)

East Texas 429 431 100%

Western OK 435 300 69%

Southeast OK** 84 84 100%

Gulf Coast 142 116 82%

Total 1,090 931 85% *Based on weighted average number of days plant(s) in service **Processing capacity includes Partnership’s portion of Centrahoma JV

Page 6: MarkWest Energy Partners Investor Presentation Feb 2015

-

500

1,000

1,500

2,000

2,500

3,000

1Q10 4Q10 3Q11 2Q12 1Q13 4Q13 3Q14 2Q15F

Keystone Houston Majorsville Mobley Sherwood

M A R C E L L U S S E G M E N T O V E RV I E W

Processed Volumes (MMcf/d) • Marcellus segment continues to achieve record operating income and volume growth

• Processed volumes increased 15% compared to third quarter 2014 and 82% from the fourth quarter 2013

• Average utilization of five Marcellus processing complexes was 88% in the fourth quarter 2014

*Based on weighted average number of days plant(s) in service

6

Complex

4Q14 Average Capacity

(MMcf/d)*

4Q14 Average Volume

(MMcf/d)

Utilization (%)

Sherwood 930 780 84%

Mobley 555 545 98%

Majorsville 870 765 88%

Houston 355 311 88%

Keystone 210 155 74%

Total 2,920 2,556 88%

Forecasted Avg. Increase from FY2014 to FY2015

~55%

1Q15

thro

ugh

4Q15

Avg

.

Page 7: MarkWest Energy Partners Investor Presentation Feb 2015

Doddridge

Marshall

Wetzel

Harrison

Butler

Washington

PENNSYLVANIA

OHIO

Washington

Tyler

Ritchie

Jefferson

Beaver

Allegheny

Greene

Ohio

Brooke

Hancock

M A R K W E S T M A R C E L L U S O P E R AT I O N S

KEYSTONE COMPLEX Bluestone I – II & Sarsen I – 210 MMcf/d – Operational

Bluestone III – 200 MMcf/d – 4Q15 Bluestone IV – 200 MMcf/d – 3Q16

C2 Fractionation – 14,000 Bbl/d – Operational C3+ Fractionation – 12,000 Bbl/d – Operational

De-ethanization – 40,000 Bbl/d – 4Q16 C3+ Fractionation – 31,000 Bbl/d – 4Q15

FOX COMPLEX Fox I – 200 MMcf/d – 3Q16

De-ethanization – 20,000 Bbl/d – 3Q16

HOUSTON COMPLEX Houston I – III – 355 MMcf/d – Operational

Houston IV – 200 MMcf/d – 2Q15 C3+ Fractionation – 60,000 Bbl/d – Operational De-ethanization – 40,000 Bbl/d – Operational

MAJORSVILLE COMPLEX Majorsville I – V – 870 MMcf/d – Operational

Majorsville VI – 200 MMcf/d – 2Q15 Majorsville VII – 200 MMcf/d – 1Q16

De-ethanization – 40,000 Bbl/d – Operational

MOBLEY COMPLEX Mobley I – IV – 720 MMcf/d – Operational

Mobley V – 200 MMcf/d – 4Q15 De-ethanization – 10,000 Bbl/d – 4Q15

SHERWOOD COMPLEX Sherwood I – V – 1,000 MMcf/d – Operational

Sherwood VI – 200 MMcf/d – 2Q15 Sherwood VII – 200 MMcf/d – 2Q16

De-ethanization – 40,000 Bbl/d – 3Q15

ATEX Express Pipeline

MWE Purity Ethane Pipeline MWE NGL Pipeline

MWE NGL/Purity Ethane Pipeline Under Construction

Sunoco Mariner Pipeline

MWE Marcellus Complex MWE Gathering System

TEPPCO Product Pipeline

HOPEDALE FRACTIONATION COMPLEX (MarkWest & MarkWest Utica EMG shared

fractionation capacity) C3+ Fractionation I & II – 120,000 Bbl/d – Operational

C3+ Fractionation III – 60,000 Bbl/d – 1Q16

27 facilities completed: 15 facilities under construction

WEST VIRGINIA

7

Page 8: MarkWest Energy Partners Investor Presentation Feb 2015

0

200

400

600

800

4Q12 2Q13 4Q13 2Q14 4Q14 2Q15F 4Q15FSeneca Cadiz

U T I C A S E G M E N T O V E RV I E W

• MarkWest Utica EMG continues to establish the leading midstream system in the Utica Shale

• Processed volumes increased 42% compared to last quarter and nearly 300% from the prior year quarter

• Average utilization of processing complexes reached 76% during the fourth quarter 2014, up from 63% last quarter

Processed Volumes (MMcf/d)

*Based on weighted average number of days plant(s) in service

8

Complex 4Q14 Average

Capacity (MMcf/d) *

4Q14 Average Volume

(MMcf/d)

Utilization (%)

Cadiz 255 215 84%

Seneca 600 437 73%

Total 855 652 76%

Forecasted Avg. Increase

from FY2014 to FY2015

~100%

1Q15

thro

ugh

4Q15

Avg

.

Page 9: MarkWest Energy Partners Investor Presentation Feb 2015

Wetzel

Harrison

Noble

OHIO

Belmont

Monroe

Carroll

Jefferson Tuscarawas

Guernsey

M A R K W E S T U T I C A O P E R AT I O N S

9

9 facilities completed: 4 facilities under construction

ATEX Express Pipeline

MWE Purity Ethane Pipeline MWE NGL Pipeline

MWE NGL/Purity Ethane Pipeline Under Construction

Sunoco Mariner Pipeline

MWE Utica Complex MWE Gathering System

TEPPCO Product Pipeline

HOPEDALE FRACTIONATION COMPLEX (MarkWest & MarkWest Utica EMG shared

fractionation capacity) C3+ Fractionation I & II – 120,000 Bbl/d – Operational

C3+ Fractionation III – 60,000 Bbl/d – 1Q16

OHIO GATHERING & OHIO CONDENSATE Joint Ventures with

Summit Midstream, LLC Stabilization Facility – 23,000 Bbl/d – Operational

SENECA COMPLEX Seneca I – III – 600 MMcf/d – Operational

Seneca IV – 200 MMcf/d – 2Q15

CADIZ COMPLEX Cadiz I & II – 325 MMcf/d – Operational

Cadiz III – 200 MMcf/d – 2Q15 Cadiz IV – 200 MMcf/d – 1Q16

De-ethanization – 40,000 Bbl/d – Operational

Page 10: MarkWest Energy Partners Investor Presentation Feb 2015

-

50,000

100,000

150,000

200,000

250,000

1Q13 3Q13 1Q14 3Q14 1Q15F 3Q15FC3+ C2

M A R C E L L U S & U T I C A F R A C T I O N AT I O N O V E RV I E W

~55% Forecasted

Avg. Increase from FY2014 to FY2015

Fractionated Volumes (Bbl/d)

Complex 4Q14 Average

Capacity (Bbl/d)*

4Q14 Average Volume (Bbl/d)

Utilization (%)

Marcellus 110,000 116,500 106%

Utica 29,000 24,900 86%

Total C3+ 139,000 141,400 102%

Total C2 134,000 62,500 47%

• Total C2+ fractionated volumes were a record 204 MBbl/d for the fourth quarter 2014, an increase of 258% from the prior year quarter

• Achieved full utilization of total C3+ fractionation capacity in the fourth quarter, up from 91% utilization in the third quarter 2014

• Commenced operations of 60,000 Bbl/d Hopedale II fractionation facility in December 2014, providing additional just-in-time C3+ capacity

*Based on weighted average number of days plant(s) in service

10

1Q15

thro

ugh

4Q15

Avg

.

Page 11: MarkWest Energy Partners Investor Presentation Feb 2015

M A R C E L L U S & U T I C A O P E R AT I O N S

4.1 Bcf/d

2.6 Bcf/d

MarkWest

61% of current capacity

OPERATES

Market Share of Processing Capacity Currently Operational

1,000

Facilities Completed 34

Plants Under Construction 18

Processing Capacity 4.1Bcf/d

C2+ Fractionation Capacity

349MBbl/d

215,000 Miles of Pipeline

Field Compression Horsepower

11

Source: BENTEK Energy - NGL Facilities Databank as of 1.21.2015

MarkWest has 3x the market share of our largest competitor

Page 12: MarkWest Energy Partners Investor Presentation Feb 2015

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2011 2012 2013 2014 2015F

M A R K W E S T ’ S T O TA L P R O C E S S E D V O L U M E F O R E C A S T

12

Proc

esse

d Vo

lum

es (B

cf/d

)

12

5 Bcf/d

For 2015, total processed volumes are forecasted to exceed

Page 13: MarkWest Energy Partners Investor Presentation Feb 2015

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2008 2009 2010 2011 2012 2013 2014 2015F

2015 Forecast Net Operating Margin by Contract Type

F E E - B A S E D M A R G I N G R O W T H

13

Note: Forecast assumes Crude Oil ($/bbl) range of $47.33 to $58.66 and Natural Gas ($mmbtu) range of $2.66 to $3.14

NOTE: Net Operating Margin is calculated as segment revenue less purchased product costs

Fee-Based 89%

Increasing Fee-Based Margin to nearly 90% for the Full-Year 2015

13

Increase of 250%

since 2008

44% of C3+ commodity

exposure hedged for 2015

Keep-Whole 2%

POP&POL 9%

Page 14: MarkWest Energy Partners Investor Presentation Feb 2015

C A P I T A L I N V E S T M E N T F O R E C A S T

$0

$1,000

$2,000

Previous 2015 Forecast Current 2015 ForecastMarcellus Utica Southwest

8%

20%

72%

12%

20%

68%

Previous Forecast $1.8-$2.3 billion

Current Forecast $1.5-$1.9 billion

14

2016 capital investment forecast reduced by $500 million to $1.5 billion

• Reduced mid-point of 2015 CapEx forecast by $350 million

• Continuously optimizing capital to match producers’ revised drilling plans

• Adjusted startup schedule for 10 of 18 facilities currently under construction

• “Just In Time” philosophy for capacity additions

• Operating facilities at high utilization to maximize financial efficiency

• Construction costs decreasing as contractors compete for reduced slate of industry projects

Page 15: MarkWest Energy Partners Investor Presentation Feb 2015

$-

$200

$400

$600

$800

$1,000

$1,200

2011 2012 2013 2014 2015FDCF Adjusted EBITDA

D C F & A D J U S T E D E B I T D A F O R E C A S T DC

F &

Adj

uste

d EB

ITDA

($ in

mill

ions

)

2015 DCF Forecast of $700MM to $800MM & Adjusted EBITDA Forecast of $925MM to $1,025MM

15

$333

$417

$483

$706

$446

$528

$606

$87

4

$92

5 –

$1,0

25

$70

0 –

$800

Page 16: MarkWest Energy Partners Investor Presentation Feb 2015

F I N A N C I A L S U M M A RY

• MarkWest preserves a strong balance sheet to fund growth > We have over $900 million of liquidity to support our capital investment program

• MarkWest maintains flexible financing options > Funding of base capital requirements using a combination of long-term debt and equity > During 2014, we raised over $1.6 billion through our at-the-market equity program > Completed a $500 million bond deal in the fourth quarter 2014, 10-year note with a coupon

of 4.875% > From the third quarter 2014 to the fourth quarter 2014, leverage decreased from 4.4 times to

4.0 times > We have significantly pre-funded our 2015 capital expenditures and are well positioned

• MarkWest is committed to achieving strong, long-term distribution growth > For 2014, the distribution was $3.54. We forecast distributions of approximately $3.70 for

2015, $3.97 for 2016 and an annual growth rate of 10% for 2017 to 2020. The annualized distribution coverage ratio during the entire period is expected to be 1.0 times to 1.2 times

MarkWest has over $900 million of liquidity

16

Page 17: MarkWest Energy Partners Investor Presentation Feb 2015

APPENDIX

Page 18: MarkWest Energy Partners Investor Presentation Feb 2015

R E C O N C I L I AT I O N O F D C F & D I S T R I B U T I O N C O V E R A G E

Year Ended Year Ended ($ in millions) 12/31/2014 12/31/2013

Net Income $ 160.3 $ 40.4

Depreciation, amortization and other non-cash operating expenses 489.4 365.7

Loss (gain) on sale or disposal of property, plant and equipment, net of tax benefit 1.1 (30.7)

Loss on redemption of debt, net of tax benefit - 36.2

Amortization of deferred financing costs and debt discount 7.3 6.7

Loss (earnings) from unconsolidated affiliates 4.5 (1.4)

Distributions from unconsolidated affiliates 12.5 6.4

Non-cash compensation expense 10.3 7.8

Unrealized (gain) loss on derivative instruments (82.1) 15.6

Deferred income tax expense 41.6 23.9

Cash adjustment for non-controlling interest of consolidated subsidiaries (17.9) 6.1

Revenue deferral adjustment 7.0 7.2

Impairment expense 62.4 -

Other (1) 29.1 18.5

Maintenance capital expenditures (2) (19.1) (19.0) Distributable Cash Flow (DCF) $ 706.4 $ 483.4

Total distributions declared for the period 629.0 490.6 Distribution Coverage Ratio (DCF / Total distributions declared) 1.12x 0.99x

18

(1) Other includes amounts related to capitalized interest associated with joint venture capital expenditures and fees earned related to development of joint venture capital projects. (2) Net of joint venture partner contributions.

Page 19: MarkWest Energy Partners Investor Presentation Feb 2015

R E C O N C I L I AT I O N O F A D J U S T E D E B I T D A

19

(1) Includes amortization of deferred financing costs and debt discount, and excludes interest expense related to the Steam Methane Reformer. (2) For the three months and year ended December 31, 2014, Other includes amounts related to capitalized interest associated with joint venture capital expenditures and fees earned related to development of

joint venture capital projects.

Year Ended Year Ended Year Ended ($ in millions) 12/31/2014 12/31/2013 12/31/2012

Net income $ 160.3 $ 40.4 $ 217.0 Non-cash compensation expense 10.3 7.8 8.2

Unrealized (gain) loss on derivative instruments (82.1) 15.6 (102.1)

Interest expense (1) 165.4 150.1 117.1

Depreciation, amortization and other non-cash operating expenses 489.4 365.7 237.6

Loss (gain) on disposal of property, plant and equipment 1.1 (33.8) 6.2

Loss on redemption of debt - 38.5 -

Provision for income tax expense 42.2 12.7 38.3

Adjustment for cash flow from unconsolidated affiliates 16.9 4.9 6.1

Impairment expense 62.4 - -

Other (2) 8.4 4.1 0.1

Adjusted EBITDA $ 874.3 $ 606.0 $ 528.5

19

Page 20: MarkWest Energy Partners Investor Presentation Feb 2015

R E C O N C I L I AT I O N O F N E T O P E R AT I N G M A R G I N

Year Ended Year Ended ($ in millions) 12/31/2014 12/31/2013

Income from operations $ 377.2 $ 245.9

Facility expenses 343.4 291.1

Derivative (gain) loss (95.3) 25.8

Revenue deferral adjustment and other (9.7) 6.2

Revenue adjustment for unconsolidated affiliate 41.5 -

Purchased product costs from unconsolidated affiliate (0.3) -

Selling, general and administrative expenses 126.5 101.6

Depreciation 422.8 299.9

Amortization of intangible assets 64.9 64.6

Loss (gain) on disposal of property, plant and equipment 1.1 (33.8)

Accretion of asset retirement obligations 0.6 0.8

Impairment of goodwill 62.4 -

Net Operating Margin $ 1,335.1 $ 1,002.1

20

Page 21: MarkWest Energy Partners Investor Presentation Feb 2015

1515 Arapahoe Street

Tower 1, Suite 1600

Denver, Colorado 80202

PHONE: 303-925-9200

INVESTOR RELATIONS: 866-858-0482

EMAIL: investorrelat [email protected]

W EBSITE: www.markwest.com