Martin Midstream Partners L.p. · NASDAQ:MMLP
Martin Midstream Partners L.p — Bank of America Merrill Lynch 2019 Energy Credit Conference
40 slides from Martin Midstream Partners L.p's conference presentation, Jun 6, 2019
Slide 1: Bank of America Merrill Lynch 2019 Energy Credit Conference
June 6, 2019 Bank of America Merrill Lynch 2019 Energy Credit Conference Martin Midstream Partners L.P. – NASDAQ: MMLP
Slide 2: Legal Notice
Legal Notice 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 results prepared in accordance with accounting princ
Slide 3: Contents
Contents Legal Notice 02 Strategic Overview 04 Business Segment Overview 09 Terminalling & Storage 10 Natural Gas Services 18 Transportation 23 Sulfur Services 27 Financial Summary 32 Appendix 38 3
Slide 4: Strategic Overview
Asphalt Facility – Hondo, Texas First LNG Transfer – Pascagoula, Louisiana Pelican Island, Galveston, Texas Strategic Overview
Slide 5: Partnership Overview
Partnership Overview Martin Midstream Partners L.P. Nasdaq: MMLP A publicly traded, diversified master limited partnership with four primary business operations: • Terminalling & Storage Services for petroleum products and by-products including refining of naphthenic crude oil, and blending and pack
Slide 6: MMLP Financial Outlook
MMLP Financial Outlook 2019E Estimates by Segment (1Q Actual, 2Q-4Q Estimates) Sulfur Services Transportation Natural Gas Services2 Terminalling & Storage $147.5 million Adjusted EBITDA • $163.4 million before $15.9 million unallocated SG&A and other non-operating income • Maintenance Capital Expend
Slide 7: Strong Fee-Based Contract Mix
Strong Fee-Based Contract Mix Terminalling & Storage • Fee-based contracts for traditional storage assets – Specialty and Marine Shore-Based Terminals (with minimum volume commitments) • Fee-based, long-term tolling agreement for Smackover Refinery (with guaranteed minimum volume) • Margin-based, lu
Slide 8: Assets Strategically Located to Oil Refining Industry
Assets Strategically Located to Oil Refining Industry 8
Slide 9: Business Segment Overview
Fourchon South, Louisiana Martin Transport LPG Truck/Trailer Fourchon 15, Louisiana Business Segment Overview
Slide 10: Terminalling & Storage
Terminalling & Storage Segment Overview • MMLP operates 33 terminal facilities with an aggregate storage capacity of 2.9 million barrels • These facilities provide storage, refining, blending, packaging and handling services of petroleum products and by-products and petrochemicals through: • 19 mari
Slide 11: Terminalling & Storage
Terminalling & Storage • Terminalling, storage and transportation services crucial to refineries • Crude oil refining, blending and packaging of finished goods, and transportation to customers 11
Slide 12: Smackover Refinery – Specialized Naphthenic Refinery
Terminalling & Storage Smackover Refinery – Specialized Naphthenic Refinery • 7,700 bpd capacity naphthenic lube refinery located in Smackover, Arkansas • Specialized facility processes crude oil into finished products including naphthenic lubricants, distillates and asphalt • Naphthenic lubricants
Slide 13: Martin Lubricants – Blending & Packaging
Terminalling & Storage Martin Lubricants – Blending & Packaging • Specialty lubricant product blending and packaging assets located within MMLP’s Smackover Refinery in Smackover, Arkansas include: • 235,000 sq. ft. warehouse • 3.9 million gallons bulk storage • MMLP purchases base oils to blend and
Slide 14: Marine Shore-Based Terminals – Gulf Coast Fuel
Terminalling & Storage Marine Shore-Based Terminals – Gulf Coast Fuel • 19 terminals along the Gulf Coast from Theodore, Alabama to Harbor Island, Aransas Pass, Texas • Terminalling assets utilized by Martin Energy Services (MRMC) to facilitate the distribution and marketing of fuel and lubricants t
Slide 15: Specialty Terminals
Terminalling & Storage Specialty Terminals • Network of 12 terminals which facilitate the movement of petroleum products and by-products and petrochemicals from oil refiners and natural gas processing facilities • Specialized capabilities include the ability to store and handle products with a wide
Slide 16: Specialty Terminals - Specialized Sites
Terminalling & Storage Specialty Terminals - Specialized Sites • Hondo Asphalt Terminal • Facility located 40 miles west of San Antonio city center with capacity of 182,100 barrels of asphalt storage, and blending and processing capabilities • Transportation advantage over the competition in relatio
Slide 17: Specialty Terminals - Specialized Sites cont.
Terminalling & Storage Specialty Terminals - Specialized Sites cont. • Beaumont Neches • Multi-service terminal • Sulfur outtake and gathering point for Texas and Louisiana refiners • Deep water and barge dock access • Serviced by 3 rail lines (BNSF, KCS, UP) • Dry bulk shiploader – 20,000 tons/day
Slide 18: Natural Gas Services
Natural Gas Services Segment Overview • Cardinal Gas Storage operates approximately 50 billion cubic feet of natural gas storage capacity across four facilities throughout northern Louisiana and Mississippi • MMLP distributes NGLs purchased primarily from refineries and natural gas processors. The P
Slide 19: Natural Gas Services
Natural Gas Services • Underground storage of natural gas and natural gas liquids • Transportation and marketing of natural gas liquids 19
Slide 20: Cardinal Gas Storage Partners
Natural Gas Services Cardinal Gas Storage Partners1 Cardinal Gas Storage Adjusted EBITDA • ~50 billion cubic feet of natural gas storage capacity in northern Louisiana and Mississippi • Long term contracts - weighted average life of approximately 3.1 years (as of December 31, 2018) protects against
Slide 21: Butane Optimization
Natural Gas Services Butane Optimization Butane Adjusted EBITDA • Refineries adjust the vapor pressure of gasoline to meet seasonal EPA standards and blend butane into the gasoline pool during winter months • MMLP owns and leases a network of underground storage facilities in Louisiana and Mississip
Slide 22: NGLs
Natural Gas Services NGLs NGLs Adjusted EBTIDA • Assets include a 200-mile East Texas Pipeline transporting Y-grade from Kilgore to Beaumont, Texas for fractionation; East Texas market volumes gathered by truck for pipeline injection • Spindletop terminal supplies natural gasoline to Beaumont, Texas
Slide 23: Transportation
Transportation Segment Overview • Martin Transport, Inc., (“MTI”) a subsidiary of MMLP, operates tank truck transportation services catering to petroleum, petrochemical and chemical industries primarily across the Southeast United States • MMLP utilizes inland and offshore tows to provide marine tra
Slide 24: Land Transportation
Transportation Land Transportation • MTI operates and provides tank truck transportation services catering to the petroleum, petrochemical and chemical industries primarily across the Southeast U.S. • MTI’s “refinery and petrochemical services” model is focused on transportation of heavy tank bottom
Slide 25: Land Transportation
Transportation Land Transportation • MTI provides MMLP with dedicated access to transportation assets that are crucial to MMLP’s business • MTI’s operations are underscored by long-term customer relationships Key Drivers Of Business Market • Overall energy, petrochemical, industrial and Demand agric
Slide 26: Marine Transportation
Transportation Marine Transportation Marine Transportation Adjusted EBITDA • 31 inland marine tank barges – 17 inland push boats – 1 offshore tug and barge unit • Ability to handle specialty products (asphalt, fuel oil, gasoline, sulfur and other bulk liquids), which complements MMLP’s Specialty Ter
Slide 27: Sulfur Services
Sulfur Services Segment Overview • Molten sulfur, a refinery by-product is aggregated, stored and prilled through MMLP’s integrated value chain systems along the U.S. Gulf Coast and Northern California region • MMLP manufactures and markets sulfur-based fertilizers and related sulfur products (sulfu
Slide 28: Integrated Sulfur Value Chain
Integrated Sulfur Value Chain • Provides transportation, processing and marketing services necessary to move product from producer to consumer • Intermodal transportation offers multiple fee opportunities for MMLP 28
Slide 29: Fertilizer
Sulfur Services Fertilizer • MMLP manufactures and markets sulfur-based fertilizers and related sulfur products for agricultural and industrial use from manufacturing plants in Texas and Illinois • Typical customers include large distributors that own or control local retail and wholesale distributi
Slide 30: Molten Sulfur
Sulfur Services Molten Sulfur • MMLP transports molten sulfur from U.S. Gulf Coast refineries to the Tampa market for fertilizer production Supply • Sulfur production is driven by refinery utilization and demand for refined products • Refiners require security of by-product offtake Demand • Demand f
Slide 31: Prilled Sulfur
Sulfur Services Prilled Sulfur • Processing molten sulfur into a solid form enables large scale transportation for exportation on dry bulk vessels Prilling Agreements • Refiners pay MMLP reservation fees, plus additional operating fees for prilling services • Contracts consist of 3 to 5 year service
Slide 32: Financial Summary
Martin Transport, Inc. Trucks Marine Tug/Barge Unit Neches Sulfur, Beaumont, Texas Financial Summary
Slide 33: Strategic Initiatives
Strategic Initiatives Objective – De-lever MMLP by divesting of non-core assets and businesses which creates the ability to focus on a simplification strategy and positions the Partnership for growth • Asset sales to strengthen the balance sheet, and simplify MMLP’s business model which provides cla
Slide 34: Financial Outlook
Financial Outlook Adjusted EBITDA & Distributable Cash Flow 1 1 Includes pro forma adjustment of $14.5MM for the acquisition of MTI on January 1, 2019 and excludes equity in earnings of, distributions from, and the 34 gain or disposition of WTLPG through July 31, 2018
Slide 35: Financial Outlook
Financial Outlook 2019E Quarterly Profile Quarterly Drivers • Seasonality of businesses • Fertilizer planting season 1Q and 2Q • Butane blending season 1Q and 4Q • Timing of maintenance capital expenditures • Refinery and plant turnarounds 35
Slide 36: Financial Outlook
Financial Outlook Cash Flow Projections Cash Flow Projections 2018A 2019E 2020P 2021P Adjusted EBITDA: Terminalling & Storage $ 56.0 $ 49.8 $ 46.7 $ 44.8 Natural Gas Services $ 47.3 $ 47.3 $ 51.2 $ 54.2 Transportation $ 25.2 $ 35.2 $ 37.9 $ 41.2 Sulfur Services $ 25.8 $ 31.1 $ 35.9 $ 36.9 Unallocate
Slide 37: Financial Outlook Capitalization
Financial Outlook Projected Capitalization2 Capitalization 2018A 2019E 2020P 2021P Senior Secured Revolver $ 287.0 $ 396.8 $ 369.7 $ 341.3 1 7.25% Senior Notes due 2021 $ 373.8 $ - $ - $ - New Senior Notes $ - $ 400.0 $ 400.0 $ 400.0 Capital Leases $ - $ 6.5 $ 0.5 $ 0.3 Inventory Sub-Limit $ (43.5)
Slide 38: Appendix
Railrack, Arcadia, Louisiana Martin Lubricants, Smackover, Arkansas Neches Terminal, Beaumont, Texas Appendix
Slide 39: Fee-based Cash Flow Reconciliation
Fee-based Cash Flow Reconciliation 1Q19A 2Q19E 3Q19E 4Q19E 2019E Terminalling & Storage Smackover Refinery $ 5.0 $ 5.1 $ 4.9 $ 5.1 $ 20.1 Fixed Fee Martin Lubricants $ 2.5 $ 3.7 $ 3.8 $ 2.6 $ 12.6 Margin Specialty Terminals $ 3.1 $ 3.1 $ 3.0 $ 3.0 $ 12.2 Fixed Fee Shore Based Lubricants $ 0.4 $ 0.5
Slide 40: MMLP Financial Outlook
MMLP Financial Outlook 2018 Consolidated EBITDA Actuals Sulfur Services 1 Transportation Natural Gas Services 2 Terminalling & Storage $138.2 million Adjusted EBITDA • $154.3 million before $16.1 million unallocated SG&A and other non-operating income 1 Includes pro forma adjustment of $14.5MM for t
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