Martin Midstream Partners L.p. · NASDAQ:MMLP
Martin Midstream Partners L.p — Investor Presentation (February 2018)
44 slides from Martin Midstream Partners L.p's investor presentation, Feb 21, 2018
Slide 1: 2018 Financial Guidance & Operational Overview
2018 Financial guidance & Operational overview February 21 www.martinmidstream.com
Slide 2: Agenda
MARTIN MIDSTREAM PARTNERS L.P. Agenda Opening remarks & introductions Bob Bondurant, Executive Vice President & Chief Financial Officer 2018 guidance Joe McCreery, Vice President of Finance & Head of Investor Relations Bank amendment Joe McCreery, Vice President of Finance & Head of Investor Relatio
Slide 3: Use of Non-GAAP Financial Measures
MARTIN MIDSTREAM PARTNERS L.P. 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 wi
Slide 4: Forward Looking Statements
MARTIN MIDSTREAM PARTNERS L.P. Forward Looking Statements 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 statemen
Slide 5: 2018 Guidance
MARTIN MIDSTREAM PARTNERS L.P. 2018 GUIDANCE 5
Slide 6: Partnership Overview
MARTIN MIDSTREAM PARTNERS L.P. Partnership Overview • NASDAQ Listed: MMLP • Formed October 31, 2002 • MMLP is a publicly traded, diversified master limited partnership with operations including: Natural Gas Services Terminalling & Storage Sulfur Services Marine Transportation • MMLP Trading
Slide 7: 2018E Guidance by Segment Update
MARTIN MIDSTREAM PARTNERS L.P. 2018E Guidance by Segment UPDATE Natural Gas Services Terminalling & Storage $69.7 $58.8 $ millions Sulfur Services Marine Transportation $34.5 $156.1 million Adjusted $8.5 EBITDA ($171.5 million before $15.4 million unallocated SG&A and other non-operating income) Mai
Slide 8: 2018E Adjusted EBITDA Guidance Reconciliation
MARTIN MIDSTREAM PARTNERS L.P. 2018E Adjusted EBITDA Guidance Reconciliation Natural Gas Terminalling Sulfur Marine Interest SG&A 2018E Services & Storage Services Transportation Expense Net income (loss) $42.5 $22.4 $23.0 $1.4 $(16.0) $(52.7) $20.6 Interest expense add back -- -- -- -- -- $52.7 $52
Slide 9: Strong Fee-Based Contract Mix
MARTIN MIDSTREAM PARTNERS L.P. Strong Fee-Based Contract Mix Natural Gas Services • Fee-based, multi-year natural gas storage contracts (weighted average * life approximately 3.0 years as of December 31, 2017) • Fee-based, regulated common carrier tariffs (WTLPG) • Margin-based, wholesale NGLs Termi
Slide 10: Bank Amendment
MARTIN MIDSTREAM PARTNERS L.P. Bank amendment
Slide 11: Bank Amendment - Situation Overview & Objectives
MARTIN MIDSTREAM PARTNERS L.P. Bank Amendment - Situation Overview & Objectives • MMLP has amended its revolving credit facility to accommodate growth capital expenditures necessary for the previously announced WTLPG extension/expansion project. • MMLP expects to spend approximately $40 million duri
Slide 12: Operational Overview
MARTIN MIDSTREAM PARTNERS L.P. OPERATIONAL OVERVIEW
Slide 13: Natural Gas Services Overview
MARTIN MIDSTREAM PARTNERS L.P. Natural Gas Services 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 natur
Slide 14: Natural Gas Services: Cardinal Gas Storage
MARTIN MIDSTREAM PARTNERS L.P. – natural gas services Cardinal Gas Storage Firm Contracted/Fee-Based Storage Model Cardinal Contract Summary Working Gas Currently • Firm contracted model (90%) for natural gas Type Capacity (bcf) Contracted Years storage with interruptible service upside Arcadia Salt
Slide 15: Cardinal Gas Storage Asset Overview
MARTIN MIDSTREAM PARTNERS L.P. – natural gas storage Cardinal Gas Storage Asset Overview Monroe Gas Storage Site Arcadia Gas Storage • Salt dome facility (Arcadia, Louisiana) – 16.0 bcf Perryville Gas Storage • Salt dome facility (Delhi, Louisiana) – 12.7 bcf Cadeville Gas Storage Monroe Gas Storage
Slide 16: Butane Optimization
MARTIN MIDSTREAM PARTNERS L.P. – natural gas services Butane Optimization Butane Optimization Butane Adjusted EBITDA • Refineries adjust the vapor pressure of gasoline $28.1 $26.1 to meet seasonal EPA standards and are allowed $23.5 $19.9 to blend butane into the gasoline pool during $15.7 winter mo
Slide 17: West Texas LPG Pipeline (WTLPG)
MARTIN MIDSTREAM PARTNERS L.P. – natural gas services West Texas LPG Pipeline (WTLPG) • The WTLPG system is approximately 2,300 miles of Y-grade pipeline from Eastern New Mexico to Mt. Belvieu, Texas. • MMLP owns a 20% non-operating interest in WTLPG (OKE is owner/operator of remaining 80%). • Namep
Slide 18: NGLs & Propane
MARTIN MIDSTREAM PARTNERS L.P. – natural gas services NGLs & Propane NGL Propane • Assets include 200-mile East Texas Pipeline • Wholesale propane distribution to approximately transporting Y-grade from Kilgore to Beaumont, 100 regional customers throughout the Texas for fractionation; East Texas ma
Slide 19: Terminalling & Storage Overview
MARTIN MIDSTREAM PARTNERS L.P. Terminalling & Storage Overview • MMLP operates 38 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 petroche
Slide 20: Marine Shore-Based Terminals
MARTIN MIDSTREAM PARTNERS L.P. – Terminalling & Storage Marine Shore-Based Terminals Gulf Coast Fuel and Lubricant Distribution Network • 22 terminals along the Gulf Coast from Theodore, • Fee-based contract structure provides stable cash Alabama to Corpus Christi, Texas flow. • Terminalling assets
Slide 21: Martin Lubricants
MARTIN MIDSTREAM PARTNERS L.P. – terminalling & storage Martin Lubricants Lubricant Blending & Packaging • Specialty lubricant product blending and packaging assets located within MMLP’s Smackover Refinery in Smackover, Arkansas include: • 235,000 sq. ft. warehouse Lubricant Packaging Facility, Smac
Slide 22: Smackover Refinery
MARTIN MIDSTREAM PARTNERS L.P. – terminalling & storage Smackover Refinery Specialized Naphthenic Refinery • 7,700 bpd capacity naphthenic lube refinery located • Fee-based contract structure provides stable cash flow. in Smackover, Arkansas • Long-term tolling agreement with MRMC • Specialized faci
Slide 23: Specialty Terminals
MARTIN MIDSTREAM PARTNERS L.P. – terminalling & storage Specialty Terminals Specialty Terminals Overview • Network of 14 terminals which facilitate the movement of petroleum products and by-products and petrochemicals from oil refiners and natural gas processing facilities • Specialized capabilities
Slide 24: Specialty Terminals: Hard to Handle Product Logistics
MARTIN MIDSTREAM PARTNERS L.P. – terminalling & Storage Specialty Terminals Expertise In “Hard to Handle” Product and By-Product Logistics Specialized Sites Specialized Sites (continued) • Hondo Asphalt Terminal • South Houston and Omaha Asphalt • Asphalt terminalling and processing facilities • Fac
Slide 25: Specialty Terminals: Hard to Handle Product Logistics (continued)
MARTIN MIDSTREAM PARTNERS L.P. – terminalling & Storage Specialty Terminals Expertise In “Hard to Handle” Product and By-Product Logistics Specialized Sites (continued) • Beaumont Neches • Multi-service terminal • Sulfur offtake and gathering point for Texas and Louisiana refiners • Deep water and b
Slide 26: Sulfur Services Overview
MARTIN MIDSTREAM PARTNERS L.P. Sulfur Services 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 relate
Slide 27: Integrated Sulfur Value Chain
MARTIN MIDSTREAM PARTNERS L.P. – sulfur services 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 27
Slide 28: Fertilizer
MARTIN MIDSTREAM PARTNERS L.P. – sulfur services Fertilizer Fertilizer Overview Supply/Demand • MMLP manufactures and markets sulfur-based • The single largest factor influencing fertilizer demand fertilizers and related sulfur products for in the U.S. is corn acres planted. agricultural and industr
Slide 29: Molten Sulfur
MARTIN MIDSTREAM PARTNERS L.P. – sulfur services Molten Sulfur Handling and Transportation Agreement • MMLP transports molten sulfur from U.S. Gulf Coast refineries to the Tampa market for fertilizer production. Supply Demand • Sulfur production is driven by refinery utilization • Demand for sulfur
Slide 30: Prilled Sulfur
MARTIN MIDSTREAM PARTNERS L.P. – sulfur services Prilled Sulfur Prilling Agreements Terminal Location Production Products Stored Capacity • Refiners pay MMLP minimum reservation fees, plus Neches Beaumont, 5,500 metric Molten, prilled & additional operating fees for prilling services Texas tons/day
Slide 31: Marine Transportation Overview
MARTIN MIDSTREAM PARTNERS L.P. Marine Transportation Overview • MMLP utilizes inland and offshore tows to provide marine transportation of petroleum products and by-products. • MMLP’s marine transportation business operates coastwise along the Gulf of Mexico, East Coast and on the U.S. inland waterw
Slide 32: Marine Transportation Assets
MARTIN MIDSTREAM PARTNERS L.P. – marine transportation Assets Marine Transportation • 33 inland marine tank barges • 18 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 Spec
Slide 33: Inland & Offshore
MARTIN MIDSTREAM PARTNERS L.P. – marine transportation Inland & Offshore Current Environment • Weak day-rates continue even as utilization has improved • Contract tenor trending toward short term and spot market • Asset rationalization continues with $5.4 million in assets currently held for sale •
Slide 34: Appendix
MARTIN MIDSTREAM PARTNERS L.P. APPENDIX
Slide 35: Capitalization and Credit Metrics
MARTIN MIDSTREAM PARTNERS L.P. $ millions Capitalization 12/31/2016 12/31/2017 DEBT Revolving Credit Facility Due March 2020 $443.0 $445.0 Senior Secured Debt $443.0 $445.0 Senior Notes Due February 2021 $373.8 $373.8 Total Debt $816.8 $818.8 EQUITY Partners’ Capital $312.0 $298.2 Total Capitalizati
Slide 36: Fee-based Cash Flow Reconciliation for 2018
MARTIN MIDSTREAM PARTNERS L.P. Fee-based Cash Flow Reconciliation for 2018 (slide 9) 1Q18E 2Q18E 3Q18E 4Q18E 2018E Terminalling & Storage Shore Based Terminals $ 2.1 $ 2.1 $ 2.1 $ 2.1 $ 8.4 Fixed Fee Shore Based Lubricants $ 1.0 $ 1.0 $ 1.0 $ 1.0 $ 4.0 Margin Martin Lubricants $ 2.9 $ 3.2 $ 3.0 $ 2.
Slide 37: 2018E Total Capital Expenditures Reconciliation
MARTIN MIDSTREAM PARTNERS L.P. 2018E Total Capital Expenditures Reconciliation (slide 7) Distribution Coverage Ratio 1.18 x 0.97 x 1.00 x 0.96 x 1.00 x 2014 2015 2016 2017 2018E Total Capital Expenditures Expansion CapEx Plant Turnaround Costs Maintenance CapEx One Time M-CapEx Items $93.3 $79.6 $14
Slide 38: West Texas LPG Pipeline Rate Update
MARTIN MIDSTREAM PARTNERS L.P. West Texas LPG Pipeline Rate Update (slide 17) • Certain shippers filed complaints with the Texas RRC (Railroad Commission of Texas) challenging the increased rates WTLPG (West Texas LPG Pipeline) implemented effective July 1, 2015. • On March 8, 2016, contrary to the
Slide 39: Existing & Proposed Terms
MARTIN MIDSTREAM PARTNERS L.P. Existing & Proposed Terms (slide 11) Existing as Amended Borrower Martin Operating Partnership L.P. (the “Borrower”) Same as existing Martin Midstream Partners L.P. and all present and future Guarantors subsidiaries of the Borrower Same as existing $664 million Senior
Slide 40: 2017 Adjusted EBITDA and GAAP Reconciliation
MARTIN MIDSTREAM PARTNERS L.P. 2017 Adjusted EBITDA and GAAP Reconciliation Natural Gas Terminalling Sulfur Marine Interest 2017 SG&A Services & Storage Services Transportation Expense Actual Net income (loss) $53.5 $3.3 $25.9 $(1.2) $(16.6) $(47.8) $17.1 Interest expense add back -- -- -- -- -- $47
Slide 41: 2016 Adjusted EBITDA and GAAP Reconciliation
MARTIN MIDSTREAM PARTNERS L.P. 2016 Adjusted EBITDA and GAAP Reconciliation Natural Gas Terminalling Sulfur Marine Interest 2016 SG&A Services & Storage Services Transportation Expense Actual Net income (loss) $43.1 $44.1 $26.8 $(19.8) $(16.4) $(46.1) $31.7 Interest expense add back -- -- -- -- -- $
Slide 42: 2015 Adjusted EBITDA and GAAP Reconciliation
MARTIN MIDSTREAM PARTNERS L.P. 2015 Adjusted EBITDA and GAAP Reconciliation Natural Gas Terminalling Sulfur Marine Interest 2015 SG&A Services & Storage Services Transportation Expense Actual Income (loss) from continuing operations $47.6 $18.8 $27.1 $4.6 $(17.6) $(43.3) $37.2 Interest expense add b
Slide 43: 2014 Adjusted EBITDA and GAAP Reconciliation
MARTIN MIDSTREAM PARTNERS L.P. 2014 Adjusted EBITDA and GAAP Reconciliation Natural Gas Terminalling Sulfur Marine Interest 2014 SG&A Services & Storage Services Transportation Expense Actual Income (loss) from continuing operations $36.1 $27.0 $25.7 $3.2 $(56.2) $(42.2) $(6.4) Interest expense add
Slide 44: Contact Information
4200 B STONE ROAD KILGORE, TEXAS 75662 877-256-6644 WWW.MARTINMIDSTREAM.COM IR@MARTINMLP.COM
Martin Midstream Partners — Investor Presentation (February 2018) on 6ix