Tpc Co., Ltd · KRX:130740
Tpc — Wells Fargo NGL Summit 2010
21 slides from Tpc's conference presentation, May 26, 2010
Slide 1: A Valuable, Unique & Stable Bridge from Mixed C4 to Purity Products
Exhibit 99.1 A Valuable, Unique & Stable Bridge from Mixed C4 to Purity Products A Service-Based Intermediary with Strong Infrastructure & Logistics Network Ruth Dreessen Executive Vice President & Chief Financial Officer Wells Fargo NGL Summit May 26, 2010
Slide 2: Forward-Looking Statements & Non-GAAP Financial Measures
Forward-Looking Statements & Non-GAAP Financial Measures This presentation may contain “forward-looking statements” within the meaning of the securities laws. These statements include assumptions, expectations, predictions, intentions or beliefs about future events, particularly statements that may
Slide 3: Investment Highlights
Investment Highlights Substantial Differentiated and Strategic Business Model Asset Value Attractive Valuation Market Position in Upside Consolidated Industry Positioned for Significant and Margin Expansion Stable Free and Growth Cash Flow Wells Fargo NGL Summit - May 26, 2010 3
Slide 4: Differentiated Business Model
Differentiated Business Model TPC Group: a C4 processor, logistics provider & marketer • C4: four carbon hydrocarbon by-products of ethylene production • Ethylene produced by cracking “heavy” (naphtha) or “light” (NGL’s) – Cracking “heavy” produces significantly more C4 than cracking “light” – “Heav
Slide 5: Substantial & Strategic Asset Value
Substantial & Strategic Asset Value Wells Fargo NGL Summit - May 26, 2010 5
Slide 6: Business Segments – C4 Processing & Performance Products
Business Segments – C4 Processing & Performance Products Wells Fargo NGL Summit - May 26, 2010 6
Slide 7: C4 Processing – Attractive Market Position
C4 Processing – Attractive Market Position LTM FY 07 FY 08 FY 09 • Products: Butadiene, Butene-1, Raffinates 3/10 • Suppliers: Dow, Formosa, Nova, CP Chem, Volume (MMlbs) 2,905 2,832 2,295 2,486 Others (15 different ethylene plants) Gross Profit ($ MM) (1) $170 $177 $121 $197 • Customers: Goodyear,
Slide 8: C4 Processing – Attractive Market Position
C4 Processing – Attractive Market Position • C4 markets remain tight, allowing margin increase opportunities • Raffinates margin is a percentage of gasoline price • Service fees for use of our logistical network • Any industry movement toward heavier feeds increases mixed C4 volumes • Light cracking
Slide 9: C4 Processing – Logistics, Credibility, Competency
C4 Processing – Logistics, Credibility, Competency Wells Fargo NGL Summit - May 26, 2010 9
Slide 10: Performance Products – Poised for Growth
Performance Products – Poised for Growth LTM FY 07 FY 08 FY 09 • Products: PIB, HPIB, DIB, Nonene, Tetramer 3/10 • Suppliers: C4 Processing, LyondellBasell, BP, Others Volume (MMlbs) 528 788 602 572 • Customers: Afton, SI Group, Lanxess, Others • Profitability model: index-based contracts Gross Prof
Slide 11: Butane Dehydrogenation
Butane Dehydrogenation World-scale Units • Two 12,500 BPD butane to butyleneCatofin dehydrogenation units • Successfully operated for many years; idled in 2007 • Operate on normal butane or isobutane Tight Product Markets • Gasoline components – MTBE, ETBE • Petrochemicals – Butadiene, Butene-1, Iso
Slide 12: TPC Business Model
TPC Business Model Component Cost Basis Product Sale Basis Butadiene - 55% Benchmark – Butadiene Benchmark Posting Processing Fee C4 Processing Butylenes - 32% Gasoline Butene-1 Gasoline + Fixed Factor Butene-1 MTBE Market Based Isobutylene HPIB Iso-butane Butene-2 Raffinates Gasoline Butanes - 13%
Slide 13: Financials – Past Performance
Financials – Past Performance 4-year Average Maintenance Cap Ex (1) 2007 CapEx for Propylene Derivatives facility (2) 2008 CapEx for second HR-PIB plant (3) See Appendix for reconciliation Wells Fargo NGL Summit - May 26, 2010 13
Slide 14: Financials – Target
Financials – Target • Target EBITDA levels allow the company to earn in excess of WACC • C4 processing driven by margin expansion from favorable market conditions and reliable supply • Performance products driven by volume and margin expansion – Recent capital investments in Polyisobutylene and Prop
Slide 15: Significant & Stable Free Cash Flow
Significant & Stable Free Cash Flow A Valuable, Unique and Stable Bridge Wells Fargo NGL Summit - May 26, 2010 15
Slide 16: Why TPC Group? Why Now?
Why TPC Group? Why Now? Differentiated Business Model • Service-based intermediary with strong infrastructure & logistics network • Long-standing, service-based contracts limit exposure to commodity prices Substantial and Strategic Asset Value • TPC asset-based services are a critical component of t
Slide 17: Appendix
Investor Presentation – May 2010 Appendix 17
Slide 18: Reconciliation of Adjusted Basic EBITDA to Net Income
Reconciliation of Adjusted Basic EBITDA to Net Income ($ millions) Fiscal year ended June 30, LTM ended 2007 2008 2009 March 31, 2010 Adjusted Basic EBITDA(a) $ 88.8 $ 97.3 $ 72.6 $ 97.8 Reconciliation to Adjusted EBITDA as reported Non-Core MTBE (1) (2.7) 6.2 - - BI Insurance / Hurricane, net (2) -
Slide 19: Reconciliation of Cash Flows
Reconciliation of Cash Flows Adjusted Basic Cash Flow from Operations to Net Cash Provided by Operating Activities ($ millions) Fiscal year ended June 30, LTM ended 2007 2008 2009 March 31, 2010 Adjusted Basic Cash Flow from Operations (a) $ 79.0 $ 51.6 $ 82.5 $ 53.9 Reconciliation to Net Cash From
Slide 20: Notes to EBITDA and Cash Flow Reconciliations
Notes to EBITDA and Cash Flow Reconciliations Adjusted Basic EBITDA is included in this presentation to provide investors with a view of the TPC Group’s financial performance as adjusted to exclude certain items that might affect the comparability of results, and to hypothetically reflect recent fin
Slide 21: Notes to EBITDA and Cash Flow Reconciliations (continued)
Notes to EBITDA and Cash Flow Reconciliations (continued) 3. Adjustment reflects recovery of $4.7 million from restitution of freight payments. This adjustment has been made to enhance the comparability of operating results by excluding items that are nonrecurring or for which the timing and/or amou