Martin Midstream Partners L.p. · NASDAQ:MMLP
Martin Midstream Partners L.p — Investor Day (March 2015)
51 slides from Martin Midstream Partners L.p's investor day presentation, Mar 24, 2015
Slide 1: Martin Midstream Partners L.P. 2015 Analyst & Investor Day
MARTIN MIDSTREAM PARTNERS L.P. 2015 ANALYST & INVESTOR DAY March 24, 2015
Slide 2: Analyst & Investor Day 2015 agenda
MARTIN MIDSTREAM PARTNERS L.P. ANALYST & INVESTOR DAY 2015 Welcome & MMLP Overview Joe McCreery, Vice President – Finance & Head of Investor Relations Operational Overview Bob Bondurant, Executive Vice President & Chief Financial Officer Growth Opportunities Wes Martin, Vice President – Corporate De
Slide 3: Use of Non-GAAP Financial Measures
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 principles general
Slide 4: Forward Looking Statements
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 statements. These statements can be id
Slide 5: MMLP Overview
MMLP OVERVIEW Joe McCreery, Vice President – Finance & Head of Investor Relations 5
Slide 6: Martin Resource Management (MRMC) Overview
MARTIN RESOURCE MANAGEMENT (MRMC) OVERVIEW • Based in Kilgore, TX, MRMC is a leading independent provider of integrated logistics solutions, storage, manufacturing, marketing, and distribution services to energy, petrochemical and other industrial concerns • MRMC and its legacy companies have been o
Slide 7: Martin Midstream Partners L.P. (MMLP) Overview
MARTIN MIDSTREAM PARTNERS L.P. (MMLP) OVERVIEW • NASDAQ Listed: MMLP • Formed October 31, 2002 • MMLP is a publicly traded, diversified master limited partnership with operations including: • Terminalling & Storage • Natural Gas Services • Sulfur Services • Marine Transportation • MMLP Trading Summa
Slide 8: Key Investment Highlights
KEY INVESTMENT HIGHLIGHTS • Majority of cash flows generated from fee-based or ‘fee-like’ contracts Fee-Based Contracts • Significant portions consist of reservation charges or minimum fee arrangements Fully Integrated, • Diversified asset base with four complementary business units that create a cu
Slide 9: Significant Events Since 2012
SIGNIFICANT EVENTS SINCE 2012 MRMC sold 49% non- $51MM acquisition of 6 controlling voting interest $134MM acquisition of 20% $41MM divestiture of 6 LPG $273MM divestiture $47MM marine LPG pressure barges and (50% economic) in MMLP's GP interest in West Texas LPG pressure barges of Prism Gas Systems
Slide 10: Uniquely Diversified Operating Mix
UNIQUELY DIVERSIFIED OPERATING MIX Terminalling & Storage Natural Gas Services $64.7 $48.8 Marine Transportation Sulfur Services $165.3 Million $18.0 $33.8 (all values in $ millions before unallocated SG&A) 10
Slide 11: MMLP Asset Locations – All Segments
MMLP ASSET LOCATIONS – ALL SEGMENTS 11
Slide 12: Strong Fee-Based Contract Mix
STRONG FEE-BASED CONTRACT MIX Recent Fee-Based Acquisitions Driving MMLP Growth Terminalling & Storage • Fee-based, multi-year contracts for traditional storage assets – Specialty and Shore Base Terminals (with guaranteed throughput minimums) • Fee-based, extended-term tolling agreement for Smackove
Slide 13: EBITDA and Contract Mix
EBITDA AND CONTRACT MIX 29% 67% A% 13 | rermnauunesronace (00) warunat cas | SULFUR | MARINE e | FEE-BASED i | MARGIN | FEE-LIKE (COST-PLUS)
Slide 14: High Quality Long Term Customer Base
HIGH QUALITY LONG TERM CUSTOMER BASE • Long-term customer relationships are a key driver of our success • Integrated and complementary business segments uniquely position MMLP • Full value chain for handling and logistics capabilities and solutions • Breadth, scale and brand recognition make MMLP a
Slide 15: Strong General Partner Support
STRONG GENERAL PARTNER SUPPORT • Ongoing MRMC businesses help support MMLP • Maintains distinct set of assets and business units that are complementary to MMLP • Approximately 30% of 2014 MMLP EBITDA derived from contracts with MRMC • MRMC has significantly assisted in MMLP’s growth • MMLP is not a
Slide 16: Operational Overview
OPERATIONAL OVERVIEW Bob Bondurant, Executive Vice President & Chief Financial Officer
Slide 17: Terminalling & Storage Overview
TERMINALLING & STORAGE OVERVIEW MMLP owns or operates 47 terminal facilities with an aggregate storage capacity of 4.2 million barrels. These facilities are located across the U.S. Gulf Coast region and provide storage, processing and handling services for producers and suppliers of petroleum produc
Slide 18: Terminalling & Storage: Specialty Terminals
TERMINALLING & STORAGE Specialty Terminals Specialty Terminals Overview • Network of 18 owned or operated terminalling facilities to assist in the movement of petroleum products and by-products to and from oil refiners and natural gas processing facilities • Specialized capabilities include the abil
Slide 19: Specialty Terminals – Corpus Christi Crude Terminal
TERMINALLING & STORAGE Specialty Terminals - Corpus Christi Crude Terminal Integral Eagle Ford Transload Facility • Corpus Christi Crude Terminal • Multi-year contract serving one of the largest U.S. • 900,000 barrel capacity crude storage facility refiners • Transloading connection capabilities wit
Slide 20: Specialty Terminals – Other
TERMINALLING & STORAGE Specialty Terminals – Other Refinery Focused Sites Specialized Sites • Beaumont Neches • South Houston and Omaha Asphalt • Multi-service facility – recent lease of additional • Asphalt terminalling and processing 96 acres facilities serving local markets • Sulfur offtake and g
Slide 21: Marine Shore-Based Terminals
TERMINALLING & STORAGE Marine Shore-Based Terminals Gulf Coast Distribution Network • 29 owned or operated terminals along the Gulf Coast • Strategically-located asset base well-positioned to from Blakeley Island, AL to Corpus Christi, TX benefit from the growing exploration and production • Termina
Slide 22: Smackover Refinery
TERMINALLING & STORAGE Smackover Refinery Specialized Naphthenic Refinery • 7,500 bpd capacity naphthenic lube refinery located in • Fee-based contract structure provides stable cash flow Smackover, AR • Long-term tolling agreement with MRMC • Specialized facility processes crude oil into finished l
Slide 23: Martin Lubricants
TERMINALLING & STORAGE Martin Lubricants Lubricant Blending & Packaging • MMLP purchases base oils to blend and package branded and private label lubricants for agriculture, fleet, and industrial applications • Specialty lubricant product blending and packaging assets located in Smackover, AR includ
Slide 24: Natural Gas Services Overview
NATURAL GAS SERVICES OVERVIEW MMLP provides wholesale distribution of natural gas liquids (NGLs) to propane retailers, refineries and industrial NGL users in Texas and the southeastern U.S. MMLP owns an NGL pipeline that runs approximately 200 miles from Kilgore, TX to Beaumont, TX. Additionally, MM
Slide 25: Cardinal Gas Storage
NATURAL GAS SERVICES Cardinal Gas Storage Cardinal Gas Storage Firm Contracted Storage/Fee-Based Cash Flow $50.0 • Successful completion of acquisition of remaining 57.8% $41.0 $41.9 $40.0 $37.3 interest for $120 million and refinancing of all project $ millions $30.0 level indebtedness (approximate
Slide 26: Cardinal Gas Storage Asset Locations
NATURAL GAS SERVICES Cardinal Gas Storage Asset Locations Arcadia Gas Storage • Salt dome facility (Arcadia, LA) – 17.5 bcf Perryville Gas Storage • Salt dome facility (Delhi, LA) – 8.5 bcf Cadeville Gas Storage Monroe Gas Storage • Depleted reservoir facility (Monroe, LA) – 17.0 bcf • Depleted rese
Slide 27: Butanes & Underground Storage
NATURAL GAS SERVICES Butanes & Underground Storage Butane Optimization Butanes & Underground Storage $30.0 • New railrack at Arcadia, LA to be operational by end of $22.5 $25.0 June 2015 – creating dual capabilities (truck and rail) $17.5 $20.0 $ millions $15.7 • EPA regulates the vapor pressure (RV
Slide 28: West Texas LPG Pipeline L.P.
NATURAL GAS SERVICES West Texas LPG Pipeline L.P. • Completed purchase of 20% ownership interests in West Texas LPG Pipeline L.P. (WTLPG) in May 2014 • WTLPG includes approximately 2,300 miles of pipeline extending from Eastern New Mexico to Mt. Belvieu • Transportation capacity is approximately 240
Slide 29: NGL & Propane
NATURAL GAS SERVICES NGL & Propane NGL NGLs $12.0 • Assets include 200-mile East Texas Pipeline providing $9.1 $10.0 Y-grade deliveries (Kilgore to Beaumont) for $8.2 $8.0 $ millions fractionation; East Texas market volumes gathered by $5.1 $6.0 truck for pipeline injection $4.0 • Spindeltop termina
Slide 30: Sulfur Services Overview
SULFUR SERVICES OVERVIEW MMLP has an integrated system of sulfur transportation assets and facilities. MMLP gathers molten sulfur from refiners, primarily located on the Gulf Coast, and from natural gas processing plants, primarily located in the Southwestern U.S. Molten sulfur is either marketed to
Slide 31: Sulfur Services: Integrated Value Chain
SULFUR SERVICES Integrated Value Chain • Provides transportation, processing and marketing services necessary to move product from producer to consumer • Intermodal transportation offers multiple fee opportunities for the Partnership 31
Slide 32: Molten Sulfur
SULFUR SERVICES Molten Sulfur Marketing Agreements Molten Sulfur $12.0 • MMLP enters into agreements with suppliers (typically $10.0 large refiners) and customers to buy and sell molten $8.7 $7.6 $7.3 $8.0 $ millions sulfur on the same price index, providing stable $6.0 margins $4.0 • Profitability
Slide 33: Prilled Sulfur
SULFUR SERVICES Prilled Sulfur Prilling Agreements Sulfur Prilling $12.0 • Refinery customers pay MMLP minimum reservation $10.0 $8.9 fees and operating fees per ton of sulfur for its prilling $6.7 $8.0 $ millions services $5.0 $6.0 • Most contracts consist of 3 to 5 year service $4.0 agreements wit
Slide 34: Fertilizer
SULFUR SERVICES Fertilizer Fertilizer Overview Fertilizer $25.0 • MMLP manufactures and markets sulfur-based fertilizer $19.7 and related sulfur products for agricultural and $20.0 $16.2 $15.1 $ millions industrial use from manufacturing plants in Texas, $15.0 Illinois and Utah $10.0 • Typical custo
Slide 35: Marine Transportation Overview
MARINE TRANSPORTATION OVERVIEW MMLP utilizes a fleet of inland and offshore tows to provide marine transportation of petroleum products and by- products produced in oil refining and natural gas processing. MMLP’s marine transportation business operates coastwise along the Gulf of Mexico, East Coast
Slide 36: Marine Transportation Assets
MARINE TRANSPORTATION Assets Marine Transportation • 42 inland marine tank barges • 25 inland push-boats • 4 offshore tug barge units • Ability to handle specialty products (asphalt, fuel oil, gasoline, sulfur and other bulk liquids), which complements the MMLP Specialty Terminals • The segment cont
Slide 37: Inland & Offshore
MARINE TRANSPORTATION Inland & Offshore Profitability Drivers Inland $25.0 • Refinery utilization $21.6 $20.2 • North American shale plays $20.0 $16.7 $ millions • Distillate aggregation from MRMC distribution $15.0 • Stack emissions reductions $10.0 • Asphalt, heavy fuel oils and cutters $5.0 Growt
Slide 38: Growth Opportunities
GROWTH OPPORTUNITIES Wes Martin, Vice President – Corporate Development 38
Slide 39: West Texas LPG
GROWTH OPPORTUNITIES West Texas LPG WTLPG • MMLP acquired a 20% interest in WTLPG in May 2014 • Original Investment: $135 million for $134 million • Potential Growth Capex: $125 million • Oneok Partners acquired the remaining 80% of WTLPG • Total MMLP Investment: $260 million for $800 million in Nov
Slide 40: Beaumont Neches
GROWTH OPPORTUNITIES Beaumont Neches Beaumont Neches Expansion • Original Investment: <$10 million • Recently entered into long-term lease agreement for 96 • Potential Growth Capex: >$100 million additional acres of property adjacent to existing Beaumont • Total MMLP Investment: >$110 million Neches
Slide 41: South Texas Asphalt Terminal
GROWTH OPPORTUNITIES South Texas Asphalt Terminal South Texas Asphalt Terminal • MMLP is working with Martin Product Sales (MRMC) • Total Investment: $25-35 million to construct an asphalt terminal to be located in • Construction Time: 12-18 months South Texas • Completion Date: Est. 2H’16 • Total c
Slide 42: Corpus Christi Crude Terminal
GROWTH OPPORTUNITIES Corpus Christi Crude Terminal CCCT • In negotiations currently with investment grade • Total Investment: $50-60 million counterparty to expand CCCT facilities under a long-term • Construction Time: up to 12 months minimum throughput agreement • Completion Date: mid 2016 • MMLP e
Slide 43: Financial Foundation
FINANCIAL FOUNDATION Joe McCreery, Vice President – Finance & Head of Investor Relations 43
Slide 44: Adjusted EBITDA by Segment
ADJUSTED EBITDA BY SEGMENT AS OF 12/31/14 $ millions Operating Income Depreciation and Amortization (Gain) Loss on Disposition/Sale of Property, Plant, and Equipment Impairment of Long Lived Asset Non-cash Mark to Market on Commodity Derivatives Distributions from Unconsolidated Entities Adjusted EB
Slide 45: Pro Forma Capitalization
$ millions Debt $900 million RCF Due 2018 Senior Secured Debt $400 million Senior Notes Due February 2021 Total debt Partners’ Capital Total Capitalization Market Capitalization Enterprise Value Credit Metrics Relvolver Capacity Availability EBITDA" Debt/EBITDA Debt/Cap ‘Reflects 2014 EBITDA from co
Slide 46: Proven Access to Capital
PROVEN ACCESS TO CAPITAL Issuance Timeline ($ millions) Net Proceeds Equity Follow-ons $34.8 $97.4 $57.1 $79.8 $71.8 $198.4 $311.0 ATM Offering $21.5 $871.8 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 Debt Offerings $200.0 $250.0 $150.0 (Redemptions) ($25.0) ($175.0) $400.0 Revolver Capacity ($ in m
Slide 47: Distribution Growth
DISTRUBUTION GROWTH $3.40 Historical Per Unit Distributions 3.25 $3.25 $3.18 $3.11 $3.10 Distribution CAGR: 4.1%(1) $3.05 $3.06 $3.00 $3.00 $2.95 $2.91 $2.80 $2.65 $2.60 $2.50 $2.44 $2.35 $2.19 $2.20 $2.10 $2.05 $1.90 $1.81 $1.75 (1) February 2003 through February 2015 – based on minimum quarterly d
Slide 48: Refinery Supported Integration
REFINERY SUPPORTED INTEGRATION Ruben Martin, President & Chief Executive Officer 48
Slide 49: Refinery Supported Integration
REFINERY SUPPORTED INTEGRATION 49
Slide 50: Question & Answer
QUESTION & ANSWER 50
Slide 51: Closing Remarks
CLOSING REMARKS Ruben Martin, President & Chief Executive Officer 51
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