Martin Midstream Partners L.p. · NASDAQ:MMLP
Martin Midstream Partners L.p — 2019 MLP & Energy Infrastructure Conference
39 slides from Martin Midstream Partners L.p's conference presentation, May 15, 2019
Slide 1: 2019 MEIC MLP & Energy Infrastructure Conference
2019 MEIC MLP & Energy Infrastructure Conference May 15, 2019 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 10 Terminalling & Storage 11 Natural Gas Services 18 Transportation 22 Sulfur Services 26 Financial Summary 31 Appendix 37 3
Slide 4: Strategic Overview
Strategic Overview MARTIN
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: Portfolio of Assets Focused on Refinery Services
Portfolio of Assets Focused on Refinery Services 6
Slide 7: Strategically Located Around Oil Refining Industry
Strategically Located Around Oil Refining Industry 7
Slide 8: 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 9: 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 10: Business Segment Overview
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Slide 11: 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 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 Port O’Connor, Texas • Terminalling assets utilized by Martin Energy Services (MRMC) to facilitate the distribution and marketing of fuel and lubricants to oil and gas
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 – Cardinal Gas Storage
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 20: Natural Gas Services – 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 21: Natural Gas Services – NGLs and Propane
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 22: 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 23: Transportation – 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 24: Transportation – Land Transportation Key Drivers
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 25: Transportation – Offshore Marine
Transportation Offshore Marine 1 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 Termina
Slide 26: 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 27: Sulfur Services – 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 28: Integrated Sulfur Value Chain
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 28
Slide 29: Sulfur Services – 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 30: Sulfur Services – 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 31: Financial Summary
Financial Summary MARTIN
Slide 32: Strategic Initiatives
Strategic Initiatives Estimated Asset Sales Annual EBITDA West Texas LPG Pipeline Effective July 31, 2018 - $195.0 million $(5.6) Dunphy Terminal Effective December 1, 2018 - $8.0 million $(1.0) Cardinal Gas Storage February 14, 2019 - Sale Process Announced, TBD $(20.5) Acquisitions Martin Transpor
Slide 33: Financial Outlook – Adjusted EBITDA & Distributable Cash Flow
Financial Outlook Adjusted EBITDA & Distributable Cash Flow 1 1 2019E EBITDA Adjusted EBITDA $ 147.5 Maintenance Capital (including Refinery turnaround) $ (25.0) Financing Costs $ (53.8) Other non-cash adjustments $ (0.8) DCF $ 67.9 1 Includes pro forma adjustment of $14.5MM from the acquisition of
Slide 34: Financial Outlook – 2019E Quarterly Profile
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 34
Slide 35: Financial Outlook – Cash Flow Projections
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 36: Financial Outlook – Projected 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 37: Appendix
Appendix MARTIN MIDSTREAM PARTNERS
Slide 38: 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 39: MMLP Financial Outlook – 2018 Consolidated EBITDA Actuals
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 from
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