powerpoint presentation - mlpa · 05.05.2018 · this presentation includes financial measures...
TRANSCRIPT
(NYSE:TLP)
May 2018
2
Forward Looking Statements
All statements contained herein and made by representatives of TransMontaigne Partners L.P. (the “Partnership”) during this presentation, other than statementsof historical facts, may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-lookingstatements address activities, events or developments that the Partnership expects, believes or anticipates will or may occur in the future. These forward-lookingstatements are based on certain assumptions made by the Partnership based on management’s experience and perception of historical trends, currentconditions, expected future developments and other factors it believes are appropriate in the circumstances.
Any forward-looking statements contained herein or made by representatives of the Partnership during this presentation are subject to risks and uncertainties,many of which are beyond the Partnership’s ability to control or predict. These risks include, among other things, (i) our ability to identify suitable growth projectsor acquisitions; (ii) our ability to complete identified projects timely and at expected costs, (iii) competition for acquisition opportunities, (iv) the successfulintegration and performance of acquired assets or businesses and the risks of operating assets or businesses that are distinct from our historical operations, and(v) the failure of the Partnership’s customers or vendors to satisfy or continue contractual obligations. Additional factors that could cause actual results differmaterially from management’s expectations are detailed in the Partnership’s filings with the Securities and Exchange Commission (the “SEC”) including thoseitems disclosed in “Item 1A. Risk Factors” in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2017. These filings are available tothe public over the internet at the SEC’s website (www.sec.gov) and at the Partnership’s website (www.transmontaignepartners.com). If one or more of risks oruncertainties materialize, or if underlying assumptions prove incorrect, then the Partnership’s actual results may differ materially from those implied or expressedby the forward-looking statements. As a result of these risks and uncertainties, investors should not place undue reliance on forward-looking statements.
The Partnership undertakes no obligation to update any forward-looking statements, whether as a result of new information or future events.
This presentation includes financial measures that are not in accordance with generally accepted accounting principles (“GAAP”). While management believessuch measures are useful for investors, they should not be used as a replacement for financial measures that are in accordance with GAAP. Please see theAppendix for reconciliations of those measures to comparable GAAP measures.
3
Business Overview
4
Organic Growth
TLP Business Highlights
Quality, Diversified Asset
Platform
Strong Financial Profile
Large asset and footprint spanning 6 key regions, 511 storage terminals and 3 product pipelines.
Asset system represents critical link in refined products distribution chain.
Diversified storage capabilities; refined products and other liquids.
Recent re-contracting success emphasizes the value of our assets.
Long term take-or-pay contracts with quality customers.
Highly contracted asset base; ~93% of capacity contracted as of 3/31/2018.
Excess coverage provides flexibility.
Track record of executing fully contracted growth opportunities with a conservative capital structure.
Primary avenues of growth – asset maximization and organic projects.
Collins Phase II construction of 870 thousand barrels is underway.
Executed contracts for the expansion of the Brownsville terminal and our Diamondback pipeline.
Strategic sponsor relationship with ArcLight.
Attractive business model creates strong value proposition
1 Owns and operates 49 storage terminals and also owns interests in two additional terminals through the Frontera and BOSTCO Joint Ventures.
5
TLP Overview
6 regions
51 storage terminals 3
$$ $134 million LTM 3/31/2018 EBITDA 4
Own and operate refined petroleum product tank farms and pipelines.
Provide integrated terminaling, storage, transportation and related services.
Petroleum products, crude oil, chemicals, fertilizers and other liquid products.
Longstanding relationships with diversified customers in refined product distribution.
Operate in 6 distinct and strategic regions across the US: Southeast, Brownsville (TX), Midwest, West Coast, Gulf Coast and along the Mississippi and Ohio rivers.
Key Stats
We are a leading terminaling and transportation partnership
38 million barrels capacity
Partnership Metrics 1
1 Market data as of 5/11/2018. 2 EV does not include the GP value. ArcLight acquired the GP from NGL Energy Partners for $350mm in February, 2016. 3 Owns and operates 49 storage terminals and also owns interests in two additional terminals through the Frontera and BOSTCO Joint Ventures. 4Pro-forma for West Coast Terminals acquisition.
NYSE: TLP | EV 2: $1,196mm | Price: $37.84 | Market Cap: $614mm
6
Ft. Lauderdale
Brownsville Complex
Bostco Investment
Sizable and Diversified Terminal Network
Notes: Black dots and dotted lines indicate third party terminals and pipelines. 1 Owns and operates 49 storage terminals and also owns interests in two additional terminals through the Frontera and BOSTCO Joint Ventures. 2 Brownsville complex is comprised of both the Frontera Joint Venture and TLP assets. Capacity includes ~1.5 MMBbl owned by FronteraJoint Venture. 3 Reflects total active storage capacity of Bostco. TLP owns a 42.5% interest. Information as of 3/31/2018.
Significant footprint of assets; 511 terminals across 6 distinct regions
• Terminals: 22
• Capacity: 11.9 MMBbl
• % Contracted: 100%
Southeast
• Terminals: 8
• Capacity: 6.9 MMBbl
• % Contracted: 97%
Gulf Coast
• Terminals: 12
• Capacity: 2.7 MMBbl
• % Contracted: 54%
River
• Terminals: 4
• Capacity: 1.6 MMBbl
• % Contracted: 100%
Midwest
• Terminals: 2
• Capacity: 5.0 MMBbl
• % Contracted: 81%
West Coast
• Terminals: 1
• Capacity: 7.1 MMBbl
• % Contracted: 100%
Bostco JV 3
• Terminals: 1
• Capacity: 0.9 MMBbl
• % Contracted: 89%
Brownsville 2
4.3%
4.0%
2.4%
7.2%
13.3%
18.3%
18.9%
31.6%
Midwest
Frontera JV
Brownsville
River
West Coast
Gulf Coast
Bostco JV
Southeast
% of Total Capacity
2
3
Oklahoma City
Cushing
Cape Canaveral
Miami
Pensacola
Port Manatee
Tampa
Jacksonville
East Liverpool
Greater Cincinnati
New AlbanyLouisville
OwensboroEvansville
HendersonPaducah
Mt. Vernon
Rogers
Cape Giradeau
Baton Rouge Dock
Arkansas City
Greenville
Matamoros
Fairfax
Richmond
NorfolkMontvale
Greensboro Selma
Charlotte
SpartanburgBelton
Athens
Lookout Mtn.
Rome DoravilleGriffinMacon
AmericusAlbany
Bainbridge
BirminghamMeridian
Purvis
Collins
Martinez
RichmondDenver
• Terminals: 1
• Capacity: 1.5 MMBbl
• % Contracted: 100%
Frontera JV 2
Frontera Investment
2
Monterrey
7
Strategic Advantages Across Regions
Quality assets and strategic geographies establish our advantage
Note: 1 Comprised of TLP Terminal and Frontera Joint Venture.
Southeast
Gulf Coast
Midwest
River
Brownsville1
Bostco JV
West Coast
Located along the Colonial and Plantation pipeline systems. Most efficient path to Southeast, Mid-Atlantic and Northeast U.S. markets. Collins: only independent terminal capable of storing and redelivering product to, from and between Colonial
and Plantation pipelines.
Largest terminal network in Florida. Region is without major product supply pipelines and refineries. Fort Lauderdale, Miami and Cape Canaveral ports are among the busiest cruise ship ports in the nation.
Products pipeline from Missouri to Arkansas. Terminal locations in Oklahoma, Arkansas and Missouri. Rogers facility: only refined products terminal located in Northwest Arkansas.
Largest independent terminal network along the Mississippi and Ohio Rivers. Spans river locations from Ohio through Louisiana. Baton Rouge dock: only direct waterborne connection between Colonial Pipeline and Mississippi River
waterborne transportation.
Facilitates product movements between the Gulf of Mexico, Northern Mexico and the U.S. Long-term growth opportunities with new and existing customers provided by recent energy deregulation in
Mexico.
Advantageous location in the Houston Ship Channel. Provides access to expansive refinery complex and export markets. Refineries in this region account for more than 25% of total U.S. refining capacity. Positioned to meet increasing demand for global export capacity.
Strategically located within the San Francisco Bay Area Refining Complex. Located in close proximity to three of the San Francisco Bay refineries and the origin of the North California
products pipeline distribution system. Bay Area Refining Complex accounts for nearly one-third of total PADD V refining capacity.
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Highly Contracted with Quality Customers
U.S. Government
23.7 23.5
30.6 30.6 31.5
37.6
10
15
20
25
30
35
40
2012 2013 2014 2015 2016 2017
Million barrelsActive Shell Capacity
38 mm barrels of capacity; ~93% contracted; Strong counterpartiesTop 20 customers represent
~91% of revenue1
All trademarks are the property of their respective owners. 1 Based on revenue for 3 months ended 3/31/2018.
Andeavor
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Multi-Year Contracts with Firm Commitments
16%
33%45%
6%
< 1 Year
>= 1 Year, < 3 Years
>= 3 Years, < 5 Years
>= 5 Years
Remaining Duration of Contracts1
~70% of Revenues from Firm Commitments
Our fee-for-service business model is underpinned by multi-year take-or-pay contracts with minimum volume commitments, providing significant stability.
Approximately 84% of our current firm commitment contracts are 1-5+ years in remaining duration; with ~51% of contracts at least 3 years in remaining duration.
75% of our revenues are generated from terminaling service fees under multi year take-or-pay minimum volume commitments.
The majority of the remaining revenue stems from ancillary services including heating and mixing of stored products, product transfer, pipeline tariffs , railcar handling, butane blending, wharfage and vapor recovery.
Note: 1 As of 3/31/2018
$27 $26 $28 $27 $28 $29 $29 $30 $32 $34 $34 $36$42
$11 $11 $10 $13 $12 $13 $11$13 $13 $12 $12 $12
$14
70% 69%74%
68% 70% 69%72% 71% 71%
74% 75% 75% 75%
0%
10%
20%
30%
40%
50%
60%
70%
80%
$0
$10
$20
$30
$40
$50
$60
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18
Firm
ly C
om
mit
ted
Re
ven
ue
$mm
Firm Commitments Variable Commitments % Firm
Our revenue structure allows for predictable cash flows
10
ArcLight Relationship Enhances Company Profile
We are backed by a highly experienced and aligned general partner Strategic and Aligned General Partner
In February 2016, ArcLight Energy Partners Fund VI indirectly acquired 100% of our general partner from NGL Energy Partners (NGL) for $350 million. TLP’s GP holds 2% GP interest and 100% of IDRs.
Represented ArcLight’s fourth major refined product terminal acquisition in a 10 month time frame.
TLP stock price is up ~45% since acquisition announcement.
On April 1, 2016, affiliates of ArcLight acquired approximately 3.2 million of our common units (20% interest) from NGL.
ArcLight has granted TLP a ROFO on its 51% interest in two terminals in Portland and Seattle which TransMontaigne operates today under a separate agreement with ArcLight. In addition, TLP has a ROFO on ArcLight’s 30% ownership interest in the Olympic Pipeline.
About ArcLight Capital Partners
Leading private equity firm focused on energy infrastructure investments.
Based in Boston; founded in 2001.
Targets midstream, power and production.
Significant track record and deep bench of experience owning and operating midstream assets.
ArcLight has invested more than $19 billion in over 100 transactions since inception.
Experienced and knowledgeable GP - owns and controls over approximately 45 million barrels of complementary refined product storage capacity on the U.S. East Coast and in the Caribbean.
11
Growth Projects
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1 Collins storage terminal expansionPhase I expansion added 2 million barrels of capacity. Developing Phase II expansion. Have signed contracts for Collins Phase IIA construction for 870 thousand barrels.
2 Brownsville expansionSigned contracts for the expansion of Brownsville tankage and the recommissioning of our Diamondback pipeline.
3 Enhance various existing assetsOpportunity to fill available storage capacity at our terminals. Potential to develop additional butane blending capabilities at various terminal locations. Executing and exploring smaller scale projects at various locations throughout our system, including building tankage and refurbishing tanks at the West Coast Terminals.
Identified Growth Opportunities
Significant inventory of identified growth opportunities
13
Collins Storage Terminal Expansion
PHASE I
PHASE II• Phase I: Have placed in service all 2 million barrels of capacity (fully contracted). $75 million capex with return in high teens. Customers include credit worthy parties with 5-
year contracts.• Phase II: Contracted and in construction.
Phase IIA - Constructing 870 thousand barrels (fully contracted) of new capacity for a major oil company.
Significant demand for additional bulk storage at Collins
14
Brownsville Storage and Pipeline Expansion
• Diamondback Pipeline Expansion: Signed contracts for gasoline and diesel use of both of the Diamondback pipelines, which run from the terminal to the U.S./Mexico boarder. 8” pipeline previously transported propane, 6” has never been used. Pipelines expected to be in service by end of 2019.
• Additional Tankage: Signed contracts for new gasoline and diesel storage. Transportation options out of the terminal include by truck or the
Diamondback pipelines. Completed at various stages between the end of 2018 and 2019. Tankage may be in Frontera, due to the JV’s ROFR.
• $56 Million in Capex
Significant demand for Brownsville with the opening of Mexican oil markets
15
WCF Acquisition: Martinez and Richmond Terminals
Martinez Terminal
Richmond Terminal
Map of West Coast Facilities
36 above ground storage tanks.
4.5 MMBbl of storage capacity.
o Includes 2.5 MMBbl of clean product capacity and 2.0 MMBbl of crude oil capacity.
o All clean product tanks are multi-product permitted.
Connectivity includes:o Deepwater dock capable of
handling tankers up to 150,000 deadweight tons (DWT) and 950’ in length.
o Pipeline connectivity to Bay Area refiners and domestic crude and refined products markets.
Products handled include crude oil, gasoline, diesel, jet fuel, gasoline blend stocks and fuel oil.
Connectivity includes:o Deepwater dock capable of
handling tankers and oceangoing barges up to 89,000 DWT and 700’ in length.
o Truck loading capabilities.o Rail unloading facilities.
Products handled include gasoline, diesel, jet fuel, gasoline blend stocks, fuel oil, Avgas, renewable diesel and neat and denatured ethanol.
29 above ground storage tanks.
0.5 MMBbl of storage capacity.
16
Financial Summary
17
1Q18 TLP Update
Achieved record levels of revenue and Consolidated EBITDA
Reported 1Q18 revenue of $56.4 million compared to $44.9 million in the prior year (PY) 1Q.
Reported 1Q18 Consolidated EBITDA of $32.9 million compared to $27.3 million in the PY 1Q.
Continued to maintain a healthy balance sheet
Reported 1Q18 distribution coverage of 1.39x and leverage of 4.35x.
Increased quarterly distribution from $0.77 to $0.785 – tenth consecutive quarterly increase and an 8.3% increase over PY 1Q.
$560 million of available capacity on revolving credit facility.
• Closed acquisition of the West Coast Facilities
Total purchase price of $277 million, financed with revolving credit facility.
Closed acquisition December 15, 2017.
18
2.5x2.9x 2.7x
1.8x 1.7x
2.6x3.0x
3.4x
2.8x 3.0x
4.4x 4.4x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1Q18
Debt/ LTM EBITDA
1
Stable Cash Flows and Conservative Balance Sheet
Consistent and Growing EBITDA Conservative Leverage Profile 3
A track record of cash flow growth and financial stability
$290
$560
Outstanding Borrowings Available Capacity As of 3/31/2018, $560 million of unused capacity
on revolving credit facility.
Credit facility availability enhances balance sheet flexibility.
Track record of delivering growth while maintaining conservative leverage.
Revolving Credit Facility 2
$53 $58 $60 $69 $69 $72 $71 $75$90 $96
$108
$134
$0$20$40$60$80
$100$120$140$160
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 PFLTM1Q18
$MM
1
Notes: 1 Pro forma for West Coast Terminals acquisition. 2 Availability subject to covenant compliance under the Revolving Credit Facility as of 3/31/2018. 3 Figures prior to 2017 not pro forma for West Coast Facilities acquisition.
1
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13 Years of Distribution Stability and Growth
$0
.43
$0
.59
$0
.60 $
0.6
4
$0
.66
5
$0
.67
$0
.78
5$0.20
$0.25
$0.30
$0.35
$0.40
$0.45
$0.50
$0.55
$0.60
$0.65
$0.70
$0.75
$0.80
$0.85
Jun
-05
De
c-0
5
Jun
-06
De
c-0
6
Jun
-07
De
c-0
7
Jun
-08
De
c-0
8
Jun
-09
De
c-0
9
Jun
-10
De
c-1
0
Jun
-11
De
c-1
1
Jun
-12
De
c-1
2
Jun
-13
De
c-1
3
Jun
-14
De
c-1
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Jun
-15
De
c-1
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Jun
-16
De
c-1
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Jun
-17
De
c-1
7
$/unit
Increased quarterly distribution from $0.77 to $0.785 for the quarter ended 3/31/18.
Tenth consecutive distribution increase.
Annual distribution growth of 8.3% over PY 1st quarter.
Long-term history of maintaining and growing cash flows and distribution.
96% increase in distribution per LP unit since our IPO on May 27, 2005.
+96%1
Note: 1 Distribution increase 6/30/05 vs. 3/31/18. IPO May 27, 2005.
We have a long-term track record of creating and building value
20
$12.5 $12.6 $12.6 $12.6 $12.6 $12.6 $12.6 $12.8 $13.1 $13.4 $13.8 $14.1 $14.6 $15.1 $15.6 $16.1 $16.6$4.1$5.9
$3.1 $2.2
$5.5$4.1 $4.7
$5.7 $6.0$4.6
$5.7 $5.2
$8.9$9.4
$6.0
$3.0
$6.4
1.33x 1.47x1.25x 1.18x
1.43x 1.32x 1.37x 1.45x 1.46x 1.34x 1.41x 1.37x1.61x 1.62x
1.39x1.19x
1.39x
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
3.0x
3.5x
4.0x
4.5x
5.0x
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18
$mm
Conservative coverage position provides significant cash cushion – historical average of 1.4x
Significant Distribution Coverage
Actual Distribution vs. Coverage
b FY15 coverage: 1.39x
DCF: $70.7mm
Distributions: $50.7mm
Cushion: $20.0mm
a FY14 coverage: 1.31x
DCF: $65.7mm
Distributions: $50.3mm
Cushion: $15.3mm
Coverage
c FY16 coverage: 1.40x
DCF: $75.9mm
Distributions: $54.4mm
Cushion: $21.5mm
Distribution Cushion Coverage
1
a b c d
d FY17 coverage: 1.45x
DCF: $88.7mm
Distributions: $61.4mm
Cushion: $27.3mm
Cash Retention
21
Appendix
22
Current Ownership Structure
100%
ArcLight affiliates
TransMontaigne GP L.L.C.(the General Partner)
Public Unitholders
Limited Partner Interest 78.8%
Gulf TLP Holdings, LLC(No other assets)
Limited Partner Interest 14.3%
2% General Partner Interest
TransMontaigne Partners L.P.(NYSE:TLP)
Operating Subsidiaries Joint Ventures
TLP Management Services LLC(Employees)
100%
100%
Limited Partner Interest 4.9%
23
Financial Summary (continued)
$ in thousands, except per unit amounts
Revenue $ 44,850 $ 45,364 $ 45,449 $ 47,609 $ 56,444
Direct operating costs and expenses (16,511) (15,984) (17,719) (17,486) (20,145)
General and administrative expenses (3,971) (4,080) (5,247) (6,135) (4,981)
Insurance expenses (1,006) (1,002) (999) (1,057) (1,246)
Equity-based compensation expense (1,817) (352) (544) (286) (2,017)
Depreciation and amortization (8,705) (8,792) (8,882) (9,581) (11,808)
Earnings from unconsolidated affiliates 2,560 2,120 1,884 507 2,889
Operating income 15,400 17,274 13,942 13,571 19,136
Interest expense (2,152) (2,525) (2,656) (3,140) (6,461)
Amortization of deferred issuance costs (294) (271) (320) (336) (501)
Net earnings $ 12,954 $ 14,478 $ 10,966 $ 10,095 $ 12,174
Net earnings per limited partner unit—basic $ 0.62 $ 0.70 $ 0.47 $ 0.41 $ 0.52
Balance Sheet Data
Property, plant and equipment $ 419,995 $ 425,875 $ 426,467 $ 655,053 $ 650,037
Investments in unconsolidated affiliates 241,304 239,023 236,706 233,181 234,030
Goodwill 8,485 8,485 8,485 9,428 9,428
Customer relationships 287 236 186 47,136 46,389
Total assets 696,530 700,947 701,895 987,003 975,618
Long-term debt 292,500 302,000 302,000 593,200 582,377
Partners’ equity 373,058 373,273 369,409 364,217 362,022
March 31, June 30, September 30, December 31, March 31,
20182017
March 31,
2017 2017 2017
June 30, September 30, December 31, March 31,
2017 2017 2017 2017 2018
24
Financial Summary
$ in thousands
Net earnings $ 12,954 $ 14,478 $ 10,966 $ 10,095 $ 12,174
Depreciation and amortization 8,705 8,792 8,882 9,581 11,808
Earnings from unconsolidated affiliates (2,560) (2,120) (1,884) (507) (2,889)
Distributions from unconsolidated affiliates 4,349 4,546 4,201 4,032 3,190
Equity-based compensation expense 1,817 352 544 286 2,017
Settlement of tax withholdings on equity-based compensation (382) (25) (304) - (341)
Interest expense 2,152 2,525 2,656 3,140 6,461
Amortization of deferred issuance costs 294 271 320 336 501
“Consolidated EBITDA” 27,329 28,819 25,381 26,963 32,921
Interest expense (2,152) (2,525) (2,656) (3,140) (6,461)
Unrealized loss (gain) on derivative instruments (258) 38 65 (77) 42
Amortization of deferred issuance costs (294) (271) (320) (336) (501)
Amounts due under long-term terminaling services agreements, net (98) (227) 772 3 28
Project amortization of deferred revenue under GAAP (51) (104) (332) (278) (187)
Project amortization of deferred revenue for DCF 452 503 717 670 582
Capitalized maintenance (1,462) (1,783) (1,992) (4,698) (3,389)
“Distributable cash flow”, or DCF, generated during the period $ 23,466 $ 24,450 $ 21,635 $ 19,107 $ 23,035
Actual distribution for the period on all common units and the general partner
interest including incentive distribution rights$ 14,592 $ 15,077 $ 15,571 $ 16,063 $ 16,571
Distribution coverage ratio 1.61x 1.62x 1.39x 1.19x 1.39x
Three months ended
March 31, June 30, September 30, December 31, March 31,
2017 2017 20182017 2017