2016 mlpa investor conference - transmontaignepartners.com · 2016 mlpa investor conference ... any...

(NYSE:TLP)

2016 MLPA Investor Conference June 2, 2016

2

Forward Looking Statements All statements, other than statements of historical facts, contained herein and made by representatives of TransMontaigne Partners L.P. during this presentation may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements address activities, events or developments that the Partnership expects, believes or anticipates will or may occur in the future. These forward-looking statements are based on certain assumptions made by the Partnership based on management’s experience and perception of historical trends, current conditions, 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. If one or more of risks or uncertainties materialize, or if underlying assumptions prove incorrect, then the Partnership’s actual results may differ materially from those implied or expressed by the forward-looking statements. Important factors that could cause actual results differ materially from management’s expectations are detailed in the Partnership’s filings with the Securities and Exchange Commission (SEC) including those items disclosed in “Item 1A. Risk Factors” in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2015. These filings are available to the public over the internet at the SEC’s website (www.sec.gov) and at the Partnership’s website (www.transmontaignepartners.com). 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.

3

TLP Overview

5 regions

48 storage terminals

$$ $92 million TTM EBITDA

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 5 distinct and strategic regions across the US: Florida, Southeast, Texas, Midwest and along the Mississippi and Ohio rivers.

New GP affiliated with ArcLight Energy Partners Fund VI, L.P.

Key Stats We are a leading terminaling and transportation company

30.6 million barrels capacity

4

Our Asset Footprint

Jacksonville

Cape Canaveral

Port Everglades

Fisher Island

Pensacola

Port Manatee Tampa

Baton Rouge Dock

Arkansas City Greenville

Cape Giradeau

Paducah

Henderson Evansville Owensboro

Louisville New Albany

Greater Cincinnati

East Liverpool

Oklahoma City Cushing

Mt. Vernon

Rogers

Brownsville Complex

Frontera Investment

Denver

Bainbridge Albany

Americus Macon

Griffin Doraville

Rome

Lookout Mountain

Roswell Birmingham

Meridian Collins

Athens Belton

Spartanburg Charlotte

Montvale

Greensboro Selma

Richmond Norfolk

Fairfax

TLP Southeast Facility

TLP River Facility

TLP Gulf Coast Facility

TLP Midwest Facility

TLP Brownsville Facility

TLP Investment

TLP Pipeline

Third-Party Pipeline

TLP Corporate Office

Bostco Investment

Large network of strategically positioned refined product assets1

Purvis

Light Refined Products

Gasoline Jet Fuel Diesel Fuel Heating Oil

Heavy Refined Products

Resid. Fuel Oil Asphalt

Heavy Refined Products

Crude Oil Fertilizers Chemicals Other Liquids

Products Stored

MEXICO Third Party Facility

Matamoros Cadereyta/Monterrey

King Ranch

Note: 1 As of 3/31/2016.

5

Sizable and Diversified Terminal Network

Note: 1 Excludes Bostco JV. 2 Includes ~1.5MM bbls owned by Frontera, TLP 50% interest. 3 Reflects total active storage capacity of Bostco – TLP owns 42.5% interest. Information as of 3/31/2016.

• Terminals: 4

• Capacity: 1.6 MM bbls

• % Contracted: 100%

Midwest

• Terminals: 2



Brownsville2

22%

5%

8%

9%

23%

33%

Active Capacity

• Terminals: 1



Bostco3

• Terminals: 12



River

• Terminals: 22



Southeast

• Terminals: 7



Gulf Coast

Significant footprint of assets; 48 terminals across 5 distinct regions1

Bostco

River

Brownsville

Midwest Gulf Coast

Southeast

6

Highly Contracted with Quality Customers

U.S. Government

22.4 23.7 23.5

30.6 30.6 30.6

10

15

20

25

30

35

2011 2012 2013 2014 2015 1Q16*

Million barrels Active Shell Capacity

31 mm barrels of capacity; 95% contracted; Strong counterparties

Key customers represent 90% of revenue

Note: As of 3/31/2016. All trademarks are the property of their respective owners.

7

Morgan Stanley, a previous owner of our GP, accounted for more than 60% of our business in 2014.

Since then, we have contracted and/or extended over 70% of our business in a proactive effort to increase the amount of third-party business and diversify our customer base.

Today, nearly all of our terminaling services fees and pipeline transportation fees are from unrelated third-parties.

Successful re-contracting effort demonstrates importance of our asset base in the refined product value chain.

38%

70%

~100%

0%

20%

40%

60%

80%

100%% of total

Q1 2014Q1 2015Q1 2016

Nearly all of our customer base is unaffiliated third-party

Third Party Contracted Capacity

Success in Achieving Third-Party Growth

8

Recent Accomplishments

Jan ‘15

Apr ‘15 Jul ‘15 Sep ‘15 Dec ‘15

Jul ‘16

Frontera Re-Contract

• TLP’s Frontera JV re-contracted a large portion of its capacity at rates in excess of the previous contract.

Two New 3-Year Contracts

• Commenced new contract for 110k barrels of previously uncontracted capacity at Brownsville with a third-party customer for a 3 year term.

• Commenced new contract for 119k barrels of previously uncontracted capacity at Louisville and Greater Cincinnati terminals to a different third-party for a 3 year term.

New 5.5-Year Contract

• Entered into a new 5.5-year terminaling services agreement with a new third-party customer for ~700,000 barrels of existing asphalt storage capacity at the Port Everglades North, Cape Canaveral, Jacksonville, and Port Manatee, Florida terminals.

ArcLight Acquires TLP’s GP

• ArcLight Energy Partners Fund VI’s affiliate completed the purchase of TLP’s general partner from NGL Energy Partners (NGL) for $350 million in cash.

Mar ‘16

The success we have achieved demonstrates the value of our assets New 5-Year Re-

Contract

• Re-contracted ~2.7mm barrels of capacity at Collins / Purvis terminals to Morgan Stanley for a 5 year term at rates in excess of the previous contract.

Revolver Amendment

• Amended revolving credit facility to extend maturity through July 2018, increase capacity by $50mm to $400mm.

New 5-Year Contract

• Entered into a new 5-year terminaling services agreement with a subsidiary of NGL Energy Partners ~1.2mm barrels of new capacity to be constructed at Collins storage terminal.

New Collins Contract, Port Everglades Hydrant Acquisition

• Entered into a 5-year terminaling services agreements with multiple third-parties for ~0.8 million barrels of new capacity to be constructed at Collins storage terminal.

• Purchased from TransMontaigne LLC its Port Everglades, Florida hydrant system for a cash payment of $12 million.

LP Unit Acquisition

• ArcLight affiliate acquired 3.2 million TLP common LP units (20% interest) from NGL Energy Partners.

9

Sponsor Enhances Growth Potential

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 for $350 million in cash from NGL Energy Partners (NGL) TLP’s GP – holds 2% GP interest and 100% of IDRs (currently in “high-splits”).

On April 1, 2016, affiliate of ArcLight acquired approximately 3.2 million of our common units (20% interest) from NGL.

Represents ArcLight’s fourth major refined product terminal acquisition in past 18 months.

About ArcLight Capital Partners

Leading private equity firm focused on energy infrastructure investments.

Based in Boston; founded in 2001.

Targets midstream, power and production.

ArcLight has invested more than $15 billion in over 95 transactions since inception.

10

• Contract 1.4 million barrels of

available storage capacity in Florida, River and Brownsville.

• Re-contract assets with new agreements at higher rates.

• Maximize butane blending opportunities.

• Constructing 2 million barrel,

fully contracted expansion at Collins.

• Developing Collins expansion Phase II; 2 to 5 million barrels of additional capacity.

• Partnering with Magellan Midstream on developing a refined product pipeline project in South Texas.

• Exploring Brownsville opportunities in Mexico.

• Benefitting from recently

acquired Port Everglades Hydrant System purchased from TransMontaigne LLC for $12 million.

• Transaction pipeline becoming more active.

• New sponsor relationship with ArcLight could significantly enhance LP growth potential.

Maximize Base System • Maximize assets • Re-contract capacity • Fill avail. capacity • Diversify customers

Invest Organically • New assets • Interconnections • Expansions • JV investments

Acquisitions

• Sponsor transactions

• Third-party M&A

Growth Opportunities

2 3

Pursuing growth in three key areas

1

11

1 Collins storage terminal expansion Phase I expansion is adding 2 million barrels of capacity. Developing Phase II expansion for 2 to 5 million barrels of additional product storage.

2 Potential JV pipeline investment with Magellan Co-developing a new 150-mile 150,000 bpd refined products pipeline in South Texas with Magellan Midstream.

3 Contract capacity at terminals 1.4 million barrels of storage capacity available at our Florida, River and Brownsville terminals. Opportunity to fill remaining capacity.

4 Butane blending at multiple locations Potential to develop additional butane blending capabilities at various terminal locations.

5 Future projects in Brownsville Regulatory changes in Mexico will create new opportunities at Brownsville. Evaluating long-term opportunities with new and existing customers.

6 Bostco Phase III expansion1

Permitted for 2 additional deep-water ship docks. Bostco strategically located on the Houston Ship Channel and access to expansive refinery complex.

Active Growth Opportunities Significant inventory of identified growth opportunities

Note: 1 TLP owns 42.5% interest in Bostco, Kinder Morgan owns 55% interest.

12

Collins Storage Terminal Expansion

PHASE I

PHASE II • Phase I: Construction of 2 million barrels of capacity (fully contracted), anticipated completion Q4-2016 through Q2-2017. Total Phase I capital of $75 million with expected return in high teens.

• Phase II: Permitting and development of up to another 5 million barrels of capacity.

Significant demand for additional bulk storage at Collins

13

Strong Cash Flows & Balance Sheet

$69 $72 $71 $75

$90

$0$10$20$30$40$50$60$70$80$90

$100

2011 2012 2013 2014 2015

$mm

1.7x

2.6x 3.0x

3.4x

2.8x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

4.0x

2011 2012 2013 2014 2015

Debt/EBITDA

Consistent and Growing EBITDA Conservative Leverage Profile

A track record of cash flow growth and financial stability

$264

$136

Outstanding Borrowings Available Capacity $70 million of approved expansion projects expected to be completed in 2016 and early 2017.

$136 million of available capacity on revolving credit facility as of 3/31/2016.

Expect to fund remaining capital expenditures with revolver borrowings and retained cash flow.

Revolving Credit Facility

Note: As of 3/31/2016.

14

Conservative coverage position provides significant cash cushion and reduction in funding needs – historical average of 1.3x.

1¢ increase in the quarterly distribution per unit an additional $1.3 million in incremental annual distributions, including IDRs.

Cash Retention

Significant Distribution Coverage High distribution coverage represents additional growth potential

1.30x 1.33x 1.47x

1.25x 1.18x

1.43x 1.32x 1.37x

1.45x 1.46x

$12.1 $12.5 $12.6 $12.6 $12.6 $12.6 $12.6 $12.6 $12.8 $13.1

$ 0.0$ 2.0$ 4.0$ 6.0$ 8.0$ 10.0$ 12.0$ 14.0$ 16.0$ 18.0$ 20.0

0.0x

0.2x

0.4x

0.6x

0.8x

1.0x

1.2x

1.4x

1.6x

4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16

$mm Coverage

Actual Distribution vs. Coverage

b a

b

a

FY15 coverage: 1.39x DCF: $71mm Distributions: $51mm Cushion: $20mm

FY14 coverage: 1.32x DCF: $66mm Distributions: $50mm Cushion: $16mm

15

Eleven Years of Distribution Stability and Growth

$0.4

3

$0.5

9

$0.6

0 $0.6

4

$0.6

65

$0.6

7 $0

.68

$0.20

$0.25

$0.30

$0.35

$0.40

$0.45

$0.50

$0.55

$0.60

$0.65

$0.70

Jun-

05

Dec-

05

Jun-

06

Dec-

06

Jun-

07

Dec-

07

Jun-

08

Dec-

08

Jun-

09

Dec-

09

Jun-

10

Dec-

10

Jun-

11

Dec-

11

Jun-

12

Dec-

12

Jun-

13

Dec-

13

Jun-

14

Dec-

14

Jun-

15

Dec-

15

$/unit

Increased quarterly distribution from $0.67 to $0.68 for the quarter ended 3/31/16.

Second consecutive distribution increase following first distribution increase since quarter ended 9/30/14.

Long-term history of maintaining and growing cash flows and distribution.

70% increase in distribution since our IPO1.

+70%1

Note: 1 Distribution increase 6/30/05 vs. 3/31/16. IPO May 27, 2005.

Denotes quarterly distribution increase

We have a long-term track record of creating and building value

16

TLP Business Highlights1

Quality, Diversified Asset

Platform

Strong Financial Profile

Attractive Growth Potential

Large asset and footprint spanning 5 key regions, 48 storage terminals and 3 product pipelines.

Asset system represents critical link in refined products value chain. Diversified storage capabilities; refined products and other liquids. Recent re-contracting success emphasizes the value of our assets.

Firmly committed, multi-year contracts with quality customers. Highly contracted asset base; ~95% of capacity contracted. Average distribution coverage of 1.3x; conservative leverage of 2.8x.

Excess coverage provides further flexibility and growth potential.

Note: 1 As of 3/31/2016. 2Increased quarterly distribution from $0.67 to $0.68/unit for quarter ended 3/31/2016.

3 avenues of growth – asset maximization, organic projects, M&A. $70 million of identified growth projects under construction. Increased distribution by 1.5% sequentially2 in April 2016. New strategic sponsor relationship with ArcLight could significantly

enhance LP growth potential.

Attractive business model creates strong value proposition

17

Financial Summary

Note: Data in thousands

Net earnings $ 10,122 $ 12,188 $ 7,712 $ 11,667 $ 8,710 Depreciation and amortization 7,337 7,476 7,711 8,126 7,935 Earnings from unconsolidated affiliates (2,056) (5,517) (2,191) (2,184) (1,850) Distributions from unconsolidated affiliates 3,642 4,310 7,510 4,187 4,135 Equity-based compensation 23 1,087 145 156 2,155 Interest expense 1,942 1,943 2,198 1,313 2,792 Amortization of deferred financing costs 315 125 167 167 205 “Consolidated EBITDA” 21,325 21,612 23,252 23,432 24,082 Interest expense (1,942) (1,943) (2,198) (1,313) (2,792) Unrealized loss on derivative instrument 149 (59) 461 (551) 794 Amortization of deferred financing costs (315) (125) (167) (167) (205) Amounts due under long-term terminaling services agreements, net 41 298 388 417 (47) Project amortization of deferred revenue under GAAP (309) (258) (437) (264) (198) Project amortization of deferred revenue for DCF 451 404 565 454 451 Cash paid for common units (70) (22) Capitalized maintenance (1,223) (3,221) (4,510) (3,484) (2,953) “Distributable cash flow”, or DCF, generated during the period $ 18,107 $ 16,686 $ 17,354 $ 18,524 $ 19,132

Actual distribution for the period on all common units and the general partner interest including incentive distribution rights $ 12,623 $ 12,623 $ 12,623 $ 12,795 $ 13,114

Distribution coverage ratio 1.43x 1.32x 1.37x 1.45x 1.46x

March 31,2015

Three months ended

June 30,2015

September 30,2015

December 31,2015

March 31,2016

18

Financial Summary (continued)

Note: Data in thousands

Revenue $ 37,897 $ 37,034 $ 37,269 $ 40,310 $ 40,626 Direct operating costs and expenses (14,954) (15,872) (16,655) (16,552) (15,906) Direct general and administrative expenses (1,021) (672) (1,117) (763) (1,557) Allocated general and administrative (2,803) (2,802) (2,835) (2,844) (2,841) Allocated insurance expense (934) (934) (944) (944) (895) Reimbursement of bonus awards expense (525) (539) (121) (118) (1,635) Depreciation and amortization (7,337) (7,476) (7,711) (8,126) (7,935) Earnings from unconsolidated affiliates 2,056 5,517 2,191 2,184 1,850 Operating income 12,379 14,256 10,077 13,147 11,707 Other expenses (2,257) (2,068) (2,365) (1,480) (2,997) Net earnings $ 10,122 $ 12,188 $ 7,712 $ 11,667 $ 8,710

Balance Sheet DataProperty, plant and equipment, net $ 385,840 $ 386,737 $ 387,056 $ 388,423 $ 394,118Investments in unconsolidated affiliates 248,090 249,297 248,204 246,700 246,641Goodwill 8,485 8,485 8,485 8,485 8,485Total assets 660,032 666,783 659,164 656,687 662,728Long-term debt 250,000 257,000 249,600 248,000 264,100Partners’ equity 388,916 389,546 384,779 383,971 376,543

September 30, 2015

March 31, June 30, 2015 2015

March 31, 2016

December 31, 2015

2015 2015 2015 2015March 31,

2016March 31, June 30, September 30, December 31,

Three months ended

2016 mlpa investor conference - transmontaignepartners.com · 2016 mlpa investor conference ... any...

Documents