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| 8-K - FORM 8-K - TPC Group Inc. | d8k.htm |
 A
market leader in value-added products based on petrochemical raw
materials Annual Meeting of Shareholders
June 8, 2011
Exhibit 99.1 |
 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
relate
to
future
operating
results,
existing
and
expected
competition,
market
factors
that
may
impact
financial
performance,
and
plans
related
to
strategic
alternatives
or
future
expansion
activities
and
capital
expenditures.
Although
TPC
Group
believes
that
such
statements
are
based
on
reasonable
assumptions,
no
assurance
can
be
given
that
such
statements
will
prove
to
have
been
correct.
A
number
of
factors
could
cause
actual
results
to
vary
materially
from
those
expressed
or
implied
in
any
forward-looking
statements,
including
risks
and
uncertainties
such
as
volatility
in
the
petrochemicals
industry,
limitations
on
the
Company’s
access
to
capital,
the
effects
of
competition,
leverage
and
debt
service,
general
economic
conditions,
litigation
and
governmental
investigations,
and
extensive
environmental,
health
and
safety
laws
and
regulations.
More
information
about
the
risks
and
uncertainties
relating
to
TPC
Group
and
the
forward-looking
statements
are
found
in
the
Company’s
SEC
filings,
including
the
Transition
Report
on
Form
10-K,
which
are
available
free
of
charge
on
the
SEC’s
website
at
http://www.sec.gov
.
TPC
Group
expressly
disclaims
any
obligation
to
update
any
forward-
looking
statements
contained
herein
to
reflect
events
or
circumstances
that
may
arise
after
the
date
of
this
presentation.
This
presentation
may
also
include
non-GAAP
financial
information.
A
reconciliation
of
non-GAAP
financial
measures
to
the
most
directly
comparable
GAAP
financial
measures,
as
well
as
additional
detail
regarding
the
utility
of
such
non-GAAP
financial
information,
is
included
in
the
Appendix.
2 |
 TPC
Group overview 3
•
Market leader with products that are essential to our customers
•
Largest
independent
producer
of
butadiene;
35%
of
North
American
production
•
Attractive, growing markets driven by transportation trends and economic
growth •
Synthetic rubber, nylon, fuels, lubricants, plastics, surfactants
•
Unique, well-situated manufacturing assets and logistics network
•
In the Gulf Coast, along the industrial corridor
•
Stable, consistent cash flows
•
Substantial future growth opportunities
•
Capital and non-capital growth opportunities |
 Fuel
& Lube Additives Gasoline & Blendstocks
Selected end product markets
4
Tires
Market Drivers:
Nylons
•
Increasing mobility trends
•
Improving tire
technologies
•
Engine life and
performance
•
Higher energy value in
fuels
•
Global growth of fuel
oxygenates
•
Attractive markets for
high performance nylons |
 Executing well on a strong foundation
5 |
 Business environment is favorable
6
•
Butadiene
markets
structurally
tight,
enabling
significant
price
increases
•
Global supply remains constrained as ethylene producers crack lighter feeds
•
Global demand rising on strength of economic recovery and Asia growth
•
Higher
gasoline
prices
have
benefited
margins.
Butene-1,
isobutylene
and
raffinates are priced relative to gasoline
•
Butene-1
market
strengthening
further
due
to
North
America
polyethylene
growth
•
Fuel and lube additives markets are growing globally, driven by desire for improved
engine life and performance
•
Strengthening global economies have improved the demand for propylene
derivatives used in a broad range of industrial and consumer products
|
 Driving sustained earnings growth
7
•
On track to achieve target of $150MM EBITDA by end of 2012
•
Margin expansion in C4 Processing segment
•
Growth in Performance Products segment
•
Implementation of high return/low risk capital projects
•
Expanding margins in C4 Processing segment through focus on profitability and
expansion of services model
•
Growing volumes in Performance Products, particularly polyisobutylene and
propylene derivative products
•
Accelerating High Return/Low Risk capital project program to drive productivity and
cost savings in manufacturing and supply chain
•
New Technical Center in Houston will enhance technology platforms
•
Operational Excellence initiatives continue to elevate our overall
performance |
 Building-out our strategies for growth beyond 2013
8
•
Unprecedented, “game-changing”
opportunities for TPC Group
•
Attractive longer term fundamentals for our key products
•
Plentiful butane sourced from natural gas liquids
•
Idled assets capable of producing valuable C4 products from butane
•
Evaluating capital project to use idled Dehydrogenation Unit to produce isobutylene
from butane as a feedstock for our performance products and fuels businesses
by Q1 2014
•
Increasing availability of butane from natural gas liquids
•
Isobutylene
and
derivatives
pricing
associated
with
crude
oil
or
gasoline
price
levels
•
Engineering study in progress on one of two idled Dehydrogenation Units
•
Considering range of alternatives for second Dehydrogenation Unit, including
on- purpose production of butadiene from natural gas liquids
•
Our longstanding customers in North America are growing rapidly in Asia.
Potential opportunities for expansion of our business in the region
|
 Adjusted EBITDA and Operating Cash Flow
9
* Excludes one time income tax refund of $40MM |
 Key
Takeaways 10
1.
Focused growth in core markets
2.
Continued margin expansion through services model
3.
Operational Excellence initiatives generating substantial financial
value
4.
Margin model yields consistent cash flow
5.
“Game-changing”
growth opportunities for the future
Strong, sustainable earnings growth |
 Appendix
11 |
 Reconciliation of adjusted EBITDA to Net Income
12
TPC Group Inc
Annual Shareholder Meeting Presentation
Reconciliation of Adjusted Proforma EBITDA to Net Income (Loss) (in millions)
Calendar Year Ended December 31,
TTM March 31,
2008
2009
2010
2011
Adjusted Proforma EBITDA
$ 92
$ 60
$ 108
$ 123
Pro Forma Adjustments (1)
(45)
25
-
-
Adjusted EBITDA as Reported
47
86
108
123
Reconciliation to Net Income (Loss)
Income taxes
3
(8)
(16)
(19)
Interest expense, net
(17)
(15)
(22)
(27)
Depreciation and amortization
(40)
(41)
(39)
(40)
Asset impairment
-
(6)
-
-
Net income (loss)
$ (8)
$ 15
$ 31
$ 38
Net cash from operating activities
$ 28
$ 59
$ 105
$ 54
Income Tax Refund
$ (40)
$ 28
$ 59
$ 65
$ 54
(1) –
Adjusted for Hurricane Ike loss and subsequent recovery
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