MLP Valuation Deep Dive Amidst the Downturn

Transcription

1 US Energy Logistics / Master Limited Partnerships (MLPs) MLP Valuation Deep Dive Amidst the Downturn John D. Edwards, CFA (713) john.edwards@credit-suisse.com Bhavesh Lodaya (212) bhavesh.lodaya@credit-suisse.com Dylan Nassano (212) dylan.nassano@credit-suisse.com Ander Thompson (212) alexander.thompson@credit-suisse.com CREDIT SUISSE SECURITIES RESEARCH & ANALYTICS BEYOND INFORMATION Client-Driven Solutions, Insights and Access DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, AND THE STATUS OF NON-US ANALYSTS. US Disclosure: John Credit Edwards, Suisse CFA does john.edwards@credit-suisse.com and seeks to do business with ( ) companies Bhavesh covered Lodaya in its research bhavesh.lodaya@credit-suisse.com reports. As a result, investors ( ) should be aware that the Firm may 0 have a conflict of interest that Dylan could Nassano affect dylan.nassano@credit-suisse.com the objectivity of this report. Investors ( ) should Ander consider Thompson this report alexander.thompson@credit-suisse.com as only a single factor in making ( ) their investment decision.

2 Discussion Agenda Intro The Valuation Debate Where we are today Macro back drop and what is likely to drive sector recovery Deep Dive Deep Dive into Valuations Compared to Commodity Prices MLP Health Check

3 Deep Dive on Valuation Bottom Line: In light of the severe downturn, the viability of the MLP model as well as valuations have faced significant challenge. The accepted wisdom before the downturn was that the models were robust enough to withstand industry cycles and that pipeline and processing plant cash flows had a degree of insulation from the industry cycle due to the long-dated nature of fee based contracts. But the prolonged down turn has challenged the robustness assumption on account of counterparty risks and contract renegotiation risks. Renewed focus on balance sheet strength, liquidity, and distribution coverage have become more important. Valuation assumptions have also been challenged. The DDM valuation model has less viability as a valuation tool if the distributions are subject to disruption as does yield spread analysis. Valuation models such as EV/EBITDA and P/DCF showing relative indifference to distribution policy are being resurrected as a way to look at the sector. We believe that the customary assumption of MLP industry yields in the 6 s will be a long time before being revisited owing to the stronger coverage, thicker equity requirements needed to withstand cycles of the future. Management teams that have already positioned for this have seen their equity hold up a lot better during this current cycle. Deep dive into valuation reveals some interesting observations: For example, a look at the history reveals a stronger correlation between multiples and the price of oil than most previously cared to admit (beginning at slide 11) and helps give us insight into the right yield or yield spread, the correct EV/EBITDA multiple (charts indicates about 12-13x at $90-$100 oil and about at $30-$40 oil though clearly neither condition is sustainable and suggests that the number of periods where multiples are below 9.5x are very few as shown on slide 24) and the correct P/DCF multiple (over 15x at $90-$100 oil and about 11x at $30-$40 oil). Compared to other sectors (slides 25-29) MLPs appear slightly expensive vs utilities (surprise to us given the rally in utilities this year) but cheap vs. E&Ps and OFS (again a bit of a surprise given our recent sector rally). Slides as well as slides 30 and 34 should help discerning long/short pairings as well. At this juncture the results from our earlier survey suggesting a 2H16 or 1H17 recovery appear to have potential (link to survey). Source: Credit Suisse 2

4 Observations About Valuation and Commodity Prices Strong correlation between multiples and the price of oil Balance sheet leverage increases the correlation Some of the sub-sectors have stronger/weaker correlations Given correlations, it suggests that playing low beta, gas exposed, defensive names are the way to play with crude in the 30's Playing more offensive, higher beta, otherwise weaker names as crude turns the corner to the upside. The whole sector should rally with definitive strength in the economy. Our survey suggested a 2H16 or 1H17 recovery. Source: Credit Suisse 3

5 Stock Recommendations Top Picks: At current prices EQM, TEP, GEL appear to offer defensive characteristics with offensive capabilities if WTI continues to languish in the $30s and upside potential should oil start to recover more meaningfully. Best high yielders: Names with high yields but high likelihood for preserving the distribution such as ETP, EEP offer promise. Best High beta for commodity upside play: As oil/gas pivots to the upside higher beta names such as CNNX, APLP, ENBL, ENLK have outsized potential. Source: Credit Suisse 4

6 Ratings Changes

7 Stock Calls - CS Coverage - MLPs Summary of Changes to Target Price and Rating Symbol Old New Old New TP TP Rating Rating Valuation Thesis MLP Coverage AM $32 - O N Downgrading AM to Neutral as units have performed well YTD and our $32 TP reflects 32% total return potential, which is below the median of our coverage universe. DPM $25 $28 N - Downgrading to Underperform - stock has moved up over 30% MTD and effectively prices in DPM's fee-based cash flow growth and mgmt.'s focus on contract repair. We continue to model no growth in distributions and expect coverage to be tight around 1x longer-term. EEP $24 $23 O N Downgrading EEP to Neutral as we believe coverage will remain tight even with flat distributions. Our $24 TP indicates a total return of ~40% near our sector mid-point. ENBL $11 - N O Upgrading to O given relative upside to our $11 target price. Units appear oversold EPD $30 - O N EPD remains a bellwether in the space but with a 6.5% yield and 32% total return outlook we believe better value can found elsewhere in the near term, especially if crude finds a floor/corrects to the upside. MMP $70 - N U Downgrading to Underperform. MMP has presented a safe alternative to higher beta midstream names since the commodity downturn began, but we believe valuation is currently stretched and units will Underperform the rest of our coverage universe in a market recovery scenario. NS $47 $43 N - We now apply a blended valuation. Our TP moves down to $43 based on 10.5x EV/EBITDA, 11x P/DCF and 3-stage DDM discounted at 10%. We continue to model no distribution growth. OKS $32 $33 N U OKS units have recovered by >$10 or near 50% since bottoming ~$22 in Feb given guidance reiteration (a positive) and ethane demand outlook. With that said OKS is now trading at P/DCF which is well ahead of peers with similar or better growth outlooks. We believe the units will lag in a commodity recover scenario while downside remains if markets remain choppy. PAA $19 $26 N - Raising target price by $7 on our equally weighted valuation blend of EV/EBITDA (11x), P/DCF (), and 3-stage DDM discounted at 10%. SEP $56 54 O N Downgrading to Neutral on total return expectations. While SEP remains a strong defensive name, we would expect it to perform in-line with our coverage if crude continues to recover. VTTI $24 - O N Downgrading to Neutral as our $24 target price which suggests a total return ~36% along with lack of trading liquidity. WES $56 $53 O N Our target price drops to $53 from $56 as we apply an equal weighting to DDM, EV/EBITDA, and P/DCF. We are downgrading WES to Neutral on a lower total return outlook that falls in-line with our coverage. Source: Credit Suisse 6

8 Stock Calls - CS Coverage GPs and C-corps Old New Old Symbol TP TP Rating GP and Corp Coverage New Rating CPGX $23 $25 N U ENLC $12 - O N KMI $20 $22 O N Valuation Thesis Downgrading to Underperform - CPGX ran up amid takeover speculation though talks with TRP reportedly stalled. We feel shares are near fair value relative to CPGX's impressive backlog of organic projects. Downgrading to Neutral on valuation. Our $12 target price suggests a total return of ~35% which is below the midpoint of our coverage universe. KMI shares have recovered well after the dividend cut and are now trading near our target EV/EBITDA and DCF multiples of. We see limited upside to KMI shares in the near-term though we remain constructive on the name. NSH $25 $23 N - We now apply a blended valuation. Our TP moves down to $23 based on 10.5x EV/EBITDA, 11x P/DCF and 3-stage DDM discounted at 10.5%. We continue to model no distribution growth. OKE $30 $34 N - Raising OKE target price by $4 on our blended valuation methodology. TRGP $33 $37 N - Summary of Changes to Target Price and Rating We are rasing our target price to $37 on the upsized preferred unit issuance which resolves/mitigates balance sheet issues. Bank covenant leverage falls to 3.2x and we now model consolidated leverage of 5.5x in We how see enough coverage and low enough leverage to resume distribution growth in 2018 (vs. our prior flat forecast). WGP $39 $37 O N Along with WES, we are downgrading WGP to Neutral after applying equal weighting to DDM, EV/EBITDA, and P/DCF. WGP total return outlook is in-line with our coverage. Source: Credit Suisse 7

9 Counter-Consensus Calls Magellan Midstream (MMP): Downgrading to Underperform, from Neutral MMP has outperformed the MLP sector since the beginning of the commodity price downturn and YTD given a healthy balance sheet (~2. debt/ebitda) and substantial distribution coverage (>1.4x). Units are currently trading at ~16x EV/EBITDA which is now 6-turns above the sector average vs. the historical 4-turn premium MMP has enjoyed. Bottom line: We believe units fairly valued (5% total return to our $70 TP) and MMP presents a target for shorts once crude finds a floor and begins to recover. Risks to our call: MMP scores favorably on our MLP health check and should crude prices fall further investors will again crowd into MMP. Oneok Partners (OKS): Downgrading to Underperform, from Neutral OKS units have recovered almost 50% from lows reached in February as investors have rewarded Oneok for its reiteration of guidance, increasing fee-based margin and positioning to benefit from expected increases in ethane recovery. We believe valuation is stretched at 15x P/DCF given 15% of OKS s gross margin remains commodity sensitive and only 80% of 2015 NGL segment revenues were tied to IG customers. Bottom line: We believe valuation is rich relative to peers with similar commodity exposure and counterparty risk. Upside is limited with a commodity recovery and downside risk remains with any further deterioration of commodity prices. Risks to our call: OKS could continue to outperform if ethane demand improves faster than expected leading to increased ethane recovery. Source: Credit Suisse 8

10 Counter-Consensus Calls Enterprise Products Partners (EPD): Downgrading to Neutral, from Outperform EPD continues to be a bellwether in the industry given its expansive footprint, solid distribution coverage and export-centric growth backlog. That being said, it trades at its historical 3X above the sector average despite below average EBITDA growth expectations over the next 2 years. Bottom line: EPD remains well positioned to weather any further collapse in commodity prices but we believe this is mostly priced in. Better value can be found in oversold names particularly if commodity prices recover more rapidly and hedge funds may view EPD units a convenient short given the high liquidity in its units. Risks to our call: EPD is viewed a safe haven even if trading 3x above sector EV/EBITDA multiples and it enjoys healthy distribution coverage. If commodities retreat once again, EPD could well outperform. Kinder Morgan (KMI): Downgrading to Neutral, from Outperform KMI shares have recovered nicely since cutting their dividend and are up 21% YTD, outperforming smartly. Now that EV/EBITDA (11x current) and P/DCF (9x current) are the preferred methods of valuation, we see limited upside and few catalysts that aren t already being considered by the market. Our $22 target price suggests a total return of ~20% which is below the ~35% median of our coverage. Risks to our call: Sentiment could continue to improve for KMI given its previous long history of trading at premiums to the sector before the 2015 share price collapse. Source: Credit Suisse 9

11 Counter-Consensus Calls Enable Midstream (ENBL): Upgrading to Outperform, from Neutral ENBL has lagged the sector given its commodity exposure (10%) and volumetric risk (30%) which brought distribution security into question. Post-4Q15 earnings we felt incrementally more positive on the name given cap ex reduction of 66% from prior guidance, CNP preferred purchase of $363mm allowing debt reduction, no equity capital market needs for 2016 and minimal re-contracting risk, though there is ~$200mm of MVC s/guaranteed return features. Even discounting valuation metrics significantly, we find upside well above average. Risks to our call: CNP is looking at potentially divesting its ownership in the next year which would remove the prospect of future sponsor support and S&P cut to below I/G despite the balance sheet strengthening from the preferred and reduced cap ex. Counterparty risk could prove to be more significant than expected (ENBL serves 200 producers in the Anadarko basin) and/or volume declines could impact gross margin more than we have considered and sentiment could remain negative weighing on the multiple on the units. Columbia Pipeline Group (CPGX): Downgrading to Underperform, from Neutral CPGX is up 15% YTD thanks to news reports of a possible takeover by TRP. Now that shares are trading ~$23 we believe the market is giving CPGX proper credit for its impressive backlog of projects, and news reports that take-over talks have stalled leads us to believe that TRP is probably not willing to pay a hefty premium for the company in this market. Risks to our call: Now that CPGX is officially a take-out candidate, TRP or another large midstream player could make a bid on the company at a premium higher than our $25 target price which could drive shares still higher. Source: Credit Suisse 10

12 Counter-Consensus Calls Spectra Energy Partners (SEP): Downgrading to Neutral from Outperform SEP has Outperformed over the last year and YTD and has been on our top picks as a safety play as it has large inventory of visible growth prospects, access to capital, and virtually no counterparty risk. Going to N on valuation not for lack of quality. Risks to our call: SEP is an Outperformer if commodity prices turn sharply lower again given its expansive fee-based asset footprint, highly visible inventory of growth projects irrespective of commodity price conditions, and highly defensive and stable business model. SEP remains a sought after security for long term oriented investors and would be considered a solid alternative for utility-focused investors. Source: Credit Suisse 11

13 Sector Performance, Yields, Yield Spreads vs. Commodity Prices

14 Alerian MLP Index vs. Crude vs. Natural Gas MLPs up ~20% over the last five years; AMZ Index trading at 2006 levels 30% Crude vs. NatGas vs. Alerian (1yr performance) 80% Crude vs. NatGas vs. Alerian (5yr performance) 20% 10% 0% -10% -20% -30% -40% -50% -60% 60% 40% 20% 0% -20% -40% -60% 80% 60% 40% 20% 0% -20% -40% -60% -80% Crude Oil (CL1) Natural Gas (NG1) Alerian TR Index Crude vs. NatGas vs. Alerian (3yr performance) 200% 150% 100% 50% 0% -50% -100% Crude Oil (CL1) Natural Gas (NG1) Alerian TR Index Crude vs. NatGas vs. Alerian (10yr performance) Crude Oil (CL1) Natural Gas (NG1) Alerian TR Index Crude Oil (CL1) Natural Gas (NG1) Alerian TR Index As of 3/15/16; Source: RAVE, Bloomberg 13

15 Alerian MLP Index and Yield Spread to US 10yr vs. Crude Strong inverse relation of MLP yields to movement in crude prices 16% Alerian Yield vs. Crude (Since 2004) $20 14% 12% 10% 8% 6% 4% $40 $60 $80 $100 $120 $140 $160 Alerian Yield WTI CL1 ($/Bbl) 14% 12% 10% 8% 6% 4% 2% 0% Alerian Yield Spread vs. Crude (Since 2004) $20 $40 $60 $80 $100 $120 $140 $160 Alerian - US 10yr Yield Spread WTI CL1 ($/Bbl) As of 3/15/16; Source: RAVE, Bloomberg 14

16 18% 16% 14% 12% 10% 8% 6% 4% 2% AMZX Yield vs Crude (Crude Decline June Feb 2009) y = x R² = % $20 $40 $60 $80 $100 $120 $140 $160 Regression - AMZ Index and AMZ Yield Spread to US 10yr in Crude cycles 14% 12% 10% 8% 6% 4% 2% AMZX Yield Spread vs Crude (Crude Decline June Feb 2009) y = x R² = % $20 $40 $60 $80 $100 $120 $140 $160 14% AMZX Yield vs Crude (Crude Recovery Feb April 2011) 12% AMZX Yield Spread vs Crude (Crude Recovery Feb April 2011) 12% 10% 8% 6% 4% y = x R² = % 8% 6% 4% y = x R² = % 2% 0% 0% $20 $40 $60 $80 $100 $120 $20 $40 $60 $80 $100 $120 As of 3/15/16; Source: RAVE, Bloomberg 15

17 Regression - AMZ Index and AMZ Yield Spread to US 10yr in Crude cycles AMZX Yield vs Crude (April June 2014) AMZX Yield Spread vs Crude (April June 2014) 8% 6% 7% y = x R² = % 4% y = x R² = % 6% 2% 1% 5% $70 $80 $90 $100 $110 $120 0% $70 $80 $90 $100 $110 $120 14% AMZX Yield vs Crude (Crude Decline Jun 2014 to date) 12% AMZX Yield Spread vs Crude (Crude Decline June 2014 to date) 12% 10% 8% 6% 4% y = e R² = % 8% 6% 4% y = e -0.0 R² = % 2% 0% 0% $20 $40 $60 $80 $100 $120 $20 $40 $60 $80 $100 $120 As of 3/15/16; Source: RAVE, Bloomberg 16

18 Regression - AMZ Index and AMZ Yield Spread to US 10yr in Crude cycles 14% AMZX Yield vs Crude (Jan 2015 to date) 12% AMZX Yield Spread vs Crude (Jan 2015 to date) 12% 10% 8% 6% 4% y = x R² = % 8% 6% 4% y = x R² = % 2% 0% $20 $25 $30 $35 $40 $45 $50 $55 $60 $65 0% $20 $25 $30 $35 $40 $45 $50 $55 $60 $65 As of 3/15/16; Source: RAVE, Bloomberg 17

19 MLP Correlations Higher correlation to crude and lower to gas over the last year 10-yr correlation Matrix 1-yr correlation Matrix Crude Oil WTI CL1 Natural Gas NG1 Alerian MLP Crude Oil WTI CL1 Natural Gas NG1 Alerian MLP 10-yr Treasury Note FINRA-BB IG Bond Index (0.02) CS High Yield Bond Index Russell 2000 Total Return Index S&P 500 Total Return Index S&P 500 Energy Index S&P 500 Utilities Index S&P 500 Real Estate Indx Crude Oil WTI CL Natural Gas NG Alerian MLP yr correlation Matrix 10-yr Treasury Note FINRA-BB IG Bond Index (0.13) (0.05) (0.02) CS High Yield Bond Index Russell 2000 Total Return Index 0.37 (0.02) 0.55 S&P 500 Total Return Index S&P 500 Energy Index S&P 500 Utilities Index 0.15 (0.04) 0.28 S&P 500 Real Estate Indx 0.23 (0.03) 0.39 Crude Oil WTI CL Natural Gas NG Alerian MLP Mo correlation Matrix Crude Oil WTI CL1 Natural Gas NG1 Alerian MLP Crude Oil WTI CL1 Natural Gas NG1 Alerian MLP 10-yr Treasury Note FINRA-BB IG Bond Index (0.08) (0.03) 0.01 CS High Yield Bond Index (0.01) Russell 2000 Total Return Index 0.36 (0.00) 0.49 S&P 500 Total Return Index S&P 500 Energy Index S&P 500 Utilities Index S&P 500 Real Estate Indx 0.26 (0.00) 0.41 Crude Oil WTI CL Natural Gas NG Alerian MLP yr Treasury Note FINRA-BB IG Bond Index (0.20) (0.22) (0.47) CS High Yield Bond Index (0.13) (0.35) 0.02 Russell 2000 Total Return Index S&P 500 Total Return Index S&P 500 Energy Index S&P 500 Utilities Index 0.25 (0.45) 0.05 S&P 500 Real Estate Indx 0.32 (0.08) 0.43 Crude Oil WTI CL Natural Gas NG (0.05) Alerian MLP 0.51 (0.05) 1.00 As of 3/15/16; Source: RAVE, Bloomberg 18

20 MLP Valuation Methodology Comparison Method Advantages Disadvantages Distribution Discount Model Yield and yield spread EV/EBITDA Focus on cash flow to investors Helps mgmt. teams focus on cash flow returns to investors Indifferent to yields and spreads Easy to use and calculate Trade off to growth easy to capture Historical ranges easy to measure Familiar to most investors Measure often used by management to help run their companies Indifferent to distribution/dividend policy Risks to distributions poorly captured Sensitive to terminal growth rate assumptions Sensitive to discount rate assumptions Worse at capturing commodity price cycle well or changes in cost of capital Does not necessarily capture business model risk Balance sheet risk poorly captured Risks to distributions poorly captured Difficult for historical data to properly adjust for GP/LP take that moves over time Adjustments by companies not consistent across companies Fails to adequately capture balance sheet risks Price/DCF Adjusts for GP/LP splits Indifferent to distribution policy Not consistent across MLPs, for example maintenance capital assumptions vary Not familiar to investors outside of MLP sector Fails to capture what is being paid to investors History not readily available from data bases Source: Credit Suisse 19

21 EV/EBITDA

22 EV / NTM EBITDA (based on Bloomberg consensus estimates) MLPs trading ~ 1 std. dev or 1.5-2x below average 15x 13x 11x 9x 7x 6x EV / NTM EBITDA - MLP Sector Sector Current 9.3x Sector Average 10.7x 13x 11x 9x 7x 6x EV / NTM EBITDA - Liquids Infra Sub-sector Current 9.4x Sub-sector Average 11.0x Excludes Upstream and Other MLPs Sector Median Average +1 StDev -1 StDev Liquids Infra Median Average +1 StDev -1 StDev 15x 13x 11x 9x 7x EV / NTM EBITDA - NatGas Pipelines Sub-sector Current 10.5x Sub-sector Average 11.4x 16x 15x 13x 11x 9x 7x 6x EV / NTM EBITDA - Gathering & Processing Sub-sector Current 8.7x Sub-sector Average 10.6x NatGas Pipeline Median Average +1 StDev -1 StDev G&P Median Average +1 StDev -1 StDev ex coal, upstream, non midstream, 83 MLPs, As of 3/15/16; Source: RAVE, Bloomberg 21

23 EV / NTM EBITDA (based on Bloomberg consensus estimates) contd.. MLP forward EBITDA multiple tracking crude price movements 13x 11x 9x 7x 6x EV / NTM EBITDA - MLP Sector vs. Crude $140 $120 $100 $80 $60 $40 $20 $0 Excludes Upstream and Other MLPs Sector Median (Qtr NTM EBITDA est) Crude (Qtr Avg WTI/bbl) 13x 11x 9x 7x 6x EV / NTM EBITDA - MLP Sector vs. Natural Gas $14 $12 $10 $8 $6 $4 $2 $0 Excludes Upstream and Other MLPs Sector Median (Qtr NTM EBITDA est) NatGas (Qtr Avg HH/MMBtu) As of 3/15/16; Source: RAVE, Bloomberg 22

24 MLPs EV/EBITDA vs. Crude on the way up and on the way Down 13x 11x 9x 7x EV / NTM EBITDA - MLP Sector (1Q09-2Q14) 11.1x $110 $100 $90 $80 $70 $60 $50 Suggests a 12.5x multiple at $90-$100 crude Discounting a crude fall 6x $40 Excludes Upstream and Other MLPs 15x 13x 11x 9x 7x Sector Median Average +1 StDev -1 StDev Crude EV / NTM EBITDA - MLP Sector (3Q14 to date) $100 $90 $80 $ x $60 $50 $40 $30 Sector Current 9.3x $20 Suggests multiple of 9x at $40 crude Discounting a crude recovery Excludes Upstream and Other MLPs Sector Median Average +1 StDev -1 StDev Crude As of 3/15/16; Source: RAVE, Bloomberg 23

25 EV/EBITDA EV/EBITDA EV/EBITDA EV/EBITDA Regression over various periods suggest buy vs short timing 15x 13x 11x 9x present y = 0.019x x R² = x $20 $40 $60 $80 $100 $120 $140 WTI crude 15x 13x 11x 9x 7x present Q 09 3Q 14 (GFC to MLP peak) y = x R² = x $40 $60 $80 $100 $120 WTI crude 15x 13x 11x 9x 7x y = x R² = x $20 $40 $60 $80 $100 $120 WTI crude 15x 13x 11x 9x 7x y = x R² = x $50 $60 $70 $80 $90 $100 $110 WTI crude As of 3/15/16; Source: RAVE, Bloomberg, Company data 24

26 MMP AM CPPL MEP OXY PSXP MPLX EPD VLP SPH GEL KMI EQM TRGP SEP NS APU ENLK WES COP.N OKS PAA DPM TEP SXL WNRL BWP PBFX TLLP MRO HES EEP VTTI WPZ ETP ENBL CNNX SUN GPP APLP MUR MMP AM CPPL MEP PSXP MPLX EPD XOM VLP SPH GEL KMI CVX EQM TRGP SEP NS APU ENLK WES OKS PAA DPM TEP SXL WNRL BWP PBFX TLLP EEP VTTI WPZ ETP ENBL CNNX SUN GPP APLP 2016 MLP EV / EBITDA Relative to Energy Sub-sectors MLPs relatively cheap vs. Majors but expensive vs. Integrated E&P 2016 EV / EBITDA - MLPs vs Super Majors 1 16x 6x 4x 2x 0x Super Major Average, 12.0x MLP Average, 10.1x MLPs at a 1.9x discount to super majors 1 16x 6x 4x 2x 0x Super Major MLP / GP Super Major Average MLP Average 2016 EV / EBITDA - MLPs vs Integrated MLP Average, 10.1x Integrated Average, 9.3x MLPs at a 0. premium to integrated E&P Integrated MLP / GP Integrated Average MLP Average As of 3/15/16; Source: RAVE, Bloomberg, Company data 25

27 OIS NOV MMP AM CPPL MEP PSXP MPLX HCLP.N EPD VLP WFT SPH GEL KMI EQM TRGP SEP NS APU ENLK WES OKS PAA DPM TEP SXL WNRL FI.N BWP PBFX OII TLLP FTI EEP VTTI WPZ ETP ENBL CNNX SUN GPP APLP ESV.N WNR MMP AM CPPL MEP PSXP MPLX EPD VLP SPH GEL KMI EQM TRGP SEP NS APU ENLK WES PSX.N OKS PAA DPM TEP SXL WNRL BWP PBFX TLLP EEP VTTI WPZ ETP ENBL HFC CNNX SUN GPP APLP TSO VLO DK ALJ MPC PBF 2016 MLP EV / EBITDA Relative to Energy Sub-sectors (cont d) MLPs relatively cheap vs. OFS but expensive vs. Refiners 2016 EV / EBITDA - MLPs vs Refiners 20x 1 16x 6x 4x 2x 0x MLP Average, 10.1x Refiner Average, 6.9x MLPs Expensive vs Refiners Refiner MLP / GP Refiner Average MLP Average 25x 20x 15x 5x 0x 2016 EV / EBITDA - MLPs vs OFS OFS Average, 11.6x MLP Average, 10.1x MLPs Cheap vs OFS OFS MLP / GP OFS Average MLP Average As of 3/15/16; Source: RAVE, Bloomberg, Company data 26

28 FANG MMP AM CHK EOG CPPL MEP OXY PSXP MPLX RRC PE EPD VLP PXD KOS REXX DNR GPOR SPH GEL KMI CXO.N EQM NBL SWN TRGP AR NFX SEP DVN NS APU ENLK LPI WES APA OKS PAA DPM TEP SXL WNRL APC CRZO BWP PBFX TLLP MRO OAS HES EEP BCEI VTTI WPZ ETP CRK ENBL PDCE CNNX WLL SUN GPP APLP MUR SN EPE 2016 MLP EV / EBITDA Relative to Energy Sub-sectors (cont d) MLPs slightly cheaper than E&Ps 2016 EV / EBITDA - MLPs vs E&P 30x 25x 20x 15x MLP Average, 10.1x E&P Average, 10.5x 5x 0x E&P MLP / GP E&P Average MLP Average Based on the chart above, it seems that the market is not assigning any significant premium to MLPs with predominantly fee-based models. In the commodity downturn E&Ps have been focusing on cutting back capex and preserving balance sheets with the looming threat of credit downgrades. MLPs do not have direct commodity risks like E&Ps. However, since MLPs are primarily volume takers, headwinds affecting producers is reflected in MLP valuations. MLPs contracted to highly levered E&Ps have underperformed and face the risk of contract re-negotiations and producer bankruptcies. As of 3/15/16; Source: RAVE, Bloomberg, Company data 27

29 MMP AM CPPL MEP PSXP MPLX EPD VLP EE SPH GEL SRE KMI NEE EQM TRGP SEP NS APU ENLK WES OKS PAA DPM TEP SXL PNM WNRL BWP AEE PBFX TLLP FE PEG EEP ETR EXC VTTI WPZ ETP ENBL CNNX SUN GPP APLP MMP AM CPPL MEP PSXP MPLX EPD VLP D LNT WEC NWE ES SCG SPH GEL SO TE KMI EQM TRGP SEP NS DUK XEL DTE APU CMS ENLK WES GXP ED OKS AEP PAA DPM TEP SXL WNRL POM BKH PNW BWP OGE PBFX POR TLLP CNP EIX EEP PCG VTTI WPZ ETP ENBL CNNX SUN GPP APLP 2016 MLP EV / EBITDA Relative to Energy Sub-sectors (cont d) MLPs not as cheap as Utilities; Relatively inline with Regulated Utes 1 16x 6x 4x 2x 0x 2016 EV / EBITDA - MLPs vs Regulated Utilities MLP Average, 10.1x Reg Util Average, x 6x 4x 2x 0x Reg Util MLP / GP Reg Util Average MLP Average 2016 EV / EBITDA - MLPs vs Integrated Utilities MLP Average, 10.1x Integ Util Average, 9.0x Integ Util MLP / GP Integ Util Average MLP Average As of 3/15/16; Source: RAVE, Bloomberg, Company data 28

30 2016 Gathering & Processing MLPs EV / EBITDA G&P MLPs about one turn lower than broader MLPs (CS Coverage) 1 16x 6x 4x 2x 0x 2016 EV / EBITDA - Gathering & Processing Average, 9.3x Median, 8.4x Uncovered CS Coverage Average Median G&P MLPs are trading relatively cheaper vs. our entire coverage and tend to outperform the space in a crude recovery cycle. Within our G&P focused coverage, CNNX looks undervalued given its strong performance over the last few quarters and visible growth potential from dropdown opportunities. As of 3/15/16; Source: RAVE, Bloomberg, Company data 29

31 EV/EBITDA EV/EBITDA vs. 2yr EBITDA CAGR 20x 1 CPPL 16x MMP AM PSXP TRGP EPD VLP EQM NS VTTI KMI EEP MPLX PAA WPZ ENBL SEP BWP GEL DPM ETP CNNX SXL WES OKS PBFX TLLP WNRL TEP y = x R² = x -10% 0% 10% 20% 30% 40% 50% 60% 70% 2 yr EBITDA Growth As of 3/15/16; Source: RAVE, Bloomberg, Company data 30

32 P/DCF

33 Price / TTM DCF (CS Coverage) LPs trading around one standard deviation below average 24x P / TTM DCF Median (CS Coverage - LPs only) 20x 16x Average 13.6x 4x Current 11.0x P/DCF Average +1 StDev -1 StDev 45x 40x 35x 30x 25x 20x 15x 5x Average 21.1x P / TTM DCF Median (CS Coverage - GPs only) Current 8. P/DCF Average +1 StDev -1 StDev As of 3/15/16; Source: RAVE, Bloomberg, Company data 32

34 Price / TTM DCF (CS Coverage) contd.. Trailing DCF multiple moving inline with crude 24x 20x 16x 4x P / TTM DCF Median (CS Coverage - LPs only) vs. Crude $120 $100 $80 $60 $40 $20 P/DCF (TTM) Crude (End of week WTI/Bbl) 24x 20x 16x 4x P / TTM DCF Median (CS Coverage - LPs only) vs. Natural Gas $7 $6 $5 $4 $3 $2 $1 P/DCF (TTM) NatGas (End of week HH/MMBtu) As of 3/15/16; Source: RAVE, Bloomberg, Company data 33

35 P/DCF P/DCF vs. 2yr DCF CAGR 25.0x PSXP 20.0x VLP AM EQM MMP 15.0x SEP CPPL 10.0x DPM EEP PBFX NS EPD PAA TLLP OKS WES SXL WNRL TEP MPLX SUN VTTI 5.0x WPZ ENBL ETP GPP CNNX GEL APLP y = 19.74x R² = x -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 2 year DCF Growth As of 3/15/16; Source: RAVE, Bloomberg, Company data 34

36 MLP Health Check 2016

37 MLP Health Scorecard 2016 Examining MLPs to determine which have the greatest financial health The financial environment for MLPs has changed significantly since the peak in August Given our current median upside of ~50%, we feel investors want to weigh in more qualitative metrics to evaluate MLPs. We scored and ranked MLPs based on their financial health, taking into consideration both quantitative and qualitative metrics we believe MLP investors should focus on. Our Health Parameters: 8 Key Factors to Judge Overall Health Metric Definition / Thought process Current Yield Current yield seen purely on the basis of risk NTM CAPEX as % of Liquidity NTM expected CAPEX / cash and revolver availability 2016 Dist. Coverage Ratio 2016 expected DCF / 2016 expected distributions 2016 Leverage 2016 expected net debt / 2016 expected EBITDA 2016 Dist. Growth Expected Y/Y increase in distributions Commodity Exposure We relatively rate MLPs on their commodity exposure Contract Quality Qualitative view of contract longevity, MVCs, contract mix, and the GP s (parents) financial health Investment Grade Advantaged cost of capital; Higher Investor Interest Top Picks based on this Analysis Based on purely the health score (see next slide), EQM, VLP, MMP and TEP come up on top of the chart. However, triangulating the health score with valuation upside we prefer GEL, TEP, and EQM Source: Credit Suisse 36

38 Current Yield Dist. Coverage Ratio Leverage Dist. Growth MLP Health Scorecard MLP Current Liquidity Capex + Acquisitions ($MM) NTM CAPEX as Distrib. Coverage Leverage Distribution Growth Comdty Contract Invt Health Ticker Yield ($MM) NTM % of Liquidity Exposure Quality Grade Score SEP 5.3% 1, ,500 63% x 1.23x 3.1x 3.2x 3.1x 8% 8% 7% Lower Above Avg Y 5.5 EQM 3.7% 751 1,056 1,056 1, % 1.67x 1.46x 1.33x 0.3x 1.7x 3.0x 23% 21% 20% Lower Above Avg. Y 5.0 VLP 2.5% 656 1,016 1,016 1, % x 1.65x 0.6x 2.1x 2.7x 27% 26% 26% Lower Above Avg. 5.0 SXL 7.4% 2,537 1,800 1,800 1,500 71% 1.19x 1.07x 1.19x x 20% 12% 10% Lower Above Avg Y 4.5 MMP 4.5% 1, % x 2.9x 3.4x 3.2x 15% 10% 9% Lower Above Avg. Y 4.5 GPP 12.5% % 1.04x x -0.2x x NA 7% 8% Lower Above Avg 4.0 EPD 6.3% 4,400 3,925 3,925 3,000 89% 1.39x 1.30x 1.31x 4.3x 4.4x 4.3x 6% 5% 6% Lower Above Avg Y 4.0 AM 3.5% % 1.45x 1.34x 1.17x 2.9x 3.1x 3. 17% 30% 28% In-line Below Avg 3.5 VTTI 6.4% % 1.22x 1.29x 1.21x 3.0x 3.7x 3.9x 9% 15% 15% Lower Average 3.5 KMI 2.6% 4,114 3,657 3,657 4,028 89% 1.32x 1.47x x 10.4x 9.6x -8% -69% 20% Lower Above Avg Y 3.5 CPPL 4.7% 1,579 1,432 1,432 3,491 91% 0.99x x 6.9x 6.6x 6.5x NA 19% 20% In-line Above Avg 2.5 CNNX 8.1% % 1.33x 1.45x 1.36x 0.9x % 17% 15% In-line Below Avg 2.5 PSXP 3.0% 823 1,825 1,825 2, % 1.30x 1.22x 1.33x 4.2x 4.9x 4.4x 34% 29% 23% Lower Above Avg Y 2.0 WNRL 7.6% % x 1.20x x 3.7x 19% 16% 13% Lower Average 1.5 PBFX 8.6% % 1.59x 1.22x 1.23x 3.5x 3.3x 3.3x 26% 18% 9% Lower Below Avg 1.5 TLLP 6.9% 1,353 1,025 1,025 1,027 76% 1.31x 1.24x x 4.0x 4.1x 17% 17% 17% In-line Average 1.5 EEP 13.2% 1, % 0.92x x 5.0x 4.3x 3.5x 4% 1% 0% Lower Above Avg Y 1.0 GEL 8.6% % 1.19x 1.42x 1.36x 6.7x 5.9x 5.5x 10% 10% 11% In-line Average 1.0 BWP 2.8% 1, % x 3.19x 4.9x 4.7x 4.1x 0% 0% 75% In-line Below Avg Y 1.0 TEP 6.7% % 1.17x x 3.0x 3.7x 3.7x 46% 22% 13% Lower Average 0.5 SUN 9.6% 1,562 2, % 1.40x x 4.4x 33% 18% 7% Lower Above Avg 0.5 MPLX 6.7% 1,658 1,560 1,560 1,758 94% 1.27x 1.17x 1.04x 4.1x 4.4x 4.5x 30% 13% 10% In-line Below Avg Y 0.5 WES 7.7% 775 1,219 1, % 1.11x 1.04x 1.17x 3.4x 3.2x 3.2x 15% 10% 9% In-line Below Avg Y 0.5 APU 8.6% % 1.06x 1.01x 1.13x x 3.6x 5% 3% 4% In-line Average 0.0 OKS 9.6% 1, % 0.86x 1.00x 1.06x 5.6x 4.4x 4.1x 3% 0% 0% In-line Average Y (0.5) PAA 11.7% 2,940 1,720 1, % 0.82x 0.72x 0.93x x 3.7x 7% 1% 0% In-line Average Y (0.5) APLP 22.7% % 1.24x 1.03x 1.04x 4.0x 4.5x 4.5x 4% 1% 0% In-line Below Avg (1.5) DPM 11.9% % x 1.01x 5.6x 4.3x 4.4x 2% 0% 0% Higher Below Avg Y (1.5) ENBL 18.5% 1, % 0.97x 0.99x 1.02x 3.7x 4.1x 4.2x 5% 1% 0% Higher Average Y (2.0) ETP 14.7% 2,668 3,556 3,556 2, % 1.01x 0.96x 1.11x 5.2x 5.1x 4.4x 8% 1% 0% Lower Average Y (2.0) SPH 11.8% % 1.11x x 3.3x x 1% 0% 0% In-line Average (2.0) MEP 32.2% % x 0.52x x 3.7x 7% 1% 0% Higher Average (2.5) WPZ 17.8% 4,470 2,432 2,432 3,435 54% 1.05x 1.05x x x -6% 0% 0% Higher Below Avg Y (3.0) Note: 1. Analysis excludes E&P MLPs, General Partners and Restricted names. We use the most recent reported data (3Q15) for all boxes. Median Our base parameter ranges are mostly driven by metric median and 1 standard deviation on either side. 3. Liquidity is defined as cash available + availability on revolver as of end of 3Q15. We then layer addtl.in equity/debt issuances (if used to pay down revolver) Health Score Ranking Methodology Median 7.7% Stdev 6.3% NTM CAPEX Stdev 68.5% Low High as % of Liquidity Base case 100.0% Median 69.5% 2016 Median Median 4.07x 2016 Median 9.8% Stdev 0.76x Stdev 1.6 Stdev 16.6% Low High Low High Low High 1.36% 14.01% 0.4x 1.9x 3.57x 4.57x -6.7% 26.4% In-line 3.0% 13.0% 100% 160% 1.00x 1.25x 3.25x 4.50x 0.0% 14.0% 0 Point 0 Point 3.0% 13.0% 0 Point 100% 160% 0 Point 1.00x 1.25x 0 Point 3.3x 4.5x 0 Point 0.0% 14.0% -1 Point > 13.0% -1 Point > 160% +1 Point > 1.25x -1 Point > 4.5x +1 Point > 14.0% +1 Point < 3.0% +1 Point < 100% -1 Point < 1.00x +1 Point < 3.3x -1 Point < 0.0% 2nd Level Scoring 2nd Level Scoring 2nd Level Scoring Alerian 5-yr Avg 6.2% MLP doesn't lose 1pt on liquidity 2016 Outlook (Med) 5.0% -0.5 Point > 6.2% 0 Point (Level 1 score) if it gains 1pt on +0.5 Point > 5.0% +0.5 Point < 6.2% leverage -0.5 Point < 5.0% Lower +1 Point Higher -1 Point Above Avg +1 Point Average 0 Point Below Avg -1 Point Yes +0.5 Point No 0 Point As of 3/16/16; Source: RAVE, Bloomberg, Company data 37

39 Price/DCF LP Unit (centered at median) NTM Total Return Potential (centered at median) MLP Health Scorecard Results We prefer MLPs lying in the right quadrants, representing a high health score preferably with high valuation upside 0x Health Score to 2016 Price/DCF LP unit 90% Health Score to NTM Total Return Potential 5x 15x 20x WPZ MEP ETP SPH APLP ENBL DPM PAA OKS SUN MPLX WES BWP TEP GEL APU EEP WNRL CNNX PBFX TLLP AM VTTI CPPL EPD GPP SXL SEP MMP EQM VLP 80% 70% 60% 50% 40% 30% WPZ ENBL ETP MEP APLP GPP GEL CPPL CNNX TEP WNRL EEP BWP PSXP WES VTTI PBFX SUN AM MPLX TLLP EPD EQM 25x PSXP KMI 20% SPH PAA DPM APU KMI VLP SXL SEP 10% OKS 30x (5.0) (4.0) (3.0) (2.0) (1.0) Health Score (centered at median) As of 3/16/16; Source: RAVE, Bloomberg, Company data MMP 0% (5.0) (4.0) (3.0) (2.0) (1.0) Health Score (centered at median) 38

40 Summing Up

41 2016 Outlook Major Themes Key Expectations Market Weight in 2016: With the sector down over 50% from the Aug 14 peak, and already down 14% in 2016 vs. 6% decline for the S&P, we continue to be in bear market territory. Although, the current ~959bp spread to the US 10-yr indicates ~70% total returns signaling an overweight MLP portfolio, we believe high crude inventory continues to weigh on the sector and do not expect a recovery to begin in full earnest until meaningful inventory declines are sustained for a substantial time frame. Storage Levels to Weigh on Volumes: Though sector valuations are at multi-year lows (yields above 10%) and yield spread at multi-year highs (above 800bp), recovery has been elusive. High storage levels weighs on price which in turn weighs on volumes which in turn weighs on cash flows. Falling inventories are expected eventually but timing remains uncertain. E&P Credit Risk to Weigh on MLPs: With lower commodity prices and declining production volumes, producers are at a risk of credit downgrades, thereby impacting midstream MLPs. Distribution Growth to Slow: With ~30% of our midstream coverage currently yielding over12%, there is growing risk of distribution reductions in Median sector distribution growth rates are expected to fall to 4-6% range. Infrastructure Spending to Drop: We expect growth capital spend to fall by ~10-15% in 2016 to the ~$40Bn. Expect More M&A: 2015 saw a record $137Bn of announced acquisitions including MPLX/MWE, ETE/WMB, TRGP/NGLS among the bigger transactions. Hunters could become the hunted with the fall in valuations. Players outside midstream could enter. Source: Credit Suisse Estimates, Company data, Thomson Reuters 40

42 CS Coverage Historical EV / NTM EBITDA spread vs. MLP Sector 25x 20x 15x 5x 0x MMP (post GP takeover) EV / NTM EBITDA Multiple vs. MLPs Current Spread 6.6x Avg Spread 4.1x 16x 6x 4x 2x 0x -2x -4x ETP EV / NTM EBITDA Multiple vs. MLPs Current Spread -1.0x Avg Spread -2.0x Multiple MLPs Multiple Multiple MLPs Multiple 20x 1 16x 6x 4x 2x 0x EPD (post GP takeover) EV / NTM EBITDA Multiple vs. MLPs Current Spread 3.7x Avg Spread 3.1x 16x 6x 4x 2x 0x -2x OKS EV / NTM EBITDA Multiple vs. MLPs Current Spread -0.1x Avg Spread 0.0x Multiple MLPs Multiple Multiple MLPs Multiple As of 3/16/16; Source: RAVE, Bloomberg, Company data 41

43 CS Coverage Historical EV / NTM EBITDA spread vs. MLP Sector 16x PAA EV / NTM EBITDA Multiple vs. MLPs 25x GEL (post GP takeover) EV / NTM EBITDA Multiple vs. MLPs 20x 15x 6x 4x 2x 0x Current Spread 0.0x Avg Spread 0.5x 5x 0x Current Spread 1.4x Avg Spread 3.1x Multiple MLPs Multiple Multiple MLPs Multiple SEP EV / NTM EBITDA Multiple vs. MLPs EEP EV / NTM EBITDA Multiple vs. MLPs 25x 20x 15x 5x 0x Current Spread 1.5x Avg Spread 2.4x 1 16x 6x 4x 2x 0x Current Spread 1.0x Avg Spread 0.6x Multiple MLPs Multiple Multiple MLPs Multiple As of 3/16/16; Source: RAVE, Bloomberg, Company data 42

44 CS Coverage Historical EV / NTM EBITDA spread vs. MLP Sector WPZ EV / NTM EBITDA Multiple vs. MLPs NS EV / NTM EBITDA Multiple vs. MLPs 16x 6x 4x 2x 0x -2x Current Spread -1.7x Avg Spread -0.2x 16x 6x 4x 2x 0x Current Spread 0. Avg Spread 1.1x Multiple MLPs Multiple Multiple MLPs Multiple BWP EV / NTM EBITDA Multiple vs. MLPs 1 16x 6x 4x 2x 0x Current Spread -0.2x Avg Spread 1.2x Multiple MLPs Multiple As of 3/16/16; Source: RAVE, Bloomberg, Company data 43

45 Disclosures

46 Companies Mentioned (Price as of 16-Mar-2016) AmeriGas Partners, L.P. (APU.N, $42.55) Antero Midstream Partners LP (AM.N, $25.33, NEUTRAL, TP $32.0) Archrock Partners, LP (APLP.OQ, $10.08) Boardwalk Pipeline Partners, LP (BWP.N, $14.3) CONE Midstream Partners, LP (CNNX.N, $11.73) CenterPoint Energy Inc (CNP.N, $20.63) Columbia Pipeline Group, Inc. (CPGX.N, $23.0, UNDERPERFORM[V], TP $25.0) Columbia Pipeline Partners, LP (CPPL.N, $15.47) DCP Midstream Partners, LP (DPM.N, $26.3, NEUTRAL[V], TP $28.0) EQT GP Holdings, LP (EQGP.N, $23.98) EQT Midstream Partners, LP (EQM.N, $76.2, OUTPERFORM, TP $109.0) EnLink Midstream (ENLC.N, $11.25, NEUTRAL[V], TP $12.0) EnLink Midstream Partners (ENLK.N, $11.4) Enable Midstream Partners (ENBL.N, $6.88, OUTPERFORM, TP $11.0) Enbridge Energy Partners, LP (EEP.N, $17.72) Energy Transfer Partners, LP (ETP.N, $28.71) Enterprise Products Partners, LP (EPD.N, $24.65, NEUTRAL, TP $30.0) Genesis Energy, LP (GEL.N, $30.5, OUTPERFORM, TP $46.0) Green Plains Partners, LP (GPP.OQ, $12.78) Kinder Morgan, Inc. (KMI.N, $18.89, NEUTRAL, TP $22.0) MPLX LP (MPLX.N, $29.66) Magellan Midstream Partners, LP (MMP.N, $70.28, UNDERPERFORM, TP $70.0) Midcoast Energy Partners, L.P. (MEP.N, $4.44) NiSource Inc. (NI.N, $23.1) NuStar Energy, LP (NS.N, $40.44, NEUTRAL, TP $43.0) NuStar GP Holdings, LLC (NSH.N, $22.18, NEUTRAL, TP $23.0) ONEOK Partners, LP (OKS.N, $32.9, UNDERPERFORM, TP $33.0) ONEOK, Inc. (OKE.N, $29.51) PBF Logistics, LP (PBFX.N, $19.14) Phillips 66 Partners, LP (PSXP.N, $60.52) Plains All American Pipeline, LP (PAA.N, $23.93, NEUTRAL, TP $26.0) Plains GP Holdings, LP (PAGP.N, $8.52) Spectra Energy Partners, LP (SEP.N, $48.5, NEUTRAL, TP $54.0) Suburban Propane Partners, LP (SPH.N, $30.0) Sunoco Logistics Partners, LP (SXL.N, $25.94) Sunoco, LP (SUN.N, $33.53) Tallgrass Energy GP, LP (TEGP.N, $16.36) Tallgrass Energy Partners, L.P. (TEP.N, $38.08, OUTPERFORM, TP $54.0) Targa Resources Corp. (TRGP.N, $30.24, NEUTRAL[V], TP $37.0) Targa Resources Partners, LP (NGLS.N, $10.65) Tesoro Logistics, LP (TLLP.N, $45.35) VTTI Energy Partners, LP (VTTI.N, $18.75, NEUTRAL, TP $24.0) Valero Energy Partners, LP (VLP.N, $50.4) Western Gas Equity Partners, L.P. (WGP.N, $33.01, NEUTRAL, TP $37.0) Western Gas Partners, LP (WES.N, $41.65, NEUTRAL, TP $53.0) Western Refining Logistics, LP (WNRL.N, $20.79) Williams Partners, LP (WPZ.N, $19.13) Important Global Disclosures Disclosure Appendix John Edwards, CFA, Bhavesh Lodaya and John Edwards, CFA each certify, with respect to the companies or securities that the individual analyzes, that (1) the views expressed in this report accurately reflect his or her personal views about all of the subject companies and securities and (2) no part of his or her compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this report. 3-Year Price and Rating History for Antero Midstream Partners LP (AM.N) 3-Year Price and Rating History for Columbia Pipeline Group, Inc. (CPGX.N) CPGX.N Closing Price Target Price Date (US$) (US$) Rating 02-Jul O * 13-Oct N 01-Dec R 02-Dec N 22-Feb * Asterisk signifies initiation or assumption of coverage. O U T PERFO RM N EU T RA L REST RICT ED 3-Year Price and Rating History for DCP Midstream Partners, LP (DPM.N) DPM.N Closing Price Target Price Date (US$) (US$) Rating 26-Apr N 08-May Jul U * 06-Aug R 08-Aug U 27-Sep N 06-Nov Feb R 28-Feb N 08-May Aug R 07-Oct N 06-Nov Dec Jan May Aug Oct Dec Feb * Asterisk signifies initiation or assumption of coverage. N EU T RA L U N D ERPERFO RM REST RICT ED AM.N Closing Price Target Price Date (US$) (US$) Rating 01-Dec O * 27-Feb Jul N 21-Sep O 29-Oct Feb * Asterisk signifies initiation or assumption of coverage. O U T PERFO RM N EU T RA L

47 3-Year Price and Rating History for EQT Midstream Partners, LP (EQM.N) 3-Year Price and Rating History for Enable Midstream Partners (ENBL.N) EQM.N Closing Price Target Price Date (US$) (US$) Rating 26-Apr O 15-Jul R 17-Jul O 22-Jul Oct Jan Feb N 24-Apr Apr R 02-May N 13-Jun Jul Jul Oct Dec Feb Mar R 12-Mar O 24-Apr Apr R 22-Jun O 23-Jul Oct Oct * 07-Dec O * Asterisk signifies initiation or assumption of coverage. O U T PERFO RM REST RICT ED N EU T RA L 3-Year Price and Rating History for EnLink Midstream (ENLC.N) ENLC.N Closing Price Target Price Date (US$) (US$) Rating 25-Mar O * 16-May Aug Nov Jan Feb R 31-Mar O 06-Aug Sep Oct Nov Dec Dec Feb * Asterisk signifies initiation or assumption of coverage. O U T PERFO RM REST RICT ED ENBL.N Closing Price Target Price Date (US$) (US$) Rating 19-May R 21-May O * 05-Aug Sep R 04-Nov O 08-Dec Feb Feb N 08-May O 12-Aug N 13-Oct Nov Dec Feb * Asterisk signifies initiation or assumption of coverage. REST RI C T ED O U T PERFO RM N EU T RA L 3-Year Price and Rating History for Enterprise Products Partners, LP (EPD.N) EPD.N Closing Price Target Price Date (US$) (US$) Rating 16-Apr N 18-Apr May Aug Nov Nov R 06-Nov N 09-Jan Jan Mar O 01-May Aug Oct Dec Jan Oct Nov R 02-Dec O 21-Dec Dec R 05-Jan O 28-Jan * Asterisk signifies initiation or assumption of coverage. N EU T RA L REST RI C T ED O U T PERFO RM

48 3-Year Price and Rating History for Genesis Energy, LP (GEL.N) 3-Year Price and Rating History for NuStar Energy, LP (NS.N) GEL.N Closing Price Target Price Date (US$) (US$) Rating 03-May O 16-Jul N 27-Aug Jan O 02-May Apr R 07-Apr O 29-Apr Jul R 17-Jul O 04-Nov Dec Feb * Asterisk signifies initiation or assumption of coverage. O U T PERFO RM N EU T RA L REST RICT ED 3-Year Price and Rating History for Kinder Morgan, Inc. (KMI.N) NS.N Closing Price Target Price Date (US$) (US$) Rating 25-Apr U 16-Jul * 13-Nov N 06-Feb Apr Jul O 08-Dec Feb N 23-Apr Oct Nov Dec * Asterisk signifies initiation or assumption of coverage. U N D ERPERFO RM N EU T RA L O U T PERFO RM 3-Year Price and Rating History for NuStar GP Holdings, LLC (NSH.N) KMI.N Closing Price Target Price Date (US$) (US$) Rating 18-Apr O 18-Jul Oct Dec Jan Apr Jul Aug Jan Apr Sep R 22-Oct N 26-Oct R 27-Oct N 07-Dec Dec Jan O * Asterisk signifies initiation or assumption of coverage. O U T PERFO RM REST RICT ED N EU T RA L NSH.N Closing Price Target Price Date (US$) (US$) Rating 16-Apr N 16-Jul * 10-Sep U 13-Nov N 09-Jan Feb Apr Jul O 08-Dec Feb N 23-Apr Oct Nov Dec * Asterisk signifies initiation or assumption of coverage. N EU T RA L U N D ERPERFO RM O U T PERFO RM 3-Year Price and Rating History for ONEOK Partners, LP (OKS.N) 3-Year Price and Rating History for Magellan Midstream Partners, LP (MMP.N) MMP.N Closing Price Target Price Date (US$) (US$) Rating 03-May O 26-Jul Nov Jan Feb Apr May Aug Nov Nov N 06-Feb Aug O 04-Nov Dec Feb N * Asterisk signifies initiation or assumption of coverage. O U T PERFO RM N EU T RA L OKS.N Closing Price Target Price Date (US$) (US$) Rating 02-May N 01-Aug Nov Nov Dec Feb May Aug Nov Nov O 03-Dec Jan Feb N 07-Aug O 14-Sep Oct N 05-Nov Dec Dec Feb * Asterisk signifies initiation or assumption of coverage. N EU T RA L O U T PERFO RM