Equity Research. MLP Monthly: October Abridged Edition. October 6, Master Limited Partnerships

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1 October 6, 2014 Equity Research MLP Monthly: October Abridged Edition Interest Rates And Equity Weigh On Performance. Master Limited Partnerships (MLP) underperformed the market in September down 2.0% (as measured by the Wells Fargo Securities MLP Index), compared to the S&P 500 s loss of 1.6%. Year to date, MLPs are now up 16.9%, outpacing the S&P 500 s increase of 6.7%. September performance was primarily driven by the following factors: (1) The Fed confirmed intentions to end its bond-buying program and begin a move toward increasing rates. Consequently, investors started to focus on the potential impact of rising interest rates for MLP performance. (REITs and Utilities were down 6.2% and 2.2%, respectively, in September). (2) After being relatively quiet year to date, there was a noticeable uptick in secondary equity issuances. (3) Finally, lower crude prices likely weighed on performance (E&P and oilfield service stocks were down 8.7% and 7.6%, respectively, for the month). Master Limited Partnerships Outlook Backdrop Favorable, But Valuations Appear Rich. The combination of full valuations and the backlog of IPOs could continue to cause volatility in the sector for the balance of the year. However, we believe the current backdrop for MLPs remains attractive, with stable fundamentals, low interest rates, and relatively strong commodity prices. Further, fund flows remain strong, with a recent closed-end fund raise and several additional funds poised to launch in the coming months. We continue to maintain a long-term positive outlook for the sector, supported by (1) MLPs still attractive yields; (2) solid fundamentals (forecasted median distribution growth of 6-8%), driven by the continued build-out of midstream infrastructure; and (3) healthy fund flow. The MLP Model Remains In Vogue. While the KMI transaction caused some to question the long-term viability of the MLP model, events in the past month should put that question to bed. ENB took steps to strengthen EEP s cost of capital via a supportive dropdown, NiSource announced its intent to separate its midstream assets into a separate company and form an MLP, and TRP/TCP saw renewed investor interest on a belief that the company would accelerate its MLP strategy. Clearly, the market still views the MLP/GP structure as one of the most efficient means to unlock value. Lower Oil Prices? Here We Go Again Every year or two, commodity prices retreat and investors start to look at downside risk scenarios for energy stocks, including MLPs. As a reminder, MLPs exhibit the highest correlation to crude oil prices relative to any other commodity (i.e., a five-year historical correlation of 0.42, versus 0.33 to natural gas liquids, and 0.06 to natural gas). Consequently, lower oil prices generally result in negative MLP price performance. While many MLPs (i.e., pipelines) have predominantly fee-based cash flow models, most are still affected (indirectly) by oil price movements, as lower prices eventually cause a reduction in drilling activity and volume. MLPs with crude or natural gas liquid (NGL) exposure (principally those that own gathering and processing assets) will be more directly affected by lower crude prices (and/or NGL prices). Since the start of the year, WTI and Brent crude prices are down 7.4% and 14.6%, respectively, while NGL prices are down 13.4%. Top Picks. Our top picks are ACMP ($62.19), ETE ($57.25), WMB ($55.17), and WNRL ($35.06). Please see page 23 for rating definitions, important disclosures and required analyst certifications All estimates/forecasts are as of 10/06/14 unless otherwise stated. Michael Blum, Senior Analyst (212) / michael.j.blum@wellsfargo.com Sharon Lui, CPA, Senior Analyst (212) / sharon.lui@wellsfargo.com Praneeth Satish, Senior Analyst (212) / praneeth.satish@wellsfargo.com Eric Shiu, Associate Analyst (212) / eric.shiu@wellsfargo.com Ned Baramov, CFA, Associate Analyst (212) / ned.baramov@wellsfargo.com David Freeland, Associate Analyst (212) / david.freeland@wellsfargo.com Michael Webber, CFA, Senior Analyst (212) / michael.webber@wellsfargo.com Sam Dubinsky, Senior Analyst (212) / sam.dubinsky@wellsfargo.com Wells Fargo Securities, LLC does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of the report and investors should consider this report as only a single factor in making their investment decision.

2 Master Limited Partnerships The following is an abridged version of our full report published on October 6, 2014 Recent Rating Changes & Initiations (Last 90 Days) Initiations: VTTI Energy Partners, LP (VTTI) initiated with an Outperform rating on 8/26/14 Transocean Partners LLC (RIGP) initiated with an Outperform rating on 8/25/14 Rating Changes: Kinder Morgan, Inc. (KMI) upgraded to Outperform from Market Perform on 10/02/14 Suburban Propane Partners, L.P. (SPH) downgraded to Market Perform from Outperform on 9/22/14 Susser Petroleum Partners, LP (SUSP) downgraded to Market Perform from Outperform on 8/27/14 Delek Logistics Partners, LP (DKL) upgraded to Outperform from Market Perform on 8/20/14 Crestwood Equity Partners LP (CEQP) downgraded to Market Perform from Outperform on 8/11/14 LRR Energy, L.P. (LRE) downgraded to Market Perform from Outperform on 8/5/14 Targa Resources Partners, L.P. (NGLS) downgraded to Market Perform from Outperform on 7/2/14 Energy Transfer Partners, L.P. (ETP) upgraded to Outperform from Market Perform on 7/2/14 MLPs Offer Stable Distributions, In Our View The following table assigns our MLP coverage universe into four broad categories: solid, secure, other, and higher risk. The table is meant to assist investors in determining the relative safety and security of MLP distributions. These categories are not meant to correspond to our ratings; rather they represent one tool investors can use to match their risk tolerance with MLP investment offerings. It s important to note that we view MLPs in the secure and other categories as being able to support steady and potentially growing distributions. However, the cash flows underlying these businesses typically have some element of volatility, which can be managed via a higher distribution coverage ratio, a more conservative balance sheet, etc., and is likely reflected in the valuation of the security. Note: We added a higher risk category to the distribution stability pyramid displayed in the following exhibit. This category contains MLPs that we believe have elevated risk with respect to distribution reductions. While we don t necessarily predict distribution reductions for any of these partnerships, we have highlighted these MLPs given that they share criteria that we believe could potentially lead to a distribution reduction if fundamentals worsen. Notably, MLPs listed in this new category have tight distribution coverage (and limited growth potential), high debt leverage, and/or significant re-contracting risk. 2

3 MLP Monthly: October Abridged Edition Exhibit 1. Relative MLP Distribution Security 1,2 Median Yield 3.7% "Solid" Distributions EPD, HEP, MMP, MPLX, PAA, SEP, SXL, TGP, VLP These MLPs have predominantly fee-based cash flows, minimal (or no) direct commodity exposure, and ample coverage ratios, in our view. Median Yield 4.8% Median Yield 7.0% "Secure" Distributions ACMP, BWP 3, CPLP, DKL, DPM, ENBL, ENLK, EQM, ETP, EXLP, GEL, GLOP, GMLP, KMP/KMR, OILT, OKS, PBFX, QEPM, RGP, RIGP, SDLP, SUSP, TCP, TEP, TLLP, TOO, USAC, VTTI, WES, WNRL Other AMID, APL, APU, ARCX, ARLP, BBEP, BKEP, BPL, CMLP, EPB, EROC, GLP, LGCY, LRE, MCEP, MEMP, MEP, MMLP, MWE, NGL, NGLS, NMM, NRP, QRE, SPH, VNR, WPZ These MLPs have moderate commodity exposure, other non-fee based activities (e.g., marketing), and/or volumetric risk. These MLPs have meaningful commodity exposure and/or other nonfee based activities. Median Yield 9.2% "Higher Risk" ARP, EEP/EEQ, EVEP, LINE/LNCO, NKA, NS, SXE These MLPs have high leverage, tight coverage (limited growth), and/or meaningful recontracting risk. Note 1: The preceding list does NOT reflect our investment ratings and/or valuation ranges. Please refer to the table at the end of this note for our current ratings and valuation ranges. Note 2: Excludes GPs and i-units, which would share the same risk profile as their underlying MLP Note 3: The preceding list represents distribution security on a forward-looking basis. Post the reduction in distribution, BWP is generating approximately 4x the cash flow required to support the current distribution and is therefore categorized as secure. Source: FactSet and Wells Fargo Securities, LLC estimates Interest Rates And Equity Weigh On Performance Master Limited Partnerships (MLPs) underperformed the market in September, down 2.0% (as measured by the Wells Fargo Securities MLP Index), compared to the S&P 500 s loss of 1.6%. Year to date, MLPs are now up 16.9%, outpacing the S&P 500 s gain of 6.7%, and have generated a total return of 21.7%, compared to 8.3% for the S&P 500. Looking at MLPs versus other yield-oriented securities, MLPs year-to-date price performance of 16.9% compares to an increase of 10.8% for Utilities (as measured by the S&P 500 Utilities Index) and 9.6% for real estate investment trusts (REIT) (as measured by the FTSE NAREIT Index). 3

4 Master Limited Partnerships Exhibit 2. MLP Price Performance And Yield Relative To Other Income-Oriented Investments 12% 10% 10.0% 8% Yield (%) 6% 4% 2% 5.8% 5.6% 4.8% 4.3% 3.7% 3.7% 2.5% 2.0% 0% BDCs ML U.S. B-BB High Yield MLP Yield Median Moody's BAA (Investment Grade) Index FTSE NAREIT Index Moody's Municipal Bond Index S&P 500 Utilities Index U.S. 10-Year Treasury S&P 500 Index 2014TD (8.4%) (2.1%) 16.9% 1.2% 9.6% 9.2% 10.8% (0.7%) 6.7% Price Perf. Note 1: Price performance for high yield index is based on the FINRA - BLP Active High Yield US Corporate Bond Index Note 2: Price performance for the investment grade index is based on the FINRA - BLP Active IG US Corporate Bond Index Note 3: Price performance for the municipal bond index is based on the S&P National AMT-Free Municipal Bond Index Note 4: Price performance for the U.S. 10-year Treasury is based on the S&P/BGCantor 7-10 Year U.S. Treasury Bond Index Source: Partnership reports and Wells Fargo Securities, LLC estimates September performance was primarily driven by the following factors. (1) On September 27, 2014, the Fed confirmed intentions to end quantitative easing after October and said that while rates would stay low for a considerable time after the bond-buying program ends, the Fed does intend to begin raising the fed funds rate sometime in 2015 (assuming economic data supports such a move). While these statements were overall benign, investors started to focus on the potential impact of rising interest rates for MLP performance. (REITs and Utilities were down 6.2% and 2.2%, respectively, in September). (2) After being a relatively quiet year to date, there was a noticeable uptick in secondary equity issuances. In September, there were 11 secondary offerings and two IPOs, raising $2.8B of new equity (gross proceeds). This compares to the prior-year period (i.e., September 2013) of eight offerings (i.e., seven secondaries and one IPO), and gross proceeds of $1.2B and an average of $1.35B raised per month from January to August (3) As noted, lower crude prices likely weighed on performance. WTI crude prices were down 5.0% for the month, while natural gas prices declined by only 0.2%. To note, E&P (as measured by the S&P 500 Oil & Gas Exploration & Production Index) and oilfield service (as measured by the S&P 500 Oil & Gas Equipment & Services Index) stocks were down 8.7% and 7.6%, respectively, for the month. Outlook Backdrop Favorable, But Valuations Appear Rich The combination of higher valuations and the backlog of IPOs could continue to cause volatility in the sector for the balance of the year. A surge in equity offerings sometimes causes temporary supply/demand imbalances in the sector, driving near-term MLP weakness. However, we believe the backdrop for MLPs remains attractive, with stable fundamentals, low interest rates, and relatively strong commodity prices. Further, fund flows remain strong with a recent closed-end fund raise ($ B) and several additional funds poised to launch in the coming months. Long-term positive view intact. We view overall fundamentals as solid, with the build-out of U.S. energy infrastructure visible for the next several years, driven by robust shale volume growth. In total, we forecast organic capital spending of about $106 billion for (or an average of approximately $35 billion annually) and a three-year distribution compound annual growth rate (CAGR) of 7.4% for the sector. We continue to see demand for infrastructure across the following areas: crude oil pipelines and logistics; gathering, processing, and NGL fractionation; exports (LNG and NGLs); storage opportunities in select markets; natural gas pipeline expansion and new-build opportunities, primarily in the Northeast market; and repurposing/re-configuration of existing pipelines. Our positive long-term outlook is also supported by (1) MLPs still attractive yields and (2) what we see as continued healthy fund flow into the sector. 4

5 MLP Monthly: October Abridged Edition Valuation Overview We expect MLPs to trade at a premium to historical levels given overall sector maturation and improved liquidity. MLPs under coverage currently have a median yield of 5.6% and trade at 2015 estimated price-todistributable cash flow and EV-to-adjusted EBITDA multiples of 13.8x and 13.5x, respectively. This compares to the historical five-year medians of 7.6%, 12.6x, and 10.8x, and the ten-year medians of 7.3%, 12.8x, and 10.9x, respectively. Exhibit 3. Current Versus Historical MLP Valuation Metrics 5-Year Premium 10-Year Premium MLP Valuation Metrics Current Average (Discount) Average (Discount) Yield 5.6% 7.6% 35.0% 7.3% 29.6% Price-to-DCF 13.8x 12.6x 9.1% 12.8x 7.4% EV-to-EBITDA 13.5x 10.8x 24.8% 10.9x 23.7% Spread-to-10-year Treasury Spread-to-investment grade bonds - discount (premium) Spread-to-high yield bonds - discount (premium) 32 (26) - (88) - Note: Current P/DCF and EV/EBITDA multiples are based on our median 2015 estimates/ unit prices as of September 30, 2014 Note: EV/EBITDA multiple is adjusted to reflect % of cash flow to GP Source: Partnership reports, FactSet, and Wells Fargo Securities, LLC estimates How To Play Top Picks We believe MLP investing has become more thematic in nature. Accordingly, stock selection and picking the right themes have become more crucial to outperformance. In general, MLP investors are more willing to pay a premium for (1) visible, above-average growth, (2) strong distribution coverage, and (3) balance sheet strength. We generally favor crude- and NGL-leveraged names, though note that investors recently have begun to rotate toward natural gas pipeline MLPs with exposure to flow reversal opportunities in the Northeast. We also continue to like general partners (GP) given IDR leverage, option value, and growing institutional interest. We continue to favor MLPs generating steady, fee-based cash flow with outsized, visible multiyear distribution growth potential. Core Holdings. We continue to view EPD, MMP, and PAA as core holdings in any MLP portfolio. These partnerships offer investors the enviable mix of a top-flight asset base, stable cash flow stream, excellent track record of delivering consistent earnings, visible growth, strong coverage ratio, and conservative balance sheet and capital structure. Our list of core holdings does not necessarily correspond to our current ratings, which are predicated on 12-month valuation ranges. We rate EPD and MMP Outperform, and PAA Market Perform. However, these are stocks that we believe should be considered when constructing a long-term portfolio of MLP securities. Top Picks. Our top picks are ACMP ($62.19), ETE ($57.25), WMB ($55.17), and WNRL ($35.06). 5

6 Master Limited Partnerships Exhibit 4. Top Picks By Subsector Price Current Valuation Range Total Return 10/06/2014 Yield Low High Potential Large-Cap Pipeline MLPs Energy Transfer Partners L.P. (ETP) $ % $64 $68 7% Enterprise Products Partners L.P. (EPD) $ % $42 $45 15% Small & Mid Cap Midstream MLPs Delek Logistics Partners L.P. (DKL) $ % $45 $47 23% Tallgrass Energy Partners LP (TEP) $ % $47 $50 14% Western Refining Logistics, L.P. (WNRL) $ % $37 $41 15% Gathering And Processing MLPs Access Midstream Partners LP (ACMP) $ % $68 $72 17% Atlas Pipeline Partners L.P. (APL) $ % $38 $40 16% DCP Midstream Partners L.P. (DPM) $ % $59 $63 20% Marine MLPs Navios Maritime Partners L.P. (NMM) $ % $19 $21 20% Seadrill Partners LLC (SDLP) $ % $38 $41 37% General Partnerships Energy Transfer Equity L.P. (ETE) $ % $73 $75 33% Kinder Morgan Inc. (KMI) $ % $46 $48 26% Williams Companies Inc. (WMB) $ % $70 $75 36% Source: FactSet and Wells Fargo Securities, LLC estimates 6

7 MLP Monthly: October Abridged Edition Lower Oil Prices? Here We Go Again Every year or two, commodity prices retreat and investors start to look at downside risk scenarios for energy stocks, including MLPs. As a reminder, MLPs exhibit the highest correlation to crude oil prices relative to any other commodity (i.e., a five-year historical correlation of 0.42, versus 0.33 to natural gas liquids, and 0.06 to natural gas). Consequently, lower oil prices generally result in negative MLP price performance. While many MLPs (i.e., pipelines) have predominantly fee-based cash flow models, most are still affected (indirectly) by oil price movements as lower prices eventually cause a reduction in drilling activity and volume. MLPs with crude or NGL exposure (principally those that own gathering and processing assets) will likely be more directly affected by lower crude prices (and/or NGL prices). Since the start of the year, WTI and Brent crude prices are down 7.4% and 14.6%, respectively, while NGL prices are down 13.4%. Exhibit 5. Correlation Of The Wells Fargo Securities MLP Index With Other Asset Classes Interest Rates (10- Yr Treasury BLP HY US Corp Bond Index HY Spread To US10Yr IG Spread To US10Yr S&P 500 Natural Gas Crude Oil NGLs Utilities REITs (0.01) (0.56) (0.66) (0.01) (0.30) - (0.47) (0.21) (0.49) (0.11) (0.61) 0.81 (0.26) (0.17) (0.36) 0.78 (0.34) (0.51) 0.63 (0.54) (0.67) (0.31) 0.65 (0.33) (0.15) (0.33) (0.54) (0.72) (0.66) 0.87 (0.81) (0.73) (0.27) 0.82 (0.65) (0.52) (0.61) (0.53) (0.03) (0.02) 0.80 (0.32) (0.30) (0.10) 0.52 (0.59) (0.04) 2014TD 0.50 (0.04) Last 3 years 0.58 (0.01) (0.03) 0.45 (0.17) (0.06) Last 5 years (0.05) 0.65 (0.48) (0.36) Last 10 years (0.11) 0.76 (0.60) (0.63) Note 1: Correlation data for fixed income products is based on the average of monthly price changes. All other correlations are based on daily percent changes. Note 2: Correlation is based on the average of monthly price changes and includes a 1-month lag for the 10-year U.S. Treasury Source: FactSet, Standard & Poor s, and Wells Fargo Securities, LLC In the following Exhibit, we have also included a table that outlines MLPs exposure by commodity and their percent of cash flow that is generated from fee-based activities. 7

8 Master Limited Partnerships Exhibit 6. MLP Commodity Mix Commodity Mix 2015 Estimates 2015E Base Natural Refined Crude Fee-Based Ticker Calc Gas NGLs Products Oil Other Cash Flow Large Cap Pipeline MLPs Small & Mid Cap. Buckeye Partners, L.P. BPL E 0% 0% 83% 13% 3% 94% Boardw alk Pipeline Partners, LP BWP R 95% 5% 0% 0% 0% 97% Enbridge Energy Partners, L.P. Class A EEP E 4% 4% 0% 92% 0% 85% El Paso Pipeline Partners, L.P. EPB E 100% 0% 0% 0% 0% 100% Enterprise Products Partners L.P. EPD G 15% 58% 2% 17% 8% 74% Energy Transfer Partners, L.P. ETP E 43% 28% 12% 17% 0% 78% Kinder Morgan Energy Partners, L.P. KMP E 42% 2% 19% 25% 13% 84% Magellan Midstream Partners, L.P. MMP E 0% 0% 62% 38% 0% 86% NuStar Energy L.P. NS E 0% 0% 58% 42% 0% 96% ONEOK Partners, L.P. OKS E 23% 73% 0% 4% 0% 71% Plains All American Pipeline, L.P. PAA E 5% 6% 0% 89% 0% 71% Spectra Energy Partners, LP SEP E 81% 4% 0% 14% 0% 100% Sunoco Logistics Partners L.P. SXL E 0% 5% 17% 77% 0% 85% Williams Partners L.P. WPZ E 57% 11% 0% 0% 32% 75% Large Cap Pipeline MLP Average 33% 14% 18% 31% 4% 85% Arc Logistics Partners LP ARCX R 33% 0% 21% 37% 8% 100% Blueknight Energy Partners, L.P. BKEP O 0% 0% 0% 52% 48% 100% Crestw ood Midstream Partners LP CMLP G 89% 8% 0% 0% 3% 97% Delek Logistics Partners LP DKL E 0% 0% 51% 49% 0% 91% Exterran Partners, L.P. EXLP E 100% 0% 0% 0% 0% 100% Genesis Energy, L.P. GEL O 0% 0% 9% 73% 18% 37% Global Partners LP GLP G 0% 0% 74% 10% 16% 5% Holly Energy Partners, L.P. HEP R 0% 0% 72% 28% 0% 100% Martin Midstream Partners L.P. MMLP E 0% 33% 6% 8% 54% 63% MPLX LP MPLX R 0% 3% 43% 54% 0% 100% NGL Energy Partners LP NGL E 0% 21% 2% 56% 21% 29% Niska Gas Storage Partners LLC NKA E 100% 0% 0% 0% 0% 67% Oiltanking Partners, L.P. OILT R 0% 14% 21% 66% 0% 100% PBF Logistics LP PBFX E 0% 0% 0% 100% 0% 100% Susser Petroleum Partners LP SUSP G 0% 0% 74% 0% 26% 21% TC PipeLines, LP TCP O 100% 0% 0% 0% 0% 100% Tallgrass Energy Partners LP TEP E 33% 18% 0% 49% 0% 95% Tesoro Logistics LP TLLP E 0% 0% 84% 16% 0% 100% USA Compression Partners LP USAC E 100% 0% 0% 0% 0% 100% Valero Energy Partners LP VLP R 0% 0% 62% 38% 0% 100% VTTI Energy Partners LP VTTI E 0% 0% 100% 0% 0% 100% USA Compression Partners LP USAC E 100% 0% 0% 0% 0% 100% Western Refining Logistics, LP WNRL E 0% 0% 55% 35% 10% 100% Small Cap Pipeline MLP Average 28% 4% 29% 29% 9% 83% Base Calc Key: E = EBITDA; G = Gross Margin; O = Operating Margin ; R = Revenue Continued on the next page 8

9 MLP Monthly: October Abridged Edition MLP Commodity Mix (Continued) Commodity Mix 2015 Estimates 2015E Base Natural Refined Crude Fee-Based Ticker Calc Gas NGLs Products Oil Other Cash Flow Access Midstream Partners, L.P. ACMP E 97% 3% 0% 0% 0% 66% American Midstream Partners, LP AMID G 48% 40% 0% 13% 0% 60% Atlas Pipeline Partners, L.P. APL G 47% 49% 0% 4% 0% 43% DCP Midstream Partners, LP DPM G 24% 71% 0% 5% 0% 61% EQT Midstream Partners LP EQM E 100% 0% 0% 0% 0% 100% Midcoast Energy Partners LP Class A MEP E 45% 44% 0% 11% 0% 40% MarkWest Energy Partners, L.P. MWE O 24% 74% 0% 3% 0% 70% Targa Resources Partners LP NGLS G 0% 91% 0% 9% 0% 62% QEP Midstream Partners LP QEPM E 78% 0% 0% 16% 7% 96% Regency Energy Partners LP RGP G 55% 42% 0% 0% 3% 67% Southcross Energy Partners, L.P. SXE G 57% 41% 0% 2% 0% 85% Western Gas Partners, LP WES G 71% 29% 0% 1% 0% 71% EnLink Midstream Partners, L.P. ENLK G 74% 19% 0% 7% 0% 98% Gathering & Processing MLP Average 55% 39% 0% 5% 1% 71% Atlas Resource Partners, L.P. ARP R 44% 8% 0% 39% 9% 0% BreitBurn Energy Partners L.P. BBEP R 16% 5% 0% 79% 0% 0% Eagle Rock Energy Partners, L.P. EROC R 26% 18% 0% 53% 2% 0% EV Energy Partners, L.P. EVEP R 60% 19% 0% 21% 0% 0% Legacy Reserves LP LGCY R 22% 5% 0% 72% 0% 0% Linn Energy, LLC LINE R 37% 14% 0% 49% 0% 0% LRR Energy, L.P. LRE R 21% 8% 0% 71% 0% 0% Mid-Con Energy Partners, LP MCEP R 1% 0% 0% 99% 0% 0% Memorial Production Partners LP MEMP R 26% 16% 0% 58% 0% 0% QR Energy, LP QRE R 11% 7% 0% 82% 0% 0% Vanguard Natural Resources, LLC VNR R 45% 17% 0% 38% 0% 0% Upstream MLP Average 28% 11% 0% 60% 1% 0% AmeriGas Partners, L.P. APU E 0% 100% 0% 0% 0% 0% Suburban Propane Partners, L.P. SPH E 0% 100% 0% 0% 0% 0% Propane MLP Average 0% 100% 0% 0% 0% 0% All MLPs Average 34% 18% 15% 29% 4% 64% Base Calc Key: E = EBITDA; G = Gross Margin; O = Operating Margin ; R = Revenue Source: Partnership reports and Wells Fargo Securities, LLC estimates Upstream MLPs Gathering & Processing MLPs Prop 9

10 Master Limited Partnerships What s Up(stream): Upstream MLP October Update Author: Praneeth Satish, Senior Analyst, Upstream MLPs, Equity Research Upstream MLPs Underperform MLP Index, But Outperform E&P C-Corps Upstream MLPs were down 7.3% in September on a market-cap basis versus a decline of 2.0% for the broader Wells Fargo Securities, MLP Index, a 1.6% decrease in the S&P 500, and a 13.5% decline for E&P C-Corps. We believe the underperformance this month was largely attributable to the recent decrease in crude oil prices and re-widening of crude basis in West Texas. Crude Basis Differentials Continue To Widen In West Texas, But Could Narrow By Year-End Crude oil basis differentials continue to widen in West Texas. The Midland-WTI differential widened to $11 per Bbl in Q3 14 versus $8 per Bbl in Q2 14. The differential is currently $7-8 per Bbl. The combination of growing production in the Permian Basin and limited takeaway solutions has resulted in wide basis differentials forming between Midland crude and other domestic oil hubs. Importantly, we expect the differential to narrow over the balance of 2014 as new takeaway pipeline infrastructure is brought into service. Specifically, the BridgeTex (Magellan/Occidental), Cactus (Plains), and Longhorn (Magellan) pipeline expansions are all slated to come online in the next few months, representing 450MMbls/d of incremental takeaway capacity. Additionally, Plains Sunrise pipeline is expected to come online in December, which should further help alleviate regional constraints in Midland. Crude Prices On The Decline Gauging Exposure In addition to wider basis differentials, crude oil prices have decreased in recent weeks. Since 6/30/14, the price of crude oil (WTI) has declined 13% to $91 per Bbl. Virtually all upstream MLPs under coverage have exposure to crude oil prices to varying degrees. The upstream MLPs with the highest oil exposure include MCEP, LGCY, and BBEP/QRE. However, as detailed below, upstream MLPs are able to significantly reduce near-term oil price exposure via robust hedging programs. On average, upstream MLPs have hedged 80-90% of H2 14 and approximately 70% of 2015E oil production. That being said, a sustained downturn in oil prices (and lower futures pricing) could negatively impact upstream MLPs as partnerships would likely be forced to enter into future hedges at lower prices. Hedges Significantly Reduce Exposure To Near-Term Fluctuations In Oil Prices All upstream MLPs routinely hedge the majority of oil and gas production under relatively conservative guidelines. The hedges serve to insulate a partnership from near-term fluctuations in the price of crude. Not surprisingly, we calculate that a $10/Bbl decline in the price of crude oil (or roughly 10%) would only reduce our Q4 14E EBITDA estimates by 2% on average for upstream MLPs under coverage. Hence, even if oil prices remained at roughly $90 for the balance of the year, our Q4 EBITDA estimates for upstream MLPs under coverage would only decrease slightly. Upstream MLPs with the greatest sensitivity to crude oil price fluctuations in Q4 14 include LGCY (5%), MCEP (3%), and QRE (3%). That said, most upstream MLPs have not fully hedged crude basis exposure, which suggests that the recent widening of basis differentials in West Texas is likely to negatively impact Q3 and Q4 earnings results for several partnerships, in our view. 10

11 MLP Monthly: October Abridged Edition The View From The Bridge: Marine MLP/GP October Update Author: Michael Webber, Senior Analyst and Donald Mclee, Associate Analyst Shipping, Equipment Leasing and Marine MLPs, Equity Research TK Lays Down Marine GP Blueprint Recently, Teekay hosted its long-awaited investor day, at which it formally indexed its dividend to its daughter company cash flow (TOO, TGP, and TNK), creating a dividend pass through format, and a 20% base-case three-year dividend CAGR. We believe TK s new dividend (about $2.25/share, based on an annualized Q1 estimate) and growth trajectory should align it closer to the other C-Corp GPs, and potentially lay down a road map for other emerging Marine GPs like GLOG and GLNG. TK remains one of our top picks, based on a target forward yield of %, which implies a valuation of $75-90/share. We believe that justifiable dividend range (and really, the justifiable yield for seaborne assets in a MLP/GP structure) will start to get more focus as TK settles in with its new comp set. The Old Growth Versus Security Debate, Coming To An Ocean Near You The question of where Marine GPs (and MLPs) should trade relative to their land-based cousins should start popping up more and more now, given the continued evolution of the space. TK s dividend growth (a 20-30% three-year CAGR, depending on new project execution) puts it firmly in the upper echelon of C-Corp GPs, with that growth rate, implying a yield around 2%. However, given relatively shorter contract durations (about five years) for some of its offshore assets and a slightly higher degree of operating risk for seaborne assets, we think that kind of valuation may be difficult. The question of what kind of risk premium to put on those cash flows then becomes one of the primary debates for the group, and while we think that a haircut should be somewhat significant, we believe our valuation range ( %) captures that risk, via a basis point (bp) risk premium, which still implies significant upside potential for TK, and the rest of Marine GP group, all else equal. It May Be Deja-Vu, All Over Again We think the Marine GP group has seen a particularly rough rotation trade over the past 12 months, with TK (late 2013), GLOG (H1 2014), GLNG (summer 2014), and now TK again (to some extent), all seeing a degree of volatility from what has turned out to be a somewhat inelastic bid for the group. What breaks that cycle? Again, all roads may lead back to TK as its new indexed dividend policy more closely aligns it with the broader MLP/GP complex and may help drag the Marine group closer to the fairway for MLP investors, which may help deepen the bid for the entire group. New Entrants Hanging In Better Than Old Guard Transocean Partners (RIGP) and Höegh LNG Partners (HMLP) priced their IPOs on July 31 and August 7, respectively, adding another offshore (drilling) and LNG (FSRU) name to the marine MLP universe, which now increases to 11 members (from 9). Since their respective IPOs, RIGP and HMLP are up an average of about 3.1% since inception, versus the rest of the Marine MLP group, which is down 5.5% (the S&P 500 is up 2% during that period), and are now trading with forward yields of 5.7% and 5.2%, a premium to the Marine MLP universe median yield of 6.1%. That outperformance (to a degree) seems to have come at the expense of some existing players, with SDLP pulling back 11.5% month over month, which we believe is also due to headline risk around the broader offshore space. While new entrants like RIGP and HMLP do not yet have the IDR headwinds that some of the more mature Marine MLPs are starting to develop, we continue to see value in a number of existing names, particularly SDLP, NMM, TOO, and GLOP. SDLP And NMM Remain Our Top Marine MLP Picks NMM continues to inch toward a new growth phase (following the two accretive containership deals done at 6.2x EBITDA, on average), with our estimated 2015 coverage ratio now at about 1.14x. While there is still work to be done, given that positive momentum and NMM s 9.0% yield, we believe it is the best way to play the back end of the marine MLP curve. SDLP remains our other top pick, given its significant value (7% yield) and its 25% annual growth. We continue to note that SDLP is actually growing twice as fast as group leader GLOP (about 28%, versus about 15%); however, its yield is 210 bps wider and, while fleet/contract details could drive some of that disconnect, we think there is significant value. 11

12 Master Limited Partnerships Mining The Data: Coal MLP October Update Author: Sam Dubinsky, Senior Analyst, and Amir Chaudhri, Associate Analyst Metals and Mining, Equity Research Coal Industry Overview The coal industry mines two types of coal: thermal and metallurgical. Thermal coal is used as a fuel source for electricity generation and competes with natural gas. Thermal coal fundamentals have been challenging over the past several years, due to weak natural gas prices, which have resulted in utilities switching away from coal in favor of natural gas. Metallurgical coal has been in a multiyear downturn, as well, though, due to slowing global steel production growth, compounded by increasing supply from low-cost mining regions. The year 2014 will likely be a muted one for thermal coal companies as most miners have locked in contracts at depressed pricing, which will likely limit earnings upside. Still, we believe fundamentals are improving, which may set the stage for a better outlook in We are growing more constructive on the thermal coal industry, due to the end of inventory destocking at utilities, which weighed on demand and pricing through most of 2012 and Re-stocking should occur if utilities experience normal seasonal burn rates (i.e., a cold winter, hot summer, etc.). Year-end coal stockpiles hit an eight-year low of 148MM short tons exiting 2013 and then declined a further 20%, to a low of 118MM tons at the end of March. Stockpiles rebounded to 125MM tons exiting May, but remained about 27% below the five-year trailing average of about 171MM tons at the end of July. We have been more cautious on the metallurgical coal market. Spot rates are currently near $110/MT, which is about 25% below average 2013 levels of $147/MT and more than 40% below average 2012 levels of $190/MT, and at a level where most North American miners fail to generate meaningful profit. Sluggish global steel production, competition from lower cost mining regions, and FX have more than offset tighter fundamentals, resulting in weak North American fundamentals. Weak International Demand Weighing On U.S. Miners The quarterly met coal bench mark, set between Australian coal producers and Japanese steel mills, fell to a six-year low of $119/MT down $1 from Q3 settlement of $120/MT. Some market participants believe that the benchmark could have fallen as low as $112/MT, due to the effects of the weaker Australian dollar. However, the market may have been propped up due to concerns that a steeper price reduction would have triggered another round of supply cuts before previously announced cuts have taken place. Total coal exports from the United States totaled 6.5MM short tons in July, down 18% year over year, and 53.8M short tons year to date, down 13% year over year, according to U.S. Census data. Thermal coal exports fell 12% sequentially and 37% year over year, to 1.6MM tons in July, due to a lack of electricity demand globally as well as global oversupply. Met coal exports fell 17% sequentially and 9% year over year to 4.8MM tons in July, due to decelerated global steel production and global oversupply. One of the top global met coal producers, Teck Resources, said it is lowering its exposure to the Chinese market to 25% of its met coal shipments down from 30% year over year as a strategic decision due to falling prices/demand in China. The company said it is currently operating its Western Canada mines below full annual capacity of 28MM MT and cited ramping supply at low-cost mines in Australia (partially currency driven) as more than offsetting global production cuts. Peabody Bucking The Trend Met and thermal coal miner Peabody raised its Q Adjusted EBITDA guidance to $ MM (versus the prior guidance of $ MM), citing strong cost controls and operating results despite the challenging environment. The company credited improved performance at its Australian met coal mines and emphasized better-than-expected results from the Western United States/PRB operations. The company also stated that it is seeing PRB coal supply agreements being signed well above published index prices, due in part to summerend customer stockpiles being at nine-year lows. Peabody expects PRB realizations per ton to be up year over year in 2015, due to improved demand, driven by the basin s cost competitiveness versus natural gas, as well as improving rail performance. 12

13 MLP Monthly: October Abridged Edition MLP Comp Table Potential Price Current Market YTD Valuation Range Return Our 3-Yr Est. Tax Form: Primary Ticker 10/06/2014 Yield Cap ($MM) Perf. Low High Rating Distrib CAGR Est. Deferral Analyst Williams Partners L.P. WPZ $ % $34,589 3% $59 $62 22% Outperform 3.4% K-1: 80% S. Lui Enterprise Products Partners L.P. EPD $ % $91,473 18% $42 $45 15% Outperform / V 6.2% K-1: 90% M. Blum El Paso Pipeline Partners, L.P. EPB $ % $14,333 13% $43 $44 13% Market Perform 0.6% K-1: 80% M. Blum Kinder Morgan Energy Partners, L.P. KMP $ % $63,420 17% $99 $102 13% Market Perform 3.4% K-1: 90% M. Blum Spectra Energy Partners, LP SEP $ % $19,593 10% $52 $56 13% Market Perform 7.1% K-1: 80% M. Blum Kinder Morgan Management, LLC KMR $ % - 33% $100 $103 12% Market Perform 3.4% 1099: 0% M. Blum Buckeye Partners, L.P. BPL $ % $13,412 8% $79 $83 11% Market Perform 5.4% K-1: 80% M. Blum Magellan Midstream Partners, L.P. MMP $ % $21,333 28% $86 $89 11% Outperform 12.5% K-1: 80% S. Lui Boardw alk Pipeline Partners, LP BWP $ % $7,643 (31%) $18 $20 10% Market Perform - K-1: 80% S. Lui Plains All American Pipeline, L.P. PAA $ % $29,434 11% $57 $60 7% Market Perform 8.4% K-1: 80% M. Blum Energy Transfer Partners, L.P. ETP $ % $37,159 15% $64 $68 7% Outperform 4.6% K-1: 80% M. Blum ONEOK Partners, L.P. OKS $ % $19,558 5% $54 $57 6% Market Perform 6.5% K-1: 80% M. Blum Enbridge Energy Management, L.L.C. EEQ $ % - 34% $34 $36 2% Market Perform 4.2% 1099: 0% S. Lui Sunoco Logistics Partners L.P. SXL $ % $13,783 25% $45 $48 2% Market Perform / V 16.3% K-1: 80% M. Blum NuStar Energy L.P. NS $ % $7,801 29% $60 $64 1% Market Perform 2.4% K-1: 80% M. Blum Enbridge Energy Partners, L.P. Class A EEP $ % $19,479 26% $34 $36 (1%) Market Perform 4.2% K-1: 100% S. Lui Large Cap Pipeline MLP Median 5.8% $19,576 16% 11% 4.6% 80% Niska Gas Storage Partners LLC NKA $ % $1,245 (15%) $15 $17 38% Market Perform 0.1% K-1: 80% M. Blum NGL Energy Partners LP NGL $ % $4,806 12% $46 $49 30% Outperform 11.0% K-1: 80% M. Blum Martin Midstream Partners L.P. MMLP $ % $1,878 (13%) $42 $45 26% Market Perform 3.4% K-1: 80% M. Blum Crestw ood Midstream Partners LP CMLP $ % $6,354 (13%) $24 $26 24% Outperform 5.3% K-1: 80% M. Blum Delek Logistics Partners LP DKL $ % $1,200 24% $45 $47 23% Outperform / V 15.1% K-1: 80% M. Blum USA Compression Partners LP USAC $ % $1,530 (10%) $26 $28 20% Market Perform / V 2.5% K-1: 80% S. Lui Blueknight Energy Partners, L.P. BKEP $ % $567 (7%) $8 $10 20% Market Perform 12.8% K-1: 80% M. Blum Global Partners LP GLP $ % $2,073 12% $42 $45 16% Market Perform 6.8% K-1: 80% M. Blum Western Refining Logistics, LP WNRL $ % $1,540 36% $37 $41 15% Outperform / V 15.6% K-1: 80% M. Blum PBF Logistics LP PBFX $ % $811 NA $27 $29 15% Market Perform / V 13.3% K-1: 80% P. Satish Tallgrass Energy Partners LP TEP $ % $2,423 68% $47 $50 14% Outperform / V 16.4% K-1: 80% M. Blum VTTI Energy Partners LP VTTI $ % $501 NA $26 $28 13% Outperform / V 13.4% 1099: 45% P. Satish Tesoro Logistics LP TLLP $ % $4,882 30% $72 $75 12% Outperform 15.5% K-1: 80% S. Lui Arc Logistics Partners LP ARCX $ % $427 13% $25 $27 12% Market Perform / V 5.6% K-1: 70% M. Blum Valero Energy Partners LP VLP $ % $2,242 34% $48 $52 11% Outperform / V 22.7% K-1: 80% M. Blum Genesis Energy, L.P. GEL $ % $6,345 (1%) $53 $57 11% Market Perform 10.4% K-1: 90% M. Blum Exterran Partners, L.P. EXLP $ % $2,663 (4%) $28 $30 8% Market Perform 2.5% K-1: 80% S. Lui Susser Petroleum Partners LP SUSP $ % $1,437 66% $54 $56 4% Market Perform / V 15.9% K-1: 55% S. Lui Holly Energy Partners, L.P. HEP $ % $3,019 15% $34 $36 (0%) Market Perform 5.5% K-1: 75% M. Blum TC PipeLines, LP TCP $ % $5,739 39% $62 $65 (0%) Market Perform 6.5% K-1: 80% M. Blum MPLX LP MPLX $ % $4,838 36% $56 $60 (2%) Market Perform / V 18.3% K-1: 80% M. Blum Oiltanking Partners, L.P. OILT $ % $4,216 56% $43 $46 (6%) Market Perform / V 19.0% K-1: 80% M. Blum Small Cap Midstream MLP Median 4.9% $2,157 14% 14% 11.9% 80% EQT Midstream Partners LP EQM $ % $5,797 50% $104 $107 22% Outperform 22.3% K-1: 80% M. Blum DCP Midstream Partners, LP DPM $ % $8,305 7% $59 $63 20% Outperform 7.8% K-1: 70% M. Blum Southcross Energy Partners, L.P. SXE $ % $1,007 21% $23 $25 18% Outperform / V 7.4% K-1: 80% M. Blum QEP Midstream Partners LP QEPM $ % $1,271 (0%) $25 $27 17% Outperform / V 16.5% K-1: 80% M. Blum Access Midstream Partners, L.P. ACMP $ % $15,972 10% $68 $72 17% Outperform 21.0% K-1: 80% S. Lui American Midstream Partners, LP AMID $ % $467 7% $31 $33 17% Outperform 7.7% K-1: 80% M. Blum Midcoast Energy Partners LP Class A MEP $ % $1,230 12% $23 $25 16% Outperform / V 13.8% K-1: 80% S. Lui Atlas Pipeline Partners, L.P. APL $ % $5,214 2% $38 $40 16% Outperform 6.6% K-1: 80% P. Satish Enable Midstream Partners LP ENBL $ % $12,626 NA $25 $27 11% Market Perform / V 10.7% K-1: 80% M. Blum Western Gas Partners, LP WES $ % $10,773 19% $76 $81 11% Market Perform 12.1% K-1: 80% S. Lui Targa Resources Partners LP NGLS $ % $10,810 31% $68 $72 7% Market Perform 9.2% K-1: 80% M. Blum EnLink Midstream Partners, L.P. ENLK $ % $12,345 11% $30 $32 6% Market Perform 9.1% K-1: 80% S. Lui Regency Energy Partners LP RGP $ % $18,214 20% $29 $32 3% Market Perform 6.5% K-1: 80% M. Blum MarkWest Energy Partners, L.P. MWE $ % $18,068 14% $72 $76 3% Market Perform 8.5% K-1: 80% M. Blum Gathering & Processing MLP Median 4.8% $9,539 12% 16% 9.1% 80% Eagle Rock Energy Partners, L.P. EROC $ % $1,855 (44%) $4 $5 47% Market Perform / V 32.2% K-1: 80% P. Satish Vanguard Natural Resources, LLC VNR $ % $3,678 (13%) $30 $32 30% Market Perform 4.3% K-1: 75% P. Satish QR Energy, LP QRE $ % $2,368 8% $20 $24 30% Market Perform 0.0% K-1: 80% P. Satish BreitBurn Energy Partners L.P. BBEP $ % $4,358 (5%) $22 $24 29% Outperform 2.8% K-1: 75% P. Satish Atlas Resource Partners, L.P. ARP $ % $2,702 (10%) $20 $22 27% Market Perform 1.7% K-1: 90% P. Satish Legacy Reserves LP LGCY $ % $2,968 (3%) $30 $32 23% Outperform 4.3% K-1: 70% P. Satish Mid-Con Energy Partners, LP MCEP $ % $591 (6%) $23 $25 22% Outperform 3.6% K-1: 60% P. Satish Memorial Production Partners LP MEMP $ % $2,975 (2%) $23 $25 22% Market Perform 3.3% K-1: 75% P. Satish LinnCo. LLC LNCO $ % $13,034 (9%) $29 $31 18% Market Perform / V 1.5% 1099: 0% P. Satish EV Energy Partners, L.P. EVEP $ % $2,758 (1%) $35 $38 18% Market Perform 3.6% K-1: 75% P. Satish Linn Energy, LLC LINE $ % $19,113 (7%) $29 $31 15% Market Perform 1.5% K-1: 100% P. Satish LRR Energy, L.P. LRE $ % $721 2% $17 $18 12% Market Perform 0.6% K-1: 70% P. Satish Upstream MLP Median 10.2% $2,863 (6%) 22% 3.0% 75% Suburban Propane Partners, L.P. SPH $ % $3,957 (4%) $44 $47 9% Market Perform 3.1% K-1: 80% S. Lui AmeriGas Partners, L.P. APU $ % $6,585 3% $44 $47 7% Market Perform 3.0% K-1: 75% S. Lui Propane MLP Median 7.7% $5,271 (0%) 8% 3.1% 80% Seadrill Partners LLC SDLP $ % $5,521 (2%) $38 $41 37% Outperform / V 10.6% 1099: 80% M. Webber Capital Product Partners LP CPLP $ % $1,596 (6%) $11 $12 27% Outperform 5.9% 1099: 60% M. Webber Golar LNG Partners LP GMLP $ % $3,203 7% $36 $40 24% Outperform 5.4% 1099: 30% M. Webber Transocean Partners LLC RIGP $ % $1,703 NA $28 $30 23% Outperform / V : 80% M. Webber GasLog Partners LP GLOP $ % $1,119 NA $34 $38 22% Outperform / V : 30% M. Webber Navios Maritime Partners LP NMM $ % $1,915 (5%) $19 $21 20% Outperform 0.0% 1099: 31% M. Webber Teekay Offshore Partners L.P. TOO $ % $5,405 (1%) $35 $38 19% Outperform 6.9% 1099: 70% M. Webber Teekay LNG Partners L.P. TGP $ % $5,484 (2%) $42 $46 11% Market Perform - K-1: 70% M. Webber Marine MLP Median 6.7% $2,559 (2%) 23% 5.9% 60% Oxford Resource Partners, LP OXF $ % $179 (40%) $1.00 $ % Market Perform / V - K-1: 75% S. Dubinsky Natural Resource Partners L.P. NRP $ % $2,808 (40%) $16 $19 57% Market Perform 0.0% K-1: 65% S. Dubinsky Alliance Resource Partners, L.P. ARLP $ % $4,015 13% $52 $57 31% Market Perform 7.4% K-1: 80% S. Dubinsky Coal MLP Median 5.7% $2,808 (40%) 57% 3.7% 65% Energy Transfer Equity, L.P. ETE $ % $34,874 40% $73 $75 33% Outperform / V 21.7% K-1: 60% M. Blum Crestw ood Equity Partners LP CEQP $ % $2,326 (26%) $12 $14 32% Market Perform 8.8% K-1: 50% M. Blum Atlas Energy, L.P. ATLS $ % $2,408 (11%) $51 $53 30% Outperform 16.1% K-1: 75% P. Satish Alliance Holdings GP, L.P. AHGP $ % $4,023 15% $72 $77 16% Market Perform 9.8% K-1: 50% S. Dubinsky Western Gas Equity Partners LP WGP $ % $13,206 53% $63 $67 10% Outperform / V 22.8% K-1: 70% S. Lui NuStar GP Holdings, LLC NSH $ % $1,841 51% $37 $40 (4%) Market Perform 3.7% K-1: 80% M. Blum General Partner (MLP) Median 4.9% $3,215 27% 23% 13.0% 65% Williams Companies, Inc. WMB $ % $61,194 43% $70 $75 36% Outperform 18.4% 1099: 0% S. Lui Kinder Morgan, Inc. Class P KMI $ % $49,246 8% $46 $48 26% Outperform 11.6% 1099: 0% M. Blum Targa Resources Corp. TRGP $ % $8,699 56% $156 $161 18% Outperform 19.1% 1099: 0% M. Blum Plains GP Holdings LP Class A PAGP $ % $4,594 12% $32 $35 15% Market Perform / V 16.9% 1099: 100% M. Blum EnLink Midstream LLC ENLC $ % $6,675 11% $40 $44 7% Market Perform / V 21.3% 1099: 0% S. Lui ONEOK, Inc. OKE $ % $14,411 18% $64 $67 6% Market Perform 8.4% 1099: 0% M. Blum General Partner (C-Corp) Median 2.8% $11,555 15% 16% 17.6% 0% All MLPs Average 6.0% $9,076 10% 17% 8.6% 1614% All MLPs Median 5.8% $4,023 9% 15% 6.7% 727% WMLP Wells Fargo Securities MLP Index 15% SP50 S&P 500 Index 6% Source: Partnership reports, FactSet, Standard & Poor's, and Wells Fargo Securities, LLC estimates C-Corp GPs MLP GPs Coal Marine Prop. Upstream MLPs Gathering & Processing MLPs Small Cap Large Cap Pipeline MLPs 13

14 Master Limited Partnerships MLP Comp Table (Sorted By Ticker) Intraday Ticker Price Current Market YTD Valuation Range Potential Our 3-Yr Est. Tax Form: Covering 10/06/2014 Yield Cap ($MM) Perf. Low High Return Rating Distrib CAGR Est. Deferral Analyst Access Midstream Partners, L.P. ACMP $ % $11,866 10% $68 $72 17% Outperform 21.0% K-1: 80% S. Lui Alliance Holdings GP, L.P. AHGP $ % $4,023 15% $72 $77 16% Market Perform 9.8% K-1: 50% S. Dubinsky American Midstream Partners, LP AMID $ % $323 7% $31 $33 17% Outperform 7.7% K-1: 80% M. Blum Atlas Pipeline Partners, L.P. APL $ % $2,948 2% $38 $40 16% Outperform 6.6% K-1: 80% P. Satish AmeriGas Partners, L.P. APU $ % $4,272 3% $44 $47 7% Market Perform 3.0% K-1: 75% S. Lui Arc Logistics Partners LP ARCX $ % $320 13% $25 $27 12% Market Perform / V 5.6% K-1: 70% M. Blum Alliance Resource Partners, L.P. ARLP $ % $3,227 13% $52 $57 31% Market Perform 7.4% K-1: 80% S. Dubinsky Atlas Resource Partners, L.P. ARP $ % $1,498 (10%) $20 $22 27% Market Perform 1.7% K-1: 90% P. Satish Atlas Energy, L.P. ATLS $ % $2,170 (11%) $51 $53 30% Outperform 16.1% K-1: 75% P. Satish BreitBurn Energy Partners L.P. BBEP $ % $2,336 (5%) $22 $24 29% Outperform 2.8% K-1: 75% P. Satish Blueknight Energy Partners, L.P. BKEP $ % $250 (7%) $8 $10 20% Market Perform 12.8% K-1: 80% M. Blum Buckeye Partners, L.P. BPL $ % $9,702 8% $79 $83 11% Market Perform 5.4% K-1: 80% M. Blum Boardw alk Pipeline Partners, LP BWP $ % $4,293 (31%) $18 $20 10% Market Perform - K-1: 80% S. Lui Crestw ood Equity Partners LP CEQP $ % $1,909 (26%) $12 $14 32% Market Perform 8.8% K-1: 50% M. Blum Crestw ood Midstream Partners LP CMLP $ % $4,057 (13%) $24 $26 24% Outperform 5.3% K-1: 80% M. Blum Capital Product Partners LP CPLP $ % $1,021 (6%) $11 $12 27% Outperform 5.9% 1099: 60% M. Webber Delek Logistics Partners LP DKL $ % $945 24% $45 $47 23% Outperform / V 15.1% K-1: 80% M. Blum DCP Midstream Partners, LP DPM $ % $5,995 7% $59 $63 20% Outperform 7.8% K-1: 70% M. Blum Enbridge Energy Partners, L.P. Class A EEP $ % $12,318 26% $34 $36 (1%) Market Perform 4.2% K-1: 100% S. Lui Enbridge Energy Management, L.L.C. EEQ $ % - 34% $34 $36 2% Market Perform 4.2% 1099: 0% S. Lui Enable Midstream Partners LP ENBL $ % $10,345 NA $25 $27 11% Market Perform / V 10.7% K-1: 80% M. Blum EnLink Midstream LLC ENLC $ % $6,580 11% $40 $44 7% Market Perform / V 21.3% 1099: 0% S. Lui EnLink Midstream Partners, L.P. ENLK $ % $10,770 11% $30 $32 6% Market Perform 9.1% K-1: 80% S. Lui El Paso Pipeline Partners, L.P. EPB $ % $9,591 13% $43 $44 13% Market Perform 0.6% K-1: 80% M. Blum Enterprise Products Partners L.P. EPD $ % $73,765 18% $42 $45 15% Outperform / V 6.2% K-1: 90% M. Blum EQT Midstream Partners LP EQM $ % $5,365 50% $104 $107 22% Outperform 22.3% K-1: 80% M. Blum Eagle Rock Energy Partners, L.P. EROC $ % $536 (44%) $4 $5 47% Market Perform / V 32.2% K-1: 80% P. Satish Energy Transfer Equity, L.P. ETE $ % $30,737 40% $73 $75 33% Outperform / V 21.7% K-1: 60% M. Blum Energy Transfer Partners, L.P. ETP $ % $22,386 15% $64 $68 7% Outperform 4.6% K-1: 80% M. Blum EV Energy Partners, L.P. EVEP $ % $1,633 (1%) $35 $38 18% Market Perform 3.6% K-1: 75% P. Satish Exterran Partners, L.P. EXLP $ % $1,616 (4%) $28 $30 8% Market Perform 2.5% K-1: 80% S. Lui Genesis Energy, L.P. GEL $ % $4,800 (1%) $53 $57 11% Market Perform 10.4% K-1: 90% M. Blum GasLog Partners LP GLOP $ % $755 NA $34 $38 22% Outperform / V : 30% M. Webber Global Partners LP GLP $ % $1,088 12% $42 $45 16% Market Perform 6.8% K-1: 80% M. Blum Golar LNG Partners LP GMLP $ % $2,002 7% $36 $40 24% Outperform 5.4% 1099: 30% M. Webber Holly Energy Partners, L.P. HEP $ % $2,180 15% $34 $36 (0%) Market Perform 5.5% K-1: 75% M. Blum Kinder Morgan, Inc. Class P KMI $ % $39,813 8% $46 $48 26% Outperform 11.6% 1099: 0% M. Blum Kinder Morgan Energy Partners, L.P. KMP $ % $42,736 17% $99 $102 13% Market Perform 3.4% K-1: 90% M. Blum Kinder Morgan Management, LLC KMR $ % - 33% $100 $103 12% Market Perform 3.4% 1099: 0% M. Blum Legacy Reserves LP LGCY $ % $1,577 (3%) $30 $32 23% Outperform 4.3% K-1: 70% P. Satish Linn Energy, LLC LINE $ % $9,468 (7%) $29 $31 15% Market Perform 1.5% K-1: 100% P. Satish LinnCo. LLC LNCO $ % $3,585 (9%) $29 $31 18% Market Perform / V 1.5% 1099: 0% P. Satish LRR Energy, L.P. LRE $ % $476 2% $17 $18 12% Market Perform 0.6% K-1: 70% P. Satish Mid-Con Energy Partners, LP MCEP $ % $452 (6%) $23 $25 22% Outperform 3.6% K-1: 60% P. Satish Memorial Production Partners LP MEMP $ % $1,826 (2%) $23 $25 22% Market Perform 3.3% K-1: 75% P. Satish Midcoast Energy Partners LP Class A MEP $ % $991 12% $23 $25 16% Outperform / V 13.8% K-1: 80% S. Lui Martin Midstream Partners L.P. MMLP $ % $1,186 (13%) $42 $45 26% Market Perform 3.4% K-1: 80% M. Blum Magellan Midstream Partners, L.P. MMP $ % $18,422 28% $86 $89 11% Outperform 12.5% K-1: 80% S. Lui MPLX LP MPLX $ % $4,572 36% $56 $60 (2%) Market Perform / V 18.3% K-1: 80% M. Blum MarkWest Energy Partners, L.P. MWE $ % $14,588 14% $72 $76 3% Market Perform 8.5% K-1: 80% M. Blum NGL Energy Partners LP NGL $ % $3,442 12% $46 $49 30% Outperform 11.0% K-1: 80% M. Blum Targa Resources Partners LP NGLS $ % $7,848 31% $68 $72 7% Market Perform 9.2% K-1: 80% M. Blum Niska Gas Storage Partners LLC NKA $ % $455 (15%) $15 $17 38% Market Perform 0.1% K-1: 80% M. Blum Navios Maritime Partners LP NMM $ % $1,399 (5%) $19 $21 20% Outperform 0.0% 1099: 31% M. Webber Natural Resource Partners L.P. NRP $ % $1,366 (40%) $16 $19 57% Market Perform 0.0% K-1: 65% S. Dubinsky NuStar Energy L.P. NS $ % $5,104 29% $60 $64 1% Market Perform 2.4% K-1: 80% M. Blum NuStar GP Holdings, LLC NSH $ % $1,815 51% $37 $40 (4%) Market Perform 3.7% K-1: 80% M. Blum Oiltanking Partners, L.P. OILT $ % $4,029 56% $43 $46 (6%) Market Perform / V 19.0% K-1: 80% M. Blum ONEOK, Inc. OKE $ % $13,333 18% $64 $67 6% Market Perform 8.4% 1099: 0% M. Blum ONEOK Partners, L.P. OKS $ % $13,787 5% $54 $57 6% Market Perform 6.5% K-1: 80% M. Blum Oxford Resource Partners, LP OXF $ % $16 (40%) $1 $2 69% Market Perform / V - K-1: 75% S. Dubinsky Plains All American Pipeline, L.P. PAA $ % $21,257 11% $57 $60 7% Market Perform 8.4% K-1: 80% M. Blum Plains GP Holdings LP Class A PAGP $ % $4,068 12% $32 $35 15% Market Perform / V 16.9% 1099: 100% M. Blum PBF Logistics LP PBFX $ % $811 NA $27 $29 15% Market Perform / V 13.3% K-1: 80% P. Satish QEP Midstream Partners LP QEPM $ % $1,239 (0%) $25 $27 17% Outperform / V 16.5% K-1: 80% M. Blum QR Energy, LP QRE $ % $1,085 8% $20 $24 30% Market Perform 0.0% K-1: 80% P. Satish Regency Energy Partners LP RGP $ % $12,717 20% $29 $32 3% Market Perform 6.5% K-1: 80% M. Blum Transocean Partners LLC RIGP $ % $1,703 NA $28 $30 23% Outperform / V : 80% M. Webber Seadrill Partners LLC SDLP $ % $2,796 (2%) $38 $41 37% Outperform / V 10.6% 1099: 80% M. Webber Spectra Energy Partners, LP SEP $ % $14,396 10% $52 $56 13% Market Perform 7.1% K-1: 80% M. Blum Suburban Propane Partners, L.P. SPH $ % $2,714 (4%) $44 $47 9% Market Perform 3.1% K-1: 80% S. Lui Susser Petroleum Partners LP SUSP $ % $1,207 66% $54 $56 4% Market Perform / V 15.9% K-1: 55% S. Lui Southcross Energy Partners, L.P. SXE $ % $778 21% $23 $25 18% Outperform / V 7.4% K-1: 80% M. Blum Sunoco Logistics Partners L.P. SXL $ % $10,415 25% $45 $48 2% Market Perform / V 16.3% K-1: 80% M. Blum TC PipeLines, LP TCP $ % $4,181 39% $62 $65 (0%) Market Perform 6.5% K-1: 80% M. Blum Tallgrass Energy Partners LP TEP $ % $2,142 68% $47 $50 14% Outperform / V 16.4% K-1: 80% M. Blum Teekay LNG Partners L.P. TGP $ % $3,236 (2%) $42 $46 11% Market Perform - K-1: 70% M. Webber Tesoro Logistics LP TLLP $ % $4,914 30% $72 $75 12% Outperform 15.5% K-1: 80% S. Lui Teekay Offshore Partners L.P. TOO $ % $2,798 (1%) $35 $38 19% Outperform 6.9% 1099: 70% M. Webber Targa Resources Corp. TRGP $ % $5,793 56% $156 $161 18% Outperform 19.1% 1099: 0% M. Blum USA Compression Partners LP USAC $ % $1,068 (10%) $26 $28 20% Market Perform / V 2.5% K-1: 80% S. Lui Valero Energy Partners LP VLP $ % $2,651 34% $48 $52 11% Outperform / V 22.7% K-1: 80% M. Blum Vanguard Natural Resources, LLC VNR $ % $2,166 (13%) $30 $32 30% Market Perform 4.3% K-1: 75% P. Satish VTTI Energy Partners LP VTTI $ % $501 NA $26 $28 13% Outperform / V 13.4% 1099: 45% P. Satish Western Gas Partners, LP WES $ % $8,750 19% $76 $81 11% Market Perform 12.1% K-1: 80% S. Lui Western Gas Equity Partners LP WGP $ % $13,206 53% $63 $67 10% Outperform / V 22.8% K-1: 70% S. Lui Williams Companies, Inc. WMB $ % $41,386 43% $70 $75 36% Outperform 18.4% 1099: 0% S. Lui Western Refining Logistics, LP WNRL $ % $1,600 36% $37 $41 15% Outperform / V 15.6% K-1: 80% M. Blum Williams Partners L.P. WPZ $ % $23,028 3% $59 $62 22% Outperform 3.4% K-1: 80% S. Lui All MLPs Average 6.0% $9,076 10% 17% 8.6% 1614% All MLPs Median 5.8% $4,023 9% 15% 6.7% 727% Wells Fargo Securities MLP Index 15% S&P 500 Index 6% Source: Partnership reports, FactSet, Standard & Poor's, and Wells Fargo Securities, LLC estimates 14