MLP Historical Returns,
Valuation & Their Impact on
Downstream M&A
Presented to:
Society of Independent
Gasoline Marketers of
America
February 9, 2015
CEDRIC FORTEMPS, CFA
Managing Director & Principal
804.591.2039
cfortemps@matrixcmg.com
SPENCER CAVALIER, CFA, ASA
Managing Director & Principal
667.217.3320
spcavalier@matrixcmg.com
Richmond | Baltimore | Chicago
www.matrixcmg.com
Comparison of Energy MLP and S&P 500 Total Returns


The graph below compares a $1,000 investment in January, 2004 in the Alerian MLP Index (a float-adjusted,
capitalization-weighted index of energy MLPs, which includes 50 prominent companies and captures
approximately 75% of available energy MLP market capitalization) versus the same investment in the S&P 500. As
the graph shows, the Alerian MLP Index has significantly outperformed the S&P 500, with all of the excess returns
occurring in the last 5 ½ years
One of the primary drivers of MLP valuations is the fact that investors continue to favor MLPs due to the
partnerships’ units current yields (Alerian Index’s current yield as of 12/31 was approximately 6.1%) in
comparison to Treasury rates (2.2%)
2
MLP Index Yield and 10-Yr Treasury Yield

Historically, the yield spread between the yield on the Alerian MLP Index and the 10 Year Treasury
has ranged between 200 and 400 basis points, with the current spread being approximately 3.9%
3
Current Energy MLP Yields Versus Other Indexes
CURRENT YIELDS ON VARIOUS INDEXES
AMZ
6.13%
REITs
3.77%
Utilities
3.39%
DJIA
2.42%
S&P
2.14%
0%
1%
2%
3%
4%
5%
6%
7%
Source: Alerian.com

Utilities are represented by the S&P 500 Utilities Index, a composite of utility stocks in the S&P 500

Real Estate Investment Trusts (REITs) are represented by the Real Estate 50 Index, a supplemental benchmark to the FTSE NAREIT US Real
Estate Index Series to measure the performance of larger and more frequently traded equity REITs

Bonds are represented by the Barclays US Aggregate Total Return Bond Index
4
Alerian MLP Index Returns in Declining Interest Rate Market



The graph below tracks the total returns of the Alerian MLP Index against the 10 Year Treasury yield
The Alerian Index has performed tremendously well since 1996, which has been a prolonged period of declining
interest rates
However, the MLPs may have challenges in continuing to provide investors with superior returns if interest rates
begin to increase as the interest expenses on debt will increase, but more importantly, unit share valuations are
likely to be compromised if MLPs cannot increase distributions through growth. If MLP distributions don’t increase
in an increasing interest rate environment, the only way for the yield spread to remain in its historical range is for
MLP unit values to decrease
5
Convenience Store Companies
Enterprise Value/Corporate EBITDA Multiples
Ticker / Index
Matrix CS-EVX: Quarterly Enterprise Value / Corporate EBITDA Multiples
2009
2010
2011
2012
2013
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
6.4 6.9 7.1 6.6 6.7 7.6 7.3 8.5 7.6 8.1 8.9 11.2 15.4 11.8 10.8 10.9 9.6
4.8 5.0 4.8 5.6 6.8 8.5 8.1 8.7 8.1 8.4 8.5 9.1 8.9 8.0 9.2 9.7 9.9
9.2 8.1
6.4
5.0 6.6 6.9 6.1 6.1 6.4 6.5 5.6 5.5 5.7 5.9 6.1 6.3 5.9 5.9 6.0 6.2
6.6 5.9 7.3 7.9 6.8 6.3 6.1 6.3 6.5 6.1 6.1 7.2 4.8 7.7 6.1 7.2 8.4
5.7 6.1 6.5 6.5 6.6 7.2 7.0 7.3 6.9 7.1 7.3 8.4 8.8 8.4 8.0 8.6 8.1
2014
Q4
Q1
Q2
Q3
10.7 11.0 11.4 13.7
10.3 10.3 9.7 11.0
8.6 9.0 10.1 10.2
6.5 7.7 7.7 7.8
6.6 6.6 6.6 6.8
9.6 14.5 14.5
8.7 9.8 10.0 9.9
Alimentation Couche-Tard Inc. (ATD.B)
Casey's General Stores, Inc. (CASY)
CST Brands, Inc. (CST)
Murphy USA Inc. (MUSA)
The Pantry, Inc. (PTRY)
Susser Holdings Corporation (SUSS+)
Matrix CS-EVX™
+ Prior to being acquired by Energy Transfer Partners, Susser Holdings Corporation (SUSS) was adjusted for its holdings in Susser Petroleum Partners LP, which now trades under Sunoco LP (SUN)

The average Enterprise Value to Corporate EBITDA valuation multiple of the publicly traded pure-play convenience store
companies that have been public since 2009 has nearly doubled since early 2009 (from 5.7X to 9.9X), allowing those companies to
make acquisitions at much higher multiples today than in the past, and still have them be accretive to earnings
6
Matrix Convenience Store – Market Capitalization Index

The graph below compares total equity returns since the beginning of 2007 for the Matrix Capital Index (consisting of pureplay publicly traded convenience store companies) versus the S&P 500 on a $1,000 investment in each. As the graph
demonstrates, publicly traded convenience store companies have nearly doubled the returns of the S&P 500 over the last 6+
years, with all of the excess returns occurring in the last 3 ½ years
7
Valuations of Publicly Traded Companies
Publicly Traded Comparables ($ in millions, except per share data)
C-Store Focused Retailers
Business Segments
Whole-
Company (Ticker)
Alimentation Couche-Tard Inc. (ATD.B)
Casey's General Stores, Inc. (CASY)
CST Brands, Inc. (CST)
Murphy USA Inc. (MUSA)
The Pantry, Inc. (PTRY)
Retail
Sale
Stock
Price On Market
Refining Terminals Logistics 12/31/14
Cap
x
x
x
x
x
Total Cash &
Debt Equiv
Pipeline/
42.04
90.32
43.61
68.86
37.06
23,990
3,481
3,387
3,149
869
2,246
854
1,021
492
930
595
72
427
328
123
Enterprise
Corp.
EV/
Value Debt/ LTM
LTM
(EV)
EV EBITDA EBITDA
25,721
4,343
4,128
3,389
1,707
8.7%
19.7%
24.7%
14.5%
54.5%
Dividend
Yield
(DY)
1,675
390
372
475
261
15.4x
11.1x
11.1x
7.1x
6.5x
0.38%
n.m.
0.57%
n.m.
n.m.
High
Low
Mean
Median
15.4x
6.5x
10.3x
11.1x
0.57%
0.38%
0.48%
0.48%
Wholesale Focused MLPs
10-yr
Consensus
Implied
Enterprise
Corp.
EV/
Distribution (2.17%)
Analyst
Forward
Total Cash & Value Debt/ LTM
LTM
Yield
Yield
Estimates
EBITDA
Debt Equiv
(EV)
EV EBITDA EBITDA
(DY)
Spread 2015 EBITDA Multiple
Business Segments
Company (Ticker)
CrossAmerica Partners LP (CAPL)
Sunoco LP (SUN)
Stock
WholePipeline/ Price On
Market
Retail Sale Refining Terminals Logistics 12/31/14
Cap
x
x
40.29
49.77
925
1,691
236
274
3
11
1,162
1,954
20.4%
14.0%
54
53
High
Low
Mean / Median
8
21.6x
36.6x
5.29%
4.39%
3.12%
2.22%
94
180
12.34x
10.84x
36.6x
21.6x
29.1x
5.29%
4.39%
4.84%
3.12%
2.22%
2.67%
180
94
137
12.3x
10.8x
11.6x
Valuations Publicly Traded Comparables (cont’d)
Publicly Traded Comparables ($ in millions, except per share data)
Multi-Segment (C-Corps & LLCs)
Business Segments
Whole-
Company (Ticker)
Alon USA Energy, Inc. (ALJ)
Delek US Holdings, Inc. (DK)
Marathon Petroleum Corporation (MPC)
TravelCenters of America LLC (TA)
World Fuel Services Corp. (INT)
Retail
Sale
x
x
x
x
x
x
x
Stock
Price On Market
Refining Terminals Logistics 12/31/14
Cap
Pipeline/
x
x
x
x
x
x
x
12.67
27.28
90.26
12.62
46.93
872
1,646
25,290
475
3,382
Total Cash &
Debt Equiv
556
594
6,264
195
767
194
498
1,854
127
389
Enterprise
Corp.
EV/
Value Debt/ LTM
LTM
(EV)
EV EBITDA EBITDA
1,343
2,017
31,971
544
3,764
41.4%
29.5%
19.6%
35.9%
20.4%
Dividend
Yield
(DY)
295
415
5,166
121
310
4.5x
4.9x
6.2x
4.5x
12.1x
3.16%
2.20%
2.22%
n.m.
0.32%
High
Low
Mean
Median
12.1x
4.5x
6.4x
4.9x
3.16%
0.32%
1.97%
2.21%
Multi-Segment (MLPs)
Business Segments
Company (Ticker)
Alon USA Partners, LP (ALDW)
Delek Logistics Partners, LP (DKL)
Energy Transfer Partners, L.P. (ETP)
Global Partners LP (GLP)
MPLX LP (MPLX)
Northern Tier Energy LP (NTI)
Stock
WholePipeline/ Price On
Market
Retail Sale Refining Terminals Logistics 12/31/14
Cap
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
12.91
35.47
65.00
32.99
73.49
22.14
807
847
22,565
996
5,840
2,053
10-yr
Enterprise
Corp.
EV/
Distribution (2.17%)
Total Cash & Value Debt/ LTM
LTM
Yield
Yield
Debt Equiv
(EV)
EV EBITDA EBITDA
(DY)
Spread
293
230
18,885
853
265
364
115
1
1,060
6
32
106
1,089
1,080
47,828
1,911
6,271
2,311
26.9%
21.3%
39.5%
44.6%
4.2%
15.8%
231
89
3,721
254
233
326
4.7x
12.1x
12.9x
7.5x
26.9x
7.1x
15.6%
5.5%
6.0%
7.9%
2.1%
12.2%
n.m.
3.36%
3.83%
5.74%
(0.09%)
15.90%
High
Low
Mean
Median
26.9x
4.7x
11.9x
9.8x
15.6%
2.1%
8.2%
7.0%
15.90%
(0.09%)
5.75%
3.83%
The dividend yield for variable MLPs (e.g. ALDW, NTI) is calculated based on the dividends distributed over the last 12 months. The dividend yield for all other companies is calculated by
annualizing the most recent quarterly dividend.
9
Unprecedented Time in the C&G Market for M&A Activity

The consolidation of the petroleum marketing and convenience store industry is accelerating, primarily due to the following
factors:
–
Factors that are likely permanent:
• Industry maturity – shrinking motor fuels volumes and cigarette sales
• Need of existing and soon-to-be public entities to grow revenues and cash flow
• Heightened competition and a lack of interest by certain regional jobber-retailers to reinvest to compete
long-term
• Need to reduce product acquisition costs (fuel and c-store) and suppliers’ willingness to provide better
pricing terms to larger customers
• Need to spread overheads over a wider base
• Ever increasing expenses putting pressure on operators (e.g. credit card fees, insurance, health-care
mandate, other government mandated costs, etc.)
• Generational transfers
–
Factors that are subject to change:
• Capital Cost & Availability
– Low interest rates and cost of capital
– Access to public equity markets by MLP’s & potential for valuation arbitrage
– Cost of capital differences between smaller and larger operators
10
Accretion/Dilution Analysis for Acquisition by an MLP

The below example illustrates the purchase price that a hypothetical MLP could pay for a company with $10 million
of Pro Forma Corporate EBITDA and have the acquisition be neither accretive nor dilutive to its unit price assuming
yield is the sole driver of unit price
Seller's Pro Forma Corporate EBITDA (in millions):
Buyer:
Unit Price:
Units Outstanding (in millions):
Market Capitalization (in millions):
Transaction Assumptions
$
10.0
Example MLP
$
50.00
20.0
$
1,000
Debt/Enterprise Value Ratio:
Interest Rate:
Distribution Coverage Ratio:
25.0%
5.0%
1.10
Example assumes that 100% of Seller's income is qualifying income and that additional debt is non-amortizing
Analysis of Purchase Price for Non-Accretive, Non-Dilutive Transaction
all $ amounts stated in millions
Total Unitholder Dividend Yield
6.00%
6.50%
7.00%
7.50%
8.00%
8.50%
Seller's Pro Forma Corporate EBITDA
Less: Maintenance CAPEX
Less: Interest Expense
Incremental Distributable Cash Flow
10.00
(0.20)
(1.98)
7.82
10.00
(0.20)
(1.85)
7.95
10.00
(0.20)
(1.74)
8.06
10.00
(0.20)
(1.65)
8.15
10.00
(0.20)
(1.56)
8.24
10.00
(0.20)
(1.48)
8.32
Total Incremental Distributions Required
Distributions Paid to Unitholders (Pre-Transaction)
Distributions Paid to Unitholders Post-Transaction
7.11
60.00
67.11
7.22
65.00
72.22
7.32
70.00
77.32
7.41
75.00
82.41
7.49
80.00
87.49
7.56
85.00
92.56
2.37
2.22
2.09
1.98
1.87
1.78
118.55
39.52
158.06
111.15
37.05
148.20
104.63
34.88
139.50
98.82
32.94
131.76
93.63
31.21
124.84
88.96
29.65
118.61
15.81
14.82
13.95
13.18
12.48
11.86
# of Shares Issued Required to Fund Transaction
Equity Issued
Debt Issued
Total Purchase Price
Implied Multiple of Seller's Pro Forma Corporate EBITDA
11