SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13E-3
Rule 13e-3 Transaction Statement Under Section 13(e)
of the Securities Exchange Act of 1934
AMERIGAS PARTNERS, L.P.
(Name of the Issuer)
UGI Corporation
AmeriGas, Inc.
AmeriGas Propane, Inc.
AmeriGas Propane Holdings, Inc.
AmeriGas Partners, L.P.
AmeriGas Propane Holdings, LLC
(Names of Persons Filing Statement)
COMMON UNITS REPRESENTING LIMITED PARTNER INTERESTS
(Title of Class of Securities)
030975 106
(CUSIP Number of Class of Securities)
Michelle Bimson Maggi Group Counsel and Director of Government Affairs AmeriGas Propane, Inc. 460 North Gulph Road King of Prussia, PA 19406 (610) 337-1000 |
Monica M. Gaudiosi Vice President and General Counsel, Secretary UGI Corporation 460 North Gulph Road King of Prussia, PA 19406 (610) 337-1000 | |||
(Name, Address, and Telephone Numbers of Person Authorized to Receive Notices and Communications on Behalf of the Persons Filing Statement)
With copies to
| ||||
Joshua Davidson Andrew J. Ericksen Baker Botts L.L.P. 910 Louisiana Street Houston, TX 77002 (713) 229-1234 |
Mark A. Morton Thomas A. Mullen Potter Anderson & Corroon LLP 1313 North Market Street, 6^{th} Floor Wilmington, DE 19801 (302) 984-6078 |
Ryan J. Maierson John M. Greer Latham & Watkins LLP 811 Main Street, Suite 3700 Houston, TX 77002 (713) 546-5400 |
This statement is filed in connection with (check the appropriate box):
a. |
☒ | The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14C or Rule 13E-3(c) under the Securities Exchange Act of 1934. | ||
b. |
☒ | The filing of a registration statement under the Securities Act of 1933. | ||
c. |
☐ | A tender offer. | ||
d. |
☐ | None of the above. |
Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: ☒
Check the following box if the filing is a final amendment reporting the results of the transaction: ☐
CALCULATION OF FILING FEE
Transaction Valuation* | Amount of Filing Fee** | |
$ 2,496,188,953 |
$ 302,539 |
* | Calculated solely for the purpose of determining the filing fee in accordance with Rule 0-11(b)(1) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The transaction valuation is calculated based on (a) the product of (i) $36.05, the average of the high and low prices per AmeriGas common unit as reported on the New York Stock Exchange on May 2, 2019, and (ii) 69,242,412, the estimated maximum number of AmeriGas common units that may be exchanged for the merger consideration (the “Transaction Valuation”). |
** | The filing fee, calculated in accordance with Rule 0-11 of the Exchange Act, is calculated by multiplying the Transaction Valuation by 0.0001212. |
☒ | Check the box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule, and the date of its filing. |
Amount Previously Paid: |
$238,506 | Filing Party: | UGI Corporation | |||||
Form or Registration No.: |
Registration Statement on Form S-4 (File No. 333-231242) |
Date Filed: | May 6, 2019 |
INTRODUCTION
This Rule 13e-3 Transaction Statement on Schedule 13E-3 (this “Transaction Statement”), together with the exhibits hereto, is being filed with the Securities and Exchange Commission (the “SEC”) pursuant to Section 13(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), by AmeriGas Partners, L.P., a Delaware limited partnership (the “Partnership”) and the issuer of the common units representing limited partner interests in the Partnership (the “Common Units”) that are subject to the Rule 13e-3 transaction; UGI Corporation, a Pennsylvania corporation (“UGI”); AmeriGas, Inc., a Pennsylvania corporation; AmeriGas Propane, Inc., a Pennsylvania corporation (the “General Partner”); AmeriGas Propane Holdings, Inc., a Delaware corporation (“Holdings”); and AmeriGas Propane Holdings, LLC, a Delaware limited liability company (“Merger Sub”). Collectively, the persons filing this Transaction Statement are referred to as the “filing persons.”
This Transaction Statement relates to the Agreement and Plan of Merger, dated as of April 1, 2019 (the “Merger Agreement”), by and among UGI, Holdings, Merger Sub, the Partnership and the General Partner. Pursuant to the Merger Agreement, Merger Sub shall merge with and into the Partnership, the separate existence of Merger Sub shall cease and the Partnership shall survive and continue to exist as an indirect, wholly owned subsidiary of UGI (the “Merger”). The Merger Agreement provides that, at the effective time of the Merger (the “Effective Time”), each Common Unit issued and outstanding or deemed issued and outstanding as of immediately prior to the Effective Time, other than (a) Common Units held by the General Partner (“Sponsor Units”) or (b) the Partnership or any of its subsidiaries or UGI or any of its affiliates (excluding the Sponsor Units) (the “Affiliate Units”), will be converted into the right to receive, at the election of each such holder of Common Units (the “Unaffiliated AmeriGas Unitholders”), but subject to any applicable withholding tax and proration as described below, one of the following forms of consideration (collectively, the “merger consideration”): (i) 0.6378 shares of common stock, no par value, of UGI (all shares of such common stock, the “UGI Shares” and such election, a “Share Election”); (ii) $7.63 in cash, without interest, and 0.500 UGI Shares (such election, a “Mixed Election”); or (iii) $35.325 in cash, without interest (such election, a “Cash Election”). In addition, until the closing of the Merger, the holders of Common Units (the “Unitholders”) will continue to receive regular quarterly distributions, in the ordinary course of business consistent with past practice but subject to certain restrictions and requirements contained in the Merger Agreement, of not less than $0.95 per Common Unit with respect to any completed quarter prior to closing. As of the Effective Time, all of the Common Units converted into the right to receive the merger consideration will no longer be outstanding and will automatically be cancelled and cease to exist. Immediately prior to the Effective Time, the General Partner’s economic general partner interest in the Partnership will be converted into (a) 10,615,711 Common Units, which will not be converted into the merger consideration and will remain outstanding as partnership interests in the Partnership following the Effective Time and (b) a non-economic general partner interest in the Partnership as the surviving entity. The Sponsor Units will be unaffected by the Merger and will remain outstanding following the Effective Time. Immediately prior to the Effective Time, the Affiliate Units will be automatically cancelled and cease to exist, with no consideration being paid thereon.
The merger consideration is subject to a proration (the “proration”) designed to ensure that the number of UGI Shares issuable as part of the merger consideration will equal approximately 34,621,206 UGI Shares. Unitholders may elect the Share Election, the Mixed Election or the Cash Election. However, the ability for Unitholders to receive the merger consideration they elected will depend on the elections of other Unitholders. The proration of the merger consideration payable to Unitholders in the Merger will not be known until Computershare, Inc. tallies the results of the elections made by Unitholders, which will not occur until near or after completion of the Merger. If no valid election is made with respect to a Common Unit, such Unitholder will receive such merger consideration as is determined in accordance with the proration provisions of the Merger Agreement.
The Merger is subject to certain closing conditions, including approval by the holders of a majority of the outstanding Common Units at a special meeting of Unitholders.
The audit committee of the board of directors of the General Partner (the “GP Board” and such audit committee, the “GP Audit Committee”), consisting of four members of the GP Board who meet the independence qualifications under the Fourth Amended and Restated Agreement of Limited Partnership of AmeriGas Partners, L.P., dated as of July 27, 2009, as amended (the “Partnership Agreement”), and the Charter of the GP Audit Committee for membership on the GP Audit Committee, unanimously (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are fair and reasonable to, and in the best interests of, the Partnership and the Unaffiliated AmeriGas Unitholders, (ii) approved, and recommended that the GP Board approve, the Merger Agreement and the transactions contemplated thereby, including the Merger, and (iii) resolved, and recommended that the GP Board resolve, to recommend approval of the
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Merger Agreement to the Unitholders, with such recommendation and approval constituting “Special Approval” as such term is defined in the Partnership Agreement. In making its recommendation, the GP Audit Committee considered, among other things, the opinion of Tudor Pickering Holt & Co Advisors LP (“TPH”), the independent financial advisor to the GP Audit Committee, that, as of the date of its opinion, based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations of the review undertaken by TPH in connection with the preparation of its opinion set forth therein, the Merger Consideration (as defined in TPH’s opinion) to be paid to the Unaffiliated AmeriGas Unitholders in the Merger pursuant to the Merger Agreement was fair from a financial point of view to such Unaffiliated AmeriGas Unitholders.
The GP Board, after considering various factors, including the unanimous determination and recommendation of the GP Audit Committee, has (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are fair and reasonable to, and in the best interests of, the Partnership and the Unaffiliated AmeriGas Unitholders, (ii) approved the Merger Agreement and the transactions contemplated thereby, including the Merger, and (iii) resolved to submit the Merger Agreement to a vote of the Unitholders and recommend approval of the Merger Agreement by the Unitholders.
Concurrently with the filing of this Transaction Statement, UGI is filing with the SEC a registration statement on Form S-4, which includes a notice of meeting and a proxy statement/prospectus (the “Proxy Statement/Prospectus”) with respect to (i) the issuance of UGI Shares as a portion of the merger consideration and (ii) the special meeting of Unitholders, at which Unitholders will be asked to consider and vote on, among other matters, a proposal to approve the Merger Agreement. A copy of the Proxy Statement/Prospectus is attached hereto as Exhibit (a)(1) and a copy of the Merger Agreement is attached as Annex A to the Proxy Statement/Prospectus. All references in this Transaction Statement to Items numbered 1001 to 1016 are references to Items contained in Regulation M-A under the Exchange Act.
Pursuant to General Instruction F to Schedule 13E-3, the information contained in the Proxy Statement/Prospectus, including all annexes thereto, is incorporated herein by reference in its entirety, and responses to each item herein are qualified in their entirety by the information contained in the Proxy Statement/Prospectus and the annexes thereto. The cross-references below are being supplied pursuant to General Instruction G to Schedule 13E-3 and show the location in the Proxy Statement/Prospectus of the information required to be included in response to the items of Schedule 13E-3. As of the date hereof, the Proxy Statement/Prospectus is in preliminary form and is subject to completion. Terms used but not defined in this Transaction Statement shall have the meanings given to them in the Proxy Statement/Prospectus.
While each of the filing persons acknowledges that the Merger is a going private transaction for purposes of Rule 13e-3 under the Exchange Act, the filing of this Transaction Statement shall not be construed as an admission by any filing person, or by any affiliate of a filing person, that the Partnership is “controlled” by any of the filing persons and/or their respective affiliates.
All information concerning each filing person contained in, or incorporated by reference into, this Transaction Statement was supplied by such filing person.
ITEM 1. | SUMMARY TERM SHEET |
Regulation M-A Item 1001
The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Summary”
“Questions and Answers”
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ITEM 2. | SUBJECT COMPANY INFORMATION |
Regulation M-A Item 1002
(a) Name and Address. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Summary—The Parties”
“The Parties”
(b) Securities. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Summary—The Special Meeting; AmeriGas Common Units Entitled to Vote; Required Vote”
“The Special Meeting—Record Date; Outstanding Units; AmeriGas Common Units Entitled to Vote”
(c) Trading Market and Price. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Common Unit Market Price and Distribution Information—Where AmeriGas Common Units Are Traded”
“Common Unit Market Price and Distribution Information—Common Unit Market Price Information”
(d) Dividends. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Summary—Comparative Share/Unit Prices and Distributions”
“Common Unit Market Price and Distribution Information”
(e) Prior Public Offerings. Not applicable.
(f) Prior Stock Purchases. Not applicable.
ITEM 3. | IDENTITY AND BACKGROUND OF FILING PERSON |
Regulation M-A Item 1003
(a)-(c) Name and Address; Business and Background of Entities; Business and Background of Natural Persons.
The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Summary—The Parties”
“The Parties”
ITEM 4. | TERMS OF THE TRANSACTION |
Regulation M-A Item 1004
(a) Material Terms. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Summary”
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“Questions and Answers”
“The Special Meeting—Required Vote”
“Special Factors—Effect of the Merger”
“Special Factors—Background of the Merger”
“Special Factors—Recommendation of the GP Audit Committee and the GP Board; Reasons for Recommending Approval of the Merger”
“Special Factors—Position of the UGI Filing Parties as to the Fairness of the Merger”
“Special Factors—The UGI Filing Parties’ Reasons for the Merger”
“Special Factors—Primary Benefits and Detriments of the Merger”
“Special Factors—Interests of Directors and Executive Officers of the General Partner in the Merger”
“Special Factors—Accounting Treatment of the Merger”
“Special Factors—No Dissenters’ Rights or Appraisal Rights”
“Proposal 1: The Merger Agreement”
“The Support Agreement”
“Material U.S. Federal Income Tax Consequences of the Merger”
“Comparison of Rights of UGI Shareholders and AmeriGas Unitholders”
Annex A: Agreement and Plan of Merger
Annex C: Support Agreement
(b) Purchases. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Summary—Interests of Directors and Executive Officers of the General Partner in the Merger”
“Special Factors—Interests of Directors and Executive Officers of the General Partner in the Merger”
“Equity Security Ownership”
“Certain Purchases and Sales of Common Units”
(c) Different Terms. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Summary”
“Questions and Answers”
“Special Factors—Effect of the Merger”
“Special Factors—Interests of Directors and Executive Officers of the General Partner in the Merger”
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“Special Factors—Provisions for Unaffiliated AmeriGas Unitholders”
“Special Factors—No Dissenters’ Rights or Appraisal Rights”
“Proposal 1: The Merger Agreement”
Annex A: Agreement and Plan of Merger
(d) Appraisal Rights. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Summary—No Dissenters’ Rights or Appraisal Rights”
“Questions and Answers”
“Special Factors—No Dissenters’ Rights or Appraisal Rights”
(e) Provisions for Unaffiliated Security Holders. The information set forth in the Proxy Statement/Prospectus under the following caption is incorporated herein by reference:
“Special Factors—Provisions for Unaffiliated AmeriGas Unitholders”
(f) Eligibility for Listing or Trading. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Summary—Listing of UGI Shares; Delisting and Deregistration of AmeriGas Common Units”
“Special Factors—Listing of UGI Shares; Delisting and Deregistration of AmeriGas Common Units”
“Proposal 1: The Merger Agreement—Conditions to Completion of the Merger”
ITEM 5. | PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS |
Regulation M-A Item 1005
(a) (1)-(2) Transactions. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Summary”
“The Parties”
“Special Factors—Interests of Directors and Executive Officers of the General Partner in the Merger”
“Certain Purchases and Sales of Common Units”
“Where You Can Find More Information”
(b)-(c) Significant Corporate Events; Negotiations or Contacts. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Summary”
“Special Factors—Effect of the Merger”
“Special Factors—Background of the Merger”
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“Special Factors—Recommendation of the GP Audit Committee and the GP Board; Reasons for Recommending Approval of the Merger”
“Special Factors—Interests of Directors and Executive Officers of the General Partner in the Merger”
“Special Factors—Position of the UGI Filing Parties as to the Fairness of the Merger”
“Special Factors—The UGI Filing Parties’ Reasons for the Merger”
“Proposal 1: The Merger Agreement”
Annex A: Agreement and Plan of Merger
(e) Agreements Involving the Subject Company’s Securities. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Summary”
“Questions and Answers”
“Special Factors—Effect of the Merger”
“Special Factors—Interests of Directors and Executive Officers of the General Partner in the Merger”
“The Special Meeting—Quorum”
“The Special Meeting—Required Vote”
“Proposal 1: The Merger Agreement”
“The Support Agreement”
“Common Unit Market Price and Distribution Information”
“Equity Security Ownership”
“Where You Can Find More Information”
“Proposal 3: The Advisory Compensation Proposal”
Annex A: Agreement and Plan of Merger
Annex C: Support Agreement
ITEM 6. | PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS. |
Regulation M-A Item 1006
(a)-(b) Purposes; Use of Securities Acquired. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Summary”
“Questions and Answers”
“Special Factors—Effect of the Merger”
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“Special Factors—Position of the UGI Filing Parties as to the Fairness of the Merger”
“Special Factors—The UGI Filing Parties’ Reasons for the Merger”
“Special Factors—Primary Benefits and Detriments of the Merger”
“Special Factors—Listing of UGI Shares; Delisting and Deregistration of AmeriGas Common Units”
“Special Factors—Interests of Directors and Executive Officers of the General Partner in the Merger”
“Proposal 1: The Merger Agreement”
Annex A: Agreement and Plan of Merger
(c) (1)-(8) Plans. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Summary”
“Questions and Answers”
“Special Factors—Background of the Merger”
“Special Factors—Recommendation of the GP Audit Committee and the GP Board; Reasons for Recommending Approval of the Merger”
“Special Factors—Position of the UGI Filing Parties as to the Fairness of the Merger”
“Special Factors—The UGI Filing Parties’ Reasons for the Merger”
“Special Factors—Primary Benefits and Detriments of the Merger”
“Special Factors—Interests of Directors and Executive Officers of the General Partner in the Merger”
“Special Factors—Listing of UGI Shares; Delisting and Deregistration of AmeriGas Common Units”
“Proposal 1: The Merger Agreement”
Annex A: Agreement and Plan of Merger
ITEM 7. | PURPOSES, ALTERNATIVES, REASONS AND EFFECTS |
Regulation M-A Item 1013
(a) Purposes. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Summary”
“Questions and Answers”
“Special Factors—Effect of the Merger”
“Special Factors—Background of the Merger”
“Special Factors—Recommendation of the GP Audit Committee and the GP Board; Reasons for Recommending Approval of the Merger”
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“Special Factors—Position of the UGI Filing Parties as to the Fairness of the Merger”
“Special Factors—The UGI Filing Parties’ Reasons for the Merger”
“Special Factors—Primary Benefits and Detriments of the Merger”
“Special Factors—Interests of Directors and Executive Officers of the General Partner in the Merger”
(b) Alternatives. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Special Factors—Background of the Merger”
“Special Factors—Recommendation of the GP Audit Committee and the GP Board; Reasons for Recommending Approval of the Merger”
“Special Factors—Position of the UGI Filing Parties as to the Fairness of the Merger”
“Special Factors—The UGI Filing Parties’ Reasons for the Merger”
“Special Factors—Primary Benefits and Detriments of the Merger”
“Special Factors—Opinion of the Financial Advisor to the GP Audit Committee”
“Special Factors—J.P. Morgan Securities LLC Financial Advisor Materials”
(c) Reasons. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Special Factors—Effect of the Merger”
“Special Factors—Background of the Merger”
“Special Factors—Recommendation of the GP Audit Committee and the GP Board; Reasons for Recommending Approval of the Merger”
“Special Factors—Position of the UGI Filing Parties as to the Fairness of the Merger”
“Special Factors—The UGI Filing Parties’ Reasons for the Merger”
“Special Factors—Primary Benefits and Detriments of the Merger”
“Special Factors—Interests of Directors and Executive Officers of the General Partner in the Merger”
“Special Factors—Opinion of the Financial Advisor to the GP Audit Committee”
“Special Factors—J.P. Morgan Securities LLC Financial Advisor Materials”
(d) Effects. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Summary”
“Questions and Answers”
“Special Factors—Effect of the Merger”
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“Special Factors—Background of the Merger”
“Special Factors—Recommendation of the GP Audit Committee and the GP Board; Reasons for Recommending Approval of the Merger”
“Special Factors—Position of the UGI Filing Parties as to the Fairness of the Merger”
“Special Factors—The UGI Filing Parties’ Reasons for the Merger”
“Special Factors—Primary Benefits and Detriments of the Merger”
“Special Factors—Financing of the Merger”
“Special Factors—Interests of Directors and Executive Officers of the General Partner in the Merger”
“Material U.S. Federal Income Tax Consequences of the Merger”
“Proposal 1: The Merger Agreement”
“Proposal 3: The Advisory Compensation Proposal”
Annex A: Agreement and Plan of Merger
ITEM 8. | FAIRNESS OF THE TRANSACTION |
Regulation M-A Item 1014
(a)-(b) Fairness; Factors Considered in Determining Fairness. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Summary”
“Special Factors—Background of the Merger”
“Special Factors—Recommendation of the GP Audit Committee and the GP Board; Reasons for Recommending Approval of the Merger”
“Special Factors—Position of the UGI Filing Parties as to the Fairness of the Merger”
“Special Factors—The UGI Filing Parties’ Reasons for the Merger”
“Special Factors—Primary Benefits and Detriments of the Merger”
“Special Factors—Interests of Directors and Executive Officers of the General Partner in the Merger”
“Special Factors—Opinion of the Financial Advisor to the GP Audit Committee”
“Special Factors—J.P. Morgan Securities LLC Financial Advisor Materials”
Annex B: Opinion of Tudor Pickering Holt & Co Advisors LP
(c) Approval of Security Holders. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Summary”
“Questions and Answers”
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“The Special Meeting—Record Date; Outstanding Units; AmeriGas Common Units Entitled to Vote”
“The Special Meeting—Quorum”
“The Special Meeting—Required Vote”
“Special Factors—Recommendation of the GP Audit Committee and the GP Board; Reasons for Recommending Approval of the Merger”
“Special Factors—Position of the UGI Filing Parties as to the Fairness of the Merger”
“Proposal 1: The Merger Agreement—Conditions to Completion of the Merger”
(d) Unaffiliated Representative. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Summary”
“Special Factors—Effect of the Merger”
“Special Factors—Background of the Merger”
“Special Factors—Recommendation of the GP Audit Committee and the GP Board; Reasons for Recommending Approval of the Merger”
“Special Factors—Position of the UGI Filing Parties as to the Fairness of the Merger”
“Special Factors—The UGI Filing Parties’ Reasons for the Merger”
“Special Factors—Primary Benefits and Detriments of the Merger”
“Special Factors—Interests of Directors and Executive Officers of the General Partner in the Merger”
“Special Factors—Opinion of the Financial Advisor to the GP Audit Committee”
Annex B: Opinion of Tudor Pickering Holt & Co Advisors LP
(e) Approval of Directors. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Summary”
“Questions and Answers”
“Special Factors—Background of the Merger”
“Special Factors—Recommendation of the GP Audit Committee and the GP Board; Reasons for Recommending Approval of the Merger”
“Special Factors—Position of the UGI Filing Parties as to the Fairness of the Merger”
(f) Other Offers. Not Applicable.
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ITEM 9. | REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS |
Regulation M-A Item 1015
(a)-(b) Report, Opinion or Appraisal; Preparer and Summary of the Report, Opinion or Appraisal. The discussion materials prepared by J.P. Morgan Securities LLC and provided to UGI, dated January 17, 2019, January 25, 2019, February 25, 2019, March 4, 2019 and April 1, 2019 are set forth as Exhibits (c)(3) — (c)(7), respectively, hereto and are incorporated herein by reference. The presentation materials prepared by Tudor Pickering Holt & Co Advisors LP and provided to the GP Audit Committee, dated January 31, 2019, February 12, 2019, February 14, 2019, February 19, 2019 (referring to two presentations), February 26, 2019, February 28, 2019, March 5, 2019, March 13, 2019, March 18, 2019 (referring to two presentations), March 29, 2019 and April 1, 2019 are set forth as Exhibits (c)(8) — (c)(20), respectively, hereto and are incorporated herein by reference. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Summary—Opinion of the Financial Advisor to the GP Audit Committee”
“Summary—J.P. Morgan Securities LLC Financial Advisor Materials”
“Special Factors—Effect of the Merger”
“Special Factors—Background of the Merger”
“Special Factors—Recommendation of the GP Audit Committee and the GP Board; Reasons for Recommending Approval of the Merger”
“Special Factors—Opinion of the Financial Advisor to the GP Audit Committee”
“Special Factors—J.P. Morgan Securities LLC Financial Advisor Materials”
“Special Factors—Position of the UGI Filing Parties as to the Fairness of the Merger”
“Special Factors—The UGI Filing Parties’ Reasons for the Merger”
“Special Factors—Fees and Expenses”
“Where You Can Find More Information”
Annex B: Opinion of Tudor Pickering Holt & Co Advisors LP
(c) Availability of Documents. The reports, opinions or appraisals referenced in this Item 9 are filed herewith and will be made available for inspection and copying at the principal executive offices of the Partnership during its regular business hours by any interested Unitholder.
ITEM 10. | SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION |
Regulation M-A Item 1007
(a)-(b), (d) Source of Funds; Conditions; Borrowed Funds. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Special Factors—Background of the Merger”
“Special Factors—Recommendation of the GP Audit Committee and the GP Board; Reasons for Recommending Approval of the Merger”
“Special Factors—Financing of the Merger”
“Special Factors—Interests of Directors and Executive Officers of the General Partner in the Merger”
“Special Factors—Fees and Expenses”
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(c) Expenses. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Summary—Expenses”
“Special Factors—Financing of the Merger”
“Special Factors—Fees and Expenses”
“Proposal 1: The Merger Agreement—Effect of Termination; Termination Fee and Expenses”
Annex A: Agreement and Plan of Merger
ITEM 11. | INTEREST IN SECURITIES OF THE SUBJECT COMPANY |
Regulation M-A Item 1008
(a)-(b) Securities Ownership; Securities Transactions. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Summary”
“The Special Meeting—Common Unit Ownership of and Voting by the General Partner’s and UGI’s Directors, Executive Officers and Affiliates”
“Special Factors—Effect of the Merger”
“Special Factors—Interests of Directors and Executive Officers of the General Partner in the Merger”
“Certain Purchases and Sales of Common Units”
“Equity Security Ownership”
ITEM 12. | THE SOLICITATION OR RECOMMENDATION |
Regulation M-A Item 1012
(d)-(e) Intent to Tender or Vote in a Going-Private Transaction; Recommendations of Others. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Summary”
“Questions and Answers”
“The Special Meeting—Common Unit Ownership of and Voting by the General Partner’s and UGI’s Directors, Executive Officers and Affiliates”
“Special Factors—Recommendation of the GP Audit Committee and the GP Board; Reasons for Recommending Approval of the Merger”
“Special Factors—Position of the UGI Filing Parties as to the Fairness of the Merger”
“Special Factors—The UGI Filing Parties’ Reasons for the Merger”
“Special Factors—Interests of Directors and Executive Officers of the General Partner in the Merger”
“Proposal 1: The Merger Agreement—Conditions to Completion of the Merger”
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“Proposal 1: The Merger Agreement—GP Audit Committee and GP Board Recommendation and AmeriGas Adverse Recommendation Change”
“The Support Agreement”
Annex A: Agreement and Plan of Merger
Annex C: Support Agreement
ITEM 13. | FINANCIAL INFORMATION |
Regulation M-A Item 1010
(a) Financial Statements. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Summary—Summary Historical Consolidated Financial Data of AmeriGas”
“Common Unit Market Price and Distribution Information”
“Where You Can Find More Information”
The Partnership’s Annual Report on Form 10-K for the fiscal year ended September 30, 2018 is incorporated herein by reference.
The Partnership’s Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2018 is incorporated herein by reference.
(b) Pro Forma Information. The information set forth in the Proxy Statement/Prospectus under the following caption is incorporated herein by reference:
“UGI Corporation Unaudited Pro Forma Financial Information”
ITEM 14. | PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED |
Regulation M-A Item 1009
(a)-(b) Solicitations or Recommendations; Employees and Corporate Assets. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Summary”
“Questions and Answers”
“The Special Meeting—Recommendation of the GP Board”
“The Special Meeting—Solicitation of Proxies”
“Special Factors—Background of the Merger”
“Special Factors—Recommendation of the GP Audit Committee and the GP Board; Reasons for Recommending Approval of the Merger”
“Special Factors—Opinion of the Financial Advisor to the GP Audit Committee”
“Special Factors—J.P. Morgan Securities LLC Financial Advisor Materials”
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“Special Factors—Interests of Directors and Executive Officers of the General Partner in the Merger”
“Special Factors—Fees and Expenses”
ITEM 15. | ADDITIONAL INFORMATION |
Regulation M-A Item 1011
(b) Golden Parachute Compensation. The information set forth in the Proxy Statement/Prospectus under the following captions is incorporated herein by reference:
“Summary—Treatment of Performance Units, Restricted Units, Phantom Units and AmeriGas Equity Plans”
“Special Factors—Interests of Directors and Executive Officers of the General Partner in the Merger”
“Proposal 1: The Merger Agreement—Treatment of AmeriGas LTIP Awards”
“Proposal 3: The Advisory Compensation Proposal”
(c) Other Material Information. The information set forth in the Proxy Statement/Prospectus, including all annexes thereto, is incorporated herein by reference.
ITEM 16. | EXHIBITS |
Regulation M-A Item 1016
Exhibit |
Description | |
(a)(1) | Proxy Statement/Prospectus of UGI (incorporated herein by reference to UGI’s Form S-4 filed concurrently with the SEC). | |
(a)(2) | Form of Proxy Card (incorporated herein by reference to the Proxy Statement/Prospectus). | |
(a)(3) | Letter to Unitholders (incorporated herein by reference to the Proxy Statement/Prospectus). | |
(a)(4) | Notice of Special Meeting of Unitholders (incorporated herein by reference to the Proxy Statement/Prospectus). | |
(a)(5) | Press Release of the Partnership, dated as of April 2, 2019 (incorporated herein by reference to Exhibit 99.1 to the Partnership’s Current Report on Form 8-K, filed April 2, 2019). | |
(c)(1) | Opinion of Tudor Pickering Holt & Co Advisors LP (incorporated herein by reference to Annex B of the Proxy Statement/Prospectus). | |
(c)(2) | Opinion of J.P. Morgan Securities LLC. | |
(c)(3) | Presentation materials prepared by J.P. Morgan Securities LLC, dated January 17, 2019, for UGI. | |
(c)(4) | Presentation materials prepared by J.P. Morgan Securities LLC, dated January 25, 2019, for UGI. | |
(c)(5) | Presentation materials prepared by J.P. Morgan Securities LLC, dated February 25, 2019, for UGI. | |
(c)(6) | Presentation materials prepared by J.P. Morgan Securities LLC, dated March 4, 2019, for UGI. |
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Exhibit |
Description | |
(c)(7) | Presentation materials prepared by J.P. Morgan Securities LLC, dated April 1, 2019, for UGI. | |
(c)(8) | Presentation materials prepared by Tudor Pickering Holt & Co Advisors LP, dated January 31, 2019, for the GP Audit Committee. | |
(c)(9) | Presentation materials prepared by Tudor Pickering Holt & Co Advisors LP, dated February 12, 2019, for the GP Audit Committee. | |
(c)(10) | Presentation materials prepared by Tudor Pickering Holt & Co Advisors LP, dated February 14, 2019, for the GP Audit Committee. | |
(c)(11) | Presentation materials prepared by Tudor Pickering Holt & Co Advisors LP, dated February 19, 2019, for the GP Audit Committee. | |
(c)(12) | Presentation materials prepared by Tudor Pickering Holt & Co Advisors LP, dated February 19, 2019, for the GP Audit Committee. | |
(c)(13) | Presentation materials prepared by Tudor Pickering Holt & Co Advisors LP, dated February 26, 2019, for the GP Audit Committee. | |
(c)(14) | Presentation materials prepared by Tudor Pickering Holt & Co Advisors LP, dated February 28, 2019, for the GP Audit Committee. | |
(c)(15) | Presentation materials prepared by Tudor Pickering Holt & Co Advisors LP, dated March 5, 2019, for the GP Audit Committee. | |
(c)(16) | Presentation materials prepared by Tudor Pickering Holt & Co Advisors LP, dated March 13, 2019, for the GP Audit Committee. | |
(c)(17) | Presentation materials prepared by Tudor Pickering Holt & Co Advisors LP, dated March 18, 2019, for the GP Audit Committee. | |
(c)(18) | Presentation materials prepared by Tudor Pickering Holt & Co Advisors LP, dated March 18, 2019, for the GP Audit Committee. | |
(c)(19) | Presentation materials prepared by Tudor Pickering Holt & Co Advisors LP, dated March 29, 2019, for the GP Audit Committee. | |
(c)(20) | Presentation materials prepared by Tudor Pickering Holt & Co Advisors LP, dated April 1, 2019, for the GP Audit Committee. | |
(d)(1) | Agreement and Plan of Merger, dated as of April 1, 2019, by and among UGI, Holdings, Merger Sub, the Partnership and the General Partner (incorporated herein by reference to Annex A of the Proxy Statement/Prospectus). | |
(d)(2) | Support Agreement, dated as of April 1, 2019, by and between the Partnership and the General Partner (incorporated herein by reference to Annex C of the Proxy Statement/Prospectus). | |
(f) | None. | |
(g) | None. | |
(h) | None. |
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SIGNATURES
After due inquiry and to the best of each of the undersigned’s knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.
Dated as of May 6, 2019
AMERIGAS PARTNERS, L.P. | ||
By: | AMERIGAS PROPANE, INC., | |
its general partner | ||
By: | /s/ Hugh J. Gallagher | |
Name: | Hugh J. Gallagher | |
Title: | President and Chief Executive Officer | |
UGI CORPORATION | ||
By: | /s/ John L. Walsh | |
Name: | John L. Walsh | |
Title: | President and Chief Executive Officer | |
AMERIGAS, INC. | ||
By: | /s/ Ted J. Jastrzebski | |
Name: | Ted J. Jastrzebski | |
Title: | President | |
AMERIGAS PROPANE, INC. | ||
By: | /s/ Hugh J. Gallagher | |
Name: | Hugh J. Gallagher | |
Title: | President and Chief Executive Officer | |
AMERIGAS PROPANE HOLDINGS, INC. | ||
By: | /s/ Ted J. Jastrzebski | |
Name: | Ted J. Jastrzebski | |
Title: | President | |
AMERIGAS PROPANE HOLDINGS, LLC | ||
By: | /s/ Ted J. Jastrzebski | |
Name: | Ted J. Jastrzebski | |
Title: | President |
16
Exhibit (c)(2)
April 1, 2019
The Board of Directors
UGI Corporation
460 North Gulph Road
King of Prussia, PA 19406
Members of the Board of Directors:
You have requested our opinion as to the fairness, from a financial point of view, to UGI Corporation (the “Company”) of the Consideration (as defined below) to be paid by the Company in the proposed merger (the “Transaction”) of a wholly-owned subsidiary of the Company (the “Merger Subsidiary”) with AmeriGas Partners, L.P. (the “Partnership”). Pursuant to the Agreement and Plan of Merger (the “Agreement”), among the Company, Merger Subsidiary, Merger Subsidiary’s direct holding company (“Holdings”), the Partnership and the Partnership’s general partner, AmeriGas Propane, Inc. (the “General Partner”), the Partnership will become a wholly-owned subsidiary of the Company, and each outstanding common unit representing limited partner interests of the Partnership (the “Partnership Common Units”), other than (a) Partnership Common Units owned by the Partnership and any subsidiary of the Partnership or the Company and its affiliates (other than the General Partner) which will be automatically canceled and cease to exist and (b) Partnership Common Units owned by the General Partner (including the Partnership Common Units into which the general partner interests in the Partnership are to be converted in accordance with Section 3.1(c)(ii) of the Agreement) which will remain outstanding, will be converted into the right to receive, at the election of the holder of such Partnership Common Unit, either (i) 0.6378 shares (the “Stock Consideration”) of the Company’s common stock, without par value (the “Company Common Stock”), (i) $35.325 in cash (the “Cash Consideration”) or (iii) both 0.500 shares of Company Common Stock and $7.63 in cash (the “Mixed Consideration”). The right of each holder of Partnership Common Units to specify the number of such Partnership Common Units with respect to which such holder elects to receive the Stock Consideration, and the number of such Partnership Common Units with respect to which such holder elects to receive the Cash Consideration is subject to procedures and limitations contained in the Agreement, including that the aggregate number of Partnership Common Units to be converted into the right to receive Cash Consideration will equal the quotient obtained by dividing (i) (A) the product obtained by multiplying (a) the number of Partnership Common Units issued and outstanding immediately prior to the Effective Time (as defined in the Agreement)
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by (b) $7.63 minus (B) the product obtained by multiplying (a) the Partnership Common Units with respect to which an election to receive Mixed Consideration has been made by (b) $7.63, by (ii) the Cash Consideration. The aggregate amount of the Stock Consideration, Cash Consideration and Mixed Consideration payable to the holders of Partnership Common Units in the Transaction is referred to herein as the “Consideration”.
In connection with preparing our opinion, we have (i) reviewed the Agreement; (ii) reviewed certain publicly available business and financial information concerning the Partnership and the Company and the industries in which they operate; (iii) compared the proposed financial terms of the Transaction with the publicly available financial terms of certain transactions involving companies we deemed relevant and the consideration paid for such companies; (iv) compared the financial and operating performance of the Partnership and the Company with publicly available information concerning certain other companies we deemed relevant and reviewed the current and historical market prices of the Partnership Common Units and the Company Common Stock and certain publicly traded securities of such other companies; (v) reviewed certain internal financial analyses and forecasts prepared by or at the direction of the management of the Company relating to the respective businesses of the Partnership and the Company, as well as the estimated amount and timing of the cost savings and related expenses and synergies expected to result from the Transaction (the “Synergies”); and (vii) performed such other financial studies and analyses and considered such other information as we deemed appropriate for the purposes of this opinion. In addition, we have held discussions with certain members of the management of the General Partner and the Company with respect to certain aspects of the Transaction, and the past and current business operations of the Partnership and the Company, the financial condition and future prospects and operations of the Partnership and the Company, the effects of the Transaction on the financial condition and future prospects of the Company and certain other matters we believed necessary or appropriate to our inquiry.
In giving our opinion, we have relied upon and assumed the accuracy and completeness of all information that was publicly available or was furnished to or discussed with us by the Partnership, the General Partner, Holdings and the Company or otherwise reviewed by or for us. We have not independently verified any such information or its accuracy or completeness and, pursuant to our engagement letter with the Company, we did not assume any obligation to undertake any such independent verification. We have not conducted or been provided with any valuation or appraisal of any assets or liabilities, nor have we evaluated the solvency of the Partnership, the General Partner, Holdings or the Company under any state or federal laws relating to bankruptcy, insolvency or similar matters. In relying on financial analyses and forecasts provided to us or derived therefrom, including the Synergies, we have assumed that they have been reasonably prepared based on assumptions reflecting the best currently available estimates and judgments
V607855
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by management as to the expected future results of operations and financial condition of the Partnership and the Company to which such analyses or forecasts relate. We express no view as to such analyses or forecasts (including the Synergies) or the assumptions on which they were based. We have also assumed that the Transaction and the other transactions contemplated by the Agreement will have the tax consequences described in discussions with, and materials furnished to us by, representatives of the Company, and will be consummated as described in the Agreement, except that we have assumed that record dates for determining the holders of Partnership Common Units entitled to receive quarterly cash distributions from the Partnership occurring after the date hereof will be consistent with the historical practice of the Partnership notwithstanding the provisions of Section 6.11 of the Agreement. We have also assumed that the representations and warranties made by the Company, the Partnership, the General Partner and Holdings in the Agreement and the related agreements are and will be true and correct in all respects material to our analysis. We are not legal, regulatory or tax experts and have relied on the assessments made by advisors to the Company with respect to such issues. We have further assumed that all material governmental, regulatory or other consents and approvals necessary for the consummation of the Transaction will be obtained without any adverse effect on the Partnership, the General Partner, Holdings or the Company or on the contemplated benefits of the Transaction.
Our opinion is necessarily based on economic, market and other conditions as in effect on, and the information made available to us as of, the date hereof. It should be understood that subsequent developments may affect this opinion and that we do not have any obligation to update, revise, or reaffirm this opinion. Our opinion is limited to the fairness, from a financial point of view, to the Company of the Consideration to be paid by the Company in the proposed Transaction and we express no opinion as to the fairness of the Consideration to the holders of any class of securities, creditors or other constituencies of the Company or as to the underlying decision by the Company to engage in the Transaction. Furthermore, we express no opinion with respect to the amount or nature of any compensation to any officers, directors, or employees of any party to the Transaction, or any class of such persons relative to the Consideration to be paid by the Company in the Transaction or with respect to the fairness of any such compensation. We are expressing no opinion herein as to the price at which the Company Common Stock or the Partnership Common Units will trade at any future time.
We have acted as financial advisor to the Company with respect to the proposed Transaction and will receive a fee from the Company for our services, a substantial portion of which will become payable only if the proposed Transaction is consummated. In addition, the Company has agreed to indemnify us for certain liabilities arising out of our engagement. Please be advised that during the two years preceding the date of this letter, neither we nor our affiliates have had any other material financial advisory or other material commercial or investment banking
V607855
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relationships with the Company or the Partnership. Our commercial banking affiliate is an agent bank and a lender under outstanding credit facilities of a subsidiary of the Company, for which it receives customary compensation or other financial benefits. In addition, we and our affiliates hold, on a proprietary basis, less than 1% of the outstanding common stock of each of the Company and the Partnership. In the ordinary course of our businesses, we and our affiliates may actively trade the debt and equity securities or financial instruments (including derivatives, bank loans or other obligations) of the Company or the Partnership for our own account or for the accounts of customers and, accordingly, we may at any time hold long or short positions in such securities or other financial instruments.
On the basis of and subject to the foregoing, it is our opinion as of the date hereof that the Consideration to be paid by the Company in the proposed Transaction is fair, from a financial point of view, to the Company.
The issuance of this opinion has been approved by a fairness opinion committee of J.P. Morgan Securities LLC. This letter is provided to the Board of Directors of the Company (in its capacity as such) in connection with and for the purposes of its evaluation of the Transaction. This opinion does not constitute a recommendation to any unitholder of the Partnership or any shareholder of the Company as to how such unitholder or shareholder should vote with respect to the Transaction or any other matter. This opinion may not be disclosed, referred to, or communicated (in whole or in part) to any third party for any purpose whatsoever except with our prior written approval. Notwithstanding the foregoing, this opinion may be reproduced in full in any proxy or information statement mailed to holders of the Partnership Common Units but may not otherwise be disclosed publicly in any manner without our prior written approval.
Very truly yours,
/s/ J.P. Morgan Securities LLC
J.P. MORGAN SECURITIES LLC
V607855
Exhibit (c)(3)
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis S T R I C T L Y P R I V A T E A N D C O N F I D E N T I A L Discussion materials January 2019
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis C O N F I D E N T I A L This presentation was prepared exclusively for the benefit and internal use of the J.P. Morgan client to whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by J.P. Morgan. Neither this presentation nor any of its contents may be disclosed or used for any other purpose without the prior written consent of J.P. Morgan. The information in this presentation is based upon any management forecasts supplied to us and reflects prevailing conditions and our views as of this date, all of which are accordingly subject to change. J.P. Morgan’s opinions and estimates constitute J.P. Morgan’s judgment and should be regarded as indicative, preliminary and for illustrative purposes only. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us by or on behalf of the Company or which was otherwise reviewed by us. In addition, our analyses are not and do not purport to be appraisals of the assets, stock, or business of the Company or any other entity. J.P. Morgan makes no representations as to the actual value which may be received in connection with a transaction nor the legal, tax or accounting effects of consummating a transaction. Unless expressly contemplated hereby, the information in this presentation does not take into account the effects of a possible transaction or transactions involving an actual or potential change of control, which may have significant valuation and other effects. Notwithstanding anything herein to the contrary, the Company and each of its employees, representatives or other agents may disclose to any and all persons, without limitation of any kind, the U.S. federal and state income tax treatment and the U.S. federal and state income tax structure of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to the Company relating to such tax treatment and tax structure insofar as such treatment and/or structure relates to a U.S. federal or state income tax strategy provided to the Company by J.P. Morgan. J.P. Morgan’s policies on data privacy can be found at http://www.jpmorgan.com/pages/privacy. J.P. Morgan’s policies prohibit employees from offering, directly or indirectly, a favorable research rating or specific price target, or offering to change a rating or price target, to a subject company as consideration or inducement for the receipt of business or for compensation. J.P. Morgan also prohibits its research analysts from being compensated for involvement in investment banking transactions except to the extent that such participation is intended to benefit investors. IRS Circular 230 Disclosure: JPMorgan Chase & Co. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters included herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone not affiliated with JPMorgan Chase & Co. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties. J.P. Morgan is the marketing name for the Corporate and Investment Banking activities of JPMorgan Chase Bank, N.A., JPMS (member, NYSE), J.P. Morgan PLC authorized by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority and their investment banking affiliates. This presentation does not constitute a commitment by any J.P. Morgan entity to underwrite, subscribe for or place any securities or to extend or arrange credit or to provide any other services. Copyright 2018 JPMorgan Chase & Co. All rights reserved. U G I
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis C O N F I D E N T I A L Situation overview The MLP space in general is going through a structural change, as the traditional MLP structure with Incentive Distribution Rights becomes increasingly untenable As discussed at the August meeting, UGI management, with the assistance of J.P. Morgan, considered and analyzed various alternatives relating to APU With the approval of the UGI Board, management delivered an offer to eliminate its GP / IDRs in APU to the APU Board and commenced negotiations with the Conflicts Committee The total consideration proposed for the elimination of the GP / IDRs was $675 million, which consisted of $325 million of APU common units and $350 million of Class B PIK units UGI’s proposal to the APU Conflicts Committee was met with opposition and a disparate view of the GP / IDR value Major driver was disagreement around go-forward business profile and ability to maintain distributions – Equity research analysts have also begun to speculate about the potential for a distribution cut However, recent developments with regard to APU and the broader market have altered the landscape and merits of such a transaction and caused a reevaluation of the best path forward As part of the UGI / APU Investor Day on December 4, 2018, management announced a strategic review of alternatives for APU, which is expected to last up to 120 days Recent price movements have resulted in a reduced relative valuation for APU versus UGI – This has increased the viability of a potential APU buy-in as such a deal could be immediately accretive to UGI’s EPS and CFPS based on today’s prices – Conversely, the decline in the APU unit price would make a potential GP / IDR repurchase more challenging absent a change in valuation and/or structure An acquisition of APU would result in increased UGI earnings volatility based on weather However, current assumptions reflect a refined analysis of the proportion of historical shortfall / excess attributable to weather; while still meaningful, the impact is dampened using the current case The trend of MLP buy-ins driven by lack of market access / investor appetite for MLP securities has accelerated In light of these developments, UGI management recommends pursuing a full MLP buy-in of APU U G I 1
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis C O N F I D E N T I A L Agenda Page 1 Buy-in of APU 2 2 Appendix 15 U G I
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Buy-in of APU C O N F I D E N T I A L MLP buy-in: potential benefits and considerations Transaction description UGI acquires all outstanding third party LP units in APU for UGI shares / cash APU becomes private entity 100% owned by UGI Potential benefits to UGI Potential considerations for UGI Likely earnings accretive to UGI given current exchange ratio Size of acquisition will require a relatively material equity issuance to APU unitholders Likely operating cash flow per share accretive to UGI Eliminates APU as an acquisition currency / source of capital Material increase in discretionary cash flow to UGI Potential tax benefits to UGI through basis step-up Eliminates MLP that serves a less strategic role today Reduces structural complexity / administrative burdens Potential investor relations considerations for UGI Weather-sensitive APU earnings replace relatively fixed IDR income driven by distribution Pro forma UGI would have significant propane concentration Unclear how the market will value APU business as a wholly-owned segment of UGI Very limited shareholder overlap with APU and potential for shareholder turnover given new business composition U G I 2
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Buy-in of APU C O N F I D E N T I A L UGI / APU relative price performance Last two years Last three months UGI APU UGI peers1 APU peers2 40% 40% 30% 30% 20% 19% 20% 10% 10% 0% 0% (1%) (2%) (10%) (3%) (10%) (10%) (20%) (20%) (28%) (30%) (30%) (35%) (40%) (38%) (40%) (50%) (50%) (60%) (60%) Jan-17 Jun-17 Oct-17 Mar-18 Aug-18 Jan-19 Oct-18 Nov-18 Dec-18 Jan-19 Price performance YTD 1% 16% 1 month (8%) (10%) 3 months (3%) (28%) 6 months 3% (30%) 1 year 13% (38%) Source: FactSet as of 1/9/19; 1 UGI peers include CNP, MDU, MIC, and NFG; 2 APU peers include FGP and SPH U G I 3
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Buy-in of APU C O N F I D E N T I A L APU / UGI two year exchange ratio analysis APU acquired by UGI exchange ratio analysis 1.200x 1.100x High: 1.086x 1.000x 0.900x 2-year average: 0.866x 1-year average: 0.797x 0.800x 0.700x 6-month average: 0.694x 0.600x Current: 0.541x 0.500x Low: 0.426x 0.400x 0.300x Jan-17 Jun-17 Oct-17 Mar-18 Aug-18 Jan-19 Source: FactSet as of 1/9/19 U G I 4
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Buy-in of APU C O N F I D E N T I A L Illustrative APU analysis at various purchase prices Based on consensus estimates Offer premium Current 5% 10% 15% 20% Implied exchange ratio 0.541x 0.569x 0.596x 0.623x 0.650x UGI share price $54.02 $54.02 $54.02 $54.02 $54.02 Implied APU unit purchase price $29.25 $30.71 $32.18 $33.64 $35.10 Implied LP equity value $2,720 $2,856 $2,992 $3,128 $3,263 Memo: Purchase price based on public ownership¹ $2,024 $2,126 $2,227 $2,328 $2,429 (+) Net debt, pref. stock, and NCI and assumed illustrative GP / IDR value 3,328 3,328 3,328 3,328 3,328 Implied transaction value $6,047 $6,183 $6,319 $6,455 $6,591 Implied transaction value / EBITDA EBITDA metric 2018A EBITDA $606 10.0x 10.2x 10.4x 10.7x 10.9x 2019E EBITDA 635 9.5x 9.7x 10.0x 10.2x 10.4x 2020E EBITDA 642 9.4x 9.6x 9.9x 10.1x 10.3x Implied APU unit price / LP DCF / unit DCF / unit metric 2018A LP DCF / unit $3.71 7.9x 8.3x 8.7x 9.1x 9.5x 2019E LP DCF / unit 3.82 7.7x 8.0x 8.4x 8.8x 9.2x 2020E LP DCF / unit 3.83 7.6x 8.0x 8.4x 8.8x 9.2x Implied APU unit price / EPS EPS metric 2018A EPS $2.35 2 12.4x 13.1x 13.7x 14.3x 14.9x 2019E EPS 2.40 12.2x 12.8x 13.4x 14.0x 14.6x 2020E EPS 2.45 11.9x 12.5x 13.1x 13.7x 14.3x Premium / (discount) to: 30-day VWAP $27.44 7% 12% 17% 23% 28% 60-day VWAP 29.78 (2%) 3% 8% 13% 18% Source: Equity research consensus projections as of 1/9/19; company filings; Note: Financials based on 9/30 FYE 1 Public ownership of approximately 74%; 2 Excludes $75mm impairment charge; including impairment results in EPS of $1.54 U G I 5
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Buy-in of APU C O N F I D E N T I A L UGI summary status quo financial projections Commentary Estimates based on FYE 9/30 EBITDA, D&A, capital expenditures and dividends per share projections based on equity research consensus projections as of 1/9/19 Implied EPS in-line with company guidance (FY 2019E of $2.75 - $2.95) and equity research consensus projections Tax assumptions per management guidance EBITDA ($mm) Cash flow from operations ($mm)1 $1,649 $1,699 $1,510 $1,566 $1,265 $1,301 $1,085 $1,156 FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E EPS ($ / share) Dividend per share ($ / share) $3.10 $3.20 $2.74 $2.88 $1.02 $1.12 $1.19 $1.25 FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Source: Company filings; Equity research consensus projections as of 1/9/19 1 Cash flow presented on a fully consolidated basis U G I 6
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Buy-in of APU C O N F I D E N T I A L APU summary status quo financial projections Commentary Estimates based on FYE 9/30 EBITDA, D&A, capital expenditures and tax projections based on equity research consensus projections as of 1/919 LP distribution per unit is held flat at $3.80 per management guidance EBITDA ($mm) Maintenance capex ($mm) $606 $635 $642 $652 $53 $55 $56 $58 FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Distributable cash flow ($mm) LP distribution per unit ($ / unit) $3.80 $3.80 $3.80 $3.80 $389 $410 $412 $419 FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Total 0.97x 1.01x 1.01x 1.03x coverage Source: Company filings; Equity research consensus projections as of 1/9/19 U G I 7
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Buy-in of APU C O N F I D E N T I A L Illustrative buy-in of APU by UGI transaction assumptions and sources and uses Assumes illustrative 10% premium to APU public unitholders, 85% equity and 15% debt consideration Transaction assumptions UGI ownership Assumes transaction is effective in the beginning of FY 2019E (10/1/18) Current UGI shareholders New APU unitholders Assumes an illustrative 10% premium to APU’s unit price of $29.25 as of 1/9/19 for a total equity purchase price of $2,227mm Standalone UGI ownership Assumes UGI purchases 69.2mm APU units that it does not currently own 100% 17% Assumes ~35mm UGI shares are issued at $54.02 (price as of 1/9/19) Assumes no synergies Assumes net income attributable to NCI associated with APU and tax savings associated with basis step-up are taxed at 27.6% Assumes 6% interest rate on newly issued transaction debt per management guidance 83% Assumes APU long-term debt remains outstanding at close Tax basis step-up per management guidance The pre-tax unlevered return to UGI from the incremental cash saved on distributions to APU third party unitholders is ~13% Sources and uses ($mm) Sources Uses Equity issued to APU $1,893 Purchase price $2,227 Incremental debt issued 334 Fees / expenses 15 UGI balance sheet cash 15 Total sources $2,242 Total uses $2,242 Source: Company filings; Equity research consensus projections as of 1/9/19 U G I 8
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Buy-in of APU C O N F I D E N T I A L Illustrative financial impact to UGI Assumes illustrative 10% premium to APU public unitholders, 85% equity and 15% debt consideration; assumes excess cash sits on balance sheet after repaying APU revolver UGI standalone UGI pro forma $2.88 $3.10 $3.20 $2.94 $3.16 $3.29 $2.74 $2.74 EPS ($ / share) FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Acc / (dil) 2.1% 2.2% 2.9% $6.14 $6.21 $5.33 $5.48 $5.48 $4.64 $4.73 $4.64 CFPS ($ / share) FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Acc / (dil) 15.7% 15.2% 13.2% Dividend per $1.02 $1.12 $1.19 $1.25 $1.02 $1.12 $1.19 $1.25 share ($ / share) FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Acc / (dil) 0.0% 0.0% 0.0% 2.7x 2.7x 2.7x 2.6x 2.7x 2.8x 2.6x 2.4x Net debt / LTM EBITDA FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Source: Company filings; Equity research consensus projections as of 1/9/19 Note: CFPS based on deconsolidated cash flow from operations plus APU distributions paid to UGI U G I 9
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Buy-in of APU C O N F I D E N T I A L Incremental cash flow to UGI Assumes illustrative 10% premium to APU public unitholders, 85% equity and 15% debt consideration Cash effect of transaction ($mm) FY 2019E FY 2020E FY 2021E Current third party APU payout APU third party LP units outstanding 69.2 69.2 69.2 Distribution per LP unit $3.80 $3.80 $3.80 Distributions saved $263 $263 $263 (-) Taxes on incremental APU ownership ($79) ($79) ($81) (-) Incremental taxes resulting from 163(J) interest limitations 0 0 0 (+) Annual tax savings from basis step-up1 96 119 94 Incremental tax saved / (paid) $17 $40 $14 Dividends on pro forma equity consideration UGI shares issued to APU third party LP unit holders 35.0 35.0 35.0 Dividend per share $1.12 $1.19 $1.25 Incremental dividends paid ($39) ($42) ($44) Memo: pro forma common share count 208.9 208.9 208.9 Incremental interest expense on new debt Interest expense on incremental debt $20 $20 $20 Marginal tax rate 27.6% 27.6% 27.6% After-tax interest expense ($15) ($15) ($15) Cash effect of transaction $226 $246 $218 Cumulative cash balance effect of transaction $226 $472 $691 Source: Company filings; Equity research consensus projections as of 1/9/19 1 Basis step-up based on ~74% UGI does not own; 90% of basis step-up assumed to be depreciable; Depreciation schedule based on 2015 PWC analysis; Subject to change per ongoing UGI and PWC internal analysis U G I 10
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Buy-in of APU C O N F I D E N T I A L Illustrative financial impact to UGI “Balanced allocation” scenario Assumes illustrative 10% premium to APU public unitholders, 85% equity and 15% debt consideration; assumes 50% excess cash from transaction is reinvested in growth capex at a 7.5x multiple and 50% is used to repurchase shares after repaying APU revolver UGI standalone UGI pro forma $3.10 $3.20 $2.94 $3.17 $3.33 $2.74 $2.88 $2.74 EPS ($ / share) FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Acc / (dil) 2.1% 2.4% 4.1% $6.17 $6.32 $5.33 $5.48 $5.48 $4.64 $4.73 $4.64 CFPS ($ / share) FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Acc / (dil) 15.7% 15.8% 15.3% Dividend per $1.02 $1.12 $1.19 $1.25 $1.02 $1.12 $1.19 $1.25 share ($ / share) FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Acc / (dil) 0.0% 0.0% 0.0% 2.7x 2.7x 2.7x 2.6x 2.7x 2.8x 2.7x 2.6x Net debt / LTM EBITDA FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Source: Company filings; Equity research consensus projections as of 1/9/19 Note: CFPS based on deconsolidated cash flow from operations plus APU distributions paid to UGI; Assumes only 50% of reinvestment EBITDA in year one U G I 11
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Buy-in of APU C O N F I D E N T I A L Financial impact to UGI based on various premiums and consideration mix “Balanced allocation” scenario EPS CFPS % of buy-in financed with equity % of buy-in financed with equity 65% 75% 85% 65% 75% 85% 0% 4.7% 4.3% 3.9% 0% 19.0% 18.1% 17.2% FY 2019E 5% 3.8% 3.4% 3.0% 5% 18.3% 17.4% 16.5% 10% 2.9% 2.5% 2.1% 10% 17.6% 16.6% 15.7% Illustrative premium 15% 2.0% 1.6% 1.2% Illustrative premium 15% 16.9% 15.9% 15.0% 20% 1.1% 0.7% 0.4% 20% 16.2% 15.2% 14.2% % of buy-in financed with equity % of buy-in financed with equity 65% 75% 85% 65% 75% 85% 0% 5.1% 4.7% 4.2% 0% 19.2% 18.2% 17.3% FY 2020E 5% 4.3% 3.8% 3.3% 5% 18.5% 17.5% 16.5% 10% 3.4% 2.9% 2.4% 10% 17.9% 16.8% 15.8% Illustrative premium 15% 2.5% 2.0% 1.6% Illustrative premium 15% 17.2% 16.1% 15.1% 20% 1.7% 1.2% 0.7% 20% 16.6% 15.5% 14.4% % of buy-in financed with equity % of buy-in financed with equity 65% 75% 85% 65% 75% 85% 0% 6.8% 6.3% 5.9% 0% 18.6% 17.7% 16.8% FY 2021E 5% 5.9% 5.4% 5.0% 5% 17.9% 16.9% 16.0% 10% 5.0% 4.5% 4.1% 10% 17.2% 16.2% 15.3% Illustrative premium 15% 4.2% 3.7% 3.2% Illustrative premium 15% 16.4% 15.5% 14.5% 20% 3.3% 2.8% 2.3% 20% 15.7% 14.7% 13.8% Source: Company filings; Equity research consensus projections as of 1/9/19 U G I 12
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Buy-in of APU C O N F I D E N T I A L UGI’s relative earnings mix Based on management projections Utilities Domestic propane International propane Midstream UGI standalone (based on FY 2019E earnings) UGI + APU pro forma (based on FY 2019E earnings) 19% 24% 21% 26% Total propane Total propane exposure: 50% exposure: 60% 26% 17% 33% 34% Total propane Total propane Pro forma earnings mix 19% 18% 18% 26% 27% 29% 34% 33% 31% 21% 22% 22% 2019E 2020E 2021E Source: UGI projections through 2021 as provided by UGI management Note: Based on net income estimates; Domestic propane adjusted for net income attributable to non-controlling interests; Pro forma exposure adjusts net income attributable to non-controlling interests by pro forma ownership and ignores effects of consideration mix for potential transaction U G I 13
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Buy-in of APU C O N F I D E N T I A L Summary conclusions UGI’s proposal to the APU Conflicts Committee on a GP / IDR elimination was met with opposition and a disparate view of GP / IDR value Recent price movements have resulted in a reduced relative valuation for APU versus UGI This has increased the viability of a potential APU buy-in as such a deal could be immediately accretive to UGI’s EPS and CFPS based on today’s prices The trend of MLP buy-ins driven by lack of market access / investor appetite for MLP securities has accelerated Prior analysis likely overestimated proportion of historical shortfall / excess attributable to weather; while still meaningful, the impact is dampened using the current case In light of these developments, UGI management recommends pursuing a full MLP buy-in of APU U G I 14
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis C O N F I D E N T I A L Agenda Page 1 Buy-in of APU 2 2 Appendix 15 Additional buy-in of APU considerations 15 Elimination of GP / IDRs in exchange for APU units 18 U G I
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Appendix | Additional buy-in of APU considerations C O N F I D E N T I A L Illustrative merger timeline Date Description Duration Proposal / Negotiation Upon authorization by the UGI Board, make merger proposal to Special Committee 60 days Negotiate transaction with Special Committee, including merger agreement Announcement Announce merger via press release / investor call Regulatory Filings Prepare / file S-4 registration statement and NYSE listing agreement re UGI share issuance; 75 days proxy statement / prospectus re AmeriGas unitholder meeting; and related “going private” filings Amend filings per SEC comments, as applicable Proxy solicitation Execute on proxy solicitation / communication plan 30 days AmeriGas unitholder meeting Closing U G I 15
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Appendix | Additional buy-in of APU considerations C O N F I D E N T I A L Premiums paid in precedent affiliate MLP buy-in deals % premium to last close Average: 11% 26% Median: 11% 23% 21% 20% 18% 17% 15% 14% 13% 11% 11% 8% 6% 6% 6% 3% 1% 1% 1% 1% May May Aug. Oct. Nov. Date Feb. 2017 Mar. 2017 Apr. 2017 May 2017 Nov. 2017 Jan. 2018 Mar. 2018 May 2018 May 2018 Jun. 2018 Jul. 2018 Sept. 2018 Oct. 2018 Oct. 2018 Nov. 2018 2018 2018 2018 2018 2018 Western World Energy Tallgrass Cheniere ArcLight Energy Antero Equitrans Williams Dominion Valero EnLink Gas Acquirer ONEOK VTTI BV Point Transfer Delek Archrock Energy Enbridge Enbridge Energy OCI N.V. Capital Transfer Midstream Midstream Companies Energy Energy Midstream Equity Terminals Partners GP Partners Partners Equity GP Corp Partners World PennTex Tallgrass Enbridge Spectra Cheniere OCI Trans- Energy Dominion Antero Valero EnLink Western ONEOK Alon US Archrock Williams EQGP Target VTTI Point Midstream Energy Energy Energy Energy Partners Montaigne Transfer Midstream Midstream Energy Midstream Gas Partners Partners Partners Partners Holdings Terminals Partners Partners Partners Partners Holdings LP Partners Partners Partners Partners Partners Partners Partners % 100% 0% 0% 0% 100% 100% 100% 100% 100% 100% 100% 0% 0% 100% 100% 90% 0% 100% 100% 0% equity % acq. 61% 51% 26% 34% 18% 57% 65% 63% 17% 26% 8% 12% 80% 34% 39% 100% 34% 78% 69% 9% Acquirer absolute price performance 1-day (2%) n/a n/a 0% (0%) (5%) 3% 1% 1% 2% (1%) (0%) n/a 3% (0%) 9% (10%) (2%) (6%) (3%) 30-day (5%) n/a n/a (12%) 13% (15%) 14% (3%) (3%) (1%) 8% (4%) n/a (4%) 1% (13%) (23%) (29%) (10%) (13%) Acquirer relative price performance to AMZ 1-day (3%) n/a n/a (1%) 1% (7%) 5% 1% 1% 1% (2%) 1% n/a 0% (1%) 8% (10%) (1%) (6%) (2%) 30-day (1%) n/a n/a (9%) 14% (13%) 8% (1%) (1%) 0% 9% (1%) n/a (5%) 11% (3%) (15%) (19%) 0% (4%) U G I 16 Source: Company filings Disclaimer: The MLP buy-in metrics above are presented merely for reference purposes only. The transactions included above represent selected master limited partnership buy-in transactions J.P. Morgan did not attempt to identify all master limited partnership buy-in transactions that may be relevant for this analysis, and none of the selected transactions is identical to any transaction that the board may be considering.
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Appendix | Additional buy-in of APU considerations C O N F I D E N T I A L Illustrative impact to UGI share price based on various pro forma EPS multiples (“balanced allocation” scenario) – for reference only Assumes illustrative 10% premium to APU public unitholders; based on current UGI share price of $54.02 2019E 2020E Current P / 2019E % of buy-in financed with equity Current P / 2020E % of buy-in financed with equity EPS multiple EPS multiple 65% 75% 85% 65% 75% 85% Pro forma UGI 20.0x $59.23 $59.00 $58.78 18.0x $57.60 $57.33 $57.07 share price at 2019E 2020E various P / E / 18.8x $55.58 $55.36 $55.15 / 17.5x $55.85 $55.59 $55.33 P P multiples multiple multiple forma 18.0x $53.30 $53.10 $52.90 forma 16.0x $51.20 $50.96 $50.73 EPS EPS Pro 17.0x $50.34 $50.15 $49.96 Pro 15.0x $48.00 $47.77 $47.56 % of buy-in financed with equity % of buy-in financed with equity 65% 75% 85% 65% 75% 85% Share price accretion / 20.0x 10% 9% 9% 18.0x 7% 6% 6% (dilution) to 2019E 2020E / 18.8x 3% 2% 2% / 17.5x 3% 3% 2% UGI’s current P P price multiple multiple forma 18.0x (1%) (2%) (2%) forma 16.0x (5%) (6%) (6%) EPS EPS Pro 17.0x (7%) (7%) (8%) Pro 15.0x (11%) (12%) (12%) Source: Company filings; Equity research consensus projections as of 1/9/19 Note: New debt issued for transaction assumes 6% interest rate per company guidance Disclaimer: This analysis is merely illustrative of the impact of hypothetical trading at assumed multiples and should not be interpreted as a stock price prediction by J.P. Morgan U G I 17
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis C O N F I D E N T I A L Agenda Page 1 Buy-in of APU 2 2 Appendix 15 Additional buy-in of APU considerations 15 Elimination of GP / IDRs in exchange for APU units 18 U G I
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Appendix | Elimination of GP / IDRs in exchange for APU units C O N F I D E N T I A L Situation update on the elimination of the GP / IDRs After receiving the Conflicts Committee’s feedback to management’s on its GP / IDR repurchase proposal, management and its advisors discussed and analyzed potential structural solutions Focus on limiting dilution and protecting against potential downside in APU business from weather volatility, while ensuring reasonable valuation for IDRs One potential structure that was discussed was partial consideration in an additional class of units (“Class C”) that only pay partial or full distributions if APU meets a certain financial threshold For illustrative purposes, this was assumed to be a certain EBITDA level entitling the holders to receive either 50% or 100% of equivalent distributions to an LP unitholder These units could eventually convert to common LP units after a determined period of time – timing and / or conditions for conversion would need to be negotiated For example, conversion could be automatic after a certain period or may require meeting a certain financial threshold for a number of consecutive periods before they convert Management and its advisors have provided the following illustrative financial impact analysis for a GP / IDR repurchase that uses Class C units as partial consideration for discussion purposes only This transaction structure has not been discussed with, presented to or offered to the Conflicts Committee The consideration for the GP / IDRs and assumed APU distribution profile are illustrative assumptions from management U G I 18
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Appendix | Elimination of GP / IDRs in exchange for APU units C O N F I D E N T I A L Elimination of GP / IDRs: potential benefits and considerations Transaction description APU issues LP units and / or Class C units to UGI in exchange for the elimination of UGI’s GP / IDR interest Class C units allow APU to issue equity without paying a cash distribution if APU encounters a warm winter Results in greater financial flexibility for APU Results in greater ownership of APU LP units by UGI Potential benefits to UGI Potential considerations for UGI Increases UGI’s LP ownership in APU Requires UGI and APU conflicts committee to agree on value of IDRs UGI retains some upside from further growth of distributions Potentially increases earnings volatility attributed to domestic UGI demonstrates continued support of APU through retained propane in UGI ownership UGI potentially forgoes future upside from the IDRs from equity IDR elimination highlights value of the IDRs and is potentially financed acquisitions at APU accretive to cash flow Increases UGI’s exposure to weather volatility Potential benefits to APU Potential considerations for APU Lower marginal cash cost of capital Potentially dilutive to short- and medium-term coverage Increases competitiveness for APU to pursue transformational acquisitions with equity Plays to meaningful MLP simplification trend Structure appeals to broader investor base U G I 19
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Appendix | Elimination of GP / IDRs in exchange for APU units C O N F I D E N T I A L APU summary status quo financial projections Commentary Estimates based on FYE 9/30 Assumes distribution cut of (20%) in 2019Ewith 0% year-over-year growth thereafter per management guidance EBITDA, D&A, capital expenditures and tax projections based on equity research consensus projections as of 1/9/19 Results in a distribution per unit of $3.04 and total coverage of 1.37x in the 2019E EBITDA ($mm) Maintenance capex ($mm) $635 $642 $652 $606 $53 $55 $56 $58 FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Distributable cash flow ($mm) LP distribution per unit ($ / unit) $3.80 $3.04 $3.04 $3.04 $389 $412 $420 $432 FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Total 0.97x 1.37x 1.39x 1.43x coverage Source: Company filings; Equity research consensus projections as of 1/9/19; UGI management U G I 20
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Appendix | Elimination of GP / IDRs in exchange for APU units C O N F I D E N T I A L Transaction assumptions and sources and uses Assumes $125mm LP units / $375mm Class C units for elimination of GP / IDRs Transaction assumptions Unit / payout assumptions Complete elimination of IDRs based on illustrative GP / IDR value of Assumes initial distribution cut to reach 1.37x coverage $500mm Distributions held flat year-over-year thereafter Assumes transaction date of 10/1/18 2019E distribution per unit of $3.04 represents a (20%) cut to 2018 distribution per unit of $3.80 Assumes no synergies Distribution profile held constant in pro forma scenario Assumes elimination of all economics of the GP in the MLP and the OLP Class C unit assumptions Assumes $125mm of consideration is in APU LP units and $375mm in Class C units Assumes units pay cash distributions dependent on respective EBITDA thresholds Assumes APU issues 4.3mm LP units and 12.8mm Class C units at $29.25 (current price as of 1/9/19) – Each Class C unit pays 50% of LP unit equivalent distribution if APU EBITDA surpasses $630mm Projections subject to modification based on conclusions of ongoing tax analysis / modeling exercise – Each Class C unit pays 100% of LP unit equivalent distribution if APU EBITDA surpasses $650mm – Class C units receive no distributions if EBITDA is below $630mm – Assumes Class C units convert to LP units 5 years after issuance Sources and uses ($mm) Sources Uses Incremental debt issued $0 GP / IDR elimination $500 LP equity issued to GP 125 Class C equity issued to GP 375 Total sources $500 Total uses $500 Source: Company filings; Equity research consensus projections as of 1/9/19; UGI management U G I 21
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Appendix | Elimination of GP / IDRs in exchange for APU units C O N F I D E N T I A L Illustrative cash flow impact to APU UGI Consensus case financials APU Assumes $125mm LP units / $375mm Class C units for elimination of GP / IDRs APU standalone APU pro forma $3.71 $3.83 $3.87 $3.94 $3.71 $3.98 $4.04 $3.90 DCF / LP + distribution paying Class C units ($ / unit)1 FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Acc / (dil) 3.8% 4.4% (0.8%) % Class C paying 50% 50% 100% distributions 1.37x 1.39x 1.43x 1.31x 1.33x 1.28x Total coverage 0.97x 0.97x FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E $3.80 $3.80 $3.04 $3.04 $3.04 $3.04 $3.04 $3.04 LP DPU ($ / unit) FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Acc / (dil) 0.0% 0.0% 0.0% 4.7x 4.4x 4.2x 4.7x 4.4x 4.3x 4.1x 4.2x Net debt / LTM EBITDA FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Source: Company filings; Equity research consensus projections as of 1/9/19; UGI management; Note: Total coverage in pro forma case defined as total DCF divided by total distributions paid to LP and Class C units 1 Includes total LP units plus only the distribution paying Class C units U G I 22
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Appendix | Elimination of GP / IDRs in exchange for APU units C O N F I D E N T I A L Illustrative financial impact to UGI UGI Consensus case financials APU Assumes $125mm LP units / $375mm Class C units for elimination of GP / IDRs UGI standalone UGI pro forma UGI LP UGI GP / OLP economic interest Public LP 25% 37% Ownership1 2% 73% 63% 0% Pre-DPU cut ($3.80 / unit) Post-DPU cut ($3.04 / unit) $3.10 $2.99 $3.20 $3.09 $3.08 $3.19 $2.74 $2.74 $2.88 $2.78 $2.74 $2.86 EPS ($ / share) FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Pre-cut acc / (dil) (0.5%) (0.4%) (0.2%) Post-cut acc / (dil) 3.1% 3.1% 3.3% $5.33 $5.48 $5.15 $5.35 $4.73 $5.01 $5.09 $4.64 $4.64 $4.42 $4.64 $4.51 CFPS ($ / share) FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Pre-cut acc / (dil) (4.8%) (4.5%) (2.5%) Post-cut acc / (dil) 1.8% 1.7% 3.9% Source: Company filings; Equity research consensus projections as of 1/9/19; UGI management Note: Pro forma EPS based on UGI’s fully diluted ownership (LP + Class C units); CFPS based on deconsolidated cash flow from operations plus APU distributions paid to UGI 1 UGI pro forma ownership based on fully diluted units at the time of transaction U G I 23
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Appendix | Elimination of GP / IDRs in exchange for APU units C O N F I D E N T I A L GP / IDR elimination sensitivity analysis Consensus case financials Assumes fixed issuance of $375mm of Class C units and remaining GP / IDR value in LP units APU DCF / LP + distribution paying Class C LP DPU Total coverage units ($ / unit)1 FYE FYE FYE 2019E 2020E 2021E 2019E 2020E 2021E 2019E 2020E 2021E mm) $400 7.4% 8.2% 2.7% mm) $400 0.0% 0.0% 0.0% mm) $400 1.35x 1.38x 1.33x ( $ $450 5.6% 6.3% 0.9% $ ( $450 0.0% 0.0% 0.0% $ ( $450 1.33x 1.35x 1.31x value $500 3.8% 4.4% (0.8%) value $500 0.0% 0.0% 0.0% value $500 1.31x 1.33x 1.28x IDR $550 2.1% 2.6% (2.5%) IDR $550 0.0% 0.0% 0.0% IDR $550 1.29x 1.31x 1.26x / / / GP $600 0.4% 0.9% (4.1%) GP $600 0.0% 0.0% 0.0% GP $600 1.26x 1.28x 1.24x Status quo coverage 1.37x 1.39x 1.43x UGI EPS2 CFPS FYE FYE 2019E 2020E 2021E 2019E 2020E 2021E mm) $400 2.3% 2.3% 2.4% mm) $400 0.5% 0.4% 2.6% $ ( $450 2.7% 2.7% 2.9% $ ( $450 1.1% 1.1% 3.3% value $500 3.1% 3.1% 3.3% value $500 1.8% 1.7% 3.9% IDR $550 3.6% 3.5% 3.8% IDR $550 2.5% 2.3% 4.5% / / GP $600 3.9% 3.9% 4.2% GP $600 3.2% 2.9% 5.2% Source: Company filings; Equity research consensus projections as of 1/9/19; UGI management; Note: Pro forma EPS based on UGI’s fully diluted ownership (LP + Class C units); CFPS based on deconsolidated cash flow from operations plus APU distributions paid to UGI; Total coverage in pro forma case defined as total DCF divided by total distributions paid to LP and Class C units 1 Includes total LP units plus only the distribution paying Class C units; 2 EPS acc / (dil) based on post-DPU cut EPS U G I 24
Exhibit (c)(4)
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis S T R I C T L Y P R I V A T E A N D C O N F I D E N T I A L Discussion materials January 25, 2019 Update
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis C O N F I D E N T I A L This presentation was prepared exclusively for the benefit and internal use of the J.P. Morgan client to whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by J.P. Morgan. Neither this presentation nor any of its contents may be disclosed or used for any other purpose without the prior written consent of J.P. Morgan. The information in this presentation is based upon any management forecasts supplied to us and reflects prevailing conditions and our views as of this date, all of which are accordingly subject to change. J.P. Morgan’s opinions and estimates constitute J.P. Morgan’s judgment and should be regarded as indicative, preliminary and for illustrative purposes only. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us by or on behalf of the Company or which was otherwise reviewed by us. In addition, our analyses are not and do not purport to be appraisals of the assets, stock, or business of the Company or any other entity. J.P. Morgan makes no representations as to the actual value which may be received in connection with a transaction nor the legal, tax or accounting effects of consummating a transaction. Unless expressly contemplated hereby, the information in this presentation does not take into account the effects of a possible transaction or transactions involving an actual or potential change of control, which may have significant valuation and other effects. Notwithstanding anything herein to the contrary, the Company and each of its employees, representatives or other agents may disclose to any and all persons, without limitation of any kind, the U.S. federal and state income tax treatment and the U.S. federal and state income tax structure of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to the Company relating to such tax treatment and tax structure insofar as such treatment and/or structure relates to a U.S. federal or state income tax strategy provided to the Company by J.P. Morgan. J.P. Morgan’s policies on data privacy can be found at http://www.jpmorgan.com/pages/privacy. J.P. Morgan’s policies prohibit employees from offering, directly or indirectly, a favorable research rating or specific price target, or offering to change a rating or price target, to a subject company as consideration or inducement for the receipt of business or for compensation. J.P. Morgan also prohibits its research analysts from being compensated for involvement in investment banking transactions except to the extent that such participation is intended to benefit investors. IRS Circular 230 Disclosure: JPMorgan Chase & Co. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters included herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone not affiliated with JPMorgan Chase & Co. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties. J.P. Morgan is the marketing name for the Corporate and Investment Banking activities of JPMorgan Chase Bank, N.A., JPMS (member, NYSE), J.P. Morgan PLC authorized by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority and their investment banking affiliates. This presentation does not constitute a commitment by any J.P. Morgan entity to underwrite, subscribe for or place any securities or to extend or arrange credit or to provide any other services. Copyright 2018 JPMorgan Chase & Co. All rights reserved. U G I
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis C O N F I D E N T I A L Agenda Page 1 Buy-in of APU 1 2 Appendix 9 U G I
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Buy-in of APU C O N F I D E N T I A L UGI / APU relative price performance Last two years Last three months UGI APU UGI peers1 APU peers2 40% 40% 30% 30% 20% 21% 20% 10% 10% 4% 0% 1% 0% 1% (10%) (7%) (10%) (20%) (20%) (22%) (30%) (31%) (30%) (37%) (40%) (40%) (50%) (50%) (60%) (60%) Jan-17 Jun-17 Nov-17 Apr-18 Aug-18 Jan-19 Oct-18 Nov-18 Dec-18 Jan-19 Price performance YTD 4% 20% 1 month (0%) 27% 3 months 1% (22%) 6 months 5% (30%) 1 year 20% (37%) Source: FactSet as of 1/23/19; 1 UGI peers include CNP, MDU, MIC, and NFG; 2 APU peers include FGP and SPH U G I 1
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Buy-in of APU C O N F I D E N T I A L APU / UGI two year exchange ratio analysis APU acquired by UGI exchange ratio analysis 1.200x 1.100x High: 1.086x 1.000x 0.900x 2-year average: 0.857x 0.800x 1-year average: 0.780x 0.700x 6-month average: 0.662x 0.600x Current: 0.546x 0.500x Low: 0.426x 0.400x 0.300x Jan-17 Jun-17 Nov-17 Apr-18 Aug-18 Jan-19 Source: FactSet as of 1/23/19 U G I 2
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Buy-in of APU C O N F I D E N T I A L Illustrative APU analysis at various purchase prices Based on consensus estimates Offer premium Current 5% 10% 15% 20% Implied exchange ratio 0.546x 0.574x 0.601x 0.628x 0.656x UGI share price $55.63 $55.63 $55.63 $55.63 $55.63 Implied APU unit purchase price $30.40 $31.92 $33.44 $34.96 $36.48 Implied LP equity value $2,827 $2,968 $3,109 $3,250 $3,392 Memo: Purchase price based on public ownership¹ $2,104 $2,209 $2,314 $2,419 $2,525 (+) Net debt, pref. stock, and NCI and assumed illustrative GP / IDR value 3,328 3,328 3,328 3,328 3,328 Implied transaction value $6,154 $6,296 $6,437 $6,578 $6,720 Implied transaction value / EBITDA EBITDA metric 2018A EBITDA $606 10.2x 10.4x 10.6x 10.9x 11.1x 2019E EBITDA 629 9.8x 10.0x 10.2x 10.5x 10.7x 2020E EBITDA 633 9.7x 9.9x 10.2x 10.4x 10.6x Implied APU unit price / LP DCF / unit DCF / unit metric 2018A LP DCF / unit $3.71 8.2x 8.6x 9.0x 9.4x 9.8x 2019E LP DCF / unit 3.78 8.0x 8.4x 8.8x 9.2x 9.6x 2020E LP DCF / unit 3.78 8.0x 8.4x 8.8x 9.2x 9.6x Implied APU unit price / EPS EPS metric 2018A EPS $2.35 2 12.9x 13.6x 14.2x 14.9x 15.5x 2019E EPS 2.39 12.7x 13.4x 14.0x 14.6x 15.3x 2020E EPS 2.44 12.5x 13.1x 13.7x 14.3x 15.0x Premium / (discount) to: 30-day VWAP $26.54 15% 20% 26% 32% 37% 60-day VWAP 29.27 4% 9% 14% 19% 25% Source: Equity research consensus projections as of 1/23/19; company filings; Bloomberg; Note: Financials based on 9/30 FYE 1 Public ownership of approximately 74%; 2 Excludes $75mm impairment charge; including impairment results in EPS of $1.54 U G I 3
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Buy-in of APU C O N F I D E N T I A L Unlevered IRR calculations Per UGI management Assumes illustrative 10% premium to APU public unitholders; all values in $ millions Normal weather scenario Warm weather scenario EBITDA for 2019 to 2021 is consensus EBITDA from 2019 to 2021 = $600 EBITDA growth = $10/yr. starting in 2022 EBITDA growth = $2/yr. starting in 2022 Maintenance + growth capital ~$109/yr. Maintenance + growth capital ~$100/yr. Acquisition capital = $15/yr. starting in 2022 Acquisition capital = $15/yr. starting in 2022 Unlevered after-tax IRR = 9.95% Unlevered after-tax IRR = 7.90% Unlevered after-tax IRR with tax optimization = 11.21% Unlevered after-tax IRR with tax optimization = 9.10% Model changes since materials presented on January 17, 2019 (which reflected 13% pre-tax IRR) Updated stock / unit prices Updated consensus Changed IRR from 10 yrs. to 20 yrs. methodology Reflected impact of tax analysis Updated terminal value multiple Added synergies of $5/yr. Source: Internal UGI U G I 4
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Buy-in of APU C O N F I D E N T I A L Illustrative financial impact to UGI Assumes illustrative 10% premium to APU public unitholders, 83% equity and 17% debt consideration; assumes excess cash sits on balance sheet after repaying APU revolver UGI standalone UGI pro forma $2.88 $3.10 $3.21 $2.91 $3.13 $3.27 $2.74 $2.74 EPS ($ / share) FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Acc / (dil) 0.8% 0.8% 1.6% $6.21 $6.44 $5.44 $5.68 $5.48 $4.64 $4.79 $4.64 CFPS ($ / share) FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Acc / (dil) 14.5% 14.1% 13.3% Dividend per $1.02 $1.12 $1.19 $1.25 $1.02 $1.12 $1.19 $1.25 share ($ / share) FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Acc / (dil) 0.0% 0.0% 0.0% 2.7x 2.7x 2.7x 2.6x 2.7x 2.9x 2.6x 2.4x Net debt / LTM EBITDA FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Source: Company filings; Equity research consensus projections as of 1/23/19 Note: CFPS based on deconsolidated cash flow from operations plus APU distributions paid to UGI U G I 5
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Buy-in of APU C O N F I D E N T I A L Illustrative financial impact to UGI “Balanced allocation” scenario Assumes illustrative 10% premium to APU public unitholders, 83% equity and 17% debt consideration; assumes 50% excess cash from transaction is reinvested in growth capex at a 7.5x multiple and 50% is used to repurchase shares after repaying APU revolver UGI standalone UGI pro forma $3.10 $3.21 $2.91 $3.14 $3.30 $2.74 $2.88 $2.74 EPS ($ / share) FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Acc / (dil) 0.8% 1.0% 2.6% $6.23 $6.55 $5.44 $5.68 $5.48 $4.64 $4.79 $4.64 CFPS ($ / share) FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Acc / (dil) 14.5% 14.6% 15.2% Dividend per $1.02 $1.12 $1.19 $1.25 $1.02 $1.12 $1.19 $1.25 share ($ / share) FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Acc / (dil) 0.0% 0.0% 0.0% 2.7x 2.7x 2.7x 2.6x 2.7x 2.9x 2.7x 2.6x Net debt / LTM EBITDA FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Source: Company filings; Equity research consensus projections as of 1/23/19 Note: CFPS based on deconsolidated cash flow from operations plus APU distributions paid to UGI; Assumes only 50% of reinvestment EBITDA in year one U G I 6
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Buy-in of APU C O N F I D E N T I A L Financial impact to UGI based on various premiums “Balanced allocation” scenario Assumes UGI issues 34.6 million shares to APU unitholders Illustrative premium 0% 5% 10% 15% 20% Implied exchange ratio 0.546x 0.574x 0.601x 0.628x 0.656x Memo: UGI share price $55.63 $55.63 $55.63 $55.63 $55.63 Memo: Implied APU unit purchase price $30.40 $31.92 $33.44 $34.96 $36.48 Consideration mix % equity 91% 87% 83% 80% 76% % debt / cash 9% 13% 17% 20% 24% Transaction funding ($mm) Equity $1,925 $1,925 $1,925 $1,925 $1,925 Debt / cash $179 $284 $389 $494 $600 EPS accretion / (dilution) 2019E 2.3% 1.6% 0.8% 0.0% (0.7%) 2020E 2.4% 1.7% 1.0% 0.3% (0.5%) 2021E 4.1% 3.4% 2.6% 1.9% 1.1% CFPS accretion / (dilution) 2019E 15.4% 15.0% 14.5% 14.1% 13.6% 2020E 15.5% 15.0% 14.6% 14.1% 13.7% 2021E 16.1% 15.7% 15.2% 14.7% 14.2% Net debt / LTM EBITDA 2019E 2.7x 2.8x 2.9x 2.9x 3.0x 2020E 2.5x 2.6x 2.7x 2.7x 2.8x 2021E 2.4x 2.5x 2.6x 2.6x 2.7x Source: Company filings; Equity research consensus projections as of 1/23/19 U G I 7
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Buy-in of APU C O N F I D E N T I A L Summary conclusions UGI’s proposal to the APU Conflicts Committee on a GP / IDR elimination was met with opposition and a disparate view of GP / IDR value Recent price movements have resulted in a reduced relative valuation for APU versus UGI This has increased the viability of a potential APU buy-in as such a deal could be immediately accretive to UGI’s EPS and CFPS based on today’s prices The trend of MLP buy-ins driven by lack of market access / investor appetite for MLP securities has accelerated Prior analysis likely overestimated proportion of historical shortfall / excess attributable to weather; while still meaningful, the impact is dampened using the current case In light of these developments, UGI management recommends pursuing a full MLP buy-in of APU UGI Management requests authority to submit a proposal to the AmeriGas Special Committee for the acquisition, through a wholly owned subsidiary, of all of the common units of AmeriGas Partners, L.P. (“APU”) held by the public at a fixed exchange ratio of up to .5000 UGI shares per APU unit plus a fixed amount of up to $5.63 in cash per APU unit, representing a value of up to $33.44 per APU unit based on UGI’s closing stock price of $55.63 as of January 23, 2019 U G I 8
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis C O N F I D E N T I A L Agenda Page 1 Buy-in of APU 1 2 Appendix 9 Additional buy-in of APU considerations 9 U G I
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Appendix | Additional buy-in of APU considerations C O N F I D E N T I A L Illustrative merger timeline Date Description Duration Proposal / Negotiation Upon authorization by the UGI Board, make merger proposal to Special Committee 60 days Negotiate transaction with Special Committee, including merger agreement Announcement Announce merger via press release / investor call Regulatory Filings Prepare / file S-4 registration statement and NYSE listing agreement re UGI share issuance; 75 days proxy statement re AmeriGas unitholder meeting; and related “going private” filings Amend filings per SEC comments, as applicable Proxy solicitation Execute on proxy solicitation / communication plan 30 days AmeriGas unitholder meeting Closing U G I 9
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Appendix | Additional buy-in of APU considerations C O N F I D E N T I A L Premiums paid in precedent affiliate MLP buy-in deals % premium to last close Average: 11% 26% Median: 11% 23% 21% 20% 18% 15% 17% 14% 13% 11% 11% 8% 6% 6% 6% 3% 1% 1% 1% 1% Feb. Mar. Apr. May Nov. Jan. Mar. May May May May Jun. Jul. Aug. Sept. Oct. Oct. Oct. Nov. Nov. Date 2017 2017 2017 2017 2017 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 Western World Energy Tallgrass Cheniere ArcLight Energy Antero Equitrans Williams Dominion Valero EnLink Gas Acquirer ONEOK VTTI BV Point Transfer Delek Archrock Energy Enbridge Enbridge Energy OCI N.V. Capital Transfer Midstream Midstream Companies Energy Energy Midstream Equity Terminals Partners GP Partners Partners Equity GP Corp Partners World PennTex Tallgrass Enbridge Spectra Cheniere OCI Trans- Energy Dominion Antero Valero EnLink Western ONEOK Alon US Archrock Williams EQGP Target VTTI Point Midstream Energy Energy Energy Energy Partners Montaigne Transfer Midstream Midstream Energy Midstream Gas Partners Partners Partners Partners Holdings Terminals Partners Partners Partners Partners Holdings LP Partners Partners Partners Partners Partners Partners Partners % 100% 0% 0% 0% 100% 100% 100% 100% 100% 100% 100% 0% 0% 100% 100% 90% 0% 100% 100% 0% equity % acq. 61% 51% 26% 34% 18% 57% 65% 63% 17% 26% 8% 12% 80% 34% 39% 100% 34% 78% 69% 9% Acquirer absolute price performance 1-day (2%) n/a n/a 0% (0%) (5%) 3% 1% 1% 2% (1%) (0%) n/a 3% (0%) 9% (10%) (2%) (6%) (3%) 30-day (5%) n/a n/a (12%) 13% (15%) 14% (3%) (3%) (1%) 8% (4%) n/a (4%) 1% (13%) (23%) (29%) (10%) (13%) Acquirer relative price performance to AMZ 1-day (3%) n/a n/a (1%) 1% (7%) 5% 1% 1% 1% (2%) 1% n/a 0% (1%) 8% (10%) (1%) (6%) (2%) 30-day (1%) n/a n/a (9%) 14% (13%) 8% (1%) (1%) 0% 9% (1%) n/a (5%) 11% (3%) (15%) (19%) 0% (4%) Source: Company filings Disclaimer: The MLP buy-in metrics above are presented merely for reference purposes only. The transactions included above represent selected master limited partnership buy-in transactions J.P. Morgan did not attempt to identify all master limited partnership buy-in transactions that may be relevant for this analysis, and none of the selected transactions is identical to any transaction that the board may be considering. U G I 10
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Appendix | Additional buy-in of APU considerations C O N F I D E N T I A L UGI summary status quo financial projections Commentary Estimates based on FYE 9/30 EBITDA, D&A, capital expenditures and dividends per share projections based on equity research consensus projections as of 1/23/19 Implied EPS in-line with company guidance (FY 2019E of $2.75 - $2.95) and equity research consensus projections Tax assumptions per management guidance EBITDA ($mm) Cash flow from operations ($mm)1 $1,649 $1,699 $1,510 $1,566 $1,325 $1,160 $1,276 $1,085 FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E EPS ($ / share) Dividend per share ($ / share) $3.10 $3.21 $2.74 $2.88 $1.02 $1.12 $1.19 $1.25 FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Source: Company filings; Equity research consensus projections as of 1/23/19 1 Cash flow presented on a fully consolidated basis U G I 11
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Appendix | Additional buy-in of APU considerations C O N F I D E N T I A L APU summary status quo financial projections Commentary Estimates based on FYE 9/30 EBITDA, D&A, capital expenditures and tax projections based on equity research consensus projections as of 1/23/19 LP distribution per unit is held flat at $3.80 per management guidance EBITDA ($mm) Maintenance capex ($mm) $606 $629 $633 $642 $53 $55 $57 $58 FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Distributable cash flow ($mm) LP distribution per unit ($ / unit) $3.80 $3.80 $3.80 $3.80 $389 $403 $403 $408 FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Total 0.97x 0.99x 0.99x 1.00x coverage Source: Company filings; Equity research consensus projections as of 1/23/19 U G I 12
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Appendix | Additional buy-in of APU considerations C O N F I D E N T I A L Illustrative buy-in of APU by UGI transaction assumptions and sources and uses Assumes illustrative 10% premium to APU public unitholders, 83% equity and 17% debt consideration Transaction assumptions UGI ownership1 Analysis reflects updated stock / unit prices, more fully developed tax analysis Current UGI shareholders New APU unitholders and updated consensus estimates Assumes transaction is effective in the beginning of FY 2019E (10/1/18) Standalone UGI ownership Assumes an illustrative 10% premium to APU’s unit price of $30.40 as of 1/23/19 for a total equity purchase price of $2,314mm 100% 16% Assumes UGI purchases 69.2mm APU units that it does not currently own Assumes 34.6mm UGI shares are issued at $55.63 (price as of 1/23/19) Assumes no synergies Assumes net income attributable to NCI associated with APU and tax savings associated with basis step-up are taxed at 27.6% Assumes 6% interest rate on newly issued transaction debt per management guidance 84% Assumes APU long-term debt remains outstanding at close Taxes and tax basis step-up per management guidance Sources and uses ($mm) Sources Uses Equity issued to APU $1,925 Purchase price $2,314 Incremental debt issued 389 Fees / expenses 15 UGI balance sheet cash 15 Total sources $2,329 Total uses $2,329 Source: Company filings; Equity research consensus projections as of 1/23/19 1 Based on UGI current diluted shares outstanding U G I 13
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Appendix | Additional buy-in of APU considerations C O N F I D E N T I A L Incremental cash flow to UGI Assumes illustrative 10% premium to APU public unitholders, 83% equity and 17% debt consideration Cash effect of transaction ($mm) FY 2019E FY 2020E FY 2021E Current third party APU payout APU third party LP units outstanding 69.2 69.2 69.2 Distribution per LP unit $3.80 $3.80 $3.80 Distributions saved $263 $263 $263 (-) Taxes on incremental APU ownership1 ($59) ($79) ($79) (+) Annual tax savings from incremental inherited DD&A 19 26 22 (+) Annual tax savings from basis step-up – ADS 52 91 91 (-) Incremental taxes resulting from 163(J) limitations 0 0 0 (-) Incremental taxes resulting from FTC limitations due to section 861 (2) (2) (2) (+) tax shield on incremental transaction debt 6 6 6 (-) NOL limitation 0 0 0 Incremental tax saved / (paid) $16 $43 $38 Dividends on pro forma equity consideration UGI shares issued to APU third party LP unit holders 34.6 34.6 34.6 Dividend per share $1.12 $1.19 $1.25 Incremental dividends paid ($39) ($41) ($43) Memo: pro forma common share count 208.5 208.5 208.5 Incremental interest expense on new debt Interest expense on incremental debt ($23) ($23) ($23) Cash effect of transaction $217 $241 $235 Cumulative cash balance effect of transaction $217 $458 $693 Source: Company filings; Equity research consensus projections as of 1/23/19; PWC Note: Basis step-up based on ~74% UGI does not own; 90% of basis step-up assumed to be depreciable; Subject to change per ongoing UGI and PWC internal analysis 1 Defined as income before depreciation and ordinary gain U G I 14
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis Appendix | Additional buy-in of APU considerations C O N F I D E N T I A L UGI’s relative earnings mix Based on management projections Utilities Domestic propane International propane Midstream UGI standalone (based on FY 2019E earnings) UGI + APU pro forma (based on FY 2019E earnings) 19% 24% 21% 26% Total propane Total propane exposure: 50% exposure: 60% 26% 17% 33% 34% Total propane Total propane Pro forma earnings mix 19% 18% 18% 26% 27% 29% 34% 33% 31% 21% 22% 22% 2019E 2020E 2021E Source: UGI projections through 2021 as provided by UGI management Note: Based on net income estimates; Domestic propane adjusted for net income attributable to non-controlling interests; Pro forma exposure adjusts net income attributable to non-controlling interests by pro forma ownership and ignores effects of consideration mix for potential transaction U G I 15
Exhibit (c)(5)
Private and confidential – illustrative and for discussion purposes only
Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis
S T R I C T L Y P R I V A T E A N D C O N F I D E N T I A L
Discussion materials
February 25, 2019 Update
J.P.Morgan
Private and confidential – illustrative and for discussion purposes only
Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis
C O N F I D E N T I A L
This presentation was prepared exclusively for the benefit and
internal use of the J.P. Morgan client to whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a
possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed
solely in conjunction with, the oral briefing provided by J.P. Morgan. Neither this presentation nor any of its contents may be disclosed or used for any other purpose without the prior written consent of J.P. Morgan.
The information in this presentation is based upon any management forecasts supplied to us and reflects prevailing conditions and our views as of this date, all of which are
accordingly subject to change. J.P. Morgan’s opinions and estimates constitute J.P. Morgan’s judgment and should be regarded as indicative, preliminary and for illustrative purposes only. In preparing this presentation, we have relied upon
and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us by or on behalf of the Company or which was otherwise reviewed by us. In addition, our analyses
are not and do not purport to be appraisals of the assets, stock, or business of the Company or any other entity. J.P. Morgan makes no representations as to the actual value which may be received in connection with a transaction nor the legal, tax
or accounting effects of consummating a transaction. Unless expressly contemplated hereby, the information in this presentation does not take into account the effects of a possible transaction or transactions involving an actual or potential change
of control, which may have significant valuation and other effects.
Notwithstanding anything herein to the contrary, the Company and each of its employees,
representatives or other agents may disclose to any and all persons, without limitation of any kind, the U.S. federal and state income tax treatment and the U.S. federal and state income tax structure of the transactions contemplated hereby and all
materials of any kind (including opinions or other tax analyses) that are provided to the Company relating to such tax treatment and tax structure insofar as such treatment and/or structure relates to a U.S. federal or state income tax strategy
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Copyright 2018 JPMorgan Chase & Co. All rights reserved.
U G I
J.P.Morgan
Private and confidential – illustrative and for discussion purposes only
Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis
C O N F I D E N T I A L
Illustrative APU analysis at various purchase prices
Based on consensus estimates as of 1/23/19 Current counter-proposal
Implied APU unit purchase
price $29.60 $32.00 $33.00 $34.00 $35.00 $41.07
Implied offer premium to APU unit price as of 2/22/19 0% 8% 11% 15% 18% 39%
UGI share price $54.36 $54.36 $54.36 $54.36 $54.36 $54.36
Implied LP equity
value $2,752 $2,976 $3,069 $3,162 $3,255 $3,819
Memo: Purchase price based on public ownership¹ $2,049 $2,215
$2,284 $2,353 $2,423 $2,843
(+) Net debt, pref. stock, and NCI and assumed illustrative GP / IDR value2 3,494 3,494 3,494 3,494 3,494 3,494
Implied transaction value $6,246 $6,470 $6,563 $6,656 $6,749 $7,313 Memo: Transaction funding
Equity / unit (assuming .500x exchange ratio) $27.18 $27.18 $27.18 $27.18 $27.18 $27.18 Cash / unit $2.42 $4.82 $5.82 $6.82 $7.82 $13.89
Implied transaction value / EBITDA EBITDA metric
2018A EBITDA $606 10.3x 10.7x 10.8x 11.0x
11.1x 12.1x 2019E EBITDA 629 9.9x 10.3x 10.4x 10.6x 10.7x 11.6x 2020E EBITDA 633 9.9x 10.2x 10.4x 10.5x 10.7x 11.6x
Implied APU unit price / LP DCF / unit DCF /
unit metric
2018A LP DCF / unit $3.71 8.0x 8.6x 8.9x 9.2x 9.4x 11.1x 2019E LP DCF / unit 3.78 7.8x 8.5x 8.7x 9.0x 9.2x 10.9x 2020E LP DCF / unit 3.78 7.8x 8.5x
8.7x 9.0x 9.3x 10.9x
Implied APU unit price / EPS EPS metric
2018A EPS $2.353
12.6x 13.6x 14.0x 14.5x 14.9x 17.5x 2019E EPS 2.39 12.4x 13.4x 13.8x 14.2x 14.6x 17.2x 2020E EPS 2.44 12.1x 13.1x 13.5x 13.9x 14.4x 16.8x
Premium / (discount) to:
30-day VWAP $30.09 (2%) 6% 10% 13% 16% 36%
60-day VWAP 28.30 5% 13% 17% 20% 24% 45%
Source: Equity research consensus projections as of 1/23/19; company filings; Bloomberg; Note: Financials based on 9/30 FYE
1 Public ownership of approximately 74%; 2 Assumes GP value of $500mm; non-controlling interest of $32mm and net debt of $2,962mm as per
latest Q1’19 filings; 3 Excludes $75mm impairment charge; including impairment results in EPS of $1.54
U G I 1
J.P.Morgan
Private and confidential – illustrative and for discussion purposes only
Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis
C O N F I D E N T I A L
Unlevered IRR calculations
Normal weather scenario per UGI management
All values in $ millions
January 25th, 2019 BoD meeting February 25th, 2019 BoD meeting
Normal weather scenario Normal
weather scenario
∎ Illustrative IRR modeled on APU purchase price of $33.44 (10% ∎ Illustrative IRR modeled on APU purchase price of $33.00 (11%
premium to then current APU unit price) premium to February 22, 2019 APU unit price)
∎ EBITDA for 2019 to 2021 is consensus ∎ EBITDA for 2019 to
2021 is consensus ∎ EBITDA growth = $10/yr. starting in 2022 ∎ EBITDA growth = $10/yr. starting in 2022 ∎ Maintenance + growth capital ~$109/yr. ∎ Maintenance + growth capital ~$109/yr.
∎ Acquisition capital = $15/yr. starting in 2022∎ Acquisition capital = $15/yr. starting in 2022
∎ Unlevered after-tax IRR = 9.95% ∎ Unlevered after-tax IRR = 9.74%
∎ Unlevered after-tax IRR with tax optimization = 11.21% ∎ Unlevered after-tax IRR with
tax optimization = 11.06%
∎ Includes estimated transaction costs of $30mm
Source: Internal UGI
U G I 2
J.P.Morgan
Private and confidential – illustrative and for discussion purposes only
Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis
C O N F I D E N T I A L
Illustrative financial impact to UGI
“Balanced allocation” scenario; based on consensus estimates as of 1/23/19
Assumes
$33.00 / unit purchase price, 82% equity and 18% debt consideration reflecting a .500x exchange ratio + $5.82 / unit in cash; assumes 50% excess cash from transaction is reinvested in growth capex at a 7.5x multiple and 50% is used to repurchase
shares after repaying APU revolver UGI standalone UGI pro forma
$2.88 $3.10 $3.21 $2.90 $3.13 $3.29 $2.74 $2.74
EPS ($ / share)
FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E
Acc / (dil) 0.7% 0.9% 2.5%
$6.23 $6.54 $5.44 $5.68 $5.48 $4.64 $4.79 $4.64
CFPS ($ / share)
FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY
2020E FY 2021E
Acc / (dil) 14.5% 14.5% 15.1%
Dividend per $1.02 $1.12 $1.19
$1.25 $1.02 $1.12 $1.19 $1.25
share ($ / share)
FY 2018A FY 2019E FY 2020E FY
2021E FY 2018A FY 2019E FY 2020E FY 2021E
Acc / (dil) 0.0% 0.0% 0.0%
2.7x
2.7x 2.7x 2.6x 2.7x 2.9x 2.7x 2.6x
Net debt / LTM EBITDA
FY 2018A FY 2019E FY
2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E
Source: Company filings; Equity research consensus projections as of 1/23/19
Note: CFPS based on deconsolidated cash flow from operations plus APU distributions paid to UGI; Assumes only 50% of reinvestment EBITDA in year one
U G I 3
J.P.Morgan
Private and confidential – illustrative and for discussion purposes only
Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis
C O N F I D E N T I A L
Financial impact to UGI based on various premiums
“Balanced allocation” scenario; based on consensus estimates as of 1/23/19 Current counter-proposal
Assumes UGI issues 34.6 million shares to APU unitholders (.500x exchange ratio with remaining portion funded with cash)
APU unit purchase price $32.00 $33.00 $34.00 $35.00 $41.07
Implied offer premium to APU unit
price as of 2/22/19 8% 11% 15% 18% 39% Memo: UGI share price as of 2/22/19 $54.36 $54.36 54.36 54.36 54.36
Transaction funding ($mm)
Equity $1,881 $1,881 $1,881 $1,881 $1,881
Memo: $ / unit $27.18 $27.18 $27.18 $27.18 $27.18
Debt / cash $334 $403 $472 $541 $961
Memo: $ / unit $4.82 $5.82 $6.82 $7.82
$13.89
Consideration mix
% equity 85% 82% 80% 78% 66% % debt / cash 15% 18%
20% 22% 34%
EPS accretion / (dilution)
2019E 1.2% 0.7% 0.2% (0.3%) (3.4%)
2020E 1.4% 0.9% 0.4% (0.1%) (3.0%) 2021E 3.0% 2.5% 2.0% 1.5% (1.5%)
CFPS accretion / (dilution)
2019E 14.8% 14.5% 14.2% 13.9% 12.0% 2020E 14.8% 14.5% 14.2% 13.9% 12.1% 2021E 15.4% 15.1% 14.8% 14.5% 12.5%
Net debt / LTM EBITDA
2019E 2.8x 2.9x 2.9x 3.0x 3.2x 2020E 2.6x 2.7x 2.7x 2.8x 3.0x 2021E 2.5x
2.6x 2.6x 2.7x 2.9x
Source: Company filings; Equity research consensus projections as of 1/23/19
U G I 4
J.P.Morgan
Private and confidential – illustrative and for discussion purposes only
Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis
C O N F I D E N T I A L
Summary conclusions
∎ On January 28, UGI submitted a proposal to purchase the common units of AmeriGas Partners, L.P. (APU) held by the public at a fixed exchange ratio of 0.500 UGI shares
per APU unit plus a fixed amount of cash equal to $4.03 cash per APU unit, representing a value of $32.00 per APU unit based on UGI’s closing stock price of $55.95 on January 25.
∎ On February 21, APU submitted a counter proposal consisting of 0.500 UGI shares per APU unit plus $13.94 cash per APU unit, valued at
$41.07 based on a 30-day VWAP for UGI of $54.26
∎ UGI Management requests authority to revise its proposal to the AmeriGas Special Committee for the acquisition, through a wholly owned subsidiary, of all
of the common units of APU held by the public at a fixed exchange ratio of 0.500 UGI shares per APU unit plus a fixed amount of cash up to $6.82 per APU unit, representing a value of $34.00 per APU unit based on UGI’s closing stock price of
$54.36 on February 22.
U G I 5
J.P.Morgan
Exhibit (c)(6)
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis S T R I C T L Y P R I V A T E A N D C O N F I D E N T I A L Discussion materials March 4, 2019 Update
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis C O N F I D E N T I A L This presentation was prepared exclusively for the benefit and internal use of the J.P. Morgan client to whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by J.P. Morgan. Neither this presentation nor any of its contents may be disclosed or used for any other purpose without the prior written consent of J.P. Morgan. The information in this presentation is based upon any management forecasts supplied to us and reflects prevailing conditions and our views as of this date, all of which are accordingly subject to change. J.P. Morgan’s opinions and estimates constitute J.P. Morgan’s judgment and should be regarded as indicative, preliminary and for illustrative purposes only. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us by or on behalf of the Company or which was otherwise reviewed by us. In addition, our analyses are not and do not purport to be appraisals of the assets, stock, or business of the Company or any other entity. J.P. Morgan makes no representations as to the actual value which may be received in connection with a transaction nor the legal, tax or accounting effects of consummating a transaction. Unless expressly contemplated hereby, the information in this presentation does not take into account the effects of a possible transaction or transactions involving an actual or potential change of control, which may have significant valuation and other effects. Notwithstanding anything herein to the contrary, the Company and each of its employees, representatives or other agents may disclose to any and all persons, without limitation of any kind, the U.S. federal and state income tax treatment and the U.S. federal and state income tax structure of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to the Company relating to such tax treatment and tax structure insofar as such treatment and/or structure relates to a U.S. federal or state income tax strategy provided to the Company by J.P. Morgan. J.P. Morgan’s policies on data privacy can be found at http://www.jpmorgan.com/pages/privacy. J.P. Morgan’s policies prohibit employees from offering, directly or indirectly, a favorable research rating or specific price target, or offering to change a rating or price target, to a subject company as consideration or inducement for the receipt of business or for compensation. J.P. Morgan also prohibits its research analysts from being compensated for involvement in investment banking transactions except to the extent that such participation is intended to benefit investors. IRS Circular 230 Disclosure: JPMorgan Chase & Co. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters included herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone not affiliated with JPMorgan Chase & Co. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties. J.P. Morgan is the marketing name for the Corporate and Investment Banking activities of JPMorgan Chase Bank, N.A., JPMS (member, NYSE), J.P. Morgan PLC authorized by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority and their investment banking affiliates. This presentation does not constitute a commitment by any J.P. Morgan entity to underwrite, subscribe for or place any securities or to extend or arrange credit or to provide any other services. Copyright 2018 JPMorgan Chase & Co. All rights reserved. U G I
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis C O N F I D E N T I A L Illustrative APU analysis at various purchase prices Latest UGI counter-proposal Based on consensus estimates as of 1/23/19 Current APU counter-proposal UGI share price as of 3/1/19 $54.50 $54.50 $54.50 $54.50 $54.50 Offer exchange ratio 0.500x 0.500x 0.500x 0.500x Equity / unit $27.25 $27.25 $27.25 $27.25 Cash / unit $6.32 $7.00 $7.75 $10.00 Implied APU unit purchase price $27.75 $33.57 $34.25 $35.00 $37.25 Implied offer premium to APU unit price as of 3/1/19 0% 21% 23% 26% 34% Implied LP equity value $2,580 $3,122 $3,185 $3,255 $3,464 Memo: Purchase price based on public ownership¹ $1,921 $2,324 $2,371 $2,423 $2,578 (+) Net debt, pref. stock, and NCI and assumed illustrative GP / IDR value2 3,494 3,494 3,494 3,494 3,494 Implied transaction value $6,074 $6,616 $6,679 $6,749 $6,958 Implied transaction value / EBITDA EBITDA metric 2018A EBITDA $606 10.0x 10.9x 11.0x 11.1x 11.5x 2019E EBITDA 629 9.7x 10.5x 10.6x 10.7x 11.1x 2020E EBITDA 633 9.6x 10.5x 10.6x 10.7x 11.0x Implied APU unit price / LP DCF / unit DCF / unit metric 2018A LP DCF / unit $3.71 7.5x 9.1x 9.2x 9.4x 10.1x 2019E LP DCF / unit 3.78 7.3x 8.9x 9.1x 9.2x 9.8x 2020E LP DCF / unit 3.78 7.3x 8.9x 9.1x 9.3x 9.9x Implied APU unit price / EPS EPS metric 2018A EPS $2.35 3 11.8x 14.3x 14.6x 14.9x 15.9x 2019E EPS 2.39 11.6x 14.0x 14.3x 14.6x 15.6x 2020E EPS 2.44 11.4x 13.8x 14.0x 14.4x 15.3x Premium / (discount) to: 30-day VWAP $30.00 (7%) 12% 14% 17% 24% 60-day VWAP 27.89 (1%) 20% 23% 25% 34% Source: Equity research consensus projections as of 1/23/19; company filings; Bloomberg; Note: Financials based on 9/30 FYE 1 Public ownership of approximately 74%; 2 Assumes GP value of $500mm; non-controlling interest of $32mm and net debt of $2,962mm as per latest Q1’19 filings; 3 Excludes $75mm impairment charge; including impairment results in EPS of $1.54 U G I 1
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis C O N F I D E N T I A L Unlevered IRR calculations Normal weather scenario per UGI management All values in $ millions February 25th, 2019 BoD meeting March 4th, 2019 BoD meeting Illustrative IRR modeled on APU purchase price of $33.00 (11% Illustrative IRR modeled on APU purchase price of $34.25 (23% premium to February 22, 2019 APU unit price) premium to March 1, 2019 APU unit price) EBITDA for 2019 to 2021 is consensus EBITDA for 2019 to 2021 is consensus EBITDA growth = $10/yr. starting in 2022 EBITDA growth = $10/yr. starting in 2022 Maintenance + growth capital ~$109/yr. Maintenance + growth capital ~$109/yr. Acquisition capital = $15/yr. starting in 2022 Acquisition capital = $15/yr. starting in 2022 Unlevered after-tax IRR = 9.74% Unlevered after-tax IRR = 9.31% Unlevered after-tax IRR with tax optimization = 11.06% Unlevered after-tax IRR with tax optimization = 10.59% Includes estimated transaction costs of $30mm Includes estimated transaction costs of $30mm Source: Internal UGI U G I 2
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis C O N F I D E N T I A L Illustrative financial impact to UGI “Balanced allocation” scenario; based on consensus estimates as of 1/23/19 Assumes $34.25 / unit purchase price, 80% equity and 20% debt consideration reflecting a .500x exchange ratio + $7.00 / unit in cash; assumes 50% excess cash from transaction is reinvested in growth capex at a 7.5x multiple and 50% is used to repurchase shares after repaying APU revolver UGI standalone UGI pro forma $2.88 $3.10 $3.21 $2.91 $3.13 $3.30 $2.74 $2.74 EPS ($ / share) FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Acc / (dil) 0.7% 0.9% 2.6% $6.25 $6.57 $5.44 $5.68 $5.50 $4.64 $4.79 $4.64 CFPS ($ / share) FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Acc / (dil) 14.9% 14.9% 15.5% Dividend per $1.02 $1.12 $1.19 $1.25 $1.02 $1.12 $1.19 $1.25 share ($ / share) FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E Acc / (dil) 0.0% 0.0% 0.0% 2.7x 2.7x 2.7x 2.6x 2.7x 2.9x 2.7x 2.6x Net debt / LTM EBITDA FY 2018A FY 2019E FY 2020E FY 2021E FY 2018A FY 2019E FY 2020E FY 2021E U G I 3 Source: Company filings; Equity research consensus projections as of 1/23/19 Note: CFPS based on deconsolidated cash flow from operations plus APU distributions paid to UGI; Assumes only 50% of reinvestment EBITDA in year one; Assumes $5mm of annual run-rate synergies
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis C O N F I D E N T I A L Financial impact to UGI based on various premiums Latest UGI counter-proposal “Balanced allocation” scenario; based on consensus estimates as of 1/23/19 Current APU counter-proposal Assumes UGI issues 34.6 million shares to APU unitholders (.500x exchange ratio with remaining portion funded with cash) UGI share price as of 3/1/19 $54.50 $54.50 $54.50 $54.50 Offer exchange ratio 0.500x 0.500x 0.500x 0.500x Equity / unit $27.25 $27.25 $27.25 $27.25 Cash / unit $6.32 $7.00 $7.75 $10.00 Implied APU unit purchase price $33.57 $34.25 $35.00 $37.25 Implied offer premium to APU unit price as of 3/1/19 21% 23% 26% 34% Transaction funding ($mm) Equity $1,886 $1,886 $1,886 $1,886 Debt / cash $437 $484 $536 $692 Consideration mix % equity 81% 80% 78% 73% % debt / cash 19% 20% 22% 27% EPS accretion / (dilution) 2019E 1.1% 0.7% 0.3% (0.8%) 2020E 1.3% 0.9% 0.6% (0.5%) 2021E 2.9% 2.6% 2.2% 1.1% CFPS accretion / (dilution) 2019E 15.0% 14.9% 14.7% 14.3% 2020E 15.0% 14.9% 14.8% 14.4% 2021E 15.6% 15.5% 15.3% 14.9% Net debt / LTM EBITDA 2019E 2.9x 2.9x 2.9x 3.0x 2020E 2.7x 2.7x 2.7x 2.8x 2021E 2.6x 2.6x 2.6x 2.7x U G I 4 Source: Company filings; Equity research consensus projections as of 1/23/19 Note: CFPS based on deconsolidated cash flow from operations plus APU distributions paid to UGI; Assumes only 50% of reinvestment EBITDA in year one; Assumes $5mm of annual run-rate synergies
Private and confidential – illustrative and for discussion purposes only Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis C O N F I D E N T I A L Summary conclusions On January 28, UGI submitted a proposal to purchase the common units of AmeriGas Partners, L.P. (APU) held by the public at a fixed exchange ratio of 0.500 UGI shares per APU unit plus a fixed amount of cash equal to $4.03 cash per APU unit, representing a value of $32.00 per APU unit based on UGI’s closing stock price of $55.95 on January 25 On February 21, APU submitted a counter proposal consisting of 0.500 UGI shares per APU unit plus $13.94 cash per APU unit, valued at $41.07 based on a 30-day VWAP for UGI of $54.26 On February 25, UGI submitted a counter proposal consisting of 0.500 UGI shares per APU unit plus $6.32 cash per APU unit, valued at $33.50 based on UGI’s closing price on February 22, 2019 of $54.36 On February 28, APU submitted a counter proposal consisting of 0.500 UGI shares per APU unit plus $10.00 cash per APU unit, valued at $37.45 based on UGI’s closing price on February 28, 2019 of $54.90 UGI Management requests authority to revise its proposal to the AmeriGas Special Committee for the acquisition, through a wholly owned subsidiary, of all of the common units of APU held by the public at a fixed exchange ratio of 0.500 UGI shares per APU unit plus a fixed amount of cash up to $7.00 per APU unit, representing a value of up to $34.25 per APU unit based on UGI’s closing stock price of $54.50 on March 1 U G I 5
Exhibit (c)(7)
STRICTLY PRIVATE AND CONFIDENTIAL Presentation to the Board of Directors Project Almanack | April 1, 2019 J.P.Morgan
CONFIDENTIAL This presentation was prepared exclusively for the benefit and internal use of the J.P. Morgan client to whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by J.P. Morgan. Neither this presentation nor any of its contents may be disclosed or used for any other purpose without the prior written consent of J.P. Morgan. The information in this presentation is based upon any management forecasts supplied to us and reflects prevailing conditions and our views as of this date, all of which are accordingly subject to change. J.P. Morgan’s opinions and estimates constitute J.P. Morgan’s judgment and should be regarded as indicative, preliminary and for illustrative purposes only. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us by or on behalf of the Company or which was otherwise reviewed by us. In addition, our analyses are not and do not purport to be appraisals of the assets, stock, or business of the Company or any other entity. J.P. Morgan makes no representations as to the actual value which may be received in connection with neither a transaction nor the legal, tax or accounting effects of consummating a transaction. Unless expressly contemplated hereby, the information in this presentation does not take into account the effects of a possible transaction or transactions involving an actual or potential change of control, which may have significant valuation and other effects. Notwithstanding anything herein to the contrary, the Company and each of its employees, representatives or other agents may disclose to any and all persons, without limitation of any kind, the U.S. federal and state income tax treatment and the U.S. federal and state income tax structure of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to the Company relating to such tax treatment and tax structure insofar as such treatment and/or structure relates to a U.S. federal or state income tax strategy provided to the Company by J.P. Morgan. J.P. Morgan’s policies prohibit employees from offering, directly or indirectly, a favorable research rating or specific price target, or offering to change a rating or price target, to a subject company as consideration or inducement for the receipt of business or for compensation. J.P. Morgan also prohibits its research analysts from being compensated for involvement in investment banking transactions except to the extent that such participation is intended to benefit investors. IRS Circular 230 Disclosure: JPMorgan Chase & Co. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters included herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone not affiliated with JPMorgan Chase & Co. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties. J.P. Morgan is the marketing name for the Corporate and Investment Banking activities of JPMorgan Chase Bank, N.A., JPMS (member, NYSE), J.P. Morgan PLC authorized by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority) and their investment banking affiliates. J.P.Morgan
CONFIDENTIAL Summary of proposed transaction Summary considerations $mm, except per share data APU unit price $30.87 UGI share price $55.42 Transaction exchange ratio 0.500x Implied stock consideration $27.71 Plus: cash consideration $7.63 Implied offer price $35.34 Implied premium to current price 14.5% Number of public units 69.4 Implied equity value of public units $2,452 Implied transaction value1 $4,682 UGI current DSO (mm) 177.6 New UGI shares for APU 34.7 Pro forma UGI DSO (mm) 212.3 UGI PF ownership 83.7% APU PF ownership 16.3% UGI & APU overview UGI APU APU @ $mm, except per share data standalone standalone transaction Price per share / unit $55.42 $30.87 $35.34 Implied premium to current 14.5% Equity value (UGI) / LP Equity value (APU) $9,845 $2,875 $3,291 Plus: Debt $4,847 $2,970 $2,970 Plus: NCI $2,142 $32 $32 Less: Cash ($478) ($8) ($8) Plus: Net debt & NCI $6,511 $2,994 $2,994 Plus: GP value $375 $375 Firm value $16,356 $6,244 $6,660 Memo: implied equity value of public units $2,452 Memo: implied transaction value 1 $4,682 Metric2 Metric2 Firm value / ‘19E EBITDA $1,483 11.0x $610 10.2x 10.9x Firm value / ‘20E EBITDA 1,668 9.8x 635 9.8x 10.5x P / ‘19E EPS (UGI)—P / ‘19E LP DCF/unit (APU) $2.49 22.3x $3.65 8.5x 9.7x P / ‘20E EPS (UGI)—P / ‘20E LP DCF/unit (APU) 3.12 17.8x 3.78 8.2x 9.3x ‘19E Yield $1.10 2.0% $3.16 10.2% 8.9% ‘20E Yield 1.20 2.2% 3.32 10.8% 9.4% Source: FactSet as of 03/29/19; Company filings Note: Projections based on 09/30 fiscal year end; APU GP value based on intrinsic valuation analysis and approved by UGI management; NCI based on market value of publicly held APU units 1 Includes ~74.5% of APU net debt and APU NCI 2 APU and UGI projections as provided and approved by UGI management and included for reference only 1 J.P.Morgan
CONFIDENTIAL Comparison of APU management versus broker projections $610 $634 $635 $644 $645 $652 ‘19E-‘21E CAGR: 2.8% EBITDA ($mm) ‘19E-‘21E CAGR: 1.4% 2019E 2020E 2021E Total distributable $379 $410 $403 $418 $421 $456 ‘19E-‘21E CAGR: 5.4% cash flow (“DCF”) ($mm) ‘19E-‘21E CAGR: 5.5% 2019E 2020E 2021E $3.65 $3.81 $3.78 $3.85 $3.87 $4.06 LP DCF ‘19E-‘21E CAGR: 3.0% ($ / unit) ‘19E-‘21E CAGR: 3.2% 2019E 2020E 2021E $39 $55 $52 $59 $60 $79 ‘19E-‘21E CAGR: 23.8% GP DCF ($mm) ‘19E-‘21E CAGR: 19.1% 2019E 2020E 2021E $3.16 $3.21 $3.32 $3.01 $3.44 $3.58 LP DPU ‘19E-‘21E CAGR: 4.4% ($ / unit) ‘19E-‘21E CAGR: 5.6% 2019E 2020E 2021E GP distributions $22 $24 $27 $18 $31 $32 ‘19E-‘21E CAGR: 18.1% ($mm) ‘19E-‘21E CAGR: 15.5% 2019E 2020E 2021E 1.40x 1.20x 1.27x 1.20x 1.20x 1.24x Total distribution coverage 2019E 2020E 2021E 2 Source: FactSet as of 03/29/19; APU management projections as provided and approved by UGI management; Note: Projections based on 09/30 fiscal year end 1 Broker research included for reference only J.P.Morgan
CONFIDENTIAL Comparison of UGI management versus broker projections Management Broker research1 $1,668 $1,782 $1,698 $1,639 $1,483 $1,366 ‘19E-‘21E CAGR: 9.6% EBITDA ($mm) ‘19E-‘21E CAGR: 11.5% 2019E 2020E 2021E $3.43 $2.64 $3.12 $3.03 $3.14 $2.49 ‘19E-‘21E CAGR: 17.4% Earnings / share ‘19E-‘21E CAGR: 9.0% 2019E 2020E 2021E $1.25 $1.26 $1.20 $1.17 ‘19E-‘21E CAGR: 6.6% $1.10 $1.10 Dividend / share ‘19E-‘21E CAGR: 7.2% 2019E 2020E 2021E $904 $900 $900 $772 $770 $760 ‘19E-‘21E CAGR: (0.8%) Capital expenditures2 ‘19E-‘21E CAGR: 8.1% ($mm) 2019E 2020E 2021E Source: FactSet as of 03/29/19; UGI management projections as provided and approved by UGI management Note: Projections based on 09/30 fiscal year end 1 Broker research included for reference only 3 2 Excludes acquisition capex J.P.Morgan
CONFIDENTIAL Overview of valuation methodologies All projections for both UGI and APU and synergy assumptions have been provided and approved by UGI management Financial Valuation date of 12/31/18 projections Fiscal year end as of 9/30 To assess APU from a trading multiples perspective, J.P. Morgan has provided multiples related to publicly traded propane companies with similar functions and geographies Trading To value these companies, J.P. Morgan employed Firm value / EBITDA multiples, Price / LP DCF multiples and LP distribution yields multiples To assess UGI from a trading multiples perspective, J.P. Morgan has utilized publicly traded diversified utilities To value these companies, J.P. Morgan employed Firm value / EBITDA multiples, and Price / EPS multiples UGI is comprised of four segments: UGI Utilities, Midstream and Marketing (“M&M”), International and APU Sum-of-the- parts To assess UGI from a sum-of-the-parts approach, J.P. Morgan has employed a Price / EPS multiple for the utilities business and Firm value / EBITDA multiples for the M&M and International segments, APU and corporate EBITDAs For reference only Transaction To assess APU from a transaction multiples perspective, J.P. Morgan has employed selected buy-in precedent transactions evaluated on a NTM LP multiples DCF basis J.P. Morgan has employed an unlevered (after-tax) discounted cash flow approach for both UGI and APU UGI deconsolidated assumes a discount rate of 7.00% to 8.00% while APU assumes a discount rate of 7.25% to 8.25% Intrinsic UGI assumes terminal growth (ex-APU) ranging from 2.50% to 3.50% while APU assumes terminal growth ranging from 0.00% to 2.50% valuation Also, for reference only, J.P. Morgan employed a discounted distributions approach for APU assuming terminal growth range of 0.00% to 2.00% on distributions per unit All analyses assume mid-period discounting Management provided J.P. Morgan with guidance on potential synergies as part of the transaction. These synergies include: Implied public company cost savings Synergy Corporate G&A savings; and analysis Incremental cash flow generated by reinvestment of excess cash at a 7.5x EBITDA multiple Synergies account for $5mm p.a. run-rate with no cost to achieve and no phase-in Synergies discounted at UGI deconsolidated at an assumed discount rate of 7.00% to 8.00% Source: UGI and APU projections and synergy assumptions as provided and approved by UGI management Note: Projections based on 09/30 fiscal year end 4 J.P.Morgan
CONFIDENTIAL Summary of preliminary analysis for APU LP units Implied unit price—rounded to the nearest $0.25 (except 52-week high/low and analyst price targets) Selected range applied to metric Implied deal Metric Low High Market metrics1 Current: $30.87 value: $35.34 52-week high / low $22.75 $43.79 $3.65 6.2x 12.0x For reference only Analyst price targets $30.00 $40.00 $3.65 8.2x 11.0x For reference only Trading multiples FV / 2019E EBITDA $9.75 $29.25 $610 7.00x 10.00x FV / 2020E EBITDA $11.50 $30.25 $635 7.00x 9.75x Unit price / 2019E LP DCF / unit $25.50 $30.00 $3.65 7.00x 8.25x Unit price / 2020E LP DCF / unit $24.50 $30.25 $3.78 6.50x 8.00x 2019E yield $28.75 $31.50 $3.16 11.00% 10.00% 2020E yield $30.25 $33.25 $3.32 11.00% 10.00% Transaction multiples Buy-in transaction multiples $25.75 $44.25 $3.68 7.0x 12.0x NTM LP DCF Discounted cash flow analysis Unlevered (after-tax) DCF Discount rate = 7.25%—8.25% Unlevered (after-tax) $22.00 $58.75 Terminal growth rate (cash flow) = 0.00%—2.50% discounted cash flow analysis Distributions Illustrative cost of equity = 9.00%—11.00% Discounted distributions $33.00 $49.75 Terminal growth rate (distributions) = 0.00%—2.00% For reference only $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 Source: FactSet as of 03/29/19; APU projections and terminal year as provided and approved by UGI management Note: Projections based on 09/30 fiscal year end; Assumes valuation date of 12/31/18; Assumes non-controlling interest of $32mm, GP value of $375mm, and net debt of $2,962mm; GP value based on intrinsic valuation analysis and approved by UGI management; Assumes 93.1mm diluted LP units outstanding based on treasury stock method 1 Multiples implied by calculating unit price / 2019E LP DCF / unit 5 J.P.Morgan
CONFIDENTIAL Trading multiples and operating metrics – APU Select propane companies Other select public companies ($mm, except for per unit data) AmeriGas Superior Plus Suburban Ferrellgas1 Parkland Fuel Global Partners Sprague Unit price as of 03/29/19 $30.87 $8.57 $22.41 $1.31 $30.56 $19.66 $18.48 % of 52-week high 1 70% 84% 91% 33% 86% 93% 66% Diluted shares outstanding 93.1 176.9 62.6 97.2 148.4 34.0 22.7 LP equity value $2,875 $1,516 $1,404 $127 $4,536 $668 $420 (+) Implied GP value 375 -———- 17 122 (+) Net debt and preferreds 2,962 1,244 1,313 2,042 2,462 954 357 (+) NCI 32 -—- (7) — 2 — Firm value $6,244 $2,760 $2,717 $2,163 $6,998 $1,641 $900 Trading multiples: Management 2 Consensus Firm value / 2019E EBITDA 10.2x 9.9x 8.2x 9.5x 9.1x 9.8x 6.8x 7.8x Firm value / 2020E EBITDA 9.8x 9.7x 7.5x 9.4x 8.7x 9.1x 7.4x 7.0x Unit price / 2019E LP DCF / unit 8.5x 8.1x 7.5x 6.8x 4.9x 12.4x 7.7x 7.0x Unit price / 2020E LP DCF / unit 8.2x 8.0x 6.7x 6.5x NA 11.1x 8.0x 6.5x 2019E yield 10.2% 10.4% 6.3% 10.7% — 2.9% 10.1% 14.4% 2020E yield 10.8% 9.8% 6.3% 10.7% — 2.9% 10.2% 14.4% Growth rates / coverage: 2019—2020 LP DCF per unit / growth 3.6% 1.0% 11.6% 5.5% — 11.2% (4.5%) 7.0% 2019—2020 DPU growth 5.2% (6.2%) 0.1% 0.0% — 1.2% 1.1% 0.1% 2019 total coverage 1.25x 1.27x 2.12x 1.37x — 2.79x 1.39x 1.00x 2020 total coverage 1.20x 1.40x 2.36x 1.30x — 3.07x 1.27x 1.11x Credit statistics: Rating (Moody’s / S&P) Ba2 /—Ba2 /—NR / BB Ba3 / BB- Caa2 / CCC Ba3 / BB B1 / B+—/—Debt / LTM EBITDA 4.8x 4.8x 4.6x 4.7x 9.1x 3.0x 2.9x 3.3x Total gross debt $2,970 $2,970 $1,261 $1,320 $2,083 $2,492 $895 $376 Source: FactSet as of 03/29/19; Company filings; APU GP value based on intrinsic valuation analysis and approved by UGI management Note: Projections and other public companies based on 09/30 fiscal year end 1 For reference only: % of 52-week high metrics, select companies including Ferrellgas 2 APU projections as provided and approved by UGI management and included for reference only 6 J.P.Morgan
CONFIDENTIAL Transaction multiples Relevant transactions Announced Total LP % equity LP price / Premium to Premium to equity value 1 1 Date Acquiror Target Type consideration NTM LP DCF last close 30-day VWAP ($mm) 11/26/18 ArcLight Capital Partners TransMontaigne Partners Intra-company $537 100% 10.3x 14% 9% 10/22/18 EnLink Midstream LLC Enlink Midstream Partners Intra-company 6,511 100% 10.9x 1% (1%) 5/17/18 Enbridge Inc. Enbridge Energy Partners Intra-company 2,139 100% 7.6x 0% 2% 3/26/18 Tallgrass Energy GP Tallgrass Energy Partners, LP Intra-company 2,628 100% 7.6x 1% 10% 1/2/18 ArchRock Inc. ArchRock Partners LP Intra-company 1,032 100% 7.2x 23% 28% 6/2/17 World Point Terminals, Inc. World Point Terminals, LP Intra-company 608 0% 10.7x 1% 2% 5/18/17 Energy Transfer Partners PennTex Midstream Partners Intra-company 280 0% 12.3x 20% 20% 5/8/17 VTTI B.V. VTTI Energy Partners Intra-company 899 0% 13.0x 4% 3% 1/27/17 Enbridge Inc. Midcoast Energy Partners, L.P. Intra-company 362 0% 11.0x (9%) 5% 5/31/16 Semgroup Corporation Rose Rock Midstream, L.P. Intra-company 888 100% 10.1x 0% 27% 11/3/15 Targa Resources Corp. Targa Resources Partners LP Intra-company 6,710 100% 11.0x 18% 16% 5/6/15 Crestwood Equity Partners LP Crestwood Midstream Partners LP Intra-company 3,878 100% 11.2x 17% 21% For reference only 11/8/18 Western Gas Equity Partners Western Gas Partners Intra-company 7,432 100% 9.6x 9% 2% 10/18/18 Valero Energy Valero Energy Partners Intra-company 2,926 0% 14.7x 8% 12% 10/9/18 Antero Midstream GP LP Antero Midstream Intra-company 5,811 90% 13.8x 5% 4% 9/19/18 Dominion Energy Dominion Energy Midstream Partners Intra-company 1,742 100% 13.7x (3%) 6% 8/24/18 Enbridge Inc. Spectra Energy Partners Intra-company 3,300 100% 11.6x 10% 9% 8/1/18 Energy Transfer Equity Energy Transfer Partners Intra-company 27,516 100% 9.3x 11% 19% 5/17/18 Cheniere Energy Cheniere Energy Partners LP Intra-company 559 100% 13.0x 7% 8% 5/17/18 The Williams Companies, Inc. Williams Partners LP Intra-company 10,468 100% 12.5x 6% 13% 2/16/17 TransCanada Corporation Columbia Pipeline Partners LP Intra-company 1,721 0% 18.9x 12% 18% 2/1/17 ONEOK, Inc. ONEOK Partners, L.P. Intra-company 15,516 100% 16.0x 26% 22% 5/13/15 The Williams Companies, Inc. Williams Partners LP Intra-company 33,626 100% 15.1x 18% 13% Source: Press releases, company filings; Note: Premia based on unaffected target price at time of initial public offer, prior to announcement of definitive agreement 1 Premium to last close and premium to 30-day VWAP included for reference only 7 J.P.Morgan
CONFIDENTIAL APU LP unlevered discounted cash flow Management projections 2019E 2020E 2021E 2022E TY EBITDA $610 $635 $645 $655 $665 % growth 4.1% 1.6% 1.6% 1.5% Less: Tax D&A (116) (156) (140) (120) (118) % capex 99.1% 125.1% 119.8% 101.3% 99.0% EBIT $494 $479 $505 $535 $547 Less: Taxes (125) (121) (127) (135) (138) % Marginal tax rate 25.2% 25.2% 25.2% 25.2% 25.2% EBIAT $369 $358 $377 $400 $409 Plus: D&A 116 156 140 120 118 Less: Capital expenditures (117) (125) (117) (118) (120) % EBITDA 19.2% 19.7% 18.1% 18.0% 18.0% Maintainance capex (61) (60) (53) (54) (55) % EBITDA 10.0% 9.5% 8.3% 8.2% 8.2% Growth capex (56) (55) (49) (49) (50) % EBITDA 9.2% 8.6% 7.5% 7.5% 7.5% Acquisition capex—(10) (15) (15) (15) % EBITDA—1.6% 2.3% 2.3% 2.3% Plus: Proceeds from asset sales 17 15 13 13 13 +/- Change in NWC 13 20 29 17 17 Unlevered free cash flow $399 $424 $442 $432 $438 Less: Stub (100) — — Unlevered free cash flow for discounting $299 $424 $442 $432 $438 PV of FCF ($mm) PV of terminal value ($mm) Firm value ($mm) Implied terminal value / 2022E EBITDA Terminal growth rate Terminal growth rate Terminal growth rate 0.00% 1.25% 2.50% 0.00% 1.25% 2.50% 0.00% 1.25% 2.50% 7.25% $1,401 7.25% $4,734 $5,809 $7,451 7.25% $6,135 $7,210 $8,852 7.25% 9.4x 11.5x 14.8x Discount rate 7.75% 1,389 + Discount rate 7.75% 4,362 5,282 6,640 = Discount rate 7.75% 5,751 6,671 8,030 Discount rate 7.75% 8.8x 10.7x 13.4x 8.25% 1,378 8.25% 4,036 4,831 5,972 8.25% 5,414 6,209 7,350 8.25% 8.3x 9.9x 12.3x Net debt1 GP value LP equity value ($mm) Implied value per unit ($)2 Implied price / 2019E DCF multiple Terminal growth rate Terminal growth rate Terminal growth rate 0.00% 1.25% 2.50% 0.00% 1.25% 2.50% 0.00% 1.25% 2.50% 7.25% $2,994 $375 7.25% $2,766 $3,841 $5,483 7.25% $29.69 $41.24 $58.87 7.25% 8.1x 11.3x 16.1x Discount ate r 7.75% 2,994—375 = Discount ate r 7.75% 2,382 3,302 4,661 Discount r ate 7.75% 25.58 35.46 50.04 Discount r ate 7.75% 7.0x 9.7x 13.7x 8.25% 2,994 375 8.25% 2,045 2,840 3,981 8.25% 21.95 30.49 42.74 8.25% 6.0x 8.4x 11.7x Source: APU projections and terminal year as provided and approved by UGI management; Company filings Note: Projections based on 09/30 fiscal year end; Valuation date as of 12/31/18; Terminal year assumes flat margins as % of EBITDA and D&A as 99% of capex; Current APU share price of $30.87; GP value based on intrinsic valuation analysis and approved by UGI management 8 1 Includes non-controlling interest of $32mm and net debt of $2,962mm 2 93.1mm diluted LP units outstanding based on treasury stock method J.P.Morgan
CONFIDENTIAL APU LP discounted distributions analysis—For reference only Management projections $mm, unless otherwise noted 2019E 2020E 2021E 2022E TY EBITDA $610 $635 $645 $655 $665 % growth 4.1% 1.6% 1.6% 1.5% Less: Interest expense (165) (166) (165) (165) (165) Less: Maintenance capex (61) (60) (53) (54) (55) Memo: Growth capex (56) (55) (49) (49) (50) Less: Taxes (5) (5) (6) (5) (5) Distributable cash flow for discounting (pre-stub) $379 $403 $421 $431 $440 Total coverage 1.20x 1.20x 1.20x 1.20x 1.20x DCF growth 6.5% 4.3% 2.4% 2.1% Average units outstanding 93.0 93.0 93.0 93.0 93.0 Memo: LP DCF / unit $3.65 $3.78 $3.87 $3.93 $3.98 LP DPU $3.16 $3.32 $3.44 $3.51 $3.57 LP DPU growth (%) 5.2% 3.5% 2.0% 1.7% Less: Stub (0.79) — — LP DPU for discounting $2.37 $3.32 $3.44 $3.51 $3.57 PV of DPU PV of terminal value (per unit) Implied LP value per unit Implied LP equity value1 LP DPU terminal growth rate LP DPU terminal growth rate LP DPU terminal growth rate 0.00% 1.00% 2.00% 0.00% 1.00% 2.00% 0.00% 1.00% 2.00% Cost of equity 9.00% $10.75 9.00% $29.43 $33.69 $39.12 Cost of equity 9.00% $40.19 $44.44 $49.87 Cost of equity 9.00% $3,742 $4,138 $4,644 Cost of equity 10.00% 10.58 + 10.00% 25.71 29.07 33.23 = 10.00% 36.29 39.65 43.81 10.00% 3,379 3,692 4,079 11.00% 10.41 11.00% 22.70 25.40 28.68 11.00% 33.11 35.81 39.09 11.00% 3,083 3,335 3,640 Terminal yield 2019E yield LP DPU terminal growth rate LP DPU terminal growth rate 0.00% 1.00% 2.00% 0.00% 1.00% 2.00% Cost of equity 9.00% 8.6% 7.5% 6.5% Cost of equity 9.00% 7.9% 7.1% 6.3% 10.00% 9.5% 8.4% 7.4% 10.00% 8.7% 8.0% 7.2% 11.00% 10.4% 9.3% 8.3% 11.00% 9.5% 8.8% 8.1% Source: APU projections and terminal year as provided and approved by UGI management Note: Projections based on 09/30 fiscal year end; Assumes valuation date of 12/31/18; Maintenance capex reflects 52% of total capex per company filings; Cost of equity is illustrative 1 Reflects values implied from 93.1mm diluted LP units outstanding based on treasury stock method 9 J.P.Morgan
CONFIDENTIAL Summary of preliminary analysis for standalone UGI Implied share price—rounded to the nearest $0.25 (except 52-week high/low and analyst price targets) Selected range applied to metric Current: $55.42 Metric Low High Market metrics1 52-week low / high $43.60 $59.31 $1,483 9.6x 11.5x For reference only Analysts price target $52.00 $65.00 $1,483 10.6x 12.2x For reference only Trading multiples FV / 2019E EBITDA $43.00 $63.25 $1,483 9.50x 12.00x FV / 2020E EBITDA $48.00 $57.25 $1,668 9.00x 10.00x Price / 2019E EPS $42.25 $52.25 $2.49 17.00x 21.00x Price / 2020E EPS $53.00 $57.75 $3.12 17.00x 18.50x 2 Sum of the parts—2019E $43.50 $54.50 3 3 $1,483 9.6x 10.9x 2019E EBITDA basis For reference only 2 3 3 Sum of the parts—2020E $48.50 $62.25 $1,668 9.0x 10.6x 2020E EBITDA basis For reference only Discounted cash flow analysis Unlevered (after-tax) DCF 4 Discount rate = 7.00%—8.00% Unlevered (after-tax) discounted $46.25 $74.25 cash flow analysis Terminal growth rate = 2.50%—3.50% $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $90.00 Source: UGI projections and terminal year as provided and approved by UGI management Note: Projections based on 09/30 fiscal year end; FactSet as of 03/29/19; Valuation date as of 12/31/18; Assumes consolidated net debt of $4,369mm; Assumes NCI for trading multiples of $2,142mm based on market value (69.4mm units at $30.87); Assumes ~178mm diluted shares outstanding based on treasury stock method; Market multiples implied based on 2019E EBITDA and sum of the parts multiples implied based on 2019E and 2020E EBITDA respectively 1 Implied multiples based market metrics calculated using 2019E EBITDA 2 See illustrative sum-of-the-parts analysis on pages 12 and 13 for more information 10 3 Implied multiples based on sum of the parts calculated using 2019E and 2020E EBITDA; SOTP firm value used for implied multiple calculated as equity value from SOTP plus consolidated net debt of $4,369mm plus NCI of $2,142mm 4 Deconsolidated free cash flows based on UGI (ex. APU) and deconsolidated net debt of $1,407mm J.P.Morgan
CONFIDENTIAL Public trading metrics – UGI Diversified $mm, except per share data UGI Centerpoint Energy National Fuel Chesapeake 1 Share price as of 03/29/19 $55.42 $30.70 $60.96 $91.21 % of 52-week high 1 93% 98% 99% 96% Diluted shares outstanding 177.6 506.1 86.8 16.5 Equity value $9,845 $15,537 $5,289 $1,506 (+) Net debt and preferreds 4,369 13,608 2,022 616 (+) NCI 2,142 0 0 0 Firm value $16,356 $29,145 $7,311 $2,124 % Utility operating income (2018A) 23% 68% 17% 82% Trading multiples: Management 2 Consensus Firm value / 2019E EBITDA $1,483 11.0x $1,366 12.0x 10.4x 9.3x 14.7x Firm value / 2020E EBITDA 1,668 9.8x 1,639 10.0x 9.3x 8.9x 13.6x P / 2019E EPS $2.49 22.3x $2.64 21.0x 18.6x 17.2x 25.3x P / 2020E EPS 3.12 17.8x 3.03 18.3x 17.2x 17.1x 23.6x Growth rates / coverage: 2019E—2021E EBITDA CAGR 9.6% 11.5% 7.4% 3.6% 7.3% 2019E—2021E EPS CAGR 17.4% 9.0% 7.4% (3.1%) 5.9% Credit statistics: Rating (Moody’s / S&P) NR / NR NR / NR BBB+ / Baa2 BBB / Baa2 NR / NR Debt / LTM EBITDA 3.5x 3.5x 4.5x 2.9x 4.2x Total gross debt $4,847 $4,847 $12,228 $2,132 $622 Source: FactSet as of 03/29/19; UGI projections as provided and approved by UGI management; Company filings Note: Projections and other public companies based on 09/30 fiscal year end; NCI of UGI based on market value (69.4mm units at $30.87) 1 For reference only: % of 52-week high metrics, select companies including Chesapeake 2 UGI projections as provided and approved by UGI management and included for reference only 11 J.P.Morgan
CONFIDENTIAL Illustrative 2019E sum-of-the-parts analysis for UGI – For reference only ($mm, except per share data) 2019E Multiple range Firm value range Metric $mm Low High Low High UGI Utilities1 Net income $118 21.50x 28.00x $3,650 $4,418 AmeriGas2 EBITDA $503 7.00x 10.00x $3,519 $5,028 UGI International EBITDA $358 9.75x 11.75x $3,494 $4,211 Midstream & Marketing2,3 EBITDA $152 10.00x 11.00x $1,524 $1,676 Capitalized corporate costs, net4 EBITDA ($2) 9.50x 12.00x ($19) ($24) Source: UGI projections as provided and approved by UGI management Note: Projections based on 09/30 fiscal year end; FactSet as of 03/29/19; Assumes net debt of $4,369mm; Assumes ~178mm diluted shares outstanding based on treasury stock method 1 UGI Utilities implied firm value calculated by taking implied equity value (estimated net income multiplied by 12 selected P/E multiple range) and adding net debt ($1,110mm) as per latest public UGI Utilities filings; 2 AmeriGas and Midstream & Marketing EBITDA adjusted by implied taxes of 25.2% and 28.9% of budget EBIT, respectively 3 Midstream & Marketing includes UGI Enterprises; 4 Comprised of costs associated with UGI Holding and UGI Properties; 5 NCI calculated based on 74.5% of the resulting LP equity value utilizing the sum-of-the-parts APU firm value less APU net debt of $2,962mm less APU GP value of $375mm J.P.Morgan
CONFIDENTIAL Illustrative 2020E sum-of-the-parts analysis for UGI – For reference only ($mm, except per share data) 2020E Multiple range Firm value range Metric $mm Low High Low High UGI Utilities1 Net income $149 20.00x 26.50x $4,095 $5,065 AmeriGas2 EBITDA $521 7.00x 9.75x $3,647 $5,079 UGI International EBITDA $437 9.00x 11.25x $3,935 $4,919 Midstream & Marketing2,3 EBITDA $187 8.00x 9.00x $1,493 $1,679 Capitalized corporate costs, net4 EBITDA $1 9.00x 10.00x $12 $13 Source: UGI projections as provided and approved by UGI management Note: Projections based on 09/30 fiscal year end; FactSet as of 03/29/19; Assumes net debt of $4,369mm; Assumes ~178mm diluted shares outstanding based on treasury stock method; 1 UGI Utilities implied firm value calculated by taking implied equity value (estimated net income multiplied by 13 selected P/E multiple range) and adding net debt ($1,110mm) as per latest public UGI Utilities filings; 2 AmeriGas and Midstream & Marketing EBITDA adjusted by implied taxes of 25.2% and 28.9% of budget EBIT, respectively 3 Midstream & Marketing includes UGI Enterprises; 4 Comprised of costs associated with UGI Holding and UGI Properties; 5 NCI calculated based on 74.5% of the resulting LP equity value utilizing the sum-of-the-parts APU firm value less APU net debt of $2,962mm less APU GP value of $375mm J.P.Morgan
CONFIDENTIAL UGI deconsolidated discounted cash flow analysis Management projections 2019E 2020E 2021E 2022E TY UGI ex-APU EBITDA $873 $1,033 $1,137 $1,223 $1,260 % growth 18.3% 10.0% 7.6% 3.0% Less: Tax D&A (251) (283) (394) (389) (510) % capex 38.3% 35.9% 59.8% 53.6% 99.0% EBIT $623 $750 $743 $834 $749 Less: Taxes (197) (222) (212) (234) (210) % marginal tax rate 31.7% 29.6% 28.6% 28.0% 28.0% EBIAT $425 $528 $531 $601 $539 Plus: D&A 251 283 394 389 510 Less: Capital expenditures (655) (789) (658) (726) (515) % EBITDA 75.0% 76.4% 57.9% 59.3% 40.9% Maintainance capex (325) (392) (327) (361) (371) % EBITDA 37.2% 38.0% 28.8% 29.5% 29.5% Growth capex (330) (397) (332) (365) (144) % EBITDA 37.8% 38.5% 29.2% 29.9% 11.4% +/- Other1 19 17 15 16 17 +/- Change in NWC (52) 18 (11) 0 0 Plus: Tax-affected GP / IDR distributions 17 20 23 25 26 Plus: Tax-affected UGI attributable LP distributions 56 59 61 62 63 Unlevered free cash flow $60 $136 $354 $367 $641 Less: Stub (15) — — Unlevered free cash flow for discounting $45 $136 $354 $367 $641 PV of FCF ($mm) PV of terminal value ($mm)2 Firm value ($mm) Implied terminal value / 2022E EBITDA Terminal growth rate Terminal growth rate Terminal growth rate 2.50% 3.00% 3.50% 2.50% 3.00% 3.50% 2.50% 3.00% 3.50% Discount rate 7.00% $768 + Discount rate 7.00% $11,080 $12,307 $13,957 = Discount rate 7.00% $11,848 $13,075 $14,724 Discount rate 7.00% 11.7x 13.0x 14.7x 7.50% 759 7.50% 9,855 10,814 12,069 7.50% 10,614 11,573 12,828 7.50% 10.6x 11.6x 12.9x 8.00% 751 8.00% 8,850 9,615 10,596 8.00% 9,601 10,366 11,347 8.00% 9.7x 10.5x 11.6x Net debt Equity value ($mm) Implied value per share ($)3 Implied TV P/E multiple 4 Terminal growth rate Terminal growth rate Terminal growth rate 2.50% 3.00% 3.50% 2.50% 3.00% 3.50% 2.50% 3.00% 3.50% Discount rate 7.00% $1,407 = Discount rate 7.00% $10,440 $11,668 $13,317 Discount rate 7.00% $58.67 $65.36 $74.35 Discount rate 7.00% 24.0x 26.9x 30.9x 7.50% 1,407 7.50% 9,207 10,165 11,421 7.50% 51.92 57.17 64.01 7.50% 21.4x 23.8x 26.9x 8.00% 1,407 8.00% 8,194 8,959 9,940 8.00% 46.36 50.57 55.94 8.00% 19.3x 21.2x 23.7x Source: UGI projections and terminal year as provided and approved by UGI management; Company filings Note: Projections based on 09/30 fiscal year end; Valuation date as of 12/31/18; Terminal year assumes flat % of EBITDA margins and D&A as 99% of capex 1 Includes other investing activity cash flow and other operating activity cash flow per UGI projections 2 Terminal value calculation assumes perpetuity growth rate of 0.0% to 2.5% for related APU distributions 3 Assumes ~178mm diluted shares outstanding calculated through the treasury stock method 14 4 Assumes terminal net income of $534mm J.P.Morgan
CONFIDENTIAL Illustrative value creation analysis $27.71 / unit in equity and $7.63 / unit in cash, $5.0mm in run-rate synergies ($ in millions) Value creation calculation UGI Standalone intrinsic UGI equity value 1 $10,165 UGI pro forma equity ownership in New Co $10,686 Plus: Cash consideration—Total value to UGI $10,686 Value creation—$ $521 Value creation—% 5.1% Value creation calculation APU Standalone intrinsic APU equity value $2,460 APU pro forma equity ownership in New Co $2,082 Plus: Cash consideration 529 Total value to APU $2,611 Value creation—$ $151 Value creation—% 6.1% Source: UGI and APU projections and terminal year as provided and approved by UGI management, Company filings Note: Values represent midpoint of respective discounted cash flow values; Assumes $5.0mm of synergies and $529mm cash to APU 1 Calculated as UGI deconsolidated DCF midpoint firm value of $11,573 less net debt of $1,407mm 2 PV of synergies includes PV of excess cash 15 3 Includes transaction costs of $30mm (financing and advisory fees) J.P.Morgan
CONFIDENTIAL Agenda Page 1 Appendix 16 J.P.Morgan
CONFIDENTIAL Cost synergies valuation Management projections $mm, except per share data 2019E 2020E 2021E 2022E TY Run-rate cost synergies $5 $5 $5 $5 $5 % growth 0.0% 0.0% 0.0% 0.0% Phase-in cost synergies $5 $5 $5 $5 $5 % phased in 100.0% 100.0% 100.0% 100.0% Less: Costs to achieve — ——% of run-rate synergies 0.0% 0.0% 0.0% 0.0% 0.0% Pre -tax net cost synergies $5 $5 $5 $5 $5 Less: Taxes (2) (1) (1) (1) (1) % tax rate 30.3% 28.9% 28.1% 27.6% 27.6% After -tax net cost synergies $3 $4 $4 $4 $4 Less: Stub (1) — — After -tax net cost synergies for discounting $3 $4 $4 $4 $4 PV of FCF ($mm) PV of synergies TV ($mm) Total PV of synergies ($mm) Discount rate 7.00% $12 + Discount rate 7.00% $41 = Discount rate 7.00% $53 7.50% 12 7.50% 38 7.50% 50 8.00% 12 8.00% 35 8.00% 47 Source: UGI projections and terminal year as provided and approved by UGI management Note: Projections based on 09/30 fiscal year end; Assumes transaction date of 12/31/18; Assumes run-rate synergies of $5.0mm 16 J.P.Morgan
CONFIDENTIAL Excess cash reinvestment valuation Management projections $mm 2019E 2020E 2021E 2022E TY APU distributions saved $219 $230 $239 $243 Less: Incremental tax on APU ownership (41) (54) (58) (63) Less: Incremental tax affected interest (23) (23) (23) (23) Less: Incremental UGI dividends paid (38) (42) (43) (45) Plus: Interest savings on APU revolver 4 9 8 6 Less: APU revolver payment (247) (45) — Excess cash (post APU revolver paydown)—$76 $122 $119 Reinvested excess cash1—38 61 59 Assumed EBITDA multiple 7.5x 7.5x 7.5x 7.5x EBITDA—$5 $13 $21 $22 Less: D&A—(2) (7) (12) (5) EBIT—$3 $6 $9 $17 Less: Taxes—(1) (2) (2) (5) % marginal tax rate 30.3% 28.9% 28.1% 27.6% 27.6% EBIAT—$2 $5 $6 $12 Plus: D&A2—2 7 12 5 Less: Maintenance capex3—(1) (3) (5) (5) Less: Growth capex—(38) (61) (59) Unlevered free cash flow—($35) ($53) ($46) $12 Less: Stub — ——Unlevered free cash flow for discounting—($35) ($53) ($46) $12 PV of FCF ($mm) PV of TV ($mm) Total PV ($mm) Terminal growth rate Terminal growth rate 2.50% 3.00% 3.50% 2.50% 3.00% 3.50% 7.00% ($114) 7.00% $211 $239 $274 7.00% $97 $125 $160 Discount rate 7.50% (113) + Discount rate 7.50% 187 209 237 = Discount rate 7.50% 74 96 124 8.00% (112) 8.00% 168 185 207 8.00% 56 74 95 Source: UGI and APU projections and terminal year as provided and approved by UGI management; Company filings Note: Projections based on 09/30 fiscal year end; Valuation date as of 12/31/18 17 ¹ Assumes 50% of the total excess cash is reinvested 2 Assumes 15-year MACRs depreciation 3 Assumes maintenance capex as 24% of EBITDA J.P.Morgan
CONFIDENTIAL Step-up valuation Management projections $mm 2019E 2020E 2021E 2022E 2023E—2042E Step-up depreciation $172 $222 $297 $296 $1,953 Total Depreciation $172 $222 $297 $296 $1,953 Tax rate 30.3% 28.9% 28.1% 27.6% 27.6% Tax impact of step-up depreciation $52 $64 $83 $82 $539 Total gross depreciation $2,940 Step-up valuation Discount rate 7.00% $569 7.50% 556 8.00% 543 Source: UGI projections as provided and approved by UGI management, PricewaterhouseCoopers analysis Note: Projections based on 09/30 fiscal year end; Assumes transaction date of 12/31/18 J.P.Morgan
Exhibit (c)(8)
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Project Rushmore Discussion Materials
January 31st, 2019
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Summary of Project Rushmore Transaction
proposal component description
Exchange ratio detail
IDR Buyin Proposal Prior to Investor Day Proposal Date Current Implied
Offer 9/19/2018 12/3/2018 1/25/2019 1/29/2019 1/25/2019 1/29/2019∎ Each Abe Common Unit to receive: Spot Abe Price $40.39 $36.67 $29.89 $29.84 $32.01 $31.76 Abe 30-Day VWAP $40.22 $36.50 $26.34 $26.29
☐ 0.500 Ulysses shares Spot Ulysses Price $53.76 $57.59 $55.95 $55.46 -- --
(1) (1)
Consideration Spot XR 0.7513x 0.6367x 0.5342x 0.5380x 0.5720x 0.5727x
☐ $4.03 Cash Premium to Spot 7.1% 6.4%∎ Expected to be taxable Premium to 30-Day VWAP 21.5% 20.8%
∎ Status Quo Abe ownership:∎ Pro Forma Ulysses ownership: Ownership ☐ Abe Public Unitholders: ~77% ☐ Abe Public Unitholders: ~17%(2)
☐ Ulysses: ~23% ☐ Existing Public Shareholders: ~83%
∎ Through a wholly
owned subsidiary, Ulysses will purchase all Abe public units with a transaction structure that will not trigger a Structure Ulysses shareholder vote (<20%)∎ Elimination of MLP
∎ 1/28: Proposal Received
∎ 1/29: Regularly scheduled Abe board meeting Proposed
Ulysses Timing∎ 2/8: Draft merger agreement∎ 2/15: Provide indicative response∎ 3/15: Offer expires
Source: Company filings, Bloomberg, FactSet
as of 1/29/2019. 2 (1) Implied all-in XR calculated as equity XR of 0.5x plus $4.03 cash consideration divided by Ulysses share price.
(2) Issuance of shares equivalent to 19.9% of status quo (pre-transaction) Ulysses outstanding shares results in ~17% Abe public unitholder
ownership in pro forma entity.
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& MERCHANT BANKING
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Corporate Trading Overview
($ in millions, years based on fiscal year)
Abe Partners Ulysses Corporation
Common Unit Price as of 1/29/19 $29.84 Common Share Price as
of 1/29/19 $55.46 52-week High (1/29/18) $48.18 52-week High (12/07/18) $59.31
%
Discount to 52-week High (38.1%) % Discount to 52-week High (6.5%) 52-week Low (12/24/18) $22.75
52-week Low (2/13/18) $42.51
% Premium to 52-week Low 31.2% % Premium to 52-week Low 30.5% Total Diluted Units Outstanding (MM) 93.2 Total Diluted Shares Outstanding (MM) 176.5 LP Equity Value $2,781 Common Equity Value $9,789 Value of GP / IDR(1) $388
Total Equity Value $3,169 Total Equity Value $9,789
Long-term Debt $2,597 Long-term Debt
$4,199 Credit Facility 232 Credit Facility 422 Other Short-term Borrowings 0 Other Short-term Borrowings 2 Cash (7) Cash (453) Net Debt $2,822 Net Debt $4,170 Non-Controlling Interest 33 Non-Controlling Interest(2) 2,066
Enterprise Value $6,024 Enterprise Value $16,025
EBITDA EBITDA
Enterprise Value / FY 2019E EBITDA $611 9.9x Enterprise Value / FY 2019E EBITDA
$1,566 10.2x Enterprise Value / FY 2020E EBITDA $630 9.6x Enterprise Value / FY 2020E EBITDA $1,649 9.7x
DCF/Unit
Price / FY 2019E DCF $3.73 7.8x Price / FY 2020E DCF 3.82 7.6x
Dist./Unit Dist./Share
Current Distribution Yield $3.80 12.7% Current Dividend Yield $1.04 1.9% FY 2019E Yield 3.80 12.7% FY 2019E Yield 1.12 2.0% FY 2020E Yield 3.80 12.7% FY 2020E
Yield 1.19 2.1% 2019E Coverage 1.0x FY 2019E Dividend Payout Ratio 38.9% Moody’s / S&P Rating Ba3 / NR Moody’s / S&P Rating Ba3 / NR Total Debt / LTM (9/30/18) EBITDA 4.8x Total Debt / LTM (9/30/18) EBITDA 3.3x
Current GP/IDR Tier 49.5% Current % of Distributions to GP/IDR 12.3%
Source: Equity Research
and FactSet as of 1/29/2019.
Note: Ulysses owns ~26% of Abe LP units and 100% of the GP/IDR cash flows. Fiscal years end on September 30th for both Abe and
Ulysses.
(1) GP / IDR value estimated by taking current GP/IDR distributions capitalized by Abe’s current yield. 3 (2) NCI accounted for at Abe’s current
market value multiplied by units held by the public. Wall Street research projections for EBITDA reflect fully consolidated EBITDA contribution of Abe.
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PRELIMINARY CONFIDENTIAL DRAFT Abe Comparable Performance Subject to Further Review & Revision
January 2017 – Current (Indexed Price Performance)
Abe Ulysses FGP SPH
AMZ
140%
11/8/17 –
Announcement 1/29/18 – $60 5/1/17 – Q2’17 8/2/17 – Q3’17 120% of SECA and 52-week high Earnings Earnings FY17
Earnings at $48.18
8/1/18 – Q3’18 12/4/18 –100% Earnings Ulysses and Abe
Investor Day
Abe Price / Unit
80% $40
1/31/18 – 2/1/17 – Q1’17 Earnings Q1’18 Earnings 5/2/18 –
Q2’18 9/17/18 – Jerry Sheridan Earnings steps down as CEO $29.84
60%
11/12/18 –FY18 Earnings
40% $20
12/24/18 –52-week low at $22.75
20%
0% $0 Jan-17 Apr-17 Jul-17
Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19
4
_____________________________________ Source: FactSet as of 1/29/2019.
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PRELIMINARY CONFIDENTIAL DRAFT Abe Comparable Performance Subject to Further Review & Revision
Immediately Prior to IDR Buy-In Proposal – Current (Indexed Price Performance)
Abe Ulysses FGP SPH AMZ
120%
100% $40
80%
12/4/18 – $30 11/12/18 – FY18 Ulysses and Abe Earnings $29.84 Investor Day
Abe Price
/ Unit
60%
$20
12/24/18 – 52-week low 40% at $22.75
$10 20%
0% $0
Sep-18 Oct-18 Nov-18 Dec-18 Jan-19
5
_____________________________________ Source: FactSet as of 1/29/2019.
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PRELIMINARY CONFIDENTIAL DRAFT
Historical Abe/Ulysses Exchange Ratio Subject to Further Review & Revision
January
2017 – Current
1.40x
Prior to IDR Proposal – Current
0.80x
0.70x
1.20x 0.60x
0.50x
0.40x
1.00x Sep-18
Sep-18 Oct-18 Nov-18 Nov-18 Dec-18 Jan-19 Jan-19
0.80x
0.60x
Average Exchange Ratio Spot XR Proposal XR
Proposed Consideration: 0.5000x + $4.03/unit; Implied XR: 0.5727x
Proposal (1/25/2018) 0.5342x
0.5720x Current (1/29/2019) 0.5380x 0.5727x
0.40x 5-Day 0.5384x 0.5722x 30-Day
0.5040x 0.5743x 60-Day 0.5477x 0.5724x 90-Day 0.6035x 0.5729x 180-Day 0.6937x 0.5747x
360-Day 0.8192x 0.5807x
0.20x
Jan-17 May-17 Aug-17 Nov-17 Mar-18 Jun-18 Sep-18 Dec-18
6
_____________________________________ Source: FactSet as of 1/29/2019.
TUDORPICKERING
HOLT&CO
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PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
20 Largest Unit/Shareholders
Abe Ownership Ulysses Ownership
Holder % OS Market Value Holder % OS Market Value
1. UGI Corp. 25.6 $709 1. The Vanguard
Group, Inc. 10.2 $987
2. OppenheimerFunds, Inc. 5.3 147 2. BlackRock Fund Advisors 8.1 784
3. Energy Income Partners LLC 3.5 97 3. Wellington Management Co. LLP 6.1 583
4. City National
Rochdale LLC 1.5 41 4. SSgA Funds Management, Inc. 5.3 512
5. ClearBridge Investments LLC 1.4 38 5. DWS Investment GmbH 4.0 386
6. MLP Investment Holdings, Inc. 1.3 37 6. First Eagle Investment Management LLC 3.4 325
7.
River Road Asset Management LLC 0.7 20 7. AJO LP 1.6 150
8. Goldman Sachs Asset Management LP 0.6 17 8. Renaissance Technologies LLC 1.4 134
9. Allianz Global Investors U.S. LLC 0.6 15 9. Diamond Hill Capital Management, Inc. 1.3 128 10. Goldman Sachs & Co. LLC (Private Banking) 0.5 13 10. Energy Income
Partners LLC 1.3 124 11. OFI Steelpath, Inc. 0.4 10 11. Geode Capital Management LLC 1.3 124 12. Fidelity Management & Research Co. 0.3 8 12. Quantitative Management Associates LLC 1.2 117 13. Williams, Jones & Associates LLC 0.3 8
13. WEDGE Capital Management LLP 0.9 89 14. Raymond James & Associates, Inc. (Invt Mgmt) 0.3 7 14. Northern Trust Investments, Inc. 0.9 88 15. Peter B. Cannell & Co., Inc. 0.3 7 15. Norges Bank Investment Management 0.9 88 16. The
California Public Employees Retirement System 0.3 7 16. AQR Capital Management LLC 0.9 85 17. BMO Asset Management Corp. 0.3 7 17. Snyder Capital Management LP 0.9 84 18. Arrowstreet Capital LP 0.2 7 18. Colonial First State Asset Management
(Australia) 0.8 76 19. Global X Management Co. LLC 0.2 6 19. Merian Global Investors (UK) Ltd. 0.8 72 20. Mirae Asset Global Investments Co., Ltd. 0.2 6 20. Numeric Investors LLC 0.6 58 Subtotal 43.5 $1,206 Subtotal 51.8 $4,994 Other 56.5 1,568
Other 48.2 4,647 Total 100.0 $2,774 (1) Total 100.0 $9,642(1)
Common Unit/Shareholders
_____________________________________ 7 Source: FactSet as of 1/29/2019.
(1) Total share
counts are basic shares and do not include effects of dilution.
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Precedents & Premiums | MLP Transactions Analysis
A B C D E F G H I J K
Announcement Transaction Adj. Transaction Deal Unaffected 1-Day Taxable Buyer Transaction Acquiror Target % Cash Date Value Value(1,3) Value Premium Transaction Type Type
11/26/18 Dominion Energy Inc Dominion Energy Midstream Partners LP $3,598 $3,584 $1,262 0.9% 0% No C-Corp Affiliate
11/26/18 Arclight Capital TransMontaigne Partners L.P. 1,247 1,232 536 12.6% 100% NA PE Affiliate 11/8/18 Western Gas Equity Partners LP Western Gas Partners, LP 12,781 12,603 5,763 7.6% 0% No C-Corp Affiliate
10/22/18 EnLink Midstream LLC EnLink Midstream Partners, L.P. 12,236 12,221 5,084 1.1% 0% Yes C-Corp Affiliate 10/18/18 Valero Energy Corporation Valero Energy Partners LP 3,788 3,734 1,976 6.0% 100% Yes C-Corp Affiliate 10/9/18 Antero Midstream GP LP Antero Midstream Partners LP 7,548 7,548 5,908 6.5% 11% Yes C-Corp Affiliate 9/18/18 Enbridge Inc. Enbridge Energy Partners
15,562 15,541 2,742 11.6% 0% Yes C-Corp Affiliate 8/24/18 Enbridge Inc. Spectra Energy Partners, LP 27,810 26,945 3,276 19.4% 0% Yes C-Corp Affiliate 8/1/18 Energy
Transfer Equity, L.P. Energy Transfer Partners 66,981 66,915 27,179 11.2% 0% No MLP Affiliate 6/19/18 Cheniere Energy Inc. Cheniere Energy Partners LP Holdings 5,651 5,526 1,240 10.7% 0% No C-Corp Affiliate
5/17/18 Williams Companies Williams Partners, LP 57,793 56,013 10,427 16.5% 0% Yes C-Corp Affiliate 3/26/18 Tall Grass Energy GP, LP Tallgrass Energy Partners, LP 8,361 8,083 1,686 (18.4%) 0% Yes C-Corp Affiliate 2/7/18 Terra Nitrogen GP, Inc. Terra Nitrogen Co. LP 1,474 1,432 387 3.7% 100% Yes C-Corp Affiliate 1/2/18 Archrock, Inc Archrock Partners, LP 2,438 2,358 607
23.4% 0% Yes C-Corp Affiliate 8/29/17 Zenith Energy US, LP Arc Logistics Partners LP 736 736 407 15.2% 100% Yes PE 3rd Party 10/25/16 Energy Transfer Partners, LP PennTex Midstream Partners, LP 789 789 640
43.3% 50% Yes MLP Affiliate 3/2/17 VTTI, B.V VTTI Energy Partners, LP 1,867 1,842 481 6.0% 100% Yes C-Corp Affiliate 4/3/17 World Point Terminals, Inc. World Point Terminals, LP 594 570 159 5.8% 100% Yes C-Corp Affiliate 2/1/17 ONEOK, Inc ONEOK Partners, LP 23,654 22,380 9,309 25.8% 0% Yes C-Corp Affiliate 1/27/17 Enbridge Energy Company Midcoast Energy Partners, LP 1,176
1,194 170 (8.6%) 100% Yes C-Corp Affiliate 11/21/16 Sunoco Logistics Partners, LP Energy Transfer Partners, LP 54,455 54,455 21,965 (0.2%) 0% No MLP Affiliate 10/24/16 American Midstream Partners LP JP Energy
Partners LP 476 476 302 9.1% 0% No MLP 3rd Party 9/26/16 Transcanada Columbia Pipeline Partners 3,464 3,384 915 9.9% 100% Yes C-Corp Affiliate 5/30/16 SemGroup Corp. Rose Rock Midstream 2,034 2,034 771 0.0% 0%
Yes C-Corp Affiliate 11/3/15 Targa Resources Corp. Targa Resources Partners LP 12,229 12,138 6,672 18.4% 0% Yes C-Corp Affiliate 8/1/16 Transocean, Inc Transocean
Partners 1,202 1,153 259 20.8% 0% No C-Corp Affiliate 10/26/15 Western Refining, Inc. Northern Tier Energy 5,286 5,185 1,982 11.7% 65% Yes C-Corp 3rd Party 7/13/15 MPLX
LP MarkWest Energy Partners, LP 22,360 22,360 16,612 36.3% 8% No MLP 3rd Party 5/6/15 Crestwood Equity Partners, LP Crestwood Midstream Partners 6,920 6,901 3,381 17.2% 0% No MLP Affiliate 4/6/15 Tesoro Logistics LP QEP Midstream Partners LP 1,145
1,104 394 (14.0%) 0% No MLP Affiliate 1/26/15 Energy Transfer Partners, LP Regency Energy Partners LP 18,593 18,593 11,276 13.2% 1% No MLP Affiliate 10/26/14 Williams Partners LP Access Midstream Partners LP 34,256 34,256 21,944 (5.7%) 0% No MLP
Affiliate 10/13/14 Targa Resources Partners LP Atlas Pipeline Partners LP 6,002 6,002 3,866 15.0% 3% No MLP 3rd Party 11/12/14 Enterprise Products Partners LP Oiltanking Partners LP 4,289 4,243 1,392 (0.9%) 0% No PE Affiliate 8/10/14 Kinder Morgan
Inc. Kinder Morgan Energy Partners 52,566 52,351 27,351 12.0% 12% Yes C-Corp Affiliate 8/10/14 Kinder Morgan Inc. El Paso Pipeline Partners 13,677 13,193 5,421 15.4% 12% Yes
C-Corp Affiliate 7/24/14 Breitburn Energy Partners QR Energy LP 2,856 2,856 1,811 17.5% 19% No MLP 3rd Party 10/10/13 Regency Energy Partners LP PVR Partners LP 5,659 5,659 3,931 25.7% 1% No MLP 3rd Party
8/27/13 Plains All American LP PAA Natural Gas Storage LP 2,531 2,434 755 8.5% 0% No MLP Affiliate 5/6/13 Inergy Midstream LP Crestwood Midstream Partners LP 2,643 2,643 1,661 14.5% 4% No MLP 3rd Party 1/29/13 Kinder Morgan Energy Partners LP Copano
Energy LLC 4,858 4,858 3,911 23.5% 0% No MLP 3rd Party 2/23/11 Enterprise Products Partners Duncan Energy Partners LP 3,282 2,973 1,006 28.1% 0% No MLP Affiliate
Median $5,651 $5,526 $1,976 9.9% 0% C-Corp Buying MLP
Mean 12,034 11,783 4,080 9.0% 30% Median $5,651 $5,526 $1,686 9.9% 0% Affiliate Mean 14,121 13,931 5,525 9.3% 24% Median $4,858 $3,857 $1,896 16.4% 6% 3rd Party Mean 5,653 5,201
3,502 18.5% 30% Median $5,072 $5,021 $1,894 11.7% 0% Overall Mean 12,306 12,155 5,162 11.3% 23%
Current (1/29/2019) Ulysses Abe $5,775 $5,730 $2,198 6.4% 13% Yes C-Corp Affiliate
Premium to Pre-Analyst Day (12/3/2018) Ulysses Abe 5,775 5,730 2,198
(13.4%) 13% Yes C-Corp Affiliate
Premium to IDR Takeout Offer (9/19/2018) Ulysses Abe 5,775 5,730 2,198 (21.4%) 13% Yes C-Corp Affiliate
Source: Company filings, press releases, presentations and FactSet for pricing data. Represents precedent MLP
transactions by affiliated and third party MLPs, Public GPs and C-Corps since 2011.
Note: Considers transactions where
target is an MLP. 8 (1) Based on Wall Street research.
(2) Non-adjusted transaction TEV values affiliated and non-affiliated units at offer price.
(3) Adjusted transaction TEV value affiliated units at market price and non-affiliated units at offer price.
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Abe Wall Street Research Overview
Equity Analyst Price Targets(1) ($/sh) Analyst
Recommendation Summary (Last Twelve Months)
9 10 10 10 10 9 9 9 9 9 8 8
Current Price: $29.84 Median Price Target: $34.50 52-Week High: $48.18
100%
10% $48
10% 10% 11% 11%
22% 20% 22% 22% 22% $44 80% 38% 38% $40 $36
Barclays: 1-16-19 $30.00 $32
60% 60% 60% 56% $28
70% 50% 67% 44% 44% 44% Ratings 56% $24 38% 38% % of Ratings
40% $20
$16 Price Target
Janney Montgomery Scott: 12-12-18 $35.00 $12 20% 33% 33% 33% 33% $8 30% 30%
30% 25% 25%
22% 20% 22% $4
0% $0 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18
Jefferies: 1-7-19 $40.00 Buy Hold Sell Target Price # of Analysts
Price vs.
Target History
% of Target Price Target Median % of Target
J.P. Morgan:
1-14-19 $35.00
$60 120%
$55 97%
$50 90% $45
Morningstar Equity Research: 1-7-19 $32.00
$40 60% $35
$30 30%
Wells Fargo Securities: 12-10-18 $34.00 $25
$20 0% Mar-14 Dec-14 Oct-15 Aug-16 Jun-17 Apr-18
Jan-19
___________________________________
Source: FactSet as of 1/29/2019.
9
(1) Excludes brokers without price targets. Median price target shown above
reflects median of individual broker estimates.
TUDORPICKERING HOLT&CO
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Ulysses Wall Street Research Overview
Equity Analyst Price Targets(1) ($/sh) Analyst
Recommendation Summary (Last Twelve Months)
6 7 7 7 7 7 6 6 6 6 6 6
Current
Price: $55.46 Median Price Target: $58.00 52-Week High: $59.31 100% $70
33% 33% $60 80% 43% 43% 43%
50% 50% 50% 50% 50%
57% 57% $50
Bank of America Merrill Lynch: 12-5-18 $58.00
% of Ratings 60% $40 $30 40% 50% 50% price
target
43% 43% 43% 33% 33% 33% 33% 33%
29% 29% $20
Barclays: 1-16-19 $53.00 20% $10
17% 14% 14% 14% 14% 14% 17% 17% 17% 17% 17% 17%
0% $0 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18
Buy Hold Sell Target Price # of Analysts
Price vs. Target History
Janney Montgomery Scott: 12-6-18 $66.00
% of Target Price Target Median % of Target
$60 120%
$55 99%
Jefferies: 1-7-19 $54.00 $50 90% $45
$40 60% $35
$30 30%
UBS: 12-13-18 $63.00 $25
$20 0% Mar-14 Dec-14 Oct-15 Aug-16 Jun-17 Apr-18 Jan-19
Source: FactSet as of 1/29/2019. 10
(1) Excludes brokers without price targets. Median price
target shown above reflects median of individual broker estimates.
TUDORPICKERING HOLT&CO
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Abe Research Commentary Since 12/4 Investor Day
General Commentary Distribution Commentary
Current 2019E 2020E+ %
Broker Date Distribution Distribution Distribution Cut
Commentary
wells fargo UBS janney jpmorgan chase&co.
“Management
noted that it is exploring all options
“The two year stretch of record warm weather in including Ulysses buying in Abe. We believe this could
FY’16-17 and relatively normal weather in FY’18 make strategic sense given the potential synergies have resulted in elevated leverage (i.e., 4.6x in between the
partnership and Ulysses International (the (1) (2) FY’18) and sub-1.0x distribution coverage (i.e., 0.96x company’s European LPG distribution segment). This is 12/10/2018 $3.80 $2.23 $1.71+ (4 on a TTM basis). We believe a distribution cut
is also a likely outcome if management concludes that the prudent as it would improve debt metrics, build MLP is no longer a viable funding vehicle for its domestic distribution coverage, and address the dislocated propane business. If improving
Abe’s near-term financial equity yield.” position is the priority, then just eliminating the IDRs or exercising the SECA (absent the GP providing a subsidy) would not achieve this goal, in our view. We estimate that leverage would still be
elevated under these two
“We currently expect Abe will monitor its scenarios.” distribution at current levels (heating season will be
-Wells Fargo 12/10/18 the determining factor) and note two factors 1) at the low end of the guide it still results in roughly 1x coverage and it’s not forced by covenants or
agencies 12/13/2018 3.80 3.80 3.80 and 2) Ulysses relies on the IDR cash flow. That said we see an increasing downside risk scenario that would result in a roughly 35% distribution cut should the beginning of 2019 be unseasonably warm and the
“Given the uncertainty surrounding a final disposition of heating season end up being warmer than normal.” what Ulysses will do with Abe across its various options, it’s hard to imagine a scenario that quickly returns unit values to
previous levels (unless Ulysses commits to maintaining the distribution at current levels through FY19/FY20, which seems unlikely given the range of communicated possibilities).” “Given what we heard at investor day and the
-Janney 12/13/18 improving metrics, we don’t see a need for 12/13/2018 3.80 3.80 3.80 Ulysses/Abe to cut [Abe’s distribution], other than the market has already priced in
a significant cut.”
“Abe has been under pressure since its analyst day in part due to a lack of resolution to its IDR structure and in recent days its
distribution sustainability.”
-UBS 12/13/18
1/15/2019 3.80 3.80 3.80 0%
___________________________________
(1) 2019E distribution forecast is
$0.95/unit for Q1 2019 and $0.43/unit for Q2-Q4 ($2.23/unit annualized). 11
(2) Distribution forecast for 2020E is $0.43/unit for Q1-Q4 ($1.71/unit annualized) and
gradually increases each subsequent year.
TUDORPICKERING HOLT&CO
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Initial Diligence Items
Data Request List for Transaction Diligence
1) Abe 5-year financial projections (budget forecast numbers agreed upon and approved by Ulysses)
2) Ulysses 5-year financial projections
3) Estimate of
synergies per year (both revenue and cost) as a result of the proposed transaction
4) Latest Wall Street research broker reports (Abe: Barclays, Jefferies, Raymond
James;Ulysses: Barclays, Citi)
5) Supporting tax diligence items:
a) Abe unit
tax basis estimates (including passive activity losses and estimate of ordinary vs. capital gains)
b) For Abe forecasts: an estimate of taxable income and tax
depreciation
c) For Ulysses projections: estimates of taxable income, income taxes, and detailed calculations of earnings and profits
12
TUDORPICKERING HOLT&CO
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Disclosure Statement
Tudor, Pickering, Holt & Co. does not provide accounting, tax or
legal advice. In addition, we mutually agree that, subject to applicable law, you (and your employees, representatives and other agents) may disclose any About The Firm aspects of any potential transaction or structure described herein that are
necessary to support any U.S. federal income tax benefits, and all materials Tudor, Pickering, Holt & Co. is an integrated energy investment and of any kind (including tax opinions and other tax analyses) related to those merchant bank,
providing high quality advice and services to benefits, with no limitations imposed by Tudor, Pickering, Holt & Co. institutional and corporate clients. Through the company’s two broker-The information contained herein is confidential
(except for information dealer units, Tudor, Pickering, Holt & Co. Securities, Inc. (TPHCSI) and relating to United States tax issues) and may not be reproduced in whole or Tudor Pickering Holt & Co Advisors LP (TPHCA), members
FINRA, in part. together with affiliates in the United Kingdom and Canada, the company offers securities and investment banking services to the energy Tudor, Pickering, Holt & Co. assumes no responsibility for independent community. Perella
Weinberg Partners Capital Management LP is an SEC verification of third-party information and has relied on such information registered investment adviser that delivers a suite of energy investment being complete and accurate in all material
respects. To the extent such strategies. information includes estimates and forecasts of future financial performance The firm, headquartered in Houston, Texas, has approximately (including estimates of potential cost savings and synergies) prepared
by, 170 employees and offices in Calgary, Canada; Denver, Colorado; New reviewed or discussed with the managements of your company and/ or other York, New York; and London, England. potential transaction participants or obtained from public sources,
we have assumed that such estimates and forecasts have been reasonably prepared Contact Us on bases reflecting the best currently available estimates and judgments of Houston (Research, Sales and Trading): 713-333-2960 such managements (or, with respect to estimates and forecasts obtained Houston (Investment Banking): 713-333-7100
from public sources, represent reasonable estimates). These materials were Houston (Asset Management): 713-337-3999 designed for use by specific persons familiar with
the business and the Denver (Sales): 303-300-1900 affairs of your company and Tudor, Pickering, Holt & Co. materials.
Denver (Investment Banking): 303-300-1900 Under no circumstances is this presentation to be used or
considered as an New York (Investment Banking): 212-610-1660 offer to sell or a solicitation of any offer to buy, any security. Prior to New York (Research, Sales): 212-610-1600 making any trade, you should discuss with your professional tax, accounting, London: +011 44(0) 20 7268 2800 or regulatory advisers how such particular trade(s)
affect you. This brief Calgary: 403-705-7830 statement does not disclose all of the risks and other significant aspects of www.TPHco.com entering into any particular
transaction.
Copyright 2019 — Tudor, Pickering, Holt & Co. Tudor, Pickering, Holt & Co. operates in the United Kingdom under the trading
name Perella Weinberg Partners UK LLP (authorized and regulated by the Financial Conduct Authority), and in Canada through its affiliate, Tudor, Pickering, Holt & Co. Securities – Canada, ULC, located in Calgary, Alberta.
13
TUDORPICKERING HOLT&CO
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Exhibit (c)(9)
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Project Rushmore Discussion Materials
February 12th, 2019
TUDORPICKERING HOLT&CO
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Table of Contents
I. Situation Overview
II. Status Quo Management Projections Overview III. Abe Financial Analysis IV. Ulysses Financial Analysis V. Transaction Analysis
Supplemental Analysis
Appendix
2
TUDORPICKERING HOLT&CO
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I. Situation Overview
3
TUDORPICKERING HOLT&CO
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PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Summary of Proposed Transaction
Proposal Component Description
Exchange Ratio Detail
∎ Each Abe Common Unit held by public IDR Buyin Proposal Prior to
Investor Day Proposal Date Current Implied Offer 9/19/2018 12/3/2018 1/25/2019 2/8/2019 1/25/2019 2/8/2019 to receive: Spot Abe Price $40.39 $36.67 $29.89 $30.14 $32.01 $30.64 Abe 30-Day VWAP $40.22 $36.50
$26.34 $28.43 Consideration ☐ 0.500 Ulysses shares Spot Ulysses Price $53.76 $57.59 $55.95 $53.21
Spot XR 0.7513x 0.6367x 0.5342x 0.5664x 0.5720x(1)
0.5757x(1)
☐ $4.03 Cash
Premium to Spot 7.1% 1.6%
∎ Taxable transaction to Abe unitholders Premium to 30-Day VWAP 21.5% 7.7%
∎ Status Quo Abe ownership:∎ Pro Forma Ulysses ownership:
Ownership ☐ Abe
Public Unitholders: ~74.7% ☐ Abe Public Unitholders: ~16.5%(2)
☐ Ulysses: ~25.3% ☐ Existing Ulysses Shareholders: ~83.5%
∎ Ulysses will exchange newly-issued Ulysses shares and cash for Abe common units held by public Structure∎ Transaction requires vote of Abe common unitholders, but no
vote of Ulysses shareholders∎ Elimination of MLP
∎ 12/4: Abe and Ulysses Investor Day∎ 2/8: Draft merger agreement & Ulysses management
presentation ∎ 1/28: Proposal Received∎ 2/12: Abe Special Committee meeting∎ 1/29: Regularly scheduled Abe board meeting Proposed Ulysses Timing∎ 2/15: Provide indicative response
∎ 2/6: Abe and Ulysses report Q1’19 results
∎ 3/15: Proposal expires∎
2/6: Received Abe financial forecasts ∎ 2/7: Received Ulysses financial forecasts
Source: Company filings, Bloomberg, FactSet as of 2/8/2019. 4 (1) Implied all-in XR calculated as equity XR of 0.5x plus $4.03 cash consideration divided by Ulysses share price.
(2) Issuance of shares
equivalent to 19.7% of status quo (pre-transaction) Ulysses outstanding shares results in ~16.5% Abe public unitholder ownership in pro forma entity.
TUDORPICKERING HOLT&CO
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Corporate Trading Overview
($ in millions, years based on fiscal year)
Abe Partners Ulysses Corporation
Common Unit Price as of 2/08/19 $30.14 Common Share Price as
of 2/08/19 $53.21 52-week High (2/08/18) $46.07 52-week High (12/07/18) $59.31
%
Discount to 52-week High (34.6%) % Discount to 52-week High (10.3%) 52-week Low (12/24/18) $22.75
52-week Low (2/13/18) $42.51
% Premium to 52-week Low 32.5% % Premium to 52-week Low 25.2% Total Diluted Units Outstanding (MM) 93.8 Total Diluted Shares Outstanding (MM) 177.8 LP Equity Value $2,828 Common Equity Value $9,459 Value of GP / IDR(1) $395
Implied Total Equity Value $3,222 Total Equity Value $9,459
Long-term Debt $2,622 Long-term
Debt $4,211 Credit Facility 232 Credit Facility 665 Other Short-term Borrowings 0 Other Short-term Borrowings 12 Cash (8) Cash (495) Net Debt $2,846 Net Debt $4,392 Non-Controlling Interest 32 Non-Controlling Interest(2) 2,103
Enterprise Value $6,100 Enterprise Value $15,955
EBITDA EBITDA
Enterprise Value / FY 2019E EBITDA $636 9.6x Enterprise Value / FY 2019E EBITDA
$1,329 12.0x Enterprise Value / FY 2020E EBITDA 644 9.5x Enterprise Value / FY 2020E EBITDA 1,623 9.8x
DCF/Unit
Price / FY 2019E DCF $3.85 7.8x Price / FY 2020E DCF 3.91 7.7x
Dist./Unit Dist./Share
Current Distribution Yield $3.80 12.6% Current Dividend Yield $1.04 2.0% FY 2019E Yield 3.80 12.6% FY 2019E Yield 1.12 2.1% FY 2020E Yield 3.80 12.6% FY 2020E
Yield 1.19 2.2%
2019E Coverage 1.0x FY 2019E Dividend Payout Ratio 41.8% Moody’s / S&P Rating Ba2 / NR Moody’s / S&P Rating A2 / NR Total Debt /
LTM (12/31/18) EBITDA 4.6x Total Debt / LTM (12/31/18) EBITDA 3.8x
Current GP/IDR Tier 49.5% Current % of Distributions to GP/IDR 12.3%
Source: Equity Research and FactSet as of 2/8/2019.
Note: Ulysses owns ~26% of Abe LP units
and 100% of the GP/IDR cash flows. Fiscal years end on September 30th for both Abe and Ulysses.
(1) GP / IDR value estimated by taking current GP/IDR distributions
capitalized by Abe’s current yield. 5 (2) NCI accounted for at Abe’s current market value multiplied by units held by the public. Wall Street research projections for EBITDA reflect fully consolidated EBITDA contribution of Abe.
TUDORPICKERING HOLT&CO
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PRELIMINARY CONFIDENTIAL DRAFT Abe Comparable Performance Subject to Further Review & Revision
Indexed Price Performance
Immediately Prior to IDR Buy-In Proposal – Current Immediately Prior to Investor Day – Current
Abe Ulysses FGP SPH AMZ S&P 500 Utilities Abe
Ulysses FGP SPH AMZ S&P 500 Utilities
Abe Price / Unit
120% 140% $50
5% 120%
100% $40 16%
(1%) $40
(6%)
(0%)
(14%) 100%
(5%) (3%)
80% $30.14 (8%)
$30 $30.14
(25%) $30
80%
(18%)
60%
Abe Price / Unit
60% $20 $20
40%
(62%)
40%
12/4/18 – $10
11/12/18 – FY18 $10 20% Ulysses and Abe Earnings
Investor Day 20%
0% $0 0% $0
Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Dec-18 Dec-18 Dec-18 Jan-19 Jan-19 Jan-19 Feb-19
6
_____________________________________ Source: FactSet as of 2/8/2019.
TUDORPICKERING HOLT&CO
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PRELIMINARY CONFIDENTIAL DRAFT
Historical Abe/Ulysses Exchange Ratio Subject to Further Review & Revision
February
8th, 2017 – February 8th, 2019
1.40x Prior to Investor Day – Current Prior to IDR Proposal – Current
0.80x 0.80x
0.70x 0.70x
Average XR: 0.6052x 0.60x Proposal Implied XR: 0.5757x 0.60x 1.20x 0.50x Proposal Implied XR: 0.5757x
0.50x
Average XR: 0.5191x
0.40x 0.40x
Dec-18
Dec-18 Dec-18 Jan-19 Jan-19 Jan-19 Feb-19 Sep-18 Oct-18 Oct-18 Nov-18 Dec-18 Dec-18 Jan-19 Feb-19
1.00x
0.80x 2-Year Average XR: 0.8442x
0.60x
Proposed Consideration: 0.5000x + $4.03/unit; Implied XR:
0.5757x
Average Exchange Ratio XR Proposal XR Premium to Current Abe Price
Proposal (1/25/2019) 0.5342x 0.5720x 7.1% 0.40x Spot Current (2/8/2019) 0.5664x 0.5757x 1.6% Prior to Investor Day (12/3/18) 0.6367x 0.5700x (10.5%) 30-Day 0.5340x 0.5736x 7.4% 60-Day 0.5371x 0.5727x 6.6% Avg. 90-Day 0.5898x 0.5729x (2.9%)
180-Day 0.6822x 0.5744x (15.8%) 360-Day 0.8115x 0.5804x (28.5%)
0.20x
Feb-17 May-17 Aug-17
Dec-17 Mar-18 Jun-18 Oct-18 Jan-19
7
_____________________________________ Source: FactSet as of 2/8/2019.
TUDORPICKERING HOLT&CO
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Analysis at Various Exchange Ratios
($ in millions, unless otherwise noted)
A B C D E F G H I J K L
At Ulysses Undisturbed At Current(3) Proposal(4) XR(5)
Exchange Ratio (At Current Ulysses Sh. Price of $53.21) 0.5500x 0.5664x 0.5757x 0.6000x 0.6367x 0.6500x 0.7000x
Premium to Implied Abe Unit Price (Ulysses Share Price x XR) (2.9%) 0.0% 1.6% 5.9% 12.4% 14.8% 23.6% Implied Abe Unit Price $29.27 $30.14 $30.64 $31.93 $33.88 $34.59 $37.25 Fully
Diluted Abe Units Outstanding 93.8 93.8 93.8 93.8 93.8 93.8 93.8 Implied Fully-Diluted Abe Equity Value $2,745 $2,828 $2,874 $2,995 $3,178 $3,245 $3,494 Net Debt 2,846 2,846 2,846 2,846 2,846 2,846 2,846 GP Equity Value(1) 395 395 395 395 395 395
395 Non-Controlling Interest 32 32 32 32 32 32 32 Implied Abe Enterprise Value(1) $6,018 $6,100 $6,147 $6,268 $6,451 $6,518 $6,767
Comparable Metrics
Abe WS Consensus Case
Propane Propane Abe Low-Growth Distributor Transaction Multiples: Statistic MLP Median Median(6) Median
EV / 2019E EBITDA $636 9.5x 9.6x 9.7x 9.9x 10.1x 10.3x 10.6x 9.3x 8.8x 7.5x EV / 2020E EBITDA $644 9.3x 9.5x 9.5x 9.7x 10.0x 10.1x 10.5x 9.0x 8.4x Equity Value / 2019E DCF(2) $367
7.5x 7.7x 7.8x 8.2x 8.7x 8.8x 9.5x 6.8x 6.5x Equity Value / 2020E DCF(2) $382 7.2x 7.4x 7.5x 7.8x 8.3x 8.5x 9.2x 6.2x 6.2x
Current Yield $3.80 13.0% 12.6% 12.4%
11.9% 11.2% 11.0% 10.2% 11.0% 8.8% 2019E Yield $3.80 13.0% 12.6% 12.4% 11.9% 11.2% 11.0% 10.2% 11.2% 8.8%
Abe Revised Budget
Propane Propane Low-Growth Distributor Transaction Multiples: Statistic MLP Median Median(6) Median
EV / 2019E EBITDA $625 9.6x 9.8x 9.8x 10.0x 10.3x 10.4x 10.8x 9.3x 8.8x 7.5x EV / 2020E EBITDA $643 10.1x 10.2x 10.3x 10.5x 10.8x 10.9x 11.3x 9.0x 8.4x $403 6.8x 7.0x 7.1x 7.4x
7.9x 8.1x 8.7x 6.8x 6.5x Equity Value / 2019E DCF(2)
Equity Value / 2020E DCF(2) $418 7.4x 7.6x 7.8x 8.1x 8.6x 8.8x 9.4x 6.2x 6.2x Abe Current Yield $3.15 10.8%
10.5% 10.3% 9.9% 9.3% 9.1% 8.5% 11.0% 8.8% 2019E Yield $3.15 10.8% 10.5% 10.3% 9.9% 9.3% 9.1% 8.5% 11.2% 8.8%
Source: Company filings, and FactSet as for 2/8/2019.
(1) GP / IDR value estimated by taking current GP/IDR distributions capitalized by Abe’s current yield. (2) DCF attributable to all unitholders including
GP + IDR Interest.
(3) Current unadjusted exchange based on Abe and Ulysses closing prices.
(4) Ulysses Proposal: 0.5000x XR and $4.03 cash consideration / unit. 8 (5) Undisturbed XR is the unaffected XR prior to the investor day on 12/4/2018.
(6) Propane distributor Equity Value / DCF and Yield metrics exclude Ferrellgas from group median.
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Analysis at Various Exchange Ratios (cont’d)
($ in millions, unless otherwise noted)
A B C D E F G H I J K L
At Ulysses Undisturbed At Current(3) Proposal(4)
XR(5)
Exchange Ratio (At Current Ulysses Sh. Price of $53.21) 0.5500x 0.5664x 0.5757x 0.6000x 0.6367x 0.6500x 0.7000x
Premium to Implied Abe Unit Price (Ulysses Share Price x XR) (2.9%) 0.0% 1.6% 5.9% 12.4% 14.8% 23.6% Implied Abe Unit Price $29.27 $30.14 $30.64 $31.93 $33.88 $34.59 $37.25 Fully
Diluted Abe Units Outstanding 93.8 93.8 93.8 93.8 93.8 93.8 93.8 Implied Fully-Diluted Abe Equity Value $2,745 $2,828 $2,874 $2,995 $3,178 $3,245 $3,494 Net Debt 2,846 2,846 2,846 2,846 2,846 2,846 2,846 GP Equity Value(1) 395 395 395 395 395 395
395 Non-Controlling Interest 32 32 32 32 32 32 32 Implied Abe Enterprise Value(1) $6,018 $6,100 $6,147 $6,268 $6,451 $6,518 $6,767
Comparable Metrics
Propane Propane Abe Low-Growth
Distributor Transaction Multiples: Statistic MLP Median Median(6) Median
EV / 2019E EBITDA $625 9.6x 9.8x 9.8x 10.0x 10.3x 10.4x 10.8x 9.3x 8.8x 7.5x
Abe Historical Weather Case
EV / 2020E EBITDA $597 10.1x 10.2x 10.3x 10.5x 10.8x 10.9x 11.3x
9.0x 8.4x Equity Value / 2019E DCF(2) $403 6.8x 7.0x 7.1x 7.4x 7.9x 8.1x 8.7x 6.8x 6.5x Equity Value / 2020E DCF(2) $370 7.4x 7.6x 7.8x 8.1x 8.6x 8.8x 9.4x 6.2x 6.2x Current Yield $3.15 10.8% 10.5% 10.3% 9.9% 9.3% 9.1% 8.5% 11.0% 8.8% 2019E Yield
$3.15 10.8% 10.5% 10.3% 9.9% 9.3% 9.1% 8.5% 11.2% 8.8%
Propane Propane Abe Low-Growth Distributor Transaction Multiples:
Statistic MLP Median Median(6) Median
EV / 2019E EBITDA $625 9.6x 9.8x 9.8x 10.0x 10.3x 10.4x 10.8x 9.3x 8.8x 7.5x
Abe Capital Investment Case
EV / 2020E EBITDA $633 9.5x 9.6x 9.7x 9.9x 10.2x 10.3x 10.7x 9.0x
8.4x Equity Value / 2019E DCF(2) $400 6.9x 7.1x 7.2x 7.5x 7.9x 8.1x 8.7x 6.8x 6.5x Equity Value / 2020E DCF(2) $391 7.0x 7.2x 7.3x 7.7x 8.1x 8.3x 8.9x 6.2x 6.2x Current Yield $3.14 10.7% 10.4% 10.2% 9.8% 9.3% 9.1% 8.4% 11.0% 8.8% 2019E Yield $3.14
10.7% 10.4% 10.2% 9.8% 9.3% 9.1% 8.4% 11.2% 8.8% ___________________________________ Source: Company filings, and FactSet as for 2/8/2019.
(1) GP / IDR value
estimated by taking current GP/IDR distributions capitalized by Abe’s current yield. (2) DCF attributable to all unitholders including GP + IDR Interest.
(3) Current unadjusted exchange based on Abe and Ulysses closing prices.
(4)
Ulysses Proposal: 0.5000x XR and $4.03 cash consideration / unit. 9 (5) Undisturbed XR is the unaffected XR prior to the investor day on 12/4/2018.
(6) Propane
distributor Equity Value / DCF and Yield metrics exclude Ferrellgas from group median.
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II. Status Quo Management Projections Overview
10
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For Committee Consideration
Abe Assumptions Ulysses Assumptions
The following three EBITDA cases have been prepared by Abe Management Ulysses forecasts have been prepared by Ulysses management and furnished on February 7, 2019
Operational Cases
∎ Revised Budget Case
∎ Base case assumes Revised Budget Case for Abe
☐ $625 MM 2019E EBITDA per revised
estimate, $642.5 MM in
∎ Regulated operation growth based on current filed rate case and 2020E, and increases of $9 MM per year in 2021E and onwards
☐ Base case reflects revised 2019 EBITDA budget of $625 MM, with DSIC recovery mechanism strategic improvements driving 2020 growth of $17.5 MM and $9
∎ All capex forecasts reflect identified projects, except for $200 MM MM growth assumed thereafter of unidentified midstream project capex over the forecast horizon
∎ Historical Weather Case∎ Assumes that “excess” cash is not used to increase dividends or for additional reinvestment, but kept on the balance sheet
☐ $625 MM 2019E EBITDA per revised estimate, $597 MM in 2020E, and increases of $9 MM per year in 2021E and onwards ∎ Forecasts represents
management’s aim to maintain a payout ratio
☐ Historical weather case factors in the impact of normalized of between 35% - 45% and an annual dividend
growth of 4% weather on a 2020 onward basis, reflecting 5-year average ☐ Management expects to increase dividends above if the
☐ 4% historical results payout ratio dips below 35%
∎ Capital Investment
Case∎ Management also expects to maintain a long term EPS growth of
☐ Incorporates additional benefits from capital investment of $56 6% - 10% per the
Ulysses management presentation on February 8, MM to digitize Abe’s customer service operations over the next 5 2019 years
Financial Sensitivities
∎ Flat Distribution of $3.80 per unit throughout forecast period∎ Targeted Leverage & Coverage Policy
☐ FY 2019E distributions are cut to achieve 1.2x LP Distribution coverage
☐
Distribution is held at cut level until Total Debt / EBITDA is reduced to less than or equal to 4.0x while coverage remains at least 1.2x respectively
☐
Distribution growth thereafter is set at the appropriate level to maintain the targeted leverage and coverage metrics above
11
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Abe Management Projections
EBITDA DCF and Distributions
Historical Distribution Revised Budget
Historical Weather Case Historical DCF
Historical Historical Weather Case Projected Distribution Capital Investment Case
Capital
Investment Case Revised Budget $720 $4.16 Wall Street Consensus $3.96 $4.00 $688 $3.87 $3.79 $3.78 $3.80 $3.70 $665 $3.72 $3.77 $3.94 $3.71 $3.92 $659 $675 $3.60 $3.80 $3.88 $644 $667 $3.82 $636 $659 $670 $3.44 $3.77 $619 $3.71 $633 $652 $661 $3.32
$3.33 $606 $3.58 $3.59 $3.58 $643 $3.53 $625 $624 $615 $551 $606 $543 $597
2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E 2023E Revised Budget 1.15x 1.05x
0.89x 0.88x 0.98x 0.99x 1.00x 1.02x 1.03x 1.04x
Coverage
Historical Weather
1.15x 1.05x 0.89x 0.88x 0.98x 0.99x 0.93x 0.94x 0.94x 0.94x
Case Coverage
2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E 2023E Capital Investment
1.15x 1.05x 0.89x 0.88x 0.98x 0.99x 0.97x 1.02x 1.05x 1.10x
Case Coverage
CapEx (Revised Budget) DCF and Dist. with Coverage/Leverage Targets
Historical Distribution Revised Budget
Historical Maintenance Growth
Acquisitions
Historical Weather Case Historical DCF
125.0 Capital Investment
Case Targeted Historical Weather Dist. 117.0 $10 117.0 118.0 119.0 Targeted Capital Investment Dist. Targeted Revised Budget Dist. $4.27 $4.08
$15 $15 $15 $3.96
$3.86 $3.96 $3.79 $3.78 $3.80 $3.78 $3.72 $4.08
$63 $4.03
$61 $55 $56 $3.60
$3.91 $141 $54 $3.44 $3.77 $3.40 $3.56 $130 $135 $3.32 $3.33 $3.71 $3.72 $123 $3.36 $3.40 $115 $3.15 $3.15 $3.15 $3.15 $3.15
2014A 2015A 2016A 2017A 2018A 2019E
2020E 2021E 2022E 2023E
Revised Budget 1.15x 1.05x 0.89x 0.88x 0.98x 1.20x 1.21x 1.23x 1.17x 1.16x
Coverage
Historical Weather 1.15x 1.05x 0.89x 0.88x 0.98x 1.20x 1.12x 1.14x 1.07x 1.05x
2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E 2023E Case Coverage
Capital Investment 1.15x 1.05x 0.89x 0.88x 0.98x 1.20x 1.18x 1.23x 1.19x 1.22x
Case Coverage
12
___________________________________ Source: Management.
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Ulysses Management Projections
EBITDA Adjusted EPS
Historical Ulysses Utilities Wall Street Consensus Management Historical $3.71
Abe Propane
Ulysses International $3.43
Midstream & Marketing Corporate and other $1,908 $1,807 $3.12 Misc. Income WSC $1,693 $2.90 $1,615 $2.74 $1,520 $3.34 $1,389
$1,421 $3.20 $1,369 $3.05 $1,209 $491 $2.29 $465 $2.02 $2.01 $2.05 $2.74 $2.68 $412 $432
$650 $666 $629 $639
$319 $350 $389 $420
-$13 -$10 -$10 -$11 2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E
WSC $1,329 $1,623 $1,684 $1,728 2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E
Cash Flow Per Share and Dividends Per Share CapEx
Maintanence & Growth Capex
Acquisitions $7.96 $7.19 $7.67 $923 $844 $6.63 $6.13 $6.20 $782 $775 $15 $753 $15 $5.74 $5.52 $725 $719 $5.44 $666 $10 $448 $102 $187 $61 $474 $37 $1.09 $1.19 $1.24 $1.29 $624 $0.71 $0.71 $0.71 $0.71 $0.71 $605 $594 $436 $475
2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E
Ending Cash $436 $439 $518 $568 $462
$475 $613 $784 $934
Balance 2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E
13
Source: Management and Wall Street consensus estimates.
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III. Abe Financial Analysis
14
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Selected Publicly Traded Company Metrics
(USD in millions, except per share data)A B C D E F
GH I J K L M N
Low Growth MLP Metrics & Propane Distributors(1)
Enterprise Value / EBITDA Price / DCF/Unit Distribution Yield Distribution Metrics Debt Metrics Low Growth MLPs
Unit (Share) Total Equity Enterprise Distribution CAGR 2019E Net Debt / S&P Credit Company Name Price Market Value Value 2019E 2020E 2019E 2020E Current 2019E 2019E to 2022E
Coverage(2) 2019E EBITDA Rating Buckeye Partners LP $30.95 $4,756 $9,930 11.2x 10.4x 7.1x 5.9x 9.7% 9.7% 4.5% 1.25x 5.8x BBB-
GasLog Partners LP 22.13 1,077 2,531
9.3x 9.0x 10.6x 11.2x 9.6% 10.0% 4.5% 0.93x 4.1x NA Genesis Energy LP 19.95 2,453 6,899 9.9x 9.5x 6.4x 5.4x 11.0% 11.4% 4.6% 1.51x 5.3x B+ Global Partners LP 18.99 679 2,052 9.1x 8.8x 7.3x NA 10.0% 10.0% 0.0% 1.31x 5.8x B+ Golar LNG Partners LP
13.06 1,004 2,221 8.9x 8.7x 5.0x 4.4x 12.4% 12.4% 0.1% 1.06x 4.6x NA Holly Energy Partners LP 28.66 3,027 4,576 12.8x 12.3x 10.6x 10.1x 9.3% 9.4% 0.4% 0.98x 4.0x Ba3 KNOT Offshore Partners LP 18.55 617 1,756 8.4x 8.1x 6.8x 7.1x 11.2% 11.2% 0.0%
1.51x 5.0x NA Martin Midstream Partners LP 12.39 502 1,197 7.3x 6.9x 5.5x 5.4x 16.1% 16.1% 0.0% 1.12x 4.2x B NGL Energy Partners LP 10.87 1,347 3,770 7.6x 7.1x 4.9x 5.0x 14.4% 14.4% 2.7% 1.63x 4.1x B+ NuStar Energy LP 24.68 3,238 7,388 10.8x 10.0x
10.4x 9.2x 9.7% 9.7% 0.0% 0.99x 5.0x BB PBF Logistics LP 21.86 1,167 1,885 10.7x 9.7x 9.3x 7.9x 9.1% 9.5% 2.4% 1.11x 3.1x NA Summit Midstream Partners LP 12.59 1,002 2,498 7.7x 7.2x 4.9x 4.8x 18.3% 18.3% 0.0% 1.12x 3.6x BB-Sunoco LP 29.06 3,080 5,888 9.5x 9.3x 7.8x 7.6x 11.4% 11.4% 0.0% 1.21x 4.5x BB-TC PipeLines LP 30.75 2,354 4,669 10.5x 10.5x 6.5x 6.5x 8.5% 8.5% 0.0% 1.83x 5.0x BBB-USA Compression Partners LP 14.32 1,383 3,604 9.1x 8.5x 6.6x 5.7x 14.7% 14.7% 0.0% 1.05x 4.4x B+ Low $502 $1,197 7.3x 6.9x 4.9x 4.4x 8.5% 8.5% 0.0% 0.93x 3.1x Mean $1,846 $4,058 9.5x 9.1x 7.3x 6.9x 11.7% 11.8%
1.3% 1.24x 4.6x Median $1,347 $3,604 9.3x 9.0x 6.8x 6.2x 11.0% 11.2% 0.0% 1.12x 4.5x High $4,756 $9,930 12.8x 12.3x 10.6x 11.2x 18.3% 18.3% 4.6% 1.83x 5.8x
Propane
Distributors
Ferrellgas Partners LP $1.11 $108 $2,119 8.8x 8.4x 2.4x 1.3x 0.0% 0.0% NA NA 8.4x CCC
Suburban Propane Partners LP 21.90 1,372 2,646 9.2x 9.1x 6.8x 6.6x 11.0% 11.0% 5.1% 1.30x 4.4x BB-Superior Plus Corporation (3) 8.25 1,430
2,716 7.8x 7.4x 6.3x 5.8x 6.6% 6.6% 0.0% 2.40x 3.7x BBLow $108 $2,119 7.8x 7.4x 6.3x 5.8x 6.6% 6.6% 0.0% 1.30x 3.7x Mean $970 $2,494 8.6x 8.3x 6.5x 6.2x 8.8% 8.8% 2.6% 1.85x 5.5x Median $1,372 $2,646 8.8x 8.4x 6.5x 6.2x 8.8% 8.8% 2.6% 1.85x 4.4x
High $1,430 $2,716 9.2x 9.1x 6.8x 6.6x 11.0% 11.0% 5.1% 2.40x 8.4x
Abe Partners, L.P. (WS) $30.14 $3,222 $6,100 9.6x 9.5x 7.8x 7.7x 12.6% 12.6% (4.5%) 1.02x 4.5x
NA Abe Partners, L.P. (Revised Budget) 9.8x 9.5x 8.0x 7.9x 12.6% 12.6% 0.0% 0.99x 4.5x NA Abe Partners, L.P. (Historical Weather Case) 9.8x 10.2x 8.0x 8.5x 12.6% 12.6% 0.0% 0.99x 4.8x NA
Abe Partners, L.P. (Capital Investment Case) 9.8x 9.6x 8.0x 8.1x 12.6% 12.6% 0.0% 0.99x 4.5x NA
Source: Company forecasts & filings, investor presentations, Wall Street research and estimates as compiled by FactSet as of 2/8/19.
(1) Low growth group defined as MLPs below 5% 2019E-2022E distribution CAGR and with enterprise value between $1.0 BB and $10 BB. 15 (2) Coverage defined as distributable cash flow
divided by total distributions to GP and LP.
(3) Uses exchange rate of 0.7534 USD per CAD.
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Propane Precedent Transactions AnalysisA B C D E F G
Date Transaction EBITDA Purchase Price /
Buyer Seller Asset Announced Value ($MM) FY1/NTM EBITDA
5/30/2018 Superior Plus Corporation NGL Energy Partners LP Retail Propane Operations 900 84 10.7x(1)
11/7/2017 DCC LPG NGL Energy Partners LP Retail West 200 28 7.1x 7/24/2017 SHV Energy American Midstream Partners Pinnacle Propane 170 19 9.0x 2/13/2017 Superior Plus Corporation Gibson Energy Canwest Propane 412 33 12.3x 6/23/2016 World Fuel
Services PAPCO, Associated Petroleum Products Misc. Fuel Services 230 38 6.0x 5/19/2015 DCC LPG Shell Butagaz 517 136 3.8x 7/2/2014 UGI Corp. Total SA Totalgaz SNC 580 95 6.1x 4/26/2012 Suburban Propane Partners Inergy Retail Propane Assets 1,800
197 9.1x 10/17/2011 AmeriGas Partners, L.P. Energy Transfer Partners Heritage Propane Operations 2,890 325 8.9x 1/4/2010 Inergy, L.P. Sterling Partners Liberty Propane 223 36 6.2x 4/20/2004 Ferrellgas Blue Rhino-343 44 7.8x 12/23/2003 Suburban
Propane Partners Agway Energy-206 34 6.0x 1/31/2001 AmeriGas Partners, L.P. NiSource Columbia Propane 216 NA NA
CurrentLow $170 $19 3.8x Mean $668 $89 7.8x Median
$343 $41 7.5x High $2,890 $325 12.3x>$1B Mean $2,345 $261 9.0x
>$1B Median $2,345 $261 9.0x
Ulysses Abe $6,094 $625 9.8x (2/8/2019)
___________________________________ 16 Source: Company
filings, Wall Street research, IHS Market.
(1) Transaction multiple before acquisition synergies; 8.2x synergy adjusted multiple.
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PRELIMINARY CONFIDENTIAL DRAFT Abe DCF Analysis Subject to Further Review & Revision
Abe Revised Budget Case | Valuation Effective Date: 3/31/2019 Abe Current Unit Price: $30.14
Implied Proposal Value: $30.64
Discounted Levered DCF Analysis Discounted
Distribution Analysis
Levered DCF Attributable to Abe LP Unitholders | $3.80 Annual Dist. Policy Distributions Attributable to LP Unitholders | $3.80 Annual Dist.
Policy
2023E DCF Multiple 2023E Distribution Yield
Discount Rate
Discount Rate
6.0x 7.5x 9.0x 13.0% 11.0% 9.0%
8.0% $29.89 $34.41 $38.92 8.0% $33.99 $38.04 $43.91
10.0% $28.41 $32.64 $36.88 10.0% $32.24
$36.05 $41.55 12.0% $27.03 $31.01 $34.99 12.0% $30.63 $34.21 $39.37
Discounted Levered DCF Analysis Discounted Distribution Analysis
Levered DCF Attributable to Abe LP Unitholders | Targeted Leverage & Coverage Policy Distributions Attributable to LP Unitholders | Targeted Leverage & Coverage
Policy
2023E DCF Multiple 2023E Distribution Yield
Discount Rate
Discount Rate
6.0x 7.5x 9.0x 13.0% 11.0% 9.0%
8.0% $30.73 $35.40 $40.08 8.0% $29.81 $33.44 $38.69
10.0% $29.20 $33.58 $37.97 10.0% $28.27
$31.68 $36.60 12.0% $27.78 $31.90 $36.01 12.0% $26.84 $30.04 $34.66
___________________________________ 17 Source: Management projections.
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Abe Illustrative Discounted Future Value Subject to Further Review & Revision
Abe
Revised Budget Case
$3.80 Annual Distribution Policy Targeted Leverage & Coverage Policy
Yield
$43.69 $43.34 $43.08 $43.03
9.0%
$37.83 $37.92 $37.00 $37.26 $36.71 $35.72 $36.23 11.0% $35.59 $33.27 $32.76 $32.61 $32.22
13.0% $31.88 $30.40 $30.44 $30.14 $29.51 $30.14 $29.18 Current $28.34 Unit Price $26.44 $25.20
2H 2019E 2020E 2021E 2022E 2H 2019E 2020E 2021E 2022E
Assumptions
∎ Management projections ∎ Valuation date as of 3/31/19
∎ Future share price calculated at FY1 annual distributions divided by yield
∎
Discounted to 3/31/19 at 10% cost of equity
☐ Interim distributions discounted upon receipt to 3/31/19
___________________________________ 18 Source: Management projections and FactSet as of 2/8/2019.
Note: Valuation based on annual distributions.
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PRELIMINARY CONFIDENTIAL DRAFT Abe DCF Analysis Subject to Further Review & Revision
Abe Historical Weather Case | Valuation Effective Date: 3/31/2019
Discounted Levered DCF
Analysis Discounted Distribution Analysis
Levered DCF Attributable to Abe LP Unitholders | $3.80 Annual Dist. Policy Distributions Attributable to LP Unitholders |
$3.80 Annual Dist. Policy
2023E DCF Multiple 2023E Distribution Yield
Discount Rate
Discount Rate
6.0x 7.5x 9.0x 13.0% 11.0% 9.0%
8.0% $27.45 $31.56 $35.66 8.0% $33.99 $38.04 $43.91
10.0% $26.10 $29.95 $33.80 10.0% $32.24 $36.05 $41.55 12.0% $24.85 $28.46 $32.08 12.0% $30.63 $34.21 $39.37
Discounted Levered DCF Analysis Discounted Distribution Analysis
Levered DCF Attributable to
Abe LP Unitholders | Targeted Leverage & Coverage Policy Distributions Attributable to LP Unitholders | Targeted Leverage & Coverage Policy
2023E
DCF Multiple 2023E Distribution Yield
Discount Rate
Discount Rate
6.0x 7.5x 9.0x 13.0% 11.0% 9.0%
8.0% $28.44 $32.73 $37.02 8.0% $28.18 $31.54 $36.41
10.0% $27.03 $31.06 $35.08 10.0% $26.74 $29.89 $34.45 12.0% $25.73 $29.51 $33.29 12.0% $25.40 $28.36 $32.64
___________________________________ 19 Source: Management projections.
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PRELIMINARY CONFIDENTIAL DRAFT
Abe Illustrative Discounted Future Value Subject to Further Review & Revision
Abe
Historical Weather Case
$3.80 Annual Distribution Policy Targeted Leverage & Coverage Policy
Yield
$43.69 $43.34 $43.08 $43.03
9.0%
$37.00 $37.26 $36.71 $36.23 11.0% $35.59 $35.72 $35.94 $35.68 $33.27 $32.61 13.0% $31.88
$30.89 $30.40 $30.44 $30.68 $30.14 $29.51 $30.14 Current Unit $27.58 $27.04 Price $26.44 $25.20
2H 2019E 2020E 2021E 2022E 2H 2019E 2020E 2021E 2022E
Assumptions
∎ Management projections ∎ Valuation date as of 3/31/19
∎ Future share price calculated at FY1 annual distributions divided by yield
∎
Discounted to 3/31/19 at 10% cost of equity
☐ Interim distributions discounted upon receipt to 3/31/19
___________________________________ 20 Source: Management projections and FactSet as of 2/8/2019.
Note: Valuation based on annual distributions.
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PRELIMINARY CONFIDENTIAL DRAFT Abe DCF Analysis Subject to Further Review & Revision
Abe Capital Investment Case | Valuation Effective Date: 3/31/2019
Discounted Levered DCF
Analysis Discounted Distribution Analysis
2023E DCF Multiple 2023E Distribution Yield
Discount Rate
Levered DCF Attributable to Abe LP Unitholders | $3.80 Annual Dist. Policy
Distributions Attributable to LP Unitholders | $3.80 Annual Dist. Policy
Discount Rate
6.0x 7.5x 9.0x 13.0% 11.0% 9.0%
8.0% $30.84 $35.61 $40.38 8.0% $33.99 $38.04 $43.91
10.0% $29.29 $33.77 $38.24 10.0% $32.24 $36.05 $41.55 12.0% $27.86 $32.06 $36.26 12.0% $30.63 $34.21 $39.37
Discounted Levered DCF Analysis Discounted Distribution Analysis
Levered DCF Attributable to
Abe LP Unitholders | Targeted Leverage & Coverage Policy Distributions Attributable to LP Unitholders | Targeted Leverage & Coverage Policy
2023E
DCF Multiple 2023E Distribution Yield
Discount Rate
6.0x 7.5x 9.0x 13.0%
11.0% 9.0%
8.0% $31.45 $36.34 $41.24 8.0% $30.74 $34.54 $40.03
Discount Rate
10.0% $29.87 $34.46 $39.04 10.0% $29.14 $32.70 $37.85 12.0% $28.40 $32.71 $37.02 12.0% $27.66 $31.00 $35.84
___________________________________ 21 Source: Management projections.
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PRELIMINARY CONFIDENTIAL DRAFT
Abe Illustrative Discounted Future Value Subject to Further Review & Revision
Abe
Capital Investment Case
$3.80 Annual Distribution Policy Targeted Leverage & Coverage Policy
Yield
$43.69 $43.34 $43.08 $43.03
9.0%
$38.19 $39.23 $37.00 $37.26 $36.71 $36.09 11.0% $35.59 $35.59 $33.83 $33.27 $32.61 $32.52
13.0% $31.88 $30.40 $30.33 $30.10 $30.14 $29.40 $28.59 $30.14 Current Unit Price $26.34 $25.11
2H 2019E 2020E 2021E 2022E 2H 2019E 2020E 2021E 2022E
Assumptions
∎ Management projections ∎ Valuation date as of 3/31/19
∎ Future share price calculated at FY1 annual distributions divided by yield
∎
Discounted to 3/31/19 at 10% cost of equity
☐ Interim distributions discounted upon receipt to 3/31/19
___________________________________ 22 Source: Management projections and FactSet as of 2/8/2019.
Note: Valuation based on annual distributions.
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IV. Ulysses Financial Analysis
23
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Selected Publicly Traded Company Metrics
(USD in millions, except per share data)
Local Distribution Companies
A B C D E F G H I J K L M O P N
Enterprise Value /
Price / Earnings Price / CFPS Dividend Metrics Debt Metrics EBITDA
LT EPS Share Total Equity Enterprise Payout Net Debt / S&P Credit Growth Company Name Price Value Value 2019E 2020E 2019E 2020E 2019E 2020E Current 2019E
Ratio(2) 2019E EBITDA Rating Rate
Atmos Energy $97.97 $11,505 $14,972 12.6x 11.3x 22.5x 21.0x 12.6x 11.0x 2.1% 2.1% 56.7% 2.9x NA 6.5%
Chesapeake Utilities Corporation 88.11 1,455 1,969 13.4x 12.6x 23.9x 22.5x NA NA 1.7% 1.8% 44.1% 3.5x NA 7.6%
NiSource Inc 26.58 9,706 18,800 11.3x 10.7x 19.8x 18.6x 8.9x 8.6x 3.0% 3.1% 128.1% 5.0x BBB+ 5.7%
(1) (1)
New Jersey Resources Corporation 45.95 4,099 5,564 19.4x 17.7x 23.0x 21.4x 17.1x 14.5x
2.5% 2.6% 80.6% 5.1x NA 6.0% Northwest Natural Holding Co. 61.94 1,789 2,675 11.5x 11.0x 25.2x 24.0x 10.2x 10.7x 3.1% 3.1% 55.6% 3.8x A+ 4.5% ONE Gas Inc 84.02 4,445 5,634 11.9x 11.2x 24.5x 23.7x 12.4x 11.5x 2.4% 2.4% 65.0% 2.5x A 5.0% Spire Inc
78.55 4,329 6,980 13.8x 12.9x 21.1x 20.2x 11.2x 10.9x 3.0% 3.0% 68.0% 5.2x A- 5.0% Southwest Gas Holdings Inc 78.50 4,187 6,051 9.1x 8.4x 19.7x 18.5x 7.8x 8.1x 2.6% 2.8% 51.5% 2.8x BBB+ 6.0%
Low $1,455 $1,969 9.1x 8.4x 19.7x 18.5x 7.8x 8.1x 1.7% 1.8% 44.1% 2.5x 4.5% Mean $5,189 $7,831 12.0x 11.2x 22.5x 21.2x 11.5x 10.8x 2.6% 2.6% 68.7% 3.9x 5.8% Median $4,258 $5,843
11.9x 11.2x 22.8x 21.2x 11.2x 10.9x 2.6% 2.7% 60.8% 3.7x 5.9% <60% Payout Ratio Median $2,988 $4,363 12.1x 11.2x 23.2x 21.8x 10.2x 10.7x 2.4% 2.5% 53.6% 3.2x 6.3% High $11,505 $18,800 13.8x 12.9x 25.2x 24.0x 17.1x 14.5x 3.1% 3.1% 128.1% 5.2x 7.6%
Ulysses Corporation (WS) $53.21 $9,459 $15,955 12.0x 9.8x 19.9x 17.4x 9.8x 8.2x 2.0% 2.1% 47.5% 3.3x NA 8.0%
Ulysses Corporation (Mgmt.) 9.9x 9.4x 18.2x 17.0x 8.6x 7.4x 2.0% 2.0% 35-45% 2.7x NA 6-10%
Source: Company forecasts & filings, investor presentations, Wall Street research and estimates as compiled by FactSet as of 2/8/19.
(1) New Jersey Resources Corporation 2019E and 2020E EBITDA multiples are excluded from summary statistics due to disproportionately high multiples 24 resulting from investment tax
credit benefits for the company’s solar assets.
(2) Payout ratio defined as last quarter dividend divided by LTM earnings.
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Selected Publicly Traded Company Metrics
(USD in millions, except per share data)
C-Corp Midstream Companies
A B C D E F G H I J K L M N
O P
Enterprise Value / Dividend (Distribution) Dividend (Distribution)
Price
/ Earnings Price / DCF/Unit Debt Metrics EBITDA Yield Metrics
Total Equity Dist. CAGR Net Debt /
Unit (Share) Market Enterprise 2019E to 2019E 2019E S&P Credit Company Name Price Value Value 2019E 2020E 2019E 2020E 2019E 2020E Current 2019E 2022E Coverage(2) EBITDA Rating
Enbridge Inc $36.10 $73,089 $134,867 13.6x 12.1x 19.3x 16.4x 10.0x 9.0x 6.2% 6.2% 3.2% 1.5x 4.8x BBB+ Kinder Morgan Inc 18.02 41,005 76,387 9.9x 9.5x 17.7x 16.7x
8.3x 7.7x 4.4% 5.5% 14.5% 2.2x 4.3x BBB SemGroup Corporation 15.32 1,367 3,955 9.0x 8.1x 21.9x 16.3x 5.1x 4.8x 12.3% 13.1% 5.3% 1.5x 5.9x B+ Targa Resources Corp. 42.67 9,913 17,151 11.2x 8.9x 129.3x 32.1x 11.1x 7.3x 8.5% 8.5% 4.4% 1.1x 3.8x BB
Tallgrass Energy LP 22.92 6,476 10,002 10.4x 11.2x 13.1x 16.8x 9.3x 9.2x 8.9% 9.5% 4.7% 1.3x 3.2x BBB-Williams Companies Inc 26.88 33,480 57,087 11.3x 10.6x 28.1x 24.9x 10.5x 9.6x 5.1% 5.7% 9.4% 1.7x 4.4x BBB
Low $1,367 $3,955 9.0x 8.1x 13.1x 16.3x 5.1x 4.8x 4.4% 5.5% 3.2% 1.1x 3.2x Mean $27,555 $49,908 10.9x 10.1x 38.2x 20.5x 9.0x 7.9x 7.6% 8.1% 6.9% 1.6x 4.4x Median
$21,697 $37,119 10.8x 10.1x 20.6x 16.7x 9.7x 8.3x 7.3% 7.3% 5.0% 1.5x 4.4x High $73,089 $134,867 13.6x 12.1x 129.3x 32.1x 11.1x 9.6x 12.3% 13.1% 14.5% 2.2x 5.9x
Ulysses Corporation (WS) $53.21 $9,459 $15,955 12.0x 9.8x 19.9x 17.4x(1) 9.8x(1) 8.2x 2.0% 2.1% 5.4% NA 3.3x NA
Ulysses Corporation (Mgmt.) 9.9x 9.4x 18.2x 17.0x(1) 8.6x(1) 7.4x 2.0% 2.0% 4.0% NA 2.7x NA
Source: Company forecasts & filings, investor presentations, Wall Street research and estimates as compiled by FactSet as of 2/8/19. 25 (1) P/CFPS shown
for Ulysses.
(2) Coverage defined as distributable cash flow divided by total distributions.
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Ulysses DCF Analysis | Management Projections Subject to Further Review & Revision
Valuation Effective Date: 3/31/2019
Discounted Unlevered DCF(1) Analysis
2023E EBITDA Terminal Multiple
Discount Rate
8.50x 10.5x 12.5x
4.00% $57.92 $77.38 $96.84
4.75% $56.34 $75.45 $94.57 5.50% $54.80 $73.57 $92.35
Discounted Unlevered DCF Analysis(1,2)
Supplemental Calculation Detail
2H 2019E 2020E 2021E 2022E
EBITDA $807 $1,693 $1,807 $1,908 Cash Taxes (53) (98) (88) Capex (377) (719) (775) FCF $378 $876 $943 Discount Factor 0.988 0.955 0.911 Disc. FCF $374 $836 $859 Disc. SQ Ulysses
FCF Total $2,069 Terminal Multiple 10.5x Terminal Disc. Factor 0.890x Implied Terminal PV EV $17,840 Less SQ Ulysses Net Debt ($4,392) Less SQ Ulysses NCI ($2,103) Implied SQ Ulysses Equity Value $13,414 SQ Ulysses Equity Value per Share $75.45
Source: Wall street consensus projections as of 2/8/2019. 26 (1) Net Income attributable to non-controlling interests is
included in consolidated EBITDA.
(2) Fully consolidated enterprise value analysis; implied Ulysses share price calculated based on eliminating Abe publicly-owned
LP interest at market value
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SQ Ulysses Sum-of-the-Parts Analysis
FY 2019E Multiple(1) Enterprise Value
FY 2019E EBITDA Low High Low High SQ Ulysses Businesss
Segments Midstream & Marketing $230 9.5x 11.5x $2,189 $2,650 Utilities $324 10.0x 12.0x $3,243 $3,891 International $420 8.0x 10.0x $3,358 $4,197 Total Enterprise Value $8,790 $10,739 Less Net Debt ($1,547) ($1,547) Equity Value $7,243
$9,192
FY 2019E GP/IDR Cashflow FY 2019E Distribution Yield(2) Equity Value
Abe
GP Equity Value $50 12.6% 12.6% $395 $395 Abe FD LP Equity Value $2,828
$2,828 Abe Equity Value $3,223 $3,223 Less Abe NCI ($2,103) ($2,103) Total SQ Ulysses Equity Value $8,363 $10,312 Ulysses FD Shares O/S 177.8 177.8 Implied SQ Ulysses Share Price $47.04 $58.01
Source: Management Projections and FactSet as of 2/8/2019.
Note: Corporate revenue, expenses,
and other income allocated pro-rata on gross revenue. 27
1. Based on comparable
C-Corp, LDC’s, and Propane Distributors median 2019E EV/EBITDA.
2. Based on Abe 2019E distribution yield.
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V. Transaction Analysis
28
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Transaction Assumptions
Transaction Assumptions Sources & Uses At Proposed
Transaction
∎ Transaction effective on 03/31/2019
∎ Ulysses will
acquire Abe in a mixed stock/cash transaction Purchase Non-Affiliated Abe Units O/S $1,864 Ulysses Equity Issued $1,864
∎ Base case assumes: Cash Consideration - Non-Affiliated Units 282 Revolver Draw 292
Uses Sources
(1)
Transaction Fees 10
☐ Each outstanding Public Abe common unit exchanged for
Total Uses $2,156 Total Sources $2,156
0.5000 Ulysses shares and $4.03 cash per Abe unit
☐ Abe earnings will be taxable at Ulysses’ corporate tax rate(2)∎ Assumes Ulysses’ status quo dividend policy for pro forma entity
∎ Synergies are expected at pro forma Ulysses mainly due to reduced filings costs
☐ $2.5MM in FY 2019E and $5 MM on a go-forward basis
Ulysses Ownership Comparison
∎ Step-up
depreciation due to:
☐ Capex allocated on a 5-20 year ADS schedule depending on capex category as provided by Abe
management Status Quo Ulysses
Existing Ulysses Public 100%
Pro Forma Ulysses
Existing Ulysses Public 83.5%
☐ Goodwill based on inside tax basis and
704(c) and 743(b) provided by company management
☐ Step-up reduces cash taxes at a marginal rate of ~28.89%
Prior Abe Public 16.5%
Status Quo Abe
Units Held by Ulysses 25.3%
Abe Public 74.7%
Source: FactSet as of 2/8/2019. 29 (1) Provided by Management.
(2) Analysis of after-tax effects on Abe unitholder and future distributions to come.
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Summary of PF Projections
EBITDA(1) Adjusted EPS
$3.78 $1,908 $3.38 $1,813 $3.11 $1,613 $1,702 $3.00
2.74 $1,520 $1,369 $1,389 $1,421 $1,209
2.29
2.02 2.01 2.05
2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E
2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E
Cash Flow Per Share and Dividends Per Share CapEx
Maintanence & Growth Capex Acquisitions
$7.09 $7.22 $923
$6.63 $6.77 $844
$6.13 $782 $15
$5.74 $753 $775 $15
$5.52 $5.44 $5.46 $725 $719 $10 $666 $448 $102 $187 $61 $474 $37
$1.24 $1.29
$1.09 $1.19
$0.71 $0.71 $0.71 $0.71 $0.71 $605 $624 $594 $436 $475 $753 $709 $760 $829
2014A 2015A 2016A
2017A 2018A 2019E 2020E 2021E 2022E
Ending Cash Balance $436 $439 $518 $568 $462 $475 $613 $784 $934
2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E
30 Source: Management.
(1) Miscellaneous income allocated to each segment as a percentage of gross profit.
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PF Ulysses Selected Publicly Traded Company Metrics
(USD in millions, except per share data)
Local Distribution Companies
A B C D E F G H I J K L M O P N
Enterprise Value /
Price / Earnings Price / CFPS Dividend Metrics Debt Metrics EBITDA
LT EPS Share Total Equity Enterprise Payout Net Debt / S&P Credit Growth Company Name Price Value Value 2019E 2020E 2019E 2020E 2019E 2020E Current 2019E
Ratio(2) 2019E EBITDA Rating Rate
Atmos Energy $97.97 $11,505 $14,972 12.6x 11.3x 22.5x 21.0x 12.6x 11.0x 2.1% 2.1% 56.7% 2.9x NA 6.5%
Chesapeake Utilities Corporation 88.11 1,455 1,969 13.4x 12.6x 23.9x 22.5x NA NA 1.7% 1.8% 44.1% 3.5x NA 7.6%
NiSource Inc 26.58 9,706 18,800 11.3x 10.7x 19.8x 18.6x 8.9x 8.6x 3.0% 3.1% 128.1% 5.0x BBB+ 5.7%
(1) (1)
New Jersey Resources Corporation 45.95 4,099 5,564 19.4x 17.7x 23.0x 21.4x 17.1x 14.5x
2.5% 2.6% 80.6% 5.1x NA 6.0% Northwest Natural Holding Co. 61.94 1,789 2,675 11.5x 11.0x 25.2x 24.0x 10.2x 10.7x 3.1% 3.1% 55.6% 3.8x A+ 4.5% ONE Gas Inc 84.02 4,445 5,634 11.9x 11.2x 24.5x 23.7x 12.4x 11.5x 2.4% 2.4% 65.0% 2.5x A 5.0% Spire Inc
78.55 4,329 6,980 13.8x 12.9x 21.1x 20.2x 11.2x 10.9x 3.0% 3.0% 68.0% 5.2x A- 5.0% Southwest Gas Holdings Inc 78.50 4,187 6,051 9.1x 8.4x 19.7x 18.5x 7.8x 8.1x 2.6% 2.8% 51.5% 2.8x BBB+ 6.0%
Low $1,455 $1,969 9.1x 8.4x 19.7x 18.5x 7.8x 8.1x 1.7% 1.8% 44.1% 2.5x 4.5% Mean $5,189 $7,831 12.0x 11.2x 22.5x 21.2x 11.5x 10.8x 2.6% 2.6% 68.7% 3.9x 5.8% Median $4,258 $5,843
11.9x 11.2x 22.8x 21.2x 11.2x 10.9x 2.6% 2.7% 60.8% 3.7x 5.9% <60% Payout Ratio Median $2,988 $4,363 12.1x 11.2x 23.2x 21.8x 10.2x 10.7x 2.4% 2.5% 53.6% 3.2x 6.3% High $11,505 $18,800 13.8x 12.9x 25.2x 24.0x 17.1x 14.5x 3.1% 3.1% 128.1% 5.2x 7.6%
Ulysses Corporation (WS) $53.21 $9,459 $15,955 12.0x 9.8x 19.9x 17.4x 9.8x 8.2x 2.0% 2.1% 47.5% 3.3x NA 8.0%
Ulysses Corporation (Mgmt.) 9.9x 9.4x 18.2x 17.0x 8.6x 7.4x 2.0% 2.0% 35-45% 2.7x NA 6-10%
Source: Company forecasts & filings, investor presentations, Wall Street research and estimates as compiled by FactSet as of 2/8/19.
(1) New Jersey Resources Corporation 2019E and 2020E EBITDA multiples are excluded from summary statistics due to disproportionately high multiples resulting from investment tax
credit benefits for the company’s solar assets.
(2) Payout ratio defined as last quarter dividend divided by LTM earnings.
31
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PF Ulysses Selected Publicly Traded Company Metrics
(USD in millions, except per share data)
C-Corp Midstream Companies
A B C D E
F G H I J K L M N O P
Enterprise Value / Dividend (Distribution) Dividend (Distribution)
Price / Earnings Price / DCF/Unit Debt Metrics EBITDA Yield Metrics
Total Equity Dist. CAGR
Net Debt /
Unit (Share) Market Enterprise 2019E to 2019E 2019E S&P Credit Company Name Price Value Value 2019E 2020E 2019E 2020E 2019E 2020E Current 2019E
2022E Coverage(2) EBITDA Rating
Enbridge Inc $36.10 $73,089 $134,867 13.6x 12.1x 19.3x 16.4x 10.0x 9.0x 6.2% 6.2% 3.2% 1.5x 4.8x BBB+ Kinder Morgan Inc 18.02
41,005 76,387 9.9x 9.5x 17.7x 16.7x 8.3x 7.7x 4.4% 5.5% 14.5% 2.2x 4.3x BBB SemGroup Corporation 15.32 1,367 3,955 9.0x 8.1x 21.9x 16.3x 5.1x 4.8x 12.3% 13.1% 5.3% 1.5x 5.9x B+ Targa Resources Corp. 42.67 9,913 17,151 11.2x 8.9x 129.3x 32.1x 11.1x
7.3x 8.5% 8.5% 4.4% 1.1x 3.8x BB Tallgrass Energy LP 22.92 6,476 10,002 10.4x 11.2x 13.1x 16.8x 9.3x 9.2x 8.9% 9.5% 4.7% 1.3x 3.2x BBB-Williams Companies Inc 26.88 33,480 57,087 11.3x 10.6x 28.1x 24.9x 10.5x
9.6x 5.1% 5.7% 9.4% 1.7x 4.4x BBB
Low $1,367 $3,955 9.0x 8.1x 13.1x 16.3x 5.1x 4.8x 4.4% 5.5% 3.2% 1.1x 3.2x Mean $27,555 $49,908 10.9x 10.1x 38.2x 20.5x 9.0x 7.9x
7.6% 8.1% 6.9% 1.6x 4.4x Median $21,697 $37,119 10.8x 10.1x 20.6x 16.7x 9.7x 8.3x 7.3% 7.3% 5.0% 1.5x 4.4x High $73,089 $134,867 13.6x 12.1x 129.3x 32.1x 11.1x 9.6x 12.3% 13.1% 14.5% 2.2x 5.9x
Ulysses Corporation (WS) $53.21 $9,459 $15,955 12.0x 9.8x 19.9x 17.4x (1) 9.8x(1) 8.2x 2.0% 2.1% 5.4% NA 3.3x NA
Ulysses Corporation (Mgmt.) 9.9x 9.4x 18.2x 17.0x (1) 8.6x(1) 7.4x 2.0% 2.0% 4.0% NA 2.7x NA
Source: Company forecasts & filings, investor presentations, Wall Street research and estimates as compiled by FactSet as of 2/8/19. (1) P/CFPS shown for
Ulysses.
(2) Coverage defined as distributable cash flow divided by total distributions.
32
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Abe Revised Budget Case | Valuation Effective Date: 3/31/2019
Discounted
Unlevered DCF(1) Analysis
2022E Terminal Multiple
Discount Rate
9.0x 10.5x 12.0x
4.00% $61.53 $73.72 $85.91
4.75% $60.13 $72.11 $84.08
5.50% $58.77 $70.53 $82.30
Discounted Unlevered DCF(1) Analysis
Supplemental Calculation Detail
2H 2019E 2020E 2021E 2022E
EBITDA $807 $1,702 $1,813 $1,908 Cash Taxes (44) (48) (44) Capex
(377) (719) (775) FCF $386 $934 $994 Discount Factor 0.988 0.955 0.911 Disc. FCF $381 $892 $906 Disc. SQ Ulysses FCF Total $2,179 Terminal Multiple 10.5x Terminal Disc. Factor 0.890x Implied Terminal PV EV $17,840 Less PF Ulysses Net Debt(2)
($4,675) Implied SQ Ulysses Equity Value $15,344 SQ Ulysses Equity Value per Share $72.11
Source: Wall street consensus projections as of 2/8/2019. 33 (1) Net
Income attributable to non-controlling interests is included in consolidated EBITDA.
(2) Includes additional debt to fund
cash component of transaction consideration.
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Revision
Abe Pre – Unitholder Tax | Valuation Effective Date: 3/31/2019
Stand Alone Abe Implied Unit Price XR Adjusted PF Ulysses Implied Share Price |0.5757x XR(1)
Discounted Levered DCF Analysis Discounted Cash Flow | Unlevered FCF(2) | Discounted at WACC
2023E DCF Multiple 2022E Terminal Multiple
6.0x 7.5x 9.0x 9.0x 10.5x 12.0x
Discount Rate
Discount Rate
8.0% $29.89 $34.41 $38.92 4.00% $34.79 $40.89 $46.99 10.0% $28.41 $32.64 $36.88 4.75% $34.09 $40.08 $46.07
12.0% $27.03 $31.01 $34.99 5.50% $33.41 $39.30 $45.18
Discounted Distribution Analysis
2023E Distribution Yield
13.0% 11.0% 9.0%
Discount Rate
8.0% $33.99 $38.04 $43.91 10.0% $32.24 $36.05 $41.55
12.0% $30.63 $34.21 $39.37
Source: Management projections and FactSet as of 2/8/2019. 34 (1)
Implied XR at 0.5000x equity XR and cash consideration of $4.03 / unit. Cash consideration added to implied share price at 0.5000x XR.
(2) Unlevered free cash flow
defined as PF Ulysses EBITDA less cash taxes and capital expenditures.
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Has / Gets Analysis | Abe Historical Weather Case Subject to Further Review & Revision
Abe Current Distribution Policy | Valuation Effective Date: 3/31/2019
Stand
Alone Abe Implied Unit Price XR Adjusted PF Ulysses Implied Share Price | 0.5757x XR(1)
Discounted Levered DCF Analysis Discounted Cash Flow | Unlevered FCF(2) |
Discounted at WACC
2023E DCF Multiple 2022E Terminal Multiple
6.0x 7.5x 9.0x
9.0x 10.5x 12.0x
Discount Rate 8.0% $27.45 $31.56 $35.66 Discount Rate 4.00% $32.59 $38.39 $44.20 10.0% $26.10 $29.95 $33.80 4.75% $31.92 $37.63 $43.33
12.0% $24.85 $28.46 $32.08 5.50% $31.28 $36.88 $42.48
Discounted Distribution Analysis
2023E Distribution Yield
13.0% 11.0% 9.0%
Discount Rate 8.0% $33.99 $38.04 $43.91 10.0% $32.24 $36.05 $41.55
12.0% $30.63 $34.21 $39.37
Source: Management projections and FactSet as of 2/8/2019. 35 (1) Implied XR at 0.5000x equity XR and cash consideration of $4.03 / unit. Cash consideration added
to implied share price at 0.5000x XR.
(2) Unlevered free cash flow defined as PF Ulysses EBITDA less cash taxes and capital expenditures.
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Has / Gets Analysis | Abe Capital Investment CaseSubject to Further Review & Revision
Abe Current Distribution Policy | Valuation Effective Date: 3/31/2019
Stand
Alone Abe Implied Unit Price XR Adjusted PF Ulysses Implied Share Price | 0.5757x XR(1)
Discounted Levered DCF Analysis Discounted Cash Flow | Unlevered FCF(2) |
Discounted at WACC
2023E DCF Multiple 2022E Terminal Multiple
6.0x 7.5x 9.0x
9.0x 10.5x 12.0x
Discount Rate 8.0% $30.84 $35.61 $40.38 Discount Rate 4.00% $35.70 $41.97 $48.24 10.0% $29.29 $33.77 $38.24 4.75% $34.98 $41.14 $47.30
12.0% $27.86 $32.06 $36.26 5.50% $34.28 $40.33 $46.38
Discounted Distribution Analysis
2023E Distribution Yield
13.0% 11.0% 9.0%
Discount Rate 8.0% $33.99 $38.04 $43.91 10.0% $32.24 $36.05 $41.55
12.0% $30.63 $34.21 $39.37
Source: Management projections and FactSet as of 2/8/2019. 36 (1) Implied XR at 0.5000x equity XR and cash consideration of $4.03 / unit. Cash consideration added
to implied share price at 0.5000x XR.
(2) Unlevered free cash flow defined as PF Ulysses EBITDA less cash taxes and capital expenditures.
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PRELIMINARY CONFIDENTIAL DRAFT Has / Gets Analysis | Abe Base Case Subject to Further Review &
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Abe Pre – Unitholder Tax | Valuation Effective Date: 3/31/2019
Stand Alone Abe Implied Unit Price XR Adjusted PF Ulysses Implied Share Price | 0.5757x XR(1)
Discounted Levered DCF Analysis Discounted Cash Flow | Unlevered FCF(2) | Discounted at WACC
2023E DCF Multiple 2022E Terminal Multiple
6.0x 7.5x 9.0x 9.0x 10.5x 12.0x
Discount Rate 8.0% $30.73 $35.40 $40.08 Discount Rate 4.00% $34.79 $40.89 $46.99 10.0% $29.20 $33.58 $37.97 4.75% $34.09 $40.08 $46.07
12.0% $27.78 $31.90 $36.01 5.50% $33.41 $39.30 $45.18
Discounted Distribution Analysis | Abe
Targeted Distribution Policy
2023E Distribution Yield
13.0% 11.0% 9.0%
Discount Rate 8.0% $29.81 $33.44 $38.69 10.0% $28.27 $31.68 $36.60
12.0%
$26.84 $30.04 $34.66
Source: Management projections and FactSet as of 2/8/2019. 37 (1) Implied XR at 0.5000x equity XR and cash consideration of $4.03 / unit. Cash
consideration added to implied share price at 0.5000x XR.
(2) Unlevered free cash flow defined as PF Ulysses EBITDA less cash taxes and capital expenditures.
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Has / Gets Analysis | Abe Historical Weather Case Subject to Further Review & Revision
Abe Current Distribution Policy | Valuation Effective Date: 3/31/2019
Stand
Alone Abe Implied Unit Price XR Adjusted PF Ulysses Implied Share Price |0.5757x XR(1)
Discounted Levered DCF Analysis Discounted Cash Flow | Unlevered FCF(2) |
Discounted at WACC
2023E DCF Multiple 2022E Terminal Multiple
6.0x 7.5x 9.0x
9.0x 10.5x 12.0x
Discount Rate 8.0% $28.44 $32.73 $37.02 Discount Rate 4.00% $32.59 $38.39 $44.20 10.0% $27.03 $31.06 $35.08 4.75% $31.92 $37.63 $43.33
12.0% $25.73 $29.51 $33.29 5.50% $31.28 $36.88 $42.48
Discounted Distribution Analysis | Abe
Targeted Distribution Policy
2023E Distribution Yield
13.0% 11.0% 9.0%
Discount Rate 8.0% $28.18 $31.54 $36.41 10.0% $26.74 $29.89 $34.45
12.0%
$25.40 $28.36 $32.64
Source: Management projections and FactSet as of 2/8/2019. 38 (1) Implied XR at 0.5000x equity XR and cash consideration of $4.03 / unit. Cash
consideration added to implied share price at 0.5000x XR.
(2) Unlevered free cash flow defined as PF Ulysses EBITDA less cash taxes and capital expenditures.
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Has / Gets Analysis | Abe Capital Investment Case Subject to Further Review & Revision
Abe Current Distribution Policy | Valuation Effective Date: 3/31/2019
Stand
Alone Abe Implied Unit Price XR Adjusted PF Ulysses Implied Share Price |0.5757x XR(1)
Discounted Levered DCF Analysis Discounted Cash Flow | Unlevered FCF(2) |
Discounted at WACC
2023E DCF Multiple 2022E Terminal Multiple
6.0x 7.5x 9.0x
9.0x 10.5x 12.0x
Discount Rate 8.0% $31.45 $36.34 $41.24 Discount Rate 4.00% $35.70 $41.97 $48.24 10.0% $29.87 $34.46 $39.04 4.75% $34.98 $41.14 $47.30
12.0% $28.40 $32.71 $37.02 5.50% $34.28 $40.33 $46.38
Discounted Distribution Analysis | Abe
Targeted Distribution Policy
2023E Distribution Yield
13.0% 11.0% 9.0%
Discount Rate 8.0% $30.74 $34.54 $40.03 10.0% $29.14 $32.70 $37.85
12.0%
$27.66 $31.00 $35.84
Source: Management projections and FactSet as of 2/8/2019. 39 (1) Implied XR at 0.5000x equity XR and cash consideration of $4.03 / unit. Cash
consideration added to implied share price at 0.5000x XR.
(2) Unlevered free cash flow defined as PF Ulysses EBITDA less cash taxes and capital expenditures.
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Precedents & Premiums | MLP Transactions Analysis
A B C F E D G H I J K
Announcement Equity Adj. Transaction Transaction Unaffected 1-Day Taxable Buyer Transaction Acquiror Target % Cash Date Value Acquired
Value(1,3) Value Premium Transaction Type Type
11/26/18 Dominion Energy Inc Dominion Energy Midstream Partners LP $1,262 $3,584 $3,598 0.9% 0% No C-Corp Affiliate 11/26/18 Arclight Capital TransMontaigne Partners L.P. 536 1,232 1,247 12.6% 100% NA PE Affiliate 11/8/18 Western Gas Equity Partners LP Western Gas Partners, LP 5,763 12,603 12,781 7.6% 0% No MLP
Affiliate 10/22/18 EnLink Midstream LLC EnLink Midstream Partners, L.P. 5,084 12,221 12,236 1.1% 0% Yes C-Corp Affiliate 10/18/18 Valero Energy Corporation Valero Energy Partners LP 1,976 3,734 3,788 6.0% 100%
Yes C-Corp Affiliate 10/9/18 Antero Midstream GP LP Antero Midstream Partners LP 5,908 7,548 7,548 6.5% 11% Yes C-Corp Affiliate 9/18/18 Enbridge Inc. Enbridge Energy
Partners 2,742 15,541 15,562 11.6% 0% Yes C-Corp Affiliate 8/24/18 Enbridge Inc. Spectra Energy Partners, LP 3,276 26,945 27,810 19.4% 0% Yes C-Corp Affiliate 8/1/18
Energy Transfer Equity, L.P. Energy Transfer Partners 27,179 66,915 66,981 11.2% 0% No MLP Affiliate 6/19/18 Cheniere Energy Inc. Cheniere Energy Partners LP Holdings 1,240 5,526 5,651 10.7% 0% No C-Corp
Affiliate 5/17/18 Williams Companies Williams Partners, LP 10,427 56,013 57,793 16.5% 0% Yes C-Corp Affiliate 3/26/18 Tall Grass Energy GP, LP Tallgrass Energy Partners, LP 1,686 8,083 8,361 (18.4%) 0% Yes C-Corp Affiliate 2/7/18 Terra Nitrogen GP, Inc. Terra Nitrogen Co. LP 387 1,432 1,474 3.7% 100% Yes C-Corp Affiliate 1/2/18 Archrock, Inc Archrock Partners, LP 607 2,358 2,438
23.4% 0% Yes C-Corp Affiliate 8/29/17 Zenith Energy US, LP Arc Logistics Partners LP 407 736 736 15.2% 100% Yes PE 3rd Party 10/25/16 Energy Transfer Partners, LP PennTex Midstream Partners, LP 640 789 789
43.3% 50% Yes MLP Affiliate 3/2/17 VTTI, B.V VTTI Energy Partners, LP 481 1,842 1,867 6.0% 100% Yes C-Corp Affiliate 4/3/17 World Point Terminals, Inc. World Point Terminals, LP 159 570 594 5.8% 100% Yes C-Corp Affiliate 2/1/17 ONEOK, Inc ONEOK Partners, LP 9,309 22,380 23,654 25.8% 0% Yes C-Corp Affiliate 1/27/17 Enbridge Energy Company Midcoast Energy Partners, LP 170 1,194
1,176 (8.6%) 100% Yes C-Corp Affiliate 11/21/16 Sunoco Logistics Partners, LP Energy Transfer Partners, LP 21,965 54,455 54,455 (0.2%) 0% No MLP Affiliate 10/24/16 American Midstream Partners LP JP Energy
Partners LP 302 476 476 9.1% 0% No MLP 3rd Party 9/26/16 Transcanada Columbia Pipeline Partners 915 3,384 3,464 9.9% 100% Yes C-Corp Affiliate 5/30/16 SemGroup Corp. Rose Rock Midstream 771 2,034 2,034 0.0% 0%
Yes C-Corp Affiliate 11/3/15 Targa Resources Corp. Targa Resources Partners LP 6,672 12,138 12,229 18.4% 0% Yes C-Corp Affiliate 8/1/16 Transocean, Inc Transocean
Partners 259 1,153 1,202 20.8% 0% No C-Corp Affiliate 10/26/15 Western Refining, Inc. Northern Tier Energy 1,982 5,185 5,286 11.7% 65% Yes C-Corp 3rd Party 7/13/15 MPLX
LP MarkWest Energy Partners, LP 16,612 22,360 22,360 36.3% 8% No MLP 3rd Party 5/6/15 Crestwood Equity Partners, LP Crestwood Midstream Partners 3,381 6,901 6,920 17.2% 0% No MLP Affiliate 4/6/15 Tesoro Logistics LP QEP Midstream Partners LP 394
1,104 1,145 (14.0%) 0% No MLP Affiliate 1/26/15 Energy Transfer Partners, LP Regency Energy Partners LP 11,276 18,593 18,593 13.2% 1% No MLP Affiliate 10/26/14 Williams Partners LP Access Midstream Partners LP 21,944 34,256 34,256 (5.7%) 0% No MLP
Affiliate 10/13/14 Targa Resources Partners LP Atlas Pipeline Partners LP 3,866 6,002 6,002 15.0% 3% No MLP 3rd Party 11/12/14 Enterprise Products Partners LP Oiltanking Partners LP 1,392 4,243 4,289 (0.9%) 0% No PE Affiliate 8/10/14 Kinder Morgan
Inc. Kinder Morgan Energy Partners 27,351 52,351 52,566 12.0% 12% Yes C-Corp Affiliate 8/10/14 Kinder Morgan Inc. El Paso Pipeline Partners 5,421 13,193 13,677 15.4% 12% Yes
C-Corp Affiliate 7/24/14 Breitburn Energy Partners QR Energy LP 1,811 2,856 2,856 17.5% 19% No MLP 3rd Party 10/10/13 Regency Energy Partners LP PVR Partners LP 3,931 5,659 5,659 25.7% 1% No MLP 3rd Party
8/27/13 Plains All American LP PAA Natural Gas Storage LP 755 2,434 2,531 8.5% 0% No MLP Affiliate 5/6/13 Inergy Midstream LP Crestwood Midstream Partners LP 1,661 2,643 2,643 14.5% 4% No MLP 3rd Party 1/29/13 Kinder Morgan Energy Partners LP Copano
Energy LLC 3,911 4,858 4,858 23.5% 0% No MLP 3rd Party 2/23/11 Enterprise Products Partners Duncan Energy Partners LP 1,006 2,973 3,282 28.1% 0% No MLP Affiliate
C-Corp Buying MLP
Affiliate
Taxable Transaction
Overall
Median $1,831 $5,355 $5,469 10.3% 0% C-Corp Buying MLP
Mean 4,004 11,746 12,000 9.0% 32%
Median $1,686 $5,526 $5,651 9.9% 0% Affiliate Mean 5,525 13,931 14,121 9.3% 24% Median $1,976 $5,185 $5,286 11.6% 12% Taxable Transaction Mean 4,113 11,889 12,147 10.7% 40% Median $1,894 $5,021 $5,072 11.7% 0% Overall Mean 5,162 12,155 12,306 11.3%
23%
Current (2/8/2019) Ulysses Abe $2,121 $5,659 $5,671 1.6% 13% Yes C-Corp Affiliate Current Premium to Abe at Proposal
Date Ulysses Abe $2,121 $5,659 5,671 2.5% 13% Yes C-Corp Affiliate (1/25/2019) Current Premium to Abe at Pre-Investor Day Ulysses Abe $2,121 $5,659 5,671 (16.5%) 13% Yes
C-Corp Affiliate
___________________________________ (12/3/2018)
Source: Company filings, press releases, presentations and FactSet for pricing data. Represents precedent MLP transactions by affiliated and third party MLPs, Public GPs and C-Corps since 2011.
Note: Considers transactions where target is an MLP. 40 (1) Based on Wall Street research.
(2) Non-adjusted transaction TEV values affiliated and non-affiliated units at offer price.
(3) Adjusted transaction TEV value affiliated units at market price and non-affiliated units at offer price.
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Supplemental Analysis
41
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PRELIMINARY CONFIDENTIAL DRAFT Abe DCF Analysis Subject to Further Review & Revision
Abe Revised Budget Case | Valuation Effective Date: 3/31/2019
Discounted Levered DCF Analysis
Discounted Distribution Analysis
Supplemental Calculation Detail | $3.80 Annual Dist. Policy Supplemental Calculation Detail | $3.80 Annual Dist. Policy
2H 2019E 2020E 2021E 2022E 2023E 2H 2019E 2020E 2021E 2022E 2023E
LP DCF per
Unit $1.88 $3.82 $3.88 $3.92 $3.94 LP Distribution Per Unit $1.90 $3.80 $3.80 $3.80 $3.80 Discount Factor 0.976 0.909 0.826 0.751 Discount Factor 0.976 0.909 0.826 0.751 PV of LP DCF per Unit $1.84 $3.47 $3.21 $2.94 PV of LP Dist. per Unit $1.86
$3.45 $3.14 $2.85 Disc. LP DCF Total $11.46 Disc. LP Dist. Total $11.31 Terminal Mulitple 7.5x Terminal Yield 11.0% Terminal Disc. Factor 0.716 Terminal Disc. Factor 0.716 Implied Terminal Value per Unit $21.18 Implied Terminal PV per Unit $24.75
Implied Present Value per Unit $32.64 Implied Equity Value per Unit $36.05
LP
DCF / LP Dist. Coverage 0.99x 1.00x 1.02x 1.03x 1.04x LP DCF / LP Dist. Coverage 0.99x 1.00x 1.02x 1.03x 1.04x Total Debt / EBITDA 4.61x 4.59x 4.61x 4.65x 4.62x Total Debt / EBITDA 4.61x 4.59x 4.61x 4.65x 4.62x
Discounted Levered DCF Analysis Discounted Distribution Analysis
Supplemental Calculation
Detail | Targeted Leverage & Coverage Policy Supplemental Calculation Detail | Targeted Leverage & Coverage Policy
2H 2019E 2020E 2021E 2022E
2023E 2H 2019E 2020E 2021E 2022E 2023E
LP DCF per Unit $1.89 $3.86 $3.96 $4.03 $4.08 LP Distribution Per Unit $1.58 $3.15 $3.15 $3.36 $3.40 Discount Factor 0.976
0.909 0.826 0.751 Discount Factor 0.976 0.909 0.826 0.751 PV of LP DCF per Unit $1.85 $3.51 $3.27 $3.03 PV of LP Dist. per Unit $1.54 $2.86 $2.60 $2.52 Disc. LP DCF Total $11.66 Disc. LP Dist. Total $9.53 Terminal Mulitple 7.5x Terminal Yield 11.0%
Terminal Disc. Factor 0.716 Terminal Disc. Factor 0.716 Implied Terminal Value per Unit $21.93 Implied Terminal PV per Unit $22.15
Implied Present Value per Unit
$33.58 Implied Equity Value per Unit $31.68
LP DCF / LP Dist. Coverage 1.20x 1.23x 1.26x 1.20x 1.20x LP DCF / LP Dist. Coverage 1.20x 1.23x 1.26x 1.20x 1.20x Total
Debt / EBITDA 4.45x 4.27x 4.11x 3.99x 3.85x Total Debt / EBITDA 4.45x 4.27x 4.11x 3.99x 3.85x
___________________________________ 42 Source: Management
projections.
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PRELIMINARY CONFIDENTIAL DRAFT Abe DCF Analysis Subject to Further Review & Revision
Abe Historical Weather Case | Valuation Effective Date: 3/31/2019
Discounted Levered DCF
Analysis Discounted Distribution Analysis
Supplemental Calculation Detail | $3.80 Annual Dist. Policy Supplemental Calculation Detail | $3.80 Annual Dist. Policy
2H 2019E 2020E 2021E 2022E 2023E 2H 2019E 2020E 2021E 2022E 2023E
LP DCF per
Unit $1.88 $3.53 $3.58 $3.59 $3.58 LP Distribution Per Unit $1.90 $3.80 $3.80 $3.80 $3.80 Discount Factor 0.976 0.909 0.826 0.751 Discount Factor 0.976 0.909 0.826 0.751 PV of LP DCF per Unit $1.84 $3.21 $2.96 $2.69 PV of LP Dist. per Unit $1.86
$3.45 $3.14 $2.85 Disc. LP DCF Total $10.70 Disc. LP Dist. Total
$11.31 Terminal Mulitple 7.5x Terminal Yield 11.0% Terminal Disc. Factor 0.716 Terminal Disc.
Factor 0.716 Implied Terminal Value per Unit $19.25 Implied Terminal PV per Unit $24.75
Implied Present Value per Unit $29.95 Implied Equity Value per Unit $36.05
LP DCF / LP Dist. Coverage 0.99x 0.93x 0.94x 0.94x 0.94x LP DCF / LP Dist. Coverage 0.99x 0.93x 0.94x 0.94x 0.94x Total Debt / EBITDA 4.61x 5.10x 5.29x 5.52x 5.58x
Total Debt / EBITDA 4.61x 5.10x 5.29x 5.52x 5.58x
Discounted Levered DCF Analysis Discounted Distribution Analysis
Supplemental Calculation Detail | Targeted Leverage & Coverage Policy Supplemental Calculation Detail | Targeted Leverage & Coverage Policy
2H 2019E 2020E 2021E 2022E 2023E 2H 2019E 2020E 2021E 2022E 2023E
LP DCF per Unit $1.89 $3.60
$3.67 $3.71 $3.75 LP Distribution Per Unit $1.58 $3.15 $3.15 $3.15 $3.15 Discount Factor 0.976 0.909 0.826 0.751 Discount Factor 0.976 0.909 0.826 0.751 PV of LP DCF per Unit $1.85 $3.27 $3.03 $2.79 PV of LP Dist. per Unit $1.54 $2.86 $2.60 $2.37
Disc. LP DCF Total $10.94 Disc. LP Dist. Total $9.37 Terminal Mulitple 7.5x Terminal Yield 11.0% Terminal Disc. Factor 0.716 Terminal Disc. Factor 0.716 Implied Terminal Value per Unit $20.12 Implied Terminal PV per Unit $20.52
Implied Present Value per Unit $31.06 Implied Equity Value per Unit $29.89
LP DCF / LP Dist.
Coverage 1.20x 1.14x 1.16x 1.18x 1.19x LP DCF / LP Dist. Coverage 1.20x 1.14x 1.16x 1.18x 1.19x Total Debt / EBITDA 4.45x 4.75x 4.75x 4.77x 4.65x Total Debt / EBITDA 4.45x 4.75x 4.75x 4.77x 4.65x
___________________________________ 43 Source: Management projections.
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PRELIMINARY CONFIDENTIAL DRAFT Abe DCF Analysis Subject to Further Review & Revision
Abe Capital Investment Case | Valuation Effective Date: 3/31/2019
Discounted Levered DCF
Analysis Discounted Distribution Analysis
Supplemental Calculation Detail | $3.80 Annual Dist. Policy Supplemental Calculation Detail | $3.80 Annual Dist. Policy
2H 2019E 2020E 2021E 2022E 2023E 2H 2019E 2020E 2021E 2022E 2023E
LP DCF per
Unit $1.88 $3.70 $3.87 $4.00 $4.16 LP Distribution Per Unit $1.90 $3.80 $3.80 $3.80 $3.80 Discount Factor 0.976 0.909 0.826 0.751 Discount Factor 0.976 0.909 0.826 0.751 PV of LP DCF per Unit $1.84 $3.37 $3.20 $3.01 PV of LP Dist. per Unit $1.86
$3.45 $3.14 $2.85 Disc. LP DCF Total $11.41 Disc. LP Dist. Total $11.31 Terminal Mulitple 7.5x Terminal Yield 11.0% Terminal Disc. Factor 0.716 Terminal Disc. Factor 0.716 Implied Terminal Value per Unit $22.36 Implied Terminal PV per Unit $24.75
Implied Present Value per Unit $33.77 Implied Equity Value per Unit $36.05
LP
DCF / LP Dist. Coverage 0.99x 0.97x 1.02x 1.05x 1.10x LP DCF / LP Dist. Coverage 0.99x 0.97x 1.02x 1.05x 1.10x Total Debt / EBITDA 4.61x 4.73x 4.63x 4.48x 4.26x Total Debt / EBITDA 4.61x 4.73x 4.63x 4.48x 4.26x
Discounted Levered DCF Analysis Discounted Distribution Analysis
Supplemental Calculation
Detail | Targeted Leverage & Coverage Policy Supplemental Calculation Detail | Targeted Leverage & Coverage Policy
2H 2019E 2020E 2021E 2022E
2023E 2H 2019E 2020E 2021E 2022E 2023E
LP DCF per Unit $1.88 $3.72 $3.91 $4.08 $4.27 LP Distribution Per Unit $1.57 $3.14 $3.14 $3.40 $3.56 Discount Factor 0.976
0.909 0.826 0.751 Discount Factor 0.976 0.909 0.826 0.751 PV of LP DCF per Unit $1.84 $3.38 $3.23 $3.06 PV of LP Dist. per Unit $1.53 $2.85 $2.59 $2.55 Disc. LP DCF Total $11.52 Disc. LP Dist. Total $9.53 Terminal Mulitple 7.5x Terminal Yield 11.0%
Terminal Disc. Factor 0.716 Terminal Disc. Factor 0.716 Implied Terminal Value per Unit $22.94 Implied Terminal PV per Unit $23.17
Implied Present Value per Unit
$34.46 Implied Equity Value per Unit $32.70
LP DCF / LP Dist. Coverage 1.20x 1.18x 1.25x 1.20x 1.20x LP DCF / LP Dist. Coverage 1.20x 1.18x 1.25x 1.20x 1.20x Total
Debt / EBITDA 4.61x 4.57x 4.31x 3.99x 3.68x Total Debt / EBITDA 4.61x 4.57x 4.31x 3.99x 3.68x
___________________________________ 44 Source: Management
projections.
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Ulysses Dist. Analysis | Management Projections Subject to Further Review & Revision
Valuation Effective Date: 3/31/2019
Discounted Dividend Analysis
Ulysses Dividends | Abe $3.80 Annual Dist. Policy
2022E Distribution Yield
discount rate
2.75% 2.25% 1.75%
4.50% $45.03 $54.40 $69.14
5.25% $44.25 $53.46 $67.94
6.00% $43.50 $52.55 $66.77
Discounted Distribution Analysis
Supplemental Calculation Detail
2H 2019E 2020E 2021E 2022E
Ulysses Dividend / Share $0.55 $1.20 $1.25 $1.30 Discount Factor 0.987 0.950 0.903 PV of Dividend/Sh. $0.54 $1.14 $1.12 Disc. GP Dist. Total $2.80 Terminal Yield 2.25% Terminal
Disc. Factor 0.880 Implied Terminal PV per Share $50.66 Implied Equity Value per Share $53.46
___________________________________ 45 Source: Wall street consensus
projections as of 2/8/2019.
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Ulysses Illustrative Discounted Future Value Subject to Further Review & Revision
Management Projections
Ulysses Status Quo
Yield
$69.32 $69.63 $68.09
1.75%
$54.29 $54.78 2.25% $53.08
Current Share Price $53.21 $44.72 $45.33 $43.53 2.75%
2H 2019E 2020E 2021E
Assumptions
∎ Wall Street Consensus Projections∎ Valuation date as of 3/31/19
∎ Future share price calculated at FY1 annual dividends divided by yield
∎ Discounted to 3/31/19 at 5.25% cost of equity
☐ Interim
distributions discounted upon receipt to 3/31/19
___________________________________ 46 Source: Wall Street consensus projections and as of 2/8/2019.
Note: Valuation based on annual dividends.
TUDORPICKERING HOLT&CO
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PRELIMINARY CONFIDENTIAL DRAFT PF Ulysses DCF Analysis Subject to Further Review & Revision
Abe Revised Budget Case | Valuation Effective Date: 3/31/2019
Discounted
Distribution Analysis
Ulysses Dividends | Abe $3.80 Annual Dist. Policy
2022E
Distribution Yield
Discount Rate
2.75% 2.25% 1.75%
4.50% $44.82 $54.15 $68.82
5.25% $44.05 $53.22 $67.62
6.00% $43.30 $52.31 $66.46
Discounted Distribution Analysis
Supplemental Calculation Detail
2H 2019E 2020E 2021E 2022E
Ulysses Dividend/Sh. $0.55 $1.19 $1.24 $1.29 Discount Factor 0.987 0.950 0.903 PV of Dividend/Sh. $0.54 $1.13 $1.12
Disc. GP Dist. Total $2.79 Terminal Yield 2.25% Terminal Disc. Factor 0.880 Implied Terminal PV per Share $50.43
Implied Equity Value per Share $53.22
___________________________________ 47 Source: Wall
street consensus projections as of 2/8/2019.
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ENERGY INVESTMENT & MERCHANT BANKING
PRELIMINARY CONFIDENTIAL DRAFT Has / Gets Analysis | Discounted Distribution Analysis Subject to Further
Review & Revision
Abe Pre – Unitholder Tax | Valuation Effective Date: 3/31/2019
XR Adjusted PF Ulysses Implied Share Price |0.5757x XR(1)
Abe Base Case Abe Base Case | Abe
Targeted Distribution Policy
2022E Distribution Yield 2022E Distribution Yield
2.75% 2.25% 1.75% 2.75% 2.25% 1.75%
Discount Rate
Discount Rate
4.50% $26.44 $31.11 $38.44 4.50% $26.44 $31.11 $38.44
5.25% $26.05 $30.64 $37.84 5.25% $26.05 $30.64 $37.84
6.00% $25.68 $30.18 $37.26 6.00% $25.68
$30.18 $37.26
Discount Rate
Discount Rate
Abe Historical Weather Case Abe Historical Weather Case | Abe Targeted Distribution Policy
2022E Distribution Yield 2022E Distribution Yield
2.75% 2.25% 1.75% 2.75%
2.25% 1.75%
4.50% $26.44 $31.11 $38.44 4.50% $26.44 $31.11 $38.44 5.25% $26.05 $30.64 $37.84 5.25% $26.05 $30.64 $37.84
6.00% $25.68 $30.18 $37.26 6.00% $25.68 $30.18 $37.26
Discount Rate
Discount Rate
Abe Capital Investment Case Abe Capital Investment Case | Abe Targeted
Distribution Policy
2022E Distribution Yield 2022E Distribution Yield
2.75%
2.25% 1.75% 2.75% 2.25% 1.75%
4.50% $26.44 $31.11 $38.44 4.50% $26.44 $31.11 $38.44 5.25% $26.05 $30.64 $37.84 5.25% $26.05 $30.64 $37.84
6.00% $25.68 $30.18 $37.26 6.00% $25.68 $30.18 $37.26
___________________________________ 48
Source: Management projections and FactSet as of 2/8/2019.
(1) Implied XR at 0.5000x equity XR and cash consideration of $4.03 / unit. Cash consideration added to
implied share price at 0.5000x XR.
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Appendix
49
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Cost of Capital
50
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PRELIMINARY CONFIDENTIAL DRAFT SQ Abe Cost of Equity Analysis Subject to Further Review & Revision
Comparable Public Company Yield-Based Cost of Equity
Abe Cost of Equity Cost
of Equity
Barra Beta Low High Sensitized Peer Total Return Low High
(2)
Raw Beta 0.68 0.92
(3)
Spot Risk-Free Rate 2.9% 2.9%
(4)
Equity Risk Premium 6.0% 6.0%
Cost of Equity 7.0% 8.5%
cost of equity 14.1% 15.1%
Expected Total Return
ABCDEF
Expected 2019E-2022E Long-Term Economic
Company Distribution CAGR Growth Estimate Expected Growth(1) Current Yield Implied Total Return
Buckeye Partners LP 4.5% 4.0% 4.1% 9.7% 13.8% GasLog Partners LP 4.5% 4.0% 4.1% 9.6% 13.7% Genesis Energy LP 4.6% 4.0% 4.1% 11.0% 15.1% Global Partners LP 0.0%
4.0% 3.4% 10.0% 13.4% MLPs Golar LNG Partners LP 0.1% 4.0% 3.4% 12.4% 15.8% Holly Energy Partners LP 0.4% 4.0% 3.5% 9.3% 12.8% KNOT Offshore Partners LP 0.0% 4.0% 3.4% 11.2% 14.6% Growth Martin Midstream Partners LP 0.0% 4.0% 3.4% 16.1% 19.5% NGL
Energy Partners LP 2.7% 4.0% 3.8% 14.4% 18.2% Low NuStar Energy LP 0.0% 4.0% 3.4% 9.7% 13.1% PBF Logistics LP 2.4% 4.0% 3.8% 9.1% 12.9% Summit Midstream Partners LP 0.0% 4.0% 3.4% 18.3% 21.7% Sunoco LP 0.0% 4.0% 3.4% 11.4% 14.8% TC PipeLines LP 0.0%
4.0% 3.4% 8.5% 11.9% USA Compression Partners LP 0.0% 4.0% 3.4% 14.7% 18.1% NA NA NA NA
Ferrellgas Partners LP NA
Dist. Suburban Propane Partners LP 5.1% 4.0% 4.2% 11.0% 15.1% Propane Superior Plus Corporation 0.0% 4.0% 3.4% 6.6% 10.0%
Median0.0%4.0%3.4%11.0%14.6%
Mean1.4%4.0%3.6%11.3%15.0%
______________________________________________ Source: Bloomberg, Duff & Phelps, FactSet, Federal Reserve, Company filings as of 2/8/2019.
(1) Weights Expected Current – 2020E distribution growth estimates 15% and long-term economic growth estimate by 85% to arrive at a long-term distribution growth estimate.
(2) Barra beta as of 12/31/2018. Illustrative low and high range reflects a -/+ 15% range around Barra beta.
(3) 20-year treasury bond yield as of 1/29/2019. 51 (4) Duff & Phelps historical arithmetic premium.
(5) 2021E dividend from May 8th, 2018 RBC equity research report.
TUDORPICKERING HOLT&CO
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Ulysses Cost of Capital Analysis
Status Quo Pro Forma Cost of Equity Cost of Equity
Barra Beta Low High Barra Beta Low High Raw Beta (3) 0.30 0.41 Raw Beta (3) 0.30 0.41
(4) (4)
Spot Risk-Free Rate 2.9% 2.9% Spot Risk-Free Rate 2.9% 2.9%
Cost of Equity 4.7% 5.4%
Equity Risk Premium(5) 6.0% 6.0% Equity Risk Premium(5) 6.0% 6.0%
Cost of Equity 4.7% 5.4%
Cost of Capital Cost of Capital
Barra Beta | SQ Capital Structure Low High Barra Beta | PF Capital Structure Low High
Cost of
Equity 4.7% 5.4% Cost of Equity 4.7% 5.4% Cost of Debt(1) 2.7% 4.2% Cost of Debt(2) 3.5% 5.0%
Cost of Capital 4.3% 5.1% Cost of Capital 4.2% 5.0%
Market Value of Equity $9,459 $9,459 Market Value of Equity $13,187 $13,187 Total Debt $2,756 $2,756 Total Debt $4,905 $4,905
Cost of Capital Cost of Capital
Barra Beta | Optimal Capital Structure(6) Low High Barra Beta
| Optimal Capital Structure(6) Low High
Cost of Equity 4.7% 5.4% Cost of Equity 4.7% 5.4%
Cost of Capital 4.3% 5.1% Cost of Capital 4.2% 5.1%
(1) (2)
Cost of Debt 2.7% 4.2% Cost of Debt 3.5% 5.0%
Market Value of Equity $9,459 $9,459 Market
Value of Equity $13,187 $13,187 Total Debt $2,542 $2,542 Total Debt $3,966 $3,966
Source: Bloomberg, Duff & Phelps, FactSet, Federal Reserve, Company
filings as of 2/8/2019.
Note: In SQ, debt held at Abe is proportionally consolidated based on LP ownership in the MLP. In PF, debt held at Abe is assumed to be
fully consolidated and the cash consideration of $4.03 for each Abe unit is funded using the Ulysses revolver at a 2.275% interest rate. Equity – Based on a 0.500x XR of Ulysses shares for each Abe unit.
(1) Illustrative low and high range reflects a -/+ 100 bps range around after tax current 4.55% cost of debt at Ulysses. Ulysses cost of debt calculated using weighted average 7-10 year YTW on the outstanding face value of debt held at Ulysses. (2) Illustrative low and high range reflects a -/+ 100 bps range around after tax current 5.56% cost of debt at Ulysses. Ulysses cost of debt
calculated using weighted average 7-10 year YTW on the outstanding face value of fully consolidated Ulysses debt.
(3) Barra
beta for Ulysses as of 12/31/2018. Illustrative low and high range reflects a -/+ 15% range around Barra beta. 52 (4) 20-year treasury bond yield as of 1/29/2019.
(5) Duff & Phelps historical arithmetic premium.
(6) Optimal Capital Structure based
on Total Debt/2019E EBITDA Ratio of 3.00x.
TUDORPICKERING HOLT&CO
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INVESTMENT & MERCHANT BANKING
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Additional Future Analysis
53
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ENERGY INVESTMENT & MERCHANT BANKING
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Additional Analysis To Be Performed
TPH Supplemental Analysis
∎ Cash flow accretion/dilution∎ Tax implications to unitholders∎ After-tax proposal evaluation
54
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Disclosure Statement
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55
TUDORPICKERING HOLT&CO
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Exhibit (c)(10)
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Project Rushmore Discussion Materials
February 14th, 2019
Tudorpickering Holt&co energy investment & merchant banking
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Table of Contents
I. Situation Overview
II. Status Quo Management Projections Overview III. Abe Financial Analysis IV. Ulysses Financial Analysis V. Transaction Analysis
Supplemental Analysis
Appendix
2
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I. Situation Overview
3
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Summary of Proposed Transaction
Proposal Component Description Exchange Ratio Detail
∎ Each Abe Common Unit held by public IDR Buyin Proposal Prior to Investor Day Proposal Date Current Implied Offer 9/19/2018 12/3/2018 1/25/2019 2/8/2019
1/25/2019 2/8/2019 to receive: Spot Abe Price $40.39 $36.67 $29.89 $30.14 $32.01 $30.64 Abe 30-Day VWAP $40.22 $36.50 $26.34 $28.43 Consideration 0.500 Ulysses shares Spot Ulysses Price $53.76 $57.59 $55.95
$53.21 -—-
(1) (1)
Spot XR 0.7513x 0.6367x 0.5342x 0.5664x 0.5720x
0.5757x
$4.03 Cash
Premium to Spot 7.1% 1.6%
∎ Taxable transaction to Abe unitholders Premium to 30-Day VWAP 21.5% 7.7%
∎ Status Quo Abe ownership:∎ Pro Forma Ulysses ownership:
Ownership Abe Public
Unitholders: ~74.7% Abe Public Unitholders: ~16.5%(2)
Ulysses: ~25.3% Existing Ulysses Shareholders: ~83.5%
∎ Ulysses will exchange newly-issued Ulysses shares and cash for Abe common units held by public Structure∎ Transaction requires vote of Abe common unitholders, but no
vote of Ulysses shareholders∎ Elimination of MLP
∎ 12/4: Abe and Ulysses Investor Day∎ 2/8: Draft merger agreement & Ulysses management
presentation ∎ 1/28: Proposal Received∎ 2/12: Abe Special Committee meeting∎ 1/29: Regularly scheduled Abe board meeting Proposed Ulysses Timing∎ 2/15: Provide indicative response
∎ 2/6: Abe and Ulysses report Q1’19 results
∎ 3/15: Proposal expires∎
2/6: Received Abe financial forecasts ∎ 2/7: Received Ulysses financial forecasts
Source: Company filings, Bloomberg, FactSet as of 2/8/2019. 4 (1) Implied all-in XR calculated as equity XR of 0.5x plus $4.03 cash consideration divided by Ulysses share price.
(2) Issuance of shares
equivalent to 19.7% of status quo (pre-transaction) Ulysses outstanding shares results in ~16.5% Abe public unitholder ownership in pro forma entity.
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PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Historical XR and Relative Performance
Two Year Historical Exchange Ratios Relative
Performance Since Undisturbed Date (12/3/18)
Abe FGP SPH AMZ
1.40x Prior to
Investor Day - Current
0.70x 150% $50
0.60x Proposal Implied XR: 0.5757x
1.20x 0.50x
Average XR: 0.5191x
0.40x 130% Dec-18 Dec-18 Dec-18 Jan-19 Jan-19 Jan-19 Feb-19
1.00x 16% $40
110%
Abe Price / Unit
0.80x (3%) (5%)
Proposed Consideration: 0.5000x + 90% $4.03/unit; Implied XR: 0.5757x $30.14
0.60x $30
(18%)
All-In XR at Proposal
Exchange Ratio XR Premium
Current (2/8/2019) 0.5664x 0.5757x 1.6%
70%
Spot Proposal (1/25/2019) 0.5342x 0.5720x 7.1%
0.40x
Undisturbed (12/3/18) 0.6367x 0.5700x (10.5%)
30-Day 0.5340x 0.5736x 7.4% 60-Day 0.5371x 0.5727x 6.6% Avg. 90-Day 0.5898x 0.5729x (2.9%)
180-Day 0.6822x 0.5744x (15.8%) 360-Day 0.8115x 0.5804x (28.5%)
0.20x 50% $20
Feb-17 May-17 Aug-17 Dec-17 Mar-18 Jun-18 Oct-18 Jan-19 Dec-18 Dec-18 Dec-18 Jan-19 Jan-19 Jan-19 Feb-19
5
_____________________________________ Source: FactSet as of 2/8/2019.
Tudorpickering
Holt&co energy investment & merchant banking
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Analysis at Various Exchange Ratios
($ in millions, unless otherwise noted)
A B C D E F G H I J K L M N
At At Current At Ulysses Undisturbed XR(3) Proposal XR(4)
XR(5)
(2/08/2019) (2/08/2019) (12/03/2018)
Exchange Ratio (At Current Ulysses Sh. Price of $53.21) 0.5500x 0.5664x 0.5757x 0.6000x 0.6367x 0.6500x 0.7000x 0.7500x 0.8000x Premium to Implied Abe Unit Price (Ulysses Share
Price x XR) (2.9%) 0.0% 1.6% 5.9% 12.4% 14.8% 23.6% 32.4% 41.2% Implied Abe Unit Price $29.27 $30.14 $30.64 $31.93 $33.88 $34.59 $37.25 $39.91 $42.57 Fully Diluted Abe Units Outstanding 93.8 93.8 93.8 93.8 93.8 93.8 93.8 93.8 93.8 Implied
Fully-Diluted Abe Equity Value $2,745 $2,828 $2,874 $2,995 $3,178 $3,245 $3,494 $3,744 $3,993 Net Debt 2,846 2,846 2,846 2,846 2,846 2,846 2,846 2,846 2,846
GP
Equity Value(1) 395 395 395 395 395 395 395 395 395
Non-Controlling Interest 32 32 32 32 32 32 32 32 32
Implied Abe Enterprise Value(1) $6,018 $6,100 $6,147 $6,268 $6,451 $6,518 $6,767 $7,017 $7,266
Comparable Metrics
Implied Abe Ownership 22.5% 23.0% 23.3% 24.0% 25.2% 25.5%
27.0% 28.4% 29.7%
Propane Propane Abe Low-Growth Distributor Transaction Multiples: Statistic MLP Median Median(6) Median
EV / 2019E EBITDA $636 9.5x 9.6x 9.7x 9.9x 10.1x 10.3x 10.6x 11.0x 11.4x 9.3x 8.8x 7.5x
Case WS
EV / 2020E EBITDA $644 9.3x 9.5x 9.5x 9.7x 10.0x 10.1x 10.5x 10.9x 11.3x 9.0x 8.4x
Abe
Consensus Equity Value / 2019E DCF(2) $367 7.5x 7.7x 7.8x 8.2x 8.7x 8.8x
9.5x 10.2x 10.9x 6.8x 6.5x Equity Value / 2020E DCF(2) $382 7.2x 7.4x 7.5x 7.8x 8.3x 8.5x 9.2x 9.8x 10.5x 6.2x 6.2x
Propane Propane Abe Low-Growth Distributor Transaction Multiples: Statistic MLP Median Median(6) Median
EV / 2019E EBITDA $625 9.6x 9.8x 9.8x 10.0x
10.3x 10.4x 10.8x 11.2x 11.6x 9.3x 8.8x 7.5x Revised EV / 2020E EBITDA $643 10.1x 10.2x 10.3x 10.5x 10.8x 10.9x 11.3x 11.8x 12.2x 9.0x 8.4x
Budget
Abe Equity Value / 2019E DCF(2) $400 6.9x 7.1x 7.2x 7.5x 7.9x 8.1x 8.7x 9.4x 10.0x 6.8x 6.5x Equity Value / 2020E DCF(2) $410 7.6x 7.8x 7.9x 8.3x 8.8x 9.0x 9.7x 10.4x 11.0x 6.2x
6.2x
Source: Company filings, and FactSet as for 2/8/2019.
(1) GP / IDR value
estimated by taking current GP/IDR distributions capitalized by Abe’s current yield. (2) DCF attributable to all unitholders including GP + IDR Interest.
(3) Current unadjusted exchange based on Abe and Ulysses closing prices.
(4)
Ulysses Proposal: 0.5000x XR and $4.03 cash consideration / unit. 6 (5) Undisturbed XR is the unaffected XR prior to the investor day on 12/4/2018.
(6) Propane
distributor Equity Value / DCF and Yield metrics exclude Ferrellgas from group median.
Tudorpickering Holt&co energy investment & merchant banking
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II. Status Quo Management Projections Overview
7
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Abe Management Projections
EBITDA DCF and Distributions
Revised Budget Historical Weather Case Revised Budget Historical Weather Case Capital Investment Case Capital Investment Case Wall Street Consensus Projected Distribution
Historical Distribution Historical DCF
Historical $720 $4.16
Abe ’19-’23 CAGR: 1.7%
$4.00 $688 $3.96 $3.87 $3.79 $3.78 $3.80 $3.70 $665 $667 $3.72 $3.77 $3.94 $659 $675 $3.71 $3.92
$3.60 $3.80 $644 $3.88 $636 $3.82 $619 $659 $670 $3.44 $3.77 $661 $3.71 $606 $633 $652 $3.32 $3.33 $643 $3.58 $3.59 $3.58 $3.53 $625 $624 $615 $551 $606 $543 $597
2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E 2023E Revised Budget 1.15x 1.05x 0.89x 0.88x 0.98x 0.99x 1.00x 1.02x 1.03x 1.04x
Coverage
Historical Weather 1.15x 1.05x 0.89x 0.88x 0.98x 0.99x 0.93x 0.94x 0.94x 0.94x
2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E 2023E Case Coverage
Capital Investment 1.15x 1.05x 0.89x 0.88x 0.98x 0.99x 0.97x 1.02x 1.05x 1.10x
Case Coverage
DCF and Distributions with Coverage/Leverage Targets
1.2x 2019E Coverage, Flat Distribution Thereafter Subject to 4.0x Leverage
Revised Budget DCF Targeted Revised Budget Dist. Historical Weather Case DCF Targeted Historical Weather Dist. Capital Investment Case DCF Targeted Capital
Investment Dist.
Historical DCF Historical Distribution Historical DCF Historical Distribution Historical DCF Historical Distribution
$3.96 $4.27 $4.08 $4.03 $3.96 $3.96 $3.79 $3.78 $3.80 $4.08 $3.78 $3.86 $3.72 $3.75 $3.96 $3.80 $3.71 $3.71 $3.91 $3.79 $3.78 $3.78 $3.67 $3.72 $3.71 $3.60 $3.60 $3.79 $3.78 $3.80
$3.72 $3.71 $3.77 $3.60 $3.72 $3.44 $3.60 $3.56 $3.44 $3.44 $3.40 $3.32 $3.33 $3.40 $3.32 $3.33 $3.36 $3.32 $3.33 $3.15 $3.15 $3.15 $3.15 $3.15 $3.15 $3.15 $3.15 $3.14 $3.14 $3.14
2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E 2023E 2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E 2023E 2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E 2023E
1.15x 1.05x 0.89x 0.88x 0.98x 1.20x 1.23x 1.26x 1.20x 1.20x 1.15x 1.05x 0.89x 0.88x 0.98x 1.20x 1.14x 1.16x 1.18x 1.19x 1.15x 1.05x 0.89x 0.88x 0.98x 1.20x 1.18x 1.25x 1.20x 1.20x
Revised Budget Coverage Historical Weather Case Coverage Capital Investment Case Coverage
8
___________________________________ Source: Management.
Tudorpickering
Holt&co energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Ulysses Management Projections
EBITDA Adjusted EPS
Historical Ulysses Utilities Ulysses ’19-’22 CAGR: Wall Street Consensus Management Historical 5.7% $3.70
Abe Propane Ulysses International $3.44
Midstream & Marketing Corporate and other
$1,908 $1,807 $3.13 Misc. Income WSC $1,693 $2.90 $1,615 $2.74 $1,520 $3.34 $1,389 $1,421 $3.20 $1,369 $3.05 $1,209 $491 $2.29 $465 $2.02 $2.01 $2.05 $2.74 $2.68 $412 $432
$312 $283 $242 $227
$650 $666 $629 $639
$319 $350 $389 $420
-$13 -$10 -$10 -$11 2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E
WSC $1,329 $1,623 $1,684 $1,728 2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E
Cash Flow Per Share and Dividends Per Share CapEx
$7.47 Maintanence & Growth Capex
Acquisitions $7.27 $923 $6.63 $6.70 $6.13 $844 $5.74 $5.81 $782 $5.52 $5.44 $753 $775$ 15 $15 $725 $719 $666 $10 $448 $102 $187 $61 $474 $37 $1.30 $1.10 $1.20 $1.25 $0.71 $0.71 $0.71 $0.71 $0.71 $605 $624 $594 $436 $475
$753 $709 $760 $829
2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E
Ending Cash $436 $439 $518 $568 $462 $475 $611 $781 $930
Balance 2014A 2015A 2016A 2017A 2018A
2019E 2020E 2021E 2022E
9
Source: Management and Wall Street consensus
estimates.
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III. Abe Financial Analysis
10
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Selected Publicly Traded Company Metrics
(USD in millions, except per share data)
Low Growth MLP Metrics & Propane Distributors(1)
A B C D E F G H I J K L M N
Enterprise Value / EBITDA Price / DCF/Unit Distribution Yield Distribution Metrics Debt Metrics Low Growth MLPs
Unit (Share) Total Equity Enterprise Distribution CAGR 2019E Net Debt / S&P Credit Company Name Price Market Value Value 2019E 2020E 2019E 2020E Current 2019E 2019E to 2022E
Coverage(2) 2019E EBITDA Rating Buckeye Partners LP $30.95 $4,756 $9,930 11.2x 10.4x 7.1x 5.9x 9.7% 9.7% 4.5% 1.25x 5.8x BBB-
GasLog Partners LP 22.13 1,077 2,531
9.3x 9.0x 10.6x 11.2x 9.6% 10.0% 4.5% 0.93x 4.1x NA Genesis Energy LP 19.95 2,453 6,899 9.9x 9.5x 6.4x 5.4x 11.0% 11.4% 4.6% 1.51x 5.3x B+ Global Partners LP 18.99 679 2,052 9.1x 8.8x 7.3x NA 10.0% 10.0% 0.0% 1.31x 5.8x B+ Golar LNG Partners LP
13.06 1,004 2,221 8.9x 8.7x 5.0x 4.4x 12.4% 12.4% 0.1% 1.06x 4.6x NA Holly Energy Partners LP 28.66 3,027 4,576 12.8x 12.3x 10.6x 10.1x 9.3% 9.4% 0.4% 0.98x 4.0x Ba3 KNOT Offshore Partners LP 18.55 617 1,756 8.4x 8.1x 6.8x 7.1x 11.2% 11.2% 0.0%
1.51x 5.0x NA Martin Midstream Partners LP 12.39 502 1,197 7.3x 6.9x 5.5x 5.4x 16.1% 16.1% 0.0% 1.12x 4.2x B NGL Energy Partners LP 10.87 1,347 3,770 7.6x 7.1x 4.9x 5.0x 14.4% 14.4% 2.7% 1.63x 4.1x B+ NuStar Energy LP 24.68 3,238 7,388 10.8x 10.0x
10.4x 9.2x 9.7% 9.7% 0.0% 0.99x 5.0x BB PBF Logistics LP 21.86 1,167 1,885 10.7x 9.7x 9.3x 7.9x 9.1% 9.5% 2.4% 1.11x 3.1x NA Summit Midstream Partners LP 12.59 1,002 2,498 7.7x 7.2x 4.9x 4.8x 18.3% 18.3% 0.0% 1.12x 3.6x BB-Sunoco LP 29.06 3,080 5,888 9.5x 9.3x 7.8x 7.6x 11.4% 11.4% 0.0% 1.21x 4.5x BB-TC PipeLines LP 30.75 2,354 4,669 10.5x 10.5x 6.5x 6.5x 8.5% 8.5% 0.0% 1.83x 5.0x BBB-USA Compression Partners LP 14.32 1,383 3,604 9.1x 8.5x 6.6x 5.7x 14.7% 14.7% 0.0% 1.05x 4.4x B+
Low $502 $1,197 7.3x 6.9x
4.9x 4.4x 8.5% 8.5% 0.0% 0.93x 3.1x Mean $1,846 $4,058 9.5x 9.1x 7.3x 6.9x 11.7% 11.8% 1.3% 1.24x 4.6x Median $1,347 $3,604 9.3x 9.0x 6.8x 6.2x 11.0% 11.2% 0.0% 1.12x 4.5x High $4,756 $9,930 12.8x 12.3x 10.6x 11.2x 18.3% 18.3% 4.6% 1.83x 5.8x
Propane Distributors(4)
Ferrellgas Partners LP $1.11 $108 $2,119 8.8x 8.4x NM
NM NM NM NA NA 8.4x CCC
Suburban Propane Partners LP 21.90 1,372 2,646 9.2x 9.1x 6.8x 6.6x 11.0% 11.0% 5.1% 1.30x 4.4x BB-
Superior Plus Corporation(3) 8.25 1,430 2,716 7.8x 7.4x 6.3x 5.8x 6.6% 6.6% 0.0% 2.40x 3.7x BB
Low $108 $2,119 7.8x 7.4x 6.3x 5.8x 6.6% 6.6% 0.0% 1.30x 3.7x Mean $970 $2,494 8.6x 8.3x 6.5x 6.2x 8.8% 8.8% 2.6% 1.85x 5.5x Median $1,372 $2,646 8.8x 8.4x 6.5x
6.2x 8.8% 8.8% 2.6% 1.85x 4.4x High $1,430 $2,716 9.2x 9.1x 6.8x 6.6x 11.0% 11.0% 5.1% 2.40x 8.4x
Abe Partners, L.P. (WS) $30.14 $3,222 $6,100 9.6x 9.5x 7.8x 7.7x
12.6% 12.6% (4.5%) 1.02x 4.5x NA Abe Partners, L.P. (Revised Budget) 9.8x 9.5x 8.0x 7.9x 12.6% 12.6% 0.0% 0.99x 4.5x NA Abe Partners, L.P. (Historical Weather Case) 9.8x 10.2x 8.0x 8.5x 12.6% 12.6% 0.0% 0.99x 4.8x NA
Abe Partners, L.P. (Capital Investment Case) 9.8x 9.6x 8.0x 8.1x 12.6% 12.6% 0.0% 0.99x 4.5x NA
Source: Company forecasts & filings, investor presentations, Wall Street research and estimates as compiled by FactSet as of 2/8/19. (1) Low growth group
defined as MLPs below 5% 2019E-2022E distribution CAGR and with enterprise value between $1.0 BB and $10 BB.
(2) Coverage defined as distributable cash flow
divided by total distributions to GP and LP. 11 (3) Uses exchange rate of 0.7534 USD per CAD.
(4) Propane distributor Equity Value / DCF and Yield metrics exclude
Ferrellgas from group median.
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PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Propane Precedent Transactions Analysis
A B C D E F G
Date Transaction EBITDA Purchase Price / Buyer Seller Asset Announced Value ($MM) FY1/NTM EBITDA
5/30/2018 Superior Plus Corporation NGL Energy Partners LP Retail Propane Operations 900 84 10.7x(1) 11/7/2017 DCC LPG NGL Energy Partners LP Retail West 200 28
7.1x
7/24/2017 SHV Energy American Midstream Partners Pinnacle Propane 170 19 9.0x 2/13/2017 Superior Plus Corporation Gibson Energy Canwest Propane 412 33 12.3x
6/23/2016 World Fuel Services PAPCO, Associated Petroleum Products Misc. Fuel Services 230 38 6.0x 5/19/2015 DCC LPG Shell Butagaz 517 136 3.8x 7/2/2014 UGI Corp. Total SA Totalgaz SNC 580 95 6.1x 4/26/2012 Suburban Propane Partners Inergy Retail
Propane Assets 1,800 197 9.1x 10/17/2011 AmeriGas Partners, L.P. Energy Transfer Partners Heritage Propane Operations 2,890 325 8.9x 1/4/2010 Inergy Sterling Partners Liberty Propane 223 36 6.2x 11/18/2004 Inergy Star Gas Partners LP Star Gas
Propane 475 NA NA
4/20/2004 Ferrellgas Blue Rhino—343 44 7.8x 12/23/2003 Suburban Propane Partners Agway Energy—206 34 6.0x 11/7/2003 Energy Transfer
Company Ltd. Heritage Propane Partners—980 119 8.3x 1/31/2001 AmeriGas Partners, L.P. NiSource Columbia Propane 216 NA NA
Low $170 $19 3.8x Mean $676 $91 7.8x
Median $412 $44 7.8x High $2,890 $325 12.3x
>$1B Mean $2,345 $261 9.0x
>$1B Median $2,345 $261 9.0x
Current
Ulysses Abe $6,094 $625 9.8x (2/8/2019)
___________________________________ 12 Source: Company
filings, Wall Street research, IHS Market.
(1) Transaction multiple before acquisition synergies; 8.2x synergy adjusted multiple.
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PRELIMINARY CONFIDENTIAL DRAFT Abe DCF Analysis Subject to Further Review & Revision
Abe Revised Budget Case | Valuation Effective Date: 3/31/2019 Abe Current Unit Price: $30.14
Implied Proposal Value: $30.64
Discounted Levered DCF Analysis Discounted
Levered DCF Analysis
Abe Levered LP DCF | $3.80 Annual Dist. Policy Abe Levered LP DCF | Targeted Leverage & Coverage Policy
2023E DCF Multiple 2023E DCF Multiple
discount rate discount rate discount rate discount rate
6.0x 8.0x 10.0x 6.0x 8.0x 10.0x
8.0% $29.89 $35.91 $41.93 8.0% $30.73 $36.96
$43.20 10.0% $28.41 $34.05 $39.70 10.0% $29.20 $35.04 $40.89 12.0% $27.03 $32.33 $37.64 12.0% $27.78 $33.27 $38.76
Discounted Distribution Analysis Discounted
Distribution Analysis
Abe LP Distributions | $3.80 Annual Dist. Policy Abe LP Distributions | Targeted Leverage & Coverage Policy
2023E Distribution Yield 2023E Distribution Yield
13.0% 10.5% 8.0% 13.0% 10.5% 8.0%
8.0% $33.99 $39.30 $47.94 8.0% $29.81 $34.57 $42.30
10.0% $32.24 $37.23
$45.33 10.0% $28.27 $32.73 $39.98
12.0% $30.63 $35.31 $42.92 12.0% $26.84 $31.03 $37.84
PV of Future Unit Price Analysis PV of Future Unit Price Analysis
Abe LP Distributions | $3.80
Annual Dist. Policy Yield Abe LP Distributions | Targeted Leverage & Coverage Policy Yield $48.24 $48.49 $47.71 $46.99
8.0% $40.21 $41.68 $41.47 8.0%
$39.99 $38.21 $38.36 $38.50 $37.19 $33.27 10.5% $33.42 $33.86 10.5% $31.88 $32.61 $31.68 $30.40 $30.84 $30.14 $28.34 $30.14 $ 29.18 $26.44 $25.20
13.0% 13.0%
Current Current Price Price
2H 2019E 2020E 2021E 2022E 2H 2019E 2020E 2021E 2022E
PV of Future Share Price Assumptions
∎ Management projections ∎ Future share price
calculated at FY1 annual distributions divided by yield∎ Valuation date as of 3/31/19∎ Discounted to 3/31/19 at 10% cost of equity
Interim
distributions discounted upon receipt to 3/31/19 13 ___________________________________ Source: Management projections and Factset as of 2/8/2019.
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Holt&co energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT Abe DCF Analysis Subject to Further Review & Revision
Abe Historical Weather Case | Valuation Effective Date: 3/31/2019 Abe Current Unit Price: $30.14
Implied Proposal Value: $30.64
Discounted Levered DCF Analysis Discounted
Levered DCF Analysis
Abe Levered LP DCF | $3.80 Annual Dist. Policy Abe Levered LP DCF | Targeted Leverage & Coverage Policy
2023E DCF Multiple 2023E DCF Multiple
discount rate discount rate discount rate discount rate
6.0x 8.0x 10.0x 6.0x 8.0x 10.0x
8.0% $27.45 $32.93 $38.40 8.0% $28.44 $34.16
$39.89 10.0% $26.10 $31.23 $36.37 10.0% $27.03 $32.40 $37.77 12.0% $24.85 $29.67 $34.49 12.0% $25.73 $30.77 $35.80
Discounted Distribution Analysis Discounted
Distribution Analysis
Abe LP Distributions | $3.80 Annual Dist. Policy Abe LP Distributions | Targeted Leverage & Coverage Policy
13.0% 10.5% 8.0% 13.0% 10.5% 8.0%
8.0% $33.99 $39.30 $47.94 8.0% $28.18 $32.59 $39.75
10.0% $32.24 $37.23 $45.33 10.0% $26.74 $30.87 $37.59
12.0% $30.63 $35.31
$42.92 12.0% $25.40 $29.28 $35.59
PV of Future Share Price Analysis PV of Future Share Price Analysis
Abe LP Distributions | $3.80 Annual Dist. Policy Yield Abe LP Distributions | Targeted Leverage & Coverage Policy Yield $48.24 $48.49 $47.71 $46.99
8.0% $40.21 8.0% $39.99 $39.55 $38.96 $38.21 $38.36 $38.50 $37.19 $33.27 10.5% 10.5% $31.88 $32.61 $31.68 $31.81 $31.92 $30.40 $30.84 $30.14 $25.20 $26.44 $27.04 $30.14 $ 27.58
13.0% 13.0% Current Current Price Price
2023E Distribution Yield 2023E
Distribution Yield
2H 2019E 2020E 2021E 2022E 2H 2019E 2020E 2021E 2022E
PV
of Future Share Price Assumptions
∎ Management projections ∎ Future share price calculated at FY1 annual distributions divided by yield∎
Valuation date as of 3/31/19∎ Discounted to 3/31/19 at 10% cost of equity
Interim distributions discounted upon receipt to 3/31/19 14
___________________________________ Source: Management projections and Factset as of 2/8/2019.
Tudorpickering Holt&co energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT Abe DCF Analysis Subject to Further Review & Revision
Abe Capital Investment Case | Valuation Effective Date: 3/31/2019 Abe Current Unit Price: $30.14
Implied Proposal Value: $30.64
Discounted Levered DCF Analysis Discounted
Levered DCF Analysis
Abe Levered LP DCF | $3.80 Annual Dist. Policy Abe Levered LP DCF | Targeted Leverage & Coverage Policy
2023E DCF Multiple 2023E DCF Multiple
discount rate discount rate discount rate discount rate
6.0x 8.0x 10.0x 6.0x 8.0x 10.0x
8.0% $30.84 $37.20 $43.56 8.0% $31.45 $37.97
$44.50 10.0% $29.29 $35.26 $41.22 10.0% $29.87 $35.99 $42.10 12.0% $27.86 $33.46 $39.06 12.0% $28.40 $34.15 $39.89
Discounted Distribution Analysis Discounted
Distribution Analysis
Abe LP Distributions | $3.80 Annual Dist. Policy Abe LP Distributions | Targeted Leverage & Coverage Policy
13.0% 10.5% 8.0% 13.0% 10.5% 8.0%
8.0% $33.99 $39.30 $47.94 8.0% $30.74 $35.72 $43.81
10.0% $32.24 $37.23 $45.33 10.0% $29.14 $33.81 $41.39
12.0% $30.63 $35.31
$42.92 12.0% $27.66 $32.04 $39.16
PV of Future Share Price Analysis PV of Future Share Price Analysis
Abe LP Distributions | $3.80 Annual Dist. Policy Yield Abe LP Distributions | Targeted Leverage & Coverage Policy Yield $48.24 $48.49 $47.71 $46.99 8.0% $42.10 $42.95 8.0%
$39.85 $40.06 $38.21 $38.36 $38.50 $37.19 $34.99 $33.27 10.5% $33.74 10.5% $31.88 $32.61 $31.56 $30.40 $30.72 $30.10 $28.59 $30.14 $26.34 $30.14 $25.11
13.0% 13.0%
Current Current Price Price
2023E Distribution Yield 2023E Distribution Yield
2H 2019E 2020E 2021E 2022E 2H 2019E 2020E 2021E 2022E
PV of Future Share
Price Assumptions
∎ Management projections ∎ Future share price calculated at FY1 annual distributions divided by yield∎ Valuation date as of
3/31/19∎ Discounted to 3/31/19 at 10% cost of equity
Interim distributions discounted upon receipt to 3/31/19 15 ___________________________________ Source:
Management projections and Factset as of 2/8/2019.
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PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
IV. Ulysses Financial Analysis
16
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PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Selected Publicly Traded Company Metrics
(USD in millions, except per share data)
A B C D E F G H I J K L M M O P N
LDCs EV / EBITDA Price / Earnings Price / CFPS Dividend
Metrics Debt Metrics
Share Total Equity Enterprise Payout Dist. CAGR Net Debt / S&P Credit LT EPS Company Name Price Value Value 2019E 2020E 2019E 2020E 2019E
2020E Current 2019E Ratio(2) 19E to ‘21E EBITDA Rating Growth Rate Atmos Energy $97.97 $11,505 $14,972 12.6x 11.3x 22.5x 21.0x 12.6x 11.0x 2.1% 2.1% 56.7% 8.0% 2.9x NA 6.5% Chesapeake Utilities Corporation 88.11 1,455 1,969 13.4x 12.6x 23.9x
22.5x NA NA 1.7% 1.8% 44.1% 10.4% 3.5x NA 7.6% NiSource Inc 26.58 9,706 18,800 11.3x 10.7x 19.8x 18.6x 8.9x 8.6x 3.0% 3.1% 128.1% 4.1% 5.0x BBB+ 5.7% New Jersey Resources Corporation 45.95 4,099 5,564 19.4x (1) 17.7x (1) 23.0x 21.4x 17.1x 14.5x 2.5%
2.6% 80.6% NA 5.1x NA 6.0% Northwest Natural Holding Co. 61.94 1,789 2,675 11.5x 11.0x 25.2x 24.0x 10.2x 10.7x 3.1% 3.1% 55.6% 0.7% 3.8x A+ 4.5% ONE Gas Inc 84.02 4,445 5,634 11.9x 11.2x 24.5x 23.7x 12.4x 11.5x 2.4% 2.4% 65.0% 7.7% 2.5x A 5.0% Spire
Inc 78.55 4,329 6,980 13.8x 12.9x 21.1x 20.2x 11.2x 10.9x 3.0% 3.0% 68.0% 5.1% 5.2x A- 5.0% Southwest Gas Holdings Inc 78.50 4,187 6,051 9.1x 8.4x 19.7x 18.5x 7.8x 8.1x 2.6% 2.8% 51.5% 6.9% 2.8x BBB+ 6.0%
C-Corp Midstream EV / EBITDA Price / Earnings Price / DCF/Unit Dividend (Distribution) Metrics Debt Metrics
Unit (Share) Market Enterprise 2019E Dist. CAGR 2019E S&P Credit 19E to ‘22E Company Name Price Value Value 2019E 2020E 2019E 2020E 2019E 2020E Current 2019E Coverage(4)
‘19E to ‘22E EBITDA Rating DCF CAGR Enbridge Inc $36.10 $73,089 $134,867 13.6x 12.1x 19.3x 16.4x 10.0x 9.0x 6.2% 6.2% 1.5x 3.2% 4.8x BBB+ 6.9% Kinder Morgan Inc 18.02 41,005 76,387 9.9x 9.5x 17.7x 16.7x 8.3x 7.7x 4.4% 5.5% 2.2x 14.5% 4.3x
BBB 4.5% SemGroup Corporation 15.32 1,367 3,955 9.0x 8.1x 21.9x 16.3x 5.1x 4.8x 12.3% 13.1% 1.5x 5.3% 5.9x B+ 5.2% Targa Resources Corp. 42.67 9,913 17,151 11.2x 8.9x NM 32.1x 11.1x 7.3x 8.5% 8.5% 1.1x 4.4% 3.8x BB 15.6% Tallgrass Energy LP 22.92
6,476 10,002 10.4x 11.2x 13.1x 16.8x 9.3x 9.2x 8.9% 9.5% 1.3x 4.7% 3.2x BBB- (0.7%) Williams Companies Inc 26.88 33,480 57,087 11.3x 10.6x 28.1x 24.9x 10.5x 9.6x 5.1% 5.7% 1.7x 9.4% 4.4x BBB 19.4%
Low $1,455 $1,969 9.1x 8.4x 19.7x 18.5x 7.8x 8.1x 1.7% 1.8% 44.1% 0.7% 2.5x 4.5% Mean $5,189 $7,831 12.0x 11.2x 22.5x 21.2x 11.5x 10.8x 2.6% 2.6% 68.7% 6.1% 3.9x 5.8% Median $4,258
$5,843 11.9x 11.2x 22.8x 21.2x 11.2x 10.9x 2.6% 2.7% 60.8% 6.9% 3.7x 5.9% <60% Payout Ratio Median $2,988 $4,363 12.1x 11.2x 23.2x 21.8x 10.2x 10.7x 2.4% 2.5% 53.6% 7.4% 3.2x 6.3% High $11,505 $18,800 13.8x 12.9x 25.2x 24.0x 17.1x 14.5x 3.1% 3.1%
128.1% 10.4% 5.2x 7.6%
Low $1,367 $3,955 9.0x 8.1x 13.1x 16.3x 5.1x 4.8x 4.4% 5.5% 1.1x 3.2% 3.2x (0.7%) Mean $27,555 $49,908 10.9x 10.1x 20.0x 20.5x 9.0x 7.9x
7.6% 8.1% 1.6x 6.9% 4.4x 8.5% Median $21,697 $37,119 10.8x 10.1x 19.3x 16.7x 9.7x 8.3x 7.3% 7.3% 1.5x 5.0% 4.4x 6.0% High $73,089 $134,867 13.6x 12.1x 28.1x 32.1x 11.1x 9.6x 12.3% 13.1% 2.2x 14.5% 5.9x 19.4%
Low $108 $2,119 7.8x 7.4x 9.9x 9.0x 6.3x 5.8x 6.6% 6.6% 0.0% 1.30x 3.7x 3.9% Mean $970 $2,494 8.6x 8.3x 9.9x 9.0x 6.5x 6.2x 8.8% 8.8% 2.6% 1.85x 5.5x 14.0% Median $1,372 $2,646
8.8x 8.4x 9.9x 9.0x 6.5x 6.2x 8.8% 8.8% 2.6% 1.85x 4.4x 5.0% High $1,430 $2,716 9.2x 9.1x 9.9x 9.0x 6.8x 6.6x 11.0% 11.0% 5.1% 2.40x 8.4x 33.2%
Propane
Distributors(5) EV / EBITDA Price / Earnings Price / DCF/Unit Dividend (Distribution) Metrics Debt Metrics
Ferrellgas Partners LP $1.11 $108 $2,119 8.8x 8.4x NM NM
NM NM NM NM NA NA 8.4x CCC 33.2% Suburban Propane Partners LP 21.90 1,372 2,646 9.2x 9.1x NM NM 6.8x 6.6x 11.0% 11.0% 5.1% 1.30x 4.4x BB- 3.9% Superior Plus Corporation(6) 8.25 1,430 2,716 7.8x 7.4x 9.9x 9.0x
6.3x 5.8x 6.6% 6.6% 0.0% 2.40x 3.7x BB 5.0%
Ulysses Corporation (WS) $53.21 $9,459 $15,955 12.0x 9.8x 19.9x 17.4x 9.8x(3) 8.2x(3) 2.0% 2.1% 47.5% 5.4% 3.3x NA 8.0%
Ulysses Corporation (Mgmt.) 9.9x 9.4x 18.2x 17.0x 8.6x(3) 7.4x(3) 2.0% 2.0% 35-45% 4.0% 2.7x NA 6-10%
Source: Company forecasts & filings, investor presentations, Wall Street research and estimates (3) P/CFPS shown for Ulysses. as compiled by FactSet as of 2/8/19. (4)
Coverage defined as distributable cash flow divided by total distributions.
(1) New Jersey Resources Corporation 2019E and 2020E EBITDA multiples are excluded from
(5) Propane distributor Equity Value / DCF and Yield metrics exclude Ferrellgas from group summary statistics due to disproportionately high multiples resulting from investment tax median. 17 credit benefits for the company’s solar assets.
(6) Uses exchange rate of 0.7534 USD per CAD.
(2) Payout ratio defined as last quarter dividend divided by LTM earnings.
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PRELIMINARY CONFIDENTIAL DRAFT
Ulysses DCF Analysis | Management Projections Subje to Further Review & Revision
Valuation Effective Date: 3/31/2019
Discounted Unlevered DCF(1) Analysis
Discounted Dividend Analysis
Ulysses SQ Dividends | Abe $3.80 Annual Dist. Policy
2023E EBITDA Terminal Multiple 2023E Distribution Yield
discount rate discount rate
8.50x 10.0x 11.5x 2.75% 2.25% 1.75%
4.00% $56.76 $71.32 $85.89 4.50% $45.03
$54.40 $69.14 4.75% $55.19 $69.50 $83.80 5.25% $44.25 $53.46 $67.94 5.50% $53.66 $67.71 $81.77 6.00% $43.50 $52.55 $66.77
Discounted Unlevered DCF Analysis(1,2)
Discounted Dividend Analysis
Supplemental Calculation Detail Supplemental Calculation Detail
2H 2019E 2020E 2021E 2022E 2H 2019E 2020E 2021E 2022E
EBITDA $805 $1,697 $1,808 $1,903 Ulysses
Dividend / Share $0.55 $1.20 $1.25 $1.30
Unlevered Cash Taxes(3) (88) (173) (166)
Capex (377) (719) (775) Discount Factor 0.987 0.950 0.903 FCF $340 $804 $867 PV of Dividend/Sh. $0.54 $1.14 $1.12
Discount Factor 0.988 0.955 0.911
Disc. FCF $337 $768 $790 Disc. GP Dist. Total $2.80
Disc. SQ Ulysses FCF Total $1,895 Terminal Yield 2.25% Terminal M ultiple 10.0x Terminal Disc. Factor 0.890x Terminal Disc. Factor 0.880
Implied Terminal PV EV $16,946 Implied Terminal PV per Share $50.66
Less SQ Ulysses Net Debt
($4,392) Less SQ Ulysses NCI ($2,103)
Implied Equity Value per Share $53.46
Implied SQ Ulysses Equity Value $12,345 SQ Ulysses Equity Value per Share $69.50
PV of Future Share Price Analysis(4)
Ulysses SQ / PF Dividends Yield $68.09 $69.32 $69.63
1.75%
Assumptions $54.78 $53.08 $54.29
∎ Wall Street Consensus Projections $53.21 2.25% $43.53 $44.72 $45.33
∎ Valuation
date as of 3/31/19
∎ Future share price calculated at FY1 annual dividends divided by yield 2.75%
∎ Discounted to 3/31/19 at 5.25% cost of equity Current
Price
â–¡ Interim distributions discounted upon receipt to 3/31/19
Source:
Management projections. 2H 2019E 2020E 2021E (1) Net Income attributable to non-controlling interests is included in consolidated EBITDA; DCF analysis assumes normalized net working capital.
(2) Fully consolidated enterprise value analysis; implied Ulysses share price calculated based on eliminating Abe publicly-owned LP interest at market value. 18 (3) Calculated as
management-forecasted cash taxable income + elimination of tax shield from interest expense.
(4) Dividend policy assumed constant in both SQ and PF scenarios ,
across all operating scenarios.
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PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
SQ Ulysses Sum-of-the-Parts Analysis
Ulysses SOTP SQ EBITDA Mix(3)
FY 2019E Multiple(1) Enterprise Value
FY 2019E EBITDA Low High Low High
SQ Ulysses Businesss Segments Midstream
Abe & Marketing
Midstream & Marketing $230 9.5x 11.5x $2,189 $2,650 20% 19%
Utilities $324 10.0x 12.0x $3,243 $3,891
International $420 8.0x 10.0x $3,358 $4,197 Total Enterprise Value $8,790 $10,739 Less Net Debt ($1,547) ($1,547) Equity
Value $7,243 $9,192
FY 2019E GP/IDR
Cashflow FY 2019E Distribution Yield(2)
Equity Value International Utilities
34% 27%
Abe
GP Equity Value $50 12.6% 12.6% $395 $395 Abe FD LP Equity Value $2,828 $2,828 Abe Equity Value $3,223 $3,223 Less Abe NCI ($2,103) ($2,103) Total SQ Ulysses Equity Value $8,363
$10,312 Ulysses FD Shares O/S 177.8 177.8
Implied SQ Ulysses Share Price $47.04 $58.01
Source: Management Projections and FactSet as of 2/8/2019.
Note: Corporate revenue &
other income / expenses allocated pro-rata to business units on basis of business unit contribution of gross revenue / gross expenses respectively.
1. Based on comparable C-Corp, LDC’s, and Propane Distributors median 2019E EV/EBITDA.
2. Based on Abe 2019E distribution yield. 19
3. Total EBITDA attributable to Ulysses
shareholders, excluding portion attributable to noncontrolling interest in Abe. Abe EBITDA allocated ~38% to Ulysses unitholders, proportionately to distributions received.
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PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
V. Transaction Analysis
20
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PRELIMINARY CONFIDENTIAL DRAFT Has / Gets Analysis | Abe Base Case Subject to Further Review &
Revision
Abe Pre – Unitholder Tax | Valuation Effective Date: 3/31/2019 Abe $3.80 Annual Dist. Policy
Targeted Leverage & Coverage Policy
Has-Standalone Abe Implied Unit Price Gets-XR Adjusted PF Ulysses Implied Share
Price |0.5757x XR(1)
Discounted Cash Flow | Unlevered FCF(2)
2023E DCF
Multiple 2023E DCF Multiple
2023E Distribution Yield 2023E Distribution Yield
discount rate discount rate discount rate discount rate
6.0x 8.0x 10.0x
Analysis 8.0% $29.89 $35.91 $41.93
2022E Terminal Multiple
DCF 10.0% $28.41
$34.05 $39.70 12.0% $27.03 $32.33 $37.64
8.5x 10.0x 11.5x Levered te 4.00% $32.34 $38.44 $44.54
Discounted Distribution Analysis Discounted Levered DCF Analysis
Discount Rate Discount Rate
6.0x 8.0x 10.0x
4.75% $31.68 $37.67 $43.67
8.0% $30.73 $36.96 $43.20 scount
D i
Discounted 10.0% $29.20 $35.04 $40.89 5.50% $31.04 $36.93 $42.81 12.0% $27.78 $33.27 $38.76
Discounted Dividend Analysis
13.0% 10.5% 8.0%
2022E Distribution Yield
Analysis 8.0% $33.99 $39.30 $47.94 10.0% $32.24 $37.23 $45.33 2.75%
2.25% 1.75%
12.0% $30.63 $35.31 $42.92
4.50% $26.54 $31.23 $38.60
Rate
Distribution t
n 5.25% $26.16 $30.76 $38.00 o u
13.0% 10.5% 8.0%
Disc
8.0% $29.81 $34.57 $42.30 6.00% $25.78 $30.30 $37.41
Discounted 10.0% $28.27 $32.73 $39.98
12.0% $26.84 $31.03 $37.84
Source: Management projections and FactSet as of 2/8/2019. 21 (1) Implied XR at 0.5000x equity XR and cash consideration of $4.03 / unit. Cash consideration added to implied share
price at 0.5000x XR.
(2) Unlevered free cash flow defined as PF Ulysses EBITDA less cash taxes and capital expenditures.
Tudorpickering Holt&co energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT
Has / Gets Analysis | Abe Historical Weather Case Subject to Further Review & Revision
Abe Pre – Unitholder Tax | Valuation Effective Date: 3/31/2019 Abe $3.80 Annual Dist. Policy
Targeted Leverage & Coverage Policy
Stand Alone Abe Implied Unit Price
2023E DCF Multiple
Discount Rate
Discounted Levered DCF Analysis
2023E DCF Multiple
Discount Rate
2023E Distribution Yield
Discount Rate
Discounted Distribution Analysis
2023E Distribution Yield
Discount Rate
XR Adjusted PF Ulysses Implied Share Price |0.5757x XR(1)
Discounted Cash Flow | Unlevered
FCF(2) | Discounted at WACC
2022E Terminal Multiple
Discount Rate
Discounted Distribution Analysis
2022E Distribution Yield
Discount Rate
Source: Management projections and FactSet as of 2/8/2019.
(1) Implied XR at 0.5000x equity XR and cash consideration of $4.03 / unit. Cash consideration added to implied share price at 0.5000x XR. (2) Unlevered free cash flow defined as
PF Ulysses EBITDA less cash taxes and capital expenditures.
6.0x 8.0x 10.0x 8.0% $27.45 $32.93 $38.40 10.0% $26.10 $31.23 $36.37 12.0% $24.85 $29.67 $34.49
6.0x 8.0x 10.0x 8.0% $28.44 $34.16 $39.89 10.0% $27.03 $32.40 $37.77 12.0% $25.73 $30.77 $35.80
13.0% 10.5% 8.0% 8.0% $33.99 $39.30 $47.94 10.0% $32.24 $37.23 $45.33 12.0% $30.63 $35.31 $42.92
13.0% 10.5% 8.0% 8.0% $28.18 $32.59 $39.75 10.0% $26.74 $30.87 $37.59 12.0% $25.40 $29.28 $35.59
8.5x 10.0x 11.5x 4.00% $31.31 $37.27 $43.22 4.75% $30.67 $36.52 $42.37 5.50% $30.04 $35.79 $41.53
2.75% 2.25% 1.75% 4.50% $26.54 $31.23 $38.60 5.25% $26.16 $30.76 $38.00 6.00% $25.78 $30.30 $37.41
TUDORPICKERING HOLT&CO energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT
Has / Gets Analysis | Abe Capital Investment Case Subject to Further Review & Revision
Abe Pre – Unitholder Tax | Valuation Effective Date: 3/31/2019 Abe $3.80 Annual Dist. Policy
Targeted Leverage & Coverage Policy
Stand Alone Abe Implied Unit Price XR Adjusted PF
Ulysses Implied Share Price |0.5757x XR(1)
2023E DCF Multiple 2023E DCF Multiple
2023E Distribution Yield 2023E Distribution Yield
discount rate discount rate discount rate
discount rate
Discounted Cash Flow | Unlevered FCF(2) | Discounted at WACC
6.0x 8.0x 10.0x Analysis 8.0% $30.84 $37.20 $43.56
2022E Terminal Multiple
DCF 10.0% $29.29 $35.26 $41.22 12.0% $27.86 $33.46 $39.06
8.5x 10.0x 11.5x
Levered te 4.00% $32.75 $38.94 $45.13
6.0x 8.0x 10.0x
4.75% $32.09 $38.16
$44.24
8.0% $31.45 $37.97 $44.50 Discounted Levered dcf analysis
Discounted
10.0% $29.87 $35.99 $42.10 5.50% $31.44 $37.40 $43.37 12.0% $28.40 $34.15 $39.89
Discounted Distribution Analysis
13.0% 10.5% 8.0%
2022E Distribution Yield
Analysis 8.0% $33.99 $39.30 $47.94 10.0% $32.24 $37.23 $45.33 2.75% 2.25% 1.75%
12.0% $30.63
$35.31 $42.92
4.50% $26.54 $31.23 $38.60
5.25% $26.16 $30.76 $38.00 o u
13.0% 10.5% 8.0%
8.0% $30.74 $35.72 $43.81 6.00% $25.78 $30.30 $37.41
Discounted 10.0% $29.14 $33.81 $41.39
12.0% $27.66 $32.04 $39.16
Source: Management projections and FactSet as of 2/8/2019. 23 (1) Implied XR at 0.5000x equity XR and cash consideration of $4.03 / unit. Cash consideration added to implied share
price at 0.5000x XR.
(2) Unlevered free cash flow defined as PF Ulysses EBITDA less cash taxes and capital expenditures.
TUDORPICKERING HOLT&CO energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT Accretion / (Dilution) Subject to Further Review & Revision
Pre – Unitholder Tax(1) | Abe Base Case
Abe Distribution Accretion / (Dilution)—%
At 0.5757x Exchange Ratio No Cut Cut
Assumptions
(78.1%) (77.2%) (77.8%)
∎ All-in XR applied to
calculate pro forma share count as if (80.0%) cash component is utilized to purchase secondary Ulysses shares by current Abe unitholders (81.1%) (80.4%)
(83.4%)
(81.9%) (77.2%) (77.8%) (78.1%) (80.0%)
∎ Estimates of pro forma CFPS incorporate step-up 743(b) tax 2019E 2020E
2021E 2022E depreciation and cash taxes
(81.9%) (81.1%) (80.4%)
∎
EBITDA synergies of $5 MM per year per Ulysses management (83. $3.4%) 80 $3.80 $3.80 $3.80 included in pro forma forecast 2019E $3.15 2020E $3.15 2021E $3.15 $ 2022E 3.36 $0.63 $0.69 $0.72 $0.75
($3.17) ($3.11) ($3.08) ($3.05) Status Quo Abe (No Cut): ($ $3. 2.80 52) ($ $3. 2.80 46) ($ $2. 3.43) 80 ($ $2. 3.61) 80
Status Quo Abe (Cut): (1) $3.15 $3.15 $3.15 $3.36
Pro Forma Ulysses at 0.5757x: $0.63 $0.69
$0.72 $0.75 $ Acc / (Dil) (No Cut): ($3.17) ($3.11) ($3.08) ($3.05) $ Acc / (Dil) (Cut): ($2.52) ($2.46) ($2.43) ($2.61)
Ulysses EPS Accretion / (Dilution)—%
Ulysses CFPS Accretion / (Dilution)—%
0.3%
(0.9%) (1.6%) (2.5%)
(6.6%) (7.2%) (7.0%) (8.2%)
2019E 2020E 2021E 2022E 2019E 2020E 2021E 2022E
Status Quo Ulysses: $2.90 $3.13 $3.44 $3.70 Status Quo Ulysses: $5.81 $6.70 $7.27 $7.47 Pro Forma Ulysses: $2.66 $2.90 $3.20 $3.46 Pro Forma Ulysses: $5.67 $6.72
$7.20 $7.35 $ Acc / (Dil): ($0.24) ($0.23) ($0.24) ($0.25) $ Acc / (Dil): ($0.14) $0.02 ($0.06) ($0.12)
___________________________________ 24 Source: Management
projections and FactSet as of 2/8/2019.
(1) Pre – Unitholder Tax; 0.5757x represents implied XR at 0.5000x equity XR and cash consideration of $4.03 / unit.
Tudorpickering Holt&co energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Precedents & Premiums | MLP Transactions Analysis
A B C F E D G H I J K
Announcement Equity Adj. Transaction Transaction Unaffected 1-Day Taxable Buyer Transaction Acquiror Target % Cash Date Value Acquired
Value(1,3) Value Premium Transaction Type Type
11/26/18 Dominion Energy Inc Dominion Energy Midstream Partners LP $1,262 $3,584 $3,598 0.9% 0% No C-Corp Affiliate 11/26/18 Arclight Capital TransMontaigne Partners L.P. 536 1,232 1,247 12.6% 100% NA PE Affiliate 11/8/18 Western Gas Equity Partners LP Western Gas Partners, LP 5,763 12,603 12,781 7.6% 0% No MLP
Affiliate 10/22/18 EnLink Midstream LLC EnLink Midstream Partners, L.P. 5,084 12,221 12,236 1.1% 0% Yes C-Corp Affiliate 10/18/18 Valero Energy Corporation Valero Energy Partners LP 1,976 3,734 3,788 6.0% 100%
Yes C-Corp Affiliate 10/9/18
Antero Midstream GP LP Antero Midstream Partners LP 5,908 7,548 7,548 6.5% 11% Yes C-Corp Affiliate 9/18/18 Enbridge Inc. Enbridge Energy Partners 2,742 15,541 15,562 11.6% 0% Yes C-Corp Affiliate 8/24/18 Enbridge Inc. Spectra Energy Partners, LP 3,276
26,945 27,810 19.4% 0% Yes C-Corp Affiliate 8/1/18 Energy Transfer Equity, L.P. Energy Transfer Partners 27,179 66,915 66,981 11.2% 0% No MLP Affiliate 6/19/18 Cheniere Energy Inc. Cheniere Energy Partners LP
Holdings 1,240 5,526 5,651 10.7% 0% No C-Corp Affiliate 5/17/18 Williams Companies Williams Partners, LP 10,427 56,013 57,793 16.5% 0% Yes C-Corp Affiliate 3/26/18 Tall
Grass Energy GP, LP Tallgrass Energy Partners, LP 1,686 8,083 8,361 (18.4%) 0% Yes C-Corp Affiliate 2/7/18 Terra Nitrogen GP, Inc. Terra Nitrogen Co. LP 387 1,432 1,474 3.7% 100% Yes C-Corp Affiliate 1/2/18 Archrock, Inc Archrock Partners, LP 607 2,358 2,438 23.4% 0% Yes C-Corp Affiliate 8/29/17 Zenith Energy US, LP Arc Logistics Partners LP 407 736 736
15.2% 100% Yes PE 3rd Party 10/25/16 Energy Transfer Partners, LP PennTex Midstream Partners, LP 640 789 789 43.3% 50% Yes MLP Affiliate 3/2/17 VTTI, B.V VTTI Energy Partners, LP 481 1,842 1,867 6.0% 100% Yes
C-Corp Affiliate 4/3/17 World Point Terminals, Inc. World Point Terminals, LP 159 570 594 5.8% 100% Yes C-Corp Affiliate 2/1/17 ONEOK, Inc ONEOK Partners, LP 9,309
22,380 23,654 25.8% 0% Yes C-Corp Affiliate 1/27/17 Enbridge Energy Company Midcoast Energy Partners, LP 170 1,194 1,176 (8.6%) 100% Yes C-Corp Affiliate 11/21/16 Sunoco
Logistics Partners, LP Energy Transfer Partners, LP 21,965 54,455 54,455 (0.2%) 0% No MLP Affiliate 10/24/16 American Midstream Partners LP JP Energy Partners LP 302 476 476 9.1% 0% No MLP 3rd Party 9/26/16 Transcanada Columbia Pipeline Partners 915
3,384 3,464 9.9% 100% Yes C-Corp Affiliate 5/30/16 SemGroup Corp. Rose Rock Midstream 771 2,034 2,034 0.0% 0% Yes C-Corp Affiliate 11/3/15 Targa Resources Corp. Targa
Resources Partners LP 6,672 12,138 12,229 18.4% 0% Yes C-Corp Affiliate 8/1/16 Transocean, Inc Transocean Partners 259 1,153 1,202 20.8% 0% No C-Corp Affiliate 10/26/15
Western Refining, Inc. Northern Tier Energy 1,982 5,185 5,286 11.7% 65% Yes C-Corp 3rd Party 7/13/15 MPLX LP MarkWest Energy Partners, LP 16,612 22,360 22,360 36.3% 8% No MLP 3rd Party 5/6/15 Crestwood Equity
Partners, LP Crestwood Midstream Partners 3,381 6,901 6,920 17.2% 0% No MLP Affiliate 4/6/15 Tesoro Logistics LP QEP Midstream Partners LP 394 1,104 1,145 (14.0%) 0% No MLP Affiliate 1/26/15 Energy Transfer Partners, LP Regency Energy Partners LP
11,276 18,593 18,593 13.2% 1% No MLP Affiliate 10/26/14 Williams Partners LP Access Midstream Partners LP 21,944 34,256 34,256 (5.7%) 0% No MLP Affiliate 10/13/14 Targa Resources Partners LP Atlas Pipeline Partners LP 3,866 6,002 6,002 15.0% 3% No
MLP 3rd Party 11/12/14 Enterprise Products Partners LP Oiltanking Partners LP 1,392 4,243 4,289 (0.9%) 0% No PE Affiliate 8/10/14 Kinder Morgan Inc. Kinder Morgan Energy Partners 27,351 52,351 52,566 12.0% 12% Yes
C-Corp Affiliate 8/10/14 Kinder Morgan Inc. El Paso Pipeline Partners 5,421 13,193 13,677 15.4% 12% Yes C-Corp Affiliate 7/24/14 Breitburn Energy Partners QR Energy LP
1,811 2,856 2,856 17.5% 19% No MLP 3rd Party 10/10/13 Regency Energy Partners LP PVR Partners LP 3,931 5,659 5,659 25.7% 1% No MLP 3rd Party 8/27/13 Plains All American LP PAA Natural Gas Storage LP 755 2,434 2,531 8.5% 0% No MLP Affiliate 5/6/13
Inergy Midstream LP Crestwood Midstream Partners LP 1,661 2,643 2,643 14.5% 4% No MLP 3rd Party 1/29/13 Kinder Morgan Energy Partners LP Copano Energy LLC 3,911 4,858 4,858 23.5% 0% No MLP 3rd Party 2/23/11 Enterprise Products Partners Duncan Energy
Partners LP 1,006 2,973 3,282 28.1% 0% No MLP Affiliate
Current (2/8/2019) Ulysses Abe $2,121 $5,659 $5,671 1.6% 13% Yes
C-Corp Affiliate Current Premium to Abe at Proposal Date Ulysses Abe $2,121 $5,659 5,671 2.5% 13% Yes C-Corp Affiliate (1/25/2019) Current Premium to Abe at Pre-Investor Day Ulysses Abe $2,121 $5,659 5,671 (16.5%) 13% Yes C-Corp Affiliate
Median
$1,831 $5,355 $5,469 10.3% 0% C-Corp Buying MLP Mean 4,004 11,746 12,000 9.0% 32% Median $1,686 $5,526 $5,651 9.9% 0% Affiliate Mean 5,525 13,931 14,121 9.3% 24% Median $1,976 $5,185 $5,286 11.6% 12% Taxable Transaction Mean 4,113 11,889 12,147
10.7% 40% Median $1,894 $5,021 $5,072 11.7% 0% Overall Mean 5,162 12,155 12,306 11.3% 23%
___________________________________ (12/3/2018)
Source: Company filings, press releases, presentations and FactSet for pricing data. Represents precedent MLP transactions by affiliated and third party MLPs, Public GPs and C-Corps since 2011.
Note: Considers transactions where target is an MLP. 25 (1) Based on Wall Street research.
(2) Non-adjusted transaction TEV values affiliated and non-affiliated units at offer price.
(3) Adjusted transaction TEV value affiliated units at market price and non-affiliated units at offer price.
Tudorpickering Holt&co energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Supplemental Analysis
26
Tudorpickering Holt&co energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT
Illustrative Transaction Tax Implications Subject to Further Review & Revision
At
Proposal | With and Without State Taxes SUBJECT TO TAX COUNSEL REVIEW
FY 1H 2019E Basis Unitholder Trade Group(2) Active Units % of Public Basis(3) Ordinary
Gain(3) Capital Gain(3)
Average Tax Basis Calculation(1) January 2018A Tax Basis $13.41 May 1995—Dec. 2010 12,044,321 17% $0.04 $4.97 $0.34 (+) FY 2018A Q2-Q4 Allocated Net Income Jan. 2011—Dec. 2013 10,693,961 15% $1.07 $4.20 ($0.53) 0.57 Jan. 2014—Dec. 2014 11,715,648 17% $2.01 $4.31 ($1.12)
∎ The average tax paid with and without state
(+) FY 2019E Q1-Q2 Allocated Net Income 0.95
Jan. 2015—Dec. 2015 6,423,910 9% $1.38 $2.13 ($0.67)
taxes is $9.94 & $8.60 respectively per unit for
public Abe unitholders as of 2H 2019 (-)
FY 2018A Q2, Q3, & Q4 Distributions 2.85 Jan. 2016—Dec. 2016 14,091,793 20% $3.25 $4.11 ($1.11) (-) FY 2019E Q1-Q2 Distributions 1.90 Jan. 2017—Dec. 2017 12,903,239 19% $5.03 $2.67 ($1.98) FY 1H
2019E Basis $10.18 Jan. 2018—Jan. 2018 1,182,662 2% $0.63 $0.12 ($0.22) Total 69,055,533 100% $13.41 $22.52 ($5.30)
Detailed Calculation of Ordinary and
Capital Gains
Average Unitholder Average Unitholder
UGI Share Price $53.21
UGI Share Price $53.21 Exchange Ratio 0.5000x Exchange Ratio 0.5000x Cash Consideration $4.03 Cash Consideration $4.03 Offer Price $30.64 Offer Price $30.64
Average 1H 2019E Tax Basis $10.18 Average 1H 2019E Tax Basis $10.18 Detail of Gains (per Unit) Detail of Gains (per Unit)
Average Ordinary Gain / (Loss)(4) $25.75 Average Ordinary Gain / (Loss)(4) $25.75 Average Capital Gain / (Loss)(4) (5.30) Average Capital Gain / (Loss)(4) (5.30)
Total Gain $20.46 Total Gain $20.46 Tax on Gain (per Unit) Tax on Gain (per Unit)
Federal
Ordinary Income Tax Rate 37.0% Federal Ordinary Income Tax Rate 37.0% Individual MLP Investor Deduction Rate 20.0% Individual MLP Investor Deduction Rate 20.0% Adjusted Ordinary Tax Rate 29.6% Adjusted Ordinary Tax Rate 29.6% ACA Tax 3.8% ACA Tax
3.8% Federal Tax Rate 33.4% Federal Tax Rate 33.4% Federal Capital Gains Tax Rate 23.8% Federal Capital Gains Tax Rate 23.8% Effective State Tax Rate(3) 0.0% Effective State Tax Rate(3) 5.2% Tax on Ordinary Gain $8.60 Tax on Ordinary Gain $8.60
Effective Ordinary Gain Tax Rate 33.4% Effective Ordinary Gain Tax Rate 33.4%
Tax on Capital Gain ($1.26) Tax on Capital Gain ($1.26)
Effective Capital
Gain Tax Rate 23.8% Effective Capital Gain Tax Rate 23.8%
State Tax Ordinary Income(5) $0.00 State Tax Ordinary Income(5) $1.34
Effective Ordinary Gain Tax Rate 0.0% Effective Ordinary Gain Tax Rate 5.2%
State Tax Capital
Gain(5) $0.00 State Tax Capital Gain(5) ($0.27)
Effective Capital Gains Tax Rate 0.0% Effective Capital Gains Tax Rate 5.2%
Total Tax on Gain(6) $8.60 Total Tax on Gain(6) $9.94
___________________________________
Total Effective Tax Rate 33.4% Total Effective Tax Rate 38.6%
Source: Company Management, FactSet as of 2/8/2019 and Wall Street research. (1) Provided by
management.
(2) Trade group and active unitholder data as of January 31, 2018.
(3) Weighted average by active unit as a percent of total outstanding active units. 27 (4) Capital and Ordinary gains as of Jan. 2018; incremental ordinary gains due to rolled
forward basis added to ordinary gains.
(5) Per discussions with management, state tax rate determined by using a weighted average of 50 state income tax rates and
median federal taxable income brackets for married and single filers. (6) Taxes Payable on Ordinary gain not offset by Capital losses.
Tudorpickering
Holt&co energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Net Tax Exchange Ratio Calculation Detail
SUBJECT TO TAX COUNSEL REVIEW
A B C D E F G H I
Secondary Equity Equity
Gross Cash Cash Net Cash Shares Net After-Component (1) All-In XR Taxes Payable Component Consideration Component XR Consideration
Purchased / Tax XR
XR XR (2) (Sold)
At proposal $4.03 0.5000x 0.0757x 0.5757x
($9.94) ($5.91) 0.5000x (0.1110x) 0.3890x
_____________________________________ 28 Source: FactSet as of 2/8/2019.
(1) Based on Ulysses spot price.
Tudorpickering Holt&co energy investment & merchant
banking
PRELIMINARY CONFIDENTIAL DRAFT SQ Abe After Tax Cash Flow Subject to Further Review & Revision
10.5% Terminal Yield Value | Abe $3.80 Annual Dist. Policy
SUBJECT TO TAX
COUNSEL REVIEW
2H 2019E 2020E 2021E 2022E 2023E
BT LP Distribution Per Unit
$1.90 $3.80 $3.80 $3.80 $3.80 AT LP Distribution Per Unit $1.87 $3.74 $3.74 $3.74 $3.74 Discount Factor 0.976 0.909 0.826 0.751 0.683 PV of LP Dist. per Unit $1.83 $3.40 $3.09 $2.81 $2.56
Disc. LP Dist. Total $13.69 Terminal Yield 10.5% Implied Terminal Future Value per Unit $36.19
Average Purchase Price $40.08 Existing RoC ($29.90)
Beginning Tax Basis
$10.18
2H 2019E 2020E 2021E 2022E 2023E
Beg. Avg. Tax Basis / Unit $10.18
$9.47 $8.18 $6.95 $5.80 Less: Distributions / Unit (1.90) (3.80) (3.80) (3.80) (3.80) Plus: Net Income Allocated 1.20 2.50 2.57 2.65 2.72
Avg. EOY Basis / Unit
$9.47 $8.18 $6.95 $5.80 $4.71
Implied Terminal Value per Unit $36.19 Less: Basis at EOY 2023E ($4.71)
Gain Subject to Tax $31.48 Capital Gain $1.72 Ordinary Gain $29.75
Total Gain $31.48
Total Tax on Gain per Unit
Tax on Ordinary Gain - 33.4% $9.94 Tax on Capital
Gain - 23.8% 0.41 State Tax on Ordinary Income - 5.2% 1.54 State Tax on Capital Gain - 5.2% 0.09
Total Tax on Gain $11.98
Total Effective Tax Rate 38.1%
After-Tax Future Value
per Unit $24.21
Terminal Disc. Factor 0.651
Implied Present Value per Unit at
11% Terminal Yield $29.46
Source: Management projections and FactSet as of 2/8/2019. 29 Note: Discounted at midpoint discount rate of 10%.
(1) Inclusive of Federal & State capital gains taxes.
Tudorpickering Holt&co
energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT SQ Abe After Tax Cash Flow Subject to Further Review & Revision
10.5% Terminal Yield Value | Targeted Leverage & Coverage Policy
SUBJECT TO TAX COUNSEL REVIEW
2H 2019E 2020E 2021E 2022E 2023E
BT LP Distribution Per Unit $1.58 $3.15 $3.15 $3.36 $3.36 AT LP Distribution Per Unit $1.55 $3.09 $3.09 $3.30 $3.30 Discount Factor 0.976 0.909 0.826 0.751 0.683 PV of LP Dist. per
Unit $1.51 $2.81 $2.55 $2.48 $2.25
Disc. LP Dist. Total $11.61 Terminal Yield 10.5% Implied Terminal Future Value per Unit $31.96
Average Purchase Price $40.08 Existing RoC ($29.90)
Beginning Tax Basis $10.18
2H 2019E 2020E 2021E 2022E 2023E
Beg. Avg. Tax Basis / Unit $10.18 $9.93 $9.61 $9.43 $9.13
Less: Distributions / Unit (1.58) (3.15) (3.15) (3.36) (3.36) Plus: Net Income Allocated 1.33 2.83 2.97 3.05 3.16
Avg. EOY Basis / Unit $9.93 $9.61 $9.43 $9.13
$8.94
Implied Terminal Value per Unit $31.96 Less: Basis at EOY 2023E ($8.94)
Gain Subject to Tax $23.03 Capital Gain ($6.73) Ordinary Gain $29.75
Total
Gain $29.75
Total Tax on Gain per Unit
Tax on Ordinary Gain - 33.4% $9.94 Tax
on Capital Gain - 23.8% 0.00 State Tax on Ordinary Income - 5.2% 1.54 State Tax on Capital Gain - 5.2% 0.00
Total Tax on Gain $11.48
Total Effective Tax Rate 38.6%
After-Tax Future Value
per Unit $20.48
Terminal Disc. Factor 0.651
Implied Present Value per Unit at
11% Terminal Yield $24.95
Source: Management projections and FactSet as of 2/8/2019. 30 Note: Discounted at midpoint discount rate of 10%.
(1) Inclusive of Federal & State capital gains taxes.
Tudorpickering Holt&co
energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT PF Ulysses After Tax Cash Flow Subject to Further Review & Revision
21.0x Terminal P/E Value
At 0.3890x Exchange Ratio SUBJECT TO TAX COUNSEL
REVIEW
2H 2019E 2020E 2021E 2022E Terminal Tax Basis at 1H 2019E $10.18 Stepped Up Basis Upon Close $30.64
PF Ulysses Earnings per Share $3.46 • Abe current price of
$30.14 as of
XR Adj. PF Ulysses Earnings per Share $1.34
PF Ulysses BT Dist. per Share $0.55 $1.20 $1.25
$1.30 2/8/2019
• Cash consideration
XR Adj. PF Ulysses BT Dist. per
Share $0.21 $0.47 $0.48 $0.50 used to pay part of
% RoC 0% 0% 0% 0% taxes for an
% QD 100% 100% 100% 100% average public Abe
unitholder;
Return of Capital $0.00 $0.00 $0.00 $0.00 additional cash Qualified Dividends ($0.05) ($0.11) ($0.12) ($0.12) made available by Project Tax Liability ($0.05) ($0.11) ($0.12)
($0.12) Ulysses secondary
shares
XR Adj. PF Ulysses AT Dist. per Share $0.16
$0.35 $0.37 $0.38
Terminal P/E 21.0x Sale at 9/30/22—Terminal FV per XR Adj. PF Ulysses Share $28.23 Less: Basis on Conversion ($30.64) Plus: Dividends
Treated as Return of Capital $0.00 Gain on Sale Tax Rate(1) ($2.40) Tax on Gain 29.0% $0.00
Sale at 9/30/22—Terminal FV per XR Adj. PF Ulysses Share $28.23
Less: Taxes on Gain $0.00 Net Proceeds $28.23
Total Net Cash Flow $0.16 $0.35 $0.37 $0.38 $28.23 Total Cash In Flow $0.21 $0.47 $0.48 $0.50 $28.23 Total Cash Out
Flow—Tax on
($0.05) ($0.11) ($0.12) ($0.12) $0.00 Dividends Discount Factor 0.987 0.950 0.903 0.858 0.836 Implied Present Value per Share $0.16 $0.34 $0.33
$0.33 $23.60
XR Adj. PF Ulysses Implied Present Value per Share $24.76
Source: Management projections and FactSet as of 2/8/2019.
Note: Discounted
at midpoint discount rate of 5.25%. 31 Note: QD / RoC split is per management guidance.
(1) Inclusive of Federal & State capital gains taxes.
Tudorpickering Holt&co energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT Summary of Material Changes Subject to Further Review & Revision
Updates since 2/12/2019 Materials
∎ Adjusted terminal distributable
cash flow multiple range to 6.0x – 10.0x for Abe Dscounted Distributable Cash Flow analysis∎ Adjusted terminal yield range to 8.0% – 13.0% for Abe Discounted Distribution analysis∎ Incorporated two additional corporate propane
precedent transactions∎ Adjusted to unlevered cash taxes in Ulysses Unlevered Discounted Cash Flow Analysis
32
Tudorpickering Holt&co energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Appendix
33
Tudorpickering Holt&co energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT Abe DCF Analysis Subject to Further Review & Revision
Abe Revised Budget Case | Valuation Effective Date: 3/31/2019
Discounted Levered DCF Analysis
Discounted Distribution Analysis
Supplemental Calculation Detail | $3.80 Annual Dist. Policy Supplemental Calculation Detail | $3.80 Annual Dist. Policy
2H 2019E 2020E 2021E 2022E 2023E 2H 2019E 2020E 2021E 2022E 2023E
LP DCF per
Unit $1.88 $3.82 $3.88 $3.92 $3.94 LP Distribution Per Unit $1.90 $3.80 $3.80 $3.80 $3.80 Discount Factor 0.976 0.909 0.826 0.751 Discount Factor 0.976 0.909 0.826 0.751 PV of LP DCF per Unit $1.84 $3.47 $3.21 $2.94 PV of LP Dist. per Unit $1.86
$3.45 $3.14 $2.85 Disc. LP DCF Total $11.46 Disc. LP Dist. Total $11.31 Terminal Mulitple 8.0x Terminal Yield 10.5% Terminal Disc. Factor 0.716 Terminal Disc. Factor 0.716 Implied Terminal Value per Unit $22.59 Implied Terminal PV per Unit $25.93
Implied Present Value per Unit $34.05 Implied Equity Value per Unit $37.23
LP
DCF / LP Dist. Coverage 0.99x 1.00x 1.02x 1.03x 1.04x LP DCF / LP Dist. Coverage 0.99x 1.00x 1.02x 1.03x 1.04x Total Debt / EBITDA 4.61x 4.59x 4.61x 4.65x 4.62x Total Debt / EBITDA 4.61x 4.59x 4.61x 4.65x 4.62x
Discounted Levered DCF Analysis Discounted Distribution Analysis
Supplemental Calculation
Detail | Targeted Leverage & Coverage Policy Supplemental Calculation Detail | Targeted Leverage & Coverage Policy
2H 2019E 2020E 2021E 2022E
2023E 2H 2019E 2020E 2021E 2022E 2023E
LP DCF per Unit $1.89 $3.86 $3.96 $4.03 $4.08 LP Distribution Per Unit $1.58 $3.15 $3.15 $3.36 $3.40 Discount Factor 0.976
0.909 0.826 0.751 Discount Factor 0.976 0.909 0.826 0.751 PV of LP DCF per Unit $1.85 $3.51 $3.27 $3.03 PV of LP Dist. per Unit $1.54 $2.86 $2.60 $2.52 Disc. LP DCF Total $11.66 Disc. LP Dist. Total $9.53 Terminal Mulitple 8.0x Terminal Yield 10.5%
Terminal Disc. Factor 0.716 Terminal Disc. Factor 0.716 Implied Terminal Value per Unit $23.39 Implied Terminal PV per Unit $23.20
Implied Present Value per Unit
$35.04 Implied Equity Value per Unit $32.73
LP DCF / LP Dist. Coverage 1.20x 1.23x 1.26x 1.20x 1.20x LP DCF / LP Dist. Coverage 1.20x 1.23x 1.26x 1.20x 1.20x Total
Debt / EBITDA 4.45x 4.27x 4.11x 3.99x 3.85x Total Debt / EBITDA 4.45x 4.27x 4.11x 3.99x 3.85x
___________________________________ 34 Source: Management
projections.
Tudorpickering Holt&co energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT Abe DCF Analysis Subject to Further Review & Revision
Abe Historical Weather Case | Valuation Effective Date: 3/31/2019
Discounted Levered DCF
Analysis Discounted Distribution Analysis
Supplemental Calculation Detail | $3.80 Annual Dist. Policy Supplemental Calculation Detail | $3.80 Annual Dist. Policy
2H 2019E 2020E 2021E 2022E 2023E 2H 2019E 2020E 2021E 2022E 2023E
LP DCF per
Unit $1.88 $3.53 $3.58 $3.59 $3.58 LP Distribution Per Unit $1.90 $3.80 $3.80 $3.80 $3.80 Discount Factor 0.976 0.909 0.826 0.751 Discount Factor 0.976 0.909 0.826 0.751 PV of LP DCF per Unit $1.84 $3.21 $2.96 $2.69 PV of LP Dist. per Unit $1.86
$3.45 $3.14 $2.85 Disc. LP DCF Total $10.70 Disc. LP Dist. Total $11.31 Terminal Mulitple 8.0x Terminal Yield 10.5% Terminal Disc. Factor 0.716 Terminal Disc. Factor 0.716 Implied Terminal Value per Unit $20.53 Implied Terminal PV per Unit $25.93
Implied Present Value per Unit $31.23 Implied Equity Value per Unit $37.23
LP
DCF / LP Dist. Coverage 0.99x 0.93x 0.94x 0.94x 0.94x LP DCF / LP Dist. Coverage 0.99x 0.93x 0.94x 0.94x 0.94x Total Debt / EBITDA 4.61x 5.10x 5.29x 5.52x 5.58x Total Debt / EBITDA 4.61x 5.10x 5.29x 5.52x 5.58x
Discounted Levered DCF Analysis Discounted Distribution Analysis
Supplemental Calculation
Detail | Targeted Leverage & Coverage Policy Supplemental Calculation Detail | Targeted Leverage & Coverage Policy
2H 2019E 2020E 2021E 2022E
2023E 2H 2019E 2020E 2021E 2022E 2023E
LP DCF per Unit $1.89 $3.60 $3.67 $3.71 $3.75 LP Distribution Per Unit $1.58 $3.15 $3.15 $3.15 $3.15 Discount Factor 0.976
0.909 0.826 0.751 Discount Factor 0.976 0.909 0.826 0.751 PV of LP DCF per Unit $1.85 $3.27 $3.03 $2.79 PV of LP Dist. per Unit $1.54 $2.86 $2.60 $2.37 Disc. LP DCF Total $10.94 Disc. LP Dist. Total $9.37 Terminal Mulitple 8.0x Terminal Yield 10.5%
Terminal Disc. Factor 0.716 Terminal Disc. Factor 0.716 Implied Terminal Value per Unit $21.46 Implied Terminal PV per Unit $21.50
Implied Present Value per Unit
$32.40 Implied Equity Value per Unit $30.87
LP DCF / LP Dist. Coverage 1.20x 1.14x 1.16x 1.18x 1.19x LP DCF / LP Dist. Coverage 1.20x 1.14x 1.16x 1.18x 1.19x Total
Debt / EBITDA 4.45x 4.75x 4.75x 4.77x 4.65x Total Debt / EBITDA 4.45x 4.75x 4.75x 4.77x 4.65x
___________________________________ 35 Source: Management
projections.
Tudorpickering Holt&co energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT Abe DCF Analysis Subject to Further Review & Revision
Abe Capital Investment Case | Valuation Effective Date: 3/31/2019
Discounted Levered DCF
Analysis Discounted Distribution Analysis
Supplemental Calculation Detail | $3.80 Annual Dist. Policy Supplemental Calculation Detail | $3.80 Annual Dist. Policy
2H 2019E 2020E 2021E 2022E 2023E 2H 2019E 2020E 2021E 2022E 2023E
LP DCF per
Unit $1.88 $3.70 $3.87 $4.00 $4.16 LP Distribution Per Unit $1.90 $3.80 $3.80 $3.80 $3.80 Discount Factor 0.976 0.909 0.826 0.751 Discount Factor 0.976 0.909 0.826 0.751 PV of LP DCF per Unit $1.84 $3.37 $3.20 $3.01 PV of LP Dist. per Unit $1.86
$3.45 $3.14 $2.85 Disc. LP DCF Total $11.41 Disc. LP Dist. Total
$11.31 Terminal Mulitple 8.0x Terminal Yield 10.5% Terminal Disc. Factor 0.716 Terminal Disc.
Factor 0.716 Implied Terminal Value per Unit $23.85 Implied Terminal PV per Unit $25.93
Implied Present Value per Unit $35.26 Implied Equity Value per Unit $37.23
LP DCF / LP Dist. Coverage 0.99x 0.97x 1.02x 1.05x 1.10x LP DCF / LP Dist. Coverage 0.99x 0.97x 1.02x 1.05x 1.10x Total Debt / EBITDA 4.61x 4.73x 4.63x 4.48x 4.26x
Total Debt / EBITDA 4.61x 4.73x 4.63x 4.48x 4.26x
Discounted Levered DCF Analysis Discounted Distribution Analysis
Supplemental Calculation Detail | Targeted Leverage & Coverage Policy Supplemental Calculation Detail | Targeted Leverage & Coverage Policy
2H 2019E 2020E 2021E 2022E 2023E 2H 2019E 2020E 2021E 2022E 2023E
LP DCF per Unit $1.88 $3.72
$3.91 $4.08 $4.27 LP Distribution Per Unit $1.57 $3.14 $3.14 $3.40 $3.56 Discount Factor 0.976 0.909 0.826 0.751 Discount Factor 0.976 0.909 0.826 0.751 PV of LP DCF per Unit $1.84 $3.38 $3.23 $3.06 PV of LP Dist. per Unit $1.53 $2.85 $2.59 $2.55
Disc. LP DCF Total $11.52 Disc. LP Dist. Total $9.53 Terminal Mulitple 8.0x Terminal Yield 10.5% Terminal Disc. Factor 0.716 Terminal Disc. Factor 0.716 Implied Terminal Value per Unit $24.47 Implied Terminal PV per Unit $24.27
Implied Present Value per Unit $35.99 Implied Equity Value per Unit $33.81
LP DCF / LP Dist.
Coverage 1.20x 1.18x 1.25x 1.20x 1.20x LP DCF / LP Dist. Coverage 1.20x 1.18x 1.25x 1.20x 1.20x Total Debt / EBITDA 4.61x 4.57x 4.31x 3.99x 3.68x Total Debt / EBITDA 4.61x 4.57x 4.31x 3.99x 3.68x
___________________________________ 36 Source: Management projections.
Tudorpickering
Holt&co energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Cost of Capital
37
Tudorpickering Holt&co energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT SQ Abe Cost of Equity Analysis Subject to Further Review & Revision
Comparable Public Company Yield-Based Cost of Equity
Abe Cost of Equity Cost
of Equity
Barra Beta Low High Sensitized Peer Total Return Low High
(2)
Raw Beta 0.68 0.92
(3)
Spot Risk-Free Rate 2.9% 2.9%
(4)
Equity Risk Premium 6.0% 6.0%
Cost of Equity 7.0% 8.5% Cost of Equity 14.1% 15.1%
A B C D E F
Expected Total Return
Expected 2019E—2022E Long-Term Economic
Company Distribution CAGR Growth Estimate
Expected Growth(1) Current Yield Implied Total Return
Buckeye Partners LP 4.5% 4.0% 4.1% 9.7% 13.8% GasLog Partners LP 4.5% 4.0% 4.1% 9.6% 13.7% Genesis Energy LP
4.6% 4.0% 4.1% 11.0% 15.1% Global Partners LP 0.0% 4.0% 3.4% 10.0% 13.4% MLPs Golar LNG Partners LP 0.1% 4.0% 3.4% 12.4% 15.8% Holly Energy Partners LP 0.4% 4.0% 3.5% 9.3% 12.8% KNOT Offshore Partners LP 0.0% 4.0% 3.4% 11.2% 14.6% Growth Martin
Midstream Partners LP 0.0% 4.0% 3.4% 16.1% 19.5% NGL Energy Partners LP 2.7% 4.0% 3.8% 14.4% 18.2% Low NuStar Energy LP 0.0% 4.0% 3.4% 9.7% 13.1% PBF Logistics LP 2.4% 4.0% 3.8% 9.1% 12.9% Summit Midstream Partners LP 0.0% 4.0% 3.4% 18.3% 21.7%
Sunoco LP 0.0% 4.0% 3.4% 11.4% 14.8% TC PipeLines LP 0.0% 4.0% 3.4% 8.5% 11.9% USA Compression Partners LP 0.0% 4.0% 3.4% 14.7% 18.1% NA NA NA NA
Ferrellgas
Partners LP NA
Dist. Suburban Propane Partners LP 5.1% 4.0% 4.2% 11.0% 15.1% Propane Superior Plus Corporation 0.0% 4.0% 3.4% 6.6% 10.0%
Median 0.0% 4.0% 3.4% 11.0% 14.6% Mean 1.4% 4.0% 3.6% 11.3% 15.0%
______________________________________________ Source: Bloomberg, Duff & Phelps, FactSet, Federal Reserve, Company filings as of 2/8/2019.
(1) Weights Expected Current – 2020E distribution growth estimates 15% and long-term economic growth estimate by 85% to arrive at a long-term distribution growth estimate.
(2) Barra beta as of 12/31/2018. Illustrative low and high range reflects a -/+ 15% range around Barra beta.
(3) 20-year treasury bond yield as of 1/29/2019. 38 (4) Duff & Phelps historical arithmetic premium.
(5) 2021E dividend from May 8th, 2018 RBC equity research report.
Tudorpickering Holt&co
energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Ulysses Cost of Capital Analysis
Status Quo Pro Forma Cost of Equity Cost of Equity
Barra Beta Low High Barra Beta Low High Raw Beta (3) 0.30 0.41 Raw Beta (3) 0.30 0.41
(4) (4)
Spot Risk-Free Rate 2.9% 2.9% Spot Risk-Free Rate 2.9% 2.9%
Equity Risk Premium(5) 6.0% 6.0% Equity Risk Premium(5) 6.0% 6.0%
Cost of Equity 4.7% 5.4%
Cost of Equity 4.7% 5.4%
Cost of Capital Cost of Capital
Barra Beta | SQ
Capital Structure Low High Barra Beta | PF Capital Structure Low High
Cost of Equity 4.7% 5.4% Cost of Equity 4.7% 5.4% Cost of Debt(1) 2.7% 4.2% Cost of Debt(2)
3.5% 5.0%
Market Value of Equity $9,459 $9,459 Market Value of Equity $13,187 $13,187 Total Debt $2,756 $2,756 Total Debt $4,905 $4,905
Cost of Capital 4.3% 5.1% Cost of Capital 4.2% 5.0%
Cost of Capital Cost of Capital
Barra Beta | Optimal Capital Structure(6) Low High Barra Beta | Optimal Capital Structure(6) Low High
Cost of Equity 4.7% 5.4% Cost of Equity 4.7% 5.4%
(1) (2)
Cost of Debt 2.7% 4.2% Cost of Debt 3.5% 5.0%
Market Value of Equity $9,459 $9,459 Market
Value of Equity $13,187 $13,187 Total Debt $2,542 $2,542 Total Debt $3,966 $3,966
Cost of Capital 4.3% 5.1% Cost of Capital 4.2% 5.1%
Source: Bloomberg, Duff & Phelps, FactSet, Federal Reserve, Company filings as of 2/8/2019.
Note: In SQ, debt held at Abe is proportionally consolidated based on LP ownership in the MLP. In PF, debt held at Abe is assumed to be fully consolidated and the cash
consideration of $4.03 for each Abe unit is funded using the Ulysses revolver at a 2.275% interest rate. Equity - Based on a 0.500x XR of Ulysses shares for each Abe unit.
(1) Illustrative low and high range reflects a -/+ 100 bps range around after tax current 4.55% cost of debt at Ulysses. Ulysses cost of debt calculated using weighted average 7-10 year YTW on the outstanding face value of debt held at Ulysses. (2) Illustrative low and high range reflects a -/+ 100 bps range around after tax current 5.56% cost of debt at Ulysses. Ulysses cost of debt
calculated using weighted average 7-10 year YTW on the outstanding face value of fully consolidated Ulysses debt.
(3) Barra
beta for Ulysses as of 12/31/2018. Illustrative low and high range reflects a -/+ 15% range around Barra beta. 39 (4) 20-year treasury bond yield as of 1/29/2019.
(5) Duff & Phelps historical arithmetic premium.
(6) Optimal Capital Structure based
on Total Debt/2019E EBITDA Ratio of 3.00x.
Tudorpickering Holt&co energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Disclosure Statement
Tudor, Pickering, Holt & Co. does not provide accounting, tax or
legal advice. This presentation does not constitute a tax opinion and cannot be used by any taxpayer for the purpose of avoiding tax penalties. We (i) make no conclusion on the valuation or About The Firm pricing for tax purposes or the effects
of federal income tax laws on any party and (ii) have assumed that the party’s intended tax treatment will be respected. Each person should seek legal, regulatory, accounting and tax advice based on his, her or its Tudor, Pickering,
Holt & Co. is an integrated energy investment and merchant particular circumstances from independent advisors regarding the evaluation and bank, providing high quality advice and services to institutional and corporate impact of any
transactions or matters described herein. clients. Through the company’s two broker-dealer units, Tudor, Pickering, Holt & Co. Securities, Inc. (TPHCSI) and Tudor Pickering Holt & Co Advisors LP (TPHCA), The information
contained herein is confidential (except for information relating to members FINRA, together with affiliates in the United Kingdom and Canada, the United States tax issues) and may not be reproduced in whole or in part except as set company offers
securities and investment banking services to the energy forth in a written agreement between the Audit Committee of the Board of Directors community. Perella Weinberg Partners Capital Management LP is an SEC of AmeriGas Propane, Inc. and Tudor,
Pickering, Holt & Co. registered investment adviser that delivers a suite of energy investment strategies. Tudor, Pickering, Holt & Co. assumes no responsibility for independent verification of third-party information and has
relied on such information being complete and The firm, headquartered in Houston, Texas, has approximately 170 employees accurate in all material respects. To the extent such information includes estimates and offices in Calgary, Canada; Denver,
Colorado; New York, New York; and and forecasts of future financial performance (including estimates of potential cost London, England. savings and synergies) prepared by, reviewed or discussed with the managements of your company and/ or other
potential transaction participants or obtained from public
Contact Us sources, we have assumed that such estimates and forecasts have been reasonably
Houston (Research, Sales and Trading): 713-333-2960 prepared on bases reflecting the best currently
available estimates and judgments of Houston (Investment Banking): 713-333-7100 such managements (or, with respect to estimates and forecasts obtained from public
Houston (Asset Management): 713-337-3999 sources, represent reasonable estimates). These materials were designed for use by Denver (Sales): 303-300-1900 specific persons familiar with the business and the affairs of your company and Tudor, Denver (Investment Banking): 303-300-1900 Pickering, Holt & Co. materials.
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212-610-1600 Under no circumstances is this presentation to be used or considered as an offer to London: +011 44(0) 20 7268 2800 sell or a solicitation of any offer to
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accounting, or regulatory advisers how such particular trade(s) affect you. This brief statement does not disclose all of the risks www.TPHco.com and other significant aspects of
entering into any particular transaction.
Copyright 2019 — Tudor, Pickering, Holt & Co. Tudor, Pickering, Holt & Co. operates in the United
Kingdom under the trading name Perella Weinberg Partners UK LLP (authorized and regulated by the Financial Conduct Authority), and in Canada through its affiliate, Tudor, Pickering, Holt & Co. Securities
– Canada, ULC, located in Calgary, Alberta.
40
Tudorpickering Holt&co energy investment & merchant banking
Exhibit (c)(11)
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Project Rushmore Presentation Materials to UGI
February 19th, 2019
NEGOTIATING DECK
Materials contain selected analyses, portions of analyses and associated
commentary to consider utilizing in negotiations with UGI and advocating for increased value for APU unitholders. Factors that may be important to the
Committee’s overall consideration of a transaction may not be included.
TUDORPICKERING HOLT & CO ENERGY INVESTMENT & MERCHANT BANKING
PRELIMINARY CONFIDENTIAL DRAFT
UGI Proposal Takes Advantage of Dislocation Subject to Further Review & Revision Following Investor Day Comments
$60 $55 $50
$45
12/4/2018
$40 Investor Day
APU Unit Price
Dec. 3, 2019 $36.67 6-Month Avg. $34.59
$35 1-Year Avg. $38.13 2-Year Avg. $41.62
Current Proposal Implied Unit Price: $30.75
$30 $29.75
Indexed Price Performance Since Dec 3rd
$25 APU (19%) 1/25/2019 UGI
Suburban (3%)
Alerian (5%) Proposal $20
Feb-17 May-17 Aug-17
Nov-17 Feb-18 May-18 Aug-18 Nov-18 Feb-19
2
Source: FactSet as of 2/15/2019.
TUDORPICKERING HOLT & CO ENERGY INVESTMENT & MERCHANT BANKING
PRELIMINARY CONFIDENTIAL DRAFT Proposed Transaction is at Discount Subject to Further Review &
Revision
Precedents & Premiums | MLP Transactions Analysis
A B C D E
F G I
Announcement Equity Adj. Transaction 1-Day Unaffected 1-Day Taxable Acquiror
Target Date Value Acquired Value(1,2) Premium Premium Transaction 11/26/18 Dominion Energy Inc Dominion Energy Midstream Partners LP $1,262 $3,584 0.9% 0.9% No 11/26/18 Arclight Capital TransMontaigne Partners L.P. 536 1,232 12.6% 13.5% NA
11/8/18 Western Gas Equity Partners LP Western Gas Partners, LP 5,763 12,603 7.6% 7.6% No 10/22/18 EnLink Midstream LLC EnLink Midstream Partners, L.P. 5,084
12,221 1.1% 1.1% Yes 10/18/18 Valero Energy Corporation Valero Energy Partners LP 1,976 3,734 6.0% 6.0% Yes 10/9/18 Antero Midstream GP LP Antero Midstream Partners LP 5,908 7,548 6.5% 18.6% Yes 9/18/18 Enbridge Inc. Enbridge Energy Partners 2,742
15,541 2.1% 11.6% Yes 8/24/18 Enbridge Inc. Spectra Energy Partners, LP 3,276 26,945 5.7% 19.4% Yes 8/1/18 Energy Transfer Equity, L.P. Energy Transfer Partners 27,179 66,915 11.2% 11.2% No 6/4/18 OCI NV OCI Partners LP 89 1,271 15.0% 15.0% No
6/19/18 Cheniere Energy Inc. Cheniere Energy Partners LP Holdings 1,240 5,526 2.2% 10.7% No 5/17/18 Williams Companies Williams Partners, LP 10,427 56,013 6.4% 16.5% Yes 3/26/18 Tall Grass Energy GP, LP Tallgrass Energy Partners, LP 1,686 8,083 0.6%
(18.4%) Yes 2/7/18 Terra Nitrogen GP, Inc. Terra Nitrogen Co. LP 387 1,432 3.7% 3.7% Yes 1/2/18 Archrock, Inc Archrock Partners, LP 607 2,358 23.4% 23.4% Yes 8/29/17 Zenith Energy US, LP Arc Logistics Partners LP 407 736 15.2% 15.2% Yes 10/25/16
Energy Transfer Partners, LP PennTex Midstream Partners, LP 640 789 43.3% 43.3% Yes 3/2/17 VTTI, B.V VTTI Energy Partners, LP 481 1,842 6.0% 6.0% Yes 4/3/17 World Point Terminals, Inc. World Point Terminals, LP 159 570 5.8% 5.8% Yes 2/1/17 ONEOK,
Inc ONEOK Partners, LP 9,309 22,380 25.8% 25.8% Yes 1/27/17 Enbridge Energy Company Midcoast Energy Partners, LP 170 1,194 (8.6%) (8.6%) Yes 11/21/16 Sunoco Logistics Partners, LP Energy Transfer Partners, LP 21,965 54,455 (0.2%) (0.2%) No 10/24/16
American Midstream Partners LP JP Energy Partners LP 302 476 9.1% 9.1% No 9/26/16 Transcanada Columbia Pipeline Partners 915 3,384 11.1% 9.9% Yes 5/30/16 SemGroup Corp. Rose Rock Midstream 771 2,034 0.0% 0.0% Yes 11/3/15 Targa Resources Corp. Targa
Resources Partners LP 6,672 12,138 18.4% 18.4% Yes 8/1/16 Transocean, Inc Transocean Partners 259 1,153 20.8% 20.8% No 10/26/15 Western Refining, Inc. Northern Tier Energy 1,982 5,185 11.7% 11.7% Yes 7/13/15 MPLX LP MarkWest Energy Partners, LP
16,612 22,360 36.3% 36.3% No 5/6/15 Crestwood Equity Partners, LP Crestwood Midstream Partners 3,381 6,901 17.2% 17.2% No 4/6/15 Tesoro Logistics LP QEP Midstream Partners LP 394 1,104 8.6% (14.0%) No 1/26/15 Energy Transfer Partners, LP Regency
Energy Partners LP 11,276 18,593 13.2% 13.2% No 10/26/14 Williams Partners LP Access Midstream Partners LP 21,944 34,256 (0.2%) (5.7%) No 10/13/14 Targa Resources Partners LP Atlas Pipeline Partners LP 3,866 6,002 15.0% 15.0% No 11/12/14 Enterprise
Products Partners LP Oiltanking Partners LP 1,392 4,243 1.7% (0.9%) No 8/10/14 Kinder Morgan Inc. Kinder Morgan Energy Partners 27,351 52,351 12.0% 12.0% Yes 8/10/14 Kinder Morgan Inc. El Paso Pipeline Partners 5,421 13,193 15.4% 15.4% Yes 7/24/14
Breitburn Energy Partners QR Energy LP 1,811 2,856 17.5% 17.5% No 10/10/13 Regency Energy Partners LP PVR Partners LP 3,931 5,659 25.7% 25.7% No 8/27/13 Plains All American LP PAA Natural Gas Storage LP 755 2,434 8.5% 8.5% No 5/6/13 Inergy Midstream
LP Crestwood Midstream Partners LP 1,661 2,643 14.5% 14.5% No 1/29/13 Kinder Morgan Energy Partners LP Copano Energy LLC 3,911 4,858 23.5% 23.5% No 2/23/11 Enterprise Products Partners Duncan Energy Partners LP 1,006 2,973 28.1% 28.1% No
Median $1,811 $4,858 11.1% 12.0% Mean 5,044 11,902 11.6% 11.7%
(3)
Current (2/15/2019) UGI Corp. AmeriGas Partners L.P. $2,154 $5,723 3.4% (16.1%) Yes
Source:
Company filings, press releases, presentations and FactSet for pricing data. Represents precedent MLP transactions by affiliated and third party MLPs, Public GPs and C-Corps since 2011.
Note: Considers transactions where target is an MLP. 3 (1) Based on Wall Street research.
(2)
Adjusted transaction TEV values affiliated units at market price and non-affiliated units at offer price. (3) Unaffected premium calculated on Abe pre-investor day
closing price (12/3/2019).
TUDORPICKERING HOLT & CO ENERGY INVESTMENT & MERCHANT BANKING
PRELIMINARY CONFIDENTIAL DRAFT
APU Discounted DCF & Distribution Analysis Subject to Further Review & Revision
Valuation Effective Date: 3/31/2019
APU Forward Yield History(1)
14% 12/4/2018 Investor Day
13% 12% 11%
10% Average: 8.9%
9% 8% 7%
6%
Feb-16
May-16 Aug-16 Nov-16 Feb-17 May-17 Aug-17 Nov-17 Feb-18 May-18 Aug-18 Nov-18 Feb-19
Discounted Distribution Analysis(2) Discounted Distribution Analysis(2)
APU LP Distributions | $3.80 Distribution Policy APU LP Distributions | Targeted Leverage & Coverage Policy
2023E Distribution Yield 2023E Distribution Yield
Discount Rate Discount Rate
12.0% 11.0% 10.0% 10.0% 9.0% 8.0%
7.00% $36.83 $39.10 $41.83 7.00% $36.82 $39.80 $43.53
7.75% $36.09 $38.31 $40.97 7.75% $36.06 $38.97 $42.60 8.50% $35.37 $37.53 $40.13 8.50% $35.31 $38.15 $41.70
Source: Management projections and Factset as of 2/15/2019. 4 (1) Forward yield utilizes weighted average of current fiscal year distributions per share and next fiscal year
distributions per share (weighted by year fraction).
(2) 7.0-8.5% cost of equity range based on Barra Betas.
TUDORPICKERING HOLT & CO ENERGY INVESTMENT & MERCHANT BANKING
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Proposed Transaction Has Burdensome Tax Implications
SUBJECT TO TAX COUNSEL REVIEW
Average Tax Basis Calculation(1)
∎ The average tax paid with state taxes is $5.78 per
unit for public APU unitholders as of 2H 2019
Detailed Calculation of Ordinary and Capital Gains
Unitholder Trade Group(2) Active Units % of Public Basis(3) Ordinary Gain(3) Capital Gain(3) Average Unitholder - FY 1H 2019E
May 1995 - Dec. 2010 12,044,321 17% $0.04 $28.47 $2.05 UGI Share Price $53.44 Jan. 2011 - Dec. 2013 10,693,961 15% $1.07 $27.14 ($3.29) Exchange Ratio 0.5000x Cash Consideration
$4.03
Jan. 2014 - Dec. 2014 11,715,648 17% $2.01 $25.43 ($6.51)
Jan. 2015 -
Dec. 2015 6,423,910 9% $1.38 $22.94 ($7.05) Offer Price $30.75
Average 1H 2019E Tax Basis $10.18
Jan. 2016 - Dec. 2016 14,091,793 20% $3.25 $20.16 ($5.33)
Detail of Gains (per Unit)
Jan. 2017 - Dec. 2017 12,903,239 19% $5.03 $14.29 ($10.48) (4)
Average
Ordinary Gain / (Loss) $25.75
Jan. 2018 - Jan. 2018 1,182,662 2% $0.63 $7.09 ($12.97) Average Capital Gain / (Loss)(4) (5.18) Total / Active Unit Average
69,055,533 100% $13.41 $22.52 ($5.18) Total Gain $20.57
Average Assumed Passive Activity Loss (2) ($11.23)
Tax on Gain (per Unit)
Federal Ordinary Income Tax Rate 37.0% January 2018A Tax Basis $13.41
Individual MLP Investor Deduction Rate 20.0% Adjusted Ordinary Tax Rate 29.6%
FY 1H 2019E Basis
(+) FY 2018A Q2-Q4 Allocated Net Income 0.57 ACA Tax 3.8% (+) FY 2019E Q1-Q2 Allocated Net Income
0.95 Federal Tax Rate 33.4% Federal Capital Gains Tax Rate 23.8%
(-) FY 2018A Q2, Q3, & Q4 Distributions 2.85 (3)
Effective State Tax Rate 5.2%
(-) FY 2019E Q1-Q2
Distributions 1.90
PAL Rate 37.0% FY 1H 2019E Basis $10.18 PAL Gain Deduction ($4.16) Tax on Ordinary Gain $4.45
Effective Ordinary Gain Tax Rate 17.3%
Tax on Capital Gain ($1.23)
Effective Capital Gain Tax Rate 23.8%
State Tax Ordinary Income(5) $1.34
Effective Ordinary Gain Tax Rate 5.2%
State Tax Capital Gain(5) ($0.27)
Effective Capital Gains Tax Rate 5.2% Source: Company Management, FactSet as of 2/15/2019 and Wall Street research. Total Tax on Gain(6) $5.78
(1) Provided by management. Total Effective Tax Rate 22.5%
(2) Trade group and active
unitholder data as of January 31, 2018.
(3) Weighted average by active unit as a percent of total outstanding active units.
(4) Capital and Ordinary gains as of Jan. 2018; incremental ordinary gains due to rolled forward basis added to ordinary gains.
(5) Per discussions with management, state tax rate determined by using a weighted average of 50 state income tax rates 5 and median federal taxable income brackets for married and
single filers.
(6) Taxes Payable on Ordinary gain not offset by Capital losses.
TUDORPICKERING HOLT & CO ENERGY INVESTMENT & MERCHANT BANKING
APU Unitholders Would Suffer Substantial PRELIMINARY CONFIDENTIAL DRAFT
Subject to Further Review & Revision
Dilution to Distributions
Pre - Unitholder Tax(1) | APU Base Case - % After Unitholder Tax(2) | APU Base Case - %
At
0.5754x Exchange Ratio At 0.4672x Transaction Exchange Ratio
(3) (3)
Coverage
Target Distribution Policy Maintain Distribution Policy Coverage Target Distribution Policy Maintain Distribution Policy
(77.2%) (77.8%)
(78.1%)
(80.0%)
(80.4%) (85.2%)
(81.1%) (85.8%) (85.6%) (83.4%) (81.9%) (87.0%)
(87.7%) (87.3%) (88.2%) (89.2%)
2019E 2020E 2021E 2022E 2019E 2020E 2021E 2022E
SQ APU (No Cut): $3.80 $3.80 $3.80 $3.80 SQ APU (No Cut): $3.80 $3.80 $3.80 $3.80
SQ APU
(Cut): $3.15 $3.15 $3.15 $3.36 SQ APU (Cut): $3.15 $3.15 $3.15 $3.36 PF UGI at 0.5754x:(1) $0.63 $0.69 $0.72 $0.75 PF UGI at 0.4672x:(2) $0.63 $0.69 $0.72 $0.75
Source: Management projections and FactSet as of 2/15/2019.
(1) Pre -
Unitholder Tax; 0.5754x represents implied XR at 0.5000x equity XR and cash consideration of $4.03 / unit.
(2) After Unitholder Tax; 0.4672x represents implied XR
at 0.5000x equity XR and cash consideration of $4.03 / unit, net of $5.78 / unit average taxes on sale of APU units. PF UGI dividends are taxed at a 20% qualified dividend rate. 6 (3) FY 2019E distributions are cut to achieve 1.2x LP Distribution
coverage; distribution is held at cut level until Total Debt / EBITDA is reduced to less than or equal to 4.0x while coverage remains at least 1.2x respectively.
TUDORPICKERING HOLT & CO ENERGY INVESTMENT & MERCHANT BANKING
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Transaction Value After Tax Bill Not Seen in ~15 Years
APU Unit Price
$60.00 12/4/2018 Investor Day
$50.00
$40.00
$30.00
Proposed After-Tax Per Unit Value: $24.97
$20.00
$10.00
$0.00
Jan-03 Jan-05 Jan-07
Jan-09 Jan-11 Jan-13 Jan-15 Jan-17 Jan-19
7 Source: Factset as of 2/15/2019.
TUDORPICKERING HOLT & CO ENERGY INVESTMENT & MERCHANT BANKING
PRELIMINARY CONFIDENTIAL DRAFT
Proposal Well Below Historical Exchange Ratios Subject to Further Review & Revision
1.4000x
12/4/2018 Investor Day
1.2000x
1.0000x
0.8000x Two Year Average XR: 0.8400x
One Year Average XR: 0.7473x
0.6000x
Proposal Implied XR: 0.5754x
Exchange Ratio XR Premium All-In XR at Proposal
Current (2/15/2019) 0.5567x 0.5754x 3.4% Spot
Proposal (1/25/2019) 0.5342x 0.5720x 7.1%
0.4000x Undisturbed (12/3/18) 0.6367x 0.5700x (10.5%) 30-Day 0.5485x 0.5737x 4.6%
60-Day 0.5315x 0.5731x 7.8% Avg. 90-Day 0.5803x 0.5730x (1.3%) 180-Day 0.6738x 0.5742x (14.8%)
360-Day 0.8063x 0.5803x (28.0%)
0.2000x
Feb-17 May-17 Aug-17 Nov-17 Feb-18 May-18 Aug-18 Nov-18 Feb-19
8
Source: FactSet as of 2/15/2019.
TUDORPICKERING HOLT & CO ENERGY INVESTMENT & MERCHANT BANKING
PRELIMINARY CONFIDENTIAL DRAFT Counterproposal Framework Subject to Further Review & Revision
$41.07 = $41.07 / $54.26(1) = 0.7569x(1) All-In XR
0.5000x UGI shares per APU unit $36.67 + $13.94 cash per APU unit
Other Key Terms:
$4.40
◾ Majority of the minority vote
Undisturbed 12/3/2019 Median Premium Illustrative APU Unit Price of 12.0% Counterproposal
9
Source: FactSet and Bloomberg as of 2/15/2019.
(1) Utilizes UGI 30-day VWAP as of 2/15/2019.
TUDORPICKERING HOLT & CO ENERGY INVESTMENT & MERCHANT BANKING
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Appendix
10
TUDORPICKERING HOLT & CO ENERGY INVESTMENT & MERCHANT BANKING
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Counter Proposal Tax Implications
SUBJECT TO TAX COUNSEL REVIEW
Average Tax Basis Calculation(1)
∎ The average tax paid with state taxes is $6.97 per
unit for public APU unitholders as of 2H 2019
Detailed Calculation of Ordinary and Capital Gains
Unitholder Trade Group(2) Active Units % of Public Basis(3) Ordinary Gain(3) Capital Gain(3) Average Unitholder - FY 1H 2019E
May 1995 - Dec. 2010 12,044,321 17% $0.04 $28.47 $12.37 UGI 30-Day VWAP Share Price $54.26 Jan. 2011 - Dec. 2013 10,693,961 15% $1.07 $27.14
$7.04 Exchange Ratio 0.5000x Cash Consideration $13.94
Jan. 2014 - Dec. 2014 11,715,648 17% $2.01 $25.43 $3.81
Offer Price $41.07
Jan. 2015 - Dec. 2015 6,423,910 9% $1.38 $22.94 $3.27 Average 1H 2019E Tax
Basis $10.18 Jan. 2016 - Dec. 2016 14,091,793 20% $3.25 $20.16 $4.99
Detail of Gains (per Unit)
Jan. 2017 - Dec. 2017 12,903,239 19% $5.03 $14.29 ($0.16) Average Ordinary Gain / (Loss)(4) $25.75 Jan. 2018 - Jan. 2018 1,182,662 2% $0.63 $7.09 ($2.65) Average Capital Gain /
(Loss)(4) 5.14 Total / Active Unit Average 69,055,533 100% $13.41 $22.52 $5.14 Total Gain $30.89
Average Assumed Passive Activity Loss (2) ($11.23)
Tax on Gain (per Unit)
Federal Ordinary Income Tax Rate 37.0% Individual MLP Investor
Deduction Rate 20.0%
January 2018A Tax Basis $13.41
Adjusted Ordinary Tax
Rate 29.6%
FY 1H 2019E Basis
(+) FY 2018A
Q2-Q4 Allocated Net Income 0.57 ACA Tax 3.8% (+) FY 2019E Q1-Q2 Allocated Net Income 0.95 Federal Tax Rate 33.4% Federal Capital Gains Tax Rate 23.8%
(-) FY 2018A Q2, Q3, & Q4 Distributions 2.85 Effective State Tax Rate(3) 5.2% (-) FY 2019E Q1-Q2 Distributions 1.90 PAL Rate 37.0%
FY 1H 2019E Basis $10.18 PAL Gain Deduction ($4.16) Tax on Ordinary Gain $4.45
Effective Ordinary Gain Tax Rate 17.3%
Tax on Capital Gain $1.22
Effective Capital Gain Tax Rate 23.8%
State Tax Ordinary Income(5) $1.34
Effective Ordinary Gain Tax Rate 5.2%
State Tax Capital Gain(5) $0.27
Effective Capital Gains Tax Rate 5.2% Source: Company Management, FactSet as of 2/15/2019 and Wall Street research. Total Tax on Gain(6) $7.27
(1) Provided by management. Total Effective Tax Rate 23.5%
(2) Trade group and active
unitholder data as of January 31, 2018.
(3) Weighted average by active unit as a percent of total outstanding active units.
(4) Capital and Ordinary gains as of Jan. 2018; incremental ordinary gains due to rolled forward basis added to ordinary gains.
(5) Per discussions with management, state tax rate determined by using a weighted average of 50 state income tax rates 11 and median federal taxable income brackets for married
and single filers.
(6) Taxes Payable on Ordinary gain not offset by Capital losses.
TUDORPICKERING HOLT & CO ENERGY INVESTMENT & MERCHANT BANKING
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Net Tax Exchange Ratio Calculation Detail
SUBJECT TO TAX COUNSEL REVIEW
A B C D E F G H I
Secondary Equity Equity
Gross Cash Cash Net Cash Shares Net After-Component (1) All-In XR(1) Taxes Payable Component Consideration Component XR Consideration
Purchased / Tax XR
XR XR
(Sold)
At UGI
Proposal $4.03 0.5000x 0.0754x 0.5754x ($5.78) ($1.75) 0.5000x (0.0328x) 0.4672x
At APU
Proposal $13.94 0.5000x 0.2609x 0.7609x ($7.27) $6.67 0.5000x 0.1248x
0.6248x
12 Source: FactSet as of 2/15/2019.
(1) Based on UGI spot price.
TUDORPICKERING HOLT & CO ENERGY INVESTMENT & MERCHANT BANKING
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
TUDORPICKERING HOLT & CO ENERGY INVESTMENT & MERCHANT BANKING
About The Firm
Tudor, Pickering, Holt & Co. is an integrated energy investment and merchant bank, providing high quality advice and services to institutional and corporate
clients. Through the company’s two broker-dealer units, Tudor, Pickering, Holt & Co. Securities, Inc. (TPHCSI) and Tudor Pickering Holt & Co Advisors LP (TPHCA), members FINRA, together with affiliates in the United Kingdom and Canada,
the company offers securities and investment banking services to the energy community. Perella Weinberg Partners Capital Management LP is an SEC registered investment adviser that delivers a suite of energy investment strategies.
The firm, headquartered in Houston, Texas, has approximately 170 employees and offices in Calgary, Canada; Denver, Colorado; New York, New York; and London, England.
Contact Us
Houston (Research, Sales and Trading): 713-333-2960 Houston (Investment Banking):
713-333-7100 Houston (Asset Management): 713-337-3999 Denver (Sales): 303-300-1900 Denver (Investment Banking): 303-300-1900
New York (Investment Banking):
212-610-1660
New York (Research, Sales): 212-610-1600 London: +011 44(0) 20 7268 2800 Calgary: 403-705-7830
www.TPHco.com
Copyright 2019 — Tudor, Pickering, Holt & Co.
Disclosure Statement
Tudor, Pickering, Holt & Co. does not provide accounting, tax or
legal advice. This presentation does not constitute a tax opinion and cannot be used by any taxpayer for the purpose of avoiding tax penalties. We (i) make no conclusion on the valuation or pricing for tax purposes or the effects of federal income
tax laws on any party and (ii) have assumed that the party’s intended tax treatment will be respected. Each person should seek legal, regulatory, accounting and tax advice based on his, her or its particular circumstances from independent
advisors regarding the evaluation and impact of any transactions or matters described herein.
The information contained herein is confidential (except for
information relating to United States tax issues) and may not be reproduced in whole or in part except as set forth in a written agreement between the Audit Committee of the Board of Directors of AmeriGas Propane, Inc. and Tudor, Pickering, Holt
& Co.
Tudor, Pickering, Holt & Co. assumes no responsibility for independent verification of third-party information and has relied on such information
being complete and accurate in all material respects. To the extent such information includes estimates and forecasts of future financial performance (including estimates of potential cost savings and synergies) prepared by, reviewed or discussed
with the managements of your company and/ or other potential transaction participants or obtained from public sources, we have assumed that such estimates and forecasts have been reasonably prepared on bases reflecting the best currently available
estimates and judgments of such managements (or, with respect to estimates and forecasts obtained from public sources, represent reasonable estimates). These materials were designed for use by specific persons familiar with the business and the
affairs of your company and Tudor, Pickering, Holt & Co. materials.
Under no circumstances is this presentation to be used or considered as an offer to sell or
a solicitation of any offer to buy, any security. Prior to making any trade, you should discuss with your professional tax, accounting, or regulatory advisers how such particular trade(s) affect you. This brief statement does not disclose all of the
risks and other significant aspects of entering into any particular transaction.
Tudor, Pickering, Holt & Co. operates in the United Kingdom under the trading
name Perella Weinberg Partners UK LLP (authorized and regulated by the Financial Conduct Authority), and in Canada through its affiliate, Tudor, Pickering, Holt & Co. Securities
– Canada, ULC, located in Calgary, Alberta.
13
Exhibit (c)(12)
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Project Rushmore Supplemental Materials
February 19th, 2019
TUDORPICKERING HOLT & CO ENERGY INVESTMENT & MERCHANT BANKING
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
PV of Future Unit / Share Price Analysis
PV of Future Share Price
$47.14 $46.48 $45.88
SQ Abe $45.33
8.0% 10.5%
(Terminal Yield)
$41.86
13.0% $40.13
$38.36 $37.75 $37.23 $36.72 $36.97 (1) $36.36
PF Ulysses (XR Adj.)
23.0x 21.0x
(Terminal P/E M ultiple) $36.68 $34.86 $34.49 $33.32
$32.24 19.0x $31.48 $31.24 $30.65 $29.73 $29.75
Abe Current Price
2H 2019E 2020E 2021E 2022E
Source: Management projections and Factset as of 2/15/2019.
Note: Utilizes 10.0% cost of equity for SQ Abe and 5.25% cost of equity for PF Ulysses. 2 (1) All-in exchange ratio of
0.5754x (0.5000x + $4.03 cash) implied by Ulysses offer as of 2/15/2019. Pro forma analysis incorporates EBITDA synergies of
$5 MM per year.
Tudorpickering Holt&co energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Ulysses Payout Ratio Over Time
Propane Acquisition Natural Gas Acquisition
140% South Jersey Royal Dutch Phillips 66 AGZ Holding PPL Gas Industries Flaga GmbH Shell (LPG
Propane Co SA (80.5%) Utilities Corp (Retail nat. distribution) gas)
120%
PG Energy Shell Services (Gas PG Energy Hungary (LPG
Marketing) distribution)
100%
Shell Gas Polska
80% ati o BP (Polish R LPG out distribution)
Pa y
60% 40% 20%
0%
Jan-96 Jan-98 Jan-00
Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 Jan-16 Jan-18
3 Source: Dealogic and company filings.
Note: Payout ratios calculated as FY DPS / FY EPS.
Adjusted EPS used for FY’11 and after. FY’95 payout ratio excluded due to negative EPS.
TUDORPICKERING HOLT & CO ENERGY INVESTMENT & MERCHANT
BANKING
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
TUDORPICKERING HOLT & CO ENERGY INVESTMENT & MERCHANT BANKING
About The Firm
Tudor, Pickering, Holt & Co. is an integrated energy investment and merchant bank, providing high quality advice and services to institutional and corporate
clients. Through the company’s two broker-dealer units, Tudor, Pickering, Holt & Co. Securities, Inc. (TPHCSI) and Tudor Pickering Holt & Co Advisors LP (TPHCA), members FINRA, together with affiliates in the United Kingdom and Canada,
the company offers securities and investment banking services to the energy community. Perella Weinberg Partners Capital Management LP is an SEC registered investment adviser that delivers a suite of energy investment strategies.
The firm, headquartered in Houston, Texas, has approximately 170 employees and offices in Calgary, Canada; Denver, Colorado; New York, New York; and London, England.
Contact Us
Houston (Research, Sales and Trading): 713-333-2960 Houston (Investment Banking):
713-333-7100 Houston (Asset Management): 713-337-3999 Denver (Sales): 303-300-1900 Denver (Investment Banking): 303-300-1900
New York (Investment Banking):
212-610-1660
New York (Research, Sales): 212-610-1600 London: +011 44(0) 20 7268 2800 Calgary: 403-705-7830
www.TPHco.com
Copyright 2019 — Tudor, Pickering, Holt & Co.
Disclosure Statement
Tudor, Pickering, Holt & Co. does not provide accounting, tax or
legal advice. This presentation does not constitute a tax opinion and cannot be used by any taxpayer for the purpose of avoiding tax penalties. We (i) make no conclusion on the valuation or pricing for tax purposes or the effects of federal income
tax laws on any party and (ii) have assumed that the party’s intended tax treatment will be respected. Each person should seek legal, regulatory, accounting and tax advice based on his, her or its particular circumstances from independent
advisors regarding the evaluation and impact of any transactions or matters described herein.
The information contained herein is confidential (except for
information relating to United States tax issues) and may not be reproduced in whole or in part except as set forth in a written agreement between the Audit Committee of the Board of Directors of AmeriGas Propane, Inc. and Tudor, Pickering, Holt
& Co.
Tudor, Pickering, Holt & Co. assumes no responsibility for independent verification of third-party information and has relied on such information
being complete and accurate in all material respects. To the extent such information includes estimates and forecasts of future financial performance (including estimates of potential cost savings and synergies) prepared by, reviewed or discussed
with the managements of your company and/ or other potential transaction participants or obtained from public sources, we have assumed that such estimates and forecasts have been reasonably prepared on bases reflecting the best currently available
estimates and judgments of such managements (or, with respect to estimates and forecasts obtained from public sources, represent reasonable estimates). These materials were designed for use by specific persons familiar with the business and the
affairs of your company and Tudor, Pickering, Holt & Co. materials.
Under no circumstances is this presentation to be used or considered as an offer to sell or
a solicitation of any offer to buy, any security. Prior to making any trade, you should discuss with your professional tax, accounting, or regulatory advisers how such particular trade(s) affect you. This brief statement does not disclose all of the
risks and other significant aspects of entering into any particular transaction.
Tudor, Pickering, Holt & Co. operates in the United Kingdom under the trading
name Perella Weinberg Partners UK LLP (authorized and regulated by the Financial Conduct Authority), and in Canada through its affiliate, Tudor, Pickering, Holt & Co. Securities
– Canada, ULC, located in Calgary, Alberta. 4
Exhibit (c)(13)
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Analysis at Various Exchange Ratios
($ in millions, unless otherwise noted)
A B D E F G H I J K L M
Ulysses Counter Original Abe Original Ulysses Abe Proposal Proposal
Counter Proposal Less $2.29 Cash
(+$2.29) Proposal
Exchange Ratio
Consideration (XR) 0.5000x 0.5000x 0.5000x 0.5000x 0.5000x 0.5000x 0.5000x Stock Consideration (Ulysses Share Price x XR) $27.37 $27.37 $27.37 $27.37 $27.37 $27.37 $27.37 Cash Consideration $4.03 $6.32 $8.21 $8.99 $10.95 $11.65 $13.94 Exchange Ratio
(At Current Ulysses Sh. Price of $54.73) 0.5736x 0.6155x 0.6500x 0.6642x 0.7000x 0.7129x 0.7547x
Implied Abe Unit Price $31.40 $33.69 $35.57 $36.35 $38.31 $39.02
$41.31 Premium to Implied Abe Unit Price (Ulysses Share Price x XR + Cash) 7.4% 15.3% 21.7% 24.4% 31.1% 33.5% 41.4% Fully Diluted Abe Units Outstanding 93.8 93.8 93.8 93.8 93.8 93.8 93.8 Implied Fully-Diluted Abe Equity Value $2,944 $3,159 $3,336
$3,409 $3,593 $3,659 $3,874 Net Debt 2,846 2,846 2,846 2,846 2,846 2,846 2,846
GP Equity Value(1) 383 383 383 383 383 383 383
Non-Controlling Interest 32 32 32 32 32 32 32
Implied
Abe Enterprise Value(1) $6,205 $6,420 $6,597 $6,670 $6,854 $6,920 $7,134
Comparable Metrics
Propane Propane Abe Low-Growth Distributor Transaction Multiples: Statistic MLP Median Median(3) Median
EV / 2019E EBITDA $636 9.8x 10.1x 10.4x 10.5x 10.8x 10.9x 11.2x 9.4x 9.0x 7.5x Consensus EV / 2020E EBITDA $644 9.6x 10.0x 10.2x 10.4x 10.6x 10.7x 11.1x 9.1x 8.5x
WS Case
Abe Equity Value / 2019E DCF(2) $367 8.0x 8.6x 9.1x 9.3x 9.8x 10.0x 10.5x 7.2x 6.8x
Equity Value / 2020E DCF(2) $382 7.7x 8.3x 8.7x 8.9x 9.4x 9.6x 10.1x 7.0x 6.5x
Propane Propane Abe Low-Growth Distributor
Transaction Multiples: Statistic MLP Median Median(3) Median
EV / 2019E EBITDA $625 9.9x 10.3x 10.6x 10.7x 11.0x 11.1x 11.4x 9.4x 9.0x 7.5x Revised EV / 2020E
EBITDA $643 9.7x 10.0x 10.3x 10.4x 10.7x 10.8x 11.1x 9.1x 8.5x
Budget
Abe
Equity Value / 2019E DCF(2) $400 7.4x 7.9x 8.3x 8.5x 9.0x 9.1x 9.7x 7.2x 6.8x Equity Value / 2020E DCF(2) $410 7.2x 7.7x 8.1x 8.3x 8.8x 8.9x 9.5x 7.0x 6.5x
Source:
Company filings, and FactSet as for 2/25/2019.
(1) GP / IDR value estimated by taking current GP/IDR distributions capitalized by Abe’s current yield. 1
(2) DCF attributable to all unitholders including GP + IDR Interest.
(3)
Propane distributor Equity Value / DCF and Yield metrics exclude Ferrellgas from group median.
TUDORPICKERING HOLT & CO ENERGY INVESTMENT & MERCHANT
BANKING
Exhibit (c)(14)
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Project Rushmore Discussion Materials
February 28th, 2019
TUDORPICKERING HOLT & CO ENERGY INVESTMENT & MERCHANT BANKING
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Table of Contents
I. Situation Overview
II. Status Quo Management Projections Overview III. Abe Financial Analysis IV. Ulysses Financial Analysis V. Transaction Analysis
Appendix
Cost of Capital
2
TUDORPICKERING HOLT & CO ENERGY INVESTMENT & MERCHANT BANKING
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
I. Situation Overview
3
Tudorpickering Holt&co energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Summary Revised Proposal
∎ In revised Ulysses proposal, each Abe Common Unit held by
public to receive:
Pre Investor Day Proposal Date 2 nd Proposal Date Current Implied Offer 12/3/2018 1/25/2019 2/22/2019 2/26/2019 2/22/2019 2/26/2019
â–¡ 0.500 Ulysses shares
Consideration Spot Abe Price $36.67 $29.89 $29.60
$29.01 $33.50 $33.62
â–¡ $6.32 Cash (up from $4.03) Abe 30-Day VWAP $36.50 $26.34 $30.08 $30.06
Spot Ulysses Price $57.59 $55.95 $54.36 $54.59 -—-
(1) (1)
Spot XR 0.6367x 0.5342x 0.5445x 0.5314x 0.6163x 0.6158x
∎ Taxable transaction to Abe
unitholders
Premium to Spot 13.2% 15.9% Premium to 30-Day VWAP 11.4% 11.8%
∎ Status Quo Abe ownership:∎ Pro Forma Ulysses ownership:
Ownership Abe Public
Unitholders: ~74.7% Abe Public Unitholders: ~16.5%(2)
Ulysses: ~25.3% Existing Ulysses Shareholders: ~83.5%
∎ Transaction requires vote of majority of Abe common unitholders, but no vote of Ulysses shareholders Other Terms∎ No majority of unaffiliated approval
∎ Abe will continue to make quarterly distributions, but will not make pro rata ‘stub’ distribution at closing
Other∎ Ulysses has discussed with the special committee the likelihood of a distribution cut in the absence of a deal
Source: Company filings, Bloomberg, FactSet as of 2/26/2019. 4 (1) Implied all-in XR calculated as equity XR of 0.5x plus $6.32 cash
consideration divided by Ulysses share price.
(2) Issuance of shares equivalent to 19.7% of status quo (pre-transaction)
Ulysses outstanding shares results in ~16.5% Abe public unitholder ownership in pro forma entity.
Tudorpickering Holt&co energy investment & merchant
banking
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Historical XR and Relative Performance
Two Year Historical Exchange Ratios Relative
Performance From Pre Investor Day (12/3/18)
1.40x
Abe FGP SPH AMZ
Prior to Investor Day – Current 150%
0.70x
Proposal Implied XR: 0.6158x $50
0.60x
1.20x 140%
0.50x
Average XR: 0.5260x
0.40x 130% Dec-18 Dec-18 Jan-19 Feb-19 Feb-19
1.00x
$40
110%
0.80x/ (1%) (1%) abe Price/unit
Proposed Consideration: 0.5000x + $6.32/unit; Implied XR: 0.6158x 90%
0.60x $30 $29.01
Performance: (20.9%)
Current (2/26/2019) 0.5314x
0.6158x 15.9% 70% 0.40x Spot Proposal (2/22/2019) 0.5445x 0.6163x 13.2% Pre Investor Day (12/3/18) 0.6367x 0.6097x (4.2%) 30-Day 0.5501x 0.6157x 11.9% 60-Day 0.5229x
0.6154x 17.7% Avg. 90-Day 0.5668x 0.6146x 8.4% 180-Day 0.6623x 0.6160x (7.0%) 360-Day 0.7984x 0.6256x (21.6%)
0.20x 50% $20
Feb-17
Jun-17 Sep-17 Dec-17 Apr-18 Jul-18 Oct-18 Jan-19 Dec-18 Dec-18 Jan-19 Feb-19 Feb-19
5
_____________________________________ Source: FactSet as of 2/26/2019.
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Post Investor Day Equity Analyst Commentary broker commentary
“With the challenging macro
backdrop and leverage persistently above the Partnership’s 4.0x target, we believe the distribution at current levels is at risk… We revise our APU price target to $38 (from $42) based on our FY20e DPS of $3.80 and a target yield of 10.0%
(vs. 9.0% previously).” – 11/12/2018
No distribution cut projected in model – 11/14/18
“That said, we do believe both our FY19 adjusted EBITDA estimate (which falls within the guidance range) and FY20 estimates are obtainable, and that distributions can meet our
2020 target of $3.82.” – 11/13/18
“On an independent basis, we see no need for APU to rein in its distribution and find its valuation attractive at
present levels” – 11/30/2018 “Our FY19/FY20 distribution estimates of $3.80/$3.80 per unit yield coverage ratios of 1.04x/1.07x.” – 11/13/18 No distribution cut projected in model – 11/12/18 NA
NA
6
barclays wells fargo janney jefferies raymond james ubs j.p.morgan morningstar
_____________________________________ Source: Wall Street research.
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PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Post Investor Day Equity Analyst Commentary broker commentary likely outcome stated
“As
far as a potential APU buy-in, we believe this remains a less likely scenario given UGI’s historical focus on a 50/50 split between its gas and LPG businesses, and the fact that an APU buy-in would more heavily skew the company toward LPG. We also note that UGI’s investor base has traditionally been more heavily weighted toward utilities investors, as evidenced by the stock’s ~80$ weekly
correlation
IDR Conversion with the XLU over the past three years (vs. ~10$ correlation between UGI/AMZ; APU is ~20$ correlated with the XLU and ~70% correlated
with the AMZ), such that the valuation multiple might compress in a buy-in scenario. Lastly, a buy-in would also likely have tax consequences for legacy APU
unitholders.” – 12/4/2018
“That said, with no clarity on the outcome of the distribution or even the MLP structure (and the market’s negative
reaction to the aforementioned uncertainty), we expect the shares to trade at a higher yield until a decision on the aforementioned items is communicated.” – 12/13/2018
NA
“In terms of valuation, the units are currently yielding just over 12%, which appears
to be pricing in some level of distribution cut. That may ultimately happen; then again it may not, particularly if the company hits its guidance range for the year.” – 2/7/2019
“Given the APU attributes noted previously (its improving financial position, lack of external pressure for a cut, etc.), the fact that a vote would likely be required as
UGI’s LP ownership is only 26%, and the fact that units violently reacted to sell-side reports calling for a sharp distribution cut given the strategic review announced at the Investor Day, we believe any Committee negotiation would advocate
for a pre-Investor Day comparison of relative equity values” – 1/7/2019
Buy-In
“APU units fell >30%
in the month following its Dec. 4th Investor Day as it was bumped from the Alerian MLP Index and several analysts have called for a distribution cut; we believe the calls for a cut are misguided and have created a uniquely compelling opportunity in
APU units” – 1/7/2019
“APU has been under pressure since its analyst day in part due to a lack of resolution to its IDR structure… Further, we
continue to believe that the outcome of the IDR structure review will result in an IDR conversion to units vs. a roll up given our view that UGI will IDR Conversion want to continue to be classified as a Utility vs. propane distributor (APU and
Europe).” – 12/13/2018
NA NA NA
“We believe that a
distribution cut remains a possibility and assume a 45% reduction (vs. 55% previously) in our model…We maintain Distribution Cut our Market Perform rating as the uncertainty of what action APU will undertake will likely continue to weigh on
valuation, in our
view.” – 2/6/2019 barclays wells fargo janney jefferies raymond james ubs j.p.morgan morningstar
7
_____________________________________ Source: Wall Street research.
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PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Analysis at Various Exchange Ratios
($ in millions, unless otherwise noted)
ABDEFGHIJKLMNOP
Original Ulysses Original Abe Ulysses Revised Counter Proposal Proposal
Proposal
Exchange Ratio Consideration (XR) 0.5000x 0.5000x 0.5000x 0.5000x 0.5000x 0.5000x 0.5000x Stock Consideration (Ulysses Share Price x XR) $27.30 $27.30
$27.30 $27.30 $27.30 $27.30 $27.30 Cash Consideration $4.03 $6.32 $8.19 $8.99 $10.92 $11.65 $13.94 Exchange Ratio (At Current Ulysses Sh. Price of $54.59) 0.5738x 0.6158x 0.6500x 0.6646x 0.7000x 0.7134x 0.7554x
Implied Abe Unit Price $31.33 $33.62 $35.48 $36.28 $38.21 $38.95 $41.24 Premium to Implied Abe Unit Price (Ulysses Share Price x XR + Cash) 8.0% 15.9% 22.3% 25.1% 31.7% 34.2% 42.1%
Fully Diluted Abe Units Outstanding 93.8 93.8 93.8 93.8 93.8 93.8 93.8 Implied Fully-Diluted Abe Equity Value $2,937 $3,152 $3,327 $3,402 $3,583 $3,652 $3,867 Net Debt 2,846 2,846 2,846 2,846 2,846 2,846 2,846
GP Equity Value(1) 380 380 380 380 380 380 380
Non-Controlling Interest 32 32 32 32 32 32 32
Implied Abe Enterprise Value(1) $6,195 $6,410 $6,585 $6,660 $6,841 $6,910 $7,125
Comparable
Metrics
Propane Propane Propane Propane Abe Low-Growth Low-Growth Distributor
Distributor Transaction Transaction Multiples: Statistic MLP Median MLP Mean Median(3) Mean(3) Median Mean
EV / EBITDA
2018A $606 10.2x 10.6x 10.9x 11.0x 11.3x 11.4x 11.8x 9.7x 10.1x 9.5x 9.4x 9.6x 8.7x 2019E $636 9.7x 10.1x 10.4x 10.5x 10.8x 10.9x 11.2x 9.4x 9.7x 8.9x 8.7x 7.5x 7.7x 2020E $644
9.6x 10.0x 10.2x 10.3x 10.6x 10.7x 11.1x 9.1x 9.3x 8.5x 8.4x
Consensus P / LP DCF(2) Case
WS 2018A $348 8.4x 9.1x 9.6x 9.8x 10.3x 10.5x 11.1x 8.1x 8.5x 6.5x 6.5x 2019E $361 8.1x 8.7x 9.2x 9.4x 9.9x 10.1x 10.7x 7.1x 7.7x 6.8x 6.8x Abe 2020E $367 8.0x 8.6x 9.1x 9.3x 9.8x
9.9x 10.5x 7.0x 7.5x 6.5x 6.5x
Propane Propane Propane Propane Abe Low-Growth
Low-Growth Distributor Distributor Transaction Transaction Multiples: Statistic MLP Median MLP Mean Median(3) Mean(3) Median Mean
EV / EBITDA
2018A $606 10.2x 10.6x 10.9x 11.0x 11.3x 11.4x 11.8x 9.7x 10.1x 9.5x 9.4x 9.6x
8.7x 2019E $625 9.9x 10.3x 10.5x 10.7x 10.9x 11.1x 11.4x 9.4x 9.7x 8.9x 8.7x 7.5x 7.7x 2020E $643 9.6x 10.0x 10.2x 10.4x 10.6x 10.8x 11.1x 9.1x 9.3x 8.5x 8.4x
Revised P / LP DCF(2) Budget
Abe 2018A $348 8.4x 9.1x 9.6x 9.8x 10.3x 10.5x
11.1x 8.1x 8.5x 6.5x 6.5x 2019E $353 8.3x 8.9x 9.4x 9.6x 10.1x 10.3x 10.9x 7.1x 7.7x 6.8x 6.8x 2020E $358 8.2x 8.8x 9.3x 9.5x 10.0x 10.2x 10.8x 7.0x 7.5x 6.5x 6.5x
Source: Company filings, and FactSet as for 2/26/2019.
(1) GP / IDR value
estimated by taking current GP/IDR distributions capitalized by Abe’s current yield. 8
(2) DCF attributable to LP unitholders.
(3) Propane distributor Equity Value / DCF and Yield metrics exclude Ferrellgas from group median.
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II. Status Quo Management Projections Overview
9
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Abe Management Projections
EBITDA DCF and Distributions
Revised Budget Historical Weather Case
Historical Historical Weather Case
Capital Investment Case Revised Budget Capital Investment Case Historical DCF $720 $4.16
Abe ’19-’23 CAGR: $4.00
1.7% $688 $3.96 $3.87 $665 $3.79 $3.77 $3.71 $659 $3.71 $3.92 $3.94 $3.88 $670 $3.82 $619 $661
$3.77 $633 $652 $3.71 $606 $643 $3.32 $3.33 $3.59 $3.58 $3.58 $3.53 $625 $624 $615 $606 $551 $597 $543 2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E 2023E
Revised Budget 1.15x 1.05x 0.89x 0.88x 0.98x 0.99x 1.01x 1.02x 1.03x 1.04x
Coverage
Historical Weather 1.15x 1.05x 0.89x 0.88x 0.98x 0.99x 0.93x 0.94x
0.94x 0.94x
2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E 2023E Case Coverage
Capital Investment 1.15x 1.05x 0.89x 0.88x 0.98x 0.99x 0.98x 1.02x 1.05x 1.10x
Case Coverage
DCF and Distributions with Coverage/Leverage Targets
1.2x 2019E Coverage,
Flat Distribution Thereafter Subject to 4.0x Leverage
Revised Budget Historical Weather Capital Investment
DCF Targete d Dist. DCF Targete d Dist. DCF Targete d Dist.
$4.08 $3.96 $4.03 $4.27 $3.80
$3.78 $3.86 $3.75 $4.08 $3.80 $3.78 $3.71 $3.71 $3.67 $3.91 $3.71 $3.60 $3.77 $3.72 $3.56 $3.40 $3.36 $3.40 $3.15 $3.15 $3.15 $3.15 $3.15 $3.15 $3.15 $3.15 $3.14 $3.14 $3.14
2018A 2019E 2020E 2021E 2022E 2023E 2018A 2019E 2020E 2021E 2022E 2023E 2018A 2019E 2020E 2021E 2022E 2023E
0.98x 1.20x 1.23x 1.26x 1.20x 1.20x 0.98x 1.20x 1.14x 1.17x 1.18x 1.19x 0.98x 1.20x 1.19x 1.25x 1.20x 1.20x
10
___________________________________ Source: Management.
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Ulysses Management Projections
EBITDA Adjusted EPS
Historical Ulysses Utilities Ulysses ’19-’22 CAGR: Wall Street Consensus Management Historical 5.7% $3.70
Abe Propane Ulysses International $3.44
Midstream & Marketing Corporate and other
$1,908 $1,807 $3.13 Misc. Income WSC $1,693 $2.90 $1,615 $2.74 $1,520 $3.34 $1,389 $1,421 $3.20 $1,369 $3.05 $1,209 $491 $2.29 $465 $2.02 $2.01 $2.05 $2.74 $2.68 $412 $432
$652 $661 $625 $643
$319 $350 $389 $420
-$13 -$10 -$10 -$11 2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E
WSC $1,335 $1,629
$1,704 $1,728 2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E
Cash Flow Per Share and Dividends Per Share CapEx
CFPS DPS Maintanence & Growth Capex Acquisitions $923 $844 $7.27 $7.47 $782 $775 $15 $753 $15 $6.63 $6.70 $725 $719 $666 $10 $6.13 $5.74 $5.81 $448 $102 $187 $5.52 $5.44
$61 $474 $37 $1.25 $1.30 $1.10 $1.20 $0.71 $0.71 $0.71 $0.71 $0.71 $605 $624 $594 $436 $475
2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E
Ending Cash $436 $439 $518 $568 $462 $475 $611 $781 $930
Balance 2014A 2015A 2016A 2017A 2018A
2019E 2020E 2021E 2022E
11
Source: Management and Wall Street consensus
estimates.
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III. Abe Financial Analysis
12
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Selected Publicly Traded Company Metrics
(USD in millions, except per share data)
Enterprise Value / EBITDA Price / DCF/Unit Distribution Yield Distribution Metrics Debt Metrics
Low Growth MLPs(1)
Unit (Share) Total Equity Enterprise Distribution CAGR
2019E Net Debt / S&P Credit Company Name Price Market Value Value 2018A 2019E 2020E 2018A 2019E 2020E Current 2019E 2019E to 2022E Coverage(2) 2019E EBITDA Rating Buckeye Partners LP $32.19 $5,004 $9,760 9.7x 10.8x 10.2x 7.8x 8.7x 8.0x 9.3% 9.3%
4.5% 1.23x 5.3x BBB-
GasLog Partners LP 22.30 1,085 2,539 9.7x 9.3x 9.1x 6.2x 10.7x 11.3x 9.5% 9.9% 4.5% 0.93x 4.1x NA Genesis Energy LP 22.12 2,719 7,165 NA 10.3x
9.8x NA 7.1x 6.0x 9.9% 9.9% 0.0% 1.44x 5.3x B+ Global Partners LP 18.67 667 2,040 NA 9.0x 8.8x NA 7.2x NA 10.2% 10.2% 0.0% 1.31x 5.8x B+ Golar LNG Partners LP 13.78 1,060 2,277 8.4x 8.9x 8.9x 6.9x 5.3x 4.6x 11.7% 11.7% 0.1% 1.06x 4.5x NA Holly
Energy Partners LP 29.12 3,075 4,624 13.3x 12.9x 12.4x 11.3x 10.9x 10.6x 9.2% 9.3% 1.0% 0.96x 4.0x Ba3 KNOT Offshore Partners LP 18.48 614 1,754 NA 8.4x 8.0x NA 6.8x 7.0x 11.3% 11.3% 0.0% 1.51x 5.0x NA Martin Midstream Partners LP 12.53 507 1,168
9.4x 7.4x 7.0x 9.4x 5.8x 6.2x 16.0% 16.0% 0.0% 1.03x 4.2x B NGL Energy Partners LP 13.38 1,697 4,160 10.2x 8.3x 7.6x 8.5x 6.0x 6.0x 11.7% 11.7% 2.7% 1.62x 4.1x B+ NuStar Energy LP 25.70 3,372 7,522 NA 11.0x 10.2x NA 10.9x 9.6x 9.3% 9.3% 0.0% 0.99x
5.0x BB PBF Logistics LP 22.77 1,277 2,107 12.1x 11.9x 10.8x 10.4x 9.9x 9.1x 8.8% 9.1% 2.4% 1.08x 3.7x NA Summit Midstream Partners LP 10.46 833 2,328 7.0x 7.2x 6.7x NA 4.0x 4.2x 22.0% 22.0% 0.0% 1.10x 3.6x
BB-Sunoco LP 30.19 3,224 6,176 9.7x 9.8x 9.7x 6.8x 8.1x 8.1x 10.9% 10.9% 0.0% 1.20x 4.7x BB-TC PipeLines LP 33.43 2,559 4,874 9.3x 10.9x 10.9x 10.7x 6.8x 6.8x 7.8% 7.8%
0.0% 1.65x 4.9x BBB-USA Compression Partners LP 15.98 1,563 3,815 11.9x 9.4x 8.7x 6.8x 7.1x 6.9x 13.1% 13.1% 0.0% 1.06x 4.4x B+
low$507$1,1687.0x7.2x6.7x6.2x4.0x4.2x7.8%7.8%0.0%0.93x3.6xmean$1,951$4,15410.1x9.7x
9.3x8.5x7.7x7.5x11.4%11.4%1.0%1.21x4.6x
median$1,563 $3,815 9.7x
9.4x9.1x8.1x7.1x7.0x10.2%10.2%0.0%1.10x4.5x high$5,004 $9,760 13.3x 12.9x 12.4x
11.3x 10.9x 11.3x 22.0% 22.0% 4.5% 1.65x 5.8x Propane Distributors(4)
Ferrellgas Partners LP $1.35 $131 $2,142 8.9x 8.9x 8.5x NM NM NM NM NM NA NA 8.4x CCC
Suburban
Propane Partners LP 22.38 1,402 2,676 9.5x 9.3x 9.2x 7.0x 7.1x 6.8x 10.7% 10.7% 5.1% 1.30x 4.4x BB-
Superior Plus Corporation(3) 8.69 1,507 2,800 9.9x 7.8x 7.5x
6.0x 6.6x 6.3x 6.3% 6.3% 0.0% 2.41x 3.6x BB
low $131 $2,142 8.9x 7.8x 7.5x 6.0x6.6x 6.3x6.3%.3%0.0%1.30X3.6X
MEAN$1,013 $2,5409.4X8.7X8.4x6.5x6.8x6.5x8.5%8.5%2.6%1.85x5.5x median $1,042$2,676 9.5x 8.9x 8.5x 6.5x 6.8x 6.5x 8.5% 8.5% 2.6% 1.85x 4.4x high $1,507 $2,800 9.9x 9.3x 9.2x 7.0x
7.1x 6.8x 10.7% 10.7% 5.1% 2.41x 8.4x
Abe Partners, L.P. (WS) $29.01 $3,100 $5,978 9.9x 9.4x 9.3x 6.9x 7.5x 7.4x 13.1% 13.1% (4.5%) 1.03x 4.5x NA Abe Partners,
L.P. (Revised Budget) 9.9x 9.6x 9.3x 6.9x 7.7x 7.6x 13.1% 13.1% 0.0% 0.99x 4.5x NA Abe Partners, L.P. (Historical Weather Case) 9.9x 9.6x 10.0x 6.9x 7.7x 8.2x 13.1% 13.1% 0.0% 0.99x 4.8x NA Abe Partners, L.P. (Capital Investment Case) 9.9x 9.6x 9.5x
6.9x 7.7x 7.8x 13.1% 13.1% 0.0% 0.99x 4.5x NA
Source: Company forecasts & filings, investor presentations, Wall Street research and estimates as compiled
by FactSet as of 2/26/2019. (1) Low growth group defined as MLPs below 5% 2019E-2022E distribution CAGR and with enterprise value between $1.0 BB and $10 BB.
(2)
Coverage defined as distributable cash flow divided by total distributions to GP and LP. 13 (3) Uses exchange rate of 0.7577 USD per CAD.
(4) Propane distributor
Equity Value / DCF and Yield metrics exclude Ferrellgas from group median.
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Propane Precedent Transactions Analysis
Date Transaction EBITDA EBITDA Purchase Price /
Purchase Price / Buyer Seller Asset Announced Value ($MM) LTM FY1/NTM LTM EBITDA NTM EBITDA
(1)
5/30/2018 Superior Plus Corporation NGL Energy Partners LP Retail Propane Operations 900 85 84 10.5x 10.7x 11/7/2017 DCC LPG NGL Energy Partners LP Retail West 200 25 28 8.0x 7.1x
7/24/2017 SHV Energy American Midstream Partners Pinnacle Propane 170 24 19 7.0x 9.0x 2/13/2017 Superior Plus Corporation Gibson Energy Canwest Propane 412 38 33 10.8x 12.3x 6/23/2016 World Fuel Services PAPCO, Associated Petroleum Products Misc.
Fuel Services 230 NA 38 NA 6.0x 5/19/2015 DCC LPG Shell Butagaz 517 139 136 3.7x 3.8x 7/2/2014 UGI Corp. Total SA Totalgaz SNC 580 NA 95 NA 6.1x 4/26/2012 Suburban Propane Partners Inergy Retail Propane Assets 1,800 197 NA 9.1x NA
10/17/2011 AmeriGas Partners, L.P. Energy Transfer Partners Heritage Propane Operations 2,890 253 325 11.4x 8.9x 1/4/2010 Inergy Sterling Partners Liberty Propane 223 NA 36 NA 6.2x
11/18/2004 Inergy Star Gas Partners LP Star Gas Propane 475 NA NA NA NA
4/20/2004 Ferrellgas Blue Rhino—343 34 44 10.0x 7.8x 12/23/2003 Suburban Propane
Partners Agway Energy—206 41 34 5.0x 6.0x 11/7/2003 Energy Transfer Company Ltd. Heritage Propane Partners—980 90 119 10.9x 8.3x 1/31/2001 AmeriGas Partners, L.P. NiSource Columbia Propane 216 NA NA NA NA
Current Ulysses Abe $6,251 $606 $625 10.3x 10.0x (2/26/2019)
low $170 $24 $19 3.7x 3.8x Mean
$676 93 $83 8.7x 7.7x Median $412 $63 $41 9.6x 7.5x High $2,890 $253 $325 11.4x 12.3x
>$1B Mean $2,345 $225 $325 10.3x 8.9x >$1B Median $2,345 $225
$325 10.3x 8.9x
___________________________________ 14 Source: Company filings, Wall Street research, IHS Market.
(1) Transaction multiple before acquisition synergies; 8.2x synergy adjusted multiple.
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PRELIMINARY CONFIDENTIAL DRAFT Abe DCF Analysis Subject to Further Review & Revision
Abe Revised Budget Case | Valuation Effective Date: 3/31/2019 Abe Current Unit Price: $29.01
Implied Proposal Value: $33.62
Discounted Levered DCF Analysis Discounted
Levered DCF Analysis
Abe Levered LP DCF | $3.80 Annual Dist. Policy Abe Levered LP DCF | Targeted Leverage & Coverage Policy
6.0x 8.0x 10.0x 6.0x 8.0x 10.0x
2023E DCF Multiple
Discount Rate
2023E Distribution Yield
Discount Rate
8.0% $29.90 $35.92 $41.95 8.0% $30.74 $36.97 $43.21 10.0% $28.41 $34.06 $39.71
10.0% $29.20 $35.05 $40.90 12.0% $27.04 $32.34 $37.65 12.0% $27.79 $33.28 $38.77
Discounted Distribution Analysis Discounted Distribution Analysis
Abe LP Distributions | $3.80 Annual Dist. Policy Abe LP Distributions | Targeted Leverage & Coverage Policy
13.0% 10.5% 8.0% 13.0% 10.5% 8.0%
8.0% $33.99 $39.30 $47.94 8.0% $29.81 $34.57 $42.30
10.0% $32.24 $37.23 $45.33 10.0% $28.27 $32.73 $39.98
12.0% $30.63 $35.31
$42.92 12.0% $26.84 $31.03 $37.84
PV of Future Unit Price Analysis PV of Future Unit Price Analysis
Abe LP Distributions | $3.80 Annual Dist. Policy Yield Abe LP Distributions | Targeted Leverage & Coverage Policy Yield $47.14 $46.48 $45.88 $45.33 8.0% $40.07 $39.98 8.0%
$39.09 $38.54 $36.36 $36.68 $36.97 $37.23 $32.24 10.5% $32.19 $32.73 10.5% $30.65 $31.48 $30.41 $29.73 $30.15 $27.35 $28.27 $24.65 $25.41 $29.01 13.0% $29.01 13.0% Current Price Current Price
2H 2019E 2020E 2021E 2022E 2H 2019E 2020E 2021E 2022E
PV of Future Share Price Assumptions
∎ Management projections ∎ Future share price calculated at FY1 annual distributions divided by yield∎ Valuation date as of 3/31/19∎
Discounted to 3/31/19 at 10% cost of equity
Interim distributions discounted upon receipt to 3/31/19 15 Source: Management projections and Factset as of 2/26/2019.
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PRELIMINARY CONFIDENTIAL DRAFT Abe DCF Analysis Subject to Further Review & Revision
Abe Historical Weather Case | Valuation Effective Date: 3/31/2019 Abe Current Unit Price: $29.01
Implied Proposal Value: $33.62
Discounted Levered DCF Analysis Discounted
Levered DCF Analysis
Abe Levered LP DCF | $3.80 Annual Dist. Policy Abe Levered LP DCF | Targeted Leverage & Coverage Policy
6.0x 8.0x 10.0x 6.0x 8.0x 10.0x
2023E DCF Multiple
Discount Rate
2023E Distribution Yield
Discount Rate
8.0% $27.47 $32.94 $38.42 8.0% $28.45 $34.17 $39.90 10.0% $26.11 $31.25 $36.38
10.0% $27.04 $32.41 $37.78 12.0% $24.86 $29.68 $34.50 12.0% $25.74 $30.78 $35.82
Discounted Distribution Analysis Discounted Distribution Analysis
Abe LP Distributions | $3.80 Annual Dist. Policy Abe LP Distributions | Targeted Leverage & Coverage Policy
13.0% 10.5% 8.0% 13.0% 10.5% 8.0%
8.0% $33.99 $39.30 $47.94 8.0% $28.18 $32.59 $39.75
10.0% $32.24 $37.23 $45.33 10.0% $26.74 $30.87 $37.59
12.0% $30.63 $35.31
$42.92 12.0% $25.40 $29.28 $35.59
PV of Future Share Price Analysis PV of Future Share Price Analysis
Abe LP Distributions | $3.80 Annual Dist. Policy Yield Abe LP Distributions | Targeted Leverage & Coverage Policy Yield $47.14 $46.48 $45.88 $45.33
8.0% 8.0% $39.09 $38.54 $38.04 $37.59 $36.36 $36.68 $36.97 $37.23 $32.24 10.5% 10.5% $30.65 $31.48 $30.41 $30.65 $30.87 $29.73 $30.15 $26.10 $26.74 $24.65 $25.41 $29.01 13.0%
$29.01 13.0% Current Price Current Price
2H 2019E 2020E 2021E 2022E 2H 2019E 2020E 2021E 2022E
PV of Future Share Price Assumptions
∎ Management projections ∎ Future share price
calculated at FY1 annual distributions divided by yield∎ Valuation date as of 3/31/19∎ Discounted to 3/31/19 at 10% cost of equity
Interim
distributions discounted upon receipt to 3/31/19 16 Source: Management projections and Factset as of 2/26/2019.
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PRELIMINARY CONFIDENTIAL DRAFT Abe DCF Analysis Subject to Further Review & Revision
Abe Capital Investment Case | Valuation Effective Date: 3/31/2019 Abe Current Unit Price: $29.01
Implied Proposal Value: $33.62
Discounted Levered DCF Analysis Discounted
Levered DCF Analysis
Abe Levered LP DCF | $3.80 Annual Dist. Policy Abe Levered LP DCF | Targeted Leverage & Coverage Policy
6.0x 8.0x 10.0x 6.0x 8.0x 10.0x
2023E DCF Multiple
Discount Rate
2023E Distribution Yield
Discount Rate
8.0% $30.85 $37.21 $43.57 8.0% $31.46 $37.99 $44.51 10.0% $29.30 $35.27 $41.23
10.0% $29.88 $36.00 $42.12 12.0% $27.87 $33.47 $39.07 12.0% $28.41 $34.16 $39.90
Discounted Distribution Analysis Discounted Distribution Analysis
Abe LP Distributions | $3.80 Annual Dist. Policy Abe LP Distributions | Targeted Leverage & Coverage Policy
13.0% 10.5% 8.0% 13.0% 10.5% 8.0%
8.0% $33.99 $39.30 $47.94 8.0% $30.74 $35.72 $43.81
10.0% $32.24 $37.23 $45.33 10.0% $29.14 $33.81 $41.39
12.0% $30.63 $35.31
$42.92 12.0% $27.66 $32.04 $39.16
PV of Future Share Price Analysis PV of Future Share Price Analysis
Abe LP Distributions | $3.80 Annual Dist. Policy Yield Abe LP Distributions | Targeted Leverage & Coverage Policy Yield $47.14 $46.48 $45.88 $45.33 $40.46 $41.39
8.0% 8.0% $37.23 $38.95 $38.40 $36.36 $36.68 $36.97 10.5% $33.81 $31.48 $32.24 $32.49 10.5% $29.73 $30.65 $30.04 $30.30 $29.14 $25.32 $27.58 $24.56 $29.01 13.0%
$29.01 13.0% Current Current Price Price
2H 2019E 2020E 2021E 2022E 2H 2019E 2020E 2021E 2022E
PV of Future Share Price Assumptions
∎ Management projections ∎ Future share price
calculated at FY1 annual distributions divided by yield∎ Valuation date as of 3/31/19∎ Discounted to 3/31/19 at 10% cost of equity
Interim
distributions discounted upon receipt to 3/31/19 17 Source: Management projections and Factset as of 2/26/2019.
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PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
IV. Ulysses Financial Analysis
18
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Selected Publicly Traded Company Metrics
(USD in millions, except per share data)
LDCs EV / EBITDA Price / Earnings Price / CFPS Dividend Metrics Debt Metrics
Share Total
Equity Enterprise Payout Dist. CAGR Net Debt / S&P Credit LT EPS Company Name Price Value Value 2019E 2020E 2019E 2020E 2019E 2020E Current 2019E Ratio(2) 19E to ‘21E EBITDA Rating Growth Rate Atmos Energy $98.28 $11,542 $15,008 12.7x 11.4x
22.6x 21.1x 12.7x 11.0x 2.1% 2.1% 56.7% 8.0% 2.9x NA 6.5% Chesapeake Utilities Corporation 90.69 1,497 2,011 13.7x 12.9x 24.6x 23.1x NA NA 1.6% 1.7% 44.1% 10.4% 3.5x NA 7.6% NiSource Inc 26.74 10,009 19,969 12.0x 11.2x 20.4x 19.2x 8.5x 8.2x 3.0%
3.0% 128.1% 6.1% 5.4x BBB+ 6.0% New Jersey Resources Corporation 48.00 4,282 5,747 20.0x (1) 18.3x (1) 24.0x 22.3x 17.8x 15.2x 2.4% 2.5% 80.6% NA 5.1x NA 6.0% Northwest Natural Holding Co. 64.27 1,856 2,742 11.8x 11.3x 26.1x 24.9x 10.6x 11.1x 3.0%
3.0% 55.6% 0.7% 3.8x A+ 4.5% ONE Gas Inc 86.06 4,553 6,128 13.0x 12.2x 25.0x 23.8x 12.7x 12.1x 2.3% 2.3% 65.0% 7.7% 3.3x A 5.0% Spire Inc 77.62 4,277 6,929 13.7x 12.8x 20.8x 20.0x 11.0x 10.8x 3.1% 3.1% 68.0% 5.1% 5.2x
A- 3.4% Southwest Gas Holdings Inc 81.30 4,336 6,200 9.2x 8.7x 20.4x 19.1x 8.1x 8.4x 2.6% 2.7% 51.5% 6.9% 2.8x BBB+ 6.0%
Low $1,497 $2,011 9.2x 8.7x 20.4x 19.1x 8.1x 8.2x 1.6% 1.7% 44.1% 0.7% 2.8x 3.4% Mean $5,294 $8,092 12.3x 11.5x 23.0x 21.7x 11.6x 11.0x 2.5% 2.5% 68.7% 6.4% 4.0x
5.6% Median $4,309 $6,164 12.7x 11.4x 23.3x 21.7x 11.0x 11.0x 2.5% 2.6% 60.8% 6.9% 3.7x 6.0% <60% Payout Ratio Median $3,096 $4,471 12.3x 11.3x 23.6x 22.1x 10.6x 11.0x 2.3% 2.4% 53.6% 7.4% 3.2x 6.3% High $11,542 $19,969 13.7x 12.9x 26.1x 24.9x
17.8x 15.2x 3.1% 3.1% 128.1% 10.4% 5.4x 7.6%
C-Corp Midstream EV / EBITDA Price / Earnings Price / DCF/Unit Dividend
(Distribution) Metrics Debt Metrics
Unit (Share) Market Enterprise 2019E Dist. CAGR 2019E S&P Credit 19E to ‘22E Company Name Price Value Value 2019E
2020E 2019E 2020E 2019E 2020E Current 2019E Coverage(4) ‘19E to ‘22E EBITDA Rating DCF CAGR Enbridge Inc $37.24 $75,435 $133,137 13.5x 11.9x 19.9x 16.9x 10.8x 9.8x 6.0% 6.0% 1.5x 3.3% 4.9x BBB+ 7.0% Kinder Morgan Inc 19.22 43,760 77,926
10.1x 9.7x 18.9x 17.8x 8.8x 8.2x 4.2% 5.2% 2.2x 14.9% 4.3x BBB 6.9% SemGroup Corporation 16.47 1,495 4,084 9.0x 8.2x 29.9x 17.5x 5.6x 5.2x 11.5% 12.1% 1.5x 5.4% 5.7x B+ 5.2% Targa Resources Corp. 40.33 9,370 16,608 12.0x 9.5x NM 39.4x 11.4x 7.3x
9.0% 9.0% 1.0x 4.4% 4.2x BB 21.6% Tallgrass Energy LP 23.08 6,538 10,244 10.6x 11.5x 13.1x 15.6x 9.4x 9.2x 9.0% 9.3% 1.3x 4.9% 3.3x BBB- 0.3% Williams Companies Inc 26.97 33,592 57,199 11.3x 10.6x 27.6x 25.2x
10.4x 9.8x 5.0% 5.6% 1.7x 9.3% 4.4x BBB 19.5%
Low $1,495 $4,084 9.0x 8.2x 13.1x 15.6x 5.6x 5.2x 4.2% 5.2% 1.0x 3.3% 3.3x 0.3% Mean $28,365 $49,866 11.1x 10.2x
21.9x 22.1x 9.4x 8.2x 7.5% 7.9% 1.5x 7.0% 4.5x 10.1% Median $21,481 $36,903 10.9x 10.2x 19.9x 17.7x 9.9x 8.7x 7.5% 7.5% 1.5x 5.2% 4.4x 7.0% High $75,435 $133,137 13.5x 11.9x 29.9x 39.4x 11.4x 9.8x 11.5% 12.1% 2.2x 14.9% 5.7x 21.6%
Propane Distributors(5) EV / EBITDA Price / Earnings Price / DCF/Unit Dividend (Distribution) Metrics Debt Metrics
Ferrellgas Partners LP $1.35 $131 $2,142 8.9x 8.5x NM NM NM NM NM NM NA NA 8.4x CCC 33.2% Suburban Propane Partners LP 22.38 1,402 2,676 9.3x 9.2x NM NM 7.1x 6.8x 10.7% 10.7% 5.1%
1.30x 4.4x BB- 3.9% Superior Plus Corporation(6) 8.69 1,507 2,800 7.8x 7.5x 18.5x 15.0x 6.6x 6.3x 6.3% 6.3% 0.0% 2.41x 3.6x BB 4.8%
Low $131 $2,142 7.8x 7.5x 18.5x 15.0x 6.6x 6.3x 6.3% 6.3% 0.0% 1.30x 3.6x 3.9% Mean $1,013 $2,540 8.7x 8.4x 18.5x 15.0x 6.8x 6.5x 8.5% 8.5% 2.6% 1.85x 5.5x 14.0% Median $1,402
$2,676 8.9x 8.5x 18.5x 15.0x 6.8x 6.5x 8.5% 8.5% 2.6% 1.85x 4.4x 4.8% High $1,507 $2,800 9.3x 9.2x 18.5x 15.0x 7.1x 6.8x 10.7% 10.7% 5.1% 2.41x 8.4x 33.2%
Ulysses
Corporation (WS) $54.59 $9,712 $16,128 12.1x 9.9x 20.4x 17.9x 10.1x(3) 8.5x (3) 1.9% 2.0% 47.5% 5.4% 3.3x NA 8.0% Ulysses Corporation (Mgmt.) 10.0x 9.5x 18.7x 17.4x 8.8x(3) 7.6x (3) 1.9% 2.0% 35-45% 4.0% 2.7x
NA 6-10%
Source: Company forecasts & filings, investor presentations, Wall Street research and estimates
(3) P/CFPS shown for Ulysses. as compiled by FactSet as of 2/26/2019. (4) Coverage defined as distributable cash flow divided by total distributions.
(1) New
Jersey Resources Corporation 2019E and 2020E EBITDA multiples are excluded from (5) Propane distributor Equity Value / DCF and Yield metrics exclude Ferrellgas from group summary statistics due to disproportionately high multiples resulting
from investment tax median. 19 credit benefits for the company’s solar assets. (6) Uses exchange rate of 0.7577 USD per CAD.
(2) Payout ratio defined as
last quarter dividend divided by LTM earnings.
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PRELIMINARY CONFIDENTIAL DRAFT
Ulysses DCF Analysis | Management Projections Subject to Further Review & Revision
Valuation Effective Date: 3/31/2019
Discounted Unlevered DCF(1) Analysis
Discounted Dividend Analysis
Ulysses SQ Dividends | Abe $3.80 Annual Dist. Policy
8.50x 10.0x 11.5x 2.75% 2.25% 1.75%
4.00% $57.20 $71.77 $86.34 4.50% $45.03 $54.40 $69.14
4.75% $55.63 $69.94 $84.25 5.25% $44.25 $53.46 $67.94 5.50% $54.10 $68.16 $82.21 6.00% $43.50 $52.55 $66.77
Discounted Unlevered DCF Analysis(1,2) Discounted
Dividend Analysis
Supplemental Calculation Detail Supplemental Calculation Detail
2H 2019E 2020E 2021E 2022E 2H 2019E 2020E 2021E
2022E EBITDA Terminal Multiple
Discount Rate
$805 $1,697 $1,808 $1,903 Ulysses Dividend / Share $0.55 $1.20 $1.25 $1.30
Unlevered Cash Taxes(3) (88) (173) (166)
Capex (377) (719) (775) Discount
Factor 0.987 0.950 0.903 FCF $340 $804 $867 PV of Dividend/Sh. $0.54 $1.14 $1.12
Discount Factor 0.988 0.955 0.911
Disc. FCF $337 $768 $790 Disc. GP Dist. Total $2.80
Disc. SQ Ulysses FCF Total $1,895 Terminal
Yield 2.25% Terminal Multiple 10.0x Terminal Disc. Factor 0.890x Terminal Disc. Factor 0.880
Implied Terminal PV EV $16,946 Implied Terminal PV per Share $50.66
Less SQ Ulysses Net Debt ($4,392) Less SQ Ulysses NCI ($2,024)
Implied Equity
Value per Share $53.46
Implied SQ Ulysses Equity Value $12,424 SQ Ulysses Equity Value per Share $69.94
PV of Future Share Price Analysis(4)
Ulysses SQ / PF Dividends Yield $67.23 $67.61 $67.94
1.75%
Assumptions $52.41 $52.96 $54.59 $53.46
2022E Distribution Yield
Discount Rate
∎ Wall Street Consensus Projections 2.25%∎ Valuation date as of 3/31/19 $42.98 $43.64 $44.25 ∎ Future share price calculated at FY1 annual dividends divided by
yield 2.75%
∎ Discounted to 3/31/19 at 5.25% cost of equity Current
Price
Interim distributions discounted upon receipt to 3/31/19
Source: Management projections and FactSet as of 2/26/2019. 2H 2019E 2020E 2021E (1) Net Income attributable to non-controlling
interests is included in consolidated EBITDA; DCF analysis assumes normalized net working capital.
(2) Fully consolidated enterprise value analysis; implied
Ulysses share price calculated based on eliminating Abe publicly-owned LP interest at market value. 20 (3) Calculated as management-forecasted cash taxable income + elimination of tax shield from interest expense.
(4) Dividend policy assumed constant in both SQ and PF scenarios , across all operating scenarios.
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V. Transaction Analysis
21
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PRELIMINARY CONFIDENTIAL DRAFT
Has / Gets Analysis | Abe Revised Budget Case Subject to Further Review & Revision
Abe Pre – Unitholder Tax | Valuation Effective Date: 3/31/2019 $3.80 Annual Dist.
Targeted Coverage Policy
Standalone Abe Implied Unit Price
XR-Adj. PF Ulysses Implied Share Price | (0.5000x + $6.32 Cash)(1) $3.80 Distribution Discounted Cash Flow | Unlevered FCF(2) | Discounted at WACC
6.0x 8.0x 10.0x
Analysis 8.0% $29.90 $35.92 $41.95 2022E Terminal Multiple DCF 10.0% $28.41
$34.06 $39.71
8.5x 10.0x 11.5x
12.0% $27.04 $32.34 $37.65
2023E DCF Multiple
Discounted Levered Analysis
Target Coverage Distribution 4.00% $34.26 $40.36 $46.46
4.75% $33.60 $39.59 $45.58
6.0x 8.0x 10.0x
8.0% $30.74 $36.97 $43.21 5.50% $32.96 $38.84 $44.73
10.0% $29.20 $35.05 $40.90 12.0% $27.79 $33.28 $38.77
$3.80 Distribution
Discounted Dividend Analysis
13.0% 10.5% 8.0%
2022E Distribution Yield
8.0% $33.99 $39.30 $47.94 10.0% $32.24 $37.23 $45.33
2.75% 2.25% 1.75%
12.0% $30.63 $35.31 $42.92
4.50% $28.83 $33.52 $40.89
Target Coverage Distribution
Distribution Rate
2022E Terminal Multiple
5.25% $28.45 $33.05 $40.29
13.0% 10.5% 8.0% 6.00% $28.07 $32.59 $39.70
8.0% $29.81 $34.57 $42.30
Discounted
10.0% $28.27 $32.73 $39.98
12.0% $26.84 $31.03 $37.84
Source: Management projections and FactSet as of 2/26/2019. 22 (1) Implied XR at 0.5000x equity XR and cash consideration of $6.32 / unit. Cash consideration added to implied share
price at 0.5000x XR.
(2) Unlevered free cash flow defined as PF Ulysses EBITDA less cash taxes and capital expenditures.
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PRELIMINARY CONFIDENTIAL DRAFT
Has / Gets Analysis | Abe Historical Weather Case Subject to Further Review & Revision
Abe Pre – Unitholder Tax | Valuation Effective Date: 3/31/2019 $3.80 Annual Dist.
Targeted Coverage Policy
Stand Alone Abe Implied Unit Price
XR-Adj. PF Ulysses Implied Share Price | (0.5000x + $6.32 Cash)(1) $3.80 Distribution Discounted Cash Flow | Unlevered FCF(2) | Discounted at WACC
6.0x 8.0x 10.0x
Analysis 8.0% $27.47 $32.94 $38.42 2022E Terminal Multiple
DCF 10.0% $26.11 $31.25 $36.38 8.5x 10.0x 11.5x
12.0% $24.86 $29.68 $34.50
Levered Target Coverage Distribution 4.00% $33.23 $39.18 $45.14
4.75% $32.59 $38.43 $44.28
6.0x 8.0x 10.0 x 8.0% $28.45 $34.17 $39.90 5.50% $31.96 $37.70 $43.45
Discounted
10.0% $27.04 $32.41 $37.78 12.0% $25.74 $30.78 $35.82 $3.80
Distribution
Discounted Dividend Analysis
2023E DCF Multiple
13.0% 10.5% 8.0%
2022E Distribution Yield
Analysis 8.0% $33.99 $39.30 $47.94 10.0% $32.24 $37.23 $45.33 2.75% 2.25% 1.75% 12.0% $30.63 $35.31 $42.92
4.50% $28.83 $33.52 $40.89
Target Coverage Distribution
Distribution Rate
2022E Terminal Multiple
5.25% $28.45 $33.05 $40.29
13.0% 10.5% 8.0%
6.00% $28.07 $32.59 $39.70
8.0% $28.18 $32.59 $39.75
Discounted
10.0% $26.74 $30.87 $37.59
12.0% $25.40 $29.28 $35.59
Source: Management projections and FactSet as of 2/26/2019. 23 (1)
Implied XR at 0.5000x equity XR and cash consideration of $6.32 / unit. Cash consideration added to implied share price at 0.5000x XR.
(2) Unlevered free cash flow
defined as PF Ulysses EBITDA less cash taxes and capital expenditures.
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PRELIMINARY CONFIDENTIAL DRAFT
Has / Gets Analysis | Abe Capital Investment Case Subject to Further Review & Revision
Abe Pre – Unitholder Tax | Valuation Effective Date: 3/31/2019 $3.80 Annual Dist.
Targeted Coverage Policy
Stand Alone Abe Implied Unit Price
XR-Adj. PF Ulysses Implied Share Price | (0.5000x + $6.32 Cash)(1) $3.80 Distribution Discounted Cash Flow | Unlevered FCF(2) | Discounted at WACC
6.0x 8.0x 10.0x
Analysis 8.0% $30.85 $37.21 $43.57 2022E Terminal Multiple 10.0% $29.30 $35.27
$41.23
DCF
12.0% $27.87 $33.47 $39.07 8.5x 10.0x 11.5x
Levered Target Coverage Distribution 4.00% $34.67 $40.86 $47.04
4.75% $34.00 $40.08 $46.16
6.0x 8.0x 10.0x
8.0% $31.46 $37.99 $44.51 5.50% $33.35 $39.32 $45.29
Discounted
10.0% $29.88 $36.00 $42.12 12.0% $28.41 $34.16 $39.90
$3.80
2022E DCF Multiple
Distribution Rate
Discounted Dividend Analysis
13.0% 10.5% 8.0%
2022E Distribution Yield
Analysis 8.0% $33.99 $39.30 $47.94 10.0% $32.24 $37.23 $45.33 2.75% 2.25% 1.75%
12.0% $30.63
$35.31 $42.92
4.50% $28.83 $33.52 $40.89
Target Coverage Distribution
Distribution Rate
5.25% $28.45 $33.05 $40.29
13.0% 10.5% 8.0%
6.00% $28.07 $32.59 $39.70
8.0% $30.74 $35.72 $43.81
Discounted
10.0% $29.14 $33.81 $41.39
12.0% $27.66 $32.04 $39.16
Source: Management projections and FactSet as of 2/26/2019. 24 (1) Implied XR at 0.5000x equity XR and cash consideration of $6.32 / unit. Cash consideration added to implied share
price at 0.5000x XR.
(2) Unlevered free cash flow defined as PF Ulysses EBITDA less cash taxes and capital expenditures.
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PRELIMINARY CONFIDENTIAL DRAFT Has/Gets Analysis SQ Abe Terminal Yield PF Ulysses Terminal P/E Multiple Subject
to Further Review & Revision
PV of Future Equity Value | Revised Budget Case
8.0%
10.5%
23.0x
21.0x
13.0%
19.0x
$3.80 Annual Dist. Policy Target Coverage Dist. Policy
$47.14 $46.48 $45.88 $45.33
$43.39 $43.88 $41.47 $41.87 $39.77 $40.21 $39.98 $38.86 $39.13 $37.96 $38.32 $37.23 $40.07 $36.97 $39.09 $36.68 $38.54 $36.36 $35.76 $34.77 $36.55 $35.51 $36.14 $34.44 $32.73
$32.24 $32.38 $32.19 $31.48 $30.65 $32.16 $30.15 $30.41 $29.73 $29.01 $29.01
$28.27 $27.35
Abe Abe Current Price $25.41 Current Price
$24.65
2H 2019E 2020E 2021E 2022E 2H 2019E 2020E 2021E 2022E
Source: Management projections and
Factset as of 2/26/2019. 25 Note: Utilizes 10.0% cost of equity for SQ Abe and 5.25% cost of equity for PF Ulysses.
(1)
All-in exchange ratio of 0.6158x implied by Ulysses offer as of 2/26/2019. Pro forma analysis incorporates EBITDA synergies of $5 MM per year.
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PRELIMINARY CONFIDENTIAL DRAFT Accretion / (Dilution) Subject to Further Review & Revision
Pre - Unitholder Tax(1) | Abe Base Case
Abe Distribution Accretion / (Dilution) - %
At 0.6158x Exchange Ratio
Assumptions
Cut No Cut
∎ All-in XR applied to calculate pro
forma share count as if cash component is utilized to purchase secondary Ulysses shares by current Abe unitholders (76.6%) (75.7%) (76.2%) (78.6%)
∎
Estimates of pro forma CFPS incorporate step-up 743(b) tax depreciation and cash taxes (82.2%) (80.6%) (79.8%) (79.0%)∎ EBITDA synergies of $5 MM per year per Ulysses management included in pro forma
forecast
2019E 2020E 2021E 2022E
Status Quo Abe (No Cut): $3.80 $3.80 $3.80
$3.80
Status Quo Abe (Cut): $3.15 $3.15 $3.15 $3.36
PF Ulysses at 0.6158x:(1)
$0.68 $0.74 $0.77 $0.80
Ulysses EPS Accretion / (Dilution) - % Ulysses CFPS Accretion / (Dilution) - %
(0.3%)
(1.4%) (2.1%) (3.1%)
(9.7%) (10.3%) (10.8%) (12.0%)
2019E 2020E 2021E 2022E 2019E 2020E 2021E 2022E
Status Quo Ulysses: $2.90 $3.13 $3.44 $3.70 Status Quo Ulysses: $5.81 $6.70 $7.27 $7.47 Pro Forma Ulysses: $2.55 $2.79 $3.08 $3.34 Pro Forma Ulysses: $5.63 $6.68 $7.17 $7.31 $ Acc
/ (Dil): ($0.35) ($0.34) ($0.35) ($0.36) $ Acc / (Dil): ($0.18) ($0.02) ($0.10) ($0.15)
Source: Management projections and FactSet as of 2/26/2019.
(1) Pre – Unitholder Tax; 0.6158x represents implied XR at 0.5000x equity XR and cash consideration of $6.32 / unit. 26 (2) Ulysses Pro Forma forecast assumes 15-year depreciation with 75% allocation credit for step-up consideration above $32.00 / Abe public unit; based on management guidance and management provided materials.
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PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Precedents & Premiums | MLP Transactions Analysis
Announcement Equity Adj.
Transaction Transaction Unaffected 1-Day Taxable Buyer Transaction Acquiror Target % Cash Date Value Acquired Value(1,3) Value Premium Transaction Type Type
11/26/18 Dominion Energy Inc Dominion Energy Midstream Partners LP $1,262 $3,584 $3,598 0.9% 0% No C-Corp Affiliate 11/26/18 Arclight
Capital TransMontaigne Partners L.P. 536 1,232 1,247 13.5% 100% NA PE Affiliate 11/8/18 Western Gas Equity Partners LP Western Gas Partners, LP 5,763 12,603 12,781 7.6% 0% No MLP Affiliate 10/22/18 EnLink Midstream LLC EnLink Midstream Partners,
L.P. 5,084 12,221 12,236 1.1% 0% Yes C-Corp Affiliate 10/18/18 Valero Energy Corporation Valero Energy Partners LP 1,976 3,734 3,788 6.0% 100% Yes C-Corp Affiliate
10/9/18 Antero Midstream GP LP Antero Midstream Partners LP 5,908 7,548 7,548 18.6% 11% Yes C-Corp Affiliate 9/18/18 Enbridge Inc. Enbridge Energy Partners 2,742 15,541 15,562 11.6% 0% Yes C-Corp Affiliate 8/24/18 Enbridge Inc. Spectra Energy Partners, LP 3,276 26,945 27,810 19.4% 0% Yes C-Corp Affiliate 8/1/18 Energy Transfer Equity, L.P. Energy Transfer
Partners 27,179 66,915 66,981 11.2% 0% No MLP Affiliate 6/19/18 Cheniere Energy Inc. Cheniere Energy Partners LP Holdings 1,240 5,526 5,651 10.7% 0% No C-Corp Affiliate 6/4/18 OCI NV OCI Partners LP 89 1,271
1,389 15.0% 100% No C-Corp Affiliate 5/17/18 Williams Companies Williams Partners, LP 10,427 56,013 57,793 16.5% 0% Yes C-Corp Affiliate 3/26/18 Tall Grass Energy GP, LP
Tallgrass Energy Partners, LP 1,686 8,083 8,361 (18.4%) 0% Yes C-Corp Affiliate 2/7/18 Terra Nitrogen GP, Inc. Terra Nitrogen Co. LP 387 1,432 1,474 3.7% 100% Yes C-Corp
Affiliate 1/2/18 Archrock, Inc Archrock Partners, LP 607 2,358 2,438 23.4% 0% Yes C-Corp Affiliate 8/29/17 Zenith Energy US, LP Arc Logistics Partners LP 407 736 736 15.2% 100% Yes PE 3rd Party 4/3/17 World
Point Terminals, Inc. World Point Terminals, LP 159 570 594 5.8% 100% Yes C-Corp Affiliate 3/2/17 VTTI, B.V VTTI Energy Partners, LP 481 1,842 1,867 6.0% 100% Yes C-Corp
Affiliate 2/1/17 ONEOK, Inc ONEOK Partners, LP 9,309 22,380 23,654 25.8% 0% Yes C-Corp Affiliate 1/27/17 Enbridge Energy Company Midcoast Energy Partners, LP 170 1,194 1,176 (8.6%) 100% Yes C-Corp Affiliate 11/21/16 Sunoco Logistics Partners, LP Energy Transfer Partners, LP 21,965 54,455 54,455 (0.2%) 0% No MLP Affiliate 10/25/16 Energy Transfer Partners, LP PennTex Midstream Partners, LP 640 789 789
43.3% 50% Yes MLP Affiliate 10/24/16 American Midstream Partners LP JP Energy Partners LP 302 476 476 9.1% 0% No MLP 3rd Party 9/26/16 Transcanada Columbia Pipeline Partners 915 3,384 3,464 9.9% 100% Yes
C-Corp Affiliate 8/1/16 Transocean, Inc Transocean Partners 259 1,153 1,202 20.8% 0% No C-Corp Affiliate 5/30/16 SemGroup Corp. Rose Rock Midstream 771 2,034 2,034 0.0%
0% Yes C-Corp Affiliate 11/3/15 Targa Resources Corp. Targa Resources Partners LP 6,672 12,138 12,229 18.4% 0% Yes C-Corp Affiliate 10/26/15 Western Refining, Inc.
Northern Tier Energy 1,982 5,185 5,286 11.7% 65% Yes C-Corp 3rd Party 7/13/15 MPLX LP MarkWest Energy Partners, LP 16,612 22,360 22,360 36.3% 8% No MLP 3rd Party 5/6/15 Crestwood Equity Partners, LP Crestwood
Midstream Partners 3,381 6,901 6,920 17.2% 0% No MLP Affiliate 4/6/15 Tesoro Logistics LP QEP Midstream Partners LP 394 1,104 1,145 (14.0%) 0% No MLP Affiliate 1/26/15 Energy Transfer Partners, LP Regency Energy Partners LP 11,276 18,593 18,593
13.2% 1% No MLP Affiliate 11/12/14 Enterprise Products Partners LP Oiltanking Partners LP 1,392 4,243 4,289 (0.9%) 0% No PE Affiliate 10/26/14 Williams Partners LP Access Midstream Partners LP 21,944 34,256 34,256 (5.7%) 0% No MLP Affiliate 10/13/14
Targa Resources Partners LP Atlas Pipeline Partners LP 3,866 6,002 6,002 15.0% 3% No MLP 3rd Party 8/10/14 Kinder Morgan Inc. Kinder Morgan Energy Partners 27,351 52,351 52,566 12.0% 12% Yes C-Corp Affiliate
8/10/14 Kinder Morgan Inc. El Paso Pipeline Partners 5,421 13,193 13,677 15.4% 12% Yes C-Corp Affiliate 7/24/14 Breitburn Energy Partners QR Energy LP 1,811 2,856 2,856 17.5% 19% No MLP 3rd Party 10/10/13
Regency Energy Partners LP PVR Partners LP 3,931 5,659 5,659 25.7% 1% No MLP 3rd Party 8/27/13 Plains All American LP PAA Natural Gas Storage LP 755 2,434 2,531 8.5% 0% No MLP Affiliate 5/6/13 Inergy Midstream LP Crestwood Midstream Partners LP
1,661 2,643 2,643 14.5% 4% No MLP 3rd Party 1/29/13 Kinder Morgan Energy Partners LP Copano Energy LLC 3,911 4,858 4,858 23.5% 0% No MLP 3rd Party 2/23/11 Enterprise Products Partners Duncan Energy Partners LP 1,006 2,973 3,282 28.1% 0% No MLP
Affiliate
Current (2/26/2019) Ulysses Abe $2,327 $6,251 $6,360 15.9% 19% Yes C-Corp Affiliate Current Premium to Abe at Pre-Investor Day Ulysses Abe $2,327 $6,251 6,360 (8.3%) 19% Yes C-Corp Affiliate
___________________________________ (12/3/2018)
Source: Company filings,
press releases, presentations and FactSet for pricing data. Represents precedent MLP transactions by affiliated and third party MLPs, Public GPs and C-Corps since 2011.
Note: Considers transactions where target is an MLP. 27 (1) Based on Wall Street research.
(2)
Non-adjusted transaction TEV values affiliated and non-affiliated units at offer price.
(3) Adjusted transaction TEV value affiliated units at market price and non-affiliated units at offer price.
Tudorpickering Holt&co energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Supplemental Analysis
28
Tudorpickering Holt&co energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Unitholder Tax Implications
Average Tax Basis Calculation(1)
∎ The average tax paid with state taxes is $6.64 per unit for public APU unitholders as of 1H 2019
Detailed Calculation of Ordinary and Capital Gains as of December 2017
May 1995—Dec. 2010
12,044,321 17% $0.23 $28.47 ($1.25) $4.91 UGI Share Price $54.59 Jan. 2011—Dec. 2013 10,693,961 15% $6.90 $27.14 ($11.99) ($0.42) Exchange Ratio 0.5000x Jan. 2014—Dec. 2014 11,715,648 17% $11.83 $25.43 ($15.44) ($3.65) Cash Consideration
$6.32 Jan. 2015—Dec. 2015 6,423,910 9% $14.86 $22.94 ($16.09) ($4.18) Offer Price $33.62 Jan. 2016—Dec. 2016 14,091,793 20% $15.92 $20.16 ($14.20) ($2.46) FY 1H 2019E Tax Basis $11.30 Jan. 2017—Dec. 2017 12,903,239 19% $26.94 $14.29
($11.09) ($7.62) Detail of Gains (per Unit) Jan. 2018—Jan. 2018 1,182,662 2% $36.63 $7.09 ($4.13) ($10.11) Average Ordinary Gain / (Loss)(4) $24.63 Total / Active Unit Average 69,055,533 100% $13.41 $22.52 ($11.23) ($2.32) Average Capital Gain
/ (Loss)(4) (2.32)
Total Gain $22.31
Unitholder Trade Group Active Units % of
Public Basis(2) Ordinary Gain(2) PAL(2) Capital Gain(2)
Average Unitholder - FY 1H 2019E
Average Assumed Passive Activity Loss (2) ($8.58) December 2017 Tax Basis $13.41 Average Ordinary Gain / (Loss) Net of PAL (Federal Only) $16.04
(+) Jan ’18 – March ’19 Allocated Net Income(3) 2.65 Tax on Gain (Per Unit)
Federal Ordinary Income Tax Rate 37.0%
(-) Jan ’18 – March ’19
Distributions (5 quarters) 4.75
Individual MLP Investor Deduction Rate 20.0%
March 2019E Basis $11.30 ACA Tax 3.8% Federal Tax Rate 33.4% Federal Capital Gains Tax Rate 23.8% Effective State Tax Rate(3) 5.2%
FY 1H 2019E Bsisi
FY 1H 2019E Ordinary Gain
FY 1H 2019E PAL Balance
December 2017 Ordinary Gain $22.52
(+) Jan ’18 – March ’19 Adjustments 2.10 Tax on Ordinary Gain $5.36
Effective
Ordinary Gain Tax Rate 33.4%
March 2019E Ordinary Gain $24.63
Capital losses
carry forward to offset against potential future capital gains
Tax on Capital Gain ($0.55)
Effective Capital Gain Tax Rate 23.8% (5)
State Tax Ordinary Income $1.28
December 2017 PAL Balance $11.23 Effective Ordinary Gain Tax Rate 5.2%
(-) January
2018—March 2019 PALs Utilized (2.65) State Tax Capital Gain(5) ($0.12)
March 2019E PAL Balance $8.58 Effective Capital Gains Tax Rate 5.2%
Total Tax on Gain(6) $6.64
Total Effective Tax Rate 26.9%
Source: Company Management, FactSet as of 2/26/2019 and Wall Street research. Note: PAL is defined as Passive Activity Loss.
(1) Provided by management.
(2) Weighted average by active unit as a percent of total
outstanding active units.
(3) Taxable income for publicly owned AmeriGas LP units for tax year ended 9/30/19 grossed up by 25% to estimate taxable income from
January 2018 to March 2019. (4) Ordinary and Capital gains provided by management as of December 2017; basis and gain estimates rolled forward to March 2019.
(5)
Per discussions with management, state tax rate determined by using a weighted average of 50 state income tax rates and median federal taxable income brackets for married and 29 single filers.
(6) Taxes Payable on Ordinary gain not offset by Capital losses.
Tudorpickering Holt&co
energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT SQ Abe After Tax Cash Flow Subject to Further Review & Revision
Terminal Yield Value | Abe $3.80 Annual Dist. Policy
SUBJECT TO TAX COUNSEL
REVIEW
2H 2019E 2020E 2021E 2022E 2023E
BT LP Distribution Per Unit $1.90
$3.80 $3.80 $3.80 $3.80 AT LP Distribution Per Unit $1.90 $3.80 $3.80 $3.22 $2.51 Discount Factor 0.976 0.909 0.826 0.751 0.683 PV of LP Dist. per Unit $1.86 $3.45 $3.14 $2.42 $1.71
Disc. LP Dist. Total $12.58
Terminal Yield 8.0% 10.5% 13.0% Implied Terminal Future Value per
Unit $47.50 $36.19 $29.23
Average Purchase Price $40.08 Existing RoC ($28.77)
Beginning Tax Basis $11.30
2H 2019E 2020E 2021E 2022E 2023E
Beg. Avg. Tax Basis / Unit $11.30 $10.46 $9.45 $8.64 $8.09 Less: Distributions / Unit (1.90) (3.80) (3.80) (3.80) (3.80) Plus: Net Income Allocated 1.06 2.79 2.99 3.25 3.35
Avg. EOY Basis / Unit $10.46 $9.45 $8.64 $8.09 $7.64 EOY PAL Balance $7.52 $4.73 $1.74 $0.00 $0.00
Implied Terminal Value per Unit $47.50 $36.19 $29.23 Less: Basis at EOY 2023E ($7.64) ($7.64) ($7.64) Gain Subject to Tax $39.86 $28.55 $21.59 Capital Gain $15.24 $3.93 ($3.03)
Ordinary Gain $24.63 $24.63 $24.63
Total Gain $39.86 $28.55 $21.59
PAL
Balance at EOY 2023E $0.00 $0.00 $0.00 Ordinary Gain / (Loss) Net of PAL (Federal Only) $24.63 $24.63 $24.63
Total Tax on Gain per Unit
Tax on Ordinary Gain—33.4% $8.22 $8.22 $8.22 Tax on Capital Gain—23.8% 3.63 0.93 0.00 State Tax on Ordinary Income—5.2% 1.28 1.28 1.28 State Tax on Capital
Gain—5.2% 0.79 0.20 0.00
Total Tax on Gain $13.92 $10.64 $9.50
Total
Effective Tax Rate 34.9% 37.3% 44.0%
After-Tax Future Value per Unit $33.58 $25.55 $19.73
Terminal Disc. Factor 0.651 0.651 0.651
Implied Present Value per Unit $34.45 $29.22 $25.43
Source: Management projections and FactSet as of 2/26/2019. 30 Note: Discounted at midpoint discount rate of 10%.
(1) Inclusive of Federal & State capital gains taxes.
Tudorpickering Holt&co
energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT SQ Abe After Tax Cash Flow Subject to Further Review & Revision
Terminal Yield Value | Targeted Leverage & Coverage Policy
SUBJECT
TO TAX COUNSEL REVIEW
2H 2019E 2020E 2021E 2022E 2023E
BT LP Distribution Per
Unit $1.58 $3.15 $3.15 $3.36 $3.36 AT LP Distribution Per Unit $1.58 $3.15 $3.15 $2.78 $2.07 Discount Factor 0.976 0.909 0.826 0.751 0.683 PV of LP Dist. per Unit $1.54 $2.86 $2.60 $2.09 $1.41
Disc. LP Dist. Total $10.50
Terminal Yield 8.0% 10.5% 13.0% Implied Terminal Future Value per
Unit $41.95 $31.96 $25.82
Average Purchase Price $40.08 Existing RoC ($28.77)
Beginning Tax Basis $11.30
2H 2019E 2020E 2021E 2022E 2023E
Beg. Avg. Tax Basis / Unit $11.30 $10.79 $10.43 $10.27 $10.16 Less: Distributions / Unit (1.58) (3.15) (3.15) (3.36) (3.36) Plus: Net Income Allocated 1.06 2.79 2.99 3.25 3.35
Avg. EOY Basis / Unit $10.79 $10.43 $10.27 $10.16 $10.15 EOY PAL Balance $7.52 $4.73 $1.74 $0.00 $0.00
Implied Terminal Value per Unit $41.95 $31.96 $25.82 Less: Basis at EOY 2023E ($10.15) ($10.15) ($10.15) Gain Subject to Tax $31.81 $21.82 $15.67 Capital Gain $7.18 ($2.81) ($8.96)
Ordinary Gain $24.63 $24.63 $24.63
Total Gain $31.81 $21.82 $15.67
PAL
Balance at EOY 2023E $0.00 $0.00 $0.00 Ordinary Gain / (Loss) Net of PAL (Federal Only) $24.63 $24.63 $24.63
Total Tax on Gain per Unit
Tax on Ordinary Gain—33.4% $8.22 $8.22 $8.22 Tax on Capital Gain—23.8% 1.71 0.00 0.00 State Tax on Ordinary Income—5.2% 1.28 1.28 1.28 State Tax on Capital
Gain—5.2% 0.37 0.00 0.00
Total Tax on Gain $11.58 $9.50 $9.50
Total
Effective Tax Rate 36.4% 43.6% 60.6%
After-Tax Future Value per Unit $30.37 $22.46 $16.32
Terminal Disc. Factor 0.651 0.651 0.651
Implied Present Value per Unit $30.28 $25.13 $21.13
Source: Management projections and FactSet as of 2/26/2019. 31 Note: Discounted at midpoint discount rate of 10%.
(1) Inclusive of Federal & State capital gains taxes.
Tudorpickering Holt&co
energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT PF Ulysses After Tax Cash Flow Subject to Further Review & Revision
Terminal P/E Value
At 0.4942x Exchange Ratio SUBJECT TO TAX COUNSEL REVIEW
2H 2019E 2020E 2021E 2022E Terminal Tax Basis at 1H 2019E $11.30 Stepped Up Basis Upon Close $33.62
PF Ulysses Earnings per Share $3.34 • Abe current price of
$29.01 as of
XR Adj. PF Ulysses Earnings per Share $1.65 2/26/2019
PF Ulysses BT Dist. per Share $0.55
$1.20 $1.25 $1.30 • Cash consideration XR Adj. PF Ulysses BT Dist. per Share $0.27 $0.59 $0.62 $0.64 used to pay part of
taxes for an
% RoC 0% 0% 0% 0%
average public Abe
% QD 100% 100% 100% 100% unitholder; Return of Capital $0.00 $0.00 $0.00 $0.00 additional cash Qualified Dividends ($0.06) ($0.14) ($0.15) ($0.15) made available by Project Tax
Liability ($0.06) ($0.14) ($0.15) ($0.15) Ulysses secondary XR Adj. PF Ulysses AT Dist. per Share $0.21 $0.45 $0.47 $0.49 shares
Terminal P/E 23.0x 21.0x 19.0x
Sale at 9/30/22 - Terminal FV per XR Adj. PF Ulysses Share $38.00 $34.70 $31.39 Less: Basis on Conversion ($33.62) ($33.62) ($33.62) Plus: Dividends Treated as Return of Capital $0.00 $0.00 $0.00 Gain on Sale Tax Rate(1) $4.39 $1.08 ($2.22) Tax on
Gain 29.0% $1.27 $0.31 $0.00
Sale at 9/30/22 - Terminal FV per XR Adj. PF Ulysses Share $38.00 $34.70 $31.39 Less: Taxes on Gain ($1.27) ($0.31) $0.00 Net Proceeds
$36.73 $34.38 $31.39
Total Net Cash Flow $0.21 $0.45 $0.47 $0.49 $36.73 $34.38 $31.39 Total Cash In Flow $0.27 $0.59 $0.62 $0.64 $38.00 $34.70 $31.39 Total Cash
Out Flow - Tax on Dividends ($0.06) ($0.14) ($0.15) ($0.15) ($1.27) ($0.31) $0.00 Discount Factor 0.987 0.950 0.903 0.858 0.836 0.836 0.836 Implied Present Value per Share $0.20 $0.43 $0.42 $0.42 $30.71 $28.75 $26.24
XR Adj. PF Ulysses Implied Present Value per Share $32.18 $30.22 $27.72
Source: Management
projections and FactSet as of 2/26/2019.
Note: Discounted at midpoint discount rate of 5.25%. 32 Note: QD / RoC split is per management guidance.
(1) Inclusive of Federal & State capital gains taxes.
Tudorpickering Holt&co
energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Summary of Full Cycle After-Tax Dist. Analysis
SUBJECT
TO TAX COUNSEL REVIEW
$29.22
$25.13
$34.45
$32.18
$30.28
$27.72 $25.43
$21.13
$3.80 Dist. Policy Target Coverage Dist. Policy PF
33
Source: Management.
Tudorpickering Holt&co energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT Summary of Material Changes Subject to Further Review & Revision
Updates since 2/14/2019 Materials
∎ Adjusted select Premiums to
Unaffected Date figures for MLP Precedents & Premiums analysis∎ Adjusted terminal value discounting for PV of future share price analysis
∎
Adjusted terminal EBITDA multiple range to 8.5x – 11.5x for Ulysses Unlevered DCF analysis (from February 12 materials)
34
Tudorpickering Holt&co energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Appendix
35
Tudorpickering Holt&co energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
SQ Ulysses Sum-of-the-Parts Analysis
Ulysses SOTP SQ EBITDA Mix(3)
FY 2019E M ultiple(1) Enterprise Value
FY 2019E EBITDA Low High Low High
SQ Ulysses Businesss Segments M idstream
& M arketing
M idstream & M arketing $230 9.5x 11.5x $2,189 $2,650
19%
Utilities $324 10.0x 12.0x $3,243 $3,891
International $420 8.0x 10.0x $3,358 $4,197 Total Enterprise Value $8,790 $10,739 Less Net Debt ($1,547) ($1,547) Equity Value $7,243 $9,192
FY 2019E FY 2019E Distribution GP/IDR Yield(2) Equity Value
Abe
GP Equity Value $50 12.6% 12.6% $395 $395 Abe FD LP Equity Value $2,720 $2,720 Abe Equity Value $3,115 $3,115 Less Abe NCI ($2,024) ($2,024) Total SQ Ulysses Equity Value $8,335
$10,284 Ulysses FD Shares O/S 177.9 177.9 Implied SQ Ulysses Share Price $46.85 $57.80
Source: Management Projections and FactSet as of 2/26/2019.
Note: Corporate revenue & other income / expenses allocated pro-rata to business units on basis of business unit contribution of
gross revenue / gross expenses respectively.
1. Based on comparable C-Corp, LDC’s, and Propane Distributors median
2019E EV/EBITDA.
2. Based on Abe 2019E distribution yield. 36
3. Total EBITDA
attributable to Ulysses shareholders, excluding portion attributable to noncontrolling interest in Abe. Abe EBITDA allocated ~38% to Ulysses unitholders, proportionately to distributions received.
Tudorpickering Holt&co energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Cost of Capital
37
Tudorpickering Holt&co energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT SQ Abe Cost of Equity Analysis Subject to Further Review & Revision
Comparable Public Company Yield-Based Cost of Equity
Abe Cost of Equity Cost
of Equity
Barra Beta Low High Sensitized Peer Total Return Low High
(2)
Raw Beta 0.78 1.05
(3)
Spot Risk-Free Rate 2.8% 2.8%
(4)
Equity Risk Premium 6.0% 6.0%
Expected Total Return
Expected 2019E - 2022E Long-Term Economic
Company Distribution CAGR Growth Estimate Expected
Growth(1) Current Yield Implied Total Return
Buckeye Partners LP 4.5% 4.0% 4.1% 9.3% 13.4% GasLog Partners LP 4.5% 4.0% 4.1% 9.5% 13.6% Genesis Energy LP 0.0% 4.0%
3.4% 9.9% 13.3% Global Partners LP 0.0% 4.0% 3.4% 10.2% 13.6% MLPs Golar LNG Partners LP 0.1% 4.0% 3.4% 11.7% 15.1% Holly Energy Partners LP 1.0% 4.0% 3.6% 9.2% 12.7% KNOT Offshore Partners LP 0.0% 4.0% 3.4% 11.3% 14.7% Growth Martin Midstream
Partners LP 0.0% 4.0% 3.4% 16.0% 19.4% NGL Energy Partners LP 2.7% 4.0% 3.8% 11.7% 15.5% Low NuStar Energy LP 0.0% 4.0% 3.4% 9.3% 12.7% PBF Logistics LP 2.4% 4.0% 3.8% 8.8% 12.5% Summit Midstream Partners LP 0.0% 4.0% 3.4% 22.0% 25.4% Sunoco LP 0.0%
4.0% 3.4% 10.9% 14.3% TC PipeLines LP 0.0% 4.0% 3.4% 7.8% 11.2% USA Compression Partners LP 0.0% 4.0% 3.4% 13.1% 16.5% Ferrellgas Partners LP NA NA NA NA NA
Dist.
Suburban Propane Partners LP 5.1% 4.0% 4.2% 10.7% 14.9% Propane Superior Plus Corporation 0.0% 4.0% 3.4% 6.3% 9.7%
Source: Bloomberg, Duff & Phelps,
FactSet, Federal Reserve, Company filings as of 2/26/2019.
(1) Weights Expected Current – 2020E distribution growth estimates 15% and long-term economic
growth estimate by 85% to arrive at a long-term distribution growth estimate.
(2) Barra beta as of 1/31/2019. Illustrative low and high range reflects a -/+ 15%
range around Barra beta.
(3) 20-year treasury bond yield as of 2/26/2019. 38 (4) Duff & Phelps historical
arithmetic premium.
(5) 2021E dividend from May 8th, 2018 RBC equity research report.
Tudorpickering Holt&co energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Ulysses Cost of Capital Analysis
Status Quo Pro Forma Cost of Equity Cost of Equity
Barra Beta Low High Barra Beta Low High Raw Beta (3) 0.33 0.44 Raw Beta (3) 0.33 0.44
(4)
(4)
Spot Risk-Free Rate 2.8% 2.8% Spot Risk-Free Rate 2.8% 2.8%
Equity Risk
Premium(5) 6.0% 6.0% Equity Risk Premium(5) 6.0% 6.0%
Cost of Capital Cost of Capital
Barra Beta | SQ Capital Structure Low High Barra Beta | PF Capital Structure Low High
Cost of
Equity 4.8% 5.5% Cost of Equity 4.8% 5.5% Cost of Debt(1) 2.7% 4.2% Cost of Debt(2) 3.2% 4.7%
Market Value of Equity $9,712 $9,712 Market Value of Equity $13,534
$13,534 Total Debt $2,756 $2,756 Total Debt $5,330 $5,330
Cost of Capital Cost of Capital
Barra Beta | Optimal Capital Structure(6) Low High Barra Beta | Optimal Capital Structure(6) Low High
Cost of Equity 4.8% 5.5% Cost of Equity 4.8% 5.5%
(1) (2)
Cost of Debt 2.7% 4.2% Cost of Debt 3.2% 4.7%
Market Value of Equity $9,712 $9,712 Market
Value of Equity $13,534 $13,534 Total Debt $2,579 $2,579 Total Debt $4,004 $4,004
Source: Bloomberg, Duff & Phelps, FactSet, Federal Reserve, Company
filings as of 2/26/2019.
Note: In SQ, debt held at Abe is proportionally consolidated based on LP ownership in the MLP. In PF, debt held at Abe is assumed to be
fully consolidated and the cash consideration of $6.32 for each Abe unit is funded using the Ulysses revolver at a 2.275% interest rate. Equity – Based on a 0.500x XR of Ulysses shares for each Abe unit.
(1) Illustrative low and high range reflects a -/+ 100 bps range around after tax current 4.54% cost of debt at Ulysses. Ulysses cost of debt calculated using weighted average 7-10 year YTW on the outstanding face value of debt held at Ulysses.
(2) Illustrative low and high range reflects a -/+ 100 bps
range around after tax current 5.18% cost of debt at Ulysses. Ulysses cost of debt calculated using weighted average 7-10 year YTW on the outstanding face value of fully consolidated Ulysses debt.
(3) Barra beta for Ulysses as of 1/31/2019. Illustrative low and high range reflects a -/+ 15% range around Barra beta. 39 (4) 20-year
treasury bond yield as of 2/26/2019.
(5) Duff & Phelps historical arithmetic premium.
(6) Optimal Capital Structure based on Total Debt/2019E EBITDA Ratio of 3.00x.
Tudorpickering
Holt&co energy investment & merchant banking
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Tudorpickering Holt&co energy investment & merchant banking
About The Firm
Tudor, Pickering, Holt & Co. is an integrated energy investment and merchant bank, providing high quality advice and services to institutional and corporate clients. Through
the company’s two broker-dealer units, Tudor, Pickering, Holt & Co. Securities, Inc. (TPHCSI) and Tudor Pickering Holt & Co Advisors LP (TPHCA), members FINRA, together with affiliates in the United Kingdom and Canada, the company
offers securities and investment banking services to the energy community. Perella Weinberg Partners Capital Management LP is an SEC registered investment adviser that delivers a suite of energy investment strategies.
The firm, headquartered in Houston, Texas, has approximately 170 employees and offices in Calgary, Canada; Denver, Colorado; New York, New York; and London, England.
Contact Us
Houston (Research, Sales and Trading): 713-333-2960 Houston (Investment Banking):
713-333-7100 Houston (Asset Management): 713-337-3999 Denver (Sales): 303-300-1900 Denver (Investment Banking): 303-300-1900
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40
Exhibit (c)(15)
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Project Rushmore Discussion Materials
March 5th, 2019
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Table of Contents
I. Situation Overview
II. Management Projections Overview III. Abe Financial Analysis IV. Ulysses Financial Analysis V. Transaction Analysis
Appendix
Cost of Capital
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2
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
I. Situation Overview
3
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Summary of Revised Proposal
Proposal Component Description
Exchange Ratio Detail
∎ In revised Ulysses proposal, each Abe Common Pre Investor Day
Proposal Date 3rd Proposal Date Current Implied Offer Unit held by public to receive: 12/3/2018 1/25/2019 3/4/2019 3/4/2019 3/4/2019 Spot Abe Price $36.67 $29.89 $27.53 $27.53 $34.25
☐ 0.500 Ulysses shares Abe 30-Day VWAP $36.50 $26.34 $29.91 $29.91
Consideration
Spot Ulysses Price $57.59 $55.95 $54.90 $54.90 —
☐ $6.80 Cash (up from $6.32)
Spot XR 0.6367x 0.5342x 0.5015x 0.5015x 0.6239x(1)
∎ Taxable transaction to Abe unitholders Premium to Spot 24.4%
Premium
to 30-Day VWAP 14.5%
∎ Status Quo Abe ownership:∎ Pro Forma Ulysses ownership:
Ownership ☐ Abe Public Unitholders: ~74.7% ☐ Abe Public Unitholders: ~16.5%(2)
☐ Ulysses: ~25.3% ☐ Existing Ulysses Shareholders: ~83.5%
∎
Transaction requires vote of majority of Abe common unitholders, but no vote of Ulysses shareholders Other Terms∎ No majority of unaffiliated approval
∎ Abe will continue to make quarterly distributions, but will not make pro rata ‘stub’ distribution at closing
Other∎ Ulysses has discussed with the special committee the likelihood of a 20% distribution cut in the absence of a deal
Source: Company filings, Bloomberg, FactSet as of 3/4/2019. 4 (1) Implied all-in XR calculated as equity XR of 0.5000x plus $6.80 cash
consideration divided by Ulysses share price.
(2) Issuance of shares equivalent to 19.7% of status quo (pre-transaction)
Ulysses outstanding shares results in ~16.5% Abe public unitholder ownership in pro forma entity.
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Historical XR and Relative Performance
Two Year Historical Exchange Ratios Relative
Performance From Pre Investor Day (12/3/18)
1.40x
Abe FGP SPH AMZ
Prior to Investor Day – Current 170%
0.70x
Proposal Implied XR: 0.6239x $50
0.60x 162%
1.20x
0.50x
Average XR: 0.5247x 150%
0.40x
Dec-18 Dec-18 Jan-19
Feb-19 Feb-19
1.00x
130% $40
Abe Price / Unit
0.80x/
110%
Proposed Consideration: 0.5000x + $6.80/unit; Implied XR: 0.6239x 99% 95%
0.60x
90% $30
Current (3/4/2019) 0.5015x 0.6239x 24.4% 75% 0.40x Spot Proposal (3/4/2019) 0.5015x
0.6239x 24.4%
70% Price: $27.53
Pre Investor Day (12/3/18) 0.6367x 0.6181x
(2.9%) 30-Day 0.5470x 0.6246x 14.2% 60-Day 0.5192x 0.6247x 20.3% Avg. 90-Day 0.5575x 0.6233x 11.8%
180-Day 0.6556x 0.6246x (4.7%) 360-Day 0.7935x 0.6349x (20.0%)
0.20x 50% $20
Mar-17 Jun-17 Sep-17 Dec-17 Apr-18 Jul-18 Oct-18 Feb-19 Dec-18 Dec-18 Jan-19 Feb-19 Feb-19
5
_____________________________________ Source: FactSet as of 3/4/2019.
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Distribution Commentary Pre Investor Day
broker commentary barclays janney jefferies
j.p.morgan raymond james UBS wells fargo
“With the challenging macro backdrop and leverage persistently above the Partnership’s 4.0x target, we believe
the distribution at current levels is at risk… We revise our Abe price target to $38 (from $42) based on our FY20e DPS of $3.80 and a target yield of 10.0% (vs. 9.0% previously).” – 11/12/2018
“That said, we do believe both our FY19 adjusted EBITDA estimate (which falls within the guidance range) and FY20 estimates are obtainable, and that distributions can meet our
2020 target of $3.82.” – 11/13/18
“On an independent basis, we see no need for Abe to rein in its distribution and find its valuation attractive at
present levels” – 11/30/2018
“Historically, distribution cuts were generally driven by severe and permanent deterioration in business leading to
capital constrains, stretched balance sheet and absence of alternatives (no help from the parent)… Given none of these are constraints, a distribution cut just to fix coverage would be premature as the weak coverage in the recent past was being
driven by weather. Additionally, as indicated, a distribution cut just to fix coverage is rare and could be punitive to equity of both the parent and the MLP.” – 11/30/2018
(No distribution cut projected in model) – 7/27/2018
“Our FY19/FY20 distribution
estimates of $3.80/$3.80 per unit yield coverage ratios of 1.04x/1.07x.” – 11/13/18
(No distribution cut projected in model) – 11/12/18
(No distribution cut projected in model) – 11/14/18
6
_____________________________________ Source: Wall Street research.
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Post Investor Day Equity Analyst Commentary
broker commentary likely outcome stated
barclays janney jefferies j.p.morgan raymond james UBS wells fargo
“As
far as a potential Abe buy-in, we believe this remains a less likely scenario given Ulysses’ historical focus on a 50/50 split between its gas and
LPG businesses, and the fact that an Abe buy-in would more heavily skew the company toward LPG. We also note that Ulysses’``` investor
base has traditionally been more heavily weighted toward utilities investors, as evidenced by the stock’s ~80$ weekly correlation with the XLU over the past
IDR Conversion three years (vs. ~10$ correlation between Ulysses/AMZ; Abe is ~20$ correlated with the XLU and ~70% correlated with the AMZ), such that the
valuation multiple might compress in a buy-in scenario. Lastly, a buy-in would also likely have tax consequences for legacy Abe unitholders.” –12/4/2018
“That said, with no clarity on the outcome of the distribution or even the MLP structure (and the market’s negative reaction to the aforementioned
uncertainty), we expect the shares to trade at a higher yield until a decision on the aforementioned items is communicated.” – 12/13/2018
NA
“In terms of valuation, the units are currently yielding just over 12%, which appears to be pricing in some level of distribution cut. That may ultimately happen; then again
it may not, particularly if the company hits its guidance range for the year.” – 2/7/2019
“Given the Abe attributes noted previously (its improving
financial position, lack of external pressure for a cut, etc.), the fact that a vote would likely be required as Ulysses’s LP ownership is only 26%, and the fact that units violently reacted to sell-side reports calling for a sharp distribution
cut given the strategic review announced at the Investor Day, we believe any Committee negotiation would advocate for a pre-Investor Day comparison of relative equity values” – 1/7/2019
“Abe units fell >30% in the month following its Dec. 4th Investor Day as it was bumped from the Alerian MLP Index and several analysts have
Buy-In called for a distribution cut” “We believe the ‘distribution cut’ narrative is misguided, that a roll-up of Abe by Ulysses would satisfy the
same goals in a much more elegant and productive manner, and a uniquely compelling buying opportunity in Abe units now exists.” – 1/7/2019
“While
not as immediately EPS accretive as we had previously believed, [a transaction] remains accretive and, importantly, our analysis assumes cash savings are used for debt repayment instead of reinvestment at historic Ulysses ROIC levels…”
– 2/5/2019
(No distribution cut projected in model but increased discount rate to reflect greater distribution cut risk) – 1/14/2019
NA
“Abe has been under pressure since its analyst day in part due to a lack of resolution
to its IDR structure… Further, we continue to believe that the outcome of the IDR structure review will result in an IDR conversion to units vs. a roll up given our view that Ulysses will want to continue to IDR Conversion be classified as a
Utility vs. propane distributor (Abe and Europe).” – 12/13/2018
“We’re modeling a 55% reduction in the annualized FQ2’19 distribution/unit
to $1.71, which should improve leverage and distribution coverage to
4.0x and 2.6x, respectively, in FY’20… We believe a distribution cut is prudent as
it would improve debt metrics, build distribution coverage, and address the dislocated equity yield. – 12/10/2018
Distribution Cut
“We believe that a distribution cut remains a possibility and assume a 45% reduction (vs. 55% previously) in our model…We maintain our Market Perform rating as the
uncertainty of what action Abe will undertake will likely continue to weigh on valuation, in our view.” – 2/6/2019
7
_____________________________________ Source: Wall Street research.
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Jefferies – Evolution of Research Commentary
Pre Investor Day Post Investor Day Merger
Commentary Distribution Commentary
Theme: A buy-in is an attractive option
Theme: A buy-in is the more attractive option
November 30, 2018 (After FQ4)
“However, given the >50%
outperformance of Ulysses shares vs. Abe units since the January 7, 2019 (Before FQ1) last Investor Day (Dec. 2016), we also believe there is the potential for a roll-up “Given the Abe attributes
noted previously (its improving financial position, announcement as Ulysses could acquire Abe via an all-equity transaction at a lack of external pressure for a cut, etc.), the fact that a vote would likely be
meaningful premium (>20%) to respective 30-day VWAPs and still achieve mid-single required as Ulysses’ LP ownership is only 26%, and the fact that units
violently digit EPS accretion in each of our F19-F23 forecast periods. Such a move would also reacted to sell-side reports calling for a sharp distribution cut given the sharply rein in cash distributions,
greatly enhancing Abe’s credit profile over strategic review announced at the Investor Day, we believe any Committee time” negotiation would advocate for a pre-Investor Day comparison of relative
equity values” “it is important to note that we believe Abe is capable of remaining a viable
independent entity.” “However, we believe a sharp
Abe distribution cut is a simplistic and incorrect
reading of the situation and a roll-up of Abe by Ulysses, as outlined in
our
“Finally, while some analysts have suggested Abe needs to curtail is distribution, we Analyst Day preview, presents a more compelling solution for all
parties, believe its acquisition is a much more attractive alternative for Ulysses as Abe especially with further unit/share price divergence.” distributions represented ~65% of its total subsidiary cash receipts in F18 and have averaged ~47%
of subsidiary dividends over the last three fiscal years. With the “We believe an equity-for-equity roll-up of Abe remains a
highly attractive
50% IDR, a reduction in Abe’s distribution would have a pronounced effect on Ulysses option which could accelerate the achievement of
projected Abe returns” cash receipts.”
February 5, 2019
December 2, 2018 “While not as immediately EPS accretive as we had previously believed, [a
“[We believe] there is a high likelihood that Ulysses announces an acquisition of transaction] remains accretive and, importantly, our analysis assumes cash the company this
week at the Abe/ Ulysses analyst day and even if they don’t, with savings are used for debt repayment instead of reinvestment at historic a 10% distribution yield, a heating season that’s setting up favorably and more Ulysses ROIC
levels…” realistic guidance, Abe shares look compelling.”
Theme: A distribution cut is unnecessary, especially given the buy-in is a superior alternative Theme: A distribution cut is unnecessary
January 7, 2019 (Before FQ1)
“Abe units fell >30% in the month following its Dec. 4th Investor Day as it was
November 30, 2018 (After FQ4) bumped from the Alerian MLP Index and several analysts have called for a
“On an independent basis, we see no need for Abe to rein in its distribution and distribution cut; we believe the calls for a cut are misguided and have find its valuation
attractive at present levels” created a uniquely compelling opportunity in Abe units” “Historically, distribution cuts were generally driven by severe and permanent
“We believe the ‘distribution cut’ narrative is misguided, that a roll-up of deterioration in business leading to capital
constrains, stretched balance sheet and
Abe by Ulysses would satisfy the same goals in a much more elegant and absence of alternatives (no help from the
parent)… Given none of these are productive manner, and a uniquely compelling buying opportunity in Abe constraints, a distribution cut just to fix coverage would be premature as the weak units now exists.” coverage in the recent past was
being driven by weather. Additionally, as indicated, a distribution cut just to fix coverage is rare and could be punitive to equity of
February 5, 2019 both
the parent and the MLP.”
“[We] reiterate our view that a severe distribution cut (advocated by others) is not warranted and a privatization of Abe by
Ulysses offers a much more compelling option”
8
Source: Equity research
reports published on or after August 1, 2018.
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Wells Fargo—Evolution of Research Commentary
Pre Investor Day Post Investor Day Merger
Commentary Distribution Commentary
Theme: A buy-in is a sensible option
December 5, 2018
“The Abe and Ulysses (GP sponsor)‘s boards are currently
assessing various options to improve the partnership’s balance sheet long-term. This includes the potential for: (1) the elimination/buy-in of the incentive distribution rights (IDRs), (2) a rollup
of Abe into Ulysses, (3) a distribution cut at
Abe and (4) the exercise of the standby equity commitment agreement between Abe and Ulysses. Management
plans to provide the market an update after its review, which will occur over the next 120 days.
“Management noted potential synergies with Ulysses
International including supply (propane)
procurement. Approximately 20% of Ulysses International’s supplies are imported from the U.S. N/A
Management has been assessing its portfolio of suppliers/contracts in an effort to optimize how it sources propane.”
December 10, 2018
“Management noted that it is exploring all options including
Ulysses buying in Abe. We believe this could make strategic sense given the potential synergies between the partnership and Ulysses International (the company’s European LPG distribution segment). This is also a likely outcome if management
concludes that the MLP is no longer a viable funding vehicle for its domestic propane business. If improving Abe’s near-term financial position is the priority, then just eliminating the IDRs or exercising the SECA (absent the GP providing a
subsidy) would not achieve this goal, in our view. We estimate that leverage would still be elevated under these two scenarios.”
Theme: WF forecasts a
distribution cut (initially a 55% cut, later revised to 45%)
December 10, 2018
“We’re modeling a 55% reduction in the annualized FQ2’19 distribution/unit to $1.71, which should improve leverage and distribution coverage to 4.0x and 2.6x,
respectively, in FY’20.”
“We believe a distribution cut is prudent as it would improve debt metrics, build distribution
November 14, 2018 (After FQ4) coverage, and address the dislocated equity yield. (i.e., current yield is 11.9%). Although NOAA
(No distribution cut projected in model) currently expects the 2019 heating season to be 3% cooler than 2018, it is forecasting weather to still be 3% warmer than normal.”
February 6, 2019 (After FQ1)
“We believe that a distribution cut
remains a possibility and assume a 45% reduction (vs. 55% previously) in our model…We maintain our Market Perform rating as the uncertainty of what action Abe will undertake will likely continue to weigh on valuation, in our view.”
9
Source: Equity research reports published on or after August 1, 2018.
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Challenges Facing Abe Partners
2019E Coverage Net Debt / 2019E EBITDA
2.36x
5.8x 5.0x 5.3x 5.0x 4.7x 4.8x
Average: 4.5x 4.5x 4.6x
1.62x 1.60x 4.4x 4.4x 4.4x 4.5x 1.51x 4.1x 4.2x 1.44x 3.7x 3.9x 4.0x
4.0x
1.31x 1.30x 1.23x Average: 1.28x
1.20x 1.20x 1.19x
1.08x 1.06x
1.03x 1.00x 0.99x
0.96x 0.93x
SPB NGL TCP KNOP GEL GLP SPH BPL GMLP SUN NS PBFX USAC MMLP SMLP Abe HEP GLOP PBFX
SPB SMLP HEP NGL MMLP USAC GMLP SPH Abe NS TCP SUN GLOP GEL KNOP BPL GLP
Yearly Heating Degree Days(1) EBITDA Expectations & Delivery
$708 $700 $700 $700 $700
15-Yr Average: 3,648 $690 $690 $666 $680 $675 $655 $670 $660 $660
$663 $650 $645 $618 $635
$605
4,065 $570
3,743 3,794 3,710 3,824 3,892 3,885 3,673 3,840 3,737 $566 3,565 3,595 3,586 3,182 3,183 3,190 $538 $536
03 - 04 - 05 - 06 - 07 - 08 - 09 - 10 - 11 - 12 - 13 - 14 - 15 - 16 - 17 - 18 - 2014 2015 2016 2017 2018
04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19E WS Estimate Actual Actual WS Mean Mgmt. Guidance Internal Range Outperform Underperform Estimate Range(2) Budget
Source: Company filings, NOAA, FactSet as of 3/4/2019. 10 (1) Represents sum of population-weighted daily heating degree days in the continental U.S. across October 1st –
March 31st heating season each year.
(2) Uses guidance provided in FQ4 immediately prior to the guidance year.
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Pre Investor Day Abe Wall Street Research Overview
Equity Analyst Price Targets(1) ($/sh)
Analyst Recommendation Summary (Last Twelve Months)
10 9 10 10 10 10 9 9 9 9 9 8
12/3/2018 Price: $36.67 Median Price Target: $39.00 52-Week High: $48.37 100% $46
10% 10% 10%
11% 11%
20% 22% 20% 22% 22% 22%
80% 38%
Barclays: 11-12-18 $38.00 $42 60% 60% 60% 56% 70% 50% 67% 44% 44% 44% 60% 56% $38 38%
% of
Ratings
40%
Janney Montgomery Scott: 11-13-18 $48.00 $34 20% 33% 33% 33% 33%
Price Target
30% 30% 30% 25% 20% 22% 20% 22%
Jefferies: 11-29-18 $40.00 0% $30 Dec-17 Feb-18 Apr-18 Jun-18 Aug-18 Oct-18
Buy Hold Sell
Target Price # of Analysts
Price vs. Target History
Morningstar Equity
Research: 11-13-18 $41.00
% of Target Price Target
$55 120%
Restricted: 11-13-18 $38.00 $50
90% $45
$40 60%
UBS: 11-12-18 $37.00 $35 $30
30% $25
Wells Fargo Securities: 11-14-18 $39.00
$20 0% Jan-14 Nov-14 Aug-15 Jun-16 Apr-17 Feb-18 Dec-18
Source: FactSet as of 12/3/2018. 11
(1) Excludes brokers without price targets. Median price target shown above reflects median of individual broker estimates.
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Current Abe Wall Street Research Overview
Equity Analyst Price Targets(1) ($/sh) Analyst
Recommendation Summary (Last Twelve Months)
9 10 10 10 10 9 9 9 9 9 8 8
Current Price: $27.53 Median Price Target: $35.00 52-Week High: $43.79
100%
10% $46
10% 11% 11%
20% 22% 22% 22% 22% 22%
80% 38% 38% $42
Barclays: 2-6-19 $30.00
60% 60% 60% 56% 50% 67% 44% 44% 44% 44% 56% $38 38% 38%
% of Ratings
40%
Price Target
Janney Montgomery Scott: 2-6-19 $35.00 $34 20% 33% 33% 33% 33% 33% 30% 30% 30% 25% 25% 22% 22%
0% $30 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19
Jefferies: 2-6-19 $40.00 Buy
Hold Sell Target Price # of Analysts
Price vs. Target History
% of Target
Price Target
Restricted: 1-14-19 $35.00 $55 120% $50 90% $45
UBS: 2-25-19
$31.00 $40 60% $35 $30 30% $25
Wells Fargo Securities: 2-6-19 $35.00
$20 0%
Apr-14 Jan-15 Nov-15 Sep-16 Jul-17 May-18 Feb-19
Source: FactSet as of 3/4/2019. 12
(1) Excludes brokers without price targets. Median price target shown above reflects median of individual broker estimates.
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II. Management Projections Overview
13
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Abe Revised Budget Case
(USD in millions, except per share data)
EBITDA DCF
Revised Budget Historical Weather Case
Historical Historical Weather Case
Capital Investment Case Revised Budget Capital Investment
Case Historical DCF $720
Abe ’19-’23 CAGR: $4.16
1.7% $688 $3.96 $4.00 $3.87 $665 $3.79 $3.77 $3.71 $659 $3.71 $3.92 $3.95 $3.88 $670 $3.82 $619 $661 $3.77 $633 $652 $3.71 $606 $643 $3.32 $3.33 $3.53 $3.58 $3.59 $3.59 $625 $624
$615 $606 $551 $597 $543 2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E 2023E
Revised Budget 1.15x 1.05x 0.89x 0.88x 0.98x 0.99x 1.01x 1.02x 1.03x 1.04x
Coverage
Historical Weather 1.15x 1.05x 0.89x 0.88x 0.98x 0.99x 0.93x 0.94x
0.94x 0.94x
2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E 2023E Case Coverage
Capital Investment 1.15x 1.05x 0.89x 0.88x 0.98x 0.99x 0.98x 1.02x 1.05x 1.10x
Case Coverage
DCF and Distributions with Coverage/Leverage Targets
1.2x 2019E Coverage,
Flat Distribution Thereafter Subject to 4.0x Leverage
Revised Budget Historical Weather Capital Investment
DCF Targete d Dist. DCF Targeted Dist. DCF Targeted Dist.
$4.08 $4.03 $4.27 $3.96 $3.80 $3.78
$3.86 $3.75 $4.08 $3.80 $3.78 $3.71 $3.71 $3.67 $3.92 $3.71 $3.60 $3.77 $3.72 $3.56 $3.40 $3.36 $3.40 $3.15 $3.15 $3.15 $3.15 $3.15 $3.15 $3.15 $3.15 $3.14 $3.14 $3.14
2018A 2019E 2020E 2021E 2022E 2023E 2018A 2019E 2020E 2021E 2022E 2023E 2018A 2019E 2020E 2021E 2022E 2023E
0.98x 1.20x 1.23x 1.26x 1.20x 1.20x 0.98x 1.20x 1.14x 1.17x 1.18x 1.19x 0.98x 1.20x 1.19x 1.25x 1.20x 1.20x
14
___________________________________ Source: Management.
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Subject to Further Review & Revision
Ulysses Management Projections Abe Revised Budget
Case
(USD in millions, except per share data)
EBITDA Adjusted EPS(1)
Ulysses ‘19-’22
Historical Ulysses Utilities Wall Street Consensus
Management Historical
CAGR: 4.3%
Abe Propane Ulysses International
Midstream & Marketing Corporate and other $1,903 $3.70
Misc. Income WSC
$1,808 $3.44 $1,697 $1,611 $3.13 $1,520 $312 $2.90 $1,389 $1,421 $283 $1,369 $242 $2.74 $1,209 $227 $3.34 $491 $3.20 $432 $465 $2.29 $3.05 $412 $2.02 $2.01 $2.05 $2.74 $2.68 $652 $661 $625 $643
$319 $350 $389 $420
-$13 -$10 -$10 -$11
2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E
WSC $1,335 $1,629 $1,704 $1,728 2014A
2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E
Dividends Per Share CapEx
DPS
Maintanence & Growth Capex Acquisitions $1.30 $1.25 $1.20 $1.10 $1.02 $923 $0.98 $0.89 $0.93 $844 $782 $753 $775$ 15 $15 $725 $719 $0.71 $666 $10 $448 $61 $102 $187 $474 $37 $829 $624 $753 $709 $760 $475 $605 $594 $436
2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E
Ending Cash $436 $439 $518 $568 $462
$475 $611 $781 $930 2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E
Balance
Source: Management and Wall Street consensus estimates. 15 (1) Adjustments to GAAP EPS include losses/gains on commodity derivatives and foreign currency derivatives,
extinguishments of debt and associated costs, gains and expenses associated with acquisitions, impairment of tradenames and trademarks, and changes in tax law.
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PRELIMINARY CONFIDENTIAL DRAFT
Subject to Further Review & Revision
PF Ulysses Management Projections
Abe Revised Budget Case
(USD in millions, except per share data)
EBITDA Adjusted EPS(1)
Ulysses ’19-’22
Historical Ulysses Utilities CAGR: 7.3% Management Historical Abe Propane Ulysses International
Midstream & Marketing Corporate and other $3.81 Misc. Income Incremental Acquisitions $1,860 $1,991 $3.52 Synergies $1,717 47 83 $3.20 $1,613 $1,520 15 312
$2.94 $1,389 $1,421 283 $1,369 242 $2.74 $1,209 227 491 432 465 $2.29 412 $2.02 $2.01 $2.05
652 661 625 643
319 350 389 420
2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E
2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E
Dividends Per Share CapEx
DPS Maintanence & Growth Capex Acquisitions $1.30 $1,112 $1.25 $1.20 $1.10 $1,013 $1.02 $923 $0.98 $283 $0.89 $0.93 $833 $253 $782 $753 $0.71 $725 $666 $124 $448 $61 $102 $187
$474 $37 $829 $624 $753 $709 $760 $475 $605 $594 $436
2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E 2022E
Ending Cash $436 $439 $518 $568 $462 $475 $611 $781 $930
Balance 2014A 2015A 2016A 2017A 2018A
2019E 2020E 2021E 2022E
Source: Management and Wall Street consensus estimates.
Note: Each outstanding public Abe common unit exchanged for 0.5000x Ulysses shares and $6.80 / per unit cash consideration. 16 (1) Adjustments to GAAP EPS include
losses/gains on commodity derivatives and foreign currency derivatives, extinguishments of debt and associated costs, gains and expenses associated with acquisitions, impairment of tradenames and trademarks, and changes in tax law.
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III. Abe Financial Analysis
17
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Selected Publicly Traded Company Metrics
(USD in millions, except per share data)
A B C D E F G H I J K L M N O P
Low Growth MLPs(1) Enterprise Value / EBITDA Price / DCF/Unit
Distribution Yield Distribution Metrics Debt Metrics
Unit (Share) Total Equity Enterprise Distribution CAGR 2019E Net Debt / S&P Credit Company Name Price
Market Value Value 2018A 2019E 2020E 2018A 2019E 2020E Current 2019E 2019E to 2022E Coverage(2) 2019E EBITDA Rating Buckeye Partners LP $33.00 $5,130 $9,886 9.8x 11.0x 10.4x 8.0x 8.9x 8.2x 9.1% 9.1% 4.5% 1.23x 5.3x BBB-
GasLog Partners LP 22.26 1,081 2,723 11.7x 10.0x 9.7x 6.1x 10.7x 11.3x 9.9% 9.9% 4.5% 0.93x 4.8x NA Genesis Energy LP 21.71 2,669 6,879 NA 9.9x 9.4x NA 6.9x 5.9x 10.1% 10.1% 0.0%
1.44x 5.0x B+ Global Partners LP 18.66 667 2,040 NA 9.0x 8.8x NA 7.2x NA 10.2% 10.2% 0.0% 1.31x 5.8x B+ Golar LNG Partners LP 12.27 940 2,164 8.3x 8.3x 8.3x 6.5x 4.5x 4.2x 13.2% 13.2% 0.1% 1.20x 4.4x NA Holly Energy Partners LP 29.10 3,074 4,628
13.3x 12.9x 12.4x 11.3x 10.8x 10.6x 9.2% 9.3% 1.0% 0.96x 4.0x Ba3 KNOT Offshore Partners LP 18.16 604 1,743 NA 8.3x 8.0x NA 6.7x 6.9x 11.5% 11.5% 0.0% 1.51x 5.0x NA Martin Midstream Partners LP 13.03 527 1,188 9.6x 7.5x 7.1x 9.7x 6.0x 6.4x 15.3%
15.3% 0.0% 1.03x 4.2x B NGL Energy Partners LP 13.13 1,666 4,128 10.1x 8.2x 7.5x 8.3x 5.9x 5.9x 11.9% 11.9% 2.7% 1.62x 4.1x B+ NuStar Energy LP 26.18 3,451 7,882 NA 11.5x 10.7x NA 9.2x 8.1x 9.2% 9.2% 0.0% 1.19x 4.5x BB PBF Logistics LP 21.71 1,217
2,048 11.8x 11.6x 10.5x 9.9x 9.4x 8.7x 9.2% 9.5% 2.4% 1.08x 3.7x NA Summit Midstream Partners LP 10.17 845 2,435 8.3x 7.6x 7.2x NA NA 4.2x 22.6% 11.3% 0.0% 1.00x 4.0x BB-Sunoco LP 29.98 3,201 6,153 9.6x 9.8x 9.6x 6.8x 8.1x 8.1x 11.0% 11.0% 0.0%
1.20x 4.7x BB-TC PipeLines LP 32.66 2,438 4,631 8.8x 10.3x 10.2x 10.4x 6.6x 6.7x 8.0% 8.0% 0.0% 1.60x 4.6x BBB-USA Compression Partners LP 16.09 1,574 3,826 11.9x 9.4x 8.7x 6.9x 7.1x 6.9x 13.1% 13.1% 0.0% 1.06x 4.4x B+
Low $527 $1,188 8.3x 7.5x 7.1x 6.1x 4.5x 4.2x 8.0% 8.0% 0.0% 0.93x 3.7x Mean $1,939 $4,157 10.3x 9.7x 9.2x 8.4x 7.7x 7.3x 11.6% 10.8% 1.0% 1.22x 4.6x Median $1,574 $3,826 9.8x 9.8x
9.4x 8.1x 7.1x 6.9x 10.2% 10.2% 0.0% 1.20x 4.5x High $5,130 $9,886 13.3x 12.9x 12.4x 11.3x 10.8x 11.3x 22.6% 15.3% 4.5% 1.62x 5.8x
Propane Distributors(4)
Ferrellgas Partners LP $1.56 $152 $2,162 8.9x 9.0x 8.6x NM NM NM NM NM NA NA 8.4x CCC
Suburban Propane Partners LP 21.47 1,345 2,619 9.3x 9.1x 9.0x 6.7x 6.8x 6.5x 11.2% 11.2% 5.1% 1.30x 4.4x BB-
Superior Plus Corporation(3) 8.67 1,534 2,932 10.4x 8.2x 7.9x 6.0x 6.8x 6.4x 6.2% 6.3% 0.0% 2.36x 3.9x BB
Low $152 $2,162 8.9x 8.2x 7.9x 6.0x 6.8x 6.4x 6.2% 6.3% 0.0% 1.30x 3.9x Mean $1,010 $2,571 9.5x 8.8x 8.5x 6.4x 6.8x 6.5x 8.7% 8.7% 2.6% 1.83x 5.6x Median $1,345 $2,619 9.3x 9.0x
8.6x 6.4x 6.8x 6.5x 8.7% 8.7% 2.6% 1.83x 4.4x High $1,534 $2,932 10.4x 9.1x 9.0x 6.7x 6.8x 6.5x 11.2% 11.2% 5.1% 2.36x 8.4x
Abe Partners, L.P. (WS) $27.53 $2,940
$5,818 9.6x 9.2x 9.0x 7.3x 7.1x 7.0x 13.8% 13.8% (4.5%) 1.03x 4.5x NA Abe Partners, L.P. (Revised Budget) 9.6x 9.3x 9.1x 7.3x 7.3x 7.2x 13.8% 13.8% 0.0% 0.99x 4.5x NA At Current Proposal (WS Estimates) $34.25 $3,210 $6,448 10.6x 10.1x 10.0x 9.1x
8.9x 8.7x 11.1% 11.1% 0.0% 1.03x 4.5x NA At Current Proposal (Revised Budget) $34.25 $3,210 $6,448 10.6x 10.3x 10.0x 9.1x 9.1x 9.0x 11.1% 11.1% 0.0% 0.99x 4.5x NA
Source: Company forecasts & filings, investor presentations, Wall Street research and estimates as compiled by FactSet as of 3/4/2019. (1) Low growth group
defined as MLPs below 5% 2019E-2022E distribution CAGR and with enterprise value between $1.0 BB and $10 BB.
(2) Coverage defined as distributable cash flow
divided by total distributions to GP and LP. 18 (3) Uses exchange rate of 0.7506 USD per CAD.
(4) Propane distributor Equity Value / DCF and Yield metrics exclude
Ferrellgas from group median.
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Propane Precedent Transactions Analysis
A B C D E F G H I
Date Transaction EBITDA EBITDA Purchase Price / Purchase Price / Buyer Seller Asset Announced Value ($MM) LTM FY1/NTM LTM EBITDA NTM EBITDA
5/30/2018 Superior Plus Corporation NGL Energy Partners LP Retail Propane Operations 900 85 84 10.5x(1) 10.7x 11/7/2017 DCC LPG NGL Energy Partners LP Retail West 200 25 28 8.0x
7.1x
7/24/2017 SHV Energy American Midstream Partners Pinnacle Propane 170 24 19 7.0x 9.0x 2/13/2017 Superior Plus Corporation Gibson Energy Canwest Propane 412 38
33 10.8x 12.3x 6/23/2016 World Fuel Services PAPCO, Associated Petroleum Products Misc. Fuel Services 230 NA 38 NA 6.0x 5/19/2015 DCC LPG Shell Butagaz 517 139 136 3.7x 3.8x 7/2/2014 UGI Corp. Total SA Totalgaz SNC 580 NA 95 NA 6.1x 4/26/2012
Suburban Propane Partners Inergy Retail Propane Assets 1,800 197 NA 9.1x NA 10/17/2011 AmeriGas Partners, L.P. Energy Transfer Partners Heritage Propane Operations 2,890 253 325 11.4x 8.9x 1/4/2010 Inergy Sterling Partners Liberty Propane 223 NA 36
NA 6.2x 11/18/2004 Inergy Star Gas Partners LP Star Gas Propane 475 49 50 9.6x 9.5x 4/20/2004 Ferrellgas Blue Rhino - 343 34 44 10.0x 7.8x 12/23/2003 Suburban Propane Partners Agway Energy - 206 41 34 5.0x 6.0x 11/7/2003 Energy Transfer Company Ltd.
Heritage Propane Partners - 980 90 119 10.9x 8.3x 1/31/2001 AmeriGas Partners, L.P. NiSource Columbia Propane 216 NA NA NA NA
Low $170 $24 $19 3.7x 3.8x Mean $676
$89 $80 8.7x 7.8x Median $412 $49 $44 9.6x 7.8x High $2,890 $253 $325 11.4x 12.3x
>$1B Mean $2,345 $225 $325 10.3x 8.9x
>$1B Median $2,345 $225 $325 10.3x 8.9x
Current Ulysses Proposal
Ulysses Abe $6,448 $606 $625 10.6x 10.3x (0.6239x All-In XR)
19 Source: Company filings, Wall
Street research, IHS Market.
(1) Transaction multiple before acquisition synergies; 8.2x synergy adjusted multiple.
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PRELIMINARY CONFIDENTIAL DRAFT Abe DCF Analysis Subject to Further Review & Revision
Abe Revised Budget Case | Valuation Effective Date: 3/31/2019 Abe Current Unit Price: $27.53
Implied Proposal Value: $34.25
Discounted Levered DCF Analysis Discounted
Levered DCF Analysis
Abe Levered LP DCF | $3.80 Annual Dist. Policy Abe Levered LP DCF | Targeted Leverage & Coverage Policy
2023E DCF Multiple
Discount Rate
2023E Distribution Yield
Discount Rate
2023E DCF Multiple
Discount Rate
2023E Distribution Yield
Discount Rate
6.0x 8.0x 10.0x 6.0x 8.0x 10.0x
8.0% $29.91 $35.94 $41.97 8.0% $30.75 $36.99 $43.23 10.0%
$28.43 $34.08 $39.73 10.0% $29.22 $35.07 $40.92 12.0% $27.05 $32.36 $37.67 12.0% $27.80 $33.29 $38.79
Discounted Distribution Analysis Discounted Distribution
Analysis
Abe LP Distributions | $3.80 Annual Dist. Policy Abe LP Distributions | Targeted Leverage & Coverage Policy
13.0% 10.5% 8.0% 13.0% 10.5% 8.0%
8.0% $33.99 $39.30 $47.94 8.0% $29.81 $34.57 $42.30
10.0% $32.24 $37.23 $45.33 10.0% $28.27 $32.73 $39.98
12.0% $30.63 $35.31
$42.92 12.0% $26.84 $31.03 $37.84
PV of Future Unit Price Analysis PV of Future Unit Price Analysis
Abe LP Distributions | $3.80 Annual Dist. Policy Yield Abe LP Distributions | Targeted Leverage & Coverage Policy Yield $47.14 $46.48 $45.88 $45.33 8.0% $40.07 $39.98 8.0%
$39.09 $38.54 $36.36 $36.68 $36.97 $37.23 $31.48 $32.24 10.5% $32.19 $32.73 10.5% $29.73 $30.65 $30.15 $30.41
13.0% 13.0% $27.53 $27.53 $25.41 $27.35 $28.27
Current $24.65 Current Price Price
2H 2019E 2020E 2021E 2022E 2H 2019E 2020E
2021E 2022E
PV of Future Share Price Assumptions
∎ Management
projections ∎ Future share price calculated at FY1 annual distributions divided by yield∎ Valuation date as of 3/31/19∎ Discounted to 3/31/19 at 10% cost of equity
Interim distributions discounted upon receipt to 3/31/19
20
Source: Management projections and Factset as of 3/4/2019.
TUDORPICKERING HOLT&CO ENERGY
INVESTMENT & MERCHANT BANKING
PRELIMINARY CONFIDENTIAL DRAFT Abe DCF Analysis Subject to Further Review & Revision
Abe Historical Weather Case | Valuation Effective Date: 3/31/2019 Abe Current Unit Price: $27.53
Implied Proposal Value: $34.25
Discounted Levered DCF Analysis Discounted
Levered DCF Analysis
Abe Levered LP DCF | $3.80 Annual Dist. Policy Abe Levered LP DCF | Targeted Leverage & Coverage Policy
2023E DCF Multiple
Discount Rate
2023E Distribution Yield
Discount Rate
2023E DCF Multiple
Discount Rate
2023E Distribution Yield
Discount Rate
6.0x 8.0x 10.0x 6.0x 8.0x 10.0x
8.0% $27.48 $32.96 $38.44 8.0% $28.46 $34.19 $39.91 10.0%
$26.13 $31.27 $36.41 10.0% $27.05 $32.42 $37.79 12.0% $24.87 $29.70 $34.52 12.0% $25.75 $30.79 $35.83
Discounted Distribution Analysis Discounted Distribution
Analysis
Abe LP Distributions | $3.80 Annual Dist. Policy Abe LP Distributions | Targeted Leverage & Coverage Policy
13.0% 10.5% 8.0% 13.0% 10.5% 8.0%
8.0% $33.99 $39.30 $47.94 8.0% $28.18 $32.59 $39.75
10.0% $32.24 $37.23 $45.33 10.0% $26.74 $30.87 $37.59
12.0% $30.63 $35.31
$42.92 12.0% $25.40 $29.28 $35.59
PV of Future Share Price Analysis PV of Future Share Price Analysis
Abe LP Distributions | $3.80 Annual Dist. Policy Yield Abe LP Distributions | Targeted Leverage & Coverage Policy Yield $47.14 $46.48 $45.88 $45.33
8.0% 8.0% $39.09 $38.54 $38.04 $37.59 $36.36 $36.68 $36.97 $37.23 $31.48 $32.24 10.5% 10.5% $29.73 $30.65 $30.15 $30.41 $30.65 $30.87
13.0% 13.0% $27.53 $27.53 $25.41 $26.10 $26.74
Current $24.65 Current Price Price
2H 2019E 2020E 2021E 2022E 2H 2019E 2020E 2021E 2022E
PV of Future Share Price Assumptions
∎ Management projections ∎ Future share price calculated at FY1 annual distributions divided by yield∎ Valuation date as of 3/31/19∎
Discounted to 3/31/19 at 10% cost of equity
Interim distributions discounted upon receipt to 3/31/19
21 _
Source: Management projections and Factset as of 3/4/2019.
TUDORPICKERING HOLT&CO ENERGY INVESTMENT & MERCHANT BANKING
PRELIMINARY CONFIDENTIAL DRAFT Abe DCF Analysis Subject to Further Review & Revision
Abe Capital Investment Case | Valuation Effective Date: 3/31/2019 Abe Current Unit Price: $27.53
Implied Proposal Value: $34.25
Discounted Levered DCF Analysis Discounted
Levered DCF Analysis
Abe Levered LP DCF | $3.80 Annual Dist. Policy Abe Levered LP DCF | Targeted Leverage & Coverage Policy
2023E DCF Multiple
Discount Rate
2023E Distribution Yield
Discount Rate
2023E DCF Multiple
Discount Rate
2023E Distribution Yield
Discount Rate
6.0x 8.0x 10.0x 6.0x 8.0x 10.0x
8.0% $30.86 $37.23 $43.59 8.0% $31.47 $38.00 $44.53 10.0%
$29.32 $35.28 $41.25 10.0% $29.89 $36.01 $42.13 12.0% $27.88 $33.48 $39.09 12.0% $28.42 $34.17 $39.92
Discounted Distribution Analysis Discounted Distribution
Analysis
Abe LP Distributions | $3.80 Annual Dist. Policy Abe LP Distributions | Targeted Leverage & Coverage Policy
13.0% 10.5% 8.0% 13.0% 10.5% 8.0%
8.0% $33.99 $39.30 $47.94 8.0% $30.74 $35.72 $43.81
10.0% $32.24 $37.23 $45.33 10.0% $29.14 $33.81 $41.39
12.0% $30.63 $35.31
$42.92 12.0% $27.66 $32.04 $39.16
PV of Future Share Price Analysis PV of Future Share Price Analysis
Abe LP Distributions | $3.80 Annual Dist. Policy Yield Abe LP Distributions | Targeted Leverage & Coverage Policy Yield $47.14 $46.48 $45.88 $45.33 $40.46 $41.39
8.0% 8.0% $37.23 $38.95 $38.40 $36.36 $36.68 $36.97 10.5% $33.81 $31.48 $32.24 $32.49 10.5% $29.73 $30.65 $30.04 $30.30
13.0% 13.0% $27.53 $27.58 $27.53 $ 29.14 $25.32
Current $24.56 Current Price Price
2H 2019E 2020E 2021E 2022E 2H 2019E 2020E 2021E 2022E
PV of Future Share Price Assumptions
∎ Management projections ∎ Future share price calculated at FY1 annual distributions divided by yield∎ Valuation date as of 3/31/19∎
Discounted to 3/31/19 at 10% cost of equity
â–¡ Interim distributions discounted upon receipt to 3/31/19
22 Source: Management projections and Factset as of 3/4/2019.
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PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
IV. Ulysses Financial Analysis
23
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Selected Publicly Traded Company Metrics
(USD in millions, except per share data)
LDCs EV / EBITDA Price / Earnings Price / CFPS Dividend Metrics Debt Metrics
Share Total
Equity Enterprise Payout Dist. CAGR Net Debt / S&P Credit LT EPS Company Name Price Value Value 2019E 2020E 2019E 2020E 2019E 2020E Current 2019E Ratio(2) 19E to ‘21E EBITDA Rating Growth Rate Atmos Energy $99.87 $11,728 $15,195 12.9x 11.6x
23.0x 21.4x 12.9x 11.2x 2.1% 2.1% 56.7% 8.0% 2.9x NA 6.5% Chesapeake Utilities Corporation 92.64 1,530 2,176 14.7x 14.0x 25.3x 24.1x NA NA 1.6% 1.7% 44.1% 10.1% 4.4x NA 7.6% NiSource Inc 26.96 10,091 20,051 12.0x 11.2x 20.6x 19.4x 8.5x 8.2x 3.0%
3.0% 128.1% 6.7% 5.4x BBB+ 6.0% New Jersey Resources Corporation 49.15 4,384 5,849 20.4x (1) 18.6x(1) 24.6x 22.9x 18.2x 15.5x 2.4% 2.4% 80.6% NA 5.1x NA 6.0% Northwest Natural Holding Co. 65.53 1,892 2,778 12.0x 11.4x 26.9x 25.6x 11.2x 11.3x 2.9%
2.9% 55.6% 0.7% 3.8x A+ 4.5% ONE Gas Inc 88.08 4,660 6,235 13.2x 12.4x 25.6x 24.5x 13.0x 12.4x 2.3% 2.3% 65.0% 7.7% 3.3x A 5.0% Spire Inc 79.72 4,393 7,045 13.9x 13.0x 21.4x 20.5x 11.3x 11.1x 3.0% 3.0% 68.0% 5.1% 5.2x
A- 3.4% Southwest Gas Holdings Inc 84.79 4,534 6,837 10.2x 9.4x 21.7x 20.1x 9.0x 8.5x 2.6% 2.6% 54.0% 6.4% 3.3x BBB+ 7.0%
C-Corp Midstream EV / EBITDA Price / Earnings Price / DCF/Unit Dividend (Distribution) Metrics Debt Metrics
Unit (Share) Market
Enterprise 2019E Dist. CAGR 2019E S&P Credit 19E to ‘22E Company Name Price Value Value 2019E 2020E 2019E 2020E 2019E 2020E Current 2019E Coverage(4) ‘19E to ‘22E EBITDA Rating DCF CAGR Enbridge Inc $35.06 $71,020 $128,180 13.0x
12.0x 18.6x 17.5x 9.7x 9.1x 6.3% 6.4% 1.5x 3.2% 4.9x BBB+ 7.2% Kinder Morgan Inc 19.85 45,195 79,361 10.2x 9.9x 19.6x 18.4x 9.1x 8.4x 4.0% 5.0% 2.2x 14.9% 4.3x BBB 6.9% SemGroup Corporation 15.13 1,380 3,500 7.7x 6.9x NM 47.3x 5.1x 4.8x 12.5% 12.8%
1.5x 3.0% 3.9x B+ 5.2% Targa Resources Corp. 41.57 9,824 16,079 11.6x 9.2x NM 40.6x 11.7x 7.5x 8.8% 8.8% 1.0x 4.4% 3.5x BB 21.6% Tallgrass Energy LP 22.97 6,507 10,213 10.5x 11.4x 13.1x 15.6x 9.3x 9.2x 9.1% 9.4% 1.3x 4.9% 3.3x BBB- 0.3% Williams Companies Inc 27.40 34,128 57,746 11.4x 10.7x 28.1x 25.6x 10.6x 10.0x 5.0% 5.5% 1.7x 9.3% 4.4x BBB 19.4%
Propane Distributors(5) EV / EBITDA Price / Earnings Price / DCF/Unit Dividend (Distribution) Metrics Debt Metrics
Ferrellgas Partners LP $1.56 $152 $2,162 9.0x 8.6x NM NM NM NM NM NM NA NA 8.4x CCC 33.2% Suburban Propane Partners LP 21.47 1,345 2,619 9.1x 9.0x NM NM 6.8x 6.5x 11.2% 11.2% 1.3x
5.1% 4.4x BB- 3.9% Superior Plus Corporation(6) 8.67 1,534 2,932 8.2x 7.9x 18.5x 15.0x 6.8x 6.4x 6.2% 6.3% 2.4x 0.0% 3.9x BB 4.8%
Ulysses Corporation (WS) $54.90 $9,769 $16,082 12.1x 9.9x 20.5x 18.0x 10.2x (3) 8.6x (3) 1.9% 2.0% 47.5% 5.4% 3.3x NA 8.0% Ulysses Corporation (Mgmt.) 10.0x 9.5x 18.8x 17.5x 8.9x
(3) 7.6x (3) 1.9% 2.0% 35-45% 4.0% 2.7x NA 6-10%
Source: Company
forecasts & filings, investor presentations, Wall Street research and estimates (3) P/CFPS shown for Ulysses. as compiled by FactSet as of 3/4/2019. (4) Coverage defined as distributable cash flow divided by total distributions.
(1) New Jersey Resources Corporation 2019E and 2020E EBITDA multiples are excluded from (5) Propane distributor Equity Value / DCF and Yield metrics exclude
Ferrellgas from group summary statistics due to disproportionately high multiples resulting from investment tax median. 24 credit benefits for the company’s solar assets. (6) Uses exchange rate of 0.7506 USD per CAD.
(2) Payout ratio defined as last quarter dividend divided by LTM earnings.
PRELIMINARY CONFIDENTIAL DRAFT
PF Ulysses DCF Analysis | Management Projections Subject to Further Review & Revision
Valuation Effective Date: 3/31/2019
Discounted Unlevered DCF(1,2) Analysis
Levered DCF Analysis
Ulysses SQ Dividends Policy
2022E Terminal Multiple
Discount Rate
2022E Price/Earnings Multiple
Discount Rate
8.5x 10.0x 11.5x 19.0x 21.0x 23.0x
4.00% $57.42 $70.15 $82.88 4.50% $67.73 $74.56 $81.39 4.75% $56.06 $68.57 $81.07 5.25% $66.55 $73.26 $79.97 5.50% $54.74 $67.02 $79.31 6.00% $65.41 $72.00 $78.59
PF PV of Future Share Price Analysis(3)
Ulysses SQ Dividends Policy PF Ulysses(4)
Terminal P/E Multiple
Assumptions $79.97 $76.70 ∎ Management projections $72.33 $73.26
19.0x $70.18 ∎ Valuation date as of 3/31/19 $66.55 $66.09 $63.66 ∎ Future share price calculated at FY1 annual earnings per share times terminal P/E multiple $59.85 $54.90 ∎ Discounted 3/31/19 to at 5.25% cost of quity
Interim dividends discounted upon receipt to 3/31/19
Current
∎ Cash consideration of $6.80 per unit added to value of 0.5000x pro Price forma Ulysses shares received by Abe unitholders
2H 2019E 2020E 2021E
Source: Management projections and FactSet as of 3/4/2019. (1) DCF
analysis assumes normalized net working capital.
(2) Fully consolidated enterprise value analysis; implied Ulysses share price calculated based on eliminating Abe
publicly-owned LP interest at current proposal consideration. 25 (3) Dividend policy assumed same as SQ policy, across all operating scenarios.
(4) Pro forma
analysis incorporates EBITDA synergies of $5 MM per year.
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
V. Transaction Analysis
26
PRELIMINARY CONFIDENTIAL DRAFT Subject to Further Review & Revision
Analysis at Various Exchange Ratios
($ in millions, unless otherwise noted)
a b d e f g h i j k l m n o p
Original Ulysses Ulysses Original Abe Abe Revised Ulysses Second
Current Counter Proposal Proposal Proposal Proposal Proposal
Exchange Ratio Consideration (XR) 0.5000x 0.5000x 0.5000x 0.5000x 0.5000x 0.5000x 0.5000x Stock
Consideration (Ulysses Share Price x XR) $27.45 $27.45 $27.45 $27.45 $27.45 $27.45 $27.45 Cash Consideration $4.03 $6.32 $6.80 $8.00 $9.00 $10.00 $13.94 Exchange Ratio (At Current Ulysses Sh. Price of $54.90) 0.5734x 0.6151x 0.6239x 0.6457x 0.6639x
0.6821x 0.7539x
Implied Abe Unit Price $31.48 $33.77 $34.25 $35.45 $36.45 $37.45 $41.39 Premium to Implied Abe Unit Price (Ulysses Share Price x XR + Cash) 14.3%
22.7% 24.4% 28.8% 32.4% 36.0% 50.3% Fully Diluted Abe Units Outstanding 93.7 93.7 93.7 93.7 93.7 93.7 93.7 Implied Fully-Diluted Abe Equity Value $2,950 $3,165 $3,210 $3,322 $3,416 $3,510 $3,879 Net Debt 2,846 2,846 2,846 2,846 2,846 2,846 2,846
GP Equity Value(1) 360 360 360 360 360 360 360
Non-Controlling Interest 32 32 32 32 32 32 32
Implied Abe Enterprise Value(1) $6,189 $6,403 $6,448 $6,561 $6,654 $6,748 $7,117
Comparable
Metrics
Propane Propane Propane Propane Abe Low-Growth Low-Growth Distributor
Distributor Transaction Transaction Multiples: abe Statistic MLP Median MLP Mean Median(3) Mean(3) Median Mean
EV / EBITDA
2018A $606 10.2x 10.6x 10.6x 10.8x 11.0x 11.1x 11.8x 9.8x 10.3x 9.3x 9.5x 9.6x 8.7x 2019E $636 9.7x 10.1x 10.1x 10.3x 10.5x 10.6x 11.2x 9.8x 9.7x 9.0x 8.8x 7.5x 7.7x 2020E $644
9.6x 9.9x 10.0x 10.2x 10.3x 10.5x 11.1x 9.4x 9.2x 8.6x 8.5x
abe ws Consensus case P / LP