Zak Brown

UBS Private Wealth Management

Current Opportunities in MLPs

The Errico Group June 2012

Current Opportunities in MLPs

What's occurred?

Master Limited Partnerships currently offer a unique buying opportunity given their mean reversion behavior to various other yield products – namely Treasuries and Baa bonds.

Spreads today have widened dramatically in response to risk aversion that is concerned with both credit markets and commodity prices.

MLPs are yielding a premium not seen since the credit crisis in 2008 despite a much healthier environment.

What's Different versus 2008?

MLPs have deleveraged and successfully refinanced the cost of capital

Credit markets are functioning

Current issues are political in nature and not questions of corporate solvency

Distribution growth is healthy regardless of commodity weakness & cyclical slowdowns

UBSMaster Limited Partnerships1

12 Month Forward Returns when Breeching 400bp over Treasuries:

September 9th, 2008... Beginning of Lehman Collapse AMZ Index 5.74% SPX Index -13.30% MSCI World - 9.69%

May 25th, 2010… Beginning of Greek Default AMZ Index 38.93% SPX Index 25.42% MSCI World 29.30%

Peak to Trough Declines:

October 11th, 2007 - March 5th, 2009 AMZ Index -37.93% SPX Index -54.56% MSCI World -56.49%

Comparative Returns through Market Dislocations

UBSMaster Limited Partnerships2

Asset Class PerformanceJan 1, 2000 through Dec 31, 2011

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 201110- Year CAGR

5- Year CAGR

3-Year CAGR

MLPs 45.70%

MLPs 43.70%

Commodities 32.10%

Small Cap 47.30%

REIT 31.50%

Commodities 25.60%

REIT 35.90%

Commodities 32.70%

BarCap HG -4.90%

MLPs 76.40%

MLPs 35.90%

Utilites 19.62%

MLPs 18.30%

MLPs 16.50%

MLPs 14.80%

Utilities 43.60%

REIT 12.80%

BarCap HG 10.10%

MLPs 44.50%

Utilities 21.30%

Non US Equity 14.00%

Non US Equity 26.90%

Utilities 15.30%

BarCap HY -26.20%

BarCap HY 58.20%

REIT 28.50%

MLPs 13.97%

REIT 10.60%

BarCap HY 8.90%

BarCap HY 10.40%

Commodities 40.90%

BarCap HG 10.30%

REIT 3.60%

Non US Equity 39.20%

Non US Equity 20.70%

Utilities 14.00%

MLPs 26.10%

MLPs 12.70%

Utilities -29.90%

Non US Equity 32.50%

Small Cap 26.90%

BarCap HG 9.73%

BarCap HY 8.90%

BarCap HG 6.00%

BarCap HG 7.20%

REIT 26.80%

BarCap HY 5.30%

BarCap HY -1.40%

REIT 36.70%

Small Cap 18.30%

REIT 12.10%

Small Cap 18.40%

Non US Equity 11.60%

Small Cap -33.80%

REIT 28.60%

BarCap HY 15.10%

REIT 7.54%

BarCap HG 6.60%

Small Cap 4.50%

Small Cap 2.20%

BarCap HG 9.10%

Small Cap 2.5%

MLPs -3.40%

BarCap HY 29.0%

Commodities 17.30%

MLPs 6.30%

Utilities 15.80%

S&P 500 5.50%

MLPs -36.90%

Small Cap 27.20%

S&P 500 15.10%

BarCap HY 4.98%

Small Cap 6.30%

REIT 3.00%

REIT 0.80%

Small Cap -3.00%

S&P 500 -11.90%

Non US Equity -15.70%

S&P 500 28.70%

MLPs 16.70%

S&P 500 4.90%

S&P 500 15.80%

BarCap HG 4.60%

S&P 500 -37.00%

S&P 500 26.50%

Commodities 9.00%

S&P 500 2.11%

Non US Equity 3.90%

Non US Equity 2.90%

S&P 500 -2.90%

BarCap HY -5.90%

Utilities -16.10%

Small Cap -20.5%

Commodities 20.70%

BarCap HY 11.10%

Small Cap 4.60%

BarCap HY 11.80%

BarCap HY 1.90%

REIT -38.00%

BarCap HG 18.70%

BarCap HG 9.00%

Small Cap -4.44%

Commodities 1.80%

S&P 500 2.30%

Non US Equity -6.50%

S&P 500 -9.10%

Non US Equity -21.20%

Utilities -21.90%

Utilities 19.50%

S&P 500 10.90%

BarCap HY 2.70%

BarCap HG 4.30%

Small Cap -1.60%

Non US Equity -43.10%

Commodities 13.50%

Non US Equity 8.20%

Commodities -7.36%

S&P 500 1.40%

Utilities -0.20%

Utilities -9.50%

Non US Equity -14.00%

Commodities -31.90%

S&P 500 -22.10%

BarCap HG 8.20%

BarCap HG 5.40%

BarCap HG 1.70%

Commodities -15.10%

REIT -16.80%

Commodities -46.50%

Utilities 4.90%

Utilities 0.90%

Non US Equity -11.67%

Utilities 0.70%

Commodities -5.70%

Commodities -12.80%

UBSMaster Limited Partnerships3

MLPs Outperform in a Recession

4 UBSMaster Limited Partnerships

10yr Total Return Analysis vs. S&P 500 & Ten Year Treasury

5 UBSMaster Limited Partnerships

MLP Relative Value

MLPs currently trade 444bp wider than 10yr Treasuries…

This gap represents a significantdislocation relative to the 10yraverage of 320bp…

MLPs which typically trade in-lineon a yield basis with Baa bondshave widened over that asset class by 102.9bp

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MLPs Offer DiversificationJune 30, 2010 - June 30, 2012

SPX S&P 500 Total Return Index Baa Moody's Corporate Baa Bond Index

REIT Dow Jones Equity REIT Total Return Index HYB iShares High Yield Corporate Bond Fund

UTY Philadelphia Stock Exchange Utility Index Total Return MUNI Moody's Municipal Bond AAA 10yr Index

10Y UST Generic U.S. 10yr Treasury Bond PREF iShares S&P U.S. Preferred Stock Index Fund

CORP iShares Investment Grade Coporate Bond Fund

MLP Correlation to Other Asset Classes

0.604

0.502

0.042

0.614

0.083

0.652

0.289

0.031

0.641

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

SPX REIT UTY 10Y UST CORP Baa HYB MUNI PREF

Low Correlation to Broad Market and

Fixed Income

UBSMaster Limited Partnerships7

Distribution & Long Term Performance

Master Limited Partnerships

Buckeye Partners, L.P. (BPL) Magellan Midstream Partners, L.P. (MMP) Enterprise Products Partners LP (EPD)2012 Full Year Distribution Forecast $4.28 2012 Full Year Distribution Forecast $3.76 2012 Full Year Distribution Forecast $2.563-Yr Hist CAGR 5.63% 3-Yr Hist CAGR 9.70% 3-Yr Hist CAGR 5.69%

Distribution Summary Distribution Summary Distribution Summary2003 $2.54 2003 $1.53 2003 $1.442004 $2.64 2004 $1.72 2004 $1.512005 $2.83 2005 $1.97 2005 $1.662006 $3.03 2006 $2.29 2006 $1.802007 $3.23 2007 $2.49 2007 $1.922008 $3.43 2008 $2.72 2008 $2.052009 $3.63 2009 $2.84 2009 $2.172010 $3.83 2010 $2.91 2010 $2.292011 $4.03 2011 $3.11 2011 $2.412012 $4.28 2012 $3.76 2012 $2.56

10 Year Distributions Per Share $33.43 10 Year Distributions Per Share $25.33 10 Year Distributions Per Share $19.79% Yield 7.00% % Yield 5.20% % Yield 5.07%

Annualized 10 Yr Distribution Grow th 6.9% Annualized 10 Yr Distribution Grow th 14.5% Annualized 10 Yr Distribution Grow th 7.7%

Kinder Morgan Energy Partners, L.P. (KMP) Plains All American Pipeline, L.P. (PAA)2012 Full Year Distribution Forecast $4.98 2012 Full Year Distribution Forecast $4.303-Yr Hist CAGR 5.78% 3-Yr Hist CAGR 5.85%

Distribution Summary Distribution Summary2003 $2.58 2003 $2.192004 $2.81 2004 $2.302005 $3.07 2005 $2.582006 $3.23 2006 $2.872007 $3.39 2007 $3.282008 $3.89 2008 $3.502009 $4.20 2009 $3.622010 $4.32 2010 $3.762011 $4.58 2011 $3.912012 $4.98 2012 $4.30

10 Year Distributions Per Share $37.05 10 Year Distributions Per Share $32.30% Yield 6.02% % Yield 5.10%

Annualized 10 Yr Distribution Grow th 9.3% Annualized 10 Yr Distribution Grow th 9.6%

2012 Forecasts and Historical Distributions

MLP PortfolioJune 2012

10 Year Historical Distribution Growth

$1.00$1.50$2.00$2.50$3.00$3.50$4.00$4.50$5.00$5.50

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Buckeye Partners, L.P. (BPL) Magellan Midstream Partners, L.P. (MMP)

Enterprise Products Partners LP (EPD) Kinder Morgan Energy Partners, L.P. (KMP)

Plains All American Pipeline, L.P. (PAA)

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UBS Master Limited Partnerships

as of June 30, 2012

Investment Style…………………………………Yield Focused

Investment Focus………………………………..Outperformance of the Alerian Index (AMZ) and S&P 500

Benchmark……………………………………….Alerian Index (AMZ), S&P 500

Managers…………………………………………R. Christopher Errico Sean T. KilduffManaging Director Senior Vice President

Master Limited Partnership Ticker Current Yld Start Value 6/30/2007 6/30/2012 Total Gains Distributions Total Value Total Return $ Total ReturnBuckeye Partners, L.P. BPL 7.00% 2,000,000$ 51.32$ 52.17$ 33,125.49$ 725,350.74$ 2,758,476.23$ 758,476.23$ 37.92%Magellan Midstream Partners, L.P. MMP 4.20% 2,000,000$ 46.58$ 70.64$ 1,033,061.40$ 622,960.50$ 3,656,021.90$ 1,656,021.90$ 82.80%Enterprise Products Partners, L.P. EPD 5.07% 2,000,000$ 31.81$ 51.24$ 1,221,628.42$ 699,622.76$ 3,921,251.18$ 1,921,251.18$ 96.06%Kinder Morgan Energy Partners, L.P. KMP 6.02% 2,000,000$ 55.19$ 78.58$ 847,617.32$ 763,906.50$ 3,611,523.83$ 1,611,523.83$ 80.58%Plains All American, L.P. PAA 5.10% 2,000,000$ 63.65$ 80.81$ 539,198.74$ 581,853.89$ 3,121,052.63$ 1,121,052.63$ 56.05%

Total/Avg 5.476% 10,000,000.00$ 3,674,631.37$ 3,393,694.39$ 17,068,325.76$ 7,068,325.76$ 70.68%

Inception AMZ Index S&P 500 Errico Group6/30/2007 60.71% 1.10% 70.68%

Annualized 12.14% 0.22% 14.14%

5 Year Master Limited Partnership Presentation

Securities

Total Return

9

Overview

Investment ThesisWhat are MLP's?

Structured as a limited partnership, not a corporation

Own, maintain and operate energy infrastructure in North

America

Issue units that are traded on public exchanges

Generate high free cash flow paid out quarterly to investors

Income and growth potential

Approximately $285 billion market cap as of 3/1/2011

UBS Master Limited Partnerships

Why own MLP's?

Unmatched total return value proposition

Attractive yield

Portfolio diversification

A lower risk (beta) way to invest in energy

Resilient business model during periods of economic weakness

Asset class is under-owned by institutions

• Structure - An MLP is a publically traded partnership with assets, growth characteristics and risk tolerance levels that are different from traditional corporations. The units or shares are registered with the U.S. Securities and Exchange Commission and trade on a major exchange, generally the New York Stock Exchange. An MLP consists of a General Partner and Limited Partners. Such an entity can qualify as an MLP as long as 90% of its income is qualified as being derived from thetransportation, storage, or processing of "natural resource" products.

• Taxation - The major difference between an MLP and a traditional corporation is its pass-through tax treatment, which exempts theMLP from taxes at the entity level and allows it to pass the taxes on to the investors of the MLP. The individual investorbenefits because in most instances, the distributions that are received are considered return of capital and therefore,the taxes due on that portion of income may be deferred until the MLP is sold.

• Valuation - Primary drivers of value are the perceived growth rate in cash distributions and the cash flow coverage of the total unitsoutstanding. MLPs that have the best opportunity to internally grow or acquire assets have historically been rewarded higher per share valuations than those MLPs whose growth is perceived as limited. Growth in assets usually translatesinto growth in an MLP's cash flow and consequently, growth in its ability to increase distributions.

• Function - As a yield instrument, MLPs have often been compared to bonds and regarded as an attractive investment option forinvestors seeking steady income. More recently, many MLPs have evolved into growth-oriented investments with the sponsor or General Partner using acquisitions to drive growth.

MLP Description

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