To today's live cast, sponsored by SS&C ALPS Advisors. Thanks so much for being with us today. My name is Stacey Morris. I'm the Head of Energy Research at VettaFi, and I'm really excited about what we have in store for you today. We'll spend the bulk of our next 30 minutes in conversation with Aaron Milford, President and Chief Executive Officer of Magellan Midstream Partners, primarily talking about the transaction with ONEOK and getting his thoughts on the transaction. VettaFi ETFs are also always near and dear to our heart, so we'll spend a few minutes also talking about how investors can access the MLP and energy infrastructure space through ETFs. Before we dive in today, there's a few housekeeping items that I wanted to go over with you. First, we offer closed captions for our video webcasts. If you wish to turn those on, simply click the CC button on the bottom right of your media player window. Also, today, throughout the presentation, you'll have the opportunity to ask questions. If you would like to submit a question, just type your question into the Q&A box. It should be located on the bottom right of your screen, and we'll try our best to get to your questions in our short time frame today. I also want to note these slides and a recording of today's presentation are expected to be available on demand in the next day or so. You will receive an email when those become available. Finally, I also wanted to highlight the folder icon at the bottom of your screen. You'll find in that folder a link to the Magellan and ONEOK transaction website, MaximizingValueforMMPunitholders.com. You'll also find a number of resources from our friends at SS&C ALPS Advisors. For example, you'll find fact sheets for the Alerian MLP ETF and the Alerian Energy Infrastructure ETF, as well as monthly insight reports for both of those funds. You'll also find a brochure about SS&C ALPS solutions for today's economy. You'll find a primer on MLP funds, a Q2 Midstream dividend recap, and then you'll also find a link to our Energy Infrastructure Channel. On that channel, you can find research from my colleagues and I, focused on the midstream energy infrastructure space. With that, let me introduce our speakers for today. I'm delighted to be joined by Aaron Milford, President and CEO of Magellan Midstream Partners, and also very excited to have with us Paul Baiocchi, the Chief ETF Strategist at SS&C ALPS Advisors. Aaron, we'll start with you. First of all, thank you so much for being with us today. Well, thank you for having me. Glad to be here. Thank you. To get started, Magellan clearly has had a really distinguished history in the MLP space, a really strong, strong track record. You know, why pursue this transaction with ONEOK instead of just maintaining the status quo? Well, we're, we're certainly really proud of what we have accomplished, in really a, you know, fairly short period of time, just a couple of decades, frankly. You know, we're often asked: What, what has made Magellan different? How, how have we achieved the, the results that we have? I think the core of that historical performance has been, I think we've been one of the most unitholder value-focused MLPs in the space. That has always been our top priority, is what, what things do we need to do to create value for our unitholders? Whether that's eliminating IDRs, whether that's, making sure we're managing our portfolio assets correctly. It goes all the way to more recently, the buyback structure, buyback program that we've had. We thought all of those things increase unitholder value. What's really important and, and to your question, you know, why are we pursuing this transaction with ONEOK? It relates to the same thing. It's that intense focus on value that we've had historically that we're applying in this case, too. As we take that intense focus on value and we look forward, we think that the combination with ONEOK is going to be very powerful. It, it's value to our unitholders in terms of the consideration they're receiving. We think it's a full value for them. We also see a lot of value in the pro forma standalone company and what it will do for our unitholders going forward, that frankly, we just don't think or would be very difficult for us to achieve, remaining as a standalone company. At the end of the day, for us, it's all about what creates value for unitholders. This transaction does that, and that's why we're recommending it. Thanks, Aaron. That's, that's helpful. I'd like to spend a few minutes on taxes, if we can. I think investors have a few questions around probably the current tax impact and maybe also a longer-term tax perspective. Can you just spend a little time talking about kind of the tax considerations around this transaction? Well, sure. The first thing I always want to highlight when we talk about taxes is, these have been front and center for us. As we evaluated this transaction and as we looked at the pro forma company and we thought about our unitholders, we knew taxes were going to be an important consideration for them. From the get-go, through our entire process, we have made sure we understood the tax impact to our unitholders. It was very important for our board and very important for us as management to make sure we understood it. At the end of the day, you know, a master limited partnership investment is a tax-deferred investment, not a tax-free investment. The reality is, is, you know, on, on May 12th, we were trading at $55.41 before we announced this transaction. On that day, if our unitholders had sold at $55.41, they would have paid taxes, and those taxes would have been, you know, deducted from their net proceeds. There was an after-tax value of their investment on May 12th. Just like there's an after-tax value of this transaction, which, you know, at, at terms that were announced on the 14th, was $67.50 a unit. You take taxes out of that as well, but you compare the after-tax from May 12 to the after-tax of this transaction, and the transaction is clearly a higher net tax after-tax outcome for our unitholders. That's really the bottom line, is it's a tax deferral investment, not a tax-free investment. Then if you also think about it, well, let's look forward for a moment and say, okay, what if I just want to hold my units for a longer period of time? What's important for our unitholders to understand is that for a unitholder that has been with us a long time, who will also have the highest tax impact with this transaction at the outset, will also realize a higher impact of ongoing taxes as we move forward. What I'm trying to say is, the tax bills that our long-term unitholders are going to pay, just holding us, are going to increase. The reason they're going to increase is because of the lower, lower tax shield for them. You know, whether you, you, you sell or whether you want to hold, the reality is for, for many of our unitholders, taxes are going up. For some of our long-tenured unitholders, that tax, a few years from now, could be as much as 60% of the distribution that we pay. When you, when you think about the taxes, yes, there's, there's a tax impact of the transaction, but you can't ignore that just holding it provides you an ability to avoid paying more taxes in the future. For us, what that means is, look at the value. If you look at the value and you look at the taxes and the reality of them, they're on both sides of the equation. We think this is, more beneficial for our unitholders, and they're economically better off, with the merger with ONEOK, than they are, holding us standalone. Yeah, that's, that's very helpful. Thanks for that. I think for a lot of investors, they've enjoyed the dividends from Magellan over the last several years and, and the strong dividend track record that you've had. So what would you say to investors who may be worried about a lower dividend post-transaction? Right. If you just look at the income stream, and we always think about value in its totality. It's all about total value, so it's capital appreciation potential as well as income stream. We look at it on a combined basis. If you just focus on the income side of that for a moment, and again, I want to talk about our long-tenured unitholders for a moment, because those that have become most reliant on the income, I would typically think of long-tenured unitholders, not unitholders or investors that may have a little shorter time horizon. When we look at that longer-tenured unitholder base, as I mentioned before, you have to look at your income on an after-tax basis. If you look at those long-term unitholders getting their distribution today, they're already most likely paying taxes that are about 30% of the distribution. As I mentioned, going forward, we think that's only going to increase, and in a few years, be as high as 60% of their distribution. When they look at their income on an after-tax basis, that's where they need to start. Then if they look at the pro forma company and the dividends that will come out of that, and look at that on an after-tax basis, and then you consider what we think will be a higher potential growth rate in that dividend income over time in the pro forma than what we could deliver standalone. You put that together, we think that for those long-tenured unitholders, that their income stream, in just a few years, would actually be higher on an after-tax basis than the income stream that we're delivering. We think from a true income investor, if you look long term, and you also consider the cash you're getting up front, even net of taxes, that this is a good opportunity for you. It's going to be a longer-term, more beneficial income stream to you than what we think we could deliver standalone. That's, that's helpful. You know, you talked about dividend growth and maximizing value for unitholders. When you think about the combined company, so what to you, do you think are some of the most kind of compelling points for investors? When we look at the combined company, there, there's really three things that stand out. The first one is the, the value of diversification. We have a really healthy business. There's no doubt about that. The refined products business that we have, the crude oil business that we have today, are really healthy businesses. When we think forward about what the pro forma has, it's going to have a really healthy refined products business, really healthy crude business, a really healthy natural gas liquids business, and a healthy natural gas business. When you think about the pro forma and you think about that diversification, all very healthy businesses, we think that's very powerful from a resilience standpoint. Going back to your income investors, when you're thinking really long term, you know, that diversification adds, we think, power to the strength of dividends going forward. It's diversification. The second one is the synergies that we're going to create. You know, there's been some doubt and uncertainty about really, are there going to be synergies in this deal or not? We believe that they are. As we work on our integration planning with ONEOK, we're becoming more confident in it. You may recall, we think synergies are going to be between $200 million, possibly greater than $400 million over the next one to four years. That's real value. That's value that we don't think we can generate by ourselves, and it's value that we don't think ONEOK can generate on a standalone basis either. It really is driven by the combination of the two companies. That's the second thing, those synergies that we'll be able to generate, this additional value for both unitholder and shareholder bases, frankly, as we move forward. Leads into my third point, which is growth, potential growth. When you look at all the different avenues that we have to win, refined products, crude oil, natural gas, liquids, natural gas, you tack the synergies onto that, that should lead to a higher growth potential in the pro forma company than what we'll have standalone. You know, we've actually been talking for a while that our capital investment opportunities are lower now than they have been in the past, and we don't see that changing anytime soon. The pro forma company is just going to have more opportunity. You put all that together, it's the diversification which gives resilience. It's the synergy that's more value we deliver to unitholders and shareholders than we can either one of us do by ourselves. That all leads to a potentially higher growth rate for the combined company, which is obviously better for shareholders moving forward. Yeah, thanks for that, Aaron. Definitely there's been a lot of focus on diversification and scale in the midstream business over time. Can you remind our audience a little bit about where they can find more information, maybe some of the resources that you all have made available? Ultimately, you know, where they can vote their units or how they can vote their units? Yeah. The primary place would be the microsite that we have set up. It's the MaximizingValueforMMPunitholders.com. Right there is sort of what I would say, transaction central. We've put a lot of information out there about the transaction. There's a lot of other good information that's out there about what others are saying, and it's a place for unitholders to go and get, you know, fully informed about this really exciting transaction. That's where I would direct them is that particular site. Then, you know, at the end of the day, I- I'm going to go back to where we started. This is a bit of a summary, which is we have always been value focused. That distinguished sort of history that you highlighted at the beginning was created because of our focus on value. This transaction and our recommendation of it is no different. It's that intense focus on value for our unitholders that led us to recommend that they vote for this transaction. It's the things that made us so great in the past are the same things that we're relying on today to recommend this. Frankly, it'll be the, the same focus that we have in the pro forma company that helps make that as successful as we can possibly make it. That's great. Thank you, Aaron. As you kind of maybe summarize our conversation or you think about, just kind of closing remarks or thoughts that you would kind of leave us with, what else would you, would you leave this audience with? Again, what I gave you a bit of my summary comment. At the end of the day, we're focused on value. This delivers it. We encourage our unitholders to vote for the transaction to realize that value. We're excited about the potential of the pro forma company and what we're going to be able to accomplish. Recommendation, vote for the transaction. Okay, great. Well, Aaron, you know, thanks so much for your time. We appreciate you joining us today. As we kind of segue into the next part of our discussion, I mentioned early on that ETFs are always kind of near and dear to what we're doing here at VettaFi. I want to bring in my friend and colleague, Paul Baiocchi. You know, Paul, we know that investors have a lot of different options for how they access the energy infrastructure space. They can directly invest in individual MLPs or C corporations, or they can also use funds and products. Paul, can you just talk to us a little bit about the ways that investors can access the energy infrastructure space through an ETF wrapper? Sure, I'm happy to, Stacey, but before I do, if you wouldn't mind, Aaron, thanks so much again for your time and your perspective on the proposed deal. I would just love to get your perspective on the outlook for the energy infrastructure industry more broadly. I think it'd be of great value to the folks on the call at a high level, some of the sort of near-term headwinds, short-term tailwinds you see in the space. We hear a lot about some of the implications of, say, the energy transition on energy infrastructure, and I'd love to just get from someone like yourself, who's such an important figure in the industry, your perspective, because we at ALPS and in partnership with Alerian, are often talking about what we see as a roadmap to the future for energy infrastructure companies. Your perspective on, on what the next 10, 15, 20 years looks like for the energy infrastructure industry would be very helpful. Well, it's a, it's a good question, you know, for us, the way we think about energy transition, it may be a little simple, but I think it's a powerful perspective to consider, and that is none of us know how energy transition is going to unfold or where it's going to end or what it's going to look like. No one really knows that. Let's just put that in the category of energy transition is uncertain. Then the question turns into, as an industry, is when you have that uncertainty, how do you position yourself such that you are best positioned to deal with that uncertainty? For us, like I said in my remarks earlier, we have a really great refined products and crude oil business. They're going to be here a really long time. The economy needs it, or, you know, we need the energy, and that's not going to change. To the extent you can have refined products, crude oil, also natural gas liquids, natural gas, and other, other markets and commodity streams that, that, that you can access, that just gives you more ways to win, which means when you're dealing with an uncertain situation, you have more ways to adapt. What's important with all that is, an all-of-the-above energy strategy is what's necessary. We're going to need all of it. That's the reality of it, in my opinion, is we're going to need all of it. The more commodity streams, markets that you can have exposure to as a company, you should win in the long run. You may not be able to guess exactly which vertical is going to win or which one is going to be more or less impacted. The more sort of industry verticals that you're exposed to, you should be better able to handle that uncertainty, and be successful at it. It's not just about weathering the storm, it's being successful. For us, it's just recognizing it's uncertain, the path is uncertain, and making sure that you have as many ways to win as you possibly can. Great. sorry to put you on the spot there, Aaron. No, that was perfectly fine. To the group to hear your perspective, so thank you so much for that. To tie it back to the, the concept of how do you access companies like ONEOK, like Magellan, and in any case, to invest in the energy infrastructure category, that's certainly something that's near and dear to our heart. I think when you look at AMLP and ENFR, the two options that SS&C ALPS Advisors offers to investors to play on the energy infrastructure space, the biggest difference between the two is the inclusion of C corps, like ONEOK, in ENFR's portfolio, and the isolation of MLPs in a portfolio like AMLP. When you think about the trade-offs investors make between the two products and the different objectives investors may have when trying to determine which of these products are the best fit, it really comes down to, at a high level, are you trying to maximize yields and specifically tax-deferred yields? If that's the case, AMLP is typically the product that investors would gravitate towards. If you're trying to be invested in a product that's more representative of the entire energy infrastructure industry, inclusive of C corps and MLPs, and yields, and specifically tax-deferred yield, is not your only objective, your main objective, then ENFR provides a solution that can be of value to those advisors, to those investors. Importantly, at a high level, from a portfolio construction perspective, it's worth noting that AMLP, by virtue of its index methodology and by virtue of its design, only invests in MLPs, whereas ENFR, by virtue of its design and its methodology, has a portfolio that is constituted by 75% C corps and 25% MLPs. The trade-off in terms of yield and tax-deferred yield is one of the key decision points, as is the diversification of the two products. We know now that there is a deal on the table for Magellan to be acquired by ONEOK, that deal will be voted on by shareholders. We'll see what the results are of that vote. We've also seen this week that Energy Transfer is acquiring another name, Crestwood Equity Partners. The number of MLPs in the market has declined over time. There are only so many MLPs that are large, liquid, scaled operators that are eligible for inclusion for AMLP. For some investors, that small list of names may be too small a universe for investors. Now, of course, you don't get a K-1, you don't get UBTI, you don't get typically state-level income taxes investing in AMLP as opposed to individual MLPs. Of course, the fact that there are fewer MLPs now than there were five years ago, than there were ten years ago, means that investors in AMLP or an MLP-only product will have less representative exposure of the energy infrastructure industry as a result of that industry-level change. Whereas ENFR, through its more inclusive methodology, will provide investors with a more representative, more diversified look at the energy infrastructure industry as a whole. When thinking about how to play on some of the themes that Aaron laid out and some of the opportunities that he laid out for energy infrastructure companies, the choice comes down to, in the ETF wrapper, an MLP-only strategy or a strategy that includes both C corps, like ONEOK, and MLPs. Now, what Aaron touched on in terms of the implications of the energy transition and how companies in the energy infrastructure industry are balancing the importance of many of these products, refined or otherwise, to our current economic structure and the need to, in theory, diversify into other business lines. He mentioned natural gas liquids. He mentioned, of course, refined products. The reality is, is carbon capture, renewable diesel, renewable natural gas, hydrogen, are products that are, in theory, aligned with the energy transition, directly or indirectly, and will provide perhaps new business opportunities for companies both in the MLP wrapper and the C corp wrapper on a go-forward basis. In reality, this combination of all that Aaron talked about, we talk about frequently at ALPS, because ultimately, for us to get from where we are now to this ambitious goal globally of Net Zero by 2050, it's going to require a combination of technologies, a combination of energy sources. We believe wholeheartedly that energy infrastructure is a really important piece of your energy infrastructure investment strategies, and whether that be via AMLP-... ENFR is certainly up to an individual investor and an advisor on behalf of that individual investor, based on things like asset location, investment objectives, risk profiles, and all of the important decision points that advisors have on behalf of their clients. Well, thanks for that, Paul. I saw that we had a question come in, and I think you can help out with this one. Acknowledging that, you, your role is not tax advice, but we did have somebody ask a question about whether the ETFs are beneficial for IRAs. Can you, can you talk a little bit about we have that question? Sure. We're always hesitant to talk too much about taxes, as you mentioned, but at, at a high level, part of the value proposition of investing in MLPs is that they're pass-through vehicles, and historically, much of their distribution stream has been treated as tax-deferred return of capital, which in a taxable investment account, can be beneficial to investors. In a deferred account, like an IRA, that may not be as beneficial to those investors. That is one consideration when thinking about a product that has a large share of its distributions historically treated as tax-deferred return of capital versus an investment vehicle that typically has a large portion of their distributions treated as qualified income or qualified dividend income, I should say. Great. Thanks, Paul. As we get to wrap up, I have one last thing I wanted to mention for the audience. We do put out research on the midstream space every Tuesday. If you are interested in being subscribed to our weekly midstream newsletter, just go ahead and type midstream into that Q&A box on the bottom right side of your screen. Again, if you type midstream into the bottom right-hand side of your screen in that question box, we'll make sure that you're added to our weekly distribution list. I want to thank everyone for attending today. We really appreciate and value your time. A very special thank you to Aaron and the investor relations team at Magellan for all their help with this event. Of course, a very special thank you to Paul as well for his insights on the ETF space. With that, I hope everyone has a great day, and we'll see you next time.