EMES vs. HCLP

Buy Battle

Determining which MLP to buy will come down to a few key metrics, management’s

guidance for the future, and how these MLPs are working to execute their growth plan.

Yield

Let’s begin with our first metric: Yield.

Yield

3.9%4.6%

YieldHistorically, BOTH of these yields would be

considered AVERAGE or LOW. Given many MLPs are sporting even lower yields right now, these

two look good comparatively.

Winner: EMESLet’s move on to the next metric.

MRQ Distribution coverage

An MLPs distribution coverage ratio should always be greater than 1.0 times distributions paid.

Credit rating agencies like Standard & Poor’s don’t give “bonus points” for higher coverage, but that

could let investors know how much breathing room an MLP could have for distribution growth.

MRQ Distribution coverage

1.18x coverageQ1 DCF $17.4 million

1.1x coverageQ1 DCF $26.2 million

MRQ Distribution coverage

This factor is a bit of a wash, both MLPs have adequate coverage.

In theory, because $EMES is a variable rate MLP, it should never (ever) miss on coverage.

Let’s move on to management’s guidance

Management guidance

• Distributable cash flow: N/A

• 2014 Distribution guidance:

$3.80 to $4.00

• Distributable cash flow ~$100 million to $130 million

• Distribution guidance: $2.30 to $2.50

Actual growth story: Emerge• 1 new mine coming online in 2014, in the permitting

stage for two other new mines expected online late 2014 to early 2015

• Recently secured 4 new contracts, existing customer contracts continue to grow

Quarter-over-Quarter*

• Net income +32%• Distributable cash flow +13%• Distribution +13% *EMES does not have YOY data available for all metrics.

Actual growth story: Hi-Crush• Recent contract with C&J Energy Services, five-

year supply agreement.• Recent contract with Halliburton, new long-

term supply agreement that increases min. volume commitment.

Year-over-Year• Net income +32%• Distributable cash flow +20%• Distribution +11%

Key takeaways

• Metrics at both of these MLPs are in good shape by MLP standards

• Growth is quite visible at both MLPs, and accelerating quickly

BUT• Neither of these MLPs offers an impressive yield.

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