North American Energy - Positioned as a Key Growing Supplier of Global Energy Demand: A Game Changer for US Energy Infrastructure - Goldman Sachs ...
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North American Energy Positioned as a Key Growing Supplier of Global Energy Demand: A Game Changer for US Energy Infrastructure GS ENERGY & INFRASTRUCTURE TEAM April 2022
Table of Contents
1
Setting the Stage
2 North America as a Supply Solution
3 Energy Equity Markets
4 Midstream Offers Unique Exposure
5 Evaluating Terminal Value Concerns
6 Natural Gas & Decarbonization
7 Appendix & Disclosures
Goldman Sachs Asset Management 21
Setting the Stage
Goldman Sachs Asset Management 3Energy & Equity Market Backdrop
We believe that a combination of fundamental and technical factors have created a very constructive
landscape for commodity prices and energy equities over the next decade
Due to the Russia/Ukraine crisis, policy makers are increasingly focused on securing
Energy Security is Top Priority reliable long-term energy with North America uniquely positioned as the key supplier.
Years of underinvestment led to tight supply and demand prior to Russia/Ukraine conflict;
Potential Long-Term Commodity Strength replacing lost Russian supply could result in years of elevated commodity prices.
Inflationary periods are historically constructive for energy equities; during the 2003-2008
Macroeconomic Tailwinds inflationary cycle, the energy sector outperformed the S&P 500 by 130%.
Investor interest has picked up and the sector may continue to benefit from a growth-to-
Shifting Equity Market Sentiment value shift, in addition to a rationalization of energy underexposure across portfolios.
Management teams have transformed balance sheets by cutting capital spending and
Reform in Public Energy Equities focusing on maximizing free-cash-flow, reducing leverage, and driving shareholder value.
The European energy crisis highlights that fossil fuels and renewables need to co-exist to
Re-Evaluation of Terminal Values maintain reliable/secure supply with reasonable consumer prices amid growing demand.
Sources: Goldman Sachs Asset Management and Bloomberg. Data as of March 31, 2022. The economic and market forecasts presented herein are for informational purposes as of the date of this
presentation. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation. Goldman Sachs does not provide accounting, tax or legal
advice. Please see additional disclosures at the end of this presentation. Past performance does not guarantee future results, which may vary.
Goldman Sachs Asset Management 4Global Oil Market Supply & Demand is Tight
Demand recovery has outpaced supply, which has been further stressed by the Russian invasion of
Ukraine; global inventories are now at the lowest level in more than a decade
Demand (-3% vs. 2019 Levels) Supply (-8% vs. 2019 Levels)
U.S. OIL DEMAND (MMBPD) OPEC+ & NORTH AMERICA OIL PRODUCTION (MMBPD)1
Actual 2019 Average Actual 2019 Average
25 65
60
20
55
15
50
10
45
5 40
Jan-20 May-20 Sep-20 Jan-21 May-21 Sep-21 Jan-22 Jan-20 May-20 Sep-20 Jan-21 May-21 Sep-21 Jan-22
INDIA OIL DEMAND (THOUSAND METRIC TONNES) GLOBAL OIL INVENTORIES (MMBBLS)
Actual 2019 Average Actual 2010-2019 Average
14,000 2.8
11,000 2.6
8,000 2.4
5,000 2.2
2,000 2.0
Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 Jul-21 Oct-21 Jan-22 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Sources: Goldman Sachs Asset Management, Bloomberg, and International Energy Agency (IEA). Latest available data as of March 31, 2022. Past performance does not guarantee future results,
which may vary.
Goldman Sachs Asset Management 5Oil Supply is Concentrated in Potentially Problematic Regions
As recent conflict has shown, the world’s oil trade is overly reliant on countries that may be prone to
geopolitically motivated supply-side disruptions, such as Russia
2019 NET TRADE BALANCE (MMBPD)
15
Net Oil Exporting Regions
10
5
13.0 8.4 4.6 3.3
0
-3.4 -4.0 -7.1 -10.3 -11.7
-5
-10
Net Oil Importing Regions
-15
Middle East Russia Africa North America Japan India Other China Europe
Sources: Goldman Sachs Asset Management, Bloomberg, and BP Statistical Review. Data as of March 31, 2022, unless otherwise noted. Past performance does not guarantee future results, which
may vary.
Goldman Sachs Asset Management 6European Gas Supply is Overly Dependent on Russia
Russia services 33% of European natural gas demand and recent conflict has added further stress to
an already undersupplied market, with UK energy bills set to rise 54% in April
RUSSIAN GAS SHARE IN EU + UK DEMAND (2001-2021) RUSSIAN GAS REFLECTS 50%+ SHARE FOR MANY EU COUNTRIES1
40%
30%
20%
10%
26% 25% 29% 37% 32%
0%
2001 2009 2014 2019 2021
In an effort to lessen the energy price burden on consumers, EU governments have proposed gas-tax relief programs, in addition to
announcing the construction of new LNG terminals and pursuing diplomatic efforts to secure oil & gas supply outside of Russia.
Sources: Goldman Sachs Asset Management, International Energy Agency (IEA), EuroStat, and British Department for Business - Energy & Industrial Strategy. Data as of March 31, 2022, unless
otherwise noted. 1Includes both piped and liquefied natural gas and excludes Austria as it did not report the source of its natural gas imports; data of December 2022.
Goldman Sachs Asset Management 7Renewables Are Not A Stand-Alone Solution
Renewables alone can’t satisfy the world’s energy needs due to intermittency issues, hidden costs,
and potential geopolitical considerations
Intermittency Issue Hidden Costs Geopolitical Concerns
• Output from renewable sources, such • LCOE1, a common measure of • Select countries control significant
as wind and solar, is dictated by renewables cost, does not account for material/resources needed to scale
weather. high associated costs of transmission renewables.
and back-up generation.
• Utility scale battery economics are • China is the top producer of Rare
currently prohibitively expensive to be • Intermittency increases the associated Earth elements and is also the leading
solely relied upon. costs of integration into the grid. processor of all key mineral inputs.
• Fossil fuels are required as a back-up • This cost is generally assumed by • The majority of Cobalt production is
source to maintain reliable and households in the form of levies and controlled by DR Congo & Russia.
consistent energy supply. taxes on energy bills.
• Concentration may result in
unintended environmental, cost,
labor and geopolitical implications
Sources: Goldman Sachs Asset Management, Bloomberg, Energy Information Administration (EIA), and International Energy Agency (IEA). Data as of March 31, 2022. 1Levelized cost of energy (LCOE):
a measure of the average net present cost of electricity generation for a generating plant over its lifetime. Past performance does not guarantee future results, which may vary.
Goldman Sachs Asset Management 8U.S. LNG Presents a Tremendous Green Opportunity
Increasing U.S. LNG capacity in order to replace coal usage has the potential to be the leading
solution for CO2 emissions reduction across the world
The Demand Emissions Reduction Impact of This Potential U.S.
LNG Solution is Equivalent To:
• There is currently 175 billion cubic feet per day (Bcf/d) of
coal-to-gas switching demand in the world.
Electrifying every U.S. passenger
A Potential Plan vehicle
• Quadruple U.S. LNG capacity to 55 Bcf/d1 by 2030 to
replace international coal.
• This initiative could be fully funded by the natural gas
industry. Powering every home in America with
rooftop solar and backup battery packs
The Result
• By 2030, this scenario would reduce international CO2
emissions by an additional -1.1 billion metric tons (Bmt) per
Adding 54,000 industrial scale windmills,
year.2
doubling U.S. wind capacity
• U.S. citizens could be paid for this initiative (tax revenues
and an additional $75 Bn in royalties3), rather than paying
for it.
COMBINED
Sources: Goldman Sachs Asset Management, EQT Corporation, ICCT, International Energy Agency (IEA), ICF Update to the life-cycle analysis of GHG emissions for U.S. LNG exports analysis. Latest
data available as of March 31, 2022. 1Including current capacity, capacity under construction, and future new capacity. 2Assuming 3 bcfd under construction, and 40 bcfd additional capacity by 2030.
3Incremental cumulative royalties above 2021 levels from 2022-2030 assuming 20% of revenue @ $3.75 / mcf. The economic and market forecasts presented herein are for informational purposes as of
the date of this presentation. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation.
Goldman Sachs Asset Management 92
North America as a
Supply Solution
Goldman Sachs Asset Management 10North America is a Key Growing Provider of Energy
Resource abundance and relative stability, has positioned North America to play an even larger role in
the global energy market as governments seek safe and reliable long-term supply solutions
Crude Oil Natural Gas
• North America is currently a top oil producing region, • North America is also rich in natural gas resource and has
producing nearly 17% of the global oil supply. grown production by 50% over the last decade
• Third most oil rich continent in the world with more than 240 • North America is a leading provider of LNG and has grown
billion barrels of proved oil reserves. export capacity by more than 600% since 2017.
Refined Products Natural Gas Liquids (NGLs) / Petrochemicals
• North America boasts one of the world’s most complex • World’s largest producer of NGLs, producing 7 MMbpd; three
refining systems, refining nearly 19 millions of barrels per day. times that of Saudi Arabia, the second largest producer.
• The system allows North America the ability to be a top global • One of the lowest cost producers of petrochemicals, the
supplier of finished products (gasoline, diesel, etc.). feedstock to thousands of consumer goods (i.e. plastics).
Sources: Goldman Sachs Asset Management, BP Statistical Review, and the International Energy Agency (IEA). Data as of March 31, 2022, unless otherwise noted. NGLs: Natural gas liquids (i.e.
ethane, propane, butane, isobutene, pentane, etc.). The economic and market forecasts presented herein are for informational purposes as of the date of this presentation. There can be no assurance
that the forecasts will be achieved. Please see additional disclosures at the end of this presentation. Goldman Sachs does not provide accounting, tax or legal advice. Please see additional disclosures at
the end of this presentation. Past performance does not guarantee future results, which may vary.
Goldman Sachs Asset Management 11North American Oil: Abundant, Reliable, and Responsible
North America has a significant amount of proved, untapped oil reserves, presenting a strong
opportunity to backfill lost Russian production and help other countries diversify energy supply
TOP 5 OIL PRODUCERS (MMBPD) PROVED OIL RESERVES (BILLIONS OF BBLS)
North America 16.9 Venezuela 303.8
Saudi Arabia 10.1 Saudi Arabia 297.5
Russia 10.1 North America 242.9
Iraq 4.4
Iran 157.8
China 3.8
Iraq 145.0
0 4 8 12 16 20
0 70 140 210 280 350
We’d highlight that while Venezuela is an oil resource rich country, output is very low given years of sanctions, corruption, and political
instability. We believe it is very unlikely that Venezuela can reintroduce oil to the market in a meaningful way over the near-to-medium term.
Sources: Goldman Sachs Asset Management and Bloomberg. Top 5 Producing countries Data as of December 31, 2020. The economic and market forecasts presented herein are for informational
purposes as of the date of this presentation. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation.
Goldman Sachs Asset Management 12Natural Gas: Ability to Provide Significant Gas to Europe
Since 2017, the U.S. has grown natural gas production by 50% and liquefied natural gas (LNG)
export by capacity by more than 600%, making it the largest global LNG exporter
U.S. NATURAL GAS PRODUCTION (BCF/D) U.S. LNG EXPORTS (BCF/D)
110 12
+50% Growth in Production Since 2012 +608% Growth in Export Capacity Since 2017
95 9
80 6
65 3
50 0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Feb-17 Dec-17 Oct-18 Aug-19 Jun-20 Apr-21 Feb-22
North America has spent billions of dollars on LNG infrastructure over the last 5+ years in order to mobilize natural gas resources, which have a
strong long term-demand outlook with the commodity being categorized as a “cleaner” fossil fuel by some European countries.
Sources: Goldman Sachs Asset Management, Bloomberg, and Energy Information Administration (EIA). Data as of March 31, 2022. The economic and market forecasts presented herein are for
informational purposes as of the date of this presentation. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation.
Goldman Sachs Asset Management 13U.S. LNG: Ability to Meaningfully Expand Export Capacity
EU is beginning to mobilize to increase LNG import capacity and recently announced a deal with the
US to import 1.5 Bcf/d of LNG this year and ramp to 5 Bcf/d by 2030
U.S. LNG CAPACITY PROJECTIONS (BCF/D)
Potential Capacity To Supply Europe
There is 3.3 Bcf/d of capacity under construction and 4.0 Bcf/d with high probability of proceeding to FID. We estimate there’s an additional 9 -
14 Bcf/d of potential capacity, but project construction will be largely contingent upon receiving firm long-term purchase agreements.
Sources: Goldman Sachs Asset Management and Energy Information Agency (EIA). Latest data available as of March 31, 2022. Bcf/d: Billion cubic feet per day.
Goldman Sachs Asset Management 14Refined Products: North America Is the Leading Exporter
North America, the largest exporter of refined products, has a unique ability to deliver consumable
liquids (gasoline, diesel, etc.)
2019 REFINERY CAPACITY THROUGHPUT (MMBPD) TRANSPORTATION FUEL IMPORTS & EXPORTS (KBPD)
20 4,000
1.5 MMbpd Net Exporter
15 2,500
10 1,000
5 -500
19.0 13.4 5.8 5.1 3.0
0 -2,000
North America China Russia India Japan 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021
Sources: Goldman Sachs Asset Management, BP Statistical Review, EIA, and Bloomberg. Data as of March 31, 2022, unless otherwise noted. MMbpd: Millions of barrels per day. Kbpd: Thousands of
barrels per day. The economic and market forecasts presented herein are for informational purposes as of the date of this presentation. There can be no assurance that the forecasts will be achieved.
Please see additional disclosures at the end of this presentation.
Goldman Sachs Asset Management 15NGLs & Petrochemicals: Largest Producer & Cost Leader
North America is the leading producer of NGLs, the feedstock for thousands of consumer goods (i.e.
plastics) and is also one of the lowest cost petrochemical producers
TOP 5 NGL PRODUCERS (MMBPD) GLOBAL ETHYLENE CASH COST ($/TONNE)
8 Saudi
(Ethane) $165
Canada
(Ethane) $315
6
U.S. $385
(Ethane)
4 Europe $705
(Naptha)
China $1,055
(CoalTO)
2
NE Asia $1,140
(Naptha)
5.7 1.7 0.6 0.5 0.5 China
0 $2,047
(MTO)
North America Saudi Arabia UAE Russia Qatar
There is a strong relationship between petrochemicals demand and GDP growth (2.5x GDP growth between 1970-2015). Assuming even 50%
of this relationship going forward, implies meaningful demand growth for NGLs as incomes rise in developing economies.
Source: Goldman Sachs Asset Management, U.S. Energy Information Administration (EIA), International Energy Agency (IEA), and Citi Group. Latest data available as of March 31, 2022. NGLs: Natural
gas liquids (i.e. ethane, propane, butane, isobutene, pentane, etc.)
Goldman Sachs Asset Management 163
Energy Equity
Markets
Goldman Sachs Asset Management 17Energy Equities Have Outperformed But Remain Cheap
On a price basis, Energy has outperformed the S&P 500 Index by 81% since the start of 2021,
however, the sector is still down 21% from 2014 highs, while the S&P 500 is up 131%
Price Performance 2021 2022 YTD Price Performance 2021 2022 YTD
Energy Select Sector Index (IXE) +47% +38% Alerian Midstream Energy Index (AMNA) +30% 22%
S&P 500 Index +27% -5% S&P 500 Index +27% -5%
Delta +20% +43% Delta +3% +27%
BROAD ENERGY VALUATIONS (EV/EBITDA SPREAD TO S&P 500)1 MIDSTREAM VALUATION (EV/EBITDA SPREAD TO S&P 500)2
EV/EBITDA Spread to S&P 500 10-Year Avg. Spread EV/EBITDA Spread to S&P 500 10-Year Avg. Spread
4.0x 12.0x
-2.3x Discount vs. 10-Year Average -5.1x Discount vs. 10-Year Average
0.0x 6.0x
-4.0x 0.0x
-8.0x -6.0x
-12.0x -12.0x
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Sources: Goldman Sachs Asset Management, Bloomberg, and Wells Fargo. Data as of March 31, 2022. 1Broad Energy valuations represented through the Energy Select Sector Index (IXE). 2Midstream
valuations represented through the Alerian MLP Index (AMZ) as MLPs have historically comprised the majority of midstream market cap. Past performance does not guarantee future results, which
may vary.
Goldman Sachs Asset Management 18Significant Capital Discipline Has Led to Record FCF
Energy companies are focused on reducing spending, increasing free-cash-flow (FCF) and driving
shareholder value through debt reduction, dividend increases and share buybacks
BROAD ENERGY CAPITAL SPENDING ($ BILLIONS) MIDSTREAM CAPITAL SPENDING ($ BILLIONS)
$100 $100
Expected to be Down 22% Since 2019 Expected to be Down 43% Since 2019
$75 $75
$50 $50
$25 $25
$59 $74 $82 $52 $49 $64 $49 $56 $51 $38 $31 $29
$0 $0
2017 2018 2019 2020 2021 2022E 2017 2018 2019 2020 2021 2022E
BROAD ENERGY FREE-CASH-FLOW YIELDS MIDSTREAM FREE-CASH-FLOW YIELDS
FCF Yield (%) $/bbl FCF Yield (%) $/bbl
12.0% $120 12.0% $120
Avg. Brent Oil Price Avg. Brent Oil Prices
9.0% $90 8.0% $90
6.0% $60 4.0% $60
0.9% 7.6% 11.4% 9.4%
3.0% $30 0.0% $30
-1.2% -1.1%
1.6% 3.7% 2.2% 3.2% 9.8% 10.1%
0.0% $0 -4.0% $0
2017 2018 2019 2020 2021 2022E 2017 2018 2019 2020 2021 2022E
Sources: Goldman Sachs Asset Management, Wells Fargo and Bloomberg. Data as of March 31, 2022. Broad Energy is represented through the top 15 constituents of the Energy Select Sector Index
(IXE). Midstream is represented through the top 15 constituents of the Alerian Midstream Energy Index (AMNA). Past performance does not guarantee future results, which may vary.
Goldman Sachs Asset Management 19Crude Oil Prices Are Expected To Remain High
Constructive commodity outlook should continue to support earnings growth for energy equities,
further strengthening their ability to drive shareholder value
GOLDMAN SACHS GLOBAL INVESTMENT RESEARCH (GIR) BRENT CRUDE OIL PRICE FORECASTS
Prior to February 24, 2022 Russian Invasion After February 24, 2022 Russian Invasion
Period % Change
(Reflects Price Forecast as of January 17, 2022) (Reflects Latest Price Forecast as of March 31, 2022)
2Q 2022 $95 $125 +32%
3Q 2022 $100 $125 +25%
4Q 2022 $100 $125 +25%
1Q 2023 $105 $115 +10%
2Q 2023 $105 $115 +10%
3Q 2023 $105 $115 +10%
4Q 2023 $105 $115 +10%
2022 Average1 $98 $125 +27%
2023 Average $105 $115 +10%
Sources: Goldman Sachs Asset Management, Goldman Sachs Global Investment Research (GIR). Data as of March 31, 2022 unless otherwise noted. 12022 average covers 2Q 2022 through 4Q 2022
forecasts. The economic and market forecasts presented herein are for informational purposes as of the date of this presentation. Any reference to a specific company or security does not constitute a
recommendation to buy, sell, hold or directly invest in the company or its securities. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this
presentation. Past performance does not guarantee future results, which may vary.
Goldman Sachs Asset Management 20Investor Interest Is Returning to the Energy Sector
The largest energy sector ETF has seen AUM growth of nearly 500% in the last 2 years; driven
heavily by investor flows ($13.9 Bn)1
ETF PERFORMANCE & ASSETS UNDER MANAGEMENT ENERGY SECTOR AS A PERCENTAGE OF THE S&P 500 INDEX
Share Price Increase AUM Growth Tech Energy
600% 50.0%
40.0%
400%
28.1%
30.0%
200%
20.0%
0%
10.0%
3.7%
-200% 0.0%
Feb-20 Jun-20 Oct-20 Feb-21 Jun-21 Oct-21 Feb-22 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022
We expect that energy will continue to benefit from the growth-to-value trade and will see additional interest as the world’s perception around
energy security/terminal value, shifts and money managers rationalize underweight energy exposure.
Sources: Goldman Sachs Asset Management, U.S. Capital Advisors, and Bloomberg. Data as of March 31, 2022. 1Investor money flow figures provided by U.S. Capital Advisors; data as of February, 28,
2022. The economic and market forecasts presented herein are for informational purposes as of the date of this presentation. There can be no assurance that the forecasts will be achieved. Please see
additional disclosures at the end of this presentation.
Goldman Sachs Asset Management 21Energy Has Historically Outperformed During Rising Inflation
Oil & gas stocks historically outperform broader equity markets during periods of inflation, which may
act as an additional tailwind for the sector
U.S. CONSUMER PRICE INDEX (CPI) URBAN CONSUMERS
16.0%
12.0%
8.0%
4.0%
0.0%
-4.0%
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
Inflationary Period1 Oil & Gas Sector Return S&P 500 Index Return Oil & Gas Sector Outperformance
1969- 1981 +383% +120% +263%
1987-1990 +80% +57% +23%
2003-2008 +145% +15% +130%
Sources: Goldman Sachs Asset Management, Bloomberg, and Professor Kenneth French and the Tuck School of Business at Dartmouth College. Data as of December 31, 2021. 1Inflationary years
defined through consecutive periods of sustained inflation over 2%. Past performance does not guarantee future results, which may vary.
Goldman Sachs Asset Management 224
Midstream Offers Unique
Exposure
Goldman Sachs Asset Management 23North American Energy Infrastructure (Midstream)
Critical assets servicing the growing need for North American energy, offering strong yields supported
by robust FCF and moderate beta to commodity prices
Sector Takeaways
Midstream Fundamentals are the Healthiest on Record: 5-7%
Dividend
• Higher oil & natural gas prices have supported strong earnings growth and FCF has inflected Yields
meaningfully higher (sector is trading with ~10% FCF yields).
• Capital return to shareholders has been prioritized with dividend growth expectations in the double digits
for years to come.
Midstream Offers Unique Asset Class Attributes:
• Highest yielding income equity sector (6%+) with ability to keep pace, or exceed inflation expectations. ~10%
Free-Cash-Flow
• Provides exposure to the long-term North American energy opportunity and 0.5 beta to oil prices. Yields
• May be a relative beneficiary during inflationary periods given contract inflation escalators and fixed cost
structures that may provide operating leverage.
Midstream Valuations Cheap on All Metrics and Fund Flow Activity Has Resumed:
• Trading at a deep valuation discount (P/E, EV/EBITDA, FCF Yield, etc.) relative to history, other income
oriented equities, and broader equity markets. $921M
YTD Net Money
• Fund flows to energy sector have returned, with midstream seeing $921 million in this year alone. Flows
Sources: Goldman Sachs Asset Management, Bloomberg, and Wells Fargo. Data as of March 31, 2022. Free-cash-flow: operating cash flow less capital expenditures (CAPEX). Free-cash-flow yield:
free-cash-flow divided by equity value. MMbpd: Million barrels per day. Please see appendix & disclosures for additional information on asset classes. The economic and market forecasts presented
herein are for informational purposes as of the date of this presentation. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation.
Past performance does not guarantee future results, which may vary.
Goldman Sachs Asset Management 24Fundamentals Strongest on Record
Earnings growth and CAPEX reductions have provided a pathway to strong FCF generation, which is
being used to lower leverage and return shareholder capital through dividend growth and buybacks
TOP 15 U.S. MIDSTREAM EBITDA ($ BILLIONS) TOP 15 U.S. MIDSTREAM FREE-CASH-FLOW ($ BILLIONS)
$65 $50
$60 $30
$55 $10
$18 $38 $33 $33
-$1
$52 $53 $57 $62 $63
$50 -$10
2019 2020 2021 2022E 2023E 2019 2020 2021E 2022E 2023E
TOP 15 U.S. MIDSTREAM LEVERAGE (DEBT/EBITDA) TOP 15 U.S. MIDSTREAM AGGREGATE DPS ($ BILLIONS)
5.0 x $30
4.5 x
$25
4.0 x
$20
3.5 x
4.5x 4.5x 4.0x 3.8x 3.6x $27 $22 $20 $22 $24
3.0 x $15
2019 2020 2021 2022E 2023E 2019 2020 2021 2022E 2023E
Sources: Goldman Sachs Asset Management and Bloomberg. Data as of March 31, 2022. The economic and market forecasts presented herein are for informational purposes as of the date of this
presentation. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation. Past performance does not guarantee future results,
which may vary.
Goldman Sachs Asset Management 25One Of The Highest Yielding Sectors
Sector yields of approximately 6% (underpinned by strong FCF) which is five times that of the S&P
500, and more than double the Utilities and REIT sectors
INCOME-ORIENTED ASSET CLASS YIELDS
Equity Markets Fixed Income Markets
10.0% Positive Inflation
Adjusted Yields
7.5%
5.0% 2022 Inflation
Estimate: 5.0%1
2.5%
Negative Inflation
Adjusted Yields
0.0%
MLPs Energy Infra. Global REITs Utilities S&P 500 High Yield Investment Municipal
C-Corps Infrastructure Bonds Grade Bonds Bonds
Sources: Goldman Sachs Asset Management, Goldman Sachs Global Investment Research (GIR), Bloomberg, and Wells Fargo. Data as of March 31, 2022. 12022 inflation estimate provided by
Goldman Sachs Investment Research. MLPs are represented by the Alerian MLP (AMZ) Index. C-Corps are represented by the C-Corp structured companies in the Alerian Midstream Energy Index
(AMNA). The economic and market forecasts presented herein are for informational purposes as of the date of this presentation. There can be no assurance that the forecasts will be achieved. Please
see additional disclosures at the end of this presentation. Past performance does not guarantee future results, which may vary.
Goldman Sachs Asset Management 26Energy Exposure With Moderate Commodity Price Beta
Midstream sector can provide access to the growing story around North American energy resources
with moderate commodity price correlation
MIDSTREAM SECTOR’S 10-YEAR CORRELATION WITH VARIOUS ASSET CLASSES (WEEKLY CALCULATION)
1.0x
0.8x
0.70x
0.5x 0.61x 0.59x 0.59x 0.56x
0.53x 0.50x
0.41x
0.3x
0.28x
0.0x
0.05x
-0.03x
-0.3x -0.13x
-0.19x
-0.5x
Global Value Global High Yield S&P Crude Growth REITs Utilities Gold Muni IG U.S. Dollar
Infra. Equities Equities Bonds 500 Oil Equities Bonds Bonds
Sources: Goldman Sachs Asset Management and Bloomberg. Data as of December 31, 2021. The economic and market forecasts presented herein are for informational purposes as of the date of this
presentation. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation. Past correlations are not indicative of future correlations,
which may vary. Past performance does not guarantee future results, which may vary.
Goldman Sachs Asset Management 27Business Models May Be a Relative Beneficiary of Inflation
Inflation escalation clauses and fixed cost structures may boost operating margins for midstream
companies
Potential Investment Case for the Midstream Sector
• We believe the midstream sector is poised to fare better during an inflationary environment given:
• Inflation escalators integrated into tariff-setting mechanisms.
• Largely fixed cost structures that may potentially provide operating leverage and improved operating margins.
• Linked to the oil & gas sector, which historically outperformed during inflationary periods.
• Attractive dividend yields that may have room to grow and keep pace, or exceed, inflation.
Type of Asset Potential Inflation Mitigants
Refined Petroleum Product Pipelines Tariffs linked to Producers Price Index (PPI + 0.78%)
Gathering & Processing Contracts include Consumer Price Index (CPI) escalators
Tariffs established via rate cases using cost-of-service methodology – allows for return on & of
Natural Gas Pipelines (FERC-Regulated)
capital + expense pass-through
Sources: Goldman Sachs Asset Management and public company filings. Data as of March 31, 2022. The economic and market forecasts presented herein are for informational purposes as of the date
of this presentation. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation.
Goldman Sachs Asset Management 285
Evaluating Terminal
Value Concerns
Goldman Sachs Asset Management 29Oil: A Critical Global Commodity
Recent energy crisis has precipitated a change in perception of fossil fuels with the reality of rising
consumer power prices being weighed against the pace of decarbonization initiatives
We believe there is significant support, and growth, for oil demand through 2035 with peak oil proponents yet to offer a
credible pathway for sustained population & prosperity growth without simultaneous increases in energy consumption.
Growth in Population & Prosperity
• The majority of the world’s population (63%) consumes less than 4 barrels of oil per person, annually.
• For context, the developed world (U.S. Europe, Japan, etc.) consumes 10-21 barrels of oil per person, annually.
• World population expected to grow to 8.8 billion by 2035 vs. 7.6 billion in 2019.
• Rising population & prosperity increases oil demand, a trend we expect to continue, and be particularly strong in China & India.
• Growing electric vehicle (EV) penetration is not a threat to oil demand growth in our view (example: Norway).
Sources: Goldman Sachs Asset Management, U.S. Census Bureau, and BP Statistical Review. Latest year-end data available as of March 31, 2022. The economic and market forecasts presented
herein are for informational purposes as of the date of this presentation. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation.
Goldman Sachs Asset Management 30Majority of the World Is Still “Energy Poor”
63% of the world’s population has per capita oil consumption of less than 4.0 bbls; a normalization to
even half that of Western Europe, suggests significant long-term demand growth
PER CAPITA OIL CONSUMPTION (BARRELS PER YEAR)
25 Canada | 23.3 bbls
South Asia
U.S. | 21.6 bbls Africa
India
20 Central Asia
China
South America
15 LATAM & Carribbean
SE Asia
Japan | 11.0 bbls
Eastern Europe
Western Europe | 9.9 bbls
10 West Asia
Western Europe
South East Asia | 5.8 bbls Japan
Oceania
5 China | 3.7 bbls
Middle East
Africa | 1.1 bbls India | 1.4 bbls USA
Canada
0
0 10 20 30 40 50 60 70 80 90 100
% of Global Population
As a point of reference, on an annual basis, Western Europe consumes 9.9 barrels of oil per person, while the U.S. consumes 21.6
barrels per person, and Japan consumes 11.0 barrels per person.
Sources: Goldman Sachs Asset Management and BP Statistical Review. Latest year-end data available as of March 31, 2022.
Goldman Sachs Asset Management 31Oil Consumption Directly Correlated With Rising Prosperity
Rising prosperity globally has historically driven oil demand, a trend which we believe will continue to
support growth in global oil consumption going forward
INCOME AND OIL CONSUMPTION (1999) INCOME AND OIL CONSUMPTION (2019)
Number of Countries Per Zone Zone of Convergence Number of Countries Per Zone Zone of Convergence
125 125
0 1 6 0 0 0 5 1
Per Capita Oil Consumption
Per Capita Oil Consumption
25 25
1 13 26 0 0 7 40 0
5 5
0 14 China 2 0
6 15 0 0
1 1 India
4 0 0 0 0 3 0 0
0 0
$100 $1,000 $10,000 $100,000 $1,000,000 $100 $1,000 $10,000 $100,000 $1,000,000
Per Capita Income Per Capita Income
From 1999-2019, the number of countries with per capita incomeGrowing Share of Electric Vehicles ≠ Collapse in Oil Demand
Using Norway as an example, EV sales have reached over 60% of total car sales, representing 16%
of the total fleet, however, oil demand today in the country is actually higher than 2016
NORWAY OIL CONSUMPTION & ELECTRIC VEHICLE SHARE
Oil Consumption (12-Month Moving Avg.) EV Share of New Car Sales (12-Month Moving Avg.) EV Share of Total Car Fleet
260 80%
Norway Oil Consumption (Kbpd)
240 60%
Electric Vehicle Share
220 40%
200 20%
180 0%
2016 2017 2018 2019 2020 2021
It’s important to highlight that passenger vehicles comprise only a small percentage of total oil demand, and the fleet (including ICEs) is still
growing. This, paired with increased demand from non-passenger vehicles has kept oil consumption flat.
Sources: Goldman Sachs Asset Management and Morgan Stanley. Data as of February 28, 2022. The economic and market forecasts presented herein are for informational purposes as of the date of
this presentation. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation.
Goldman Sachs Asset Management 33Oil: Long-Term Demand Through 2035
We do not have near-term peak oil demand concerns and expect global oil demand to hit 108 million
barrels per day by 2035 – approximately 12% above 2019 levels
2035 CRUDE OIL DEMAND BRIDGE (MMBDP)
135
120
-9.4
13.6
105 -1.7
7.8
90
98.2 110.1 108.4
75
2019 Population Living EVs 2035 EVs 2035
Growth Standards (Developed Nations) (Ex. China EV Impact) (China)
We expect growing world population and rising per capita income to drive oil demand higher by ~21 MMbpd while EV usage in developed
markets displaces ~9 MMb/d of demand and EV adoption in China could result in an additional ~1.7 MMbpd of declines.
Sources: Goldman Sachs Asset Management, OPEC+, International Energy Agency (IEA) and BP Statistical Review. Latest year-end data available as of March 31, 2022. MMb/d: Millions of barrels per
day. The economic and market forecasts presented herein are for informational purposes as of the date of this presentation. There can be no assurance that the forecasts will be achieved. Please see
additional disclosures at the end of this presentation.
Goldman Sachs Asset Management 346
Natural Gas &
Decarbonization
Goldman Sachs Asset Management 35Natural Gas Has Proven Effective in Lowering Emissions
The U.S. has led all countries across the globe in CO2 emission reductions since 2005, with the
majority of this effort achieved by coal-to-gas switching in over 200 locations
EXAMPLE OF COAL-TO-GAS SWITCHING1 U.S. CO2 REDUCTION BY SOLUTION 2005-20192 CO2 REDUCTION 2005 – 20193 (MMT OF CO2)
MT CO2e/GWH1
1,400
Country CO2 Reduction
1,200
United States -959
1,031
1,000 United Kingdom -188
60% reduction in CO2 Italy -147
from switching to gas Solar
800 31% Germany -144
Coal-to Gas-
600 Japan -122
Switching
61%
Ukraine -120
395
400
Wind Spain -104
8%
200 France -77
Venezuela -51
0
Coal Natural Gas Greece -39
Sources: Goldman Sachs Asset Management, EQT Corporation, Energy Information Administration (EIA), International Energy Agency (IEA). Latest year-end data available as of March 31, 2022. MMT
of CO2: Million Metric Tons of CO2. 1EIA electricity data and power plant emissions 2020, EIA carbon dioxide emissions coefficients, EIA average operating heat rate. 2Data obtained from EIA’s U.S.
Energy-Related Carbon Dioxide Emissions, 2019 report, splitting wind and solar proportionally to their increased in power generation from 2005 to 2019 per EIA’s renewable generation data. 3Data
obtained from IEA World Energy outlook 2021; EIA emissions data; EIA form 80 retired plant data and EQT analysis.
Goldman Sachs Asset Management 36Coal-To-Natural Gas Projects Have Had A Substantial Impact
Projects to replace coal plants with natural gas plants have proved to be the most effective emissions
reduction effort when compared to the leading green projects globally
IMPACT OF LARGE GREEN PROJECTS GLOBALLY: ANNUAL MMT OF CO2 REDUCED FROM 2005-2019
600
400
200
0
U.S. Coal-to-Gas Switching 1 Germany Energiewende 2 China's Three Gorges 3 Brazil Hydro 4
U.S. Coal-to-Gas Switching Germany Energiewende China’s Three Gorges
• Replaced >200 coal plants • ~30,000 windmills & 2 million • Hydroelectric gravity dam
since 2005 solar arrays installed5
• Government funded: $37 Bn8
• Projects completed by natural • Government funded: ~$80 Bn6
gas industry • Largest power plant in the
• Electricity costs up 3x since world
• Natural gas run 50% more 20007
efficiently than coal plants
Sources: Goldman Sachs Asset Management, EQT Corporation, IEA World Energy outlook 2021, EIA, Germany’s Federal Ministry for Economic Affairs and Energy, S&P Global, BDEW Bundesverband
der Energie, German Wind Energy Association (BWE), Clean Energy Wire, and Reuters. Latest year-end data available as of March 31, 2022. MMT of CO2: Million Metric Tons of CO2. 1Total CO2
emissions variation between 2005 and 2019 according to EIA report. 2Germany’s CO2 emissions reduction from 2005 to 2020 (from 997 to 749 MtCO2) based on Federal Ministry For Economic Affairs
And Climate Action data. 3China’s Three Gorges Dam 110 TWh generation in 2020 assumed to replace coal which has a carbon intensity factor of 1.15 MtCO2/TWh. 4Brazil hydro generation growth
between 2005 and 2020 was 60 TWh assumed to replace coal which has a carbon intensity factor of 1.15 MtCO2/TWh. 5Per Germany’s wind Energy association and Clean Energy Wire. 6Estimated
Germany’s climate financing from 2011 through 2021. 7Price index x3 in 2019 compared to 2000 based on BDEW data. 8China's Three Gorges Dam, including resettling the 1.3 million people it
displaced, cost 254.2 billion yuan ($37.23 billion), according to the Xinhua news agency.
Goldman Sachs Asset Management 37Potential Emissions Reduction From Coal-to-Gas Switching
We estimate that coal-to-gas switching represents a 30-40 Bcf/d potential opportunity for natural gas /
LNG exporting nations; to put this in context, total global trade in LNG averaged 47 Bcf/d in 2020
COAL-TO-GAS SWITCHING CO2 EMISSIONS BRIDGE (MILLION TONNES)
Total CO2
Emissions From
8,000
~1,400 MM Tonnes of CO2
U.K., Italy,
Other* Reduction From Coal-to- France, Spain, &
Gas Switching Netherlands
Japan
6,000
India
4,000
China
2,000
0
Current CO2 From Coal CO2 Reduction From CO2 From Coal Power Equivalent CO2
Power 30% Coal-to-Gas Post Coal to Gas Emissions
Switching Switching
If the largest coal-fired power producing countries switched 30% of generation from coal to natural gas, reduction would be equivalent to
UK, Italy, France, Spain & Netherlands all eliminating 100% of their CO2 emissions.
Sources: Goldman Sachs Asset Management and BP Statistical Review. Latest year-end data available as of March 31, 2022. Bcf/d: Billions of cubic feet per day. LNG: Liquefied natural gas. These
examples are for illustrative purposes only and are not actual results. If any assumptions used do not prove to be true, results may vary substantially. The economic and market forecasts presented
herein are for informational purposes as of the date of this presentation. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation.
Goldman Sachs Asset Management 38Renewable Power Generation Suffers From Intermittency
Low wind output in Europe caused a spike in gas usage, which coupled with gas supply disruption
from the Russian/Ukraine conflict, is expected to result in a 54% increase in UK energy bills in April
EUROPEAN WIND GENERATION & NATURAL GAS PRICES
Megawatts 4-Week Average Daily European Wind Generation 3-Month Rolling Avg. TTF Natural Gas Prices TTF Natural Gas Prices
24,000 €40
18,000 €30
12,000 €20
6,000 €10
0 €0
Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22
Sources: Goldman Sachs Asset Management and Bloomberg. Data as of March 31, 2022. Past performance does not guarantee future results, which may vary.
Goldman Sachs Asset Management 39Associated Costs Are Still High For Renewables
In our view, levelized cost of energy (LCOE), a common measure of renewables cost, is an incomplete
metric as it does not account for high associated costs of transmission and back-up generation
LEVELIZED COST OF ENERGY ($/MWH) POWER PRICES AND % OF RENEWABLE GENERATION
Onshore Wind Offshore Wind Utility PV (Solar)
$400 € 0.40
Greater dependence on renewable power has a direct relationship with
higher consumer prices with an R2 = 0.456
$300 € 0.30 Germany
European Power Prices
Denmark
Belgium
Ireland
Spain
United Kingdom
Austria Italy
Portugal
$200 € 0.20 France Luxembourg
Czech Republic
Finland
Slovakia Cyprus Sweden Greece
Slovenia Poland
Latvia Romania
Norway Netherlands
Estonia
Iceland Croatia
$100 € 0.10 Hungary
Bulgaria Turkey
North Macedonia
Ukraine
$0 € 0.00
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 0.0% 20.0% 40.0% 60.0%
% of Power Generation From Renewable Sources (Wind & Solar)
Sources: Goldman Sachs Asset Management, BP Statistical Review, Eurostat, and BloombergNEF. Latest year-end data available as of March 31, 2022. Past performance does not guarantee future
results, which may vary.
Goldman Sachs Asset Management 40Geopolitics of Renewables May Also Be Problematic
Select countries control significant material and resources needed to scale renewables, and
accelerated agendas may have unintended environmental, cost, labor and geopolitical implications
SHARE OF TOP COUNTRIES IN PRODUCTION & PROCESSING OF KEY ENERGY TRANSITION MATERIALS
Minerals Production
Minerals Top 3 Producing Countries % of Supply from Top Country % of Supply from Top 3 Countries
Copper Chile, Peru, China 28% 48%
Nickel Indonesia, Philippines, Russia 33% 56%
Cobalt DR Congo, Russia, Australia 69% 77%
Rare Earths China, US, Myanmar 60% 84%
Lithium Australia, Chile, China 52% 87%
Minerals Processing
Minerals Top 3 Processing Countries % of Processing by Top Country % of Processing by Top 3 Countries
Copper China, Chile, Japan 40% 56%
Nickel China, Indonesia, Japan 35% 58%
Cobalt China, Finland, Belgium 65% 80%
Rare Earths China, Malaysia, Estonia 87% 100%
Lithium China, Chile, Argentina 58% 97%
In our view, there needs to be an appropriate balance between renewable and fossil fuel energy sources in order to ensure safe, reliable, and
affordable energy for decades to come. We believe the recent global energy crisis may have shed light on this reality.
Sources: Goldman Sachs Asset Management and International Energy Agency (IEA). Latest year-end data available as of March 31, 2022. Past performance does not guarantee future results,
which may vary.
Goldman Sachs Asset Management 417
Appendix &
Disclosures
Goldman Sachs Asset Management 42General Definitions
It is not possible to invest directly in an unmanaged index.
Midstream: Midstream investments include both Master Limited Partnership (MLP) and C-Corporation (C-Corp) structured companies that are engaged in the treatment, gathering,
compression, processing, transportation, transmission, fractionation, storage and terminalling of natural gas, natural gas liquids, crude oil, refined products or coal. Midstream
companies may also operate ancillary businesses including marketing of energy products and logistical services.
Upstream: exploration & production companies (E&Ps); generally engaged in the exploration, recovery, development and production of crude oil, natural gas and natural gas
liquids.
MLPs Only – Alerian MLP Total Return Index (AMZ) – the leading gauge of energy Master Limited Partnerships (MLPs). The float-adjusted, capitalization-weighted index, whose
constituents represent approximately 85% of total float-adjusted market capitalization, is disseminated real-time on a price-return basis (AMZ) and on a total-return basis (AMZX).
“Alerian MLP Index”, “Alerian MLP Total Return Index”, “AMZ” and “AMZX” are trademarks of Alerian and their use is granted under a license from Alerian or “Source: Alerian”.
MLPs + C-Corps – Alerian Midstream Energy Index (AMNAX) – a broad-based composite of North American energy infrastructure companies. The capped, float-adjusted,
capitalization-weighted index, whose constituents earn the majority of their cash flow from midstream activities involving energy commodities, is disseminated real-time on a price-
return basis (AMNA) and on a total-return basis (AMNAX).
Broad Energy Equities – Energy Select Sector Index (IXE) – a modified market capitalization-based index intended to track the movements of companies that are components of
the S&P 500 and are involved in the development or production of energy products.
Utilities – PHLX Utility Sector Index (UTY) – a market capitalization-weighted index composed of geographically diverse public utility stocks.
Real Estate Investment Trusts (REITS) – FTSE/NAREIT North America Index – gauges the performance of companies that develop and own real estate in North America.
10 Year Treasury – BofA Merrill Lynch US Treasuries (10Y) Index – an unmanaged index that tracks the performance of the three most recently issued 10-year US Treasury notes.
Natural Gas – N G1 Contract – tracks the one m
onth forward natural gas fu tures tradin gin units o f 10,000 m
illion British ther m
al unites ( mmBt u ). The price is based on delivery at
the Henry Hub in Louisiana.
WTI Crude Oil – CL1 Contract – tracks the one month forward WTI crude oil futures contracts that trade in units of 1,000 barrels, and the delivery point is Cushing, Oklahoma, which
is also accessible to the international spot markets via pipelines.
Brent Crude Oil – CO1 Contract – tracks the one month forward price of Brent crude oil. Current pipeline export quality Brent blend as supplied at Sullom Voe. ICE Brent Futures is
a deliverable contract based on EFP delivery with an option to cash settle.
Real Asset Classes: Real assets are often defined as physical or tangible assets that tend to provide a “real return,” often linked to inflation. This definition encompasses a wide
range of potential investments, including real estate, infrastructure, timberlands, agrilands, commodities, precious metals, and natural resources.
Stocks: Stock investments are subject to market risk, which means that the value of the securities may go up or down in response to the prospects of individual companies,
particular sectors and/or general economic conditions.
Bonds: Fixed income investing involves interest rate risk. When interest rates rise, bond prices generally fall.
High Yield: Below investment grade (high yield) bonds are more at risk of default and are subject to liquidity risk.
Goldman Sachs Asset Management 43General Definitions
Free Cash Flow (FCF): Operating Cash flow less Capital Expenditures (CAPEX). Free cash flow is the cash a company produces through its operations, less the cost of
expenditures on assets. In other words, free cash flow (FCF) is the cash left over after a company pays for its operating expenses and capital expenditures.
Capital Expenditures (CAPEX): Funds used by a company to acquire, upgrade, and maintain physical assets such as property, buildings, an industrial plant, technology, or
equipment.
EV/EBITDA: Enterprise Value (EV) divided by earnings before interest, taxes, depreciation, and amortization (EBITDA). EV is calculated as follows: Market Capitalization +
Preferred Shares + Minority Interest + Debt – Total Cash.
CAGR: Compound annual growth rate is a business and investing specific term for the geometric progression ratio that provides a constant rate of return over the time period.
Volatility: a statistical measure of the dispersion of returns for a given security or market index.
Share Buyback: Issuer buys back its own outstanding shares to reduce the number of shares available on the open market
OPEC+: Organization of Petroleum Exporting Countries, and Russia.
Spread: A spread is the difference between two numbers, usually between two types of yields such as the yield of a security above a 10 year treasury bill.
Basis point (BPS): refers to a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 1/100th o f 1%, or 0.01%, or 0.0001, and is
used to denote the percentage change in a financial instrument.
Correlation: is a measure of the amount to which two investments vary relative to each other.
Goldman Sachs Asset Management 44General Disclosures
Views are as of April 6, 2022 unless noted otherwise and are subject to change in the future.
Master Limited Partnerships ("MLPs") may be generally less liquid than other publicly traded securities and as such can be more volatile and involve higher risk. Investments in
securities of an MLP involve risks that differ from investments in common stocks, including risks related limited control and limited rights to vote on matters affecting the MLP, risks
related to potential conflicts of interest between the MLP and the MLP’s general partner, cash flow risks, dilution risks and risks related to the general partner’s right to require unit
holders to sell their common units at an undesirable time or price. MLPs are also generally considered interest-rate sensitive investments. During periods of interest rate volatility,
these investments may not provide attractive returns.
The Global Industry Classification Standard (“GICS”) was developed by and is the exclusive property and a service mark of MSCI Inc. (“MSCI”) and S&P Global Market Intelligence
(“S&P”) and is licensed for use by Goldman Sachs. Neither MSCI, S&P, nor any other party involved in making or compiling the GICS or any GICS classifications makes any
express or implied warranties or representations with respect to such standard or classification (or the results to be obtained by the use thereof), and all such parties hereby
expressly disclaim all warranties of originality, accuracy, completeness, merchantability and fitness for a particular purpose with respect to any of such standard or classification.
Without limiting any of the foregoing, in no event shall MSCI, S&P, any of their affiliates or any third party involved in making or compiling the GICS or any GICS classifications have
any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even i f notified of the possibility of such damages.
Investments in MLPs are subject to certain risks, including risks related to limited control and limited rights to vote, potential conflicts of interest, cash flow risks, dilution risks, limited
liquidity and risks related to the general partner’s right to force sales at undesirable times or prices.
MLPs may also involve substantially different tax treatment than other equity-type investments, and such tax treatment could be disadvantageous to certain types of investors, such
as retirement plans, mutual funds, charitable accounts, foreign investors, retirement accounts or charitable entities. In addition, investments in MLPs may trigger state tax reporting
requirements. Generally, a master limited partnership (“MLP”) is treated as a partnership for Federal income tax purposes. Therefore, investors in an MLP may be subject to certain
taxes in addition to Federal income taxes, including state and local income taxes imposed by the various jurisdictions in which the MLP conducts business or owns property. In
addition, certain tax-exempt investors in an MLP, such as tax-exempt foundations and charitable lead trusts, may incur unrelated business taxable income (“UBTI”) with respect to
their investment. UBTI may result in increased Federal, and possibly state and local, tax costs, and may also result in additional filing requirements for tax exempt investors. Non-US
investors may be subject to US taxation on a net income basis and have US filing obligations as a result of investing in MLPs. The tax reporting information for MLPs generally is
provided to investors on an annual IRS Schedule K-1, rather than an IRS Form 1099. To the extent the Schedule K-1 is delivered after April 15, you may be required to request an
extension to file your tax returns.
Exposure to the commodities markets may subject an investor to greater volatility than investments in traditional securities.
Views and opinions expressed are for informational purposes only and do not constitute a recommendation by Goldman Sachs Asset Management to buy, sell, or hold any security.
Views and opinions are current as of the date of this presentation and may be subject to change, they should not be construed as investment advice.
References to indices, benchmarks or other measures of relative market performance over a specified period of time are provided for your information only and do not imply that the
portfolio will achieve similar results. The index composition may not reflect the manner in which a portfolio is constructed. While an adviser seeks to design a portfolio which reflects
appropriate risk and return features, portfolio characteristics may deviate from those of the benchmark.
Economic and market forecasts presented herein reflect a series of assumptions and judgments as of the date of this presentation and are subject to change without notice. These
forecasts do not take into account the specific investment objectives, restrictions, tax and financial situation or other needs of any specific client. Actual data will vary and may not be
reflected here. These forecasts are subject to high levels of uncertainty that may affect actual performance. Accordingly, these forecasts should be viewed as merely representative
of a broad range of possible outcomes. These forecasts are estimated, based on assumptions, and are subject to significant revision and may change materially as economic and
market conditions change. Goldman Sachs has no obligation to provide updates or changes to these forecasts. Case studies and examples are for illustrative purposes only.
Goldman Sachs Asset Management 45General Disclosures
This material is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities.
THIS MATERIAL DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY JURISDICTION WHERE OR TO ANY PERSON TO WHOM IT WOULD BE UNAUTHORIZED
OR UNLAWFUL TO DO SO.
Prospective investors should inform themselves as to any applicable legal requirements and taxation and exchange control regulations in the countries of their citizenship, residence
or domicile which might be relevant.
Past performance does not guarantee future results, which may vary. The value of investments and the income derived from investments will fluctuate and can go down
as well as up. A loss of principal may occur.
Goldman Sachs does not provide legal, tax or accounting advice, unless explicitly agreed between you and Goldman Sachs (generally through certain services offered only to clients
of Private Wealth Management). Any statement contained in this presentation concerning U.S. tax matters is not intended or written to be used and cannot be used for the purpose
of avoiding penalties imposed on the relevant taxpayer. Notwithstanding anything in this document to the contrary, and except as required to enable compliance with applicable
securities law, you may disclose to any person the US federal and state income tax treatment and tax structure of the transaction and all materials of any kind (including tax opinions
and other tax analyses) that are provided to you relating to such tax treatment and tax structure, without Goldman Sachs imposing any limitation of any kind. Investors should be
aware that a determination of the tax consequences to them should take into account their specific circumstances and that the tax law is subject to change in the future or
retroactively and investors are strongly urged to consult with their own tax advisor regarding any potential strategy, investment or transaction.
This information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research
or investment advice. This material has been prepared by Goldman Sachs Asset Management and is not financial research nor a product of Goldman Sachs Global Investment
Research (GIR). It was not prepared in compliance with applicable provisions of law designed to promote the independence of financial analysis and is not subject to a prohibition on
trading following the distribution of financial research. The views and opinions expressed may differ from those of Goldman Sachs Global Investment Research or other departments
or divisions of Goldman Sachs and its affiliates. Investors are urged to consult with their financial advisors before buying or selling any securities. This information may not be current
and Goldman Sachs Asset Management has no obligation to provide any updates or changes.
Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. We have relied upon and assumed
without independent verification, the accuracy and completeness of all information available from public sources.
GSAM leverages the resources of Goldman Sachs & Co. LLC subject to legal, internal and regulatory restrictions.
Goldman Sachs & Co. LLC, member FINRA.
Date of First Use: April 6, 2022
Compliance Code : 275255-OTU-1588266
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