Professional Documents
Culture Documents
20
18
16
14 List Price
$15.90
12
(as of 12/8/16)
10
12.8.15 1.8.16 2.8.16 3.8.16 4.8.16 5.8.16 6.8.16 7.8.16 8.8.16 9.8.16 10.8.16 11.8.16 12.8.16
Industry &
Business Financial
Introduction Competitive Valuation Risk Analysis
Overview Analysis
Positioning
Introduction
Vertical integration to drive earnings and support cash flows
Sustainable dividend yield over 3-6 month investment horizon
22
Intrinsic Value
20 $18.50
18
16
14 List Price
$15.90
12
(as of 12/8/16)
10
12.8.15 1.8.16 2.8.16 3.8.16 4.8.16 5.8.16 6.8.16 7.8.16 8.8.16 9.8.16 10.8.16 11.8.16 12.8.16
Industry &
Business Financial
Introduction Competitive Valuation Risk Analysis
Overview Analysis
Positioning
Business Overview
Midstream petroleum logistics company
57% of revenue derived from wholesale segment
Constrained growth due to debt covenant Segments as a percentage of total
revenue:
Industry &
Business Financial
Introduction Competitive Valuation Risk Analysis
Overview Analysis
Positioning
Business Overview
Growth of GDSO
12,000,000 1400
1200
10,000,000 1000 1000 1000
1000
8,000,000 800
800
6,000,000 600
4,000,000 400
190
200
2,000,000
0
0 2010 2011 2012 2013 2014 2015
2013 2014 2015 2016 (9 mo.)
Industry &
Business Financial
Introduction Competitive Valuation Risk Analysis
Overview Analysis
Positioning
Industry Overview
Threat of New Entrants
4
3
Analysis
Legend
0 No threat to GLP
5 High threat to
GLP
Source: Team
Estimates
Industry &
Business Financial
Introduction Competitive Valuation Risk Analysis
Overview Analysis
Positioning
Industry Overview
Competition
Industry &
Business Financial
Introduction Competitive Valuation Risk Analysis
Overview Analysis
Positioning
Financial Analysis
Key Takeaways
Industry &
Business Financial
Introduction Competitive Valuation Risk Analysis
Overview Analysis
Positioning
Financial Analysis
Decline in crude oil prices in 2015
Wholesale: Rising
wholesale gasoline prices
GDSO: Business Transition
Industry &
Business Financial
Introduction Competitive Valuation Risk Analysis
Overview Analysis
Positioning
Financial Analysis
Peer Analysis YE 2015 Peer Analysis Q2 2016
PERFORMANCE GLP ARCX SRLP SUN PERFORMANCE GLP ARCX SRLP SUN
EBITDA 230.6 30.2 130.7 519.3 EBITDA 41.2 13.6 2.6 202.9
EBITDA Margin 2.24 36.92 3.75 3.07 EBITDA Margin 1.92 51.87 0.55 5.01
Revenue 10,314.9 81.8 3,481.9 16,935.3 Revenue 2,146.2 26.2 477.5 4,052.2
Revenue Growth -40.27 48.96 -31.32 64.14 Revenue Growth -19.92 37.33 -27.84 -20.95
Operating expenses 482.9 74.1 186.2 1,139.9 Operating expenses 117.4 20.0 40.4 456.4
Distribution Coverage 1.06 1.08 2.45 2.78 Distribution Coverage 4.84 1.30 -0.06 2.01
Industry &
Business Financial
Introduction Competitive Valuation Risk Analysis
Overview Analysis
Positioning
Financial Analysis
M&A Activity (in $millions)
600
0 Completed a $63.5
2013 2014 2015 2016 2017
million sale-leaseback
-200 transaction with a
premier institutional
-400 real estate investor.
-600
-800
Industry &
Business Financial
Introduction Competitive Valuation Risk Analysis
Overview Analysis
Positioning
Financial Analysis
2012 2013 2014 2015 2016
GLP Dividend Distribution Distributable cash flow 80.8 105.2 161.2 126.9 -69.5
Dividend payouts 2.06 2.34 2.53 2.74 1.85
200
Stock Price 17.7 26.5 33.2 27.5 17.2
(in millions)
150
Dividend Payouts
100 2.9
2.7
2.5
50
2.3
2.1
0
2012 2013 2014 2015 2016 1.9
1.7
-50 1.5
2012 2013 2014 2015 2016
-100
Industry &
Business Financial
Introduction Competitive Valuation Risk Analysis
Overview Analysis
Positioning
Valuation
Valuation Summary
Best Case Base Case Worst Case
$18.50
25.00
$23.26
$21.19 $21.68
$19.72
20.00
15.00
$17.37
0.00
DCF Value at 4.5x-6.5x Exit DCF Value at 0.0%-2.0% DDM Value 52 Week Market High/Low
EBITDA Range Perpetuity Range
Industry &
Business Financial
Introduction Competitive Valuation Risk Analysis
Overview Analysis
Positioning
Valuation
Industry &
Business Financial
Introduction Competitive Valuation Risk Analysis
Overview Analysis
Positioning
Valuation
Industry &
Business Financial
Introduction Competitive Valuation Risk Analysis
Overview Analysis
Positioning
Decrease in Oil Prices GLP vs WTI Crude Oil
$120.00
$100.00
Beta of 0.649
$80.00
$60.00
$40.00
$20.00
$0.00
2012 2013 2014 2015 2016
GLP WTI
World Liquid Fuels Production and Consumption Balance
Industry &
Business Financial
Introduction Competitive Valuation Risk Analysis
Overview Analysis
Positioning
Increase in Interest Rates
GLP vs 10 Year US Treasury
20.00%
15.00%
10.00%
5.00%
0.00%
2012 2013 2014 2015 2016
GLP Dividend Yield 10 Year Treasury Yield GLP 6.25% 7/15/2022 Corp
Industry &
Business Financial
Introduction Competitive Valuation Risk Analysis
Overview Analysis
Positioning
Credit Downgrade
Description Principal Due YTM Increase in YTM if Credit Rate
Downgraded
2022 Term Note $375M 6.719% 7.708%
2023 Term Note $300M 7.120% 8.109%
Industry &
Business Financial
Introduction Competitive Valuation Risk Analysis
Overview Analysis
Positioning
Lack of Access to Capital
Current Debt Covenant
$2,500 m
$2,000 m
$1,500 m
12/22/2016
Signed pact to terminate $1,000 m
$17.3m cash 4
3
2
1
0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Industry &
Business Financial
Introduction Competitive Valuation Risk Analysis
Overview Analysis
Positioning
Conclusion
Dividend yield (9%) and distribution ($1.85) as of 2/10/17
Stock is now fully valued List Price
$20.50
GLP Share Price (as of 2/10/17)
22
20
18
16
Intrinsic Value
$18.50
14
List Price
12
$15.90
(as of 12/8/16)
10
12.8.15 1.8.16 2.8.16 3.8.16 4.8.16 5.8.16 6.8.16 7.8.16 8.8.16 9.8.16 10.8.16 11.8.16 12.8.16 1.8.17 2.8.17
Appendix 1 Income Statement Forecasted
Appendix 2 Balance Sheet Forecasted
Appendix 3 Multiples Valuation
Appendix 4 Terminal Value
Appendix 5 Valuation Weighting
Findings
Gross margin
per gallon of gas Profit margin
per gallon of gas
5.7% 1-2%