What I see for the 9 months ending 9/30/11 causes me concern regarding BPL's ability to make distributions that are financed by operations, not by borrowings or sale of additional partnership units.
BPL issued a press release with its fourth quarter and year-end results February 10, 2012, reporting distributable cash flow (DCF) of $72.25 million for the quarter and $318.7 for the 12 2011. Following that, on February 13, Citigroup downgraded BPL to "Sell".
The reported DCF numbers are indeed good cause for concern:
|Reported DCF per unit||$0.77||$3.51|
|Distributions per unit||$1.0375||$4.075|
|Coverage ratio based on reported DCF||0.74||0.86|
Indeed, sustainable DCF was substantially lower than reported DCF in each of the first 3 quarters of 2010 and in each of the first 3 quarters of 2011. To review these numbers click here.
BPL currently yields 6.74%, but investors should be aware that a significant portion of what they are receiving does not seem to be generated from sustainable sources. I will take a closer look at the numbers and compare reported to sustainable DCF once BPL files its 10-K (which will include cash flow data not provided in the press release).