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Ron Hiram

 
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  • A Closer Look At Regency Energy Partners' Distributable Cash Flow As Of Q3 2012 [View article]
    Not necessarily. ETE is the GP of both and would likely have the most influence on the transaction price. Investment bankers will be retained by ETP and RGP to provide a "fairness opinion" to each side of this non-arms length transaction. If there is a premium, I doubt it will be much. Also, rather than ETP acquiring RGP, you may see a 3-way merger between ETE, ETP and RGP accompanied by elimination of the GP IDRs. This seems to me a more likely path. The premium is likely to be paid to ETE unitholders.
    Dec 15 03:16 PM | Likes Like |Link to Comment
  • A Closer Look At Boardwalk Pipeline Partners' Distributable Cash Flow As Of Q3 2012 [View article]
    If they cut the distribution to a more sustainable level the price would drop sharply. That could change my level of comfort and the recommendation. I do not view favorably issuing debt or equity to fund distributions (whether you define them as "additional" distributions or not). It is not sustainable. I generally avoid MLPs that repeatedly do that.
    Dec 6 09:11 AM | Likes Like |Link to Comment
  • A Closer Look At Suburban Propane Partners' FY 2012 Distributable Cash Flow [View article]
    I have been adding to my EPD position on dips and would also feel comfortable with MMP and PAA.
    I view WPZ is riskier but with greater capital appreciation upside. Have also been adding WPZ on dips - but seems like every time I do that it falls further. Still, I think it is attractive from a risk-reward standpoint.
    SPH is my most speculative MLP position.
    Dec 4 10:41 AM | Likes Like |Link to Comment
  • A Closer Look At Regency Energy Partners' Distributable Cash Flow As Of Q3 2012 [View article]
    MLPs invested within tax-exempt accounts could potentially generate unrelated business taxable income (UBTI). Should one place a MLP in an IRA and its allocated taxable net income exceeds $1,000, then it may trigger UBTI that would be subject to tax at the Federal level. Not sure about state level, but would not be surprised if this were the case at the state level too. You should check with an accountant or tax lawyer.
    Nov 30 04:19 PM | Likes Like |Link to Comment
  • A Closer Look At Enterprise Products Partners' Distributable Cash Flow As Of Q3 [View article]
    I will shortly summarize key parameters for the MLPs I follow along the lines you suggest (I did that ~3 months ago once I completed my analysis of all the 10-Q). I don't think price-to-book is not a key metric for MLPs.
    Nov 30 06:55 AM | Likes Like |Link to Comment
  • A Closer Look At Energy Transfer Partners' Distributable Cash Flow As Of Q3 2012 [View article]
    "In reconciling net income to net cash provided by operating activities you need to subtract the income from equity investees and add back the cash that was actually received from the equity investee." - this indeed is what I do
    Nov 13 09:32 PM | Likes Like |Link to Comment
  • A Closer Look At Energy Transfer Partners' Distributable Cash Flow As Of Q3 2012 [View article]
    ETE is GP of both ETP and RGP.
    RGP owns 30% of Lonestar (ETP owns 70%).
    ETP sells natural gas and NGLs to RGP. It also provides transportation services and compression equipment to RGP and receives certain contract compression services from RGP.
    ETE pays ETP to provide various general and administrative services on its behalf to RGP.
    Nov 13 08:23 AM | Likes Like |Link to Comment
  • A Closer Look At Williams Partners' Distributable Cash Flow As Of Q3 2012 [View article]
    An increase in NKG prices should improve results in the short term. Longer term (2014), I think improved results will be driven by WPZ's Marcellus shale infrastructure and the Geismar acquisition. I hope the wave of unitholder dlution is over.
    Nov 11 08:22 AM | Likes Like |Link to Comment
  • A Closer Look At Magellan Midstream Partners' Distributable Cash Flow As Of 3Q 2012 [View article]
    I assume you are refering to possible tax reform proposals that would deny MLPs their tax-advantaged (pass-through) structure. Current legislation (Revenue Act of 1987) requiresd MLPs to
    receive 90% of their income from qualified sources. Qualifying sources include natural resource activities such as exploration, development, production, mining, efining, and transportation (including pipelines) of oil, natural gas, minerals, geothermal energy, and/or timber. Given that these incentives have worked well for many years and that additional investments are required to increase domestic oil and gas production and reduce U.S. dependence on oil imports, I doubt that there will be a repeal of the legislation granting MLPs their special status. Of course, if I am wrong, I will suffer significant declines in the value of my MLPs.
    Nov 8 07:44 PM | 2 Likes Like |Link to Comment
  • A Closer Look At Magellan Midstream Partners' Distributable Cash Flow As Of 3Q 2012 [View article]
    Question 1: the physical life of a pipeline is considered virtually unlimited given proper maintenance, repair & replacement programs (see http://bit.ly/VWbRdJ).
    I haven't seen any studies that indicate maintenance cap ex per pipeline mile must rise substantially over time.
    Question 2: I cannot answer because I don't know what backs up the assertion that MLPs are undervalued on a risk adjusted basis relative to utilities, high yield bonds and telecom stocks.
    Nov 8 07:28 PM | Likes Like |Link to Comment
  • A Closer Look At Trailing-12-Months Performance Of Selected MLPs [View article]
    My response to a similar question that followed my recent article on EPB was as follows:
    FERC regulates the interstate transmission rates. On the one hand it limits the returns pipeline operators can earn and on the other hand it stabilizes their earnings. FERC, like other government agencies, may be influenced by politics and the policies of, the current administration. From 1992 to 2006 the pipeline inflation indexing methodology there has been only one substantive change to the , and it was a positive for the pipeline owners. Prior to July 2003, the FERC capped tariff increases at PPI minus 1%. In 2003, the FERC raised this to PPI + 0%. In 2006, this again was raised to PPI +1.3%. Future regulatory changes could, theoretically, be detrimental. The FERC issue with respect to Buckeye Pipelines is specific to that MLP and I don't a see it affecting others
    Nov 4 06:35 PM | Likes Like |Link to Comment
  • A Closer Look At El Paso Pipeline Partners' Distributable Cash Flow As Of 3Q 2012 [View article]
    Question 1: the 9% per annum is the average distribution growth rate projcted for the period 2011-2015. In 2012 distribution growth over 2011 will be twice the average (~18%). Therefore distribution growth in 2013-2015 will be less than the average. It works out to 6.7%.

    Question2: FERC regulates the interstate transmission rates. On the one hand it limits the returns pipeline operators can earn and on the other hand it stabilizes their earnings. FERC, like other government agencies, may be influenced by politics and the policies of, the current administration. From 1992 to 2006 the pipeline inflation indexing methodology there has been only one substantive change to the , and it was a positive for the pipeline owners. Prior to July 2003, the FERC capped tariff increases at PPI minus 1%. In 2003, the FERC raised this to PPI + 0%. In 2006, this again was raised to PPI +1.3%. Future regulatory changes could, theoretically, be detrimental. The FERC issue with respect to Buckeye Pipelines is specific to that MLP and I don't a see it affecting others.
    Nov 3 04:42 AM | Likes Like |Link to Comment
  • A Closer Look At American Capital Agency's Cash Flows [View article]
    I plan to do that after I complete the 2Q12 analysis of AGNC
    Aug 29 12:21 PM | Likes Like |Link to Comment
  • A Closer Look At Annaly Capital Management's Cash Flows As Of Q2 2012 [View article]
    You are correct. The dividend and total return amounts for the period beginning 12/31/2008 displayed in Table 1 are wrong. However, I caclulated the last column (Total Return) in Table 1 based on the correct dividend amount ($2.54 for 2009), so those numbers do not ned to be changed. Having corrected row 1, coumns 3 and 4, Table 1data should read as follows:

    12/31/2008 $1.45 $8.74 $10.19 13%
    12/31/2009 ($0.19) $6.20 $6.01 10%
    12/31/2010 ($0.76) $3.54 $2.78 7%
    12/31/2011 $1.20 $1.10 $2.30 15%

    My apologies.
    Aug 28 08:14 PM | 1 Like Like |Link to Comment
  • A Closer Look At Plains All American Pipeline's Distributable Cash Flow As Of Q2 2012 [View article]
    Working on it and will publish shortly
    Aug 19 09:22 AM | 1 Like Like |Link to Comment
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