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Ron Hiram  

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  • A Closer Look At Kinder Morgan's Distributable Cash Flow As Of 2Q 2015 [View article]
    Not an issue in my view because KMI consolidated KMP, EPB, KMR before the merger.
    EBITDA as reported by KMI includes its share of equity investees' DD&A and is before "certain items". On a TTM basis the difference is $490 million.
    Aug 6, 2015. 11:25 AM | Likes Like |Link to Comment
  • A Closer Look At Kinder Morgan's Distributable Cash Flow As Of 2Q 2015 [View article]
    Since there is no standard definition of DCF, it is not an issue of "right/wrong". Reasonable people can have different interpretations of DCF. Mine focuses on sustainability. In any event, I am waiting to hear back from a VP in KMI's IR dept.
    Aug 6, 2015. 03:03 AM | 1 Like Like |Link to Comment
  • A Closer Look At Kinder Morgan's Distributable Cash Flow As Of 2Q 2015 [View article]
    My calculation is as follows:
    Long term debt = 44,553 (including current portion)
    EBITDA = operating income + earnings from equity investments & other income + DD&A
    TTM EBITDA = 4,258 + 475 +2,150 = 6,883
    LT Debt / TTM EBITDA = 6.5

    I don't think consolidation is an issue because even before the November 26, 2014 merger, the equity interests in KMP, EPB and KMR were consolidated in KMI's financial statements. The portion of the equity interests owned by the public prior to the merger was shown as “Noncontrolling interests”.
    Aug 5, 2015. 09:24 AM | Likes Like |Link to Comment
  • A Closer Look At Kinder Morgan's Distributable Cash Flow As Of 2Q 2015 [View article]
    I am pointing out that DD&A on non-consolidated JV's is not in the cash flow statement and therefore does not increase the end-of-period cash balance. It is not a matter of not being able to find the details in the cash flow statement.
    Conversely, the $318 million "other" reduces the end-of-period cash balance reported by KMI. I deduct it when calculating sustainable DCF because it is a real cash outflow.
    I do not treat working capital as a non-cash item.
    Aug 3, 2015. 11:32 PM | 3 Likes Like |Link to Comment
  • Preliminary Review Of Kinder Morgan's Results For Q2 2015 [View article]
    Due to a technical problem I am as yet unable to resolve.
    Jul 22, 2015. 03:21 PM | Likes Like |Link to Comment
  • Preliminary Review Of Kinder Morgan's Results For Q2 2015 [View article]
    KMI Analyst Day presentation (Jan 28, 2015 p19)
    Jul 21, 2015. 02:06 PM | Likes Like |Link to Comment
  • Preliminary Review Of Kinder Morgan's Results For Q2 2015 [View article]
    It is hard to compare KMI return numbers prior to the merger transactions (when it was primarily an MLP GP) to to those after (beginning 4Q14) and to those of other midstream operators. Comparing KMI numbers for 1Q15 to EPD and MMP in the same period shows that higher interest expenses and provision for taxes explain the bulk of the ROE and ROA differences. Hope the table below appears properly formatted and is helpful (note that ROE and ROA % not annualized).
    KMI EPD MMP
    Operating Income 1,078 896 220
    Interest expense (512) (239) (37)
    Other income (expenses) 77 1 2
    Provision for income taxes (224) (7) (1)
    Noncontrolling 10 (15) -
    Net income 429 636 184
    Equity at period end 35,359 20,058 3,748
    Assets at period end 86,164 46,505 5,605
    ROE in period 1.21% 3.17% 4.90%
    ROA in period 0.50% 1.37% 3.28%
    Jul 20, 2015. 03:42 PM | Likes Like |Link to Comment
  • Anticipating Targa Resources Partners' Q2 2015 Results [View article]
    Hard to answer in a vacuum. Depends on how concentrated you are in this position, your need for current income, the composition of the rest of your portfolio, etc. My MLP holdings are biased towards partnerships with the strongest coverage ratios, but I do have smaller positions in others.

    I avoided Targa because I thought it was too concentrated in the Bakken, where it is more expensive to extract oil & to transport it to the market. By more expensive I mean relative to, for example, the Texas shale formations (Eagle Ford, Permian) and Marcellus/Utica. My thinking was that the Bakken, and for similar reasons the Canadian and midcontinent shale formations, are likely to be the first to see production cuts in response to lower oil prices. Having said that, I do not believe the dividend is under threat in the short term. Longer term (>1 year), distributions could be adversely impacted.
    Jun 9, 2015. 08:37 AM | Likes Like |Link to Comment
  • A Closer Look At Buckeye Partners' Distributable Cash Flow As Of Q1 2015 [View article]
    Yes, probably by end of next week
    May 28, 2015. 09:19 AM | Likes Like |Link to Comment
  • Preliminary Review Of Energy Transfer Partners' Q4 2014 Results [View article]
    MLP Data computes coverage by dividing total DCF by distributions made to LPs. But LPs are not entitled to the entire amount of DCF. ETE (the general partner) gets a substantial portion. DCF coverage should be computed based on distributions made to all the partners. Therefore the denominator should be distributions to LPs + distributions to GP. The result will be a lower number than that shown by MLP Data.
    Feb 26, 2015. 09:04 PM | Likes Like |Link to Comment
  • Preliminary Review Of Energy Transfer Partners' Q4 2014 Results [View article]
    The coverage ratios in the link you sent are incorrect. ETP does not have, nor does it claim to have, 1.35x coverage.
    Feb 26, 2015. 08:59 AM | Likes Like |Link to Comment
  • Preliminary Review Of Magellan Midstream Partners' 4Q 2104 Results [View article]
    See my response to same question under PAA.
    Feb 13, 2015. 10:40 AM | Likes Like |Link to Comment
  • Preliminary Review Of Plains All American Pipeline's Q4 2014 Results [View article]
    The terms are defined in the article, e.g., EV = enterprise value. So EV/TTM EBITDA = enterprise value divided by earnings before interest, taxes and depreciation. More in depth descriptions of what these terms mean and their significance are easily obtained via Wikipedia.
    Feb 13, 2015. 10:39 AM | Likes Like |Link to Comment
  • Preliminary Review Of Plains All American Pipeline's Q4 2014 Results [View article]
    Higher coverage ratio is better. This is the only ratio in the tables I provided. The other numbers in the tables are either $ millions or per unit numbers, or % change from the same quarter a year ago.
    Feb 11, 2015. 12:51 PM | Likes Like |Link to Comment
  • A Closer Look At Plains All American Pipeline's Q3'14 Distributable Cash Flow [View article]
    Transportation and Facilities are fee-based businesses, while Supply & Logistics are margin-based activities associated with sale of gathered and bulk-purchased crude oil, as well as sales of NGL volumes purchased from suppliers (including the sale of additional barrels exchanged through buy/sell arrangements entered into to supplement the margins of the gathered and bulk-purchased volumes). Therefore it is not surprising that S&L accounts for the bulk of PAA's revenues and expenses. It makes more sense to look at segment profits than at revenues. For example, in 3Q14 Transportation generated $231m, Facilities $147m and S&L $152m. Margin-based activities are more volatile. Regarding the risk that S&L will wipe out the entire profit I can only point out that PAA's track record. S&L has made a positive contribution every single quarter, without exception, since at least 1Q10.
    Jan 13, 2015. 08:19 AM | 2 Likes Like |Link to Comment
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