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Ron Hiram

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  • Preliminary Look At Q1 Distributable Cash Flow Generated By Kinder Morgan Energy Partners [View article]
    1. Of course it is possible my analysis is too conservative in some cases. In the case of KMP, outflows from risk management activities totaled $157 million in 2012 reflecting termination of interest rate swap agreements. I ignored this outflow while management deducted it in calculating DCF. So for this item I was less conservative. On the other hand, I deducted $367 million of inflows in the "Other" category, while management included these in the DCF calculation. So here I was more conservative. The breakdown of items included in "Other" is provided in http://bit.ly/10eyvzb. Readers can decide for themselves which items are appropriate. As an aside, I could go either way on $171 million of that $367 million. It represents KMP’s share of depreciation in various joint ventures. The way I look at cash from joint ventures that appears in DCF numbers but not in an MLP’s cash flow statements our outlined in prior articles. For example, see the RGP analysis in http://bit.ly/ZmeWtk.
    2. I always look at quarterly and TTM numbers but recognize that both are rear view mirror numbers. They are helpful but not sufficient in trying to assess future performance. Many other factors should also be taken into account.
    3. The article on KMP referenced above takes a crack at answering your 3rd question. In the discussion of Table 6 I noted that KMR owns approximately 31% of KMP in the form of i-units that receive distributions in kind. Not having to pay cash for such a significant portion of distributions makes a big difference. I think it causes KMP’s coverage ratios to appear higher than what I believe they really are.
    Apr 25 02:44 AM | Likes Like |Link to Comment
  • A Closer Look At Regency Energy Partners' Distributable Cash Flow As Of Q4 2012 [View article]
    Wish I had the time to cover more.
    Apr 21 09:34 PM | Likes Like |Link to Comment
  • Preliminary Look At 1Q 2013 Distributable Cash Flow Generated By El Paso Pipeline Partners [View article]
    I looked it up and agree with some, but not all, their points. In the case of EPD, they base their calculations on 2012 gross capital expenditures, ignoring $1.2B generated via asset sales. I disagree with that approach. See http://bit.ly/13pGayu
    Apr 21 09:31 PM | 1 Like Like |Link to Comment
  • A Closer Look At Buckeye Partners' Distributable Cash Flow As Of 4Q 2012 [View article]
    Based on my analysis, I became uncomfortable and, as detailed in prior reports, began reducing my position a while back. The balance left over is quite small. I redeployed the capital into EPD.
    Apr 21 01:08 PM | Likes Like |Link to Comment
  • A Closer Look At Magellan Midstream Partners' Distributable Cash Flow As Of 4Q 2012 [View article]
    You get taxed on your pro-rata portion of the MLP's income, not on the distributions. An MLP's income is typically less than its distributions, primarily because of depreciation deductions, so in effect the distributions are tax deferred. Distributions decrease your basis, so when you ultimately dispose of the investment your tax bill is higher (i.e., the tax deferred distributions are recaptured). If limited partners receive distributions equal to their share of net income, there is no tax deferral and consequently also no tax recapture in the future.
    DCF that is not distributed can be distributed in future years. But MLPs are typically required to distribute the bulk of the cas flow available for distributions.
    Apr 7 03:29 PM | Likes Like |Link to Comment
  • A Closer Look At Boardwalk Pipeline Partners' Distributable Cash Flow As Of 4Q 2012 [View article]
    At this point I am not increasing my exposure to MLPs.
    Mar 28 01:34 PM | Likes Like |Link to Comment
  • Issues Raised By Energy Transfer Partners' Acquisition Of 60% Of ETP Holdco [View article]
    I made corrections to this 3/22 article. See piece published today.
    Mar 25 09:42 AM | Likes Like |Link to Comment
  • Issues Raised By Energy Transfer Partners' Acquisition Of 60% Of ETP Holdco [View article]
    I made corrections to this article in a piece published 3/25..
    Mar 25 09:41 AM | Likes Like |Link to Comment
  • Issues Raised By Energy Transfer Partners' Acquisition Of 60% Of ETP Holdco [View article]
    I made corrections to this 3/22 article in a piece published today.
    Mar 25 09:39 AM | Likes Like |Link to Comment
  • Issues Raised By Energy Transfer Partners' Acquisition Of 60% Of ETP Holdco [View article]
    I made corrections to this article. See piece publsihed today.
    Mar 25 09:38 AM | Likes Like |Link to Comment
  • Issues Raised By Energy Transfer Partners' Acquisition Of 60% Of ETP Holdco [View article]
    I made corrections to this 3/22 article. See piece that was published today.
    Mar 25 09:36 AM | Likes Like |Link to Comment
  • Issues Raised By Energy Transfer Partners' Acquisition Of 60% Of ETP Holdco [View article]
    I amde corrections to this 3/22 article. See article published today.
    Mar 25 09:35 AM | Likes Like |Link to Comment
  • Issues Raised By Energy Transfer Partners' Acquisition Of 60% Of ETP Holdco [View article]
    I made corrections to this 3/22 article. See article published today.
    Mar 25 09:35 AM | Likes Like |Link to Comment
  • Issues Raised By Energy Transfer Partners' Acquisition Of 60% Of ETP Holdco [View article]
    Corrections were made to this 3/22 article. See article publsihed today.
    Mar 25 09:34 AM | Likes Like |Link to Comment
  • Issues Raised By Energy Transfer Partners' Acquisition Of 60% Of ETP Holdco [View article]
    Corrections to this 3/22 article published 3/25. See article publsihed today.
    Mar 25 09:34 AM | Likes Like |Link to Comment
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