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Ron Hiram  

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  • A Closer Look At Enterprise Products Partners' Distributable Cash Flow As Of 1Q 2012 [View article]
    The overwhelming majority of Buy side analyst recommendations are positive, so your point re worrying about the downside is well taken. Indeed, you should worry about the downside of every material stock position. But worrying is useless if not accompanied by analysis, so you need to analyze all your positions. I eliminated my positions in NRGY and BPL followng such analysis. Take a look at my Jan 3 2012 article on NRGY and Feb 14 2012 article re BPL. For me, the return on the time and effort I put into the analytical effort was definitely worthwhile.
    I don't think technical analysis will help too much in deciding whether and when to buy. There is no algorithm that I know of that will do this for you. Although the decision process involves integrating data from many sources, at the end of the day the number of variables that can impact the outcome is too large to list, let alone integrate and understand. I try to make a decision if after the fundamental analysis I develop a strong sense, either positive or negative, and develop a gut feel that the timing is right. Wish I could be more precise.
    May 12, 2012. 06:58 AM | 6 Likes Like |Link to Comment
  • A Closer Look At Williams Partners' Distributable Cash Flow As Of 2Q 2012 [View article]
    Bond investors will sell and rating agencies will downgrade if the debt/equity ratio is too high
    Aug 13, 2012. 03:57 PM | 3 Likes Like |Link to Comment
  • Another Note Of Caution On Buckeye Partners L.P.'s Distributable Cash Flow [View article]
    Hi Don
    Bear in mind that the distirbutions made by MLPs are not dividends. 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. What MLP investors need to watch for on the tax front are proposals to tax MLPs as corporations. This would reduce the tax benefit of owning them.
    Feb 14, 2012. 01:59 PM | 3 Likes Like |Link to Comment
  • Energy Transfer Partners: Are Distributions Sustainable? [View article]
    My analysis is not meant to produce a buy, hold or sell recommendation. It provides a tool which supplements additional analysis. There are reasons to be positive on ETP, including the expected drop-downs from the acquisition of Southern Union Gas by ETE, the $1.25 billion of investments to expand ETP’s Eagle Ford footprint, the Woodford Shale project, the NGL storage and pipeline assets (Lone Star JV, 70% ETP, 30% RGP) acquired with from LDH, as well as other NGL pipelines that recently have, or shortly will have, commenced operations. I reduced my exposure to ETP and ETE, but remain invested.
    Dec 27, 2011. 08:23 PM | 3 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
  • A Closer Look At Targa Resources Partners' 3Q'14 Distributable Cash Flow [View article]
    Targa is highly 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 the Texas shale formations (Eagle Ford, Permian) and Marcellus/Utica. So 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. The larger price drop for NGLS vs. for example EPD, MMP, and ETP reflects this. Having said that, I do not believe the dividend is under threat in the short term. Longer term (>1 year), dividend growth could be adversely impacted.
    Dec 2, 2014. 11:24 AM | 2 Likes Like |Link to Comment
  • 2-Year Performance Comparison Of Selected MLPs [View article]
    Look at TRGP, WMB, PAGP, OKE
    Dec 8, 2013. 09:57 AM | 2 Likes Like |Link to Comment
  • Thoughts On Kevin Kaiser's Allegations Of Inadequate Capital Maintenance Expenditures At Kinder Morgan [View article]
    I submitted the article for publication before the transcript of the conference call was made available. The additional level of detail provided re the maintenance cap ex issue was very helpful in mitigating my concern on this issue. My other concerns (relating to the way coverage is calculated and KMR's impact on coverage) were not the subject of this call and were therefore not addressed.
    Sep 21, 2013. 12:49 PM | 2 Likes Like |Link to Comment
  • Thoughts On Kevin Kaiser's Allegations Of Inadequate Capital Maintenance Expenditures At Kinder Morgan [View article]
    I suggested Gasland not as a reliable source of information but as an example of how opponents try to sway public sentiment.
    Sep 21, 2013. 12:09 PM | 2 Likes Like |Link to Comment
  • A Closer Look At Suburban Propane Partners' Distributable Cash Flow [View article]
    There are no incentive distribution rights for the benefit of SPH's General Partner. The Partnership owns (directly and indirectly) all of the limited partner interests in the Operating Partnership. The Common Units represent 100% of the limited partner interests in the Partnership.
    May 22, 2013. 03:48 PM | 2 Likes Like |Link to Comment
  • Performance Comparison Of Selected MLPs [View article]
    Distributable cash flow for 2012: 4,133.3 (1-31-13 press release)
    Total distributions in 2012: 2,191.9 (10-K p F-6).
    Divide 1st line by 2nd line.
    Apr 28, 2013. 04:12 AM | 2 Likes Like |Link to Comment
  • A Closer Look At Magellan Midstream Partners' Distributable Cash Flow As Of 3Q 2012 [View article]
    Environmental. To quote an International Energy Agency (IEA) official: "If the social and environmental impacts aren't addressed properly, there is a very real possibility that public opposition...will halt the unconventional gas revolution in its tracks". See also a documentary titled "Gaslands" by Josh Fox. 2. Falling afoul of the regulators. For example, ETP fell >12% when FERC announced that it is seeking civil penalties and the disgorgement of profits totaling $167 million for allegedly manipulating the wholesale natural gas markets in Texas. 3. Too much money. MLPs have become increasingly popular. The ease with which they can raise equity and debt creates a risk of too much money investment opportunities and lowering the returns. 4. Tax code changes that would eliminate the advantages inherent in the MLP structure.
    Jan 8, 2013. 11:54 AM | 2 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, 2012. 07:44 PM | 2 Likes Like |Link to Comment
  • A Closer Look At El Paso Pipeline Partners' Distributable Cash Flow As Of 2Q 2012 [View article]
    EPB continues to operate as before, except the general partner is now KMI. There could, in the future, be some rollup transaction which will combine all the Kinder Morgan partnerships, including KMI, into one partnership that will not be obligated to pay incentive distributions to the general partner. Whether, when and under what terms this will occur is not known.
    Aug 9, 2012. 10:41 AM | 2 Likes Like |Link to Comment
  • A Closer Look At Annaly Capital Management's Cash Flows [View article]

    "It is true that when you own an MLP you are considered to be earning income in every state in which that MLP operates. However, in most cases unless you own a large position in the MLP it’s likely you will not have to file a return in every state or pay any state taxes outside your home state. There are two main reasons for this.

    First, many key states in which MLPs operate don’t have state income taxes at all. Examples include Texas and Wyoming, both xtates where MLPs are extremely active.

    Most others have minimum income limits; unless you have income from the MLP above that limit you’re not required to file state taxes.

    As most MLPs operate in multiple states, the share of income allocable to each individual State is quite small; typically only investors with large holdings will need to file. The exact amount of income allocable to each individual State is included in your K-1 form.

    The benefits of tax deferral coupled with high current income outweigh these complications. And many find it easier to simply consult a tax professional; any good accountant can easily handle MLPs."

    Hope this is responsive to your question.
    Jun 18, 2012. 10:49 PM | 2 Likes Like |Link to Comment