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.
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
A Closer Look At El Paso Pipeline Partners' Distributable Cash Flow As Of Q4 2012 [View article]
Capital expenditures for Phase 1 of the plant to be built by Elba Liquefaction Company are estimated at ~$1 billion. I doubt EPB’s 50% share will all be spent this year. In 2013 EPB expects to spend $4 billion for growth capital. So this project is not very significant as a percent of total capital spending and I see no reason that its results would have a greater effect on EPB’s long term share price than other projects. There are at least 10 LNG export terminals in various stages of planning in the U.S. The process of getting DOE permission to export LNG (especially to non-FTA countries) and getting FERC combined operating licenses and approval to construct or modify facilities is very lengthy. While Phase 1 of this project has received DOE approval, and while it is smaller than most of the others and utilizes Shell’s capabilities for rapid design, construction and implementation, I still cannot hazard guesses as to whether it will receive all the required approvals or when it will commence operations. No timeline was provided by Shell or EPB.
Trailing 12 Months Performance Comparison Of Selected MLPs [View article]
I would start buying EPD, MMP, PAA, WPZ and EPB. I would allocate more to the first 3 than the last 3, despite their lower yields. I would split the 6th investment between KMI (GP of EPB, KMP, KMR) and WMB (GPof WPZ). Safety is, of course, relative.
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:
A Closer Look At Boardwalk Pipeline Partners' Distributable Cash Flow As Of 1Q 2012 [View article]
If I had to pick one MLP to own, it would probably be EPD. However, whether exposure to a single MLP is appropriate for you depends on your overall level of diversification in your portfolio and on how much exposure to a single position you can tolerate.
A Closer Look At El Paso Pipeline Partners' Distributable Cash Flow As Of 1Q 2012 [View article]
In 2011 quarterly distributions for the first time exceeded the $0.43125 threshold beyond which the general partner’s incentive distribution rights reach 50%. KMI purchased EP, so I think KMI will now receive 50% of any excess beyond the threshold. That is one of my main concerns with EPB.
A Closer Look At Cash Flow Implications Of Energy Transfer Partners' Transformative Transactions [View article]
I also wonder. There is no strategic fit and there certainly is no structural fit because the retail gasoline operation is owned by a C-Corp. It will therefore owe taxes on its taxable income and any dividends it distributes will be taxable to its shareholder (ETP). Kelcy Warren said he likes the business even though there is no strategic fit, but my guess is they will try to sell it.
A Closer Look At Buckeye Partners' 2011 Distributable Cash Flow [View article]
Hi Henry. BPL's $260m purchase of the liquids terminal in New York Harbor is the latest in what has been a string of acquisitions. You ask whether I like this strategy. My answer is that external acquisitions generally require paying top dollar and are thus less accretive than internal growth projects. So I prefer MLPs that are not taking on significant price and execution risks by going on a buying spree. I noted in my article that BPL's LT debt is at 4.9x EBITDA. You seem to agree this is quite high. I no longer own BPL because I am uncomfortable with: 1) the strategy; 2) the execution (writeoffs and missing projections); 3) the debt level; 4) the likelihood more equity being issued. Hope this is responsive.
A Closer Look At Boardwalk Pipeline Partners' 2011 Distributable Cash Flow [View article]
You have not missed anything. What is important is not to rely too much on published reports re insider purchases without checking exactly whether the transaction sends a significant positive signal about the stock. In this case I think it does not, regardless of whether purchase was made by CEO or by spouse.
Another Note Of Caution On Buckeye Partners L.P.'s Distributable Cash Flow [View article]
Hi Henry
The 10-K for 2011 has not yet been filed. Having read company filings, press releases and presentations I can summarize my concerns as follows: 1) BPL has not met expectations for at least 4 consecutive quarters; 2) the trend in BPL's reported DCF per unit does not seem positive: $1.03 in 1Q11, $0.83 in 2Q11, $0.87 in 3Q11 and $0.77 in 4Q11; 3) reported DCF includes items I do not consider sustainable (such as reductions in working capital, certain risk management activities); 4) BPL has been aggressively buying assets and projects these purchases will significantly drive performance. But for that to happen, it must price them correctly and sucessfully integrate them into its operations. That has not always happened, as witnessed by the ~$170m (38%) 3Q11 write down of the Natural Gas Storage business unit (acquired in 2008 for ~$440 million). Hopefully they will fare better with the BORCO acquisition.
My analysis of sustainable DCF for the 9 months ended 9/30/11 caused me concern regarding BPL’s ability to make distributions that are financed by operations, not by borrowings or sale of additional partnership units. I will update the analysis once the 10-K is issued and additional cash flow information becomes available. In the meantime, I think a note of caution is in order and that investors who don't want their current distributions to be dependent on an MLP's future growth and/or ability to raise capital should consider alternatives to BPL.
A Closer Look At Suburban Propane Partners' Distributable Cash Flow [View article]
Preliminary Look At 1Q 2013 Distributable Cash Flow Generated By El Paso Pipeline Partners [View article]
A Closer Look At El Paso Pipeline Partners' Distributable Cash Flow As Of Q4 2012 [View article]
Trailing 12 Months Performance Comparison Of Selected MLPs [View article]
A Closer Look At Annaly Capital Management's Cash Flows As Of Q2 2012 [View article]
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.
A Closer Look At Plains All American Pipeline's Distributable Cash Flow As Of Q2 2012 [View article]
A Closer Look At Williams Partners' Distributable Cash Flow As Of 2Q 2012 [View article]
A Closer Look At Boardwalk Pipeline Partners' Distributable Cash Flow As Of 1Q 2012 [View article]
A Closer Look At El Paso Pipeline Partners' Distributable Cash Flow As Of 1Q 2012 [View article]
A Closer Look At Enterprise Products Partners' Distributable Cash Flow As Of 1Q 2012 [View article]
A Closer Look At Cash Flow Implications Of Energy Transfer Partners' Transformative Transactions [View article]
A Closer Look At Kinder Morgan Energy Partners' 2011 Distributable Cash Flow [View article]
A Closer Look At Buckeye Partners' 2011 Distributable Cash Flow [View article]
BPL's $260m purchase of the liquids terminal in New York Harbor is the latest in what has been a string of acquisitions. You ask whether I like this strategy. My answer is that external acquisitions generally require paying top dollar and are thus less accretive than internal growth projects. So I prefer MLPs that are not taking on significant price and execution risks by going on a buying spree.
I noted in my article that BPL's LT debt is at 4.9x EBITDA. You seem to agree this is quite high.
I no longer own BPL because I am uncomfortable with:
1) the strategy; 2) the execution (writeoffs and missing projections); 3) the debt level; 4) the likelihood more equity being issued.
Hope this is responsive.
A Closer Look At Boardwalk Pipeline Partners' 2011 Distributable Cash Flow [View article]
Another Note Of Caution On Buckeye Partners L.P.'s Distributable Cash Flow [View article]
The 10-K for 2011 has not yet been filed. Having read company filings, press releases and presentations I can summarize my concerns as follows:
1) BPL has not met expectations for at least 4 consecutive quarters;
2) the trend in BPL's reported DCF per unit does not seem positive: $1.03 in 1Q11, $0.83 in 2Q11, $0.87 in 3Q11 and $0.77 in 4Q11;
3) reported DCF includes items I do not consider sustainable (such as reductions in working capital, certain risk management activities);
4) BPL has been aggressively buying assets and projects these purchases will significantly drive performance. But for that to happen, it must price them correctly and sucessfully integrate them into its operations. That has not always happened, as witnessed by the ~$170m (38%) 3Q11 write down of the Natural Gas Storage business unit (acquired in 2008 for ~$440 million). Hopefully they will fare better with the BORCO acquisition.
My analysis of sustainable DCF for the 9 months ended 9/30/11 caused me concern regarding BPL’s ability to make distributions that are financed by operations, not by borrowings or sale of additional partnership units. I will update the analysis once the 10-K is issued and additional cash flow information becomes available. In the meantime, I think a note of caution is in order and that investors who don't want their current distributions to be dependent on an MLP's future growth and/or ability to raise capital should consider alternatives to BPL.