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Analyzing Cash Flows of Master Limited Partnerships

Stock Quotes

BPL70.82  chart+0.62
BWP13.70  chart+0.28
EPD28.62  chart+0.16
ETP49.56  chart+0.95
KMI32.63  chart+0.63
MMP71.94  chart+0.75
NGLS29.92  chart+1.02
RGP23  chart+0
PAA35.51  chart+0.56
SPH37.00  chart+0.77
WPZ39.73  chart+0.50
NLY10.17  chart-0.04
AGNC19.36  chart-0.19
2015-08-28 16:00

BWP - A Closer Look At Boardwalk Pipeline Partners' 2Q15 Distributable Cash Flow

master limited partnership logos-BWP

 

 

 

Author: Ron Hiram

Published: August 30, 2015

Summary:

  • Operating income and EBITDA trends in recent quarters and TTM period are not encouraging; but there are some positive signals from the gas transportation business.
  • Coverage is not an issue given that distributions were cut so drastically.
  • Leverage remains high.
  • Valuation multiple lower than peers, but so are growth prospects and current yield. The likelihood of significant distribution growth in next 2-3 years is low.
Continue reading BWP – A Closer Look At Boardwalk Pipeline Partners’ 2Q15 Distributable Cash Flow

A Closer Look at Suburban Propane Partners' Results and Cash Flows as of 6/30/15

master limited partnership logos-SPH

Author: Ron Hiram

Published: August 27, 2015

Summary:

  • SPH benefited from lower oil prices; it did not pass on to its customers all the benefits of lower propane costs thus increasing gross margin to 57% in 3QFY15 .
  • Distributions coverage at 1.09x in the TTM ended 6/30/15; sustainable DCF shows a marked improvement over the prior TTM period.
  • SPH has demonstrated less volatility and has performed better than the Alerian MLP Index over the past 12 months.
  • SPH may not provide substantial distribution growth and may underperform the index if we see sustained increases in MLP price levels.
  • But the ~10% yield appears secure, the valuation multiple is lower, and it is less leveraged.

Continue reading A Closer Look at Suburban Propane Partners’ Distributable Cash Flow as of 6/30/15

KMI - Conversation with Kinder Morgan’s management re Distributable Cash Flow

master limited partnership logos-KMP

Author: Ron Hiram

Published: August 27, 2015

Summary:

  • Management’s response covers concepts brought up in my recent SA article on KMI.
  • We discuss the rationale for a number of the non-GAAP calculations.
  • We discuss the impact of KMI having eliminated the structural subordination of its debt.
  • We discuss the differences in our methods of calculating the ratio of long-term debt to EBITDA.
  • We discuss the differences in our methods of calculating distributable cash flow.

Continue reading KMI – Conversation with Kinder Morgan’s management re Distributable Cash Flow

NGLS - A Closer Look At Targa Resource Partners' 2Q15 Distributable Cash Flow

master limited partnership logos-NGLS

Author: Ron Hiram

Published: August 22, 2015

Summary:

  • NGLS provided very solid distribution coverage in the TTM ended 6/30/15.
  • While exposure to gross margin from sale of commodities has been coming down over time, it is still substantial.
  • Given that, and given that operating margin, operating income, Adjusted EBITDA and DCF are declining on a per unit basis, the sustainability of continued distribution growth should be questioned.
  • But unit price declines have reached a point where investors brave enough to broaden their exposure to midstream energy MLPs should consider initiating, or adding to, positions in NGLS.
Continue reading NGLS – A Closer Look At Targa Resource Partners’ 2Q15 Distributable Cash Flow

BPL - A Closer Look at Buckeye Partners' 2Q15 Distributable Cash Flow

master limited partnership logos-BPL

 

Author: Ron Hiram

Published: August 19, 2015

Summary:

  • Substantial improvement in Adjusted EBITDA and DCF in the TTM period ending 6/30/15 mostly due to Global Marine Terminals segment and year-ago losses at Merchant Services.
  • Coverage ratios, both based on reported DCF and sustainable DCF, improved markedly in the latest TTM period. Management expects in excess of 1x coverage for 2015.
  • The combination of increasing capacity (via expansion projects), higher utilization rates, and higher storage rates at Global Marine Terminals should lift results for the balance of the year.
  • Management will soon consider accelerating the distribution growth rate.
  • Investors wishing to broaden their exposure to midstream energy MLPs, or to exchange MLPs in their portfolios whose operational results and prospects appear less robust, should consider BPL.

Continue reading BPL – A Closer Look at Buckeye Partners’ 2Q15 Distributable Cash Flow