Subscribe for email updates on new posts

Analyzing Cash Flows of Master Limited Partnerships

Stock Quotes

BPL72.54  chart-0.27
BWP17.58  chart-0.05
EPD27.43  chart-0.01
ETP35.80  chart+0.62
KMI17.7738  chart-0.1462
MMP69.47  chart-0.61
NGLSN/A  chartN/A
RGP23  chart+0
PAA22.28  chart-0.26
SPH34.655  chart+0.115
WPZ32.29  chart+0.49
NLY10.615  chart-0.085
AGNC18.86  chart-0.15
2016-05-27 13:47

KMI - A Closer Look at Kinder Morgan’s results for 1Q 2016 results

master limited partnership logos-KMP

Author: Ron Hiram

Published: May 25, 2016


  • Adjusted EBITDA in 1Q16 is up about 1.5% from 1Q15 measured in absolute terms and down about 2% on a per share basis.
  • Reported DCF in 1Q16 was essentially unchanged from 1Q15. Sustainable DCF was lower than reported DCF by approximately 9.6% in the TTM ending 3/31/16 and by approximately 27% in 1Q16.
  • The $5.4 billion Trans Mountain Pipeline expansion now accounts for 38% of the reduced backlog. KMI’s dependence on proceeding and successfully executing it on time and on budget has increased.
  • KMI is now generating excess cash and on a much more solid financial footing; quarter to prior-year quarter EBITDA comparisons should begin to look better for the rest of the year. Continue reading KMI – A Closer Look at Kinder Morgan’s results for 1Q 2016 results

ETP - A Closer Look At Energy Transfer Partners' 1Q16 Results

master limited partnership logos-ETP


Author: Ron Hiram

Published: May 22, 2016


  • Absent a $60 million gain due to an accounting method, ETP’s Adjusted EBITDA would have declined in 1Q16 vs. 1Q15.
  • Maintenance capital expenditures in 1Q16 declined 30% vs. 1Q15 and are flat when measured on a TTM basis, while investment in property plant and equipment is up 45%.
  • Sustainable DCF and DCF coverage are negative and substantially lower than the reported numbers mostly because ETP has, since January 2014, invested heavily in working capital.
  • Absent $317 million of income tax benefits in the TTM ended 3/31/16, reported and sustainable DCF numbers would have been even lower.
  • ETP has been funding distributions by issuing debt and limited partnership units, by generating cash proceeds from asset sales, and by reducing cash reserves. Continue reading ETP – A Closer Look At Energy Transfer Partners’ 1Q16 Results

MMP - A Closer Look at Magellan Midstream Partners' Results for 1Q 2016

master limited partnership logos-MMP

Author: Ron Hiram

Published: May 16, 2016


  • MMP’s reliance on commodity-related activities has been diminishing.
  • Coverage ratio in 1Q16 was substantially below MMP’s historical levels.
  • Projects under construction being placed into service in 2016 will increase EBITDA by over 10%; the 10% distribution growth guidance with 1.2x coverage for 2016 seems achievable.
  • DCF per unit has recently been growing at a slower pace than distributions per unit. This trend threatens the ability to combine strong coverage with distribution growth in later years.
  • By various qualitative and other measures, MMP receives top marks; I continue to hold it.

Continue reading MMP – A Closer Look at Magellan Midstream Partners’ Results for 1Q 2016

A Closer Look at Enterprise Products Partners' results for 1Q 2016

master limited partnership logos-EPD


Author: Ron Hiram

Published: May 14, 2016


  • Absolute levels of gross margins have held up remarkably well in the face lower energy prices, but have declined for 5 consecutive quarters on a per unit basis .
  • Mainly due to acquisitions, increases in distributions per unit have been accompanied by declines in DCF per unit; however the pace of decline slowed significantly in the last two quarters.
  • Coverage ratios, while having declined, are generally still robust. But in 1Q16, the ratio based on sustainable DCF is considerably thinner.
  • A key question is whether the gap between per unit DCF growth and the faster per unit distribution growth can be narrowed or reversed in the difficult environment facing EPD.
  • For reasons outlined in the article, at the current price level continue to hold my position.

Continue reading EPD – A Closer Look at Enterprise Products Partners’ results for 1Q 2016

BPL - Preliminary review of Buckeye Pipeline Partners' 4Q15 results

master limited partnership logos-BPL

Author: Ron Hiram

Published: February 15, 2016


  • Overall results for 4Q15 and 2015 are impressive, given market conditions.
  • Adjusted EBITDA by segment in 4Q15 is up 9.4% in absolute dollar terms, vs. 4Q14, and up 7.6% on a per unit basis.
  • In 2015, DCF increased 16.3% in absolute dollar terms and 8.4% on a per unit basis vs. 2014. Coverage ratio of increased to 1.02x vs. 0.96x for 2014.
  • A comparison of full year 2015 to 2014 Adjusted EBITDA looks favorable also because of the one-time losses in 2014.
  • BPL’s cost of capital has increased far less than other MLPs; it can finance its growth capital plans and continue to increase distributions by $0.0125 per quarter in 2016.

Continue reading BPL – Preliminary review of Buckeye Pipeline Partners’ 4Q15 results