This article supplements, and should be read in conjunction with, my preliminary review of 2Q14 results recently reported by El Paso Pipeline Partners, L.P. (EPB). I now evaluate the sustainability of EPB’s Distributable Cash Flow (“DCF”) and assesses whether EPB is financing its distributions via issuance of new units or debt.
DCF is one of the primary measures typically used master limited partnerships (“MLPs”) to evaluate their operating results. However, each MLP may define this term differently, making comparisons difficult. In addition, MLPs typically include non-sustainable items in their definitions of DCF.
This article focuses on some of the key facts and trends revealed by the results of operations reported by Kinder Morgan Energy Partners LP (KMP) for 2Q 2014.
Adjusted earnings before depreciation and amortization (“Adjusted EBDA” or “Segment earnings before DD&A and certain items”) is one of the important yardsticks used by management to measure its success in maximizing returns to the partners, to evaluate segment performance, and to decide how to allocate resources to KMP’s five reportable business segments. Comparing each quarter to its counterpart in the prior year period we see slow growth in Adjusted EBDA per unit over the past 4 calendar quarters, as shown in Table 1 below: Continue reading KMP – Preliminary review of Kinder Morgan Energy Partners’ results for 2Q 2014
Ron Hiram currently manages investment portfolios and assists earlier stage companies in their capital raising efforts. His career includes serving as Managing Partner of Eurofund 2000 L.P., an Israeli venture capital fund; Partner and co-head of the Israeli operations of TeleSoft Partners, a Silicon Valley based venture capital fund; Managing Director and Partner at Soros Fund Management and Soros Private Equity Partners, New York; and Managing Director of a workout and restructuring group at Lehman Brothers, New York. Mr. Hiram also served as Chairman of the Board of Comverse Technology, Inc. (CMVT), as a board member of other private and public companies, and as CEO of a telecom start-up.Read More
About this Website
The website explains how distributable cash flow (DCF) is defined and why it is important to analyze it and derive a sustainable measure of DCF. Results reported by master limited partnerships (MLPs) are analyzed. comparisons of reported DCF to sustainable DCF are generated, and various coverage ratios and reports analyzing performance are generated. Simplified sources and uses of funds statements are presented to focus readers' attention on key cash flow items. The website also features general articles about MLPs and about other topics of interest to yield-focused investors.
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