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Analyzing Cash Flows of Master Limited Partnerships

Stock Quotes

BPL74.92  chart-1.06
BWP17.80  chart+0.15
EPB0.00  chartN/A
EPD34.13  chart-0.42
ETP62.98  chart-0.57
KMP0.00  chartN/A
MMP82.61  chart+1.98
NGLS46.60  chart-0.03
CEQP8.07  chart+0.38
RGP23.50  chart-0.70
PAA51.37  chart+0.39
SPH42.83  chart-0.41
WPZ43.85  chart-0.15
NLY11.33  chart+0.10
AGNC22.295  chart+0.295
2014-12-19 16:01

NGLS - A Closer Look at Targa Resources Partners’ Distributable Cash Flow as of 3Q 2014

master limited partnership logos-NGLS

Author: Ron Hiram

Published: November 25, 2014

Summary:

  • Impressive increases in operating margins and Adjusted EBITDA in the last 4 consecutive quarters.
  • Very solid coverage of sustainable DCF in the TTM ended 9/30/14.
  • Multiple of enterprise value to TTM EBITDA appears very reasonable relative to other MLPs with lower distribution growth prospects.
  • APL acquisition should be immediately accretive to DCF. Combined partnership will be one of the largest diversified MLPs with pro forma enterprise value of $23 billion.

Continue reading NGLS – A Closer Look at Targa Resources Partners’ Distributable Cash Flow as of 3Q 2014

BPL - A Closer Look at Buckeye Partners' Distributable Cash Flow as of 3Q 2014

master limited partnership logos-BPL

 

Author: Ron Hiram

Published: November 21, 2014

Summary:

  • BPL has been funding distributions by issuing debt and equity.
  • Stark differences between reported and sustainable DCF due to cash consumed by working capital and by payments to terminate interest rate swaps.
  • DCF coverage is likely to be below 1x in 2014. Improvement expected in 4Q14.
  • Distribution growth rate is slow; increased by 1.25 cents per unit each quarter in 2013 and in each of the first 3 quarters of 2014.
  • High multiple of enterprise value to TTM EBITDA relative to better performing MLPs.

Continue reading BPL – A Closer Look at Buckeye Partners’ Distributable Cash Flow as of 3Q 2014

ETP - A Closer Look at Energy Transfer Partners' Distributable Cash Flow as of 3Q 2014

master limited partnership logos-ETP

Author: Ron Hiram

Published: November 17, 2014

Summary:

  • All segments exhibited notable Adjusted EBITDA improvements on a TTM basis except Interstate Transportation & Storage.
  • Substantial differences between reported DCF and what I consider sustainable DCF.
  • Sustainable DCF coverage in the latest TTM periods improved considerably compared to the prior year period, but is still below 1x in the TTM ended 9/30/14.
  • ETE’s relinquishment of some IDR distributions provided considerable help in achieving the improvement.
  • Growth underpinned by substantial list of large projects underway; concerns regarding related-party transactions remain regarding how these projects will be split among the various Energy Transfer entities.

Continue reading ETP – A Closer Look at Energy Transfer Partners’ Distributable Cash Flow as of 3Q 2014

PAA - A Closer Look at Plains All American Pipeline’s Distributable Cash Flow as of 3Q 2014

master limited partnership logos-PAA

Author: Ron Hiram

Published: November 15, 2014

Summary:

  • 3Q14 results bolstered by Supply & Logistics segment profits; up 138% over 3Q13.
  • Unusually strong 1Q14 results may cause Adjusted EBITDA unfavorable comparison with 1Q15; could create a buying opportunity if unit price drops in response.
  • DCF coverage of distributions remains strong and sustainable.
  • Unit price has underperformed peers and MLP index in last 12 months.
  • Disciplined, cohesive, management team; well positioned in major crude oil basins and market hubs; not highly leveraged; consistently meet or exceed guidance.

Continue reading PAA – A Closer Look at Plains All American Pipeline’s Distributable Cash Flow as of 3Q 2014

EPD - A Closer Look at Enterprise Products Partners' Distributable Cash Flow as of 3Q 2014

master limited partnership logos-EPD

 

Author: Ron Hiram

Published: November 12, 2014

 

Summary:

  • Consistently strong DCF coverage ratios; growth in DCF per unit exceeding growth in distributions
  • Substantial excess cash reduces reliance on capital markets and minimizes dilution.
  • Favorable structure: no IDRs, low leverage, breadth and diversification.
  • Growth underpinned by projects beginning commercial operations: $4.9 billion in latest 12 months and a further $6.3 billion in 2015-2016.
  • Core MLP holding; premium price vs. other MLPs justified.

Continue reading EPD – A Closer Look at Enterprise Products Partners’ Distributable Cash Flow as of 3Q 2014