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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Disclaimer

The documents and opinions in this website are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the securities mentioned or to solicit transactions or clients. The information in this website is believed, but not guaranteed, to be accurate. All content on this website is presented as of the date published, is not updated and may be superseded by subsequent market events or for other reasons Under no circumstances should a person act upon the information contained within without first conducting his/her own independent research and consulting with his/her investment advisor and tax professional as to whether such action is suitable based on the investor’s investment objectives, personal and financial situation, and specific legal or tax situation.

Taking issue with the argument that the MLP business model is unlikely to survive

Author: Ron Hiram

Published: June 1, 2016

Summary:

Long asset lives is a unique feature of the business of midstream energy MLPs It is too onerous and overly conservative to require them to cover the payments out of FCF as if the pipelines had 5 or 10-year lives Investors need to bear in mind disclosure […]

Two-Year Performance Comparison of Selected MLPs

Author: Ron Hiram

Published: March 31, 2014

As an investment class, master limited partnerships (“MLPs”) have been highly correlated with the S&P 500 for the past 2 years. I derived Chart 1 using March 31, 2012 as the starting level for both the Alerian MLP Index, a composite of the 50 most prominent energy MLPs, […]

A Closer Look at Williams Partners’ Distributable Cash Flow as of 3Q 2012

Author: Ron Hiram

Published: November 8, 2012

 

On October 31, 2012 July 23, 2012, Williams Partners, L.P. (WPZ) announced results for 3Q12 that did not meet expectations and were sharply lower than 3Q11. It lowered Distributable Cash Flow (“DCF”) guidance for 2012 but increased it for 2013-2014.

On October 31, 2012, WPZ also […]

Distributable Cash Flow (DCF)

By: Ron Hiram

Published: Jan 23, 2012

Distributable cash flow (DCF) is a quantitative standard viewed by master limited partnerships (MLP) investors and analysts as an indicator of the MLP’s ability to generate cash flow at a level that can sustain or support an increase in quarterly distribution rates. Since DCF is a non-GAAP measure, […]

Estimating sustainable DCF-why and how

By: Ron Hiram

Published: Dec 18, 2011

As an investor seeking the high yields being offered by master limited partnerships (MLPs), I look carefully at what portion of the distributions being received are really “earned” and generally seek to avoid or reduce positions in MLPs that fund distributions with debt or through issuance of equity […]