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 All content on this website is presented as of the date published, is not updated and may be superseded by subsequent market events or for other reasons Under no circumstances should a person act upon the information contained within without first conducting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.

MMP - A Closer Look at Magellan Midstream Partners' Distributable Cash Flow as of 4Q 2014

Author: Ron Hiram

Published: March 28, 2015

Summary:

Differences between reported and sustainable DCF in the quarter and year ended 12/31/14 related principally to the exclusion of derivative gains and were not material. Coverage ratios are among the strongest, if not the strongest, in the universe of midstream energy MLPs. Favorable structure: no IDRs, […]

ETP - A Closer Look at Energy Transfer Partners' Distributable Cash Flow as of 4Q 2014

Author: Ron Hiram

Published: March 17, 2015

Summary:

Coverage ratio, as reported by ETP, increased from1.03x in 2013 to 1.27x in 2014. Through IDR relinquishment, ETE provides considerable help in achieving ETP’s coverage ratios. Frequent occurrence of items characterized as “one-time” and “non-cash” mars the quality of the reported coverage numbers. Sustainable DCF coverage […]

EPD - A Closer Look at Enterprise Products Partners' Distributable Cash Flow as of 4Q 2014

Author: Ron Hiram

Published: March 10, 2015

Summary:

On a per unit basis, sustainable DCF decreased in 2014 and in 4Q14 vs. the corresponding prior year periods; however, coverage ratios still appear to be very strong. Sustainable DCF substantially exceeded distributions, but grew more slowly in 2014. Excess cash generated (~$6.7 billion over the […]

PAA - A Closer Look at Plains All American Pipeline’s Distributable Cash Flow as of 4Q 2014

Author: Ron Hiram

Published: March 2, 2015

Summary:

PAA’s sustainable cash flow in 2014 did not materially differ from reported DCF due to a number of offsetting items. PAA is not financing its distributions via issuance of new units or debt. The drop in the 2014 coverage ratio from the prior-year level was expected. […]

SPH - A Closer Look at Suburban Propane Partners' Results and Cash Flows as of 12/31/14.

Author: Ron Hiram

Published: February 25, 2015

Summary:

1QFY15 volumes and earnings were adversely by warmer than usual weather. But, together with sharply lower propane prices, there was a positive effect on working capital needs. Adjusted EBITDA of around $320 million can be expected for fiscal 2015; should be more than sufficient to cover distributions […]