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.



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 All content on this website is presented as of the date published, is not updated and may be superseded by subsequent market events or for other reasons Under no circumstances should a person act upon the information contained within without first conducting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

SPH - A Closer Look at Suburban Propane Partners' 1QFY17 Results


Author: Ron Hiram

Published: February 7, 2017


  • Cold weather throughout most of SPH’s service territories in December drove the improvement in results for 1QFY17.
  • In the latest TTM period, coverage of distributions deteriorated substantially and was below 1x; distributions were funded from non-sustainable sources.
  • Overall demand for propane is expected to be flat or to moderately decline over the next several years; while SPH may continue consolidating, that path is becoming harder.
  • SPH could, for a period, outperform the Alerian MLP Index should the index pull back, especially if cold weather prevails in SPH’s service areas for the rest of the winter.

Continue reading SPH – A Closer Look at Suburban Propane Partners’ 1QFY17 Results

TRGP - A Closer Look at Targa Resources Corp.’s results for 3Q 2016

master limited partnership logos-NGLS


Author: Ron Hiram

Published: November 28, 2016


  • Operating margin in 3Q16 is down 12-13% vs. 3Q15; on a TTM basis it is down 2% in absolute terms and 25% per share, primarily due to lower commodity prices.
  • Adjusted EBITDA per unit declined in the last 3 quarters but is expected to improve in 4Q16; for the TTM ended 9/30/16, it declined 27% vs. the prior year.
  • DCF coverage is expected to be >1x for 2016, in line with coverage in the latest TTM period, and despite ratios substantially below 1x in 3Q16.
  • Growth projects will be financed with >50% equity until the leverage target is reached; until then dividend increases are also unlikely; this could take several years.
  • Sale of commodities still generates a significant (and recently increasing) portion of total gross margin; this makes TRGP more susceptible to commodity price fluctuations.  Continue reading TRGP – A Closer Look at Targa Resources Corp.’s results for 3Q 2016

PAA - A Closer Look at Plains All American Pipeline's 3Q16 results

master limited partnership logos-PAA




Author: Ron Hiram

Published: November 26, 2016


  • Lower Supply & Logistics continues to burden results; management attributed some of the 3Q16 segment loss to one-time events and is forecasting segment profit of ~$165 million in 1Q17.
  • Coverage was below 1x i n 3Q16 and TTM; PAA funded distributions by issuing debt and equity; the Simplification Transaction reduces cost of capital and cuts distributions by ~$320 million.
  • Total segment profit and Adjusted EBITDA have declined in 6 and 7 of the last 9 quarters, respectively; for the past 9 quarters, total dollars distributed grew faster than DCF.
  • Management expects DCF coverage to improve to ~1.09x in 2017.
  • Higher cash retention, asset sale proceeds, projects coming online, and lower 2017 capital expenditures, should reduce PAA’s high leverage ratio and allow maintaining its maintain investment grade rating.

Continue reading PAA – A Closer Look at Plains All American Pipeline’s 3Q16 results

BPL - A Closer Look at Buckeye Pipeline Partners' 3Q16 results

master limited partnership logos-BPL


Author: Ron Hiram

Published: November 12, 2016



  • All business segments exhibited improved performance in 3Q16 over 3Q15.
  • DCF per unit has been increasing at a faster pace than distributions per unit in 8 of the past 9 quarters.
  • Coverage ratios based on both reported and sustainable DCF have improved markedly and are at or above 1x in the latest TTM period.
  • BPL has substantially underperformed the Alerian MLP index since announcing the VTTI acquisition, possibly due to concerns regarding this deal.
  • Investors wishing to broaden their exposure to midstream energy MLPs, or replace one MLP investment with another that exhibits better operational results, better prospects and lower leverage, should consider BPL.

Continue reading BPL – A Closer Look at Buckeye Pipeline Partners’ 3Q16 results

MMP - A Closer Look at Magellan Midstream Partners' results for 3Q16

master limited partnership logos-MMP

Author: Ron Hiram

Published: November 11, 2016

  • Summary:
  • The 14% drop in total operating margin reflects a move from unrealized profits on hedged positions in 3Q15 to a unrealized losses in 3Q16.
  • Reliance on commodity-related activities continues to diminish; correspondingly, the fee-based portion is increasing.
  • For 8 of the last 10 quarters, distribution growth has outpaced DCF growth; consequently, coverage ratios, while still very robust, are declining.
  • MMP cannot continue funding growth projects using only debt and internally generated funds; it is considering issuing equity for the first time since 2010 to help maintain low leverage ratio.
  • Projects under construction being placed into service in 2016 will increase EBITDA by ~9%; the 10% distribution growth guidance with 1.2x coverage for 2017 seems achievable.

Continue reading MMP – A Closer Look at Magellan Midstream Partners’ results for 3Q16