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Breitburn Energy Partners LP Message Board

  • strum_this strum_this Jan 6, 2014 3:09 PM Flag

    Has it occurred to anyone...

    ...that in switching to the monthly payout, they have held back the equivalent of two months of distributions? What they should have done is paid us our quarterly distribution of .48xx in January and switched over to monthly starting in Feb. The way they did the switchover seems like a sneaky way to get out of paying us for November and December. Perhaps this "missing" $.33 is where they get the ability to bump up to a 1.5 cents raise per quarter?

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    • I was hoping that the volatility on the pps would have subsided a bit, it seems that it;ll still be here,
      except in a more compressed time period!

      Sentiment: Strong Buy

    • im sure there will be an upside

    • you lose (more accurately it is deferred but at some point if you sell it is lost) one month of distribution, not two. This has been true with the conversion by LINE, BBEP and QRE. VNR, however, made sure that no unitholders were disadvantaged in this way which meant receiving 13 months of distributions in the transition year. I had a long thread on the LINE board last year complaining about this and even took it up with LINE IR. They essentially agreed with me, however wouldn't change the plan.

      • 2 Replies to lizahuang54321
      • Oh my, I'm afraid to even begin this, but Liz, in this case BBEP is paying a distribution that would have been paid mid February evenly from January to March. The midpoint of the payments is precisely the same as the old payment date, and the present value is unity, one third early, one third late. Selling in that period aside, how is there any difference?

      • Yes it's one month, not two - I corrected myself immediately after the first post, but it got lost in the noise...too bad you can't edit posts here. Anyway, glad I'm not the only one who sees this issue.

        I'm sure it is "cleaner" in some ways for them to start the one month payout in January. That way, partners get one calendar year of payout all in the same calendar year for 2013 and 2014 forward. But yeah, one month of deferred payout is the result.

    • strum may want to re check you math. whether you gain or lose is all dependent on which quarter/month you buy or sell. If you held bbep at the Nov 2013 distribution and say for instance held thru Nov 15 distribution, you would receive the equivalent of 24 months of distributions under quarter and equivalent of 25 months of distributions under monthly. NPV difference is negligible but in favor of monthly from Nov 2103 thru Nov 2015 (keeping distribution flat at Jan 2014 rate and using 5% discount rate) the NPV of monthly is better by $.00205. The primary way you lose is if you hold to the very end of bbep and depending on the month of the very final ever distribution you could lose up to two months or again you buy/sell in between distribution periods.

      • 2 Replies to moneyonomics
      • correction you receive one more month of distributions under my formula for quarterly, than monthly which amounts to .1634 and the NPV goes to quarterly so strum I stand corrected and you are right.

      • I am a longterm holder. My math begins the first day after the last quarterly distribution they paid - i.e. the last time I got paid. The *cumulative* distribution payment is now permanently offset by one month from what it would have been if they had stuck with quarterly payments. It's pretty simple math - not much to check.

        Whatever, it's only $0.16, But I'm just surprised that nobody had mentioned it yet. Even more surprised at the backlash here after I pointed it out.

    • if you do not like it get LOST!!

    • When were they going to pay Q4, when have they always paid it? Mid February. When are the paying the distribution instead? One third mid January, one third mid February and one third mid March. The median of those dates is . . .


      • 2 Replies to ruby.thedyke
      • "unbelievable" at the stupidity! Forty lashes for me! Ruby, please explain and point out what I'm missing in my conclusion of the expected distribution!

      • Unbelievable? I find your notion that they normally "advance" us one month of DCF in the quarterly payment unbelievable. Have you got proof of that? Would that not violate all kinds of SEC and/or IRS regs?

        In 2013 we got four quarterly payments for DCF earned between Nov 15 '12 and Nov 15 '13. In 2014, we will get 12 monthly payments for DCF earned between Dec 15 '13 and Dec 15 ' 14. There is a one month hole there (Nov 15 '13 - Dec 15 '13). Explain it, please.

        We have permanently floated them the Nov 15 - Dec 15 2013 DCF, plain and simple. I'm not suggesting anything malicious, but it's certainly turned out to be a cash flow trick in their favor. I agree with pba69 - I think it's why we are getting a $.015 bump right now - they can use this additional retained DCF give us faster increases, at least for awhile.

    • Maybe it is only one month - December. Still, same argument applies.

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