My response: Adjusted Ebitda forecast $260 million; outstanding shares 80 million; interest and maintenance capex $100 million: leaves distributable cash $160 million; 30 percent shares are insider or ESOT and can be paid in shares. Management says acquisitions made recently immediately accretive.
2 problems - 1st you can't pick and choose which shares get a distribution and which ones dont, its all or nothing, so that leaves us at $160 million for the year (80 million units x $2.00 per unit). 2nd the EBITDA to distributable cash flow isnt as simple as you make it out to be.
"I note that recently management has released guidance of "Adjusted EBITDA" of $245-$260 million for FY 2013. I could write a whole other article on "Adjusted" EBITDA (maybe I will!) which excludes a host of items (such as stock compensation, which is a direct transfer of shareholder wealth), "loss on disposal of assets and other," and a several other real and recurring items, but let's ignore all that for now and assume a "clean" EBITDA figure of $250M. Interest eats up approximately $100M. If true "maintenance" capital expenditures are in the $65M range (I think I have made the case here), that leaves (250-100-65) about $85 million left over to pay a current distribution level of $158 million."