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Energy Transfer Partners, L.P. Message Board

  • rrb1981 rrb1981 Feb 18, 2010 8:12 PM Flag

    DCF for 4Q '09

    Looks like ETP did a good job of bringing DCF up from the 3Q '09. They still fell below a 1.00x coverage, however, I suspect that with the recent acquisitions, future pipeline revenue and potentially better basis differentials in Texas, I think '10 will provide at least a 1.0x coverage ratio.

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    • 09E DCF to LP 587 ,98 3.51 (3.58)
      10E 674 1.0 3.62(3.58)
      11E 798 1.09 4.09 (3.73)
      Note distribution for 2010 remanins same and secondaries not in model
      2011 is when all things move foward and Distribution .9325 per 1/4

    • If you take the 230 million divided by 251 million, which gives a coverage of .92x, I think the analysts came up with .93x, so I am content with my numbers being close enough that I have complete confidence in knowing how well ETP is doing, or not doing.

      We really need to see them make a strong push for the 1st Q to get closer to the 251 million. As one of my colleagues pointed out, the 4th Q was boosted by strong propane sales.

      While I typically would be very alarmed about one of my MLPs not have above a 1.0x coverage ratio, the fact that they have several pipelines coming online over the next 18 months, I think they will have a nice uplift in distributable cash flow. The real question is can they pull themselves above 1.0x before those projects kick in.

    • After reading transcript on seekingalpha and CS analyst Siegel's take on the last 09 1/4 I came away with the thought that ETP did OK and year was one of positioning,growth,and potential. The DCF was ,93 for 1/4 and year was 1.01 Target 12 mos is $50. ETP let it out that they have a marcellus purchase. It appears that 2011 is when everything is in place and will be running on all 12 cylinders. PS Keegen ETE reduction is to Market Perform

    • Q4 DCF looks like $1.30 per unit to me. Am I missing something?

      • 1 Reply to lestah
      • lestah wrote: "Q4 DCF looks like $1.30 per unit to me. Am I missing something?"

        Yes you are! And it is not your fault!

        First - lestah's math
        Basic average # of units outstanding 177,217,522
        Distributable cash flow $230,394,000

        230/177 = 1.30

        So I see where lestah derived his estimate of coverage. But when ETP revealed the calculation of DCF, there was no subtraction made of the GP's 2% or for the GP's IDRs.

        In other words, from the way I am reading the earnings release, the DCF is not the same as "DCF available to the common unit holders" - so taking the diluted number of units as a divisor for total DCF nets you a number that has no meaning.

        Most MLPs do it this way. So this is NOT unique to ETP. But that does not mean that this kind of disclosure is OK. It sucks.

        Prior to the earnings release I posted the email below on the I.V. MLP board so that other members could petition ETP for better metrics. If you are a bit frustrated with ETP release - copy and paste this email and send it to InvestorRelations@energytransfer.com

        ------ start of email ------
        There are metrics that MLP investors commonly use, to compare MLP to MLP, which you are not currently producing. I am writing to request that you begin to report those metrics.

        You are reporting a number for distributable cash flow or DCF number. Thanks for adding this last quarter. But - it is my impression that DCF from other MLPs is often expressed in DCF available to common unit holders. Your DCF does not look like that kind of number because there is not a subtraction made for DCF going to the GP.

        I also need ’DCF per unit’ available to common unit holders, and the distribution coverage ratio. I want to know the distribution is safe - and these numbers are a quick and easy tool many investors use to determine distribution safety. Strong coverage ratios tend to result in future distribution growth.

        You are not providing debt/book or debt/market cap ratio metrics, or a trailing 12 month debt to EBITDA number. These metrics are also used as tools for distribution safety.

        --------- end of email ----

        36 folks at I.V. joined the effort to petition ETP - and apparently that was not enough of a response to motivate them to change. I hope that this board can generate a stronger response.

 
ETP
63.69-0.26(-0.41%)Dec 26 4:03 PMEST

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