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Energy Transfer Partners, L.P. Message Board

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  • factoids2002 factoids2002 May 6, 2010 12:53 PM Flag

    Morningstar

    ETP reported that 'Distributable cash flow for the three months ended March 31, 2010 totaled $376.8 million, a decrease of $64.8 million from the three months ended March 31, 2009'

    ETP had 2009 DCF of $3.55/uni compared to a distribution of $3.575. Q1-10 DCF [in absolute terms] is falling, and with more units out there [could not find number of units outstanding in the earnings release], DCF per unit is falling even more.

    Yet the analyst from Morningstar is "pleased with this level of distributable cash flow, as by our calculations it is enough to cover distributions 1.4 times, suggesting that Energy Transfer will be positioned to contemplate a distribution increase later this year."

    One of us is getting a failing grade on their reading and comprehension of this release - and while I hope it is me [given that I am an ETP unit holder], I think the above is going to be another example of how Morningstar and the other part time MLP analysts do not understand the sector.

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    • factoid, I have been following your post for quite a while and I respect your knowledge. Whether you are right, or the analyst is right, I just added 200 more shares at 45. 8% yield on a really good MLP like ETP is hard for me to pass up. I think the correction has more to go but I view it as a buying opportunity. Only time will tell.

    • Aren't you mixing quarterly and yearly numbers. The DCF for the quarter was 376 million, the payout is $.895 per unit per QUARTER, not $3.58 per quarter. $.895 per unit times approx. 189 million units outstanding is 169 million dollars or so. They have the payout covered quite nicely , AM I MISSING SOMETHING. if so ,what??

      • 1 Reply to johnniemar
      • johnniemar asked "Aren't you mixing quarterly and yearly numbers?"

        I did mention both quarterly and yearly numbers, but I did not intentionally mix them - so let me re-state.


        ETP reported that 'Distributable cash flow for the three months ended March 31, 2010 totaled $376.8 million, a decrease of $64.8 million from the three months ended March 31, 2009'. In other words, there is a trend in 2010 for falling DCFs and falling DCF/unit.

        What happened in 2009? ETP had 2009 DCF of $3.55/unit/year compared to a distribution of $3.575/unit/year.

        So, the Q1-10 DCF [in absolute terms] is falling, and with more units out there [could not find number of units outstanding in the earnings release], DCF per unit is falling even more.

        Given a falling DCF trend in 2010 based on the Q1-10 earnings release, and given that ETP did not have a DCF that covered the distribution in 2009, it is difficult to follow the logic of the Morningstar analyst who wrote that DCF coverage was strong and the distribution may increase in 2010.

        I hope that the above re-wording still contains the reference to yearly and quarterly numbers without 'mixing' them.

 
ETP
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