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What will investors pay for aggressive non-GAAP accounting and financial engineering?  Apparently more than $2 billion, the current market cap of ATLS.

As the General Partner (GP) of Atlas Pipeline Partners LP (APL) and Atlas Resource Partners LP (ARP), Atlas Energy LP’s (ATLS) only material source of income is from the distributions that ARP and APL pay it.  However, we believe that the majority of ARP and APL’s “Distributable Cash Flow (DCF)” is a function of aggressive non-GAAP accounting, which those MLPs use to justify distributions to its LPs and ATLS. 

In our view, ARP and APL’s distributions are funded with capital raises – not real profits – and that can only go on for so long.  ATLS is most at risk, as we believe that neither ARP nor APL can support an LP distribution that would trigger an incentive distribution right payment (IDR) to ATLS.  We believe that fair values for all three Atlas MLPs are well below their current market valuations.  The downside is considerable, particularly for ATLS.

We will publish a full report with our investment thesis and valuation analysis on Thursday morning, April 24th.  We will hold a brief conference call on Thursday at 12:30pm EST to discuss the key points and field questions.

Conference Call Details

Thursday, April 24th at 12:30pm EST

Participant Dial-In:

Participant Code: 169921#

Send questions to

Kevin Kaiser

Managing Director