How should a new MLP Profits reader allocate his money? That’s a question my co-editor Elliott Gue and I have been getting fairly often recently. And there’s good reason for that, given the gains the group has made and the fact that many trade above our buy targets.

We set buy targets on a number of criteria. But it really boils down to our assessment of business quality and our forecast for distribution growth, combined with where the price is.

We sold EV Energy Partners LP (NSDQ: EVEP) a few weeks ago largely on the basis of valuation: At a yield of barely 7 percent, it’s actually priced at a premium to oil and liquids-focused Legacy Reserves LP (NSDQ: LGCY), which yields 7.3 percent. That’s probably because EV Energy has pushed up its distribution by a tenth of penny every quarter since inception in 2006, while Legacy’s half-cent per unit bump announced Jan. 18 is its first increase since August 2008.

Despite four consecutive boosts, however, EV Energy’s dividend is still just 0.5 percent higher than it was a year ago. Legacy’s increase for just one quarter is nearly twice that, and there’s the promise of more to come, as output rises in the year ahead and the company takes advantage of a pricing environment for liquids that’s far more hospitable than that for gas–EV Energy’s focus.

Trading well below our buy target of 32, Legacy Reserves is definitely a good place for new money to come into, though with one caveat. Fundamentally, it’s a producer of energy and subject to the ups and downs of that volatile market. That’s why it’s a member of our Aggressive Holdings.

Like most MLPs that produce energy, Legacy Reserves has protected itself against volatile pricing with hedging. So has Linn Energy LLC (NYSE: LINE), also a suitable first buy trading below out target of 40. Regency Energy Partners LP (NSDQ: RGNC) also trades below our buy target of 29, as does Navios Maritime Partners LP (NYSE: NMM); I review Navios’ fourth-quarter and full-year 2010 earnings below. Encore Energy Partners LP (NYSE: ENP), meanwhile, is something of a turnaround play in the producer sector, which accounts for its yield of 9 percent.

Some investors may be put off by our Aggressive Holdings’ lower Safety Ratings. That’s a function of the fact that cash flow is affected by commodity price volatility. But this group also has the greatest potential in 2011, as all can benefit from volatile energy market conditions by virtue of a very low cost of capital.

On the other hand, they’re by no means as secure as the Conservative Holdings, which rely either solely or almost so on fee-based businesses. Conservative Holdings are far and away the best bets for those who sole concern is income and safety. They also offer reliable distribution growth.

Below I review earnings results for three of our Conservative picks: Kinder Morgan Energy Partners LP (NYSE: KMP), Magellan Midstream Partners LP (NYSE: MMP), Sunoco Logistics Partners LP (NYSE: SXL) and Spectra Energy Partners LP (NYSE: SEP). Kinder Morgan trades below our buy target of 73 and is coming off a very robust quarter. Magellan Midstream boosted its distribution 2 percent (7 percent year over year), posted solid results and trades below our target of 58. Sunoco Logistics also posted very strong results, but sells a bit above target of 85. Spectra Energy is right at our buy target of 33.

Even the most conservative investor can buy any of these with confidence that things are on the right track at their underlying businesses. Further, management has put the pieces in place for asset growth that will power distributable cash flow (DCF)–the best measure of MLP profitability, as it takes into account all the tax advantages these entities enjoy. But be sure to buy only when they’re below our buy targets.

We won’t know for certain how the fourth quarter went for the remaining Conservative Holdings until they release their results. We do have a pretty good indication all is well at Enterprise Products Partners LP (NYSE: EPD), which is trading below its buy target of 45, after the company’s 26th consecutive quarterly distribution boost in mid-January.

Finally, Genesis Energy LP (NYSE: GEL) won’t announce its numbers until on or about Feb. 24, though management still hasn’t stated a definitive date. The “Enterprise of oil,” however, did boost its distribution by 3.2 percent in mid-January, for a total boost of 11.1 percent over the past year. That’s a very good portent for the numbers to come, though our buy target remains 27 for now.

Somewhere in between the risk-reward of Conservative and Aggressive lie our Growth Holdings. These combine some exposure to energy prices with a steady base of fee-generating assets. The result is a mix of stable companies with substantial upside, particularly to a strengthening economy and energy sector.

Ironically, this group of MLPs has mostly underperformed both our Conservative and Aggressive groups. One reason is their energy price exposure is mostly to the downstream side, including pricing spreads between refined profits and raw energy, as well as oil, gas and natural gas liquids. That makes them a bit more difficult to understand as well.

Only one of these companies has reported its fourth-quarter and full-year 2010 results thus far, Inergy LP (NYSE: NRGY). I discuss its mostly bullish results below, and it trades right around our target of 41.

As for the rest, the safest thing for would-be buyers to do is to wait for earnings to come out. We’re still waiting, for example, to see what Energy Transfer Partners LP (NYSE: ETP) will do with its distribution, now that it’s completed the Tiger Pipeline and Fayetteville Express Pipeline. That could depend on how the rest of the business is faring, as shown by fourth quarter numbers. But in the meantime, our buy target remains 55, and there seems to be only moderate risk paying up to that.

DCP Midstream Partners LP (NYSE: DPM) isn’t expected to announce numbers until March. But it’s also raised expectations by boosting its distribution 1.2 percent to 61.75 cents per unit per quarter. That adds up to a 2.9 percent hike over the 60 cents paid 12 months ago, and augurs future growth for the business.

The purchase of a 33 percent interest in the DCP Southeast Texas joint venture from its general partner is the ostensible catalyst for the dividend boost and will lift 2011 profits. Further growth this year will no doubt depend on finding more such opportunities. But in the meantime, DCP Midstream Partners is below our target of 40.

Finally, both Targa Resources Partners LP (NSDQ: NGLS) and Teekay LNG Partners LP (NYSE: TGP) appear to be in great shape. Teekay announced a 5 percent boost in its quarterly distribution in late January to 63 cents per share. Targa, meanwhile, lifted its payout another 1.9 percent to 54.75 cents per share starting with the Feb. 14 “Valentine’s Day” scheduled payment. That’s sharing the love indeed as the third consecutive quarterly boost, and a 5.8 percent jump over the year-ago tally.

Both have bright futures and look set for a robust 2011. New investors, however, should watch those buy targets and take care to buy Targa Resources only at 33 or lower, and Teekay LNG up to 36. We may lift these targets following the release of fourth-quarter numbers.

So, where’s the best place for new-money buys? Our advice is to spread your investment over at least five or six individual MLPs. Focus on the group that best fits your risk profile. If your risk tolerance is nil, then stick to the Conservative Holdings. If you like to swing for the fences, get Aggressive.

If you’re somewhere in between, the best advice is to buy several from all three Portfolios. Clearly, many of you are going to simply want to buy those with the biggest yields and there’s nothing wrong with that. All of these Portfolio stocks are recommendations, at least up to their buy targets.

The wise investor, however, will balance yield with dividend growth. Dividend growth doesn’t just increase the cash you get. It also pulls up the price of your units over time. And there’s no better protection against both the risk of dividend cuts and inflation.

If you want your performance to reflect ours at MLP Profits, you’re going to want to buy and hold at least five or six recommendations. Remember to stick with the group you’re most comfortable with. We’ve made some monster gains the past couple years. But you’re going to do best buying and sticking with companies you’re most comfortable with and willing to ride out the near-term volatility.

The Numbers

Here are the highlights for our favorite MLPs that have reported their numbers thus far. We’ll have more as the rest report in the coming weeks.

Inergy LP (NYSE: NRGY) reported a 23 percent boost in fiscal first-quarter cash flow, propelled by a 4.5 percent increase in retail propane gallon sales and a 30.8 percent boost in midstream energy operations. Retail propane margins rose 8.8 percent to $1.23 per gallon.

That was offset partially by costs relating to the takeover of the LP’s general partner (GP), the former Inergy Holdings. The elimination of the GP’s IDR–incentive distribution rights–will strongly accretive for LP unitholders over time, which should accelerate distribution growth as well.

During the LP’s quarterly conference call CEO John Sherman affirmed “consistent business performance across all of our business units.” Midstream operations affirmed capacity agreements with several key customers, important to maintaining consistent cash flow and expanding operations–a key strategic goal. One of these is an LPG (liquefied petroleum gas) project in New York State awaiting regulatory approval. Another is the Tres Palacios pipeline and storage system serving the Eagle Ford Shale region in Texas.

Revenue from these businesses is year round, which offsets the seasonality of Inergy’s propane operations. Propane volumes are extremely sensitive to winter heating demand, though the company continues to build scale with acquisitions, boosting its ability to weather the inevitable ups and downs in demand.

Distributable cash flow in the first quarter was $96 million, a 15 percent boost from year-earlier levels. That should rise again over the next 12 months, as acquisitions and construction build out the midstream business, propane operations grow with purchases of smaller firms and management continues to make progress refinancing and/or reducing debt. That’s despite delays getting projects approved in New York State.

Distribution growth over the past 12 months was 3 percent, to a current annualized rate of $2.82 per unit. Coverage was 1.46-to-1 in the first quarter. The fiscal second quarter should be similar, as that will also reflect the winter heating season demand at propane operations. The full-year rate, meanwhile, will be closer to 1-to-1.

Inergy LP units have been profitable in the 18 months we’ve had them in the Growth Portfolio. They have, however, slightly underperformed the Alerian MLP Index over that time. One reason may be that Wall Street prefers stories that are more one-dimensional, rather than combining similar but yet different businesses like propane and midstream energy. In addition, the propane business operates something like refining, with margins depending on prices of the end product at least keeping pace with raw energy prices.

Whatever the case, Inergy currently trades right around our buy target of 41, at which point it yields roughly 7 percent. We expect to see quarterly payout growth resume later this year, as the costs of acquiring the GP are absorbed and savings are realized. Inergy LP is a buy up to 41.

Kinder Morgan Energy Partners LP (NYSE: KMP) lifted its quarterly distribution to $1.13 per share last month. That’s an 8 percent lift over year earlier levels and it’s backed by a 14 percent jump in full-year distributable cash flow.

Fourth-quarter DCF rose 7 percent, though per-unit totals were flat due to equity issues. These as we’ve written repeatedly in MLP Profits often dilute profits per share in the near term. But the asset purchases they finance lift cash flow and dividend-paying power in subsequent years. That goes double at times when equity is as cheap to issue as it is now, with Kinder Morgan and other MLPs trading at or near all-time-high prices.

Beneath the headline numbers, all five of Kinder Morgan’s business segments produced stronger returns in the fourth quarter than in 2009. That’s mainly due to the company’s continued investment in new fee-generating assets, with $2.5 billion in such capital spending in 2010 to lift results in 2011 and beyond. Management expects another year of robust spending this year (budget of $1.4 billion on growth capital), as well as an overall 4.5 percent increase in distributions to an annualized rate of $4.60 per year.

Kinder Morgan can make such projections and stick to them largely because its business is so transparent. Revenues are affected in some divisions by weather and economic variables. But the impact is muted by the high quality and flexibility of assets and what’s usually extremely inelastic demand for services.

Ethanol volumes were up 29 percent for the year on the company’s key Pacific pipelines, which benefitted from California’s mandate boosting the blend in gasoline from 5.7 to 10 percent starting in the first quarter of 2010. System throughput volumes of gasoline, diesel and even jet fuel were also higher, partly offset by a drop in volumes of natural gas liquids.

That’s a reflection of improved economic prospects in the US, but also management’s ability to locate its assets in areas of robust activity. One of these is the KinderHawk venture in the Haynesville Shale that’s already contributing solidly despite less than a year of operations. The Rockies Express and Fayetteville Express Pipeline–completed in December–are also up and earnings, and the company has made significant strides doing the same for its Eagle Ford Gathering venture with Copano Energy LLC (NSDQ: CPNO).

Overall transport volumes were up 9 percent in the fourth quarter and 13 percent for the full year across Kinder Morgan’s operations. Even the carbon dioxide business, long an underperformer, registered profit growth of 21 percent, though that was below management’s 2010 target of 26 percent. The pipeline of new assets ensures further growth in 2011, particularly with the MLP’s cost of capital at an historic low.

Distributions to Kinder Morgan’s GP–Kinder Morgan Inc (NYSE: KMI)–have long been a murky subject, with the company’s critics frequently charging the general partner with essentially “overcharging” for services. We expect many of those questions to be answered by an upcoming initial public offering (IPO) of the GP, which was taken private four years ago for $22 billion.

One reason is the IPO will significantly reduce the interests of the private capital concerns that enabled that deal. They’ve no doubt been anxious to get at least some cash from their investment, which has grown from a total value of less than $8 billion to some $17.5 billion. Significantly, CEO Richard Kinder will keep his 31 percent of the stock, as well as effective control. The firms’ interests will likely drop further in subsequent offerings.

In any case, going public will open up the books on the relationship, though the limited partnership is unlikely to buy out the general partner at this time as other LPs have done. Kinder Morgan Energy Partners LP is still a buy for income and dividend growth up to 75.

Magellan Midstream Partners LP (NYSE: MMP) announced record fourth-quarter distributable cash flow, a boost of 22 percent over year-earlier results. The key was a series of successful acquisitions and new construction of midstream energy projects generating fees.

Thanks to the acquisition of the GP by the LP in 2009, 100 percent of cash flow now goes to limited partner unitholders. Management has targeted 7 percent distribution growth for 2011, extending a streak of four consecutive quarterly payout boosts initiated early last year.

Taking apart the numbers further, the company’s petroleum pipeline systems generated a 16.5 percent increase in operating margin. That was driven by a 53 percent increase in energy transportation volumes to a new record. The biggest catalyst was the purchase of Texas pipelines from cash-strapped BP (NYSE: BP) in September 2010. But even excluding those newly added assets, volumes surged 12 percent, buoyed by 21 percent higher diesel volumes and 10 percent higher gasoline volumes.

Higher demand also means higher fees, and Magellan Midstream enjoyed them across the board, from leased storage and terminal throughput to ethanol blending. Tariffs per barrel of oil equivalent shipped declined due the change in asset mix, as the former BP pipelines were primarily short haul. Excluding them, however, rates rose 7 percent.

With operating margin of $132.8 million in the fourth quarter, petroleum pipeline systems are the most important contributor to Magellan Midstream’s bottom line. But other areas were also robust, including petroleum terminals, which saw a 15 percent jump in operating margin to $37.4 million for the quarter. This business benefitted from higher ethanol and additive fees, which in turn are driven by government mandates that are here to stay.

When Magellan Midstream was first spun off as an MLP from former parent Williams Companies (NYSE: WMB) the core asset was an ammonia pipeline system, mainly serving the fertilizer industry. Today that asset is only a very minor contributor to cash flow, generating operating margin of just $1.8 million in the quarter. Those results were negatively impacted by an extensive integrity-testing program, which should improve future results by reducing off-times. As a result, it should again contribute more fully the rest of the rest of the year.

Magellan Midstream’s full-year DCF covered distributions by a solid 1.2-to-1 margin. The company, meanwhile, spent roughly $500 million on growth-oriented capital expenditures (CAPEX), including acquisitions. It plans an additional $30 million on these projects, which should all start to generate cash flow this year. It also has $170 million in already allocated CAPEX plans for 2011, with an additional $500 million-plus in potential growth projects in various stages of development.

During the company’s fourth-quarter conference call Chairman, President and CEO Michael Mears noted that 1.2-to-1 distribution coverage by DCF was “a higher coverage than we generally indicate we think is needed for our company” and stated “2010 results simply outperformed out initial expectations” thanks to “improved economic conditions” and acquisitions. That’s another good sign that, if anything, 2011 dividend growth guidance of 7 percent could prove conservative, which in Mears’ words is based on fairly conservative assumptions for tariffs and pipeline volumes. In fact, the goal for 2012 is “at least” 7 percent.

More potential upside could come from oil prices. Magellan Midstream’s operating margin is currently about 85 percent fee-based, with commodity-related activities such as blending at just 15 percent. It also hedges exposure. But every $1 change in oil prices does have the potential to affect results by $1 million. That’s not nearly the leverage that, for example, our Aggressive Holdings have. But it’s more likely upside for the Conservative Holding, on top of the generous gains we’ve already realized. Buy Magellan Midstream Partners LP up to 58.

Navios Maritime Partners LP’s (NYSE: NMM) unit price, as Elliott Gue reported for MLP Profits readers Feb. 1, has taken an unfair hit from the bankruptcy of one of its customers. At least some investors appear to be recognizing that the dry bulk shipper is insured from the financial impact of this turmoil–which basically affects one ship leased to Korea Line–as the units have rallied a bit since. Many, however, still seem to be paying insufficient attention to the company’s hard numbers, which continue to be impressive.

The initial good news was reported a couple of days prior to the fourth-quarter earnings release: a 2.4 percent boost in distributions from the prior quarter’s level, the third boost in the past year and lifting the 12-month payout increase to 4.9 percent.

This increase, if anything, was quite conservative given the solid fourth-quarter and full-year 2010 results that came out a few days later. Those included an 89.5 percent jump in operating surplus, management’s primary number for gauging the profitability of the enterprise. The key was the addition of five new vessels, all under long-term charters. These were primarily purchases and immediately lifted cash flow, hence distributable income.

Navios Maritime has been able to continue building profits this way while others in its industry have suffered for several reasons. One, it’s cost of capital is very low, thanks in large part to a gain of 141 percent over the past two years and a share price that’s now back to an all-time high. There are no significant debt maturities until 2017. And the $26 million outstanding of the $198 million tranche is only 2.7 percent of the company’s market capitalization.

That’s an enormous amount of financial flexibility other shippers lack, which is why many are in dire straits. Navios Maritime’s focus on signing on long-term contracts has also continued to serve it well, as has its policy of insuring such cash flow. That’s emerged as an even bigger advantage in view of the growing number of idle tankers and weak commercial lending markets in Europe. And inking the 2017 credit facility last year has cut its effective interest rate by a third, further reducing the company’s cost of capital.

Since Navios Maritime’s initial public offering in late 2007, it has boosted its fleet by 170 percent, throughput of cargo by almost five times and its distribution by 23 percent. That’s been during a period of very volatile conditions in the global dry-bulk shipping industry, though the company managed a 99.7 percent vessel utilization rate in 2010.

Looking ahead, faster global growth–and resulting improved conditions for dry-bulk shippers–would lift cash flow and dividend paying power. Failing that, distribution growth will depend largely on management’s ability to add to the fleet at reasonable cost and without taking on more operating risk. Fourth-quarter distribution coverage was a superior 1.51-to-1 for common units, however, which leaves the door open for more growth even if fewer purchases occur in 2011.

As Director and Executive Vice President-Business Development George Achniotis explained during Navios Maritime’s fourth-quarter earnings conference call: “The key to expanding dry bulk commodity trade is urbanization and industrialization,” particularly in developing Asia. Chinese iron ore imports, for example, are up 40 percent from 2008 levels and are expected to expand again in 2011. India, meanwhile, has increased its coal imports at a compound annual rate of 26 percent since 2006, with further substantial boosts set as a series of giant coal plants goes into service the next several years.

That’s all positive for global dry-bulk shipping going forward. Meanwhile, some 16 percent of the global fleet is 25 years or age or older, with 24 percent 10 years or older. That, according to Achniotis, is already accelerating “scrapping” of vessels, which eventually will reduce supply. “Overbook” that’s pressured shipping rates for 2011 is set to decline in 2012 and again in 2013. Even Australian floods, which have depressed shipping volumes of scores of natural resources, will eventually subside.

The upshot: Navios Maritime is likely to continue finding new opportunities to grow its fleet, cash flow and distributions going forward. It’s proven its ability to generate profits in conditions that have pushed rivals into bankruptcy and has minimal exposure to the weak market of 2011, other than potential bankruptcies it’s insured against. And, finally, it pays a yield of nearly 9 percent that’s well covered by distributable cash flow. Take advantage of the recent selloff and the opportunity to buy Navios Maritime Partners LP under 20 if you don’t own it.

Penn Virginia GP Holdings (NYSE: PVG) and its acquirer Penn Virginia Resource Partners LP (NYSE: PVR) appear to have reached an agreement with critics of its merger. That clears the way for a Feb. 16 vote, with a close on the deal soon after. Unitholders of the GP will receive 0.98 units of the LP at that time.

Our current advice is to hold onto the GP through the merger to receive shares of the LP. At that point, Penn Virginia LP will replace Penn Virginia GP Holdings as an Aggressive Holding, as a low-risk bet on continued robust coal demand globally.

Fourth-quarter and full year results were encouraging. Distributable cash flow rose 3 percent at the GP, whose primary asset is its stake in the LP. Payout coverage for the GP was roughly 1-to-1, whose 12-month distributable cash flow per unit rose 2.7 percent.

More encouraging were the numbers within the numbers. Penn Virginia Resource Partners LP/Penn Virginia GP Holdings has three basic sources of cash flow: royalties from sales of coal produced on its lands; services to coal companies; and a midstream natural gas business. All were healthy in 2010, with the fourth quarter reflecting acceleration of the positive trends.

Coal mined in tons rose 4.7 percent, while royalties per ton moved up 2.5 percent. That produced a 7.7 percent jump in royalty income, with more expected as global supplies continue to tighten. Coal services revenue were also higher. Midstream gas throughput rose 38.4 percent from year earlier levels, producing a 31.3 percent jump in revenue and a 22 percent jump in profit margins.

The history of MLPs buying out their general partners is very encouraging for unitholders on both sides. Not only are their considerable opportunities for greater efficiencies and cost controls, but the cost of capital generally declines as well with the elimination of the incentive distribution rights. That’s added up to higher cash flows at the LP and eventually faster dividend growth. We expect the same for the combined entity. Hold Penn Virginia GP Holdings through the deal’s completion.

Spectra Energy Partners LP (NYSE: SEP) posted cash available for distribution of $174.5 million in 2010, a 10 percent boost from 2009 levels. Management also forecast a 19.2 percent jump in distributable cash flow for 2011 to $209 million. Fourth quarter DCF surged 28.2 percent.

DCF coverage of distributions, meanwhile, was 0.94-to-1 for the quarter and 1.24-to-1 for the full year. And the partnership boosted its distribution for the 13th time in the 13 quarters since inception, a 9.8 percent increase over last year’s tally.

One key to these solid results was the acquisition of an additional 24.5 percent stake in the Gulfstream pipeline system, essentially a “drop-down” from parent and general partner Spectra Energy (NYSE: SE). The GP anticipates some $5 billion in capital spending on new assets over the next five years, which will provide many more opportunities to kick down secure, fee-generating assets to the LP going forward.

Gulfstream’s primary customers are power generators in Florida, who have ramped up their demand for natural gas in recent years with major new construction to replace oil-fired plants and meet growing demand. Weather-related demand helped demand in the fourth, further boosting the LP’s cash flows from the project.

The Gulfstream stake is booked as an “equity investment.” So is the LP’s 50 percent ownership of Market Hub Partners, whose primary assets are storage facilities. Robust demand boosted the LP’s fourth-quarter take from the investment by 32.9 percent, 11.8 percent for the full year.

Spectra Energy Partners anticipates spending $208 million on new capital projects in 2011, a 20 percent boost over 2010 levels. More than two-thirds will be on the East Tennessee Northeastern Tennessee (NET project), which President and CEO Gregory Rizzo stated in the fourth-quarter and full-year conference call is set to be “a key driver” of growth. The Federal Energy Regulatory Commission (FERC) approved the project last year, which will supply the Tennessee Valley Authority with natural gas to fuel power plants.

The project’s cash flows will be booked as from Gas Transportation and Storage segment operations, which also include Saltville Gas Storage and Ozark Transmission and Gathering. That’s the side likely to capture the most cash flow growth, and therefore fund distribution increases going forward. And the pipeline of fee-generating projects is robust as ever, even as the LP has been able to reduce its cost of capital with interest rates low and the unit price near an all-time high the past several months.

FERC has challenged the LP on rates at its Ozark Transmission operation, as it has several other pipeline companies around the country recently. The case is still in the early stages, with a settlement the most likely (and preferred) outcome. Meanwhile, at least at this juncture, legal and financial risks don’t appear significant in this case.

If there is a significant risk with Spectra Energy Partners, it’s valuation. The unit price has slipped roughly 10 percent from the all-time reached in early October 2010. The yield, however, is only about 5.5 percent. On the plus side, risks are low and the units are flat thus far in 2011, selling slightly below our buy target. Buy Spectra Energy Partners LP up to 33 if you haven’t yet.

Sunoco Logistics Partners LP (NYSE: SXL) has increased its distribution again, this time to an annualized rate of $4.72 per unit. That was the 23rd consecutive quarterly boost for the Conservative Holding, and it represents a lift of 8.3 percent above last year’s rate.

Distributable cash flow surged 38 percent during the fourth quarter, pushing distribution coverage to 1.4-to-1 and opening the door to further growth. DCF coverage for the full year was a solid 1.3-to-1. Cash flow excluding market-related earnings to hedge exposure rose 15 percent for the full-year, fueled by continuing organic growth and acquisitions, as well as improved market conditions across the asset value.

The standout operation in terms of fourth quarter income was the crude oil pipeline system, which enjoyed a 48.6 percent boost. Growth was driven by a combination of higher pipeline volumes and acquisitions of joint venture interests. Expansion capital spending totaled $389 million for the full year, more than double the prior year’s $194 million. That included $243 million for acquisitions of a butane blending business and oil pipelines from BP (NYSE: BP), as well as funds to expand services and storage at refined products terminals and other facilities.

Looking ahead to 2011, management expects to spend $100 million to $150 million on organic growth projects alone. That’s not including further acquisitions made possible by Sunoco Logistics’ low cost of capital and its growing reach of operations. The tight relationship with parent and general partner Sunoco (NYSE: SUN) always leave open the possibility of asset dropdowns as well. Natural gas liquids remain a focus, with expansion of the newly acquired butane blending business a target.

Gasoline demand is an important factor for parent Sunoco, and indirectly for the MLP as it determines throughput. So is the contango crude oil curve, which affects pipeline margins. During its recent fourth-quarter earnings call management stated its belief that conditions would continue to improve in 2011. Even if they don’t, however, Sunoco Logistics looks like a lock to meet management’s stated target of 6 percent distribution growth.

From a sheer dollar standpoint, Sunoco Logistics is by far the most expensive of our MLPs. That’s misleading, however, given its distribution and robust growth. Moreover, the project in the Marcellus is extremely promising for the NGLs business and could be substantial catalyst for the units from here as well. Buy Sunoco Logistics Partners LP up to 85.

As for the rest of our MLP Profits Portfolio Holdings, we won’t have all the numbers again until early March. That’s the consequence of federal reporting requirements that have become increasingly elaborate and cumbersome over the years.

There’s nothing we as investors can do, however, except wait, though based on what we’ve seen so far there’s not much cause for worry. Here are the scheduled reporting dates for our Portfolio Holdings. Estimated times (indicated with an “e” in parentheses) are given for companies haven’t announced specifics.

Conservative Holdings

• Enterprise Products Partners LP (NYSE: EPD)–Feb. 17
• Genesis Energy Partners LP (NYSE: GEL)–Feb. 24 (e)

Growth Holdings

• DCP Midstream Partners LP (NYSE: DPM)–Mar. 3 (e)
• Energy Transfer Partners LP (NYSE: ETP)–Feb. 16
• Kayne Anderson Energy Total Return Fund (NYSE: KYE)–N/A
• Targa Resources Partners LP (NSDQ: NGLS)–Mar. 1 (e)
• Teekay LNG Partners LP (NYSE: TGP)–Mar. 4 (e)

Aggressive Holdings

• Encore Energy Partners LP (NYSE: ENP)–Feb. 22 (e)
• Legacy Reserves LP (NSDQ: LGCY)–Mar. 3 (e)
• Linn Energy LLC (NSDQ: LINE)–Feb. 25 (e)
• Regency Energy Partners LP (NSDQ: RGNC)–Feb. 17