Earnings season for MLP Profits Portfolio Holdings is in full swing.

We update results in the bi-weekly MLP Investing Insider as they appear.

Below is a brief recap of how our picks reporting so far did. See also the table for how companies matched up on our four-part MLP Profits Safety Rating System.

Note the changes in buy-under targets for several holdings, including Enterprise Products Partners LP (NYSE: EPD) and Kinder Morgan Energy Partners LP (NYSE: KMP).

Also, we’re selling Sunoco Logistics Partners LP (NYSE: SXL) and replacing it with Oiltanking Partners LP (NYSE: OILT), as I note in a Sector Spotlight.

Buckeye Partners LP (NYSE: BPL) has been our most pleasant surprise so far.

The company has been challenged for several quarters to convert recent acquisitions into reliable cash flow for distributions. And for the first time it’s clear that management is succeeding.

Distributable cash flow–the primary metric for profits for all MLPs–shot up 38.6 percent during the quarter over year-earlier levels. That pushed the distribution coverage ratio up to a very solid 1.19-to-1, or an 84 percent payout ratio, a sharp improvement from the 0.92-to-1 ratio of a year ago.

CEO Clark C. Smith stated the partnership benefitted from higher volumes and rates for domestic pipelines and terminals as well as increased cash flow at international operations due to expansion of capacity. The Perth Amboy marine terminal in New York Harbor also added to results for the first time.

As we’ve said, Buckeye is cheap because it interrupted 32 straight quarters of distribution increases this spring, leading to doubts about the safety. These results affirm the current level of payout, and further gains going forward should lead to a return to growth. Recovery in the share price will then follow.

Even gas storage operations showed a solid gain in adjusted cash flows, the company maintained a robust capital expansion program, and it’s been able to get facilities back up and running following Hurricane Sandy’s devastation as well. Buy Buckeye Partners up to USD55 if you haven’t yet.

Eagle Rock Energy Partners LP (NSDQ: EROC) is hurting from lower oil and natural gas liquids prices, which have hit the commodity price-sensitive end of its business. Third-quarter distributable cash flow slipped 14.6 percent from year-arlier levels, pushing the coverage ratio down to just 0.83-to-1, a payout ratio of 120.5 percent.

On the plus side, this shortfall should narrow considerably as cash flow starts from the Oct. 1, 2012, acquisition of midstream assets in the Texas Panhandle from BP Plc (NYSE: BP). That deal included a 20-year, fixed-fee gas gathering and processing contract with BP.

Eagle Rock also announced an extension of a contract with Anadarko Petroleum Corp (NYSE: APC) in western Louisiana during the quarter.

These deals have only added to costs thus far, so the impact going forward of owning them should become considerably more positive.

Based on its decision not to raise the payout in the current quarter, management is likely to hold the payout steady until these and other expansion projects pay off enough to fund the current rate. That’s currently projected for mid-2013, based on a management forecast for 5 percent to 7 percent distributable cash flow growth the next 12 to 18 months.

At least some of the timing will depend on what happens to the prices of various NGLs, for which management noted some hopeful signs during its third-quarter conference call.

In the meantime, however, Eagle Rock appears committed to maintaining the current rate, even as it builds out a wealth of new projects to capitalize on liquids production from US shale.

Eagle Rock has been disappointing since our initial recommendation about a year ago. But with business growth still on track, it’s still a buy up to USD12 for those who don’t already own it.

El Paso Energy Partners LP’s (NYSE: EPB) 18 percent distribution growth rate the past 12 months is a sharp acceleration from when the former El Paso Corp was its general partner. And it confirms that new general partner Kinder Morgan Inc (NYSE: KMI) is keeping its promise to accelerate distribution growth.

One thing making that possible is much improved access to capital as part of the Kinder Morgan family. This month the partnership sold USD475 million of 30-year debt with an interest rate of just 4.7 percent.

Distributable cash flow surged 32 percent in the third quarter, providing a coverage ratio of 1.22-to-1 after the latest payout boost. That was in part thanks to the May 24 drop-down of a 14 percent interest in the Colorado Interstate Gas Pipeline and all of the Cheyenne Plains Gas Pipeline.

The company also completed projects on the Southern Natural Gas System to take advantage of a 26 percent surge in gas-fired power generation.

Management is still forecasting an annualized rate of distribution increases of 9 percent, suggesting growth will be a bit more modest next year, but still much more than the market appears to be pricing in. That implies more gains ahead for El Paso Energy Partners units, which remain a buy up to USD38.

Enterprise Products Partners LP (NYSE: EPD) reported strong performance at four of its five business units in the third quarter, including record onshore crude oil and natural gas transportation volumes, record fee-based natural gas processing volumes and near-record transportation and fractionation volumes for natural gas liquids.

The only laggard was in the offshore pipelines and services segment, which suffered lower volumes and fee revenues as an after-effect from the 2010-11 drilling moratorium in the Gulf of Mexico. But here too fortunes are improving, as Gulf activity reaches pre-BP spill levels.

Enterprise Products’ current growth is thanks to USD4 billion in new fee-generating assets coming on stream in the last 12 months, which has triggered an acceleration in distribution growth to an annualized rate of 6.1 percent. And there’s more to come with another USD3.7 billion set to begin operations in the fourth quarter of 2012 and early 2013.

Distributable cash flow–the primary metric for master limited partnerships’ profits–surged to USD743 million, for a 1.4-to-1 dividend coverage ratio excluding one-time items. The payout ratio was 71.4 percent.

Enterprise Products’ results are particularly impressive in light of what have been weak margins for NGLs processing in 2012. And its results are reason enough for us to give it another boost in buy target to USD55, where it’s a buy for anyone who doesn’t already own it.

Kinder Morgan Energy Partners LP (NYSE: KMP) topped management’s projections for the third quarter 2012, keeping it on track to grow distributions at least 7 percent annually through 2015.

Distributable cash flow surged 8 percent to USD1.28 per unit, and the partnership continued to ride recent asset additions to accelerated distribution growth, with the payout increased 8.6 percent to USD1.26 per unit.

Kinder Morgan Energy Partners follows a policy of paying out virtually all cash flow after capital expenditures. And that shows no sign of changing any time soon, given CEO Richard Kinder’s conference call statement that “all five of our business segments reported better results than in the third quarter of 2011.”

Mr. Kinder also raised the company’s target for capital projects to boost future cash flow and distributions to USD11 billion from a previously stated USD10 billion. Based on the distribution increase, I’m raising my buy target for Kinder Morgan Energy Partners to USD86.

Long-term savers may want to buy shares of Kinder Morgan Management LLC (NYSE: KMR) instead, as it pays a stock dividend. Investors can follow its fundamentals simply by looking at Kinder Morgan Energy Partners’ numbers.

Legacy Reserves LP’s (NSDQ: LGCY) third-quarter distributable cash flow did not cover its distribution once again, though it did come in 22.5 percent higher than in the year-earlier quarter.

Encouragingly, the MLP also increased its Development Capital Expenditures during the quarter to USD19.6 million from the previous year’s USD16.7 million.

Production rose 3 percent sequentially from the third quarter, thanks mostly to several major acquisitions. Average realized selling prices, meanwhile, actually rose by 2 percent thanks to a drop in oil price differentials between the Midland and Cushing hubs and aggressive hedging.

The company was also able to raise its average realized price for natural gas, which offset a 6 percent drop in average realized prices for natural gas liquids.

The biggest negative in the numbers was a 13 percent sequential rise in production expense to USD20.76 per barrel of oil equivalent from USD18.35 in the second quarter.

General and administrative costs also rose to USD5.15 per barrel of oil equivalent in the third quarter, up from USD3.97.

The challenge for Legacy is producing the cash flow to cover those changes consistently, and that means expenses are going to have to come down.

That’s what management is forecasting, but until numbers do again start to cover the payout distribution increases are likely to get more difficult to come by.

On the plus side, the current yield of more than 8 percent does price in a lack of future payout growth, and there is actually a small increase in the November payment. Legacy Reserves remains a buy up to USD27, but only for those who don’t already own it.

Linn Energy LLC (NSDQ: LINE) is once again covering distributions with cash flow, as it produced a superior 1.4-to-1 coverage ratio in the third quarter, or a payout ratio of 74.1 percent.

The key was the success of a raft of recent acquisitions and expansions of production, which lifted average daily output by more than double from year earlier levels. Cash flow rose 65 percent. As I note in this month’s In Focus feature on IPOs, Linn Energy also completed a successful public offering of certain of its production as Linn Co LLC (NSDQ: LNCO).

Unitholders did not receive units of the new company but will still benefit from improved cash flows to the parent and growth funded by the funds received from the offering.

The latter is expected to help drive further growth, even as 100 percent of expected gas production is hedged through 2017 and 100 percent of oil output is protected through the end of 2016.

Following the pattern of prior dividend increases, we can expect another boost in late January. That will likely earn the units another boost in buy target. Until then, Linn Energy is a buy up to USD40 for anyone who doesn’t already own it.

Magellan Midstream Partners LP (NYSE: MMP) posted a 7 percent increase in distributable cash flow (DCF) to USD100.7 million, up from USD94 million in the third quarter of 2011. DCF per unit was USD0.45, while the MLP paid USD0.48 to unitholders for the quarter. The DCF coverage ratio was 0.92. The third-quarter distribution was up 21.3 percent year over year, 2.3 percent on a sequential basis.

The distribution coverage shortfall was primarily attributable to gasoline sales deferred from the third quarter to the fourth quarter and a USD5 million non-recurring environmental charge related to potential remediation work at the MLP’s Corpus Christi terminal. In addition, higher throughput volumes were offset by a lower average tariff rate.

Crude oil and gasoline volumes were up 53 percent and 28 percent, respectively, year over year. Crude oil volumes were driven by additional interconnects to the pipeline system (incremental Eagle Ford Shale volumes) and increased deliveries to existing customers, while gasoline volumes benefited from higher end-use market demand. Petroleum Terminals results were impacted by higher operating expenses, primarily the Corpus Christi environmental charge.

Management boosted its 2012 DCF guidance by USD5 million to approximately USD525 million and still plans to raise the cash distribution by 18 percent overall for 2012 and 10 percent for 2013.

Magellan and partner Occidental Petroleum Corp (NYSE: OXY) are in “advanced discussions” with potential shippers to support the BridgeTex pipeline project.

This project should fuel distribution growth beyond 2014.

Magellan’s Double Eagle joint venture pipeline project with Copano Energy LLC (NSDQ: CPNO) remains contracted at about 50 percent of capacity, but management noted that it’s still in active discussions with potential shippers to secure additional agreements.

Although the pipeline isn’t fully contracted, Magellan expects to be able to use uncontracted capacity to handle spot shipments at a higher margin. The pipeline is expected to be placed into service by early 2013 and be fully operational by mid-2013.

As for blending activities, Magellan has hedged approximately 80 percent of its fourth-quarter volumes and about two-thirds of its 2013 first-half volumes.

Magellan’s assets didn’t sustain any significant damage from Superstorm Sandy and the MLP is in the process of restoring operations.

As of Sept. 30, 2012, Magellan had no borrowings outstanding on its credit facility and approximately USD100 million in cash on its books. Magellan Midstream is a buy under USD70 for reliable distribution growth fueled by fee-based cash flows.

Navios Maritime Partners LP (NYSE: NMM) has remained somewhat insulated from the prevailing dry bulk market weakness, with 2012 and 2013 charter coverage at 99 percent and 83 percent, respectively. The maritime MLP posted increased third-quarter revenue on the drop-down of the Buena Ventura, a Capesize vessel, in June and two second-quarter purchases, the Soleil and the Helios, a Panamax and Handymax respectively. The latter transactions marked the first time Navios has ventured away from parent Navios Maritime Holdings Inc (NYSE: NM) for growth.

Management noted during its third-quarter conference call that it will continue to evaluate the market for growth opportunities and is focused on adding four to six additional vessels using internal funds and 50 percent leverage.

For the third quarter Navios posted a 15.6 percent increase in revenue to USD55.5 million, a 33.1 percent increase in net Income to USD22.1 million and a 21.5 percent increase in operating surplus to USD35.6 million.

Distributable cash flow per unit was USD0.45, and the MLP declared a distribution of USD0.4425 per unit.

Navios completed USD44 million in new financing in August to partially fund the acquisitions of the Buena Ventura, Soleil and Helios at Libor plus 350 basis points with a maturity of February 2018. The MLP also refinanced its two existing facilities with a new USD290 million facility that matures in November 2017 with an interest rate of Libor plus 180 to 205 basis points.

Combined with the USD52 million cash on hand as of the end of the third quarter Navios is in good position to add to its fleet and generate new cash flow. Navios Maritime Partners is a buy under USD20.

PVR Partners LP (NYSE: PVR) again failed to cover its payout with third-quarter distributable cash flow (the payout ratio was 158.8 percent), as the slump in its coal mining unit and lower natural gas liquids prices offset its rapid growth of fee-generating energy midstream assets once again.

Management nonetheless lifted the partnership’s distribution for the seventh consecutive quarter with a 1.9 percent boost. That’s the surest sign management is sticking to future cash flow forecasts that are based mainly on the addition of new fee-generating assets in the Marcellus Shale region.

During the company’s third-quarter conference call, CEO William Shea also pointed to signs coal mining royalties from PVR’s lands were bottoming. This operation essentially collects from companies producing on its lands based on coal prices and volumes.

On the first day of the fourth quarter PVR started up a 30-mile gas pipe in the Marcellus Shale that will add to fourth-quarter results, setting up a sizeable boost in cash flow going forward. That’s on track to carry on as more assets come on stream in 2013 and 2014, producing fee-based revenue locked with long-term contracts.

There are challenges to making good on management’s forecast, such as bringing new assets on line on time and on budget. And there’s little room for error, given the low distribution coverage ratio. But PVR remains a solid buy up to USD28 for more aggressive investors.

Spectra Energy Partners LP (NYSE: SEP) declared a quarterly cash distribution of USD0.485 per unit, an increase of USD0.005 over the previous level of USD0.48 per unit. It’s the 19th consecutive quarter that Spectra Energy Partners has increased its quarterly cash distribution.

The MLP reported adjusted earnings before interest, taxation, depreciation and amortization (EBITDA) of USD37 million versus USD32.9 million a year ago. The increase was primarily due to an increase in rates on existing Big Sandy contracts, lower Gas & Transportation Segment operating expenses and higher than forecast Gulfstream equity earnings.

Third-quarter distributable cash flow per unit was USD0.51, down from USD0.66 a year ago but up from USD0.48 sequentially and good enough for a distribution coverage ratio of 1.03.

On Oct. 23, 2012, Spectra Energy Partners announced the acquisition of a 38.8 percent interest in the Maritimes & Northeast Pipeline from parent Spectra Energy Corp (NYSE: SE) for USD545 million.

The drop-down is consistent with the MLP’s growth strategy, which is to grow via third-party acquisitions, organic projects and, if the first two aren’t available, drop-downs.

Management reiterated its 2012 distributable cash guidance of USD222 million.

With a high-quality cash flow stream and solid growth potential Spectra Energy Partners is a buy under USD33.

Targa Resources Partners LP (NYSE: NGLS) boosted its quarterly distribution 13.7 percent from year-ago levels to USD0.6625 per unit.

The MLP posted third-quarter earnings before interest, taxation, depreciation and amortization (EBITDA) of USD116.2 million, up from USD107.3 million a year ago. The logistics and marketing & distribution segments posted expectations-beating results but were partially offset by higher operating expenses and lower equity earnings contributions.

Third-quarter distributable cash flow per unit was USD0.67, up from USD0.65 a year ago and good enough for a coverage ratio of 1.01 times.

Targa holds leading position in the natural gas liquids logistics market and boasts solid growth prospects, evidenced by USD1.6 billion of identified organic investments and backed by a conservative balance sheet. Targa Resources is a buy on a dip to USD39.

Vanguard Natural Resources LLC (NYSE: VNR) opened its third-quarter conference call by announcing the execution of a purchase and sale agreement with Bill Barrett Corp for USD335 million acquisition of primarily natural gas and natural gas liquids properties in the  Powder River Basin and Wind River Basin in Wyoming.

The deal increases Vanguard’s operating footprint in two of the largest producing basins in Wyoming, and it also brings a high-quality non-operated position alongside a lean development company in the Piceance Basin of Colorado.

Management forecasts the Wyoming acquisition could generate USD50 million to USD55 million of annual earnings before interest, taxation, depreciation and amortization (EBITDA).

Vanguard acquired approximately 300 billion cubic feet (Bcf) of total reserves, which consist of 240 Bcf of proved developed reserves and 60 Bcf of proved undeveloped reserves. The assets are 78 percent natural gas, 15 percent natural gas liquids and 7 percent oil and condensate.

The deal is structured in a way that negates the near-term production decline of the assets while maintaining steady cash flow; this is the reason for the inclusion of the non-operated Piceance assets, which include a gradually increasing working interest.

Along with its hedging strategy Vanguard anticipates having relatively flat cash flows each year through 2016, absent any significant capital expenditures.

Vanguard posted distributable cash flow per unit of USD0.69, up from USD0.63 a year ago and good enough to cover the USD0.60 per unit distribution by 1.15 times. Vanguard Natural Resources is a buy under USD30.

Here’s when to expect numbers for the rest of the MLP Profits Portfolio. Look for our comments in the next issue of MLP Investing Insider.

• DCP Midstream Partners LP (NYSE: DPM)–Nov. 6 (confirmed)
• Energy Transfer Partners LP (NYSE: ETP)–Nov. 7 (confirmed)
• Genesis Energy LP (NYSE: GEL)–Nov. 6 (confirmed)
• Inergy Midstream LP (NYSE: NRGM)–Nov. 19 (estimate)
• Mid-Con Energy Partners LP (NSDQ: MCEP)–Nov.  6 (confirmed)
• Oiltanking Partners LP (NYSE: OILT)–Nov. 7 (confirmed)
• Regency Energy Partners LP (NYSE: RGP)–Nov. 7 (confirmed)
• Teekay LNG Partners LP (NYSE: TGP)–Nov. 8 (confirmed)