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Inergy, L.P. Message Board

  • flintly flintly Jul 24, 2008 8:35 PM Flag

    NRGY Dividend

    What am I missing? How can this company make 1.25 per share and payout over 2.00 per share in dividends? And raise the dividend...What am I missing?

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    • Is anyone else seeing a bunch of these "What am I missing" postings which always claim that they don't know how a company could have GAAP earnings of one amount and pay a higher amount in distributions?

      Are these investors just inexperienced or stupid? Do they not understand GAAP earnings and noncash mark-to-market changes in the value of interest rate swaps used to swap floating rate debt into a fixed rate or the mark-to-market in various energy hedges used to lock-in cashflow?

      The postings always appear without the poster ever trying to read the company's earnings release to understand the accounting.

      Or do you think it's a bunch of short-sellers trying to get investors to panic that a distribution that has been confirmed by mgmt is somehow going to be cut when they discover these "accounting tricks?"

      Flintly, I'm not sure what camp you're in -- stupid or short?

    • Of course if you never sell, you don't have back taxes. . .I will just leave my stock to the SPCA or some nice organization when I "cash in.". . .in the meantime - I am off to Europe again on all my MLP dividends.

    • You are looking at earnings that include noncash items such as depreciation. This partnership, like some other MLP's, could incur a GAAP loss and still distribute cash because the cash flow is available. That's why these are considered "Tax Shelters". You are taxed on less than what you receive in distributions, but watch out. Its only a deferred taxable income because you catch up what you missed when you sell the units.

 

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