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Inergy, L.P. Message Board

  • abter1 abter1 Jan 25, 2010 4:33 PM Flag

    NRGY increases distribution $.01 (1.5%)

    KANSAS CITY, Mo., Jan 25, 2010 (BUSINESS WIRE) -- The Board of Directors of Inergy GP, LLC, managing general partner of Inergy, L.P. (Nasdaq:NRGY), today announced an increase in the Company's quarterly cash distribution to $0.685 per limited partner unit ($2.74 annually) for the quarter ended December 31, 2009. This represents the 33rd consecutive quarterly increase and an approximate 6.2% increase over the distribution for the same quarter of the prior year. The distribution will be paid on February 12, 2010, to unitholders of record as of February 5, 2010.

    I am always amazed at the distribution growth leverage that NRGP (the general partner of NRGY) provides over NRGY. Here are the numbers:

    NRGP raised by 10.59%, and NRGY went up by 1.48%.
    So the NRGP leverage is 7.13 this quarter (= 10.6/1.48) . Wow!

    For the year, NRGP's distribution was up 39.26%, and NRGY was up 6.20%, so the annual leverage = 6.33. The two year leverage is very similar (= 6.35), a pretty consistent leverage.

    That amount of GP leverage on top of a nicely growing MLP really pays off; the NRGP distribution has over doubled in two years (NRGP dist. 2/5/07 = $0.40, upcoming dist. in Feb 2010 = $0.94). NRGY increased their distribution by 21.2% in that same period (NRGY dist 2/5/07 = $0.565).

    As always though, the key caveat; NRGP prospers more if NRGY prospers, but if NRGY falters, NRGP will be hit harder. Live by the leverage, die by the leverage.


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