KANSAS CITY, Mo.--(BUSINESS WIRE)--Jan. 27, 2012--
The Board of Directors of Inergy GP, LLC, general partner of Inergy,
L.P. (NYSE:NRGY) (“Inergy”), announced that it has declared the
company’s quarterly cash distribution of $0.705 per limited partner unit
($2.82 annually) for the quarter ended December 31, 2011. The
distribution will be paid on February 14, 2012, to unitholders of record
as of February 7, 2012.
On December 21, 2011, Inergy completed the initial public offering of
its Northeast natural gas storage and transportation business forming a
new partnership called Inergy Midstream, L.P. (“Inergy Midstream”). In a
separate announcement today, Inergy Midstream also declared its
quarterly distribution. Inergy Midstream’s operating business is
performing as expected, and has strong underlying fundamentals and
visible growth. Inergy Midstream is expected to provide a number of
benefits to Inergy including: an improved cost of capital in its
midstream business, a valuable equity currency for its midstream growth
plans, a reduction in current borrowings on the Inergy balance sheet,
and a reduction in the future capital funding required at Inergy. Inergy
owns 75.2% of the outstanding limited partnership units, the incentive
distribution rights, and the managing general partner of Inergy
While these benefits are important, Inergy continues to face a
challenging operating environment. For the twelve months ended December
31, 2011, Inergy generated distributable cash flow of approximately 68%
of the total cash distributions paid for the period. Market conditions,
primarily in its propane operations and to a lesser extent in the Texas
gas storage market, remain challenging. Although there are a number of
factors that may impact its operations through the remainder of this
fiscal year, a material improvement in distribution coverage is not
expected. In light of these factors, management is conducting an
evaluation of the operating businesses at Inergy, and is in the process
of a major cost reduction initiative in its propane operations. In
addition, management and the board of directors of Inergy are evaluating
a reset of the quarterly distribution to a level that is supportable by
the cash flow expected to be generated from Inergy’s businesses in the
John Sherman, President and CEO of Inergy, said, “While we have made
progress on our midstream growth initiatives and completed the Inergy
Midstream IPO, which we see as an important step to repositioning the
company for the future, we continue to face a challenging operating
environment in some of our businesses. We look forward to our upcoming
earnings call, during which we will discuss our operations and outline
our plans to improve our position on behalf of investors.”
Inergy plans to release its fiscal 2012 first quarter earnings on
January 31, 2012. Inergy will host a live conference call and internet
webcast on January 31, 2012, at 11:00 a.m. Central Time to discuss the
results of operations for the quarter ended December 31, 2011, provide
an update on its business outlook, and discuss its business strategy.
The call-in number for the earnings call is 1-877-405-3427, and the
conference name is Inergy. The live internet webcast and the replay can
be accessed on Inergy’s website, www.inergylp.com.
A digital recording of the call will be available for one week following
the call by dialing 1-855-859-2056 and entering the pass code 46666307.
About Inergy, L.P.
Inergy, L.P., headquartered in Kansas City, Missouri, is a publicly
traded master limited partnership. Inergy’s operations include the
retail marketing, sale, and distribution of propane to residential,
commercial, industrial, and agricultural customers from customer service
centers throughout the United States. The company also operates a
natural gas storage business in Texas and an NGL supply logistics,
transportation, and wholesale marketing business that serves customers
in the United States and Canada. Through its general partner interest
and majority equity ownership interest in Inergy Midstream, L.P.
(NYSE:NRGM), Inergy is also engaged in the development and operation of
natural gas and NGL storage and transportation business in the Northeast
region of the United States.
About Inergy Midstream, L.P.
Inergy Midstream, L.P., headquartered in Kansas City, Missouri, is a
master limited partnership engaged in the development and operation of
natural gas and NGL storage and transportation assets. Our assets are
located in the Northeast region of the United States.
This press release contains forward-looking statements, which are
statements that are not historical in nature such as the expectations
that Inergy Midstream is expected to provide a number of benefits to
Inergy and we expect to achieve cost savings in our propane business.
Forward-looking statements are subject to certain risks, uncertainties,
and assumptions. Should one or more of these risks or uncertainties
materialize or any underlying assumption proves incorrect, actual
results may vary materially from those anticipated, estimated, or
projected. Among the key factors that could cause actual results to
differ materially from those referred to in the forward-looking
statements are: weather conditions that vary significantly from
historically normal conditions; the general level of petroleum product
demand and the availability of propane supplies; the price of propane to
the consumer compared to the price of alternative and competing fuels;
the demand for high deliverability natural gas storage capacity in the
Northeast; our ability to successfully implement our business plan; the
outcome of rate decisions levied by the Federal Energy Regulatory
Commission; our ability to generate available cash for distribution to
unitholders; and the costs and effects of legal, regulatory, and
administrative proceedings against us or which may be brought against
us. These and other risks and assumptions are described in Inergy’s
annual reports on Form 10-K and other reports that are available from
the United States Securities and Exchange Commission. Readers are
cautioned not to place undue reliance on forward-looking statements,
which reflect management’s view only as of the date made. We undertake
no obligation to update any forward-looking statement, except as
otherwise required by law.
Corporate news, unit prices, and additional information about Inergy,
including reports from the United States Securities and Exchange
Commission, are available on the company’s website, www.inergylp.com.
For more information, contact Mike Campbell in Inergy’s Investor
Relations Department at 816-842-8181 or via e-mail at email@example.com.
This release is intended to be a qualified notice under Treasury
Regulation Section 1.1446-4(b). Brokers and nominees should treat one
hundred percent of Inergy’s distributions to foreign investors as being
attributable to income that is effectively connected with a United
States trade or business. Accordingly, Inergy’s distributions to foreign
investors are subject to federal income tax withholding at the highest
applicable effective tax rate.
Source: Inergy, L.P.
Mike Campbell, 816-842-8181