I'm betting this will be answered during the CC.
Key to many buybacks is the money saved through diminishing distribution obligations. It may well have been the determining factor in arranging the proposal in the first place. In this instance NGL would save approximately $21 million per year in discontinued payout obligations.
As for holding reclaimed units in the company treasury? ---one needs only look at units issued and outstanding over a specified time period to find our unit count has remained steady at 123,700 million for some time now.
Lastly, it might be interesting to note that we unitholders look at insider buys of common units as a great indicator of their confidence in the company's future prospects. When I look at buybacks, I'm seeing exactly the same thing, to wit---management with much larger unit positions than we on the retail side likely hold---seeks to reduce the overall number of units available to retail AND themselves so as to enhance opportunity to capitalize on THEIR expectation that company units will soon be rising in value. This, then, benefits us on both the inside and retail positions. It also allows for a more convincing short squeeze, should that enter into the picture. And then there's the unmistakable PRO-retail posturing we've seen coming from management! They may have acted a bit foolishly when trying to goad the BOD into increasing the distribution a couple of years ago but they earned plaudits from me for their resolve. Clearly they wanted (and continue to want) us retail folks to be true partners in this business we co-own.
These are my opinions only. However, it was in this spirit that I added units this week as I've done consistently for five years so far. And need I say, it's been very profitable for me as well as many others here?
Tomorrow will come soon enough and while it may not paint the prettiest of picture, I'm confident there'll be enough meat on the bone for some good meals.
