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Linn Energy, LLC Message Board

  • lizahuang54321 lizahuang54321 Jun 18, 2013 7:42 PM Flag

    Proof that one month's distribution is missed.

    We used to get paid in May for Jan-Mar, Aug for Apr-Jun, etc. The payment was 45 days after the end of each quarter. Under the new system, LINE's own table makes it clear that payments are 75 days following the end of each month: April is paid in July, May is paid in August, etc. The whole cycle has been shifted back by one month.

    Now consider 3 examples of a one year holding period encompassing the transition and see how many month's worth of distributions you receive. Under the old system a one year holding period would always give you 4 quarterly distributions.

    case a) purchase Jan 5th 2013, sell Jan 5th 2014
    collect quarterly payments in Feb and May, 6 monthly paymnents in Jul-Dec. Total 12 monthly payments.

    case b) purchase Feb 5th 2013, sell Feb 5th 2014
    collect quarterly payment in May, 7 monthly payments in Jul-Jan. Total 10 monthly payments.

    case c) purchase Mar 5th 2013, sell Mar 5th 2014
    collect quarterly payment in May, 8 monthly payments in Jul-Feb. Total 11 monthly payments.

    Holding for a year encompassing the transition gives you either 10, 11 or 12 month's of distributions. On average 1 month has been missed. You can call it missing the June distribution or the final distribution before you sell, nevertheless it is indisputable that on average one month's payment is missed.

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    • You made your point. Now give it a rest. Like Hillory said,"Who cares?" Ed

    • So, should the stock price be cut in half because of a one month dividend "adjustment" when going from yearly to monthly dividends? Is the company going under because they (allegedly) needed to "steal" a month of dividends to raise the coverage ratio? In reality, stock prices are dependent on future dividends, so very shortly, this missed small amount (if it exists - I haven't bothered to see if it really is missing since it is almost irrelevant) will really be irrelevant. This type of argument really seems to fall into the bear raid theme that is currently overwhelming Linn - an event that is very much NOT APPRECIATED by real investors.

      • 2 Replies to nivek777
      • it is why bear raids are successful as most retail can't figure. yes they are short one month payment and if it was a CD at a bank you would be #$%$. Some people get into these mlps and bcds thinking they are CDs, should it affect the stock, NO because you still own the company and now they have more funds, did the company mislead you, YES, are you stupid enough not to understand it well that is the real question isn't it. They have pulled the wool over your eyes at IR but the board knows what Lisa is saying is true and they planned it that way.

      • LINE investors seem to have a victim culture. So many of them want to apologize for being ripped off.
        LINE deliberately witholds one distribution and obscures it with the transition and almost every body here want to apologize and be grateful for being ripped off.

        Of course the price is not cut in half or the company going bankrupt. They confiscated one of your distributions is what, and that shows unscrupulous management. Some of these people seem like if they got mugged on the street they would apologize to the mugger for not having much cash on them.

    • where are you getting the 75 days till ex dates from? I have scoured the web site and can't get any future dist dates planned or other wise. I have state before that they will try to pay out more in calendar year 2013 than they did in 2112 just so that their YOY charts look good.

      • 1 Reply to davemaine
      • Look at the schedule of distributions they have published.
        April revenues are being distributed in mid July,
        May in mid August, etc.
        They publishes a table showing that for all the distributions July 2013-March 2014.
        It was published in the press release where they announced the switch to monthly distributions (which was around the time of last earnings announcement). I'd guess it's on the website too, but haven't checked.

    • Old American saying ... "Don't look a Linn gift horse in the dividend".... Years ago their IR fellow called me with a K-1 problem I was having at tax time. He and the other LINE representatives provided superior service. I wish I had pulled the trigger on buying more LINE last week.I would think over time monthly divys paid would create an interest bump for thr retail investors.

    • the joys of a public school education....ey?
      Declared Ex-Date Record Payable Amount Type
      04/23/13 05/06/13 05/08/13 05/15/13 0.725 U.S. Currency
      01/24/13 02/05/13 02/07/13 02/14/13 0.725 U.S. Currency..

      Month Record Date LINE / LNCO
      Payable Date Payment Amount Annualized
      April 2013 July 10, 2013 July 15 / 16, 2013 $0.2416 $2.90
      May 2013 August 12, 2013 August 14 / 15, 2013 $0.2416 $2.90
      June 2013 September 10, 2013 September 13 / 16, 2013 $0.2416 $2.90
      July 2013 October 10, 2013 October 14 / 15, 2013 $0.2566 $3.08
      August 2013 November 11, 2013 November 14 / 15, 2013 $0.2566 $3.08
      September 2013 December 10, 2013 December 13 / 16, 2013 $0.2566 $3.08

      go to the corner & put on that Dunce Cap

      • 1 Reply to cayman99
      • Not sure who you're talking to but the important date in the example were the 2014 record dates, so who is the dunce? You are looking at the wrong year. My example was correct with respect to ex-dates, but the exact dates are not critical - it was just an example, the same pattern holds true for other dates. It should be obvious that when the record date is shifted back by one month as they have done (payable date moved from 45 days after end of quarter to 75 days after end of month, with record and ex-dates a couple of weeks earlier), that existing holders from before the transition will lose one month of distribution over the life of their investment. It's obvious dummy because your sell date whenever it is will miss one more monthly distribution than before due to the record and ex-dates being shifted back by a month.

        As for public school education, well I have higher degree from Stanford so my education was OK. 4.0 grade point average too.

    • Are you going to sell or buy more?

    • That's good work, but . . . wouldn't one expect the market price to (more or less) correct for the distribution pending or past date? So that in cash terms there wouldn't be a full effect?

    • wow you all really get tied up into some details.

      Based on your thesis are you going to dump linn energy or not? Whats the impact to you?
      My holdings are long term, and based on your thesis I will lose 1 month of distributions. Over a 5 year period that is really trivial.

      Bottom line is on an anualized basis I will receive the same payments so whats the big deal?

      • 1 Reply to purplespyderman
      • "My holdings are long term, and based on your thesis I will lose 1 month of distributions. Over a 5 year period that is really trivial."

        That may be true but hardly the point. If you are a wage earner and your employer says "oh, I'm not going to pay your salary this month but don't worry you are a long time employee so this is trivial over the long term" would you be happy? What reason is there to extend the time lag before payment from 45 days to 75 days? None that I can see.

        It does say something about management that they are willing to screw existing unitholders like this though. Goes hand in hand with the aggressive accounting that is causing them so much headache currently.

    • Sounds reasonable but the bottom LINE will be if 2013 total distribution is $3.08 as the company claims.


      Sentiment: Buy

      • 1 Reply to kenpalley2000
      • 2013 will be the same total, however in the year you sell your position you will receive one month's less distributions than you would have before due to the extra month between the production quarter and the distribution record and payment date. It went from 45 days to 75 days and that deprives you on one distribution in the year you sell.

        You may not think it's a big deal, but how can this management be trusted when they do things like that and try to hide it in a transition to monthly payments? Would you take the same attitude if they decide to just skip a distribution or two in future? It is effectively the same.

    • liza. I don't really think missing/delaying a month's distribution is a big deal, but I appreciate you bringing it to our attention. Thanks for your civil and thoughtful approach. Please don't let the board bullies stop you from posting. I find your posts interesting and often helpful.

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