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Linn Energy, LLC Message Board

  • sandra888us sandra888us Sep 19, 2013 5:33 PM Flag

    Will the Distribution be affected ... Opinions

    Wondering about the distribution .. any thoughts?

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    • Distribution won't be affected because reversal of CAP cost won't affect financial statement and cash flow, if will only reduce depreciation per BOE.

    • No impact, there were only two effects of the amended S4 (presumably responding to SEC coercion).

      1) "Adjusted EBITDA" has to be restated, which unfortunately adds some fuel to those silly lawsuits. That's merely a disclosure point, I never liked the metric anyway.

      2) "DCF" will no longer be used, and the new number which is called cash provided (used) by operations with discretionary adjustments (or something like that) will be the replacement, the acronym currently pending (I like "discretionary cash flow", or . . . yup). Instead of being a stand-alone number, it will be reconciled from cash flow from operations off the cash flow statements, a completely confusing mish-mash of numbers, since GAAP cash flow on that financial statement line is a very polluted metric that really says nothing about performance for a quarter, except by coincidence.

      Before we had a common metric that was well understood by reasonably intelligent investors, where the only discretionary input was maintenance capex, now a forbidden term. Replacing it will be . . . a mess. But it's the same number in the end, see page 251 of the amended S4 and compare it to the last earnings release. I defy you to say that the S-4 schedule is more informative, but as you can see, it's the same bottom line.

      Since management previously used DCF as a standard for its recommendations to the board (in combination with many other factors, of course), and since the new metric is the same, there's no reason to think that this re-jumbling of numbers will have any effect on distribution policy. All it adds is confusion in the market place, and the galling reality that the Hedgeye monkeys will be able to crow that they were right.

    • Certainly some scathing comments in that Seeking Alpha article. Accounting is opinion driven mumbo jumbo (in my opinion) I'm feeling a Div cut due to the result of the "new accounting" rules being applied to LINE/LNCO. After Berry ( and maybe other acquisitions) we may trend back to earlier price levels. This could take a while----1-2 yrs is my guess.
      I'm real sure the lawyers will have a FIELD DAY after this last S-4 filing. They may have " materially misled investors " but that is different than PURPOSELY misleading investors with intent to deceive.

      Sentiment: Hold

    • At this point who knows.
      As long as they continue to pay the divi I am not worried.
      Berry deal is what concerns me.

    • garrh Sep 19, 2013 6:24 PM Flag

      Why the thumbs down? Can't somebody ask a question on this board without thumbs down or obnoxious replies?

      Sentiment: Hold

    • Per Schwab News:
      Raymond James analyst Kevin Smith said the rewiring does not change Linn's underlying cash flow.

      "Meaning there is a lot of heartache going on but no change in the company's ability to pay its distribution or how much cash flow Linn actually generates," he said.

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