about $14 (originally $16). Been here for YEARS!
very frustrating..MM doesn't need money and won't get rid of senior management including Krauz who probably is responsible for the ARS debacle.
While financials look ok I wonder who would really want them and why?
I've been adding small amounts for a while...not easy to buy larger blocks as it pushes up price
10Q- $22million reserve against ARS which they intend to hold to maturity (not sure when that is....asked Rosenberg. When that day comes as I see it there will be credit to income. Not sure of tax impact.
Also, wanted to know how much is left in net losss carryover. As was stated earlier real BV is closer to $10-$11
DTAs are usually due to timing differences between the tax and accounting basis. So a DTA means the tax basis is higher and thus tax was "paid" for accounting purposes but not actually paid for tax purposes. It's an asset because when the tax is actually due it won't need to be reflected on the income statement because it already has been. I don't have their 10-K in front of me to see how they got theirs. For more detail look at the notes in the K. My recollection is that "Other Assets" contains about $22 or so mil of DTAs and there is another similar amount with a valuation allowance against it. Hope that helps.
I assume these DTAs stem from the tax law regarding the losses on the Fannie/Freddie preferred stock? Can you point out where on the balance sheet I can find the DTAs, and how you know that "half their DTAs are not reflected"? And what was the total dollar value of the DTAs? Thanks.
There are 2 things here. A DTA is essentially a prepaid tax credit. If you owe $100 in taxes and have a $100 DTA you would owe no taxes (everything else being equal) and the $100 would go to the bottom line and increase book value accordingly.
DTAs are listed on the balance sheet as an asset. However, in order to do so it must be more likely than not that there will be sufficient profitability in order to use the DTA. If not, then there has to be a valuation allowance against it. The valuation allowance is shown as a charge on the income statement via income tax expense. So in the above example if they thought there would only be enough profitability (as determined under accounting rules) to use $50, thr remaining amount would have a valuation allowance against it, reduce net income by the $50 and reduce the DTA on the balance sheet by that amount.
The interesting thing is that once profitability is sustained that valuation allowance can be reversed and be added back to the balance sheet and is shown as an income tax credit thus going right to the bottom line and increasing book value. Then it can still be used to reduce taxes so it's almost a double use. In this case about half their DTAs are not reflected.
Make more sense?
their you have it! I am familiar with the deferred Tax Asset but DID NOT RECOGNIZE Value to bottom line. Just to be clear, in essence this means just that if they had a profit on which Income tax would otherwise be accrued and payable, that a credit would go against the Income tax provision. Bottom line...no income tax expense...correct?
Thanks again. Funny, I was about ready to leave the Board but will now stay on.
DTA = Deferred Tax Assets. The point being that they won't need to pay taxes for quite a while. That is something that could be attractive to an acquiror, although there are some limitations on how much DTAs, NOLs (net operating losses), etc carry over after an acquisition. But the key element here, near term, is that once they have demonstrated that it is more likely than not that they will be profitable and thus need to pay taxes, they can release the valuation allowance and that amount would result in a tax benefit on the income statement and flow right to the bottom line. It's accounting, not cash earnings, but still would result in nice looking numbers (which would hopefully attract others in the market).