Lotsa details in the prospectus, which also serves as a proxy statement for shareholder votes.
Among the interesting tidbits:
A narrative of the chronology leading to the announcement. Hamo told the truth at the May CC.
At the moment he spoke nrf was not in negotiations with Griffin. Before and after, but not on CC day.
An advisor to Griffin using various assumptions estimated the deal to be slightly dilutive to slightly accretive to NRF's cad per share in 2015. NRF says neutral, which fits.
There is a list of possible pros and cons to each side......factors the respective sides considered in getting to "yes".
NRF is estimating 3Q cad will be higher than 4Q. Document did not say why.
All with a significant stake in NRF should read at least the summary portions, skip the boilerplate, and read the other details which interest you.
A secondary offering (SO) is when a SHAREHOLDER registers for a public offering of a company's stock that is already outstanding. The company does not sell (issue) any new shares nor does the company receive any proceeds. Also, the company does not pay any underwriter fees. Total shares outstanding do not change as a result of a secondary.
A follow-on offering is any public offering of new shares to be issued by a company subsequent to an initial public offering. The company gets the proceeds, net of fees to the underwriters and total shares outstanding increases by the newly issued shares sold by the company.
Both types of offering will cause a market discount (public price drops) because the offer price has to be lower than a tute can buy in the open market in order to induce the tutes to buy large blocks. The market discount can be 1% to 5%, depending on the strength of the company and proposed use of the money. NRF has been around 2.5%. BUT, the market discount can be increased by dilution freaks who sell whether or not the issuance will actually be dilutive to eps. OR, the market may not like what the company is going to do with the proceeds. Then, the trading price on offer day will go below the public offering price. I like to buy follow-ons at 1% or more below the offer price.
In addition, the company must pay the underwriters. In an underwritten offering, the underwriters buy the shares from the company , net of an offering discount ranging from 1.25% to 5%. NRF pays around 2.5%. Here, the underwriters bear the risk of selling to the public. If it does not sell well, the underwriters have to lower their price to unload the shares.
In a best efforts offering, the company bears the risk of selling to the public. The underwriters get a commission on whatever they sell. If it does not sell out, that's the company's problem.
When I "eyeball" a NRF offering, I use 95.5% of the pre-announcement closing price as net, net to the company and have been close.
Lots of detailed financial info. I have only just skimmed, but have seen nothing to change my opinion that this is a great, though expensive, deal for NRF and a very great deal for NSAM.
Well, the ordinary income portion of your gain will likely be UBTI because most of it is recapture of prior deductions which reduced prior UBTI. I don't know if you have to file prior years' Form 990-T to establish UBTI loss carryforwards which can offset 2014 UBTI.
Hmmmm, don't know if passive losses are unit by unit or by percentage of your partnership interest.
If it's unit by unit, your older units will have accumulated more suspended losses than newer units. They also have more cumulative distributions which reduce basis (as do suspended losses).
If the rule operates on percentage of your partnership interest, then it's simple....if you give your kid 25% of your units, then 25% of your suspended passive losses gets added to the adjusted basis of the units you give to your kid.
IMO, you need an experienced CPA. Free advice on an internet message board may be worth what you pay for it.
I think this is the time of year when roger goes primitive at his cabin in the boonies.....where he wash himself twice a month in the lake. The greenies will be after him for polluting local waters, just like scco. In any event, he's not missing much.
Holding a C corp is not a passive activity. The disposition of KMP in the exchange is treated as a fully taxable sale. It will trigger deductibility of suspended passive losses.
This assumes, of course, you were not dumb enough to elect to combine KMP with another pipeline MLP ( such as ETP) to constitute a single activity. If you did, you do not trigger KMP's suspended losses unless you also sell all of your ETP in 2014 (assuming KMP closes in 2014).
First, your child could be subject to kiddie tax......kid's tax calculated as if income on parents' tax return.
Second, suspended passive losses get added to basis in the case of a gift, but basis in the hands of the donee cannot exceed fmv on date of gift. In the case of KMP where a total sale is contemplated, you end up converting an ordinary loss (triggering suspended ordinary losses) into a reduction of a long term capital gain in the hands of the kid.
Nice try, but the feds are way ahead of you on this.
Collected 444.4 thru 8/14 vs 434.0 thru 8/11.....10.4 million in 3 days.....ave of 3.467 per day
Healthcare on fire this month.....396.2 thru 7/25, so 75.2 million in 20 days....ave of 3.76 million per day.
Too bad nsam didn't raise their estimate of 2014 with their Aug presentation materials. Oh well, they will in Nov, by which time they will be reasonably sure where the year will end. Always better to underpromise and overdeliver than vice versa.
If you sell your entire interest in a fully taxable transaction to an unrelated party (all of which are met in the proposed transaction), your suspended passive losses are deductible in full. The loss is an ordinary loss which will offset the ordinary income (Sec 751 gain) on the sale of your units.
Your ultimate net gain will be cash received plus fmv of KMI shares recived plus cumulative distributions received on these units minus cash out to buy these units. Much of this gain will be ordinary income. A very rough estimate of the long term capital gain portion (assuming you have held all units more than one year) is with absolute unit price. To illustrate, if you paid 75 per unit and receive 100 per unit, your long gain is in the neighborhood of 25 per unit. The balance of your gain is ordinary income.
As to when to sell, if the trading price is substantially higher than the exchange consideration, go ahead and sell.
The rub is you won't know what the value of KMI is until very close to the exchange date.
Don't know what I did wrong. Fidelity posted today at 54.4255. Anybody else get a discount drip posted?
Please post cost per share here to 4 decimal places.
Zacks = junk. Of course earnings estimates are down. DUH, NRF just executed a deal to pay nsam 150 million per year in management fees beginning 7/1. Do you suppose profits will go down when expenses increase?
I believe tomorrow is deadline to file reports. NASDAQ website still showing 5 pages of tute reports dated 3/31 or prior.
This one could be full of errors due to split/spin which took place at 11:59 pm on 6/30. I suspect these reports will show positions as of close of business 6/30, so shares reported will be pre-split and pre-spin. After all, the earliest they could be posted to any brokerage account was 7/1.
NASDAQ summary looks pretty foolish.....198 million shares out with tutes owning 283 million.
Site shows Thornburg owning 350K of nsam. Well, those had to be when issued if nobody booked the spin shares. I suppose all but stragglers will be posted early next week. Will try to make some sense then, but suspect we have to wait until Sep 30 report to see which tutes are holding/dumping which stock.
I use specific identification for the lots I sell so if I sold today's drip lot, the gain, if any, would be peanuts.
In any event, I hope ETP doesn't pull a KMP deal, which just kills my 2014 tax plan. I planned to die with both to get the step-up in basis. Half that plan has been shattered by Kinder.
I own no mutual funds. I own small amounts of VNQ (reit index) as a marker and a small position in RXR for international real estate. Together, these are about 3% of the portfolio. The rest is common stock.
I started stock investing over 30 years ago with nothing but equity mutual funds because at the time I was just beginning to learn about stock investing. As I gained more knowledge and experience and paid some "tuition" for mistakes, I gradually moved the portfolio to individual companies. I am responsible for my own destiny and that's the way I like it.
I own no preferred. The only significant position I ever had in preferred was NRF-A where I had a weighted average cost of 6.99 (and a yield on cost of over 31%). I sold all the retirement account preferred after 3Q 2010 earnings release which was full of flim flam (my opinion words) from the CSE cdo. I kept 2,000 in the taxable account because I had over a triple, but sold those after the 2010 10-K was filed because of the phony (my opinion word) accounting for the newly consolidated VIEs. Today, IMO, once one decides to risk money in NRF, the only place to be is common.
I have never owned bonds because I believe they are, over a very long term, losers to inflation and equities.
Yup, a trader can make lots of money trading bonds and swings in interest markets if the calls are correct. I don't have that skill and have no interest in learning it. My investment horizon is infinite. 80% of my portfolio is old and cold. I'll only sell if something bad happens to the company or its industry.
Notwithstanding the above, what's feels right for me may not fit the next guy, or the next. It truly is different strokes for different folks. That's why so many different investment vehicles are available.
Well, I can't resist a same-day 5% profit. I already know exactly how many shares I will get even though Fidelity won't post them to my account until next week. I could sell the drip shares today and pocket 2.80 per share vs yesterday's close. I wish I could make 5% same-day on all my trades. If I could, I'd be sitting on my 300 ft yacht instead of posting here, so I take the gimmees when they are offered.
I did not say I believes there is less risk to nsam. To the contrary, until they show two or three quarters of operating results, especially the first in Nov, I believe it will be very volatile and is selling well below what it will sell at once it shows some historical numbers
As to nrf, I expect the most rapid gain will come from getting the yield down to 7% or so. Thereafter, its rate of cad (and price) growth will be much slower than nsam's. One billion of new nrf common equity will not be accretive until return on leveraged equity exceeds 11.5%. Once over 11.5%, accretion will be minimal as a percent of 1.64 current midpoint cad. On the other side, one billion of new nrf equity adds 6 cents to nsam's cad from a base midpoint of 66 cents.....almost 10%. The griffin deal initially adds nothing to nrf's 1.64 yet it adds 6.6 cents to nsam's cad....10% on 66 cents.
Even though I think the total return on nsam will be at least double that of nrf in 3 years, I am a yield investor. I want dividends growing by at least inflation. The price of the portfolio is meaningless to me except for ego and estate tax purposes. NSAM is for my kids and grandkids. NRF pays for my winter extravagance in the Florida Keys.
You're right on 158.2 thru 7/23. My eyes get bad at the end of the day. I had this on my score sheet as supplement 6. Now this date and amount is in supplement 7, the preface to which says it replaces all prior supplements.
So, income 2 revised.....172.7 thru 8/11 vs 158.2 thru 7/23 = 14.5 in 19 days = .763 per day.
Business days is more accurate, but I'm generally too lazy. In can make a big difference over short periods, like 6/28 thru 7/8 which included 4th of July holiday. But over a longer period, say a quarter, it has less impact on the average.
BTW, 1Q = 150 million in 90 days = 1.667 per day
2Q= 208 million in 91 days = 2.286 per day
So far 42 days into 3Q = 111.6 million = 2.657 per day
The trend is our friend to finish 2014 closer to 900 million than 800.