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Ashland Inc. Message Board

dog_house_reilly 6 posts  |  Last Activity: Dec 27, 2014 6:55 PM Member since: Dec 17, 2012
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  • Reply to

    shipping

    by glenw00doo1 Dec 26, 2014 6:05 PM
    dog_house_reilly dog_house_reilly Dec 27, 2014 6:55 PM Flag

    Awesome data. The Soo locks close between 1/15 and 3/25, with very little variation. It's not just the water temperature - there a great deal of maintenance that can only be done when the locks are closed.

    Note that the warmest Januaries were 1/2012 and 1/2013. In 1/2012 the last ship through the Soo locks passed on 1/19 (a special extension requested by the shipping industry) and in 1/2013 the last ship passed on 1/15. Also note that despite the polar vortex this year, the first ship went through on 1/24/14.

    So I wouldn't expect any change in the Soo Locks schedule. Ice can of course slow shipments even when they are open.

  • Reply to

    December and YTD Shipping from Silver Bay

    by gutowskido Dec 15, 2014 10:33 AM
    dog_house_reilly dog_house_reilly Dec 27, 2014 6:30 PM Flag

    Good memory, you are correct.

    When quarterly shipments of MSB ore fall below the 90% threshold out of Silver Bay, MSB gets "credited" with 90%. That happened in the calendar quarters ended ("CQE") 3/31/13 and 6/30/13, with the adjustment reversed in CQE 12/31/13. Ditto for CQE 3/31/12 reversed in CQE 12/31/12 and for CQE 6/30/11 reversed in CQE 12/31/11. The 8K's released shortly after the CQ spell out the 90% adjustment in each case. Note also that the reversal is always made in CQE 12/31, likely because its just easier to do the adjustment at year-end.

    No such adjustments were made in CQE 3/31/14, 6/30/14 or 9/30/14 because shipments were well above the 90% threshold as shown by the following:
    - CQE 6/30/14 8K says 100% for the prior 3 months.
    - FQE 7/31/14 10Q says 97.8% for the prior 6 months.
    - FQE 10/31/14 10Q says 89% for the prior 9 months.

    Note also that the shipments derived for Sept-October from the 10Q's and 8K's compared to the LCA stats also agrees with the 89% disclosure from the FQE 10/31/14 10Q. So I'm very confident in the monthly shipping estimates.

  • Reply to

    December and YTD Shipping from Silver Bay

    by gutowskido Dec 15, 2014 10:33 AM
    dog_house_reilly dog_house_reilly Dec 27, 2014 4:01 AM Flag

    Credited means shipped. The 1361841 was for the same quarter in the prior year. "In the third calendar quarter of 2014, Northshore was credited with 2,115,189 tons of iron ore pellets while Northshore shipped 1,361,841 tons of iron ore pellets during the third calendar quarter of 2013."

  • Reply to

    December and YTD Shipping from Silver Bay

    by gutowskido Dec 15, 2014 10:33 AM
    dog_house_reilly dog_house_reilly Dec 25, 2014 10:15 PM Flag

    Hey Rnomava - 10/2014 MSB ore shipments in LT's derived as follows:

    2/1-10/31: 3,723,506 shipped per MSB 10/31 10K (page 10).
    7/1-9/30: 2,115,189 shipped per MSB 10/14 8K (paragraph 4).
    4/1-6/30: 1,113,433 shipped per MSB 7/11 8K.
    2/1-3/31: 0 shipped. Per MSB 4/11 8k 71,007 shipped from 1/1-3/31. But all shipments for the quarter were in January as the LCA monthly reports show nothing from Silver Bay in Feb and March.

    So October MSB shipments = 3,723,506 - 2,115,189 - 1,113,433 = 494,884. That means that only 70% of ore shipped out of Silver Bay in October was MSB ore. Why so low? Because MSB shipments were 94% of Silver Bay shipments through September vs. the 90% minimum required for CLF, so CLF chose to blast and ship more non-MSB ore since they don't have to pay royalties on it. For November and December, I'm assuming that CLF ships the minimum % of MSB ore required (90% of first 4m LT's and 85% above that = 89.0% for CY 2014's projected 4,487k shipments). That means 88.1% of MSB ore shipped for November and December.

    Note that the % of MSB ore shipped out of Silver Bay bounces around a lot: 89% in Jan, 100% in April-June, 95% in July, 88% in Aug-Sept and 70% in Oct.

  • Reply to

    December and YTD Shipping from Silver Bay

    by gutowskido Dec 15, 2014 10:33 AM
    dog_house_reilly dog_house_reilly Dec 25, 2014 7:05 PM Flag

    497 ST reported by LCA x 2000 / 2240 x 88% of total Silver Bay shipments that is MSB ore = 390 LT of MSB ore shipped.

  • Reply to

    December and YTD Shipping from Silver Bay

    by gutowskido Dec 15, 2014 10:33 AM
    dog_house_reilly dog_house_reilly Dec 24, 2014 7:01 PM Flag

    G - the Q4 distribution isn't going to be $1.25, it'll be very close to $0.57. Here's why:

    Seventeen ships will depart Silver Bay in December with a max 527.9k long tons of carrying capacity as follows (x # of visits): Sam Laud 3 x 24.3 LT + Adam E. Cornelius 3 x 29.2 LT + St. Clair 2 x 44.8 LT + American Courage 2 x 24.3 LT + H. Lee White 2 x 35.4 LT + Buffalo 2 x 24.3 LT + Joseph L. Block 1 x 37.3 LT + Lakes Contender / Ken Boothe Sr. 1 x 38.5 LT + John J. Boland 1 x 34.0. The American Courage scheduled for 12/31 will almost certainly be pushed back a few days as all Duluthboats ships are, so I'm excluding it.

    Assuming the ships carry 84.0% of capacity (slightly lower than the 85% in Oct / Nov) and that 88.1% of the ore is MSB's (above the 82% for Aug / Sept / Oct, plugging to the minimum shipment requirement for the CY), that's 528 x 84.0% x 88% = 390k long tons of MSB ore shipped in December. The LCA December report should read 497k short tons.

    Calendar Q4 MSB ore shipments will thus be 1,187k long tons = 495k October + 302k November + 390k December. In calendar Q1-Q3 total MSB ore shipments were 3,300k (total 4,487k for the year). So for Q4, we'll have 700k in the 5.5% royalty bucket and 487k in the 6.0% bucket. At $73.58 price per long ton (Q3's figure), the Q4 the base overriding royalty will be $4,983k = (700k x $73.58 x 5.5%) + (487k x $73.58 x 6.0%).

    MSB's Q4 distribution will be $0.57 per share = $4,983k base overriding royalty + $2,620k bonus royalty (1,187k x $73.58 x 3%) + $164k fee royalty + $2k interest - $243k expense = $7,526k net income / 13,120k shares.

    PS - There is no "carryover". MSB calendar Q1-Q3 net income and distribution both equal $1.20 per share.

ASH
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