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jrad52 146 posts  |  Last Activity: 4 hours ago Member since: Jul 25, 1999
  • Reply to

    ANR Bankruptcy

    by clean_06905 Mar 8, 2016 9:20 PM
    jrad52 jrad52 Mar 9, 2016 11:42 AM Flag

    You're a bit early. ANR has proposed a plan to reorganize but it's missing specifics and no one has accepted it yet.

    On March 7, ANR proposed a plan whereby it would sell its core mines to a private equity group for $ 500 MM (I think that was the number mentioned) and aggregate the rest of its mines into a smaller operator that would basically use any cash flow from those mines to cover environmental and employee obligations. I don't think anyone other than ANR (and probably the investors that are going to invest in the core operations) are happy with the plan.

    There is a website for ANR and all its bankruptcy filings. That's where I found a copy of the plan. The plan refers to leases that ANR proposes to accept in bankruptcy and those leases that it will walk away from. Supposedly the names of the properties in those 2 groups are found in an attachment to the plan, but it's not on the web site. So either they haven't reached decisions as to some leases or else the information is secret. I don't know of their plans for the properties leased from NRP.

  • Reply to

    More speculation on my part

    by jrad52 Mar 9, 2016 8:41 AM
    jrad52 jrad52 Mar 9, 2016 11:36 AM Flag

    The real risk to what you are saying is Mr Robertson. He owns something like 20% of NRP, and he owns the GP as well, so he would have 2 choices - either fight for the unit holders or else join in an LBO to take the company private. Even though the GP has no real economic interest in NRP (that is, no IDRs), it still has the ability to control NRP's actions.

    And FELP claimed force majeure on the Deer Run mine last year. NRP has said that it's considering its options.

  • Reply to

    More speculation on my part

    by jrad52 Mar 9, 2016 8:41 AM
    jrad52 jrad52 Mar 9, 2016 10:11 AM Flag

    From one of NRP's loan agreements, covering $ 300 MM of debt: Section 5.01

    The Borrower will furnish to the Administrative Agent and each Lender:
    within 90 days after the end of each fiscal year of the Borrower, a copy of the Borrower’s audited consolidated balance sheet and related statements of operations, partners’ capital and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by Ernst & Young L.L.P. or other independent public accountants of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied;

    I don't know how to underscore here, but one of the requirements of the debt is that NRP must deliver the annual financial statements to the lenders without a going concern opinion.

    The same requirement is contained in several of NRP's loan agreements. You can find them attached to 8-Ks that NRP filed with the SEC in June 2015 and January 2013.

    My problem is that I can't see why NRP might be having problems with getting a waiver. What else can the lenders do? They will charge fees or higher interest for the waiver, but NRP doesn't have much choice. That is, if there is a going concern issue. The delay in filing might be something completely different.

  • Reply to

    More speculation on my part

    by jrad52 Mar 9, 2016 8:41 AM
    jrad52 jrad52 Mar 9, 2016 9:46 AM Flag

    There was no "big" compensation package. There were no numbers announced, just the terms of the plan. So we don't know if the plan is big or small. And I think the reason for the release was to keep the creditors happy. And right now, they are more important to NRP than the unit holders.

    And even if I'm right on this, it's only a guess.

  • AZUR, an oil & gas MLP today announced a delay in the filing of its 10-K. Long story, but from th3 release: "The Partnership is currently working with its lenders to waive or eliminate the requirement in the credit facility which states that the receipt of a going concern explanatory paragraph is considered an event of default."

    The longer story, which is kind of funny if you are morbid and don't own AZUR, is that AZUR has some debt coming due that it can't repay - it must find a way to refinance it. Based on that fact, the CPAs have told AZUR that they will add a "going concern" limitation to their opinion. But the going concern opinion is a violation of a debt covenant. So the fact that they will have to refinance (and the refi certainly isn't a slam-dunk in today's market) causes the going concern opinion which in turn causes the debt to be accelerated under the debt covenants. So the default is accelerated by the fact that they won't be able to repay the debt when it comes due. Kind of circular, but that's the story.

    I wish NRP would release the Q4 numbers and issue the 10-K so we can stop guessing the reason for the delay.


  • Reply to

    Book value $16.79

    by weekseventy434 Mar 7, 2016 1:16 PM
    jrad52 jrad52 Mar 8, 2016 10:18 AM Flag

    When it comes to MLPs especially, Yahoo's numbers are rarely right. They are all computer driven with no adjustments for different business structures. Their EV/EBITDA number, for example, is way off also.

  • I’ll see if this post takes.

    I just listened to the earnings call. I have criticized NEWT’s disclosures before, but I have to say that they disclose a whole lot on the call. Barry always sounds honest and doesn’t dance around questions and he makes you see the opportunities that NEWT has. So I’m staying.

    In no particular order:

    1. Net realized gain on controlled investments – NEWT didn’t sell anything. This is dividends received from controlled companies in excess of their earnings. $ 4.9 MM from 1 company, $ 500K from another. They pointed out that they do not count this in adjusted net investment income or earnings, they just include it in the NAV calculation.

    2. In the Q&A, they explained that they have reduced their write-down on the retained piece of the SBA loans from 5% to 2.5%. This resulted in a Q4 gain of $ 2.85 MM included in unrealized depreciation on SBA unguaranteed investments. This number has always been a loss, but reducing the write-down percentage caused this line to be a gain in Q4. I have to say that I didn’t catch this in any of the company’s presentations but it must be there because someone asked about it. Again, this does not affect net investment income, it only affects NAV.

    3. That reminds me – management’s presentation was pretty long and I figured they wouldn’t take many questions. I was wrong. They kept the call going until everyone’s questions were answered.

    4. The SBA loans they are making this year are much smaller in size than in prior years - $ 400K average loan in Q1 so far versus $ 900K last year. Technology makes this possible, I guess. They said smaller loans get better pricing and they are cheaper to process – the SBA requirements for smaller loans are less onerous. In this regard, they talked about coming out with an app for loans in the next 2 weeks. It really sounds like there is a great opportunity here. Loan referrals are running at 40% higher than last year. That’s dollar volume and (my comment now) if the average loans size is dropping, that must mean the number of loans is rising even faster.

    There’s more but those were the high points I caught.

  • Reply to

    Met coal related news

    by jrad52 Mar 7, 2016 9:57 PM
    jrad52 jrad52 Mar 8, 2016 9:11 AM Flag

    Just a suggestion - if you like US steel manufacturing, you might want to look at SXCP, another MLP. It buys met coal and converts it into coking coal under long-term, take or pay, contracts with 3 major US steel makers. It has been completely destroyed over the last year (similar to NRP) on concerns about their customers' survival and their living up to their contracts. Lots of issues, but SXCP currently yields 30%. I don't own it although I have owned it in the past.

    On the other side, the increased anti-dumping tariffs that were imposed on China do not apply to South Korean steel. I think the tariffs on Chinese steel are up 266% or some similar number. The tariffs on South Korean steel were raised less than 10%, and the US steel makers are upset about that because they think SK has been dumping its steel in the US just like the Chinese makers.


  • Reply to

    Book value $16.79

    by weekseventy434 Mar 7, 2016 1:16 PM
    jrad52 jrad52 Mar 7, 2016 10:08 PM Flag

    Closer to $ 10.

    You're ignoring AHGP's GP/IDR interest in ARLP and dividing the entire ARLP capital just by the LP units. That's wrong.

    Take a look at AHGP's financial statements, which consolidate ARLP and then carve out a noncontrolling interest for the public LP holders. AHGP says the book value attributable to the public LP holders (excluding AHGP's 42% ownership) is $ 442 MM. There are 43.1 MM units held by people other than AHGP, making the book value per share about $ 10.20.


  • From tonight’s Wall Street Journal site – “The price of iron ore jumped almost 20% on Monday as investors bet that China will stimulate its economy and buoy demand for the key steelmaking ingredient.”

    If iron ore prices rise, can met coal be far behind?

    Unfortunately, we don’t export much coal to China. In 2015, total coal exports to China were only 230,000 tons per the EIA, an 86% drop from 2014. Almost 100% of those tons were met coal.

    FWIW, it can't hurt.

  • Reply to


    by jrad52 Mar 7, 2016 4:33 PM
    jrad52 jrad52 Mar 7, 2016 7:34 PM Flag

    How did you get to 56 cents? The average shares outstanding for Q4 was 12,323,000. So 56 cents would be $ 6.9 MM of income. Net investment income for Q4 was $ 77,000 - basically break even. Realized gain on non-affiliate investments (I think that's the SBA securitizations) was $ 6.7 MM for Q4. So just those 2 items gets you to the 56 cents, I assume. But they also reported realized gains on controlled investments of $ 5.5 MM. I have absolutely no idea what that might represent, but you seem to be leaving it out of your EPS calculation. Are you? And if so, why? The rest of their gains and losses for Q4 are unrealized gains of $ 3.8 MM. I can see leaving that out.

    Would you care to share some of your numbers with us?

    BTW, Q4 income included much larger dividend income from the controlled companies than in prior quarters. That and the gain on some sale of a controlled investment make up a lot of the reported increase in net assets. I wonder how recurring these 2 Q4 numbers might be.

  • jrad52 by jrad52 Mar 7, 2016 4:33 PM Flag

    What company does an earnings release and doesn't give Q4 numbers? So we have to pull out the Q3 release and subtract that from the 12 month numbers they just released to figure out what happened in Q4? It looks like Q4 was pretty good - net increase in BV of $ 1.40 and net investment income of 4 cents. Although with the change in the number of shares outstanding, it's hard to tell the per-share numbers.

    But why do they make things hard? I assume tomorrow's call will have slides that break down Q4 separately; at least I hope so.

  • Reply to

    Trading 3/7/2016

    by ayscuew Mar 7, 2016 10:06 AM
    jrad52 jrad52 Mar 7, 2016 3:22 PM Flag

    You may be right. All we can do is guess. I'd just like to see the 10-K and get it over with.

  • Reply to

    Trading 3/7/2016

    by ayscuew Mar 7, 2016 10:06 AM
    jrad52 jrad52 Mar 7, 2016 1:07 PM Flag

    The more beaten down an energy stock has been recently, the bigger the bounce it has gotten since March began. LINE up 325%, BBEP, SXE, WLL all up 100% and NRP up 36%, probably because it's not a penny stock any longer.

    This is the most sustained bounce NRP has seen in a long time. Over the last few months, there have been 2 or 3 day bounces that moved NRP up 70% (Jan 21/22), 27% (just before Christmas) and that's about it. The other bounces up that NRP has seen in the last 6 months or so have only lasted 1 day. I doubt it is short covering; I don't think the short interest ever got high enough to matter. I would guess it's just people thinking the worst is over and that things might get better? I can't see that rationale applying to LINE or BBEP, though. Maybe pure speculation.

    Whatever it is, congratulations to anyone holding. Unless you just bought in this week, I assume you're still down, but you're down a lot less than you were this time last week.

    Now my latest speculation about the 10-K. I'm sure the delay relates to debt. Maybe it's good news and NRP will announce a restructuring of the debt. But I think the news release about giving out bonuses if the debt is refinanced or repaid was a message to the lenders that NRP is seriously intending to make the lenders whole. The only reason I can think for NRP to send that message is that they have tripped up on a covenant and need a waiver.

  • I just read that NRP's phones are not ringing, in addition to the web site being down. So I called the number on Yahoo's NRP Profile page and sure enough, no ringing at all and after you wait a minute or so, the call dies.

    Maybe their subject to some outage, who knows.

  • Reply to


    by ic4593 Mar 2, 2016 12:08 PM
    jrad52 jrad52 Mar 2, 2016 1:08 PM Flag

    You won't need NRP's web site to get the K-1. Taxpackagesupport is the site where the majority of K-1s are available. They show NRP as being available "early March". Most other K-1s have specific dates but not NRP.

  • Reply to


    by jrad52 Mar 1, 2016 4:38 PM
    jrad52 jrad52 Mar 2, 2016 11:01 AM Flag

    LINE announced today that it expects to violate its debt covenants because it is receiving a going concern opinion from its auditors. Apparently, LINE's debt contains a covenant that it will get clean opinions from the CPAs, so this causes the violation, and the violation causes all of its debt to become due now. LINE is negotiating a waiver from its lenders, which I assume ti will get. It owes so much money to its lenders that calling in the debt would be a disaster for everyone, including the lenders.

    I tried checking NRP's covenants but I can't see them all immediately. The credit agreement has been amended several times, and the amendments only show the changes; they don't show what hasn't been changed. So to see all the covenants, I'd have to go thru more SEC filings than I have time for just now. I have no idea if NRP's debt contains "clean opinion" covenants similar to LINE. I don't even know if that type of covenant is common, or if LINE is a special case.

    So I'm just posting and speculating, in the absence of the 10-K.

  • Reply to

    NRP website

    by fullerbuckyr Mar 2, 2016 6:11 AM
    jrad52 jrad52 Mar 2, 2016 8:14 AM Flag

    If by "wonky" you mean "down", yes. I don't try to access it often, but I can't get on it today.

  • The U.S. government announces tariffs of 266% on steel imports from China, with goods from Brazil, India, South Korea, Russia, Japan and the U.K. subject to smaller duties.

    It is the second time since December that the U.S. government has penalized foreign steel producers, including Chinese mills, for selling steel in the U.S. at unfairly low prices.

    Analysts say the duties may not fully satisfy U.S. producers, as the 6.9% rate for South Korea, the second-largest source of the products, was far below what the industry alleged.

  • jrad52 by jrad52 Mar 1, 2016 4:38 PM Flag

    Can anyone suggest possible reasons for the delay in issuign Q4 numbers and filing the 10-K? By now the cash numbers are long finished, so the only things I can think of are noncash or legal items, such as:

    Write-downs of assets - I can't think that this would be a big issue because the Q3 write-down was so large.

    Additional liabilities or problems with liabilities - NRP doesn't have the kind of balance sheet that would have undisclosed liabilities (like asbestos or things like that). Maybe they have violated a debt covenant and are having problems with getting a waiver? That is actually my best bet today. Maybe the contingent liability to Anadarko for the Ciner purchase is kicking up? I don't think so.

    Legal problems - maybe the CPAs are giving NRP a problem with their opinion? This could tie into the debt covenant possibility.

    Does anyone have any other ideas/guesses? They are 2 weeks later than normal for the Q4 release and I can't figure out why.

19.8096-0.1566(-0.78%)1:42 PMEDT