book value zero but valued on cashflow/earnings. Like being underwater on a house (on paper) but still earning rents - if price never recovers net of depreciation then u lose someday
thanks...now my head is really spinning...they are definitely clearing the deck...big haircut to assets...implies a div cut for sure. why the bankers gave the go ahead on buybacks, i have no idea (set the noose?)....looks to me like they are going to sell off (in some manner) non-perf. assets (BL, coal...) at written down price to pay down debt betting on USIO ... equity has zero book but stock will trade on projected earnings/CF.
surf - the writedown was after tax so actual writedown to assets was $8+bn (2+bn tax asset created). so net only 2.5bn in value according to your numbers - not enuf to cover debt. they are now at the mercy of whoever is going to provide liquidity financing.
they are at the mercy of the bankers. my guess is they are going to arrange some PE financing, which will be secured top of the stack. they will take their chunk of flesh. you get whats leftover.
surf - the 6bn is the writedown after tax. the likely tax impact is 2bn, 1 of which offsets their tax defered liability. So net only 1bn over 15 years so ~65mn/annum
by a brand new author...and such a cutie....whatever happened to Adam Glanz, the guy pumping CLMT back in the spring...oh right, he stopped publishing once the pumping scandal on SA was discovered
have u looked at gas cracks? they are in the dumpster and are heading to single digits. Oil is dropping but RBOB is dropping faster...
ahh wall street upgrade and a new seeking alpha article written by a new pumper.. where's adam glanz....just in time for a secondary....lets get this over 30!
currently they have a (deferred) tax liability that has been coming down of late with negative earnings (e.g., its 1bn now but was 1.15 at ye)
they state that writedown of $6bn was after tax so wouldn't that imply they took a $8bn hit to their properties and created a $2bn tax asset?
no - they have a deferred tax liability on their books for $1bn, any remainder ends up as a deferred asset used against future earnings.
according to 8k: "Cliffs Natural Resources Inc. (NYSE: CLF) today announced that it expects to record a non-cash impairment of its long-lived assets of approximately $6 billion, after tax, "
how do we read that? Is the actual write down to their properties 8bn with a 2bn tax asset created?
the impairment was after tax so how does that work? Sounds to me like they took a larger writedown to PP&E but that their deferred tax liability will get zeroed out ...how do u get $10?