Old and still drinking water and eating dry white toast.
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Average Cost is current at $12.409. I bought in at $19.65 (382 shares), and then at $8.25 (120 shares) and $5.00 (218 shares). Fifty shares received from Dividends over the years.
No other Oil or Gas Investments.
The preferred shares are half the price, and the poison pill
option makes them better than the common shares....IMHO
PLUS the 2010 conversion are one to one from preferred to common shares, and the anti-takeover is $1 Million dollars payable to the preferred shareholders.
A BRIEF HISTORY OF CANADIAN INCOME TRUSTS
In the late 90s, Canadian economic reforms spawned an ideal business structure to encourage economic development of barely profitable energy assets, the Energy Income Trust (aka Canadian Royalty Trust, or Canroy). It was a smashing success for creating wealth and prosperity because:
1. It created a new way for income investors to play energy. Like Master Limited Partnerships and S-Corporations in the U.S., there was no tax at the entity level, with income and expense passed straight through to the unit holders. Distributed income was a deductible expense.
Thus the trusts could get a much higher proportion of their income to investors than corporations. Income not needed for ongoing operation and development went to the investors, usually 60%-70% of distributable income. While these distributions were less steady than those of large energy producers because they varied directly with energy prices, the far higher yields (typically 3-4 times higher) justified the risks. Individuals, pension funds, and other income oriented investors piled seeking exceptionally high returns poured in.
2. It spurred growth in energy development. It allowed capital-hungry exploration companies holding mature oil and gas properties to monetize those assets by selling them for cash to these trusts. The explorers could now afford the billions in capex needed to rapidly expand production via:
a. Investing in equipment to extend the useful lives of more inaccessible sources
b. Drill and upgrade “probable” reserves to “proven” ones and thus extend the reserve lives of these energy trusts
3. It helped grow the Canadian economy. It attracted billions from income investors for expansion of energy production industry, one of the mainstays of the Canadian economy. Rising energy prices made these investments more profitable, compounding the growth of the Canadian energy industry and its contribution to the economy.
Soon, other mature corporations that could not attract growth investors realized that they too could attract income investor funds by converting to income trusts. As regular corporations, any dividends they paid were subject to an onerous 41% withholding tax. The size of income trust industry grew from a few billion to $80 billion.
Fearing a reduction in tax revenue (for “necessary” government programs) if this movement continued, the ruling Conservative party broke its promise to leave the trusts alone and on Halloween night 2006 truly kept with the scary tone of the date and announced changes that will force trusts to convert to corporations and be taxed at much higher rates discussed below. Overnight, $20 billion was frightened away from the trusts, as was an undetermined amount of future energy development. Prices recovered due to rising energy prices, but have since receded to decade lows, due to both energy price declines and the impending higher tax and uncertainty it creates about ultimate yields on each individual trust.
Why they didn’t simply reduce the high taxation on corporate dividends and continue to encourage investment and growth is beyond the scope of this article. They did it.
6. WHAT THE NEW TAX MEANS FOR INVESTORS IN CANADIAN INCOME TRUSTS
So, now what?
Since I’m writing for investors not accountants, I’ll minimize the technical aspects and focus on the ramifications for investors. Consult your tax advisor for details regarding your specific situation.
Assuming the legislation remains in its current form (?), here are the key points.
A. The Worst Case Scenario
The total federal and provincial tax on distributions will be 29.5% in 2011, and 28% in 2012.The tax will apply only to distributions of income, not to returns of capital. Most trust distributions are considered qualified dividends for U.S. investors and thus are taxed at 15%.
It’s unclear as of this writing how much, if any, of the Canadian tax could be treated as a tax credit for U.S. investors. The IRS does give a tax credit via filing form 1116 for the current 15% Canadian withholding tax for foreign investors. If that’s any guide, U.S. investors can expect at least some relief to get them closer to the 15% qualified dividends level.
I haven’t gotten clarification as of this writing. Has anyone heard anything definitive about U.S. tax credits for Canadian taxes withheld on dividends of U.S investors when that tax rises above 15% in 2011?
Thus the worst case scenario for U.S. investors is a total tax increase on distributions close to about 30%. Does 70% of the current yield seem acceptable to you? If so, read no further. In fact, for many trusts bought at current prices and distributions, the yield is still relatively high for the risk involved.
B. The Likely Case
The good news is that none of the trusts I’ve mentioned expect to be paying anything close to the worst case rate, due to one or more of the above factors. At a 2007 Money Show in Washington, one trust claimed it would pay only around 6.5% tax.
The actual tax paid will vary with each individual trust. For full details, consult the Management’s Discussion and Analysis of recent financial statements available on each trust’s web site.
C. The Key Variables
The main factors that will ultimately determine the tax on each trust include:
Tax Pools: Many trusts have tax pools that will keep the tax low for a number of years, depending on the type and amount of tax pools.
Depreciation and other non-cash deductible expenses: To the extent that cash distributions exceed taxable income, these distributions become tax exempt “returns of capital” (though these returns of capital reduce your cost basis and thus possibly increase tax on capital gains if any exist when you sell the shares). Some trusts have higher depreciation and other non cash expenses than others, so more of their distribution will be exempt from tax. For example, the below mentioned Great Lakes Hydro Income Fund (GLHIF.PK) has a distribution that is about half return of capital due to its huge depreciation expenses, thus cutting its tax bill in half without even considering tax pools or foreign energy production.
Foreign production: Others like Vermillion Energy Trust (VETMF.PK) have production assets outside of Canada. Revenues from these are exempt from tax. Expect all others to at least consider this option, which bodes well for development in the nearby and familiar U.S., at the expense of Canada.
Certain high yielders are exempt from the new tax, such as previously covered Atlantic Power Corporation (ATPWF.PK). It’s a Canadian company, but it’s organized as a corporation issuing income deposit securities, not as a trust. REIT income trusts are specifically exempt from the new tax, like soon to be discussed Canadian Apartment Properties REIT (CDPYF.PK), Northern Property REIT (NPRUF.PK), RIOCAN REIT (RIOCF.PK).
All will be seeking to exploit the above and any other means to reduce their tax bill.
D. Yield and Price Appreciation Matter More than Tax
Remember that for those buying at current decade-plus low prices and distributions, when energy prices recover to 2008 highs and beyond, the yields and prices on these will also recover, meaning between two to three times increase from current levels, making even the worst case tax far more palatable.
For example, if current distribution share price were $100 and the annual distribution is $10, worst case it becomes $5.50 (combined 30% Canadian and 15% U.S with no U.S. tax credit). With all other factors (production levels, expenses, etc) remaining the same, a recovery to 2008 levels brings that $5.50 to anywhere from $11 to $16.50 (i.e. 11%-16.5%) and the share prices also rising 200-300%. Some of these energy trusts, like Provident Energy Trust (PVX) have fallen 4 to 5 times, and thus could see an increase of that same magnitude.
E. Possible Future Scenarios
Hey, 2 years is a long time in politics. It’s possible there will be future tax changes on at least some trusts due to:
Pressure to increase investment in energy production.
Preferential tax treatment worked before. Yes, $200/barrel oil prices would also do the trick, but no one wants the economic damage that the implied supply shortages entail, at least not if they can avoid it with intelligent energy policy.
Pressure from Retirees and their pension funds: A growing population of retirees hungry for yields causes further tax reduction on trusts. Indeed, the trusts were a factor in the greater health Canada’s pension funding.
Takeovers from foreign companies: Continued share price weakness could lead to foreign takeovers of some of these trusts, as happened with PWI. It’s unclear how foreign ownership would affect their tax status, and even if it did lower the tax burden, how the Canadian government would respond to a wave of foreign takeovers.
Link - http://seekingalpha.com/article/129059-2011-a-canadian-tax-odyssey-canadian-income-trust-investors-guide
Yep, I've been in for a couple of years. Holding the shares in my ROTH (319 shares) and 401K (447 shares) retirement accounts. I have no reason to sell now or in the future.
"Schemes of arrangement can also be used to entirely eliminate very long term obligations. For example, insurance companies may use them to compel policy holders to accept a one-off payment in return for putting an end to future claims that might still arise on past policies."
"When used to reach a compromise with creditors, a scheme of arrangement can keep a company trading rather than being liquidated, which benefits both creditors (assuming it is worth more as a going concern than its assets would be) and shareholders."
Link - http://moneyterms.co.uk/scheme-of-arrangement/
I started doing research on enriched Artemia biomass last night, interesting subject matter.
The key is having a control farming environment for growing the biomass on a small scale and being able to maintain the quality controls during the scaling of the farming operation.
This year I need to finish the HOUSE and control the CASH flow.
Operators are standing by for answers to your questions...
Note the following:
1. "It is anticipated that any further distributions...will occur within 12 months..." Emphasis on "anticipated"
2. a small number of contingent assets which may result in further realizations for the estate in the future....Emphasis on realizations, which implies more than two realization.
3. "...an additional distribution...may be made..." Emphasis on "may" to the Preferred Shareholders, which is the FIRST realization.
4. a small number of contingent assets which may result in further realizations for the estate in the future....Emphasis on the estate, which includes both Preferred and Common SHAREHOLDERS.
Please note the following IMHO:
5. The Second realization and distribution, may be made to the Common Shareholders..." Emphasis on "may".
You have mail
Here's the LINK that I found for a FIELD BIN with DRAINAGE. I need to measure my GARAGE and PATIO to see how many I can layout within the space.
LINK:
http://www.rotonics.com/material-handling/bulki-tanks.html
All you need is a Large Residential Garage (20 by 20) and Patio (15 by 20) for your shrimp farming operation.
Do you have the Storage Tanks already or will these need to be purchased?
How much space do you require for this year's operation?
I'm sure that we can come to a reasonable LAND LEASE AGREEMENT that will support your SHRIMP FARMING ENTERPRISE.
Yes we own the Land.
The Land been in the Family for the last thirty five years, a House and Garage was build on one of the 5 acre parcel, with hopes to develop the other 15 acres. ( A fire burned down the HOUSE and GARAGE in 1998, and it's been RAW Land since 1998)
The Land is currently being held in a Family Trust for our Dad, and I've been paying the property taxes for the last three years.
It's not a Shrimp Farm now, but with the RIGHT person it can be turned into one.
Do you want to LEASE the LAND for SHRIMP farming?
The LAND is owned FREE and CLEAR, and the property taxes are about $1000 dollars per year.
The water is FREE, the only cost is the electricity for the water pumps.
http://www.shrimpnews.com/index.html
Can you use about twenty acres to farm your shrimp?
So it would seem that China is trying to be added on the next five-year review in 2010.
The SDR is an international reserve asset, created by the IMF in 1969 to supplement the existing official reserves of member countries.
http://www.imf.org/external/np/exr/facts/sdr.htm
SDR valuation
The value of the SDR was initially defined as equivalent to 0.888671 grams of fine gold—which, at the time, was also equivalent to one U.S. dollar. After the collapse of the Bretton Woods system in 1973, however, the SDR was redefined as a basket of currencies,today consisting of the euro, Japanese yen, pound sterling, and U.S. dollar. The U.S. dollar-value of the SDR is posted daily on the IMF's website. It is calculated as the sum of specific amounts of the four currencies valued in U.S. dollars, on the basis of exchange rates quoted at noon each day in the London market.
The basket composition is reviewed every five years to ensure that it reflects the relative importance of currencies in the world's trading and financial systems. In the most recent review in November 2005, the weights of the currencies in the SDR basket were revised based on the value of the exports of goods and services and the amount of reserves denominated in the respective currencies which were held by other members of the IMF. These changes became effective on January 1, 2006. The next review by the Executive Board will take place in late 2010.
Happy 5th, glad to see the death of the FX trading robots.
Learned a great way to remove ANTs from the cat's food, place the food in a large freezer bag, freezer the ants, and then remove the food from the bag....
It could be the shrimps are too small
Just drinking FREE coffee and collecting the Div checks...no more no less.
No me, I've been busy working on my San Diego house for the last three months.
I accepted a contingency job offer based upon a government contract approval in the San Diego area.
I've betting that Tempy bought them
Yes.....
...watching from the sidelines for now.
Will New York private equity firm CCMP Capital Advisors LLC get some competition for Eddie Bauer?
It’s hard to say. But it is noteworthy that Gordon Brothers Group LLC is closely following Eddie Bauer’s Chapter 11 bankruptcy case.
The Boston–based company that restructures and liquidates retail assets has notified the U.S. Bankruptcy Court in Delaware that it wants to kept abreast of the case.
Gordon Brothers was one of the companies said to be interested in buying Eddie Bauer’s assets before the Bellevue-based retailer filed for bankruptcy protection June 17. In April distressed Northwest retailer Joe’s Sports & Outdoor sold its assets to Gordon Brothers and closed 31 stores.
CCMP Capital has made an offer to buy Eddie Bauer’s assets for $202 million. But that offer is just an opening bid in an auction that will be overseen by a bankruptcy court judge.
The Eddie Bauer bankruptcy case also is drawing intense interest from many of the company’s nearly 38,000 potential creditors, including landlords, utilities and governments worried about potentially losing tax revenues if Eddie Bauer closes any of its 370 stores.
The END is NEAR
for the EBH shareholders
The END is near....
Yes, please keep your distance during the cooties outbreak....
GUYS
She's got FX-cooties
GIRLS
...FX-Cooties
AMBER
Nobody want to sit by her
GUYS
She's got FX-cooties
GIRLS
...FX-Cooties
AMBER
She don't need a coat
'Cause she's got fur!
Circle, circle,
ALL
Dot, dot, dot
AMBER
Hurry, get your FX-cootie shot!
"Come on everybody, let's stamp 'em out!"
GUYS
She's got FX-cooties
GIRLS
...FX-Cooties
AMBER
She's just as friendly as can be
GUYS
She's got FX-cooties
GIRLS
...FX-Cooties
AMBER
She shows them FX-cootie hospitality
GUYS
She's got FX-cooties
GIRLS
...FX-Cooties
Time to take a Margarita Bath....
I made $5K on the first 2001 dead Trenwick (TWK) cat bounce and then gave back $35K on on the second 2002 dead cat bounce.
Another two lost in the last two days....
...time to bring out the dancing girls
Hopefully the next Trainwreck 8K new release will be like a kindergarten sports day where everybody wins.
Yes, but it's still over 100 - the next 8k will push it over 200.
I ate the red pill years ago when I bought the Trainwreck, it opened my eyes up to the true Reinsurance Industry....a form of legalized MONEY Laundering on a global scale.
Should of took the blue pill.
On his way to the market, the boy met a stranger.
"I will give you five magic beans for your cow," the stranger offered.
Jack was unsure and hesitated for a while but then, enticed by the idea of such an extraordinary deal, he decided to accept.
It may be better to look for a few magic mushrooms to push the Trainwreck back on it's train tracks....
....I finally have a REAL internet connection after 4 months of down time....no more driving to the LIBARY for the FREE internet connection
Happy Birthday - P
Just use some DUCT TAPE to close the wound
I restored them as I type....
Good to see your still alive and trading
I have two Cat's for sale - how many shares can I buy?