Cleveland Cliffs Inc (CLF)

[sts66]

What do you think about the just announced MSB 45 cent distribution vs. last year's 55 cents? Some commentary from Yahoo I don't quite understand, especially item 2 about adjustments:

Quick positives that I took from the two (2) releases yesterday:
1) $.45 was declared and will be payable on 05/20/18. This in line with everyone's forecasts and there no were adjustments.
2) The "Accrued Income Receivable" of $1,956,091 was nice to see and, if it holds up throughout the first calendar quarter of 2019, represents $.149 per unit, owing to positive price adjustments. My rough calculations indicate that this accrual is about $.13 per unit more than the royalty due solely on January shipments (using 70,000 long tons) at $90.00 per ton. I'm not quite sure whether the adjustments will be paid on the forthcoming royalty payment, but we'll certainly find out in the upcoming CLF Royalty Report and Payment. The 8-K should be released in the last week of April, definitely by 05/01/18, so we'll know then. If these positive adjustments hold up and are immediately payable, my estimates indicate there's a chance we could receive somewhere between $.16 and $.20 per unit, which compares favorably with the $.16 distribution paid last August. As always, I reserve the right to be 100% wrong about this.

As points of reference, taken from the 10-K:

1) Accrued Income Receivable. The $933,101, or 95.4%, decrease in the accrued income receivable portion of the Unallocated Reserve is the result of pricing adjustments recognized in the last month of the fiscal year ended January 31, 2017, as compared to the fiscal year ended January 31, 2016. (see page 16)

2) During the fourth quarter of fiscal 2018, positive price adjustments were recorded by Mesabi Trust and added to accrued income receivable due to price adjustment mechanisms in the agreements between Cliffs and its customers that determine the final sales price of the shipments from Northshore with respect to certain shipments during calendar year 2017. During the fiscal year ended January 31, 2017, negative price adjustments were recorded by Mesabi Trust as deferred royalty revenue due to price adjustment mechanisms in the agreements between Cliffs and its customers that determine the final sales price of the shipments from Northshore with respect to shipments during calendar year 2016. As of January 31, 2018, the Trust recognized revenue related to approximately 1,068,786 tons of iron ore that were shipped by Northshore as of December 31, 2017, but for which Cliffs has indicated that final pricing was not yet known. Pricing related to these shipments is expected to be finalized in the first quarter of calendar 2019. (see page 17)