ritrading

Thanks for that. I'm having some trouble wrapping my head around this statement. "The increase in tax provision was due to the impairment of long-lived intangible assets that reduced the deferred tax liabilities (“DTLs”) and related deferred tax expense for 2013." Is this saying that they've recognized an impairment loss for the said asset in the current quarter, and as a result requires decreasing the estimated tax losses in the future quarters? I guess it makes sense if I really think it through... amazing how there seems to be an unlimited number of ways net income can be manipulated. I see the 14.9M writeup in 2012 and then the same 14.9M written back down in 2013.

https://www.sec.gov/Archives/edgar/data/1041657/000114420415009981/v400218_10k.htm, page 49 I've been looking at Radio One and noticed that their interest expense is bigger than their operating profit. I thought this would mean they wouldn't be paying taxes, but doesn't appear to be the case in the past couple of years. What's going on here? I can see how this might happen in a multi national corporation with different divisions having profits and others having losses, but doesn't seem to be the case here.

Just have a quick question. I'd like to start researching stocks on the London stock exchange. Do they have something like SEC's Edgar for filings?

I recently read in the Series 56 exam material that when a stock pays a stock dividend, the existing options contracts will not be modified. Effectively, this will likely require the holder of an in the money contract to exercise early, similar to how it may be optimal to exercise early before a cash dividend. I don't have access to the reading material anymore though, was hoping someone knows of a reliable source.

I'm a little fuzzy on this. GCI is due for a spinoff on a record date Jun 22nd. If I own a Jul call option, what will happen to the option? After the spinoff, will I still only have the GCI option or will I get some 1 for 2 TEGNA options as well?

There's that other option that seems to be implicitly taken during inaction. Let the dollar gradually devalue via inflation so that everyone can continue to receive their nominal payments. Paid for by the dilution of buying power from anyone making an effort to save money.

Could allowing liabilities to go unfunded be though of as an alternative to issuing debt? With interest rates this low, it's been a prime time to issue debt. But perhaps the friction from underwriting fees could be eliminated by allowing some other liabilities for which the funding would have went to to grow instead. As for existing portfolios of bonds getting a one time windfall capital gains due to falling interest rates, how much of it is really meaningful and how much of that is being held to maturity?

It's more correct for you to subtract both interest and taxes. As mentioned in my other reply, EBITDA-MCX without accounting for interest and taxes is only appropriate if you plan on modifying the company's capital structure to remove their debt, and reincorporating the company in another country to remove the tax expense. If you use EBITDA - MCX without being able to perform the needed restructuring, you will be overvaluing the company since the interest and tax expenses still exist. Such a valuation describes an optimal scenario which management may not achieve for you.

There are definitely uses for these metrics. They are appropriate when used in the correct environment and context. Such metrics would be useful for someone internal to the company in an effort to increase ROE, for example. But as Buffett advocates, the path of least resistance is to invest a company which is already well run than to hope for a weaker one to turn around.

It is inappropriate for most people to use such measures like op income - maintenance capex or Enterprise value. Op income does not include interest expense, which is a real expense. It is an expense which is here to stay unless you can change the capital structure of the company. It is not easily done, and it is only appropriate to look at if you're actually planning to alter the capital structure via a buyout or influencing the board of directors. Taxes are a real expense too. Companies have in the past been able to re-incorporate themselves in countries in lower tax rates, or have international operations which they can use to leverage the dilution of taxes. For everyday investors like the most of us, who do not have the power to enact such changes, it's best not use measures which leave out specific expenses. If you do, then you're making a bet that someone in the near future will attempt such restructuring for you, and that they are also successful. If this does not work out as planned, then the margin of safety would be reduced by using a more aggressive valuation. Attempting to predict such events is beyond the scope of how I invest, but it would indeed be appropriate analysis for a firm intending to acquire / influence a target in such a manner.