Document_and_Entity_Informatio
Document and Entity Information Document | 3 Months Ended |
Mar. 31, 2014 | |
Document and Entity Information [Abstract] | ' |
Document Type | '10-Q |
Document Period End Date | 31-Mar-14 |
Amendment Flag | 'false |
Entity Registrant Name | 'LinnCo, LLC |
Entity Central Index Key | '0001549756 |
Current Fiscal Year End Date | '--12-31 |
Entity Well-known Seasoned Issuer | 'Yes |
Entity Voluntary Filers | 'No |
Entity Current Reporting Status | 'Yes |
Entity Filer Category | 'Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 128,503,236 |
Document Fiscal Year Focus | '2014 |
Document Fiscal Period Focus | 'Q1 |
BALANCE_SHEETS_Unaudited
BALANCE SHEETS (Unaudited) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash | $1,048 | $1,045 |
Accounts receivable – related party | 651 | 11,218 |
Income taxes receivable | 12,849 | 12,849 |
Deferred income tax | 698 | 639 |
Total current assets | 15,246 | 25,751 |
Noncurrent assets: | ' | ' |
Investment in Linn Energy, LLC | 3,516,087 | 3,639,768 |
Total noncurrent assets | 3,516,087 | 3,639,768 |
Total assets | 3,531,333 | 3,665,519 |
Current liabilities: | ' | ' |
Accounts payable | 804 | 11,298 |
Total current liabilities | 804 | 11,298 |
Noncurrent liabilities: | ' | ' |
Income taxes liability | 8,983 | 8,983 |
Deferred income tax | 745,712 | 757,444 |
Total noncurrent liabilities | 754,695 | 766,427 |
Contingencies (Note 8) | ' | ' |
Shareholders’ equity: | ' | ' |
Voting shares; unlimited shares authorized; 1 share issued and outstanding at March 31, 2014, and December 31, 2013 | 1 | 1 |
Common shares; unlimited shares authorized, 128,503,236 shares issued and outstanding at March 31, 2014, and December 31, 2013 | 3,868,387 | 3,868,387 |
Additional paid-in capital | 37,029 | 36,247 |
Accumulated deficit | -1,129,583 | -1,016,841 |
Total shareholders' equity | 2,775,834 | 2,887,794 |
Total liabilities and shareholders’ equity | $3,531,333 | $3,665,519 |
BALANCE_SHEETS_Unaudited_Paren
BALANCE SHEETS (Unaudited) (Parenthetical) | Mar. 31, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Voting shares: issued | 1 | 1 |
Voting shares: outstanding | 1 | 1 |
Common shares: issued | 128,503,236 | 128,503,236 |
Common shares: outstanding | 128,503,236 | 128,503,236 |
STATEMENTS_OF_OPERATIONS_Unaud
STATEMENTS OF OPERATIONS (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Income Statement [Abstract] | ' | ' |
Equity loss from investment in Linn Energy, LLC | ($30,541) | ($21,272) |
General and administrative expenses | -734 | -11,767 |
Loss before income taxes | -31,275 | -33,039 |
Income tax benefit | 11,791 | 14,820 |
Net loss | ($19,484) | ($18,219) |
Net loss per share, basic and diluted | ($0.15) | ($0.52) |
Weighted average shares outstanding | 128,503 | 34,788 |
Dividends declared per share | $0.73 | $0.71 |
STATEMENT_OF_SHAREHOLDERS_EQUI
STATEMENT OF SHAREHOLDERS' EQUITY (Unaudited) (USD $) | Total | Shares [Member] | Share Amount [Member] | Additional Paid-in Capital [Member] | Accumulated Income (Deficit) [Member] |
In Thousands, unless otherwise specified | USD ($) | USD ($) | USD ($) | USD ($) | |
Beginning of period at Dec. 31, 2013 | $2,887,794 | ' | $3,868,388 | $36,247 | ($1,016,841) |
Beginning of period (in shares) at Dec. 31, 2013 | ' | 128,503 | ' | ' | ' |
Increase (Decrease) in Partners' Capital [Roll Forward] | ' | ' | ' | ' | ' |
Capital contributions from Linn Energy, LLC | 782 | ' | 0 | 782 | 0 |
Dividends to shareholders | 93,258 | ' | 0 | 0 | 93,258 |
Net loss | -19,484 | ' | 0 | 0 | -19,484 |
End of period at Mar. 31, 2014 | $2,775,834 | ' | $3,868,388 | $37,029 | ($1,129,583) |
End of period (in shares) at Mar. 31, 2014 | ' | 128,503 | ' | ' | ' |
STATEMENTS_OF_CASH_FLOWS_Unaud
STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Cash flow from operating activities: | ' | ' |
Net loss | ($19,484) | ($18,219) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ' | ' |
Equity loss from investment in Linn Energy, LLC | 30,541 | 21,272 |
Noncash general and administrative expenses paid by Linn Energy, LLC | 734 | 11,767 |
Deferred income taxes | -11,791 | -14,820 |
Cash distributions received | 93,228 | 25,221 |
Net cash provided by operating activities | 93,228 | 25,221 |
Cash flow from financing activities: | ' | ' |
Dividends paid to shareholders | -93,225 | -24,699 |
Net cash used in financing activities | -93,225 | -24,699 |
Net increase in cash and cash equivalents | 3 | 522 |
Cash and cash equivalents: | ' | ' |
Beginning | 1,045 | 523 |
Ending | $1,048 | $1,045 |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Basis of Presentation | ' |
Basis of Presentation | |
Nature of Business | |
LinnCo, LLC (“LinnCo” or the “Company”) is a Delaware limited liability company formed on April 30, 2012. LinnCo’s initial sole purpose was to own units representing limited liability company interests (“units”) in its affiliate, Linn Energy, LLC (“LINN Energy”). In connection with the acquisition of Berry Petroleum Company (“Berry”) (see Note 2), LinnCo amended its limited liability company agreement to permit, among other things, the acquisition and subsequent transfer of assets to LINN Energy for consideration received. As of March 31, 2014, LinnCo had no significant assets or operations other than those related to its interest in LINN Energy. LINN Energy is an independent oil and natural gas company that trades on the NASDAQ Global Select Market under the symbol “LINE.” At March 31, 2014, LINN Energy’s last reported sales price per unit, as reported by NASDAQ, was $28.32 and the Company owned approximately 39% of LINN Energy’s outstanding units. | |
Principles of Reporting | |
The information reported herein reflects all normal recurring adjustments that are, in the opinion of management, necessary for the fair presentation of the results for the interim periods. Certain information and note disclosures normally included in annual financial statements prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) have been condensed or omitted under Securities and Exchange Commission (“SEC”) rules and regulations; as such, this report should be read in conjunction with the financial statements and notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. The results reported in these unaudited financial statements should not necessarily be taken as indicative of results that may be expected for the entire year. | |
Investments in noncontrolled entities over which the Company exercises significant influence are accounted for under the equity method. | |
Reimbursement of LinnCo’s Costs and Expenses | |
LINN Energy has agreed to provide to LinnCo, or to pay on LinnCo’s behalf, any legal, accounting, tax advisory, financial advisory and engineering fees, printing costs or other administrative and out-of-pocket expenses incurred by LinnCo, along with any other expenses incurred in connection with any public offering of common shares representing limited liability company interests (“shares”) in LinnCo or incurred as a result of being a publicly traded entity. These expenses include costs associated with annual, quarterly and other reports to holders of LinnCo shares, tax return and Form 1099 preparation and distribution, NASDAQ listing fees, printing costs, independent auditor fees and expenses, legal counsel fees and expenses, limited liability company governance and compliance expenses and registrar and transfer agent fees. In addition, LINN Energy has agreed to indemnify LinnCo and its officers and directors for damages suffered or costs incurred (other than income taxes payable by LinnCo) in connection with carrying out LinnCo’s activities. Because all general and administrative expenses and certain offering costs are actually paid by LINN Energy on LinnCo’s behalf, no cash is disbursed by LinnCo. | |
For the three months ended March 31, 2014, LinnCo incurred total general and administrative expenses of approximately $734,000, of which approximately $83,000 had been paid by LINN Energy on LinnCo’s behalf as of March 31, 2014. The expenses for the three months ended March 31, 2014, include approximately $470,000 related to services provided by LINN Energy necessary for the conduct of LinnCo’s business, such as accounting, legal, tax, information technology and other expenses. In addition, during the three months ended March 31, 2014, LINN Energy paid approximately $11 million on LinnCo’s behalf for general and administrative expenses incurred by LinnCo in 2013. | |
For the three months ended March 31, 2013, LinnCo incurred total general and administrative expenses and certain offering costs of approximately $12 million, of which approximately $2 million had been paid by LINN Energy on LinnCo’s behalf as of March 31, 2013. The expenses included approximately $11 million of transaction costs related to professional services rendered by third parties in connection with the Berry acquisition. The expenses also included approximately $462,000 related to services provided by LINN Energy necessary for the conduct of LinnCo’s business, such as accounting, legal, tax, information technology and other expenses. | |
Dividends | |
Within five (5) business days after receiving a cash distribution related to its interests in LINN Energy units, LinnCo is required to pay the cash received, net of reserves for its income tax liability (“tax reserve”), if any, as dividends to its shareholders. The amount of the tax reserve is calculated on a quarterly basis and is determined based on the estimated tax liability for the entire year. The current tax reserve can be increased or reduced, at Company management’s discretion, to account for the over/(under) tax reserve previously recorded. Because the tax reserve is an estimate, upon filing the annual tax returns, if the actual amount of tax due is greater or less than the total amount of tax reserved, the subsequent tax reserve, at Company management’s discretion, could be adjusted accordingly. Any such adjustments are subject to approval by the Company’s Board of Directors (“Board”). | |
Use of Estimates | |
The preparation of the accompanying financial statements in conformity with GAAP requires management of the Company to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amount of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of income and expenses. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Such estimates and assumptions are adjusted when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ from these estimates. Any changes in estimates resulting from continuous changes in the economic environment will be reflected in the financial statements in future periods. | |
Accounting for Investment in Linn Energy, LLC | |
The Company uses the equity method of accounting related to its ownership interest in LINN Energy’s net income (losses). The Company records its share of LINN Energy’s net income (losses) in the period in which it is earned. At March 31, 2014, the Company owned approximately 39% of LINN Energy’s outstanding units. The Company’s ownership percentage could change as LINN Energy issues or repurchases additional units. Changes in the Company’s ownership percentage affect its net income (losses). | |
At March 31, 2014, the carrying amount of the Company’s investment in LINN Energy exceeded the Company’s ownership interest in LINN Energy’s underlying net assets by approximately $1.3 billion. The difference is attributable to proved and unproved oil and natural gas properties, senior notes and equity method goodwill. These amounts are included in “investment in Linn Energy, LLC” on the balance sheet and are amortized over the lives of the related assets and liabilities. Such amortization is included in the equity income from the Company’s investment in LINN Energy. Equity method goodwill is not amortized; however, the investment is reviewed for impairment. Impairment testing is performed when events or circumstances warrant such testing and considers whether there is an inability to recover the carrying value of an investment that is other than temporary. As of March 31, 2014, no impairment had occurred with respect to the Company’s investment in LINN Energy. |
Capitalization
Capitalization | 3 Months Ended | |||
Mar. 31, 2014 | ||||
Equity [Abstract] | ' | |||
Capitalization | ' | |||
Capitalization | ||||
LinnCo’s authorized capital structure consists of two classes of interests: (1) shares with limited voting rights and (2) voting shares, 100% of which are currently held by LINN Energy. At March 31, 2014, LinnCo’s issued capitalization consisted of $3.9 billion in shares and $1,000 contributed by LINN Energy in connection with LinnCo’s formation and in exchange for its voting share. LinnCo is authorized to issue an unlimited number of shares and voting shares. Additional classes of equity interests may be created upon approval by the Board and the holders of a majority of the outstanding shares and voting shares, voting as separate classes. | ||||
Berry Acquisition | ||||
On December 16, 2013, the Company completed the transactions contemplated by the merger agreement between the Company, LINN Energy and Berry under which LinnCo acquired all of the outstanding common shares of Berry and the contribution agreement between the Company and LINN Energy, under which the Company transferred Berry to LINN Energy in exchange for LINN Energy units. Under the merger agreement, as amended, Berry’s shareholders received 1.68 LinnCo common shares for each Berry common share they owned, totaling 93,756,674 LinnCo common shares valued at approximately $2.7 billion. Under the contribution agreement, LinnCo transferred Berry to LINN Energy after which Berry became an indirect wholly owned subsidiary of LINN Energy. As consideration for the transfer of Berry to LINN Energy, the Company acquired 93,756,674 newly issued LINN Energy units, valued at approximately $2.8 billion and equal to the number of LinnCo shares issued as consideration for Berry. | ||||
On the Berry acquisition date, the Company transferred Berry to its affiliate, LINN Energy. Accordingly, the assets, liabilities and results of operations of Berry are not included in the Company’s financial statements. The acquisition of 93,756,674 LINN Energy units, which are equal to the number of LinnCo shares issued as consideration for Berry, increased the Company’s ownership of LINN Energy’s outstanding units from approximately 15% to approximately 39%. | ||||
The following unaudited pro forma financial information presents a summary of the Company’s results of operations for the three months ended March 31, 2013, assuming the transactions had been completed as of January 1, 2013: | ||||
Three Months Ended | ||||
March 31, 2013 | ||||
(in thousands, except per share amounts) | ||||
Equity loss from investment in Linn Energy, LLC | $ | (45,399 | ) | |
Net loss | $ | (26,272 | ) | |
Net loss per share, basic and diluted | $ | (0.20 | ) | |
The pro forma condensed combined statement of operations includes adjustments to: | ||||
• | Reflect the impact of the transactions on the equity income (loss) from investment in LINN Energy. The Company uses the equity method of accounting related to its ownership interest in LINN Energy’s net income (losses). | |||
• | Reflect the impact of the transactions on taxes. | |||
• | Exclude transaction costs incurred during the three months ended March 31, 2013, consisting of investment banking fees, legal fees and other acquisition-related transaction costs from the pro forma statements of operations as they reflect nonrecurring charges not expected to have a continuing impact on the combined results. | |||
• | Reflect approximately 93.8 million LinnCo common shares assumed to be issued in conjunction with the transaction on January 1, 2013. |
Business
Business | 3 Months Ended |
Mar. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Business | ' |
Business | |
In October 2012, LinnCo completed its IPO. At no time after LinnCo’s formation and prior to the IPO did LinnCo have any operations or own any interest in LINN Energy. After the IPO, LinnCo’s initial sole purpose was to own units in its affiliate, LINN Energy. In connection with the Berry acquisition (see Note 2), LinnCo amended its limited liability company agreement to permit, among other things, the acquisition and subsequent transfer of assets to LINN Energy for consideration received. As of March 31, 2014, LinnCo had no significant assets or operations other than those related to its interest in LINN Energy. |
Summarized_Financial_Informati
Summarized Financial Information for Linn Energy, LLC | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Equity Method Investments and Joint Ventures [Abstract] | ' | |||||||
Summarized Financial Information for Linn Energy, LLC | ' | |||||||
Summarized Financial Information for Linn Energy, LLC | ||||||||
Following is summarized statements of operations and balance sheet information for LINN Energy. Additional information on LINN Energy’s results of operations and financial position are contained in its Quarterly Report on Form 10-Q for the three months ended March 31, 2014, which is included in this filing as Exhibit 99.1 and incorporated herein by reference. | ||||||||
Summarized Linn Energy, LLC Statements of Operations Information | ||||||||
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Revenues and other | $ | 733,587 | $ | 369,060 | ||||
Expenses | (677,154 | ) | (481,407 | ) | ||||
Other income and (expenses) | (136,116 | ) | (102,002 | ) | ||||
Income tax expense | (5,654 | ) | (7,536 | ) | ||||
Net loss | $ | (85,337 | ) | $ | (221,885 | ) | ||
Summarized Linn Energy, LLC Balance Sheet Information | ||||||||
March 31, | 31-Dec-13 | |||||||
2014 | ||||||||
(in thousands) | ||||||||
Current assets | $ | 798,505 | $ | 815,940 | ||||
Noncurrent assets | 15,676,183 | 15,689,024 | ||||||
16,474,688 | 16,504,964 | |||||||
Current liabilities | 1,229,871 | 1,252,733 | ||||||
Noncurrent liabilities | 9,653,865 | 9,360,804 | ||||||
Unitholders’ capital | $ | 5,590,952 | $ | 5,891,427 | ||||
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2014 | |
Income Tax Disclosure [Abstract] | ' |
Income Taxes | ' |
Income Taxes | |
LinnCo is a limited liability company that has elected to be treated as a corporation for U.S. federal income tax purposes. Deferred income tax assets and liabilities are recognized for temporary differences between the basis of the Company’s assets and liabilities for financial and tax reporting purposes. At March 31, 2014, and December 31, 2013, the majority of the Company’s temporary difference and associated deferred tax benefit resulted from its investment in LINN Energy. |
Distributions_and_Dividends
Distributions and Dividends | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Distribution Received and Dividend Paid [Abstract] | ' | ||||||||
Distributions and Dividends | ' | ||||||||
Distributions and Dividends | |||||||||
The following provides a summary of distributions paid by LINN Energy to LinnCo and dividends paid by LinnCo to its shareholders during the three months ended March 31, 2014: | |||||||||
LINN Energy Distributions to LinnCo | |||||||||
Date Paid | Distributions Per Unit | Total Distributions | |||||||
(in millions) | |||||||||
Mar-14 | $ | 0.2416 | $ | 31 | |||||
Feb-14 | $ | 0.2416 | $ | 31 | |||||
Jan-14 | $ | 0.2416 | $ | 31 | |||||
LinnCo Dividends to its Shareholders | |||||||||
Date Paid | Dividends Per Share | Total Dividends | |||||||
(in millions) | |||||||||
Mar-14 | $ | 0.2416 | $ | 31 | |||||
Feb-14 | $ | 0.2416 | $ | 31 | |||||
Jan-14 | $ | 0.2416 | $ | 31 | |||||
On April 1, 2014, LINN Energy’s Board declared a cash distribution of $0.725 per unit with respect to the first quarter of 2014, to be paid in three equal monthly installments of $0.2416 per unit. The first monthly distribution with respect to the first quarter of 2014, totaling approximately $31 million, was paid to LinnCo on April 16, 2014. | |||||||||
On April 1, 2014, the Company’s Board declared a cash dividend of $0.725 per common share with respect to the first quarter of 2014, to be paid in three equal monthly installments of $0.2416 per common share pending the receipt of the applicable cash distribution from LINN Energy. Company management has determined that no income tax reserve is required to be deducted from the cash dividend declared on April 1, 2014. The first monthly dividend with respect to the first quarter of 2014, totaling approximately $31 million, was paid on April 17, 2014, to shareholders of record as of the close of business on April 11, 2014. |
Supplemental_Disclosures_to_th
Supplemental Disclosures to the Statements of Cash Flows | 3 Months Ended |
Mar. 31, 2014 | |
Supplemental Cash Flow Information [Abstract] | ' |
Supplemental Disclosures to the Statement of Cash Flows | ' |
Supplemental Disclosures to the Statements of Cash Flows | |
For the three months ended March 31, 2014, and March 31, 2013, LinnCo incurred and recorded approximately $734,000 and $12 million, respectively, of general and administrative expenses. Of the expenses and costs incurred for the three months ended March 31, 2014, and March 31, 2013, approximately $83,000 and $2 million had been paid by LINN Energy on LinnCo’s behalf as of March 31, 2014, and March 31, 2013, respectively. In addition, during the three months ended March 31, 2014, LINN Energy paid approximately $11 million on LinnCo’s behalf for general and administrative expenses incurred by LinnCo in 2013. All of these expenses and costs are paid by LINN Energy on LinnCo’s behalf, and therefore, are accounted for as capital contributions and reflected as noncash transactions by LinnCo. |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Contingencies | ' |
Contingencies | |
On July 9, 2013, Anthony Booth, individually and on behalf of all other persons similarly situated, filed a class action complaint in the United States District Court, Southern District of Texas, against LINN Energy, Mark E. Ellis, Kolja Rockov, and David B. Rottino (the “Booth Action”). On July 18, 2013, the Catherine A. Fisher Trust, individually and on behalf of all other persons similarly situated, filed a class action complaint in the United States District Court, Southern District of Texas, against the same defendants (the “Fisher Action”). On July 17, 2013, Don Gentry, individually and on behalf of all other persons similarly situated, filed a class action complaint in the United States District Court, Southern District of Texas, against LINN Energy, LinnCo, Mark E. Ellis, Kolja Rockov, David B. Rottino, George A. Alcorn, David D. Dunlap, Terrence S. Jacobs, Michael C. Linn, Joseph P. McCoy, Jeffrey C. Swoveland, and the various underwriters for LinnCo’s initial public offering (the “Gentry Action”) (the Booth Action, Fisher Action, and Gentry Action together, the “Texas Federal Actions”). The Texas Federal Actions each assert claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) based on allegations that LINN Energy made false or misleading statements relating to its hedging strategy, the cash flow available for distribution to unitholders, and LINN Energy’s energy production. The Gentry Action asserts additional claims under Sections 11 and 15 of the Securities Act of 1933 based on alleged misstatements relating to these issues in the prospectus and registration statement for LinnCo’s initial public offering. On September 23, 2013, the Southern District of Texas entered an order transferring the Texas Federal Actions to the Southern District of New York so that they could be consolidated with the New York Federal Actions, which are described below. | |
On July 10, 2013, David Adrian Luciano, individually and on behalf of all other persons similarly situated, filed a class action complaint in the United States District Court, Southern District of New York, against LINN Energy, LinnCo, Mark E. Ellis, Kolja Rockov, David B. Rottino, George A. Alcorn, David D. Dunlap, Terrence S. Jacobs, Michael C. Linn, Joseph P. McCoy, Jeffrey C. Swoveland, and the various underwriters for LinnCo’s initial public offering (the “Luciano Action”). The Luciano Action asserts claims under Sections 11 and 15 of the Securities Act of 1933 based on alleged misstatements relating to LINN Energy’s hedging strategy, the cash flow available for distribution to unitholders, and LINN Energy’s energy production in the prospectus and registration statement for LinnCo’s initial public offering. On July 12, 2013, Frank Donio, individually and on behalf of all other persons similarly situated, filed a class action complaint in the United States District Court, Southern District of New York, against LINN Energy, Mark E. Ellis, Kolja Rockov, and David B. Rottino (the “Donio Action”). The Donio Action asserts claims under Sections 10(b) and 20(a) of the Exchange Act based on allegations that LINN Energy made false or misleading statements relating to its hedging strategy, the cash flow available for distribution to unitholders, and LINN Energy’s energy production. Several additional class action cases substantially similar to the Luciano Action and the Donio Action were subsequently filed in the Southern District of New York and assigned to the same judge (the Luciano Action, Donio Action, and all similar subsequently filed New York federal class actions together, the “New York Federal Actions”). The Texas Federal Actions and the New York Federal Actions have now been consolidated in the United States District Court for the Southern District of New York (the “Combined Actions”). In November 2013, LINN Energy filed a motion to dismiss the Combined Actions. The motion is currently pending before the Southern District of New York. There has not been any discovery conducted in the Combined Actions. As a result, the Company is unable to estimate a possible loss, or range of possible loss, if any. | |
On July 10, 2013, Judy Mesirov, derivatively on behalf of nominal defendant LINN Energy, filed a shareholder derivative petition against Mark E. Ellis, Kolja Rockov, David B. Rottino, Arden L. Walker, Jr., Charlene A. Ripley, Michael C. Linn, Joseph P. McCoy, George A. Alcorn, Terrence S. Jacobs, David D. Dunlap, Jeffrey C. Swoveland, and Linda M. Stephens in the District Court of Harris County, Texas (the “Mesirov Action”). On July 12, 2013, John Peters, derivatively on behalf of nominal defendant LINN Energy, filed a shareholder derivative petition against many of the same defendants in the District Court of Harris County, Texas (the “Peters Action”). On August 26, 2013, Joseph Abdalla, derivatively on behalf of nominal defendant LINN Energy, filed a shareholder derivative petition against many of the same defendants in the District Court of Harris County, Texas (the “Abdalla Action”) (the Mesirov Action, Peters Action, and Abdalla Actions together, the “Texas State Court Derivative Actions”). On August 19, 2013, the Charlote J. Lombardo Trust of 2004, derivatively on behalf of nominal defendant LINN Energy, filed a shareholder derivative petition against many of the same defendants in the United States District Court for the Southern District of Texas (the “Lombardo Action”). On September 30, 2013, the Thelma Feldman Rev. Trust, derivatively on behalf of nominal defendant LINN Energy, filed a shareholder derivative petition against many of the same defendants (the “Feldman Rev. Trust Action”). On October 21, 2013, the Parker Family Trust of 2012, derivatively on behalf of nominal defendant LINN Energy, filed a shareholder derivative petition against many of the same defendants (the “Parker Family Trust Action”) (the Lombardo Action, Feldman Rev. Trust Action, and Parker Family Trust Action together, the “Texas Federal Court Derivative Actions”) (the Texas State Court Derivative Action and Texas Federal Court Derivative Actions together, the “Texas Derivative Actions”). The Texas Derivative Actions assert derivative claims on behalf of LINN Energy against the individual defendants for alleged breaches of fiduciary duty, waste of corporate assets, mismanagement, abuse of control, and unjust enrichment based on factual allegations similar to those in the Texas Federal Actions and the New York Federal Actions. The cases are in their preliminary stages and it is possible that additional similar actions could be filed in the District Court of Harris County, Texas, or in other jurisdictions. As a result, the Company is unable to estimate a possible loss, or range of possible loss, if any. |
SEC_Inquiry
SEC Inquiry | 3 Months Ended |
Mar. 31, 2014 | |
SEC Inquiry [Abstract] | ' |
SEC Inquiry | ' |
SEC Inquiry | |
As disclosed on July 1, 2013, the Company and its affiliate, LINN Energy, have been notified by the staff of the SEC that its Fort Worth Regional Office has commenced an inquiry regarding LINN Energy and LinnCo (the “SEC inquiry”). The SEC staff is investigating whether any violations of federal securities laws have occurred. The SEC staff has requested the production of documents and communications that are potentially relevant to, among other things, LINN Energy and LinnCo’s use of non-GAAP financial measures and disclosures related to LINN Energy’s hedging strategy. The SEC staff has stated that the fact of the inquiry should not be construed as an indication that the SEC or its staff has a negative view of any entity, individual or security. Both LINN Energy and LinnCo are cooperating fully with the SEC in this matter. LINN Energy and LinnCo are unable to predict the timing or outcome of the SEC inquiry or estimate the nature or amount of any possible sanction the SEC could seek to impose, which could include a fine, penalty, or court or administrative order prohibiting specific conduct, or a potential restatement of LINN Energy’s or LinnCo’s financial statements, any of which could be material. No provision for losses has been recorded for this exposure. |
Basis_of_Presentation_Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Principles of Reporting | ' |
Principles of Reporting | |
The information reported herein reflects all normal recurring adjustments that are, in the opinion of management, necessary for the fair presentation of the results for the interim periods. Certain information and note disclosures normally included in annual financial statements prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) have been condensed or omitted under Securities and Exchange Commission (“SEC”) rules and regulations; as such, this report should be read in conjunction with the financial statements and notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. The results reported in these unaudited financial statements should not necessarily be taken as indicative of results that may be expected for the entire year. | |
Investments in noncontrolled entities over which the Company exercises significant influence are accounted for under the equity method. | |
Dividends | ' |
Dividends | |
Within five (5) business days after receiving a cash distribution related to its interests in LINN Energy units, LinnCo is required to pay the cash received, net of reserves for its income tax liability (“tax reserve”), if any, as dividends to its shareholders. The amount of the tax reserve is calculated on a quarterly basis and is determined based on the estimated tax liability for the entire year. The current tax reserve can be increased or reduced, at Company management’s discretion, to account for the over/(under) tax reserve previously recorded. Because the tax reserve is an estimate, upon filing the annual tax returns, if the actual amount of tax due is greater or less than the total amount of tax reserved, the subsequent tax reserve, at Company management’s discretion, could be adjusted accordingly. Any such adjustments are subject to approval by the Company’s Board of Directors (“Board”). | |
Use of Estimates | ' |
Use of Estimates | |
The preparation of the accompanying financial statements in conformity with GAAP requires management of the Company to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amount of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of income and expenses. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Such estimates and assumptions are adjusted when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ from these estimates. Any changes in estimates resulting from continuous changes in the economic environment will be reflected in the financial statements in future periods. | |
Accounting for Investment in Linn Energy, LLC | ' |
Accounting for Investment in Linn Energy, LLC | |
The Company uses the equity method of accounting related to its ownership interest in LINN Energy’s net income (losses). The Company records its share of LINN Energy’s net income (losses) in the period in which it is earned. At March 31, 2014, the Company owned approximately 39% of LINN Energy’s outstanding units. The Company’s ownership percentage could change as LINN Energy issues or repurchases additional units. Changes in the Company’s ownership percentage affect its net income (losses). | |
At March 31, 2014, the carrying amount of the Company’s investment in LINN Energy exceeded the Company’s ownership interest in LINN Energy’s underlying net assets by approximately $1.3 billion. The difference is attributable to proved and unproved oil and natural gas properties, senior notes and equity method goodwill. These amounts are included in “investment in Linn Energy, LLC” on the balance sheet and are amortized over the lives of the related assets and liabilities. Such amortization is included in the equity income from the Company’s investment in LINN Energy. Equity method goodwill is not amortized; however, the investment is reviewed for impairment. Impairment testing is performed when events or circumstances warrant such testing and considers whether there is an inability to recover the carrying value of an investment that is other than temporary. As of March 31, 2014, no impairment had occurred with respect to the Company’s investment in LINN Energy. |
Capitalization_Tables
Capitalization (Tables) | 3 Months Ended | |||
Mar. 31, 2014 | ||||
Equity [Abstract] | ' | |||
Schedule of Pro Forma Results of Operations | ' | |||
The following unaudited pro forma financial information presents a summary of the Company’s results of operations for the three months ended March 31, 2013, assuming the transactions had been completed as of January 1, 2013: | ||||
Three Months Ended | ||||
March 31, 2013 | ||||
(in thousands, except per share amounts) | ||||
Equity loss from investment in Linn Energy, LLC | $ | (45,399 | ) | |
Net loss | $ | (26,272 | ) | |
Net loss per share, basic and diluted | $ | (0.20 | ) |
Summarized_Financial_Informati1
Summarized Financial Information for Linn Energy, LLC (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Equity Method Investments and Joint Ventures [Abstract] | ' | |||||||
Summarized Financial Information for Linn Energy, LLC | ' | |||||||
Following is summarized statements of operations and balance sheet information for LINN Energy. Additional information on LINN Energy’s results of operations and financial position are contained in its Quarterly Report on Form 10-Q for the three months ended March 31, 2014, which is included in this filing as Exhibit 99.1 and incorporated herein by reference. | ||||||||
Summarized Linn Energy, LLC Statements of Operations Information | ||||||||
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Revenues and other | $ | 733,587 | $ | 369,060 | ||||
Expenses | (677,154 | ) | (481,407 | ) | ||||
Other income and (expenses) | (136,116 | ) | (102,002 | ) | ||||
Income tax expense | (5,654 | ) | (7,536 | ) | ||||
Net loss | $ | (85,337 | ) | $ | (221,885 | ) | ||
Summarized Linn Energy, LLC Balance Sheet Information | ||||||||
March 31, | 31-Dec-13 | |||||||
2014 | ||||||||
(in thousands) | ||||||||
Current assets | $ | 798,505 | $ | 815,940 | ||||
Noncurrent assets | 15,676,183 | 15,689,024 | ||||||
16,474,688 | 16,504,964 | |||||||
Current liabilities | 1,229,871 | 1,252,733 | ||||||
Noncurrent liabilities | 9,653,865 | 9,360,804 | ||||||
Unitholders’ capital | $ | 5,590,952 | $ | 5,891,427 | ||||
Distributions_and_Dividends_Ta
Distributions and Dividends (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Distribution Received and Dividend Paid [Abstract] | ' | ||||||||
Distributions Received and Dividends Paid | ' | ||||||||
The following provides a summary of distributions paid by LINN Energy to LinnCo and dividends paid by LinnCo to its shareholders during the three months ended March 31, 2014: | |||||||||
LINN Energy Distributions to LinnCo | |||||||||
Date Paid | Distributions Per Unit | Total Distributions | |||||||
(in millions) | |||||||||
Mar-14 | $ | 0.2416 | $ | 31 | |||||
Feb-14 | $ | 0.2416 | $ | 31 | |||||
Jan-14 | $ | 0.2416 | $ | 31 | |||||
LinnCo Dividends to its Shareholders | |||||||||
Date Paid | Dividends Per Share | Total Dividends | |||||||
(in millions) | |||||||||
Mar-14 | $ | 0.2416 | $ | 31 | |||||
Feb-14 | $ | 0.2416 | $ | 31 | |||||
Jan-14 | $ | 0.2416 | $ | 31 | |||||
Basis_of_Presentation_Details
Basis of Presentation (Details) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 3 Months Ended | |||||||||
Mar. 31, 2014 | Mar. 31, 2013 | Jun. 30, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 16, 2013 | Sep. 30, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | |
Linn Energy, LLC [Member] | Linn Energy, LLC [Member] | Linn Energy, LLC [Member] | Linn Energy, LLC [Member] | FY 2014 [Member] | FY 2014 [Member] | FY 2013 [Member] | FY 2013 [Member] | Business Acquisition, Berry [Member] | Linn Energy, LLC [Member] | ||||
Linn Energy, LLC [Member] | Linn Energy, LLC [Member] | Linn Energy, LLC [Member] | Linn Energy, LLC [Member] | ||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equity Method Investment, Ownership Percentage | 39.00% | ' | ' | ' | ' | 39.00% | 15.00% | ' | ' | ' | ' | ' | ' |
Number of days after receiving cash distribution related to interest in Linn Energy units, required to pay the cash received, net of tax reserve, to shareholders | ' | ' | '5 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equity method investment, difference between carrying amount and underlying equity | ' | $1,300,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related Party Transaction | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $28.32 |
General and Administrative Expenses and Offering Costs | ' | 12,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11,000,000 | ' |
General and administrative expenses paid by related party | ' | ' | ' | ' | ' | ' | ' | 83,000 | 2,000,000 | 11,000,000 | 2,000,000 | ' | ' |
General and administrative expenses | 734,000 | 11,767,000 | ' | 734,000 | 11,767,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Expenses for services provided by related party | ' | ' | ' | 470,000 | 462,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Equity Method Investment, Other than Temporary Impairment | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Capitalization_Related_Party_T
Capitalization (Related Party Transactions) (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 16, 2013 | Sep. 30, 2013 | Dec. 16, 2013 | Dec. 17, 2013 |
Linn Energy, LLC [Member] | Linn Energy, LLC [Member] | Linn Energy, LLC [Member] | Business Acquisition, Berry [Member] | Business Acquisition, Berry [Member] | |||
LINN [Member] | |||||||
Related Party Transaction | ' | ' | ' | ' | ' | ' | ' |
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned | ' | ' | ' | $2,800,000,000 | ' | $2,700,000,000 | ' |
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | ' | ' | ' | ' | ' | ' | 93,756,674 |
Common shares; unlimited shares authorized, 128,503,236 shares issued and outstanding at March 31, 2014, and December 31, 2013 | 3,868,387,000 | 3,868,387,000 | ' | ' | ' | ' | ' |
Ownership percentage of voting shares held by LINN Energy | ' | ' | 100.00% | ' | ' | ' | ' |
Number Of Classes Of Interests | 2 | ' | ' | ' | ' | ' | ' |
Capital contributed by LINN for share purchase | $1,000 | $1,000 | $1,000 | ' | ' | ' | ' |
Equity Method Investment, Ownership Percentage | 39.00% | ' | ' | 39.00% | 15.00% | ' | ' |
Capitalization_ProForma_Financ
Capitalization Pro-Forma Financial Information (Details) (Business Acquisition, Berry [Member], USD $) | 3 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 |
Business Acquisition, Berry [Member] | ' |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ' |
Equity loss from investment in Linn Energy, LLC | ($45,399) |
Net loss | ($26,272) |
Net loss per share, basic and diluted | ($0.20) |
Capitalization_Purchase_Price_
Capitalization (Purchase Price) (Details) (Business Acquisition, Berry [Member], USD $) | 0 Months Ended | |
In Billions, unless otherwise specified | Feb. 20, 2013 | Dec. 16, 2013 |
Business Acquisition, Berry [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Number of LinnCo common shares for each Berry common share | 168.00% | ' |
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned | ' | $2.70 |
Summarized_Financial_Informati2
Summarized Financial Information for Linn Energy, LLC (Details) (Linn Energy, LLC [Member], USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 |
Linn Energy, LLC [Member] | ' | ' | ' |
Equity Method Investment, Summarized Financial Information, Income Statement | ' | ' | ' |
Revenues and other | $733,587 | $369,060 | ' |
Expenses | -677,154 | -481,407 | ' |
Other income and (expenses) | -136,116 | -102,002 | ' |
Income tax expense | -5,654 | -7,536 | ' |
Net loss | -85,337 | -221,885 | ' |
Equity Method Investment, Summarized Financial Information, Assets | ' | ' | ' |
Current assets | 798,505 | ' | 815,940 |
Noncurrent assets | 15,676,183 | ' | 15,689,024 |
Total assets | 16,474,688 | ' | 16,504,964 |
Equity Method Investment, Summarized Financial Information, Liabilities | ' | ' | ' |
Current liabilities | 1,229,871 | ' | 1,252,733 |
Noncurrent liabilities | 9,653,865 | ' | 9,360,804 |
Equity Method Investment Summarized Financial Information, Equity | ' | ' | ' |
Unitholders’ capital | $5,590,952 | ' | $5,891,427 |
Distributions_and_Dividends_De
Distributions and Dividends (Details) (USD $) | 1 Months Ended | 3 Months Ended | 1 Months Ended | ||||||||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Feb. 28, 2014 | Jan. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Feb. 28, 2014 | Jan. 31, 2014 | Apr. 30, 2014 | Apr. 30, 2014 | Apr. 30, 2014 |
Linn Energy, LLC [Member] | Linn Energy, LLC [Member] | Linn Energy, LLC [Member] | Subsequent Event [Member] | Dividend Declared [Member] | Dividend Paid [Member] | ||||||
Linn Energy, LLC [Member] | Subsequent Event [Member] | Subsequent Event [Member] | |||||||||
Dividends Payable [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Distributions Received, Amount Per Unit | ' | ' | ' | ' | ' | $0.24 | $0.24 | $0.24 | $0.73 | ' | ' |
Distributions Received, Monthly Installment, Amount Per Unit | ' | ' | ' | ' | ' | ' | ' | ' | $0.24 | ' | ' |
Common Stock, Dividends, Per Share, Cash Paid | $0.24 | $0.24 | $0.24 | ' | ' | ' | ' | ' | ' | ' | ' |
Payments of Ordinary Dividends, Common Stock | $31,000 | $31,000 | $31,000 | $93,225 | $24,699 | ' | ' | ' | ' | ' | $31,000 |
Cash distributions received | ' | ' | ' | $93,228 | $25,221 | $31,000 | $31,000 | $31,000 | $31,000 | ' | ' |
Dividends declared per share | ' | ' | ' | $0.73 | $0.71 | ' | ' | ' | ' | $0.73 | ' |
Common Stock, Dividends, Per Share, Declared, Monthly Installment, Net Of Tax Reserve | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.24 |
Supplemental_Disclosures_to_th1
Supplemental Disclosures to the Statements of Cash Flows (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Related Party Transaction | ' | ' |
General and administrative expenses | $734 | $11,767 |
Linn Energy, LLC [Member] | ' | ' |
Related Party Transaction | ' | ' |
General and administrative expenses | 734 | 11,767 |
FY 2014 [Member] | Linn Energy, LLC [Member] | ' | ' |
Related Party Transaction | ' | ' |
General and administrative expenses paid by related party | 83 | 2,000 |
FY 2013 [Member] | Linn Energy, LLC [Member] | ' | ' |
Related Party Transaction | ' | ' |
General and administrative expenses paid by related party | $11,000 | $2,000 |