Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 31, 2015 | Dec. 07, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | MESABI TRUST | |
Entity Central Index Key | 65,172 | |
Document Type | 10-Q | |
Document Period End Date | Oct. 31, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --01-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 13,120,010 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 |
Condensed Statements of Income
Condensed Statements of Income - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
Revenues | ||||
Royalty income | $ 2,619,097 | $ 11,780,502 | $ 6,667,942 | $ 20,139,905 |
Interest income | 2,468 | 2,256 | 6,993 | 6,647 |
Total revenues | 2,621,565 | 11,782,758 | 6,674,935 | 20,146,552 |
Expenses | 219,498 | 243,152 | 848,958 | 1,053,187 |
Net income | $ 2,402,067 | $ 11,539,606 | $ 5,825,977 | $ 19,093,365 |
Number of units outstanding | 13,120,010 | 13,120,010 | 13,120,010 | 13,120,010 |
Net income per unit (Note 2) | $ 0.1831 | $ 0.8795 | $ 0.4441 | $ 1.4553 |
Distributions declared per unit (Note 3) (in dollars per unit) | $ 0.8800 | $ 0.0400 | $ 1.2000 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Oct. 31, 2015 | Jan. 31, 2015 |
Assets | ||
Cash and cash equivalents | $ 5,784,902 | $ 8,717,943 |
U.S. Government securities, at amortized cost (which approximates market) | 633,700 | 510,573 |
Accrued income receivable | 355,567 | 558,385 |
Prepaid expenses | 92,712 | 54,957 |
Current assets | 6,866,881 | 9,841,858 |
U.S. Government securities, at amortized cost (which approximates market) | 132,940 | 255,759 |
Fixed property, including intangibles, at nominal values | ||
Amended Assignment of Peters Lease | 1 | 1 |
Assignment of Cloquet Lease | 1 | 1 |
Certificate of beneficial interest for 13,120,010 units of land trust | 1 | 1 |
Total other assets | 3 | 3 |
Total assets | 6,999,824 | 10,097,620 |
Liabilities | ||
Distribution payable | 8,396,806 | |
Accrued expenses | 87,520 | 89,687 |
Total liabilities | 87,520 | 8,486,493 |
Unallocated Reserve (Note 4) | 6,912,301 | 1,611,124 |
Trust Corpus | 3 | 3 |
Total liabilities, unallocated reserve and trust corpus | $ 6,999,824 | $ 10,097,620 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - shares | Oct. 31, 2015 | Jan. 31, 2015 |
Condensed Balance Sheets | ||
Certificate of beneficial interest of land trust, units | 13,120,010 | 13,120,010 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) | 9 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Cash flows from operating activities | ||
Royalties received | $ 6,872,800 | $ 16,895,966 |
Interest received | 4,953 | 4,618 |
Expenses paid | (888,880) | (1,096,536) |
Net cash provided by operating activities | 5,988,873 | 15,804,048 |
Cash flows from investing activities | ||
Maturities of U.S. Government Securities | 82,320 | 105,000 |
Sale of U.S. Government Securities | 100,056 | |
Purchases of U.S. Government Securities | (82,628) | (205,447) |
Net cash used for investing activities | (308) | (391) |
Cash flows used for financing activities | ||
Distributions to unitholders | (8,921,606) | (11,676,809) |
Net change in cash and cash equivalents | (2,933,041) | 4,126,848 |
Cash and cash equivalents, beginning of year | 8,717,943 | 7,719,963 |
Cash and cash equivalents, end of period | 5,784,902 | 11,846,811 |
Reconciliation of net income to net cash provided by operating activities | ||
Net income | 5,825,977 | 19,093,365 |
Decrease (increase) in accrued income receivable | 202,818 | (3,245,968) |
Increase in prepaid expense | (37,755) | (37,417) |
Decrease in accrued expenses | (2,167) | (5,932) |
Net cash provided by operating activities | $ 5,988,873 | 15,804,048 |
Non Cash Financing Activity | ||
Distributions payable | $ 11,545,608 |
NATURE OF BUSINESS AND ORGANIZA
NATURE OF BUSINESS AND ORGANIZATION | 9 Months Ended |
Oct. 31, 2015 | |
NATURE OF BUSINESS AND ORGANIZATION | |
NATURE OF BUSINESS AND ORGANIZATION | Note 1. The financial statements included herein have been prepared without audit (except for the balance sheet at January 31, 2015) in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Trustees, all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of (a) the results of operations for the three months and nine months ended October 31, 2015 and 2014, (b) the financial position at October 31, 2015 and (c) the cash flows for the nine months ended October 31, 2015 and 2014, have been made. For further information, refer to the financial statements and footnotes included in Mesabi Trust’s Annual Report on Form 10-K for the year ended January 31, 2015. |
NET INCOME PER UNIT
NET INCOME PER UNIT | 9 Months Ended |
Oct. 31, 2015 | |
NET INCOME PER UNIT | |
NET INCOME PER UNIT | Note 2. Net income per unit includes accrued income receivable. For the three months ended October 31, 2015, the Trust recorded $355,567 of accrued income receivable as reflected on the Condensed Balance Sheet as of October 31, 2015 (unaudited). Accrued income receivable is accounted for and reported for the Trust’s third fiscal quarter based on shipments during the month of October, even though such accrued income receivable is not available for distribution to Unitholders until the applicable royalties are actually received by the Trust. Accrued income receivable also includes accruals for anticipated pricing adjustments, which can be positive or negative. Net income per unit is based on 13,120,010 units outstanding during the period. |
DIVIDEND AND DISTRIBUTION
DIVIDEND AND DISTRIBUTION | 9 Months Ended |
Oct. 31, 2015 | |
DIVIDEND AND DISTRIBUTION | |
DIVIDEND AND DISTRIBUTION | Note 3. The Trust declares distributions (if any) each year in April, July, October and January. Distributions are declared after receiving notification from Northshore Mining Company (“Northshore”) as to the amount of royalties expected to be paid to the Trust in cash based on shipments through the end of each calendar quarter. The Trust’s financial statements are prepared on an accrual basis and present the Trust’s results of operations based on each fiscal quarter which ends one month after the close of each calendar quarter. Because distributions, if any, are declared based on the royalty payment that is payable as of the end of each calendar quarter and the Trust’s Net Income is calculated as of the end of each fiscal quarter, the distributions declared by the Trust are not equivalent to the Trust’s Net Income during the periods reported in this quarterly report on Form 10-Q. |
UNALLOCATED RESERVE AND DISTRIB
UNALLOCATED RESERVE AND DISTRIBUTIONS | 9 Months Ended |
Oct. 31, 2015 | |
UNALLOCATED RESERVE AND DISTRIBUTIONS | |
UNALLOCATED RESERVE AND DISTRIBUTIONS | Note 4. During recent periods, the Trustees had determined that Mesabi Trust’s unallocated reserve should usually be within the range of $500,000 to $1,000,000. In April 2015, the Trustees determined that the unallocated reserve will no longer necessarily be within such range. Rather, each quarter, as authorized by the Agreement of Trust, the Trustees will reevaluate all relevant factors including all costs, expenses, obligations, and present and future liabilities of the Trust (whether known or contingent) in determining a prudent level of unallocated reserve in light of the unpredictable nature of the iron ore industry and current economic conditions. Accordingly, although the actual amount of the Unallocated Reserve will fluctuate from time to time, and may increase or decrease from its current level, it is currently expected that future distributions will be highly dependent upon royalty payments received quarterly and the level of Trust expenses that the Trustees anticipate occurring in subsequent quarters. Pursuant to the Agreement of Trust, the Trust makes decisions about cash distributions to Unitholders based on the royalty payments it receives from Northshore when received, rather than as royalty income is recorded in accordance with the Trust’s revenue recognition policy. Refer to Note 3 for further information. As of October 31, 2015 and January 31, 2015, the unallocated cash and U.S. Government securities portion of the Trust’s Unallocated Reserve was comprised of the following components: October 31, 2015 (unaudited) January 31, 2015 Cash and U.S. Government securities $ $ Distribution payable — ) Unallocated cash and U.S. Government securities $ $ A reconciliation of the Trust’s Unallocated Reserve from January 31, 2015 to October 31, 2015 is as follows: Unallocated Reserve, January 31, 2015 $ Net income, nine months ended October 31, 2015 Distributions declared ) Unallocated Reserve, October 31, 2015 $ |
UNALLOCATED RESERVE AND DISTR10
UNALLOCATED RESERVE AND DISTRIBUTIONS (Tables) | 9 Months Ended |
Oct. 31, 2014 | |
UNALLOCATED RESERVE AND DISTRIBUTIONS | |
Schedule of unallocated cash and U.S. Government securities portion of the Trust's Unallocated Reserve | October 31, 2015 (unaudited) January 31, 2015 Cash and U.S. Government securities $ $ Distribution payable — ) Unallocated cash and U.S. Government securities $ $ |
Schedule of reconciliation of Trust's Unallocated Reserve | Unallocated Reserve, January 31, 2015 $ Net income, nine months ended October 31, 2015 Distributions declared ) Unallocated Reserve, October 31, 2015 $ |
NET INCOME PER UNIT (Details)
NET INCOME PER UNIT (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | Jan. 31, 2015 | |
NET INCOME PER UNIT | |||||
Accrued income receivable | $ 355,567 | $ 355,567 | $ 558,385 | ||
Number of units outstanding | 13,120,010 | 13,120,010 | 13,120,010 | 13,120,010 |
DIVIDEND AND DISTRIBUTION (Deta
DIVIDEND AND DISTRIBUTION (Details) | 9 Months Ended |
Oct. 31, 2015 | |
DIVIDEND AND DISTRIBUTION | |
Period after the close of each calendar quarter when the fiscal quarter ends | 1 month |
UNALLOCATED RESERVE AND DISTR13
UNALLOCATED RESERVE AND DISTRIBUTIONS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | Jan. 31, 2015 | |
UNALLOCATED RESERVE AND DISTRIBUTIONS | |||||
Cash and U.S. Government securities | $ 6,551,542 | $ 6,551,542 | $ 9,484,275 | ||
Distribution payable | (8,396,806) | ||||
Unallocated cash and U.S. Government securities | 6,551,542 | 6,551,542 | $ 1,087,469 | ||
Reconciliation of unallocated reserve | |||||
Unallocated Reserve at the beginning of the period | 1,611,124 | ||||
Net income, nine months ended October 31, 2015 | 2,402,067 | $ 11,539,606 | 5,825,977 | $ 19,093,365 | |
Distributions declared | (524,800) | ||||
Unallocated Reserve at the end of the period | 6,912,301 | 6,912,301 | |||
Minimum | |||||
UNALLOCATED RESERVE AND DISTRIBUTIONS | |||||
Unallocated cash and U.S. Government securities | 500,000 | 500,000 | |||
Maximum | |||||
UNALLOCATED RESERVE AND DISTRIBUTIONS | |||||
Unallocated cash and U.S. Government securities | $ 1,000,000 | $ 1,000,000 |