Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jul. 31, 2016 | Sep. 07, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | MESABI TRUST | |
Entity Central Index Key | 65,172 | |
Document Type | 10-Q | |
Document Period End Date | Jul. 31, 2016 | |
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 | 2,017 | |
Document Fiscal Period Focus | Q2 |
Condensed Statements of Operati
Condensed Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | |
Revenues | ||||
Royalty income | $ 2,608,619 | $ 2,732,892 | $ 2,608,619 | $ 4,048,845 |
Interest income | 1,017 | 2,469 | 2,696 | 4,525 |
Total revenues | 2,609,636 | 2,735,361 | 2,611,315 | 4,053,370 |
EXPENSES | 189,389 | 251,717 | 621,320 | 629,460 |
Net income | $ 2,420,247 | $ 2,483,644 | $ 1,989,995 | $ 3,423,910 |
Number of units outstanding | 13,120,010 | 13,120,010 | 13,120,010 | 13,120,010 |
Net income per unit (Note 2) (in dollars per unit) | $ 0.1845 | $ 0.1893 | $ 0.1517 | $ 0.2610 |
Distributions declared per unit (Note 3) (in dollars per unit) | $ 0.2000 | $ 0.0400 | $ 0.4000 | $ 0.0400 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Jul. 31, 2016 | Jan. 31, 2016 |
Assets | ||
Cash and cash equivalents | $ 6,311,545 | $ 2,587,165 |
U.S. Government securities, at amortized cost (which approximates market) | 132,940 | 5,740,659 |
Accrued income receivable | 1,494,257 | 978,146 |
Prepaid expenses | 134,537 | 54,930 |
Current assets | 8,073,279 | 9,360,900 |
U.S. Government securities, at amortized cost (which approximates market) | 373,430 | 456,058 |
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 | 8,446,712 | 9,816,961 |
Liabilities | ||
Distribution payable | 2,624,002 | 656,001 |
Accrued expenses | 91,552 | 171,793 |
Total liabilities | 2,715,554 | 827,794 |
Unallocated Reserve (Note 4) | 5,731,155 | 8,989,164 |
Trust Corpus | 3 | 3 |
Total liabilities, unallocated reserve and trust corpus | $ 8,446,712 | $ 9,816,961 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) | Jul. 31, 2016shares |
Condensed Balance Sheets | |
Certificate of beneficial interest of land trust, units | 13,120,010 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jul. 31, 2016 | Jul. 31, 2015 | |
Cash flows from operating activities | ||
Royalties received | $ 2,030,521 | $ 3,839,431 |
Interest received | 3,450 | 4,406 |
Expenses paid | (719,935) | (709,496) |
Net cash provided by operating activities | 1,314,036 | 3,134,341 |
Cash flows from investing activities | ||
Maturities of U.S. Government Securities | 5,690,347 | 82,320 |
Purchases of U.S. Government Securities | (82,628) | |
Net cash provided by (used for) investing activities | 5,690,347 | (308) |
Cash flows used for financing activities | ||
Distributions to Unitholders | (3,280,003) | (8,396,806) |
Net change in cash and cash equivalents | 3,724,380 | (5,262,773) |
Cash and cash equivalents, beginning of year | 2,587,165 | 8,717,943 |
Cash and cash equivalents, end of period | 6,311,545 | 3,455,170 |
Reconciliation of net income to net cash provided by operating activities | ||
Net income | 1,989,995 | 3,423,910 |
Increase in accrued income receivable | (516,111) | (209,533) |
Increase in prepaid expenses | (79,607) | (79,358) |
Decrease in accrued expenses | (80,241) | (678) |
Net cash provided by operating activities | 1,314,036 | 3,134,341 |
Non Cash Financing Activity | ||
Distributions payable | $ 2,624,002 | $ 524,800 |
NATURE OF BUSINESS AND ORGANIZA
NATURE OF BUSINESS AND ORGANIZATION | 6 Months Ended |
Jul. 31, 2016 | |
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, 2016) 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 six months ended July 31, 2016 and 2015, (b) the financial position at July 31, 2016 and (c) the cash flows for the six months ended July 31, 2016 and 2015, 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, 2016. |
NET INCOME (LOSS) PER UNIT
NET INCOME (LOSS) PER UNIT | 6 Months Ended |
Jul. 31, 2016 | |
NET INCOME (LOSS) PER UNIT | |
NET INCOME (LOSS) PER UNIT | Note 2. Net income per unit includes accrued income receivable. For the three months ended July 31, 2016 the Trust recorded $1,494,257 of accrued income receivable as reflected on the Condensed Balance Sheet as of July 31, 2016 (unaudited). Accrued income receivable is accounted for and reported for the Trust’s second fiscal quarter based on shipments during the month of July, even though such accrued income receivable is not available for distribution to the holders of Certificates of Beneficial Interest in Mesabi Trust (“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 | 6 Months Ended |
Jul. 31, 2016 | |
DIVIDEND AND DISTRIBUTION | |
DIVIDEND AND DISTRIBUTION | Note 3. The Trust declares distributions (if any) each year in April, July, October and January. 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 (i) distributions, if any, are declared by the Trustees based on, among other considerations, the amount of royalties actually paid to the Trust through the end of each calendar quarter prior to April, July, October and January of each year, the Trustees’ evaluation of known and projected Trust expenses in the current and future quarters, the then-current level of Unallocated Reserve and general economic conditions, and (ii) 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. |
ROYALTY AGREEMENT, UNALLOCATED
ROYALTY AGREEMENT, UNALLOCATED RESERVE AND DISTRIBUTIONS | 6 Months Ended |
Jul. 31, 2016 | |
ROYALTY AGREEMENT, UNALLOCATED RESERVE AND DISTRIBUTIONS | |
ROYALTY AGREEMENT, UNALLOCATED RESERVE AND DISTRIBUTIONS | Note 4. On July 28, 2016, the Trustees received the quarterly royalty report of iron ore product shipments from Silver Bay, Minnesota during the quarter ended June 30, 2016 from Cliffs Natural Resources Inc. (“Cliffs”), the parent company of Northshore Mining Company (“Northshore”). On July 14, 2016, the Trustees declared a distribution of twenty cents ($0.20) per Unit of Beneficial Interest payable on August 20, 2016 to Mesabi Trust Unitholders of record at the close of business on July 30, 2016. Each quarter, as authorized by the Agreement of Trust, the Trustees evaluate all relevant factors including all costs, expenses, obligations, and present and future liabilities of the Trust (whether known or contingent) in determining the 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, if any, received in the prior quarter, and the level of Trust expenses that the Trustees anticipate will occur in subsequent quarters. Pursuant to the Agreement of Trust, the Trustees make 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 July 31, 2016 and January 31, 2016, the unallocated cash and U.S. Government securities portion of the Trust’s Unallocated Reserve was comprised of the following components: July 31, 2016 January 31, 2016 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, 2016 to July 31, 2016 is as follows: Unallocated Reserve, January 31, 2016 $ Net income, six months ended July 31, 2016 Distributions declared ) Unallocated Reserve, July 31, 2016 $ |
ROYALTY AGREEMENT, UNALLOCATE10
ROYALTY AGREEMENT, UNALLOCATED RESERVE AND DISTRIBUTIONS (Tables) | 6 Months Ended |
Jul. 31, 2016 | |
ROYALTY AGREEMENT, UNALLOCATED RESERVE AND DISTRIBUTIONS | |
Schedule of unallocated cash and U.S. Government securities portion of the Trust's Unallocated Reserve | As of July 31, 2016 and January 31, 2016, the unallocated cash and U.S. Government securities portion of the Trust’s Unallocated Reserve was comprised of the following components: July 31, 2016 January 31, 2016 Cash and U.S. Government securities $ $ Distribution payable ) ) Unallocated cash and U.S. Government securities $ $ |
Schedule of reconciliation of Trust's Unallocated Reserve | A reconciliation of the Trust’s Unallocated Reserve from January 31, 2016 to July 31, 2016 is as follows: Unallocated Reserve, January 31, 2016 $ Net income, six months ended July 31, 2016 Distributions declared ) Unallocated Reserve, July 31, 2016 $ |
NET INCOME (LOSS) PER UNIT (Det
NET INCOME (LOSS) PER UNIT (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | Jan. 31, 2016 | |
NET INCOME (LOSS) PER UNIT | |||||
Accrued income receivable | $ 1,494,257 | $ 1,494,257 | $ 978,146 | ||
Number of units outstanding | 13,120,010 | 13,120,010 | 13,120,010 | 13,120,010 |
DIVIDEND AND DISTRIBUTION (Deta
DIVIDEND AND DISTRIBUTION (Details) | 6 Months Ended |
Jul. 31, 2016 | |
DIVIDEND AND DISTRIBUTION | |
Period after the close of each calendar quarter when the fiscal quarter ends | 1 month |
ROYALTY AGREEMENT, UNALLOCATE13
ROYALTY AGREEMENT, UNALLOCATED RESERVE AND DISTRIBUTIONS (Details) - USD ($) | Jul. 14, 2016 | Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | Jan. 31, 2016 |
ROYALTY AGREEMENT, UNALLOCATED RESERVE AND DISTRIBUTIONS | ||||||
Distributions declared per unit (in dollars per unit) | $ 0.2000 | $ 0.0400 | $ 0.4000 | $ 0.0400 | ||
Unallocated Cash and Securities portion of Unallocated Reserve | ||||||
Cash and U.S. Government securities | $ 6,817,915 | $ 6,817,915 | $ 8,783,882 | |||
Distribution payable | (2,624,002) | (2,624,002) | (656,001) | |||
Unallocated cash and U.S. Government securities | 4,193,913 | 4,193,913 | $ 8,127,881 | |||
Reconciliation of Trust's Unallocated Reserve | ||||||
Unallocated Reserve at the beginning of the period | 8,989,164 | |||||
Net loss | 2,420,247 | $ 2,483,644 | 1,989,995 | $ 3,423,910 | ||
Distributions declared | (5,248,004) | |||||
Unallocated Reserve at the end of the period | $ 5,731,155 | $ 5,731,155 | ||||
Northshore | ||||||
ROYALTY AGREEMENT, UNALLOCATED RESERVE AND DISTRIBUTIONS | ||||||
Distributions declared per unit (in dollars per unit) | $ 0.20 |