FGE.to - Fortress Paper (formerly FTP.to)

[dolce2think]

As I have a smallish position here,

I am contemplating.

 

The issue is here, that the DP prices are dependent mainly on the cotton price, as such

a closure of DP capacity cannot help too much, maybe a bit - but the producers will

switch to cotton if the differential is high.

So, when cottons goes up, its a homerun as capacity cannot meet DP demand -

but also the other way round.

 

 

[finetrader]

I can understand the panic.

 

They have about 108M$ cash

 

but let say they operate at flat EBITDA for the next 3 years.

 

My understanding is that they will pay about :

 

12M$/year in interest

20M$/year in maintenance capex ( this is pure approximation from my part, please correct me if you think i'm wrong)

 

 

so that is about 96M$ cash outflow in three years

 

and the 40M$ debenture 6,5% comes due in dec. 2016

 

Investor relations at Fortress just told me that they will have to make a 16M$ debt payment in 2014 on the IQ loan.

[alertmeipp]

yes, that was mentioned during the last call, they are trying to delay that amortization i think.

[Liberty]

yes, that was mentioned during the last call, they are trying to delay that amortization i think.

 

From the beginning of the IQ deal, it has been mentioned a few times that the terms are very favorable and they can push back repayments without penalty if they need to. Obviously, the priority of IQ is keeping jobs at Thurso.

 

It doesn't mean that's what they'll do, but it's an option.

[triedtestedand]

Until a final ruling comes from MOFCOM, I don't think FTP will want to be seeking (or seen to be seeking) any financial flexibility/assistance/etc. from gov't entities, or securing viable alternatives ... otherwise it could provide ammo to MOFCOM to keep (or even increase) interim tariff level. 

 

If tariff stays, that's the time to go to the table to IQ ... And if tariff gets reduced/eliminated, then any request to change amortization terms, structure of loan/etc. w IQ becomes less of an issue.

 

Two weeks after the tariff is announced, and Chinese VSF prices are where they were before the ruling, and (via tidbit headlines from ccfgroup.com) such Chinese VSF producers are resisting price increases on both domestic and imported pulp (although it looks like imported went up $2/tonne yesterday) ... if this continues to hold, it helps make case in the near term of tariff not helping Chinese DP producers at all ... and only really helping non-Chinese-owned (or with Chinese operations) US and Cdn DP producers who have spare DP capacity ... the most notable being Sappi

[alertmeipp]

large block trade, breaks 4.

[alertmeipp]

Until a final ruling comes from MOFCOM, I don't think FTP will want to be seeking (or seen to be seeking) any financial flexibility/assistance/etc. from gov't entities, or securing viable alternatives ... otherwise it could provide ammo to MOFCOM to keep (or even increase) interim tariff level. 

 

If tariff stays, that's the time to go to the table to IQ ... And if tariff gets reduced/eliminated, then any request to change amortization terms, structure of loan/etc. w IQ becomes less of an issue.

 

Two weeks after the tariff is announced, and Chinese VSF prices are where they were before the ruling, and (via tidbit headlines from ccfgroup.com) such Chinese VSF producers are resisting price increases on both domestic and imported pulp (although it looks like imported went up $2/tonne yesterday) ... if this continues to hold, it helps make case in the near term of tariff not helping Chinese DP producers at all ... and only really helping non-Chinese-owned (or with Chinese operations) US and Cdn DP producers who have spare DP capacity ... the most notable being Sappi

 

Did the Chinese explain why they don't target Euro, Asia, etc... in their anti-dumping?

[triedtestedand]

Maybe I spoke too soon ...

 

http://montreal.ctvnews.ca/quebec-pledges-430-million-to-struggling-forestry-sector-1.1554958

http://www.sys-con.com/node/2878525

 

You'd think Yvon and co might get their $2 ?

 

 

 

[Liberty]

Maybe I spoke too soon ...

 

http://montreal.ctvnews.ca/quebec-pledges-430-million-to-struggling-forestry-sector-1.1554958

http://www.sys-con.com/node/2878525

 

You'd think Yvon and co might get their $2 ?

 

 

Thanks for the links.

 

That clip is hilarious. I've actually never seen that movie... :D

[alertmeipp]

Maybe I spoke too soon ...

 

http://montreal.ctvnews.ca/quebec-pledges-430-million-to-struggling-forestry-sector-1.1554958

http://www.sys-con.com/node/2878525

 

You'd think Yvon and co might get their $2 ?

 

 

Thanks for the links.

 

That clip is hilarious. I've actually never seen that movie... :D

 

How do you think this will help FTP?

[Liberty]

How do you think this will help FTP?

 

Too soon to tell, IMO, but I know that politicians in Quebec - especially as a minority government facing an election sooner than later - want to appear to be doing something about bad economic news and about jobs in that regionally important sector.  They'll definitely be more receptive and looser with the purse strings because of it, and more open to modifying the IQ deal if it comes to that.

 

How much will it help? Who knows, but it should at least boost confidence a bit.

 

It would be nice if FTP go a subsidy after all to switch from oil to natural gas as part of the "green" investments mentioned. This would reduce costs per ton (I'm not sure by how much -- had this been mentioned previously? anyone knows?).

[jeffmori7]

There is currently an important public consultation on energy issues in Quebec, and while reading the different documents, I found this one, prepared by Fortress :

 

http://consultationenergie.gouv.qc.ca/memoires/20130910_041_Marco_Veilleux_M.pdf

 

It is in French, sorry, but to summarize, it is asking the Quebec province to take into account the importance of natural gas supply over fuel oil for the future LSQ project.

 

Liberty, in this document that i posted previously, they were speaking about 4,6 millions$ for LSq, not connected to a distribution network. So I don't know if at Thurso they use nat gas or oil?

[alertmeipp]

Not sure if anyone read the CIBC report.

 

But the main reason for the 2 notches downgrade is they are assuming 1150 mid-cycle DP price, 13% is $150, times 200,000 = 30 EBITDA loss because of duties. Times that by 6.3 multiple. Thus, Thurso's NAV is written down by $180 million.

 

After that huge write down, the NAV is still around 10 bucks. Then, the analyst further cut the NAV to 5 bucks for the slow ramp up. The $4.5 target price is 10% off of that.

 

 

 

[OptsyEagle]

Not sure if anyone read the CIBC report.

 

But the main reason for the 2 notches downgrade is they are assuming 1150 mid-cycle DP price, 13% is $150, times 200,000 = 30 EBITDA loss because of duties. Times that by 6.3 multiple. Thus, Thurso's NAV is written down by $180 million.

 

After that huge write down, the NAV is still around 10 bucks. Then, the analyst further cut the NAV to 5 bucks for the slow ramp up. The $4.5 target price is 10% off of that.

 

Yeah, that is probably how they came up with it.  I find these analysts usually FIRST decide they want to downgrade a stock and reduce the target price, and then they go along and make the numbers relate back to their "gut feeling", as opposed to the other way around.  Not only would the target price change considerably if they changed the multiple from 6.3 to 7.3 or 5.3 (an assumption), but they are forgetting that at this moment, Fortress Paper is extremely leveraged to the price of dissolving pulp.  I mean, just change the DP price from $1150 to $1200 per tonne (a 4.3% increase) and his $4.50 target would now calculate out at $9.00 per share (100% increase).  Does this sound like math one should be focusing on in any precise manner.

 

Ignore those reports and just feel good about how free markets work and what this downgrade actually does do.  Whenever there is more negative news then positive news about an asset, that asset will always sell for less then it is worth and whenever there is more positive news then negative, assets will sell for something higher then they are worth.  This is the law of free markets.  It says nothing about what type of news will come over the hill in the future but it certainly tells you about how a stock will be trading in comparision to all its known information at any point in time.  In FTPs case...significantly below what it is actually worth.

[alertmeipp]

Agree.

 

Fortunately or unfortunately, I think FTP may get taken out by its larger competitors if its share price remain depressed in next few months. RFP will be happy to issue some of its share to get FTP at the bottom of the cycle. They would want an asset in growing market to offset others.

[ECCO]

Agree.

 

Fortunately or unfortunately, I think FTP may get taken out by its larger competitors if its share price remain depressed in next few months. RFP will be happy to issue some of its share to get FTP at the bottom of the cycle. They would want an asset in growing market to offset others.

 

My guess is one of the chinese customer will buy FTP just before they went bankrupt or when they will be bankrupt. Chinese control the price of pulp, they are the customer of that stuff and now they change the rules to kill DP producer.

[OptsyEagle]

Agree.

 

Fortunately or unfortunately, I think FTP may get taken out by its larger competitors if its share price remain depressed in next few months. RFP will be happy to issue some of its share to get FTP at the bottom of the cycle. They would want an asset in growing market to offset others.

 

My guess is one of the chinese customer will buy FTP just before they went bankrupt or when they will be bankrupt. Chinese control the price of pulp, they are the customer of that stuff and now they change the rules to kill DP producer.

 

I usually don't give much thought about takeovers since everyone that I have ever been involved in was a complete surprise when it happened and anyone I ever thought would happen, never did.

 

That being said, I have wondered about two things. 

 

The first is the amount and value of all the Canadian tax loss carry forwards that Fortress currently has on its books and how much that would add to the value of an acquirer who might be profitable in other areas:  softwood lumber, paper pulp, etc.  Tax is just a cost of doing business and this type of merger has proven in the past to be an effective reducer of these costs.

 

The second thought was what would the ramifications be if a Viscose customer decided to buy us.  So instead of paying 13% above market price for the pulp, they buy us, write up a contract to buy dissolving pulp for $100 per tonne, pay $13 to the Chinese government and then become wildly profitable on selling their Viscose Staple Fibre (VSF) using this low cost supply (basically a shell game but a good one).  With this they can turn a 13% duty into about a 1% duty, while all the other competitors are dealing with the 13% to 49% duties.  Positioning this way, would make the duty an advantage...provided there isn't something in the rule to prevent it. 

 

In any event, just thinking out loud here.

[alertmeipp]

FTP is in a sector where M&A market is quite active but on scalp pricing most of the time. But true, takeover almost never happen or happen as expected.

 

Your second thought is a good one for IR, I suspect it won't be that easy.

 

 

Some details on Forestry support from Fed and Quebec. Hopefully, they can lower their cost with this.

 

http://www.sys-con.com/node/2878935

 

[Myth465]

 

 

I usually don't give much thought about takeovers since everyone that I have ever been involved in was a complete surprise when it happened and anyone I ever thought would happen, never did.

 

 

This is what I am seeing as well, at least over the last few years. Interesting.

[alertmeipp]

http://translate.google.com/translate?hl=en&sl=zh-CN&tl=en&u=http%3A%2F%2Fwww.tnc.com.cn%2Finfo%2Fc-014003-d-3401418.html

 

Pulp Antidumping: interests of the game? Or the market have the final say

 

"The Third Plenary Session of sanctions introduced before 18 quite interesting." Insiders, who asked not to be named, told this reporter.

 

He said sanctions November 6, notify the Ministry of Commerce determined that originated in the United States, Canada and Brazil imported pulp product dumping, since November 7, taking the form of provisional anti-dumping measures on imports of pulp margin. Third Plenary Session of the 18 held in Beijing on November 9 - 12, 2011, the market play a decisive role in the allocation of resources raised.

 

Last December, on behalf of Yibin Long Yi pulp LLC, Yanbian Shixian Bai Lu Paper Co. Ltd., quite unexpectedly submitted an anti-dumping investigation on the origin of imported pulp in the United States, Canada and Brazil. February 6 this year, the Commerce Department will be published on the website of origin anti-dumping investigation on imports of pulp United States, Canada and Brazil. In the same month, the China Chemical Fiber Industry Association submitted a "Report on the import of chemical wood pulp resolutely oppose anti-dumping investigation." Egret Xinxiang Chemical Fiber Group Co., Ltd., Tangshan three friends Xingda Chemical Fiber Group Co., Ltd., Shandong You Long Co., Ltd., Shandong and Xinjiang Yami Wealthy Technology Co., Ltd. have jointly submitted a fiber "on the opposition to dissolving pulp import anti-dumping recommended "investigation. Competing interests of the viscose industry and pulp industry into sight again. However, compared to 2009 to 2011, the manufacturers of viscose pulp industry profits have long been swallowed, then the pulp industry has become the object of urgent assistance. Behind this is the pulp industry leap forward with the expansion of production.

 

However, due to limitations of the viscose industry and technical bottlenecks lack of domestic forest resources, failed to go beyond the size and strength abroad. Under the trend of the United States, Canada and Brazil markets are highly profitable, increasing the capacity expansion and technological upgrading, making the product prices continued to fall, but the target market is also directed at China's huge viscose industry. Thus, the conflict escalated domestic pulp industry. If the viscose industry with enough pressure to digest raw pace, but also how to cover the intensification of the contradiction, but as the second half of 2012 textile and apparel market cools downstream, making the industry the ability to digest viscose pulp industry declined. This exacerbated the conflict between domestic and pulp companies.

 

From the market relations, the current pattern of interests and viscose pulp industry is a buyer's market. Thus, in the face of global competition, the domestic enterprises to select cheap viscose pulp understandable. Especially in the viscose industry downturn, reducing costs was guaranteed profits, and even their own survival. Meanwhile, the operating rate of the pulp industry is also worrying urgent protective support, the Ministry of Commerce round of sanctions was once seen as the last straw pulp industry. However, the interests of the viscose industry who will guarantee? In the current global competitive environment, the choices and trade-offs have what?

 

Viscose industry to pass on the cost of upgrading

 

Dissolving pulp as the main raw material of wood and bamboo, and made of paper pulp has certain similarities in the process. This switch to the production of dissolving pulp for the paper industry to provide a convenience.

 

Data show that in 2011, China's dissolving pulp gap of about 1.84 million tons, the same year the paper industry suffered a profit bottleneck, forcing companies in the industry to find other ways to improve profitability, while at the profiteering of the dissolving pulp industry attracted Chenming Paper , Sun Paper and a number of listed companies in the paper industry to invest. "Dissolving pulp and paper companies have expansion caused by profiteering" and other related news frequently appear, to attract attention, more and more paper companies added to which, the rapid development of the industry over the same period of viscose pulp industry has brought our country to the rare development opportunities. Statistics show that pulp products surveyed domestic production capacity in 2010 was 800,000 tons; 2011 was 1,092,100 tons, an increase of 36.51% over 2010; 2012 was 1,779,900 tons, an increase of 62.98% over 2011.

 

However, after the Commerce Department said the investigation, during the survey period, similar products, the domestic industry operating rate in 2010 was 66.01%; 2011 was 53.77 percent, 12.24 percent decrease over 2010; 2012 was 52.35%, less than in 2011 1.42 percentage points.

 

Why should one side cut side to expand production capacity it? Analysts said that this and similar developments of other industries, mainly due to the local government's aspirations for GDP growth given the appropriate policies to encourage enterprise, there is as technology advances in the industry, in-line production can be some improvement. This expansion of the viscose industry can have similarities. But, the biggest difference with the industry is that most of the foreign viscose industry shift to developing countries. The most obvious of the viscose industry, has accounted for more than 50% of the global total capacity, while foreign companies are still preserved pulp industry competitive advantage and continue to develop. Which is largely due to our relatively scarce compared to some countries, wood resources, which can be seen in the relevant content each year for many years the United Nations Food and Agriculture Organization published "status of the world's forests", which became a short board development pulp industry. The country needs to rely on imports of wood pulp mill, product competitiveness natural deficiencies.

 

In addition, the environmental pollution problems are mostly criticized. While the Commerce Department's investigation, said the investigation related to pulp companies have built a standardized recycling sewage waste gas treatment equipment, long-term real-time monitoring by national and local environmental protection department, emission standards in line with national and local government requirements, but the pulp industry pollution or heard about the reported problem. Just recently, the Xinjiang region of a pulp production capacity shut down a large area because of environmental reasons, involving 57 million tons.

 

Thus, there are viscose business representatives believe that profits from the previous period to the current trough, changes in the status of the pulp industry, pulp and viscose downstream should look for problems from their own industry transformation and upgrading can not pressure and then go to the viscose industry.

 

Xingda Chemical Fiber Group of Friends of Tangshan Co., Ltd. Deputy General Manager of Jatropha Curcas high that now compete to be on the global market, and competitive pulp in a global perspective is not strong. Learn from foreign experience in the development of related industries, such as foreign textile enterprises due to reasons such as labor costs increase at a disadvantage in global competition, mostly to developing countries, and therefore focus on the high end domestic enterprises to enhance value-added products to meet specific needs, and take the difference road. Domestic enterprises can also adjust the positioning of pulp, making high-end products.

 

Some innocent viscose industry

 

Some analysts believe that the anti-dumping, viscose staple fiber will increase domestic enterprises to use the cost of dissolving pulp, dissolving pulp prices in the domestic focus will be on the move in the next period of time. Laws of history shows that the process of dissolving pulp prices, viscose staple fiber profitability improved. But the fact is that in the weak downstream demand, rising costs are difficult to conduction, resulting viscose corporate victims.

 

Secretary-General of China Chemical Fiber Industry Association Professional Committee Katsuya viscose When talking about China Chemical Fiber Industry Association opposed the sanctions said the sanctions are not conducive to the development of viscose industry. He said that raw material prices will inevitably raise viscose prices, but in the current downturn situation, viscose industry is difficult to price the cost of conducting, in the end could cost the industry itself to digest policy.

 

Li-Jun Zhao, senior analyst at the fiber network is also in favor of the implementation of the preliminary ruling. Her long-term observation of changes in pulp and viscose industry. "The sanctions have a stimulating effect on the market after the preliminary implementation, viscose prices by 1,000 yuan / ton, while the lack of downstream support, the actual turnover rose only 200 yuan / ton to 300 yuan / ton." However, according to Yao Zhi Gao said, viscose industry itself is more difficult, the price is 13,000 yuan / ton, after the sanctions came out, viscose only rose 600 yuan / ton to 700 yuan / ton, in order to ensure that current profits.

 

Therefore, viscose manufacturers, will make the implementation of the preliminary ruling will further increase the cost of raw materials, manufacturers of viscose Forced survival of the fittest, upgrade technology, management and other areas in order to meet the challenge. However, in the critical period of viscose business transformation and upgrading, many companies have put new capacity, increased technical innovation and R & D investment, which will take up a lot of money. Artificially increase the cost of disrupting existing enterprise restructuring plans to become a drag on corporate concerns about industry rebound in front.

 

Meanwhile, the competitiveness among enterprises will be of viscose artificially distorted. For businesses, it is not fair. Those who have self-production of viscose pulp companies may be a corresponding increase in competitiveness.

 

Compared to the dilemma of Tangshan three friends, Jilin Chemical Fiber, said the company has its own subsidiary companies pulp, pulp imports accounted for less after the sanctions came out, the current structure unchanged with syrup, producing little impact on business.

 

For both production and production of viscose pulp Shandong Silver Hawk Chemical Fiber, it is a double-edged sword that its policy. Company official said that anti-dumping ruling, on the one hand lead to rising prices of cotton pulp, cotton linters, but may in turn lead to price increases, leading to rising cotton pulp manufacturing costs. On the other hand a direct result of the viscose industry raw material prices, leading to an increase of viscose manufacturing costs. However, if the price does not follow up the adhesive to a certain extent, it is not very good.

 

Some also say that the viscose industry overcapacity, this opportunity should be reduced scale. If the viscose industry overcapacity, then dissolving pulp industry expansion, and why should it crazy? Experts said that in a globalized world of today, according to the current rate of expansion, the relative size of dissolving pulp production capacity will viscose industry overcapacity, while the domestic industry has not competitive, it is not more should be eliminated? So, where's the logic in that both the upstream and downstream industry chain, market expectations are nice. Especially in the current technological progress of China's viscose industry, technological innovation and competitiveness in the market fully to the good situation, coupled with the increasingly obvious alternative to cotton trends, demand is expected to lead to a high potential. Since 2011, the viscose industry operating rate has been steadily rising in August this year, the industry's operating rate has been above 85%.

 

Preliminary ruling blow for viscose industry seem innocent, while the pulp industry may not have the desired impact. Li-Jun Zhao said that the ruling on the domestic pulp companies no significant improvement in the profitability of the situation, but administrative intervention for viscose business damage. Currently viscose plant raw materials inventory as a whole has more than one month, some more in the way of existing stocks of imported pulp enough plus two months, while the domestic dissolving pulp mill industry inventory levels in a half down. Taken together, the pulp is still a lack of short-term domestic discourse, the possibility of converting the stop is still larger. Now, after the anti-dumping, the improvement in the domestic pulp mill is minimal.

 

Moreover, regardless of dissolving pulp antidumping final results no matter how the final event, the latter will be wary of domestic dissolving pulp mill in Europe, Indonesia, Laos and South Africa to raise chip prices opportunistic.

 

Viscose industry several companies believe that supporting a weak competitiveness of the industry, and to suppress a competitive industry, outweigh the benefits.

 

Market regulation multistakeholder

 

CCF According to statistics, in 2012 China imported pulp 157.8482 million tons, accounting for about 58% of the Chinese pulp consumption. China Viscose company's future will face the crisis of over-reliance on imports.

 

Some people worry that the pulp industry debacle, the product will result in the loss of bargaining power. Some even said that if this happens, on the downstream industry chain is a fatal blow.

 

The fact is that after globalization, the market regulator, the choice in the industrial countries have all played their competitive advantage. Interests of viscose pulp industry and the game industry under the regulation of the market, and gradually win, shows the competitiveness of the viscose industry. Especially in view of global trends, are gradually increasing influence. Currently, on rising labor costs, RMB appreciation and other factors, China's textile and chemical fiber industry is to upgrade the road to accelerate the pace. Even a number of scientific and technological achievements in the international advanced level. In China, the pulp industry, its competitive potential is limited.

 

Some analysts believe that, PX become the polyester chain margins reservoir downstream PX industry will have to work. In this case, PX is our policy for the private capital industry is limited, but explained that under the policy intervention, the development of the industry has been constrained. The temporary storage of cotton policy "normalization", although there are forcing enterprises to upgrade cotton good intentions, ultimately proved to be unsustainable, leading cotton, chairman of the leading enterprises in Anhui Pharmanex benefit when it comes. " are embarrassed to say. "

 

Behind the pulp anti-dumping sanctions, is forcing companies own production of viscose logic of raw materials, may eventually lead to sanctions against the country for dumping of viscose fiber revenge.

 

So, play a decisive role in the understanding of the market in allocating resources, we must also have a vision and thinking globally. For example, the domestic enterprises to go abroad can also be put into resource-rich pulp.

 

Overall, the need for full market competition, and to have an international perspective. Policies can not always guarantee the interests of an industry, and to make this industry grow and find their place in the competition.

[alertmeipp]

if DP price does not go up high enough to use up the over capacity in China, what's the point of the anti-dumping after all.

[finetrader]

Hey guys,

 

It unclear to me, what is the % of NBHK are they planning to produce at Thurso? is it 100%? Or how much are they allowed to produce under the asset purchase agreement?

 

Thanks in advance

[triedtestedand]

Finetrader:

 

- For Thurso, there's no  limit to what they can produce under asset purchase agreement.  (There is at LSQ however, which is what can get confusing.)

- In early October, when the "swing mill" strategy was communicated, sounded like they might produce large % (up to 100%) for an interim period.

- In conjunction with the Q3 results, it sounded like there may be more of a blended approach (i.e. produce smaller %, along with DP). Several potential reasons for this:

    - maintaining existing DP contracts (which cover up to 74% of their theoretical DP capacity) while await

    - only selling in highest margin NBHK scenarios (closest customers with lowest shipment cost; customers where can guarantee ongoing supply; customers where can sell premium maple NBHK; negotiating with less position of weakness vs just producing NBHK en-masse to start and trolling for buyers).

 

The wildcard is what exactly are the margins on (premium) NBHK at this point (and forecastable for near-to-mid term).

 

 

Found the following recent profile on Chad which has a couple of interesting points:

 

http://www.paperadvance.com/index.php/people/current-interviews/2445-a-man-on-the-move.html

 

 

 

 

 

 

[OptsyEagle]

I think Yvon indicated that they are planning on producing 30% NBHK and 70% dissolving pulp.

[triedtestedand]

~30% NBHK, ~70% DP ...  that's what I heard as well.  Nobody asked "why" though ...

 

My speculation was that the "roughly 70%" of DP coincides quite nicely with their contracted volumes req't ... Chad also speculated on the call (over-optimistically as always?) about getting their partners to split the interim tariff deposits ...

 

Who knows what (if any) pressures/motivations there are on the VSF producers -> I'm guessing they don't want to do anything to help domestic Chinese high-cost DP producers to force prices up (and lend credence to their/MOFCOM objective), so maybe such cost sharing is something they might consider, especially if it's only for a portion of their overall DP purchase.  Fulida is one of the contracts, and they got off scott free with imports from Neucel (which they own) not subject to tariff (well ... 0.7%, if you call that a tariff) ... and I don't know if there's any residual goodwill on the floor prices of the contracts being broken last year. 

 

The long-term bottom line will be prime motivator, but in short term the strategies get interesting ...

 

Anybody got other theories on all this?