Alliance Semiconductor Is A Liquidation Gone Wrong, But Potential Remains – ALSC

Alliance Semiconductor is the story of a liquidation gone wrong. In 2005, after years of poor performance, the company found itself targeted by activist investors seeking liquidation. After agreeing to dismantle itself, Alliance set about selling off its portfolio of venture investments and shareholdings in other companies. In the largest of these transactions, QTV Capital paid $123.6 million for nearly all of Alliance’s venture capital holdings.

Flush from asset sales, Alliance paid special dividends totaling $4.35 per share through July 1, 2008. In September, the company announced its board of directors announced its intentions to begin liquidation proceedings. On September 5, 2008, Alliance Semiconductor filed to deregister its stock.

That’s when the trouble started. Seeking to maximize yield on its remaining cash, Alliance had invested nearly $60 million in auction-rate securities issued by AMBAC. A good explanation of these securities is available here, but two features of these securities are salient to the Alliance Semiconductor story:

Liquidity – Rates on the AMBAC auction-rate securities purchased by Alliance were to be reset in frequent auctions, which would also provide liquidity to holders. Outside of these auctions, liquidity for these securities was extremely limited.

Put Rights – Under certain conditions, AMBAC possessed the right to force the auction rate securities trusts to purchase AMBAC preferred stock, effectively converting these auction-rate securities into AMBAC preferred stock.

In October 2008, Lehman Brothers failed and the entire financial world plunged into crisis. The auction process for auction-rate securities failed, and transactions in these securities virtually ceased. Worse, for Alliance Semiconductors, AMBAC was decimated by losses suffered on the sub-prime mortgage products and derivatives it insured.

Instead of holding the safe, liquid cash alternatives Alliance Semiconductor thought it had purchased, the company now held $60 million worth of completely illiquid securities issued by a distressed sub-prime insurer. Interest on these securities was still being paid, but the company found itself unable to continue its liquidation as scheduled.

Alliance Semiconductor’s management certainly bears the blame for investing nearly all its cash in these auction-rate securities, but they were hardly the only ones to make the mistake. Before the crisis, auction-rate securities were widely considered to be cash alternatives. A failure of the auction market for these securities was nearly unimaginable.

Faced with an outcry from the many business and individuals who had purchased auction-rate securities, many banks and investment banks repurchased these securities at par value in 2008. Alliance Semiconductors was not so fortunate. According to a bankruptcy attorney in San Diego, reeling from losses and facing the threat of bankruptcy, AMBAC was in no position to repurchase these securities and instead exercised its right to exchange these auction-rate securities for preferred shares.

As can be determined from this filing, AMBAC swapped each $25,000 worth of auction-rate securities for a share of AMBAC preferred stock with a par value of $25,000. Alliance received 2,277 shares. Due to AMBAC’s distressed status, market value for these preferred shares was nowhere near par value, causing Alliance to suffer large losses. AMBAC eventually declared bankruptcy in November, 2010.

In the following years, Alliance Semiconductor pursued legal channels to receive full value for its former auction-rate securities. The company filed a claim with FINRA against JP Morgan, alleging the risks of the securities were not fully explained prior to Alliance’s purchase. FINRA, however, disagreed, denying all of Alliance’s complaints in November, 2011.

Deregistration, the losses on the auction-rate securities conversion and a near-complete lack of communication with shareholders lead Alliance’s share to dip to a low of 10 cents in mid-2012. Little hope seemed to remain for shareholders, as the company’s legal efforts were denied and AMBAC’s bankruptcy seemed to indicate the AMBAC preferred shares would wind up worthless as well.

But on Friday, after market close, Alliance filed a new quarterly report indicating its AMBAC preferred shares do have value after all!

As of December 31, 2012, Alliance still held 2,277 shares of AMBAC preferred stock and listed these as having a value of $11.95 million, or $5,250 each. Even better, the company sold 80 of these shares for $6,750 each on February 4.

Assuming the market price of these shares still stands at $6,750, Alliance’s balance sheet is as follows, and it’s very simple:

ALSC balance sheet

 

All of Alliance Semiconductor’s assets and liabilities are current. With $15.47 million in adjusted equity and 33.05 million shares outstanding, Alliance has 46.8 cents per share in net current assets/equity. Alliance stock last closed at 27 cents, a 42.3% discount to net current assets. The company also has $71.8 million in NOLs, capital loss carryforwards and unrealized losses, all of which are currently fully reserved against.

This calculation comes with a few caveats. For one, the market price of the AMBAC preferred stock may be volatile and could easily decline. (Anyone with access to a current quote on these $25,000 par securities is encouraged to contact me!) Another significant issue with non-operating companies is cash burn. Fortunately, Alliance is consuming only about $60,000 per quarter. A third issue is strategy. Alliance may trade at a large discount to net current assets, but what if management decides to retain cash and make a bad acquisition? Or what if liquidating the remaining assets takes another five years, killing the IRR? There is some indication that the process might linger on, as the company’s tax filings for the years 2008-2012 remain open to IRS scrutiny.

Investors should be aware of these factors and discount Alliance Semiconductor accordingly. However, if a final liquidation happens sooner rather than later, the current share price offers material upside.

Disclosure: No position.

Burnham Holdings Heats The Nation – BURCA/BURCB

Burnham Holdings is a classic example of a small, profitable business that has been ticking along without much fanfare for years and years. Burnham’s fourteen subsidiaries manufacture boilers, the critical but hardly sexy machinery that keeps our homes and businesses warm when cold weather arrives. Burnham also manufactures various other heating and cooling products. Burnham was founded in 1905 and is headquartered in Lancaster, Pennsylvania.

Burnham Holdings’ financial results are heavily dependent on the state of the real estate market, both residential and commercial. Hot markets increase demand for Burnham’s products as new construction and remodeling activity surges. Poor real estate markets hurt results as property owners delay replacing old boilers and equipment.

In 2003, Burnham achieved record profits of $2.28 per share and paid dividends of $1.06 per share. Dividends reached $1.16 per share in 2005, though profits had peaked in 2003. Shares peaked in 2004 at $29 per share. When cracks first appeared in the American real estate market in 2006, Burnham was hit hard and reported a loss for the year. The dividend was slashed to 76 cents per share, breaking a string of 24 consecutive years of dividend increases.

Burnham’s fortunes hit a trough in 2009. Revenues for the year were $190 million, down 24% from 2004’s record $250 million. Impressively, Burnham was able to cut costs aggressively and recorded a profit of over $1 per share even in the worst years of the financial crisis. Here’s a look at the company’s results going back to 2004, the year before the trouble started.

BURCA results

 

Revenues have not yet recovered to previous highs. However, revenue trends have been encouraging since 2010 and Burnham’s increases in efficiency allowed the company to produce $18.43 million of EBITDA in 2012. Burnham’s free cash flow generation is worth noting. Even in a period of sluggish demand for its core products, Burnham Holdings produced an average of $1.36 per share in free cash flow from 2004 to 2012.

Burnham has devoted significant free cash flow to paying generous dividends, but has also focused on debt reduction. Since hitting nearly $30 million in 2008, long-term debt has been reduced to less than $8 million.

BURCA balance sheet

 

While long-term debt is under control, Burnham’s post-retirement obligations are another story. Since 2004, the book value of these obligations has increased by $37 million! In the 2011 annual report, Burnham assures investors that the funding status of its pensions are well above ERISA minimums. The company also discloses that the pension plan is currently closed to non-union employees hired after June 5, 2003.

Pension plans are among the thorniest balance sheet entries. Any net pension deficit or surplus is, at best, a rough estimate of the actual present value of benefits to be paid less the pension plan’s assets. A complete treatment of pensions would require another post (or perhaps even another blog!) but there are a few data points investors can examine to determine whether a pension deficit or surplus is likely to be understated or overstated.

Expected Return on Plan Assets – A company is required to assume a rate of return on the assets within a pension plan. This rate is often based on a blend of actual historical performance and future projections based on the asset allocation of the fund. By examining this figure, investors can determine how aggressively invested the pension fund is and/or how realistic the company is being. Some companies are optimistic to the point of delusion, projecting 10% or greater returns on portfolio assets. Since pensions nearly always include an allocation to fixed income, a 10% return assumption would require equities to earn well in excess of 10% annually. Extremely unlikely. High return assumptions will understate pension liabilities.

Discount Rate on Plan Liabilities – Expected benefits to pension beneficiaries are discounted to present value using long-term interest rates. Pension benefits can be thought of as a bond. When interest rates are low, the present value of these benefits is high. When rates are high, the present value of these benefits is low. With interest rates near historic lows, the present value of pension obligations is very high. If interest rates eventually revert to historical averages, the present value of pension benefits will decline. However, fixed income assets in pension plan accounts will also decline in value as interest rates rise.

Burnham’s pension accounting is a mixed bag. Burnham’s return assumption for its pension assets is 8.5%. This is very aggressive, especially considering only 30% of plan assets were invested in US equities as of 2011. (Another 17% were listed as “other,” which may include foreign equities.) Given the low yields on investment-grade debt, the plan’s assets will be hard-pressed to earn 8.5% annually without taking on extreme risk. On the other hand, the discount rate on pension plan obligations was just 4.25% in 2011. A return to higher interest rates would reduce the present value of plan obligations.

In 2012, Burnham contributed $3.35 million to its pension funds to improve their funded status. So long as the net pension obligation does not grow, Burnham’s free cash flow should be relatility unaffected. However, a significant downturn in the stock market or a continued decrease in interest rates would further increase the funding gap.

While Burnham’s pension liabilities may be larger than they first appear, Burnham’s balance sheet also conceals a significant asset. Burnham accounts for inventories using LIFO. Many older manufacturing companies have large LIFO reserves, and Burnham is one of them. In 2011, the size of this LIFO reserve stood at $19.4 million, or $4.3 per share. Inventories declined just slightly in 2012, meaning the size of the LIFO reserve is likely little-changed.

Burnham’s valuation looks reasonable, both in terms of multiples to earnings and cash flow and in terms of book value.

BURCA valuation

At 9 times trailing earnings, Burnham may be a reasonably-priced play on a real estate recovery. While Burnham Holdings trades at a 16% discount to book value adjusted for inventory, the company is probably not worth more than book value. Burnham earned an return on average equity north of 10% just once since 2004, hitting 12.35% in 2012. Once equity is adjusted for inventory, returns on equity are even worse. Asset intensity is the culprit here, as asset turns averaged just 1.37 since 2004. If the company could find a way to shed excess assets, returns to shareholders would improve greatly.

Burnham pays dividends per share of 80 cents, offering a 4.9% yield at current prices. Burnham also has a series of preferred shares outstanding that yield 7.5% at the current $40 bid. However, these preferred shares are extremely illiquid and trade only rarely.

While Burnham’s valuation is reasonable, I will be taking a pass for now. While the company’s free cash flow and exposure to the real estate market is attractive, I am put off by the aggressive pension return assumptions and the sluggish returns on equity. I would reconsider Burnham if the company took steps to streamline its assets and got more realistic about its pension obligation, or if the share price took a tumble if the US economy falters.

Disclosure: No position.

Significant Corporate Actions for ALJJ, CVTR, ERS

Unlisted companies can be just as dynamic as their larger, listed peers. Three of the companies I have profiled recently announced major corporate actions that deserve attention.

ALJ Regional Holdings – ALJJ

ALJ Regional Holdings successfully completed the sale of its operating subsidiary, KES Acquisition Company to Optima Specialty Steel for $112.5 million in cash. ALJ completed its previously announced tender offer on February 8, accepting 30 million shares at 84 cents. 90.8% of shares tendered were accepted for purchase. Following the tender offer, ALJ Regional holdings has 29.65 million diluted shares outstanding, with 93.8 cents per share of cash and receivables, plus tax assets.

I tendered all of my shares in the offer, but I intend to keep my remaining shares in order to benefit if Mr. Ravich can repeat his success. I will be moving ALJ Regional Holdings to the Inactive Ideas section of the Idea Tracker page. Total return since my writeup on August 10, 2012 was approximately 91%, assuming remaining shares are sold at today’s price of 75 cents.

Care Investment Trust – CVTR

On December 31, 2012, Care Investment Trust announced plans to merge with its parent company, Tiptree Financial Partners, LP, to form a new company, Tiptree Financial Inc. The newly-formed company will attempt to list on a national exchange and will have a pro forma book value of $380 million.

On February 8, Care Investment Trust announced a joint venture with Calamar Enterprises to acquire two senior living complexes in Western New York state for a contribution of $18.3 million. The company expects to generate a greater than 12% cash return in the first year of operations, or at least 21.5 cents per share.

It is good to see the company putting some of its excess cash to work, assuming the deal goes through. This deal, if successful, will result in better coverage for the company’s dividend and perhaps greater investor conference. The merger with Care’s parent company is difficult to parse. On one hand, being a part of a larger company may provide greater liquidity and better investment opportunities for Care, on the other hand it is possible that Care Investment Trust shareholders aren’t getting the best deal on the exchange. After all, Care Investment Trust is 90.8%-owned by Tiptree and Tiptree would not be doing this if it were not getting a good deal.

The situation is developing and for now, Care Investment Trust will remain an active idea.

Empire Resources – ERSO/ERS

On February 4, Empire Resources successfully uplisted its stock to the New York Stock Exchange, changing its ticker symbol to “ERS.” Since announcing the uplisting on January 31, the stock has been on a tear. Empire Resources now trades at 15x trailing earnings and 1.3x book value. The stock may have more room to run, but at $5.00 it is no longer the screaming bargain it was when I wrote about it on March 22, 2012. Total return from then to now was 77.69%. I will be moving Empire Resources to the Inactive Ideas section.

Disclosure: I own shares of ALJ Regional Holdings

EACO Corp Has a Tiny Float, Solid Profits – EACO

EACO Corp. is a small but rapidly-growing distributor of fasteners and electronic components to a large variety of industries. The company has 43 sales offices and 6 distribution centers across the US. EACO Corp. conducts its activities through its subsidiary Bisco Industries, Inc., which it acquired in 2005.

Prior to acquiring Bisco Industries, EACO Corp. operated restaurants in the state of Florida. Results were abysmal. In 2005, the company sold off all its operating restaurant properties, retaining the workers compensation liabilities associated with them. The company also retained five properties held for lease in California and Florida.

In 2010, EACO Corp. executed an agreement to purchase Bisco Industries, a private company owned entirely by Glen F. Ceiley. Pursuant to the agreement, EACO executed a reverse split and then issued 4.706 million shares to Glen F. Ceiley, as well as 36,000 shares of cumulative convertible preferred stock.

Before the reverse split, EACO had 3.91 million shares outstanding. After the 1-for-25 reverse split, only about 156,000 shares remained. Issuing the 4.706 million new shares to Glen F. Ceiley resulted in him owning 96.8% of the company. The transaction was effectively a reverse merger, where a much larger company merges into a smaller or shell company in exchange for nearly all the equity of the combined enterprise. According to basic KPI theory, reverse mergers can be a cost-effective way for a private company to achieve a public listing.

Since 2010, Mr. Ceiley has built his stake in EACO Corp. to 98.7%. Other executives own another few hundred shares, leaving a float of only 62,211 shares, or 1.3% of shares outstanding. I have no data to prove it, but I am convinced EACO Corp. must have one of the smallest, if not the actual smallest float of any company that trades in the US. The value of the float is a mere $145,000. Even the smallest of value funds is likely to pass on EACO.

Float makes little difference, except at extremes. Whether a company has 10% or 90% of its shares in the hands of the public does not affect its revenues, earnings or cash flows one whit. However, a low float often indicates concentrated share ownership, which increases the power of insiders or significant outside investors to influence a company’s decision-making. With an ownership of 98.7%, Glen F. Ceiley has carte blanche to manage EACO and Bisco Industries however he sees fit.

Fortunately, EACO has done extremely well under Mr. Ceiley’s leadership. Since 2010, revenues are up 26.8% and has moved from making losses to earning significant profits and free cash flows.

Results

Revenues include a small figure from the company’s remaining leased properties. Distribution sales from Bisco Industries accounted for 99% of revenues in fiscal 2012. With gross margins of nearly 28%, it’s somewhat surprising that operating margins register below 4%. Officer compensation is very reasonable at less than $1 million in 2011, so that is not the issue. EACO does not release much detail regarding operating expenses, but I suspect that sales commissions and salaries account for most of the overhead. Being a distributor, EACO depends on Bisco’s sales force to sign up new accounts and grow the business. Talented salespeople do not work for cheap. In the most recent quarterly report, EACO noted its sales staff headcount increased 10% from a year early, by 26 people. That equates to 260 sales people across the nation and an average of about $450,000 in sales for each.

EACO Corp.  has good liquidity, but carries a substantial amount of debt.

balance sheet

Net debt of $11.23 million is 2.2 times trailing EBITDA. While I would like to see less debt on the balance sheet, my concerns are put to rest by the fact that the debt balance is declining and the company is becoming less leveraged as time goes by.

debt

The line of credit with Community Bank accounts for over half of EACO’s total debt and carries a very reasonable (floating) interest rate. The line of credit is personally guaranteed by Glen F. Ceiley. The Symlar Properties note with Community Bank is backed only by the company’s leased Symlar, California properties.

In January, the company announced the sale of a property in Orange Park, Florida for $1.07 million. The sale is expected to finalize by late March. This property had been listed on EACO’s balance sheet as held-for-sale and has no debt against it.

Despite its Bisco subsidiary’s 10%+ annual growth, EACO trades at just over 5 times earnings and at 72% of book value.

valuatoin

If EACO can continue its success, the math could work out well for shareholders. If EACO grows at 8% annually for the next five years and then trades at 10 times forward earnings, shares would be worth $6.86, good for 25% annual returns.

Investors should remember that EACO is effectively a one-man show due to Mr. Ceiley’s extraordinarily high ownership. What I can’t understand is why he took over the company at all. He was already running a highly successful, growing private business. Why bother with the hassles of public ownership like quarterly reporting and investor communications, especially when less than 2% of all shares will be held by the public? Perhaps he had or has ambitions of raising additional capital through share sales and conducting acquisitions.

Mr. Ceiley is 66 and will eventually want to step back from the business. It could be 20 years from now, but at that point I would expect a sale to a competitor. Due to the tiny size of EACO’s float, investors will have a tough time accumulating any meaningful stake in EACO. On the other hand, returns are returns and picking up a few shares here and there could potentially result in significantly greater worth down the road.

Disclosure: I own shares in EACO Corp.

 

Regency Affiliates Is A Collection of Unrelated Yet Valuable Assets – RAFI

Regency Affiliates owns three valuable assets: cash, a 50% stake in a real estate partnership and a 50% stake in a power generation partnership. Regency Affiliates is majority-owned by financier Laurence S. Levy, whose Hyde Park Holdings, Inc. has a long and successful history of successful investments, especially in the infrastructure arena.

Cash

At the corporate level, Regency Affiliates has $6.79 million in cash and equivalents. Total corporate-level liabilities are only $215,704. The great majority of this cash is available for making new investments or for distribution to shareholders.

Real Estate Partnership

Since 1994, Regency Affiliates has owned a 50% interest in Security Land and Development Company, LP. Security Land owns a 34.3 acre complex at 1500 Woodlawn Drive, Woodlawn, Maryland. This parcel includes a two-story office building and a connected six-story office tower. These buildings are occupied by the United States Social Security Administration Office of Disability and International Operations under a lease that expires in 2018. These administrations have occupied these buildings since their construction in 1972. Regency Affiliates also owns a 5% limited partnership interest in the general partnership that manages the complex. This investment provides a very small amount of annual income.

In 2003, Security Land executed a $98.5 million cash out refinancing of the property that resulted in cash proceeds of $41 million for Regency Affiliates. The agreement called for the new debt to be amortization from 2003 to October 31, 2018, at which time a $10 million balloon payment will be due. The debt bears interest at 4.63% and is non-recourse to Regency Affiliates.

Since the refinancing, Security Land has paid down debt from $98.5 million to $52.92 million. While Security Land is quite profitable, it devotes substantially all of its cash flow to paying down debt and does not currently provide cash flow to Regency Affiliates.

Here are Security Land’s results for the past several years:

Security Land

Operating income and net income hit highs in the twelve trailing months as a result of rent increases and reduced debt.

Estimating Security Land’s value to Regency Affiliates is a manner of estimating a cap rate for the office property, then netting that against cash and debt at the partnership level. Real estate data company Reis estimates a mean cap rate of 6.1% for office buildings in the West/Northwest Baltimore area in the fourth quarter of 2012. With a long-term, high-quality tenant like the Office of Disability, I think it’s reasonable to expect the property to command an average or better cap rate. A cap rate of 6.1% on operating income of $6.23 million indicates a gross value of $102.13 million.

As a check, I pulled up tax assessments for Baltimore County. The property at 1500 Woodlawn drive has a 2013 assessment of $90.16 million. At present, Security Land has debt of $52.92 million against cash and restricted cash of $3.02 million for net debt of $49.9 million. If we use the more conservative $90.16 million value estimate, Security Land’s net value is $40.26 million. 50% of that value, $20.13 million, is attributable to Regency Affiliates.

Risks to Security Land’s value include the possibility that the Office of Disability will leave at the end of its lease (due to government cutbacks or other factors) or that Security Land will not be able to refinance before the $10 million balloon payment is due in 2018. I consider the possibility of the Office of Disability picking up and leaving to be remote, due to the sheer headache involved and the unlikely prospect of finding substantially cheaper accommodations. As for potential cutbacks, I have a hard time imagining the ranks of the disabled growing smaller as the US population ages. Demands on the Office of Disability will likely grow. As far an inability to refinance its debt, I can’t imagine the company would have any difficulty finding a lender willing to lend $10 million against a property worth at least $90 million.

I think it’s extremely likely that Security Land will execute another large cash out refinancing once 2018 arrives and another lease has been negotiated with the government. Assuming an $80 million refinancing, Regency Affiliates would find itself with $11.93 per share for new investments or dividends.

Power Generation Partnership

Regency Affiliates’ other major investment is its subsidiary Regency Power Corporation, which owns a 50% interest in MESC Capital, LLC. In 2004, MESC Capital purchased Mobile Energy, which owns on-site generation assets that provide steam and electrical power to a Kimberly-Clark tissue mill in Mobile, Alabama. To acquire Mobile Energy, Regency Power Corporation contributed $4.3 million in equity capital to MESC Capital with DTE Mobile contributing another $4.3 million. MESC Capital took on $28.5 million in debt to fund the remaining purchase price and provide working capital. This loan (again non-recourse to Regency Affiliates) was to be amortized over 15 years.

At the time of the agreement, MESC Capital executed a 15 year agreement with Kimberly-Clark where MESC would be the tissue mill’s sole steam supplier. The agreement is “take-or-pay” meaning Kimberly-Clark owes MESC a set amount regardless of whether or not any power is actually used.

MESC Capital’s revenues and profits have been quite consistent since 2005, the first full year of operations. Average operating income for 2005 to 2011 was $3.98 million.

MESC

Valuing Regency Affiliates’ share of this income is not as simple as assigning a multiple to average earnings. Come 2019, there’s no guarantee Kimberly-Clark will renew the contract on equivalent terms, or at all. Unlikely, but possible. To account for this risk, investors should assign a discount to MESC’s value. MESC Capital earned $3.96 million in pre-tax income in the four trailing quarters. Adjusted for 35% tax, the figure would be $2.57 million. Let’s say a tiny but consistently profitable utility company is worth 10 times earnings. And then let’s say a tiny, consistently profitable utility with questions about future earnings is worth 7.5 times earnings. In that case, MESC is worth $19.28 million and Regency Affiliates’ stake is worth $9.64 million.

The Sum of the Parts

Regency Affiliates’ market capitalization is about $24.4 million. However, the sum of its $6 million in excess cash and stakes in two valuable partnerships may be worth considerably more.

sum of parts

Conservatively estimated, Regency Affiliates’ assets may be worth over $35 million or 46.6% more than the company’s current trading price. What’s more, the intrinsic value of the company’s partnership stakes will likely grow as the debt continues to be reduced. In 2011 alone, Security Land reduced its debt outstanding by $5.66 million, generating $2.83 million in value for Regency Affiliates. This analysis does not consider potential taxes owed on any sale of properties, but I consider it more likely that Regency Affiliates would monetize its investments by borrowing against them.

And the Unfortunate Past

Despite the rosy present, a look at Regency Affiliates’ past reveals some questionable transactions and corresponding litigation. In 2008, the company was forced to pay a $3 settlement to former shareholders to objected to a transaction involving many tons of rock aggregate at a Michigan mining site. The transaction was complex, so I’ll leave it to readers to investigate further should they desire. The details can be found in the company’s 2008 annual report. A deeper look at the company’s finances reveals a host of transactions, some involving related parties and many not working out well for Regency Affiliates’s shareholders.

Whatever shenanigans troubled the company back then, Regency Affiliates’ current operations are streamlined and profitable. The company may be worth far more than its current market value based on conservative estimations of the value of each partnership.

Disclosure: No position.