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Corrections Corporation of America Message Board

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  • newMK newMK Jun 29, 1999 5:14 PM Flag

    Statistical trivia re: ADV

    Flip, I meant the pre-merger losses of OPCO. For
    tax purposes, if they are merged, OPCO would file a
    tax return from 1/1/99 to the date of the merger.
    Those losses would not offset PZN's income for the same
    period, but could be carried forward to future
    post-merger tax years under really complex rules that could
    significantly delay the tax benefit.

    After the merger,
    everything would be combined (netted). Lord only knows what
    happens to all the capitalized/deferred intercompany
    income and expenses related to the special fees. Because
    the leases would evaporate, I guess they would be
    netted, too.

    One or both of these companies may
    not be "poolable", so if the merger was treated as a
    purchase, the intercompany note of 134MM would become
    goodwill and would be amortized.

    To me the merger
    only makes sense if we're at the point of "nothing
    left to lose", which we may be. One might say that the
    LOC is left, but to me it's borrowing money to pay a
    dividend to qualify as a REIT so the stock price will go
    up and we can grow again by doing accretive deals.
    Sound familiar?

 
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