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Corrections Corporation of America Message Board

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  • newMK newMK Jul 12, 1999 2:29 PM Flag

    Please Post in a perspicacious manner

    You're both right, but it's a little complicated.
    To be a REIT, PZN has to pay out not only 95% of
    this year's taxable income, but also 100% of CCA's
    "earnings and profits" that were accumulated as of
    12/31/98. The only timing requirement is that they be paid
    out by the end of 1999.

    Currently, PZN has
    been paying .05/share of the special dividend
    quarterly. In addition, the quarterly operating dividend is
    about .04/share higher than required under the 95%
    rule, so that excess comes out of CCA's E&P, which also
    reduces the amount that has to be paid as a special
    dividend ine December.

    If PZN continues to pay .60
    per share each quarter this year, but taxable income
    decreases, then the additional excess over the 95%
    requirement will also come out of CCA's E&P, thus further
    reducing the amount required to be paid in

    You understand correctly that the CCA E&P is a fixed
    amount. The only variable is when it is paid. The more
    that is paid in the quarterlies, the less will be paid
    in Dec.

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