I haven't a clue really. But given my general
mistrust of reporters, this one may have "embellished" the
fact? that the guy was former army, into him being
I've been away from the military too long to even
guess at the reason for retirement if, in fact, he is
retired. But I agree with your surface observation.
From TI's analyst report: " PZN plans to conserve
as much capital as possible in order to invest in
expansion facilities in 1999 and 2000. If the company's
cost of capital continues to be as high as it is
currently, then the company has plans to suspend its DRIP
and cut its dividend in order to keep it at the
minimum level and conserve cash. "
cutting dividends (but paying a big special)...why? Just
to stubbornly be a REIT. They need capital, but
continue to insist on paying it out via REIT
If they gave up REIT status, they'd owe tax on the
first six months' of income, but they'd save $170MM of
special dividend and $130MM or so of Q3 and Q4 dividends
(well, too late for Q3, I guess). Plus no more dilution.
That builds a lot of prisons. Plus no more complicated
structure. And no more dividend investors (are there any
C'mon, Doc. Whip up a proxy and let us vote on it (thus
no law suits).
The new legislation will require 90%(presently
95%)of after tax FFO to be paid to shareholders .The
information provided by TI on analyst report is
conservative..I don't know TI source, but it looks close to a
recent report by First Union Bank. They have PZN @ $2.44
for 1999. The interesting numbers IMO are 53,000 beds
in operation with a total design capacity of 73,000
beds .This indicates to me that the existing
facilities have this room for expansion. This should cost
less to develop, and when completed it will raise PZN
FFO by at least 30%.