Below is from todays ACAS report. As I read it, dividends will be increased by the distribution of LTcap gains starting in 2008. This is great for my retirement income.
"American Capital also announced a change to its dividend policy for net long-term capital gains. Previously, the Company retained these gains permanently by paying a 35% tax on behalf of its shareholders and treating the gains as a deemed distribution to shareholders. American Capital will now treat net long-term capital gains similarly to ordinary taxable income, making them available for the payment of dividends to shareholders. The change will not impact the tax characteristics of American Capital's 2007 dividends because net long-term capital gains earned during the tax year ending in 2007 will not be distributed in 2007 and American Capital will pay a 4% excise tax on those gains. However, such gains will be available for the payment of dividends in 2008 and, thus, beginning in 2008, a portion of American Capital's dividends will be from net long-term capital gains. As a result of this policy change, American Capital will likely be required to distribute more cash dividends than under the previous policy."