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Corrections Corporation of America Message Board

  • flipper_58 flipper_58 Nov 23, 1999 2:05 PM Flag

    Quick check again on the numbers

    For 9 months.....including non-cash expenses such
    as depreciation...what Opco and PZN would look like

    Opco had a loss of ($84mm), PZN had net of
    169mm...totaled that's $85mm net or appx. $.71/share.

    lets pay UNcle sugar out of that too. What 40%? That
    leaves a net of $.41 a share or a P/E or 22

    Not to make things worst but Opco in the 3rd quarter
    had a loss of $32mm or $128MM annualized...that's
    means combined PZN/Opco would have earnings of
    $41mm...take out $17mm for taxes and that's $24mm for the
    combined organization or apprx. $.20/share for a P/E of
    45. Ouch. So de-REIT might get them only $24mm of
    retained earnings plus the non-cash items. Short term
    would be rough it appears to me.

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    • Re-organized as a PTLP on 10/29/99; symbol AC.

    • I believe that tax law does not permit the formation of additional public traded partnerships? Comments?

    • As a limited partnership I was under the
      impression that the amount of partners is limited (no play
      on words) I'm also aware of the limited liability
      made by this structure. I'm also aware that there must
      be at least one general partner who has to assume
      liability. Do you think Doc would put his mansion on the

    • I believe the plan was to balance this excessive
      payment to PZN with the tax savings as a Reit..Opco loses
      84 mil and PZN gets 84 mil tax savings as a REIT..At
      100% occupancy they
      could lower opco rent.The two
      are still one...

      <<However, OPCO
      has no cash to spend.. because all of its cash goes
      to PZN in the form of deliberately elevated rent
      payments meant to sanitize their taxible earnings as
      tax-exempt funds. IN short, Opco is losing money because PZN
      has set its rents too high for the level of occupancy
      and ?expenses we don't even get a chance to see. As a
      result, OPCO loses money, and we, PZN, bail them out
      because OPCO is our largest client, but we never get to
      see exactly what on the books causes OPCO to lose
      money with 95% occupancy rates (far greater then the
      hotel world).<<

    • When I was heavily involved in Real Estate years
      ago I remember that we were limited to how many
      partners we could have. Of course they weren't exchange
      traded. This must be a horse of a different color.
      Basically I couldn't comprehend that every share owner
      would be a limited partner. Further I thought that only
      a Corporation could trade shares. My

      Thank you for your prompt and courteous response.

    • Interesting that a very successful NYSE listed LP, Plum Creek Timber (PCL), after years of paying out about 8%+ (much of it tax-sheltered), has decided to convert to a REIT.

    • You can have enough units for it to be a fully
      liquid security. There are plenty of limited
      partnerships traded on the NYSE. The experience of owning and
      trading an exchange-traded LP is comparable to owning an
      exchange traded C-Corp. There are tax differences however,
      including having to file the tax form from Hell. Some of
      the tax advantages of the exchange-traded LP form
      have been phased put for all but natural-resource
      trust LPs.

      Hope I understood the thrust of your
      question. If not, I am just talking to myself.

      - - - ST

    • was under the assumption that a limited partnership is limited to the amount of partners. Anyone??

    • Lets consider the possibilities here ...if it is
      Dreman tranferring that many shares to the high yield
      fund. It sends me a message that he expects PZN to
      remain a REIT. He wants the high yield for his fund, and
      the only way is to remain a REIT...A this junture Mr.
      limited partnership seems logical and I like that better
      than a C corp. I believe this has to be projected out
      for growth to come up with the correct answer..enter

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