OUT-TAKES from First Union Securities. . . .
It Appears To Make More Sense To De-REIT Without The
Equity Infusion? The
convertible equity infusion is
at the heart of the proposed transactions and still
common shareholder approval (slated for April-May 2000).
analysis (using revised PZN estimates and consolidating
operating losses at OPCO/CCA,
and de-REITing), fixed
charge coverage ratio (adjusted EBITDA divided into
and dividend payments) would be about
1.9x in late 2000 WITH the convertible
infusion. Assuming PZN simply de-REITed and did not take
the convertible equity, fixed
would be about 2.3x.
23, 1999, i9PZN: Back To EPS;
Consolidating PZN With OPCO, Then De-REITing; �No
Gain�li for additional information. We are simply
highlighting that we do not
believe PZN�s financial
condition, even when consolidating OPCO, is as dire as the
of this equity infusion implies. Using estimated
consolidated after-tax earnings per share,
we also believe
PZN�s financial performance would be healthier, by as
much as $0.10-
$0.15 per share (off a $0.33 cent
EPS base in 2000).
why neither of them has asked my advice? Not all questions get answered in this world -- and not all the questions asked. Well, as Michener's admiral said, "where do we find such men?"
You seem to forget that it is always the
government that makes the laws, enforces the laws, sends
people to prison, leaves people in prison or releases
them, and determines how private prisons will be run.
All the moral and ethical issues are controlled by
the government even when private prisons are run for
The idea of a private prison is to carry out
government dictated policy more efficiently. Government
control is not reduced and in some ways may be increased.
It is sometimes easier to order your contractor to
make a change that to make the change
The value-added by the private prisons is measured by
two factors: 1. The government's evaluation that the
private prison achieved the government's goals (obviously
the government must change contractors if the private
prison fails to achieve these goals) and 2. The profit
the private prison earns. Profit is value added to
the society because it measures the amount by which
the product produced (incarceration per government
standards) exceeds the cost of production (society's
material, land, and labor resources used to produce the
Are you in any way associated with a labor union
involved in prison work? This would explain your aversion
to private prisons, but it would suggest that this
aversion is strictly a result of your personal profit
Prisons themselves have social value, though you
could argue that there are better ways to take care of
serious offenders. The social value lies in keeping those
who can't live in society off the streets -- what's
it worth to you to prevent burglary of your home,
rape of a loved one, or a scamster tricking your
mother out of her life savings? Private prisons are
simply facilities. The state does not delegate the
decision to deprive citizens of liberty -- it only
contracts for their custody and housing. If motel 6 was
secure, they could conceivably put them up there. Your
beef is on behalf of civil service jobs, not the
philosophy of who gets to take away one's liberty. "Value
added" is not the issue, it's cost subtracted. All that
really matters is performance -- security, adherence to
law, and (if you believe it works) rehabilitation. I
think there are better ways to deal with the problems
of crime (have published on the subject), but
neither Crants nor Gray Davis have asked my opinion.
I am suggesting that private prisons cost more
than they are worth. I have yet to see them "add
value" to society to a great degree.
taking a persons life, the deprivation of a persons
liberty in one of the most serious things a society can
do and should be the job of a goverment agency.
That criminal who's freedom has been taken away still
is out of control. You just have them put in a cage
with other imprisoned people and those people who
watch over them. Many criminals do need to be taken off
the street. Many don't.
Are we suggesting the
the answer to the crime problem is to lock people
away as cheaply as possible without looking at the
effects this policy has on society when they get out?
If all this is governed by profit and loss why would
we want to rehabilitate prisoners?
people we imprison the more money we make.
we really want them to come back so that we can make
more money off of them? Our country has one of the
most serious crime problens in the world. Why would we
want to solve the crime problem at all?
...make money off the sick. Biotech investors
make money off the hopes and dreams of the sick. Food
co. investors make money off the hungry. Clothing co.
investors make money off the poor. Housing investors make
money off the otherwise homless. Energy investors make
money off those polluting the air. Tech investors make
money off gadgets we don't need.
Come to think
of it, clothing makers make money off the captivity
of others since they must clothe prisoners. Steel
companies because steel is used to make prisons. Concrete
companies since they build foundations of prisons. Phone
companies since there are phones in prisons. Drug
comnpanies since prisoners need medical care. Farmers since
prisoners need to eat.
Whew, there's a pool of
blood running down my shirt now.