I'd say you were wrong. We were expecting a Feb, 2014 dividend of 22 cents had the penny per quarter increase continued. Hamo surprised us with 25 cents (50 cents on a split adjusted basis). So there was a dividend increase in 2014, as with 2013, 2012 and 2011.
Now he has until the November dividend to keep the "annual increase" streak alive.
The numbers were not estimates. They were made up to flesh out an illustration of how aggregate taxable distributions and roc are calculated. Nevertheless, they were numbers in a big ballpark when the ballpark would not surprise me.
If I were going to a per share calculation, I would use 385 million as an annual number. In real life, the number on each record date is used......too much work.
I think you are correct.....the equity put into NRE (plus their bragging about appreciation) will far exceed this year's E&P, resulting in a good chunk of roc which will put many old, already reduced-basis lots into a taxable long gain situation.
BTW, schwartz, it's nice to see a "thinking man's" post now and then with some original analytical work.
The fair market value of the NRE stock will be the dollar amount distributed in the spin. This amount will be added to cash distributions to arrive at total distributions. Next is to determine whether all distributions are taxable. NRF has no accumulated earnings & profits (E&P) going into 2015. I know this because some of the 2014 distributions was return of capital. Thus, 2015 distributions will be taxable to the extent of 2015 E&P, which is a modified form of taxable income.
For purposes of illustration, let's assume cash distributions total 685 million comprised of 600 million to common and 85 million to preferred. Let's also assume the fair market value of all NRE stock is 1.8 billion at the date of distribution and the basis of the stock in NRF's hands is 1.3 billion. NRF will recognize a 500 million gain on the distribution. If NRF has held NRE stock for more than one year as of the date distributed, NRF's gain will be long term capital gain. If not held more than one year, it is a short term capital gain which, for reit dividend taxability to shareholders, is ordinary.
So total distributions will total 2.485 billion (685 million cash plus 1.8 B FMV of nre stock). Let us now suppose that NRF's taxable income excluding the gain on NRE is 300 million (because of depreciation and robber shares). Total taxable income is 800 million (300 regular plus 500 gain on distributing nre stock). Assume adjustments to get to E&P are 40 million positive. Thus, current E&P is 840 million.
The first 85 million gets allocated to preferred which is 100% taxable and 755 million is left for common. Common got 2.4 billion and 755 million is taxable (probably ordinary). Thus 31.46% of the common distribution is taxable (755 / 2.400), probably ordinary, and 68.54% is return of capital.
Jerk brings up a 2005 change in accounting for stripping costs. Hey dope, it was a charge to retained earnings.......a write-off of previously deferred costs.... they switched to direct write-off, a more conservative accounting method.
I understand that you shorts will post anything negative about a stock that you can think of, but this thread is as lame as it gets. First you bring up something they did 10 years ago....as if it cast a negative shadow on their accounting and then you get the balance sheet effect wrong.
Morbid stupidity is defined as a level of brain activity so low it just about keeps the vital organs functioning. There is no energy left for even the most rudimentary intellectual activity. This thread is a classic example.
I live on dividends which are more than enough to pay the bills. If you don't own the stock, you don't get the dividend. We've been through this before and will do so again in the future. I held before, am holding now and will hold through the next downturn and the downturn after that. It is highly unlikely that I will ever be forced into selling principal. Thus the price is not important to me except psychologically. Financially, it is meaningless due to the dividends.
"I'll take it, sit and collect ROC divi's and wait for spinoffs"
I suggest you not count on much, if any, roc dividends this year, (assuming they distribute the spin shares this year), because the distribution is a taxable event to nrf, hence to us.
4.625% is less than half the dividend cost on common at today's price (over 9.5%), there is no 1.5% nsam fee until stock is issued and the lender has agreed to take stock as payment at some formula price after the public has been told stock will be issued. I wish I knew the pricing formula which I suppose could make a great deal a lousy deal (like 70% of then market price per share), but if the pricing formula is at market or up to a 5% discount, it's a great and clever deal, imo.
I'll save you the work since the one month chart results are so pathetic.
Next worst but less than half of NRF's decline is HCN, down 4.43%. YUP, nrf down more than double the percent of the next worst in the group.
VNQ....the index which was supposed to boost nrf price with Vanguard buying 22 million shares, down 2.25%, which means nrf dragged the index down.
MAR and CLDT (hotels)....down 1.37% and 1.08%, respectively.
SUI....UP 3.06% in the last month.
So it is NOT correct to say that NRF is down in line with other reits, not today, this week, one month, 3 months or 6 months. Only HCN was worse over 6 months.
I think more appropriate comparisons are with VNQ, the index it just joined. The announcement was May 12. NRF joined at the close on May 29. Also appropriate are pure plays in NRF's major sectors. I suggest SUI for manufactured housing, CLDT & MAR for hotels (nrf is partners with cldt and bought some from them and most are Marriott) and, since I own it, HCN for healthcare.
Try it, right here on yahoo. I think most telling is the one month chart since it captures addition to the RMZ index, which VNQ tracks. One month also covers the annual meeting (5/27) where 49.5% of the votes cast were against the compensation package. The one month lookback is perfect for the compensation vote effect on price.
Guess who is the one-month loser.
Twice burned on nrf options.....a wasting asset. I do better with the stock where the dividends make it easy to wait as long as necessary.
I was out for an hour so wasn't watching. Chart shows what could be a short smackdown, but stock has been so weak lately it's hard to tell a tute dumping vs a short attack. I have no opinion as of now.
Remember, 9 at the time is 18 today on half the shares + an equal number of nsam. So, 17 + 20 = 37 (plus cash dividends) from 18 when short monkey was trashing it and I was trashing him.
Hey, fritzy.....cover your short position while you have the chance.
Since you claim awareness, you must be among the dumbest investors you are referring to.
".....complete collapse...." Gimmee-a-break. Short trash talk can only foll (your word) the dumbest investors for so long.
Sorry, I've said over and over on this board I will not offer specific investment advice because I cannot offer correct advice because I don't know all there is to know about a given individual's financial and personal situation. What could be great advice for Peter could be terrible advice for Lisa.
That said, I'm not thinking of selling any of mine except flippers. I'm retired and our current dividends are more than 3 times what we normally spend (excluding buying cars, boats and real estate). We can pay for two nursing home stays and still not invade principal. Thus the likelihood of me ever being forced to sell principal to pay bills is negligible. Thus, I can hold forever, meaning my kids and grandkids inherit it. It's a main reason I can hold such large positions in nrf and nsam. I sell when I WANT to sell, not when I HAVE to sell.
We've seen these negative spells before and I'm sure we will see them again in the future. My thinking is there is no profit or loss until a position is closed. Between the buy and the sell there are just unrealized changes in value.
Ask yourself this: If you sell and pay the taxes, where would you put the after tax proceeds? How much would you earn on what's left after paying the taxes?
Yup, smackdowns are alive and well. VNQ up over 1%, nrf down almost 1%. Maybe management will come to the realization that the market doesn't like obscenely greedy compensation, especially when followed by almost immediate selling.