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Geo Group anticipates special dividend for 2012

BOCA RATON, Fla. (AP) -- The GEO Group Inc. said Friday that it may issue a special dividend payment before the end of the year.

The correctional institute services provider said it may pay a special dividend totaling $340 million to $360 million on or before Dec. 31. The payment is still subject to approval by its board. The company expects the board to approve the dividend by Dec. 7.

The potential special dividend would be paid in connection with board's consideration of whether GEO should elect to convert into a real estate investment trust.

GEO has about 61.6 million shares outstanding, according to FactSet, implying a per-share payout of $5.68 at the midpoint.

Geo Group is one of a number of companies considering whether to move up its quarterly payout or issue a special end-of-year payment to protect investors from potentially having to pay higher taxes on dividend income starting in January.

Since 2003 investors have paid a maximum 15 percent on dividend income. But that historically low rate will expire in January unless Congress and President Barack Obama reach a compromise on taxes and government spending. As it stands, dividends will be taxed as ordinary income in 2013, the same as wages, so rates will go up depending on which income bracket a taxpayer is in. For the highest earners, the dividend rate would jump to 43.4 percent.

Shares fell 21 cents to close at $28.20 but gained 80 cents in after-hours trading. The stock has gained 68 percent in the year to date.