RE: RE: RE: Todays Conference Call BY DEFINITION, a return of capital is the distribution in excess of net income. SPB distributes far more of its cash flow than it has net income to distribute. There are no games on words. It's all there on the income statement and cash flow.
If their tax form says that 100% of the distribution is a taxable dividend, then that is horrible. It would be a very tax inefficient distribution. On SPB's tax page for US citizens it says:
"Superior has made an election to be taxed as a corporation for U.S. tax purposes. As a result, any distribution made on a share by Superior is treated as foreign-source dividend income under U.S. federal income tax principles, reportable on a Form 1099. This treatment of the distributions is based on the fact that we have not determined our current or accumulated earnings and profits. In the absence of such information, we believe that a United States person should report our distributions as fully subject to United States federal income tax."
How can SPB say "...we have not determinted our current or accumulated earnings and profits."???? They release quarterly income statements with net income, and balance sheets with retained earnings. What are they talking about?
The $800M of tax credits that SPB bought for $50M was pure genius. That's one of many things I like about them. It has nothing to do with the general issue here which is to distinguish return on capital to pure dividend.