MDH » Topics » Dividend Policy

This excerpt taken from the MDH 10-Q filed May 20, 2009.

Dividend Policy

In December 2008, in the interest of capital preservation within the current economic environment, and based on the expectation that the U.S. economy, and in particular the lodging industry, will continue to face declining operating trends through 2009, we amended our dividend policy. We have since entered into two amendments to our revolving credit facility which impose additional restrictions on the timing of the payment and the amount of cash dividends but permit us to pay, with respect to a given fiscal year, that amount of cash dividends necessary to maintain REIT status, providing certain conditions are met before additional distributions can be made. We are permitted to pay with respect to a given fiscal year a dividend in an amount minimally necessary to maintain our REIT status; provided that no dividend may be paid during the first three quarters of such fiscal year. We anticipate the amount of such a dividend will remain at 90% of taxable income. Notwithstanding this limitation, we will be permitted to pay the dividend declared on or about April 20, 2009. If certain liquidity thresholds and other conditions are met, we may be able to declare and pay additional cash dividends in any fiscal year. This may result in a reduction in the level of dividend payouts compared to the level of dividend payments we have made in recent years.

The amount, timing and frequency of distributions will be authorized by our board of directors and declared by us based upon a variety of factors deemed relevant by our directors, including, among other things, the Internal Revenue Code’s annual distribution requirements, and no assurance can be given that our distribution policy will not change in the future.

This excerpt taken from the MDH 10-Q filed Nov 13, 2008.

Dividend Policy

Generally, we intend to continue to distribute to our stockholders each year on a regular quarterly basis sufficient amounts of our REIT taxable income so as to avoid paying corporate income tax and excise tax on our earnings (other than the earnings of our TRS and TRS lessees, which are all subject to tax at regular corporate rates) and to qualify for the tax benefits afforded to REITs under the Internal Revenue Code of 1986, as amended (the “Code”). In order to qualify as a REIT under the Code, we generally must make distributions to our stockholders each year in an amount equal to at least:

 

   

90% of our REIT taxable income determined without regard to the dividends paid deduction, plus

 

   

90% of the excess of our net income from foreclosure property over the tax imposed on such income by the Code, minus

 

   

any excess non-cash income.

We pay quarterly cash dividends to common stockholders at the discretion of our Board of Directors. The following table sets forth the dividends paid to common stockholders since January 1, 2008:

 

Payment Date

  

Record Date

   Dividend Per Share

January 11, 2008

   December 14, 2007    $ 0.17

April 11, 2008

   March 14, 2008    $ 0.17

July 11, 2008

   June 16, 2008    $ 0.17

October 10, 2008

   September 15, 2008    $ 0.17

 

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In light of ongoing challenging economic conditions, we are evaluating the merits of reducing its future dividend payments in order to align the dividend payout with market conditions and to conserve cash. We expect to complete this evaluation and review with the Board of Directors later this year and do not expect to make a decision on the level of future dividends until that review is completed.

EXCERPTS ON THIS PAGE:

10-Q
May 20, 2009
10-Q
Nov 13, 2008
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