A Section 19 notice is expected to be included with the distribution announced today for RAP. RAP generally invests in exchange listed or traded equity securities of Asia Pacific real estate companies. Certain of RAP’s investments are in real estate companies characterized as passive foreign investment companies (“PFICs”) for U.S. federal income tax purposes. On an annual basis, RAP is required to mark its PFIC investments to current market value and to recognize any unrealized gain as ordinary income for U.S. federal income tax purposes. As a result, PFIC investments may cause RAP to recognize and distribute to shareholders taxable ordinary income without a corresponding receipt of cash. RAP estimates that $0.005 of today’s announced special distribution is derived from PFIC mark to market adjustments and represents a distribution of ordinary income for U.S. federal tax reporting purposes and a return of capital for financial reporting purposes. RAP is not able to determine the actual characterization of this distribution until the end of the calendar year.Shareholders of RIF and RAP should not use the information provided in this press release or any notice delivered in compliance with Section 19 of the Investment Company Act of 1940 in preparing their tax returns. Shareholders of RIF and RAP will receive a Form 1099-DIV for the calendar year indicating how to report distributions from RIF and RAP for U.S. federal income tax purposes. RIF and RAP are closed end investment companies advised by RMR Advisors, Inc. WARNINGS REGARDING FORWARD LOOKING STATEMENTS THIS PRESS RELEASE CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER FEDERAL SECURITIES LAWS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON RIF’S AND RAP’S PRESENT BELIEFS AND EXPECTATIONS, BUT THEY ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR FOR NUMEROUS REASONS, SOME OF WHICH ARE BEYOND RIF’S AND RAP’S CONTROL. FOR EXAMPLE:
- THIS PRESS RELEASE DESCRIBES RIF’S DISTRIBUTION OF $0.42 PER SHARE AS A REGULAR QUARTERLY DISTRIBUTION AND REFERS TO RIF’S LEVEL RATE DIVIDEND POLICY. THE IMPLICATIONS OF THESE STATEMENTS MAY BE THAT RIF WILL CONSISTENTLY PAY A DIVIDEND OF $0.42 PER SHARE FOR EACH QUARTER. IN FACT, THE AMOUNT OF DIVIDENDS PAID BY RIF IN THE FUTURE WILL DEPEND PRIMARILY UPON RIF’S FUTURE EARNINGS. IN THE PAST, RIF’S PREDECESSORS HAVE LOWERED THEIR DIVIDEND RATES AND RIF CAN PROVIDE NO ASSURANCE THAT ITS FUTURE EARNINGS WILL BE SUFFICIENT TO ENABLE RIF TO PAY A REGULAR QUARTERLY DIVIDEND OF $0.42 PER SHARE.
- THIS PRESS RELEASE STATES THAT RIF BELIEVES THE DISTRIBUTION DESCRIBED IN THIS PRESS RELEASE CONSISTS SOLELY OF INCOME RECEIVED FROM ITS INVESTMENTS. AS NOTED IN THE PRESS RELEASE, THE DIVIDENDS WHICH RIF HAS RECEIVED FROM ITS INVESTMENTS IN REITS MAY BE CHARACTERIZED BY THOSE REITS DIFFERENTLY THAN RIF NOW EXPECTS. FOR THIS REASON, AMONG OTHERS, SOME OF THE DISTRIBUTION DESCRIBED IN THIS PRESS RELEASE MAY CONSIST OF CAPITAL GAINS OR RETURN OF CAPITAL.
- THIS PRESS RELEASE STATES THAT RAP BELIEVES THAT A PORTION OF THE DISTRIBUTION DESCRIBED IN THIS PRESS RELEASE REPRESENTS A RETURN OF CAPITAL FOR FINANCIAL REPORTING PURPOSES. AS NOTED IN THE PRESS RELEASE, RAP IS NOT ABLE TO DETERMINE THE ACTUAL CHARACTERIZATION OF THIS DISTRIBUTION UNTIL THE END OF THE CALENDAR YEAR. FOR THIS REASON, AMONG OTHERS, MORE OR LESS OF THE DISTRIBUTION DESCRIBED IN THIS PRESS RELEASE MAY REPRESENT A RETURN OF CAPITAL FOR FINANCIAL REPORTING PURPOSES.