Published 22 December 2009
Seattle-based forest products company Weyerhaeuser Co’s board said on 15 December it had determined that conversion to a real estate investment trust would best support the company’s strategic direction.
The group is one of the 20 biggest homebuilders in the US, under 6 brands, and also sells surplus industrial property & acreage for homes in forests.
President & chief executive Dan Fulton said: “Our company will be enhanced by the reit structure. This conversion will position us to be more competitive in our timberlands business. In addition, we are able to convert with our existing business mix of timberlands, wood products, cellulose fibres & real estate.”
Chairman Chuck Williamson said: “The board has not set a date for the conversion, but the earliest & most likely date would be for the year 2010, based on circumstances as we know them today.”
One factor in timing of the decision concerns the distribution of earnings & profits required under tax laws for reit election. By the end of the year of conversion, Weyerhaeuser must issue a special taxable dividend to stockholders of its undistributed earnings & profits. As of the beginning of 2010, Weyerhaeuser expects earnings & profits to total just under $US6 billion.
Weyerhaeuser said it intended to pay a significant portion of the dividend in stock, which will require shareholder approval at the annual meeting in April.
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Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.