Weyerhaeuser's board of directors has declared a special dividend of $5.6 billion payable on Sept. 1 to shareholders of record as of July 22 in connection with a planned conversion to a real estate investment trust. To be eligible to elect REIT status for fiscal 2010 for federal income tax purposes, the company must distribute to its shareholders, on or before December 31, previously undistributed earnings and profits attributable to taxable periods ending prior to January 1, 2010. The special dividend is intended to satisfy this requirement.
Shareholders can elect stock or cash for the special dividend, with the total cash payment limited to 10 percent, or $560 million, of the total distribution. In addition, the number of common shares a shareholder may receive in the special dividend may be limited by the ownership limitations in the company's Articles of Incorporation. The board has granted an exemption from the ownership limitations to one existing shareholder which currently owns common shares in excess of the ownership limit.
Weyerhaeuser filed a prospectus supplement on Form 424B4 dated 7/13/10 to cover the securities that will be issued in the special dividend, and announced the special dividend in a Form 8-K filing on 7/12/10.
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