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Weyerhaeuser to Convert to a REIT

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Weyerhaeuser Co., Federal Way, Wash., USA, reports that its board of directors has determined that conversion to a real estate investment trust (REIT) would best support the company's strategic direction. The board has not yet set a date for the conversion, but Chairman Chuck Williamson said that the earliest and most likely date would be for the year 2010 "based on circumstances as we know them today."

Dan Fulton, president and CEO, added that "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 Fibers, and Real Estate."

Factors the board will consider in determining the timing of converting to a REIT include the state of the economic recovery, changes in tax policy including shareholder tax rates, and the distribution of earnings and 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 and profits. As of the beginning of 2010, Weyerhaeuser expects earnings and profits to total just under $6 billion. Weyerhaeuser said it intends to pay a significant portion of the dividend in stock. This will require shareholder approval to increase the authorized number of shares at the annual shareholder meeting in April. Shareholders will receive information on this proposal, and the proposed governance changes announced earlier (see next news item) in the 2010 proxy statement to be mailed in February.


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