Weyerhaeuser temporarily suspending quarterly dividend

On March 30, Weyerhaeuser announced actions to enhance financial flexibility in response to the COVID-19 pandemic. The company also announced that the board of directors would continue to review the company's capital allocation plans in light of rapidly evolving market conditions. During the second quarter, macroeconomic fundamentals have continued to erode. In light of continued significant uncertainty regarding the duration and magnitude of an economic slowdown and its effect on the company's business conditions, the board of directors is temporarily suspending the quarterly cash dividend to preserve liquidity and financial flexibility. Additionally, members of the company's senior management team and board of directors have elected to reduce their compensation for the remainder of 2020. This includes a base salary reduction of 30 percent for the company's CEO and base salary reductions of 10 percent for the remainder of the senior management team, as well as a 20 percent reduction in fees for the board of directors. Weyerhaeuser is also providing updates on its previously announced actions: Reducing capital expenditures: The company will reduce 2020 capital expenditures by approximately $90 million, or 25 percent, by deferring discretionary projects. Weyerhaeuser now expects full year capital expenditures of approximately $270 million; Reducing non-essential operating expenses: The company will reduce 2020 operating expenses by approximately $55 million. In addition, approximately $25 million of federal payroll tax payments will be deferred until 2021; Refinancing 2021 maturities: During the first quarter, Weyerhaeuser issued $750 million of 4.0% notes through a public bond offering, with net proceeds to be used to repay the company's outstanding 2021 maturities. The company subsequently submitted notice that it will redeem in May 2020 its $569 million of notes due March 2021; Enhancing liquidity: The company increased cash on hand by $550 million through a precautionary draw on its revolving credit facility, which expires in January 2025; Excluding cash received from the bond offering, the company had approximately $700 million of cash on hand at the end of the first quarter and $950 million of available revolver capacity. The company maintains investment grade credit ratings and remains well in compliance with its financial covenants. Weyerhaeuser's 11 million acres of high-quality timberlands also provide strong asset coverage. The company expects to remain compliant with REIT taxable income distribution requirements.