|  | | 2008 News and Press Releases | | |
HEADLINE NEWS:
Down With The Dividend, Up With The Cash
Stephen Taub
CFO.com. December 17, 2008
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EXCERPT: More companies are joining the ranks of those choosing to sacrifice the dividend to the gods of cash. The latest group to suspend cash payouts: Liz Claiborne Inc., Progressive Corp., FelCor Lodging Trust, Wabash National, First Federal of Northern Michigan Inc., and OceanFreight. Liz Claiborne Inc. said its board voted to suspend the quarterly dividend indefinitely, adding that it already has paid the dividend scheduled for Dec. 15. Its stock dropped 6 percent in trading early Wednesday. "Given what is going on in the world, and the retail sector in particular, we have made the difficult but necessary decision to suspend our dividend," said Chairman Kay Koplovitz. "As we continue to weather this tough Holiday season, with consumer spending levels expected to continue to be very low, halting our dividend is an important way to enhance our financial flexibility." […] Among smaller companies, the real estate investment trust FelCor Lodging suspended its quarterly common dividend. The REIT, which specializes in what it calls upper upscale, all-suite hotels, said that the decision reflects the expectation that revenue per available room will continue to decline in 2009. "The $125 million market cap company said it expects to generate positive cash flow during 2009, but it does not anticipate that it will be required to pay a common dividend to maintain its REIT status in 2009,” it stressed. By suspending the dividend, the company calculated it will preserve about $48 million of liquidity through 2009. Its stock, however, was knocked down by more than 8 percent in early Wednesday trading after the announcement was made the prior evening. |
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