USG Corp. reduces quarterly dividend
The dividend reduction is consistent with other recently announced restructuring initiatives to maximize operating efficiency and increase cash flow as the company addresses a cyclical downturn in its businesses and the costs of asbestos litigation.
The company's policy has been to reinvest in its businesses and return excess cash to shareholders. The new dividend level represents an adjustment that will help maintain the investment-grade profile of the company's balance sheet.
Commenting on the new dividend, William C. Foote, chairman, president and CEO, said, "USG has a balance sheet and committed bank lines that provide significant liquidity. This decision provides USG an additional level of financial flexibility. More specifically, this will allow us the liquidity to continue to optimize our businesses as we face the current industry down cycle and as we intensify our efforts to secure satisfactory asbestos legislation."
USG recently reported fourth quarter 2000 net sales of $841 million and net earnings of $34 million, excluding special charges. The company reported a net loss of $523 million after $557 million in special after-tax charges associated with asbestos litigation and business restructuring initiatives, including plant shutdowns, severance costs and inventory write-offs.
Annual savings from the previously announced restructuring initiatives are estimated at $40 million. The dividend reduction decreases the USG’s annual dividend payments by approximately $22 million, to further enhance the company's financial flexibility.