MILL VALLEY, Calif., Jan. 30 /PRNewswire-FirstCall/ -- Redwood Trust, Inc.
(NYSE: RWT) today announced tax information regarding its dividend
distributions for 2008.
Shareholders should check the tax statements they receive from brokerage
firms to make sure the Redwood dividend information reported in those
statements conforms to the information reported here. Furthermore,
shareholders should consult their tax advisors to determine the amount of
taxes that should be paid on Redwood's dividend distributions.
Under the tax rules applicable to real estate investment trusts (REITs)
such as Redwood, the $0.75 per share fourth quarter 2007 regular common stock
dividend that had a record date of December 31, 2007 and a payment date of
January 22, 2008 was reportable on shareholders' 2007 tax returns.
All of the other common stock dividends paid during 2008 are reportable on
shareholders' 2008 tax returns, including three $0.75 per share quarterly
regular dividends. In addition, the $0.75 per share fourth quarter 2008
common stock regular dividend with a record date of December 31, 2008 that was
paid on January 21, 2009 is also reportable on shareholders' 2008 tax returns.
Thus, for 2008, Redwood shareholders that held stock for this entire
period should report a total of $3.00 per share of common stock dividends for
tax purposes.
Under the tax rules applicable to REITs, Redwood's 2008 dividend
distributions are characterized for tax purposes as 91.7% ordinary income and
8.3% return of capital. None of Redwood's 2008 dividend distributions are
characterized for tax purposes as long-term capital gain dividends.
As a REIT, the portion of Redwood's dividends that is characterized as
ordinary income is generally taxed at full ordinary income rates. The portion
of Redwood's dividends characterized as a return of capital is not taxable,
and reduces shareholders' basis for shares held at each quarterly distribution
date.
The table below provides more detailed information for each of Redwood's
common stock dividends that are taxable in 2008.
Common Stock (CUSIPs 758075 40 2)
Total
Dividend Declaration Record Payable Distribution Ordinary Return of
Type Dates Dates Dates Per Share Income Capital
Regular 3/5/2008 3/31/2008 4/21/2008 $0.75 $0.6875 $0.0625
Regular 5/22/2008 6/30/2008 7/21/2008 $0.75 $0.6875 $0.0625
Regular 8/21/2008 9/30/2008 10/21/2008 $0.75 $0.6875 $0.0625
Regular 11/10/2008 12/31/2008 1/21/2009 $0.75 $0.6875 $0.0625
Total $3.00 $2.7500 $0.2500
Long
Term
Dividend Declaration Record Payable Capital # of Total $
Type Dates Dates Dates Gains Shares Paid
Regular 3/5/2008 3/31/2008 4/21/2008 $0.00 32,709,963 $24,532,472
Regular 5/22/2008 6/30/2008 7/21/2008 $0.00 33,184,317 $24,888,238
Regular 8/21/2008 9/30/2008 10/21/2008 $0.00 33,237,676 $24,928,257
Regular 11/10/2008 12/31/2008 1/21/2009 $0.00 33,470,557 $25,102,918
Total $0.00 $99,451,885
For shareholders that are corporations, Redwood's dividends are not
generally eligible for the corporate dividends-received deduction.
No portion of Redwood's 2008 dividends consisted of unrelated business
taxable income (UBTI), which is subject to specialized tax reporting and other
rules applicable for certain tax exempt investors.
For more information about Redwood Trust, Inc., please visit our website
(http://www.redwoodtrust.com).
CAUTIONARY STATEMENT: This press release contains forward-looking
statements within the meaning of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995 including statements related to the
closing date of the offering and the use of the net proceeds. Forward-looking
statements involve numerous risks and uncertainties. Redwood's actual results
may differ from our expectations, estimates, and projections and,
consequently, you should not rely on these forward-looking statements as
predictions of future events. Forward-looking statements are not historical in
nature and can be identified by words such as "anticipate," "estimate,"
"will," "should," "expect," "believe," "intend," "seek," "plan," and similar
expressions or their negative forms, or by references to strategy, plans, or
intentions. These forward-looking statements are subject to risks and
uncertainties, including, among other things, those described in Redwood's
Prospectus Supplement dated January 21, 2009, the accompanying Prospectus
dated November 23, 2007, and the documents incorporated in the Prospectus
Supplement and the Prospectus by reference. We undertake no obligation to
update or revise any forward-looking statements, whether as a result of new
information, future events, or otherwise. Important factors, among others,
that may affect our actual results include: changes in interest rates; changes
in mortgage prepayment rates; the timing of credit losses within our
portfolio; our exposure to adjustable-rate and negative amortization mortgage
loans; the state of the credit markets and other general economic conditions,
particularly as they affect the price of earning assets and the credit status
of borrowers; the concentration of the credit risks we are exposed to; the
ability of counterparties to satisfy their obligations to us; legislative
and regulatory actions affecting the mortgage industry; the availability of
high quality assets for purchase at attractive prices; declines in home prices
and commercial real estate prices; increases in mortgage payment
delinquencies; changes in the level of liquidity in the capital markets which
may adversely affect our ability to finance our real estate asset portfolio;
changes in liquidity in the market for real estate securities, the re-pricing
of credit risk in the capital markets, inaccurate ratings of securities by
rating agencies, rating agency downgrades of securities, and increases in the
supply of real estate securities available-for-sale, each of which may
adversely affect the values of securities we own; the extent of changes in the
values of securities we own and the impact of adjustments reflecting those
changes on our income statement and balance sheet, including our stockholders'
equity; our ability to maintain the positive stockholders' equity necessary to
enable us to pay the dividends required to maintain our status as a real
estate investment trust for tax purposes; changes in our investment,
financing, and hedging strategies and the new risks that those changes may
expose us to; changes in the competitive landscape within our industry and for
the personnel we need to retain or attract; our failure to manage various
operational risks associated with our business; our failure to maintain
appropriate internal controls over financial reporting; our failure to
properly administer and manage our securitization entities; risks we may be
exposed to if we expand our business activities, such as risks relating to
significantly increasing our direct holdings of loans; limitations imposed on
our business due to our REIT status and our status as exempt from the
Investment Company Act of 1940; our ability to raise additional capital to
fund our investing activity; and other factors not presently identified.
SOURCE Redwood Trust, Inc.
Contact: Martin S. Hughes, +1-415-389-7373, or Mike McMahon, +1-415-384-3805, both of Redwood Trust, Inc.