The Wall Street Journal - 20.03.2020

B2| Friday, March 20, 2020 **** THE WALL STREET JOURNAL.

INDEX TO BUSINESSES

These indexes cite notable references to most parent companies and businesspeople

in today’s edition. Articles on regional page inserts aren’t cited in these indexes.

A

Airbus..........................B4

Allstate.....................B12

Amazon.com.............B11

American Airlines Group

...................................B10

American Axle &

Manufacturing

Holdings....................B1

Andersons...................A7

Apple.........................B12

Atkore International

Group.........................B1

B

Barclays.....................B12

Blackstone Group.....B10

BNP Paribas..............B12

Boeing.........................B1

C

Capital One Financial.B2

Cargill..........................A7

Chubb.........................B12

Cirque du Soleil........B10

Citigroup..............B6,B10

Clorox........................B11

Costco Wholesale.......A7

Crédit Agricole..........B12

D-E

Dan Hotels..................A8

Danone........................A7

Darden Restaurants...B4

Dell Technologies........B1

Delta Air Lines...........B1

Deutsche Lufthansa...A8

Discover Financial

Services.....................B6

Domex Superfresh

Growers....................A7

Dunkin' Brands Group B4

Equifax........................B6

Experian......................B6

F

FedEx......................B3,B4

Fiat Chrysler

Automobiles.............B4

Ford Motor.............B1,B4

G

General Motors...........B4

Goldman Sachs GroupB6

H

Heritage Bank.............B2

Hilton Worldwide

Holdings..................B10

Hiscox........................B12

Huntington Bancshares

.....................................B2

I

Impossible Foods........A7

ING Groep..................B12

J

John Lewis Partnership

....................................M9

Johnson & Johnson..A10

JPMorgan Chase &B2,B6

L

Lennar.........................B5

Lineage Logistics........A7

M

Magnolia Oil & Gas....B3

Moderna....................A10

MVP Dairy...................A7

N

Netflix................B11,B12

O-P

Occidental Petroleum.B3

Open Orphan.............A10

Peugeot.......................A8

PNC Financial Services

Group.........................B2

Prestage Farms..........A7

Progressive...............B12

R

Regeneron

Pharmaceuticals.....B11

Regions Financial........B2

Restaurant Brands

International.....B4,B10

Rose Acre Farms........A7

S

Samsung Electronics..B3

Sanderson Farms........A1

Sanofi........................A10

Société Générale.......B12

Starbucks....................B4

T

Taylor Farms...............A7

Tesla............................B4

TransUnion..................B6

Travelers....................B12

Trip.com Group.........B12

Truist Financial...........B2

24 Hour Fitness

Worldwide...............B10

Tyson Foods................A1

U

United Airlines Holdings

...................................B10

United Parcel Service.B3

W

Wells Fargo.................B2

Wintrust Financial......B2

Z

Zoom Video

Communications.....B11

INDEX TO PEOPLE

BUSINESS & FINANCE

and the broader aerospace

sector.

The company’s $60 billion

request this week caught

some executives at its suppli-

ers by surprise, said a senior

industry executive. While the

company has said 70% of its

spending is with suppliers, it

didn’t detail what share of any

aid would be directed to them.

However, Boeing’s clout with

the administration and law-

makers made it the best con-

duit to secure government

support, the executive said.

Boeing hasn’t disclosed de-

tails, but it has said it is seek-

ing private financing as well

as taxpayer support.

U.S. lawmakers are calling

for conditions to accompany

any aid. “Taxpayers should be

paid back, and workers should

be protected,” said Rep. Rick

Larsen (D., Wash.), whose dis-

trict includes Boeing’s Seattle-

area airliner factories. Mr.

Larsen is also chairman of a

key U.S. House aviation sub-

committee.

A Boeing spokesman said,

“We have strong long-term vi-

ability, and we need this

short-term assistance to get

there.” He added, “We would

be good stewards of any assis-

tance provided.”

The company disclosed in a

regulatory filing that Nikki

Haley has resigned from its

board, citing her philosophical

opposition to any government

support for Boeing. Ms. Haley,

a former ambassador to the

United Nations, joined Boe-

pany could default on its bor-

rowing obligations.

Even without government

support, Boeing was forecast

to end the year with as much

as $45 billion in debt, accord-

ing to S&P Global, which

downgraded the company this

week to two notches above

junk status.

Boeing ended 2019 with

$10 billion in cash and typi-

cally has kept that level as a

buffer in recent years. Ana-

lysts estimate it burns around

$4.3 billion a month to pro-

duce jetliners, and has com-

pensation payments to MAX

customers as well as the divi-

dends—which cost $4.6 billion

last year—and debt repay-

ments. Boeing’s dividend yield

is about 8.4%; before the

stock’s selloff this year, the

yield was in the low 2% range

for much of the past two

years.

After drawing down a $13.8

billion loan last week, Boeing

still has an untapped $9.6 bil-

lion bank facility.

Boeing has no immediate

plans to pull from it, a person

familiar with the matter said.

Aside from possible pro-

duction cuts, Boeing has been

drawing up contingency plans

should Washington state offi-

cials order the closure of its

wide-body aircraft factory in

Everett, north of Seattle, peo-

ple familiar with the matter

said.

—Alex Leary

contributed to this article.

eries from this year after the

near-collapse in passenger

traffic, and cancellations are

on the rise, starving Boeing of

new cash and draining liquid-

ity in the form of deposit re-

funds. Cargo planes, once a

source of strength, are also

under pressure.FedExCorp.

said this week that it had

pushed back delivery of some

jets until 2023.

Plane maker Airbus SE,

whose shares have fallen al-

most as much as Boeing’s this

year, is also seeking govern-

ment support in Europe. Its

global supply network is en-

twined with that of Boeing,

raising questions about how

aid packages on both sides of

the Atlantic could be struc-

tured.

Boeing’s market value ap-

proached $50 billion on

Thursday, with analysts as-

cribing more than half of the

total to the Chicago-based

company’s defense business

versus its larger commercial-

airplane division.

Boeing joined U.S. airlines

and other industries this week

in asking for financial aid on

behalf of itself, its suppliers

Continued from page B1

Boeing

Looks to

Save Cash

ing’s board last April.

Boeing, the biggest U.S. ex-

porter, has some 150,000 em-

ployees and is at the tip of a

pyramid of an industry that

accounts for a fifth of the

country’s manufacturing

workforce.

Aircraft leasing companies,

which now rent half the global

airliner fleet to carriers, have

turned from being a source of

liquidity to a concern of their

own.

Shares in Air Lease Corp,

one of the biggest, almost

halved in price at one point

on Wednesday. The leasing

companies’ clout has put them

first in line—ahead of air-

lines—in canceling and defer-

ring orders with Boeing, said

one industry executive.

As pressure mounts, Boeing

executives have said they

were working to avoid mass

layoffs or furloughs.

Investors are worrying

about the company’s ability to

repay its debt.

The cost of insuring Boeing

debt has doubled over the

past week, according to IHS

Markit, suggesting investors

see a growing risk the com-

Nikki Haley quit the

board, saying she

opposes the idea of

government aid.

Expectations Grow

For Dividend Cuts

Funding strains and slid-

ing sales are forcing a grow-

ing number of companies to

slash or suspend their divi-

dend payouts.

Hundreds of S&P 500

companies issue dividends—

payouts that companies

make to shareholders as a re-

ward for standing by them.

Before the coronavirus pan-

demic hit the world, S&P

Dow Jones Indices estimated

dividend payouts for the year

would top $500 billion to set

a new record.

But because the pandemic

has upended the global econ-

omy, analysts expect dividend

payouts to fall sharply. That

could add to the woes of

beaten-down stocks that

have often relied on steady

dividend payouts to compen-

sate investors for less robust

profit growth.

While the broader market

was near flat Thursday, a

ProShares exchange-traded

fund tracking the S&P 500

Dividend Aristocrats Index fell

1.7%. The index tracks shares

of companies that have

raised dividends every year

for the past 25 years. It has

dropped 27% over the past

month, generally in line with

the broader market, and the

yield on the fund has slipped

to 2.6%.

ing swung to losses overseas.

A protracted shutdown of its

plants in the U.S., Canada and

Mexico would severely dent its

cash flow and operating profit,

analysts say. The company also

has suspended some produc-

tion in Europe.

Ford is in the midst of an

$11 billion multiyear restruc-

turing that has crimped its

cash flow, which has already

dwindled in recent years.

As Ford’s shares have

dropped in recent years, its

dividend yield has climbed, ris-

ing to over 13% as of Thurs-

day’s close and giving inves-

tors a reason to hold on to the

stock. The Ford family, which

controls 40% of the voting

shares through ownership of

all of its Class B stock, is also a

big beneficiary of the dividend

payouts.

Company executives have

said the dividend is being

funded from cash on the bal-

ance sheet, rather than cash

flow, but had planned to con-

tinue paying it.

“We like to return value to

shareholders,” Mr. Hackett said

during a conference call with

analysts in February. “The div-

idend’s been a legendary value

creator at Ford...I want to con-

tinue that.”

Ford shares fell 1% Thurs-

day. This year the stock has

fallen 52%.

Ford’s balance sheet is in

far better shape than it was

heading into the last down-

turn, when the then-cash-

strapped auto maker mort-

gaged factories, office

buildings and even its blue

oval trademark to provide a

cash cushion to weather the

recession. Last year, Ford had

$22 billion in cash and total li-

quidity of $35 billion, the com-

pany said.

Credit Suisse analyst Dan

Levy said Thursday that Ford’s

dividend cut helps to leave the

auto maker with “likely ample

liquidity at moment.” But he

said the company is still at risk

of an investment downgrade,

which would raise Ford’s bor-

rowing costs. Moody’s Inves-

tors Service cut Ford’s rating

to junk status last year, though

it still has investment-grade

ratings from Standard & Poor’s

and Fitch Ratings.

RBC Capital analyst Joseph

Spak estimates Ford has the

cushion to last roughly 18

weeks without making vehicles

in the U.S. “We would expect

Continued from page B1

other auto companies to also

draw on facilities and poten-

tially suspend dividends,” Mr.

Spak wrote in an investor note

Thursday.

Ford’s pretax profit and

cash flow forecast outlined to

investors last month hadn’t

factored in the potential coro-

navirus impact, yet it still dis-

appointed Wall Street. The

company had expected pretax

profit of $5.6 billion to $6.6

billion, compared with $6.38

billion last year. It forecast ad-

justed free cash flow of $2.4

billion to $3.4 billion, although

some of that was expected to

be siphoned off to pay for re-

structuring in Europe and

South America.

Mr. Hackett said in Febru-

ary the company has redou-

bled its focus on generating

free cash flow, including tying

it more closely to executives’

incentive plans.

Ford on Thursday also re-

leased a plan to relieve cus-

tomers of payments on some

new cars. For buyers of 2019

and 2020 model-year vehicles,

the company said it would can-

cel three months’ worth of

payments and defer three ad-

ditional months’.

B

Batchelder, Gene........B3

Buffett, Warren..........B3

C

Chazen, Stephen.........B3

G

Gould, Andrew............B3

H

Hackett, Jim..........B1,B3

Hollub, Vicki................B3

I-J

Icahn, Carl...................B3

Jackson, Alex............B10

K

Kassam, Altaf...........B11

Kleintop, Jeffrey.........B1

L

Lee, Gene....................B4

M

Markham, Paul..........B11

Melentyev, Oleg........B10

Miller, Stuart..............B5

Moore, Jack.................B3

O

Ossino, Frank............B10

S-Y

Shaiman, Lee............B10

Yawger, Robert.........B11

The coronavirus pandemic is

forcing U.S. banks to begin

closing branches indefinitely,

an unprecedented measure that

could rattle customers who ex-

pect instant access to their

money.

JPMorgan Chase& Co. said

it would close 20% of its nearly

5,000 branches starting Thurs-

day. The bank had scaled back

weekday hours at branches.

Capital One FinancialCorp. on

Monday closed about a quarter

of its 461 branches—about half

in New York City—to “minimize

health risks from the coronavi-

rus.”

Truist FinancialCorp. and

PNC Financial Services Group

Inc. will restrict branch access

to drive-through lanes and ap-

pointments, except at some key

branches that lack drive-

throughs.Regions Financial

Corp. andHuntington Banc-

sharesInc. plan to limit con-

tact at branches to drive-

throughs and appointments.

“We were having several

dozen people in our branch

lobbies and we couldn’t con-

trol it,” said Huntington Chief

Executive Stephen Steinour.

“We had customers say they

didn’t feel safe with that kind

of crowd.”

As the coronavirus spreads

throughout the U.S., banks oc-

cupy a unique position. They

are among the few businesses

deemed essential and not sub-

ject to government-ordered

shutdowns.

Yet banks that choose to

close must strike a delicate bal-

ance—taking measures to keep

employees safe while assuring

customers they can access their

money through a full slate of

digital services or at a branch.

The greatest risk for banks is

how the closures are perceived,

industry analysts said.

“You can’t separate people

from their money and maintain

the confidence of the person in

the banking system,” said

banking analyst Dick Bove.

The top three federal bank-

ing regulators reminded banks

last week that short-term

shutdowns are permissible

when the circumstances are

out of their control. The Office

of the Comptroller of the Cur-

rency advised banks to “pro-

vide alternative service op-

tions when possible, and

reopen affected facilities when

it is safe to do so.”

Lightly staffed locations

near other branches are easier

to close. Those with drive-

through lanes that put distance

between customers and em-

ployees are more likely to stay

open. Capital One said it priori-

tized closing locations that lack

the lanes or glass to separate

tellers from customers.

Community banks and those

near early clusters of coronavi-

rus were among the first to

close branches.

Wintrust Financial Corp.

said this week it would close or

alter services at 50 of its

branches in Illinois and Wis-

consin.Heritage Bank,a67-

branch bank in Washington

state, told customers that, be-

ginning Wednesday, it would

close all branch lobbies

through the end of March.

Many banks are providing

customer-facing employees

with additional paid time off

and advising high-risk staffers

to stay home.

The decision to keep

branches open is putting some

workers on edge. At aWells

Fargo& Co. location in the Se-

attle area, more tellers than

usual are calling out sick, ac-

cording to a branch employee.

Wells Fargo stopped using

many of its drive-throughs ear-

lier this year as part of a push

to encourage customers to use

digital services. A spokes-

woman said the bank is using

drive-throughs in some loca-

tions to limit interaction.

Wells Fargo said it is direct-

ing most employees who don’t

interact with customers to

work from home and stagger-

ing shifts for customer-facing

workers.

BYORLAMCCAFFREY

As Virus Spreads, Banks Face

Tough Call on Branch Closures

Capital One on Monday closed about a quarter of its 461

branches—about half in New York City—to ‘minimize health risks.’

GABRIELA BHASKAR FOR THE WALL STREET JOURNAL

Ford Halts

Dividend,

Guidance

The jet maker still has an untapped $9.6 billion bank facility. Employees and contractors outside the Boeing factory in Renton, Wash.

BRIAN SNYDER/REUTERS

 Heard on the Street: Banks

have nowhere to hide......... B12