Dividend Planned by Time Warner
Time Warner Inc., having pared its debt by $11 billion in three years, plans to start paying the company’s first dividend since its acquisition by America Online four years ago.
The 5-cent quarterly payouts will start in September and are “the beginning of a commitment we hope will grow over time,” Time Warner Chief Executive Richard Parsons said Friday at the company’s annual meeting in New York. Based on Time Warner’s 4.69 billion shares outstanding, the dividend will cost the world’s biggest media company about $937 million a year.
The payments illustrate the turnaround engineered by Parsons after Time Warner’s $124-billion purchase by AOL led to record losses. Parsons cut debt and settled government probes into the AOL unit. Now he’s driving sales growth with a new Web push and an agreement last month to purchase cable TV assets from Adelphia Communications Corp., the company’s biggest deal since the merger.
Time Warner has considered selling a stake in AOL to the public and concluded that the move isn’t currently necessary, Parsons told investors. Time Warner will reassess the decision if there’s consolidation in the Internet industry and the company needs new shares to pay for acquisitions, he said.
Time Warner’s stock dropped 14 cents to $17.61 on the New York Stock Exchange.
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