Time Warner Board OKs Dividend5/20/2005 5:47 AM Eastern
Time Warner Inc. said Friday that its board of directors has approved issuing a cash dividend to shareholders, beginning in the third quarter.
In a prepared statement, Time Warner said the first cash dividend payments -- about 5 cents per share -- will be made in September, with the record and payment dates to be announced in the summer.
Time Warner has been batting around the idea of issuing a dividend to return value to shareholders for months. The media giant has generated strong free cash flow in recent years -- it converted about 45% of adjusted operating income before depreciation and amortization into free cash flow in the first quarter -- and it has said in the past that it could use that money to pay down debt, to buy back its own stock or to pay a dividend.
“In keeping with our commitment to build and deliver value to our investors, we’re pleased that our board of directors has agreed that the company’s strong balance sheet, robust free-cash-flow generation and excellent growth prospects support our decision to pay a dividend to Time Warner stockholders,” chairman and CEO Richard Parsons said in a prepared statement.
“At the same time, we'll continue to have the financial flexibility to invest in organic growth and high-return, high-growth strategic opportunities, as well as to explore other ways to reward our investors,” he added. “Today’s announcement underscores the progress of our company over the past several years and our confidence in Time Warner’s future success.”
Time Warner shares were down 11 cents each to $17.64 in early trading Friday.