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Technology Stocks : What about old Time Warner
TWX 98.770.0%Jun 15 5:00 PM EST
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To: sixty2nds who wrote (93)2/21/2006 7:26:10 AM
From: sixty2nds   of 102
 
03:58 TWX Stock buyback will raise debt of Time Warner - WSJ (17.78 )

The Wall Street Journal reports Time Warner's (TWX) agreement with Carl Icahn to raise its stock-buyback program to $20 bln will likely lift the co's debt to $35 bln -- the highest in absolute terms ever recorded by the co. Both the co and Wall Street analysts say the increased debt won't endanger Time Warner's investment-grade credit rating. Time Warner says that even at the higher level, its debt won't go above its internal limit of three times its operating income before depreciation and amortization. A spokesman also noted the co's debt has been higher as a ratio of operating earnings in the past. But the higher debt will reduce Time Warner's flexibility to make acquisitions. Mr. Icahn and Time Warner late Friday announced a settlement, under which Mr. Icahn will drop his proxy contest for seats on the co's board in exchange for a number of concessions. These include the increased buyback and commitments by Time Warner to consult the Icahn camp on appointments of two new independent directors, to consider a larger spinoff of its cable unit and to reduce costs by an additional $500 mln in 2007 on top of $500 mln in a cost-cutting program already under way.
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