Time Warner Makes Dividend Announcement

24 May 2005

US media titan Time Warner will resume dividend payments to shareholders for the first time since its controversial merger with America Online in 2000.

The dividend of $0.05 (€0.039; £0.027) per share is to be paid in September, reports TW. The last payout, five years ago, was $0.045 per share.

Chairman/ceo Richard Parsons beams with pride at his board's largesse, saying: "We're pleased ... that the company's strong balance sheet, robust free cashflow generation and excellent growth prospects support our decision to pay a dividend to Time Warner stockholders."

One of the biggest stockholders is cable pioneer John Malone's Liberty Media, which has a 4% stake. Malone is also a non-executive director of Cablevision which lost out to a joint $17.6 billion bid by TW and cable operator Comcast for the troubled Adelphia Communications [WAMN; 27-Apr-05].

In an interview with the UK's Financial Times, Malone says the joint bid for Adelphia was driven by tax considerations and TW's desire to unwind its relationship with Comcast, which owns around 17% of TW's cable business.

He says: "Effectively their's was a transaction where [TW] gets a $3bn tax advantage by paying off Comcast with cable systems," referring to Comcast's decision to exchange its stake in TW's cable division for Adelphia cable systems.

Data sourced from Financial Times online; additional content by WARC staff