Time will de-lever, enhance financial flexibility after dividend cut

By Devika Patel

Knoxville, Tenn., May 10 – Time Inc. plans to pay down debt and reach the lower end of its targeted leverage range of 2x to 2.5x with the savings it will realize after reducing its common stock dividend to $0.04 per share.

“Today, our board of directors approved a revision to the company’s capital allocation strategy,” executive vice president and chief financial officer Sue D’Emic said on the company’s first quarter earnings conference call on Wednesday.

“Our quarterly common share dividend has been reduced to four cents per share.

“This change will enable us to invest in our key growth drivers, enhance our financial flexibility, de-lever the balance sheet and move towards the low end of our target leverage range of 2x to 2.5x net debt to adjusted OIBDA.

“The dividend reduction we announced today would provide approximately $60 million on an annualized basis to further enhance our strategic and financial flexibility as we execute our plan.

“Our strong cash position and untapped revolving credit facility of approximately $500 million also provides us with further financial flexibility.

“As of March 31, $75 million remains unused under our authorization for discretionary debt repayments and repurchases,” she said.

The company ended the quarter with $281 million of cash, cash equivalents and short-term investments.

Time is a New York-based media company.

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