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GAIN ON SALE AND DISCONTINUED EARNINGS REPORTING
* * * By divesting MMB, we are completely exiting the
legal and health sciences publishing business, and are
required to separately report MMB earnings as
discontinued operations. Similarly, the gain on sale
appears in the discontinued line.
* * * * * * *
* * * We will receive over $2.0 billion in cash from
the sale. * * *
* * * * * * *
BALANCE SHEET REVIEW
After the magnitude of the gain on the MMB sale became
apparent, we decided to use this opportunity to conduct
a thorough examination of our balance sheet, operations
and investments to see what actions we could take to
benefit the businesses in future years.
* * * * * * *
CAPITALIZATION AND
INVESTMENT STRATEGY
Introduction
The disposition of Mosby Matthew Bender (MMB) will
produce an unprecedented level of investible [sic]
capital for Times Mirror. Net proceeds of
approximately $2.0 billion will be deposited into our
accounts requiring immediate rigorous management.
The net proceeds of the MMB disposition, in conjunction
with our annual operating cash flow will provide the
company with enormous investment capacity over the next
few years. If we can successfully deploy this
investment capacity in assets that meet our return
criteria, our total 5 year investment capacity would be
as much as $5 billion. Investment at this level would
still enable us to retain our current solid credit
ratings and associated financial flexibility.
Our first responsibility upon receipt of the
disposition proceeds is to establish a short term
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