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portfolio management framework. The primary objective
of this activity is to preserve principal value while
earning a return commensurate with the risk parameters
we establish through our investment policy.
Second, we will begin to redeploy these resources into
operating assets to drive revenue growth and into share
repurchases to start to return towards our target
capitalization. In the current high asset valuation
environment, in view of our well developed return
discipline, this program could require several years.
Most significantly, we are not looking at our resources
as a war chest for a big cash acquisition. Instead, we
are expecting increases of approximately 25%, a
doubling of our recent spending rate on acquisitions of
businesses that are closely related to or fill in gaps
in our core businesses, acceleration of our share
repurchase plans and, in general, an acceleration of
investments in our base businesses.
This stance leaves us with ample resources for pursuing
unexpected opportunities and will position us to try to
“make things happen” as important strategic initiatives
are identified. It also means that we will allocate a
portion of our surplus cash investment portfolio to
investments with medium term horizons in order to
increase the overall return on our cash. Examples of
this type of investing include the investment we made
in Target Media Partners in connection with the
Recycler purchase, and the Latin Communications Group
opportunity we discussed at the last meeting, as well
as increases in “new media” venture capital
investments. We will also allocate a portion of the
funds for tax-advantaged investments to enhance yield
and for “pre-funding” our charitable commitments with
contributions to our tax-exempt affiliates.
* * * * * * *
Short Term Portfolio Strategy
The following shows the gross amount of disposition
proceeds the company will be receiving:
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