CHANDLERS REDUCE TIMES HOLDINGS, DIVERSIFY PORTFOLIO.Byline: Floyd Norris  The of this article or section may be compromised by "peacock terms".You can help Wikipedia by removing peacock terms. The New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Times The Chandler family, which founded and controls Times Mirror Co., on Friday reached a deal with the company that will give the family more current income and diversify its investments, at the cost of cutting its stake in the company. Times Mirror publishes such newspapers as The Los Angeles Times Los Angeles Times Morning daily newspaper. Established in 1881, it was purchased and incorporated in 1884 by Harrison Gray Otis (1837–1917) under The Times-Mirror Co. (the hyphen was later dropped from the name). , Newsday, The Baltimore Sun and The Hartford Courant Cou`rant´ a. 1. (Her.) Represented as running; - said of a beast borne in a coat of arms. n. 1. A piece of music in triple time; also, a lively dance; a coranto. 2. . The complicated deal includes two transactions that together will have almost no effect on the after-tax cash flow of the company, Tom Unterman, the company's chief financial officer, said. But because they will result in a reduction in the number of shares outstanding, the moves will lead to an increase in per-share earnings. Mark Willes, the company's chairman and chief executive, said the moves would raise per-share earnings by 10 cents in 1998. Under the deal, Times Mirror and the Chandler family trusts will form a limited liability company. The company will contribute real property valued at $226 million, and $249 million in cash. The cash will be invested in a diversified portfolio of investments, while the property will be leased back to Times Mirror. The family trusts will put in 5 million shares of Times Mirror class A common stock and $221 million of 8 percent preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. . The family trusts will be allocated 80 percent of the income from the portfolio investments and from the leasing of the property, while the company will get 80 percent of the income from its own securities. For financial statement purposes, that will lead to a reduction in the number of shares outstanding. The other transaction essentially involves one of the Chandler family trusts exchanging 2 million class A common shares, $190 million of the 8 percent preferred stock and $21 million of other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. , including real estate and cash, for $313 million of a new preferred stock. That stock will pay 5.8 percent annual dividends, but the dividend rate will increase in line with the dividend on common stock, up to a maximum of 8.4 percent. The deal is structured to largely avoid taxes for the family trusts; the ability to depreciate depreciate v. in accounting, to reduce the value of an asset each year theoretically on the basis that the assets (such as equipment, vehicles or structures) will eventually become obsolete, worn out and of little value. (See: depreciation) the value of the real estate acquired will give the trusts some tax-deferred income Tax-deferred income Dividends, interest, and unrealized capital gains on investments in an account such as a qualified retirement plan, where income is not subject to taxation until a withdrawal is made. , while the diversified portfolio of investments will reduce the family's concentration of assets. The company would owe taxes if the real estate was worth more than its book value, but Unterman said the real estate in total was in fact worth less than its value on the company's books. The real estate includes Times Mirror Square, the company's headquarters in Los Angeles; Sun Park, the headquarters of The Baltimore Sun; an office building that houses The Hartford Courant; the Long Island plant where Newsday is printed; and some warehouses. |
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