reply from YLO IR
Part of my question was about their ability to continue to pay the preferred shareholders and meet their debt obligations. The second part was the issue of Jitney trading programs and a suggestion of how to combat them. I appreciate the considered response.
Miner
Thanks again for your insight and interest in Yellow Media Inc.
We will look further into your email.
Please note that we remain committed to strengthening our capital structure. On May 5, 2011, Yellow Media inc. announced its intention to implement a normal course issuer bid for its common shares and first preferred shares, series 3 and 5 and to renew, upon expiry, the current normal course issuer bid for its first preferred shares, series 1 and 2 through the facilities of the Toronto Stock Exchange. The Company plans to purchase for cancellation up to but not more than 10% of the public float of the common shares and of each such series of first preferred shares outstanding.
As you know, In December 2010, both rating agencies, Standard and Poors and DBRS confirmed all credit ratings for Yellow Media Inc. In addition, management remains firmly committed to its investment grade rating.
Regarding our dividend policy, for 2011, Yellow Media Inc. is paying a monthly dividend of C
.0542 (C
.65 annually) per common share. This was announced in November 2010 as part of our conversion from an income trust to a corporation. The existing dividend policy reflects a payout of 60% to 70% of adjusted earnings per common share and is intended to provide shareholders with a sustainable source of income. For example, based on adjusted earnings for Q1-2011 (
.23), the annual
.65 dividend (
.16 by quarter) represents a payout of 70%. We believe adjusted earnings per share represents the best metric on which to base our dividend payout calculation since it excludes the effect of non-recurring and non-cash expenses and is therefore representative of sustaining cash available for dividend payout.
Regards,
Yellow Media Inc. Investor Relations Team