RE: AH DIVIDENDSYou seem to be confusing cash flow with earnings per share. If a company earns $1.00 per share that is not the cash flow per share. There are many non cash expenses that effect the earnings per share but not cash flow. The best example of that is depreciation. TA does not have a cash flow problem. They are selling some assets to invest in others.
The asset they sold to their subsidiary will still earn them some money and at the same time repositions the asset base they want to work with. Companies buy and sell assets all the time in order to focus on what they consider the core business for them. If they were in such a cash crunch as you are suggesting then how could they spend more on assets and acquisitions than they received from asset dispositions?
You are right to ask the question of what does a company do if they don't make enough income per share to cover the dividend they pay. The answer in the short term is they pay the dividend out of cash flow. Of course if their earnings continue to be below their dividend for a long period (more than a year) then they will have to reduce the dividend if they feel the situation will not improve in a reasonable amount of time. Your assumption that they only have 2 choices if they don't earn enough to pay the 3rd and 4th qtr dividends, sell assets or reduce the dividend, is incorrect. In 2002 their cash flow from operations was roughly $2.87 per share. This does not include cash from disposals. Therefore they currently have plenty of cashflow to cover the dividends. If their earnings continue to decline that will begin to have an impact on operating cash flow and could in time hurt the dividend but we are not at that stage yet.
Regarding 2003, the company made some conscious decisions (such as accelerated maintenance) in late 2002 that would hurt current (2002 and early 2003) earnings but would put them in a better position by the end of 2003.