Tribune Co.: $880 million? No problem

Or at least that’s what CEO Dennis J. FitzSimons claimed, in essence, today in a company-wide email about last week’s Tax Court verdict decreeing that the company owed about a billion dollars in taxes stemming from the Times Mirror acquisition. The company paid the $880 million federal portion of the tax assessment and hey, Tribune stock is rising again!

On Friday we made the $880 million federal portion of the required tax payment. Funding came primarily from the issue of short-term debt. Because of our strong financial position> -> both from a cash flow and debt perspective> -> our interest rate was below 4%. Our debt level is now $2.9 billion (compared to $5.5 billion when we acquired Times Mirror) and we remain one of the highest-rated media companies in the credit markets.

As expected with news of this magnitude, our stock declined about 5% following the announcement of the Tax Court decision. TRB shares gained $.28 on Friday and are up slightly so far today.

While we had hoped that the Tax Court decision would go our way, strong cash flow from our operating businesses and good financial planning ensure that we still have the flexibility to pay down debt, invest in our core businesses, make acquisitions that fit strategically and buy back our own stock.

Full text of the email at L.A. Observed.