Time Warner Cable Splits Off From Time Warner: $9 Billion Payout

Time Warner has let its cable division walk away as a solo company - a move that's earning its shareholders a one-time $9.25 billion dividend payout. Good news for Time Warner shareholders.

Better news for Time Warner Cable. Even with $13.5 billion in debt (before the dividend payout), TWC remains the strongest card in the Time Warner hand - or, I should say, formerly in the Time Warner hand:

"They are taking on the additional debt because they can," [Analyst Craig Moffett] said. "Their cash flow prospects are sufficiently strong to warrant an aggressive capital structure that was underleveraged as part of the bigger company."

Indeed, TWC might be worth more without its parent company:

"The notion of any synergies between Time Warner corporate and Time Warner Cable were debunked a long time ago," he said. "But cable has always been the strongest part of the portfolio, and Time Warner Cable will likely benefit from the additional freedom."

That's a natural fact - TWC not only wields a powerful cable television business but has risen to compete with phone companies in terms of both voice service and broadband. And as part of the SpectrumCo. consortium and its WiMax technology, TWC is tackling the wireless market, too.

That's a long way from basic cable, baby.

Congratulations on your breakup, Time Warner Cable [CNet]