Moody's: Disney unchanged

Moody's Investors Service said the Walt Disney Co.'s A2 senior unsecured ratings, prime-1 short-term ratings and stable outlook are unaffected by news that the company approved a significant increase in its dividend payout from about $750 million to about $1.1 billion per year.

Given the fixed-charge nature of dividends, as compared to more flexible share repurchase activity, the significant increase in the dividend payout will reduce free cash flow and negatively impact credit metrics, the agency said.

However, Disney has sustained well over $3 billion in pre-dividend free cash flow per year, even through the 2009 recession, the agency said.

And Moody's said it anticipates the company will continue to generate free cash flow at these levels.

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