The ratings on Atlanta, Ga.-based Cox Enterprises (CEI) and its subsidiaries reflect the company's diversified portfolio of cable TV systems, auto auctions, and media businesses, which have solid market positions, good operating margins, healthy free cash flow generating characteristics, and significant asset value. The ratings also incorporate Standard&Poor's Ratings Services' expectations that CEI will refrain from meaningful leveraged transactions until financial risk moderates. Tempering factors include elevated leverage from the company's December 2004 $8.5 billion cash acquisition of minority interests in the cable subsidiary, weaker industry trends in advertising-dependent businesses, particularly newspapers, capital spending requirements in the cable business, and longer-term competitive threats from local telephone companies in the cable segment. We view the credit profile of CEI
