The ratings on Atlanta, Ga.-based Cox Enterprises Inc. (CEI) and its subsidiaries reflect the company's diversified portfolio of cable TV systems, auto auctions, and media businesses; improving credit measures; and significant asset value. The businesses have solid operating margins and generate healthy free cash flow. In particular, the cable TV unit, which is the third-largest cable operator in the U.S., has strong investment-grade characteristics. These factors are tempered by weaker industry trends in advertising-dependent businesses, particularly newspapers, significant capital spending requirements, and competitive threats from local telephone companies in the cable business. Standard&Poor's Ratings Services views the credit profile of CEI and its subsidiaries on a consolidated basis, given the economic and strategic importance of the units to
