AOL Time Warner

(AOL)

said Thursday its board approved a $5 billion stock repurchase program, and the company filed a shelf registration covering $10 billion of its securities.

The stock buyback will span the next two years and is slated to begin in February.

"Thanks to the strong growth prospects for our company, we're able not only to continue to invest in our world-class businesses, but to use a portion of our growing financial capacity to buy back stock at a time when we believe our shares are undervalued," the company said in a statement.

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Shares of AOL Time Warner gained 98 cents, or 2%, to close the regular

New York Stock Exchange

session at $49.77, and rose to $50.88 in after-hours

Island

activity.