AOL Time Warnertoday (Jan 29) posted a net loss of nearly $100bn for 2002 - the biggest annualloss in corporate history - after announcing a fourth quarter writedown of$45.5bn that followed a $54bn writedown in the first quarter to cover thecompany's plummeting value. In a separate announcement that adds to theembattled media conglomerate's woes, vice chairman Ted Turner said hewould be stepping down in May to pursue philanthropic interests.
AOL declared afourth quarter net loss of $44.9bn, or $10.04 a share, compared to a $1.8bnloss or $0.41 drop in share prices a year ago. Revenue in the fourth quarterclimbed 8% to $11.4bn. For 2002 the company lost $98.7bn or $22.15 a share onrevenue of $41.1bn. In 2001 it lost $4.9bn or $1.11 a share on revenue of$38.5bn. Reports said the $98.7bn loss was greater than Egypt's grossdomestic product for 2001.
In a memo to AOLTime Warner staff CEO Dick Parsons said the writedown reflected stock pricesand would not impact on operations, liquidity or debt agreements. He remainedupbeat and pointed to the companyís studio divisions, Warner Bros andNew Line, which combined for the highest grosses by any distributor in thedomestic and international markets last year. Warner Bros owns the HarryPotter franchise whileNew Line has the Lord Of The Rings series, both of which have yielded sparkling box office results.The chief underachiever is America Online, which has been blighted by anadvertising downfall and a drop in subscribers.
Companyexecutives said 2003 - which Parsons referred to in the memo as a 'reset'year - would see revenue grow :'in the mid single digits', withdebt eradication a chief priority. Earlier today the company said it had soldits 8.4% stake in Hughes Electronics Group, which owns the DirecTV satelliteservice. It plans to reduce total consolidated debt to around $20bn by the endof 2004.
Turner'sdeparture will come as little surprise to some observers. Last year he told a cableconvention that selling Turner Broadcasting to Time Warner in 1996 was ìthebiggest mistake I ever made'. His nose was further put out of joint whenhe lost operational responsibilities following the AOL Time Warner merger twoyears ago. 'He's concluded now is the right time to make more space forhis other activities,' Parsons told analysts during a conference call.
Turner's exit will coincide with the departure ofAmerica Online founder Steve Case, who said at the beginning of the year hewould be stepping down as company chairman. Both will leave at the annualshareholders meeting in May.
By the close oftrading on the New York Stock Exchange today AOL shares were up 30 cents to$13.96.