This week, AOL Time Warner posted the largest annual loss in US corporate history--a whopping $100 billion--for fiscal 2002. The loss includes a $45 billion charge the company took in the fourth quarter to adjust the value of some of its assets, including the AOL Internet service. The world's largest media company, AOL Time Warner is the result of a failed experiment to merge the old media company Time Warner with the new media company America Online; the corporation has been hemorrhaging cash ever since.
From a financial perspective, the company's performance has been poor but will likely get a bit stronger in the coming days. AOL Time Warner grew revenue 8 percent to $11.4 billion, with before-tax earnings rising 16 percent to $2.8 billion, compared with the same quarter a year earlier. And despite the weakness of its online unit, parts of the company continue to excel, including the film and entertainment business, which was recently bolstered by "The Lord of the Rings: The Two Towers," the second film in the Lord of the Rings trilogy. AOL Time Warner expects growth in fiscal 2003 to continue in the mid-single digits.
The company also announced that Vice Chairman Ted Turner will step down in May. With 122 million shares, Turner is AOL Time Warner's largest individual shareholder; he created CNN, the 24-hour cable news station that rose to prominence during the Gulf War. Turner is reportedly stepping down to spend more time on other interests, including his philanthropic efforts.