NEW YORK--(BUSINESS WIRE)--July 23, 2003--
The presentation of AOL Time Warner Inc.'s historical financial
performance reflects the adoption by the SEC of Regulation G and other
rules affecting the use and disclosure of non-GAAP financial measures.
Pursuant to recent SEC guidance on the application of Regulation G and
the use of non-GAAP financial measures, going forward, the Company no
longer will refer to "Operating Income (Loss) before Depreciation and
Amortization" as "EBITDA." In addition, unless otherwise noted, the
Company's financial results described in this release, such as
Operating Income (Loss), Operating Income (Loss) before Depreciation
and Amortization, and Free Cash Flow, have not been adjusted for items
that may affect their comparability, including merger and
restructuring charges, impairments of goodwill and intangible assets
and the gains or losses from asset disposals.
AOL Time Warner Inc. (NYSE:AOL) today reported financial results
for its second quarter ended June 30, 2003.
Revenues for the quarter increased 6% over the same period in 2002
to $10.8 billion, led by increases at the Filmed Entertainment,
Networks and Cable divisions.
Operating Income before Depreciation and Amortization decreased 4%
to $2.2 billion, including a total of $277 million in non-cash
impairments of goodwill and intangible assets, offset partially by a
$43 million gain on an asset sale. Excluding these impairments and the
gain, Operating Income before Depreciation and Amortization increased
6% to $2.4 billion, reflecting double-digit increases at the Networks,
Cable and Filmed Entertainment businesses, offset in part by declines
at the America Online division.
Operating Income declined 15% to $1.3 billion, further reduced by
higher levels of depreciation and amortization.
For the first six months of 2003, the Company generated $3.8
billion in Cash Flow from Operations, and Free Cash Flow totaled $2.5
billion. Free Cash Flow benefited from the favorable timing of working
capital requirements and approximately $350 million of net cash
received through the settlements of certain litigation.
At the end of the quarter, the Company's net debt totaled $24.2
billion, versus $26.3 billion at March 31, 2003. The reduction in net
debt reflected proceeds of $1.225 billion received during the quarter
from the sale of a 50% ownership stake in the Comedy Central cable TV
network and the aforementioned net benefit from certain litigation
settlements, as well as the generation of significant Free Cash Flow.
This decrease was offset partially during the quarter by $813 million
of incremental borrowings for the repurchase of all non-voting
preferred shares in AOL Europe.