EBITDA Increases 14% to $2.0 Billion; Operating Income Rises 9% to
Free Cash Flow Totals $1.0 Billion;
Cash Flow from Operations Amounts to $1.5 Billion
AOL Time Warner Inc. (NYSE:AOL) today reported financial results
for its first quarter ended March 31, 2003.
Revenues for the quarter increased 6% over the same period in 2002 to
$10.0 billion. Subscription revenues climbed 10% to $4.9 billion, led
by growth in the Company's Cable and America Online businesses.
Content revenues improved 11% to $3.3 billion, due to increases at the
Filmed Entertainment and HBO divisions. Advertising revenues declined
5% to $1.3 billion, stemming from decreases at America Online and
Cable, offset partially by solid gains at the Publishing and Networks
divisions. Other revenues decreased 21% to $472 million, due to
declines at the America Online and Publishing divisions.
The quarter's EBITDA rose 14% to $2.0 billion, led by growth at
the Filmed Entertainment, Networks and Cable divisions, as well as a
decline in restructuring charges from $107 million in the year-ago
quarter to $24 million this quarter. Excluding the effect of these
charges, EBITDA grew 9%.
Operating Income climbed 9% to $1.2 billion, reflecting the EBITDA
growth, which was offset in part by increased depreciation primarily
at the America Online and Cable divisions.
Cash Flow from Operations was $1.5 billion. Free Cash Flow totaled
$1.0 billion, or 48% of EBITDA, partially due to the favorable timing
of working capital requirements.
At the end of the quarter, the Company's net debt totaled $26.3
billion, versus $25.8 billion at year-end 2002. This net debt balance
includes $2.1 billion of incremental borrowings upon the closing of
its Time Warner Entertainment Company, L.P. ("TWE") restructuring
transaction. This increase was substantially offset during the quarter
by the sale of an investment in GM Hughes for approximately $800
million, as well as the generation of significant free cash flow that
was used to reduce debt.