When AOL Time Warner
"Oh no, Hughes! Don't!" he may have said. "I quit!"
The charismatic media visionary who brought us CNN, the swell pitching of the Atlanta Braves, and a series of Turner-branded cable properties will be the latest to move on from the troubled entertainment giant come May. Steve Case resigned as chairman earlier this month.
They're checking out at the worst time. While the company announced a better-than-expected fourth-quarter operating profit of $0.28 a share, it's also taking a jaw-dropping $45.5 billion charge to write down the value of its teetering empire. This comes on the heels of a massive $54 billion hit to goodwill recorded last year.
All said, you might want to cup any impressionable eyes when you add up the damage. For 2002, the company lost $98.7 billion -- or $22.15 a share -- on $41.1 billion in revenue. While that's more than the company is presently worth, the deficit was a result of the two huge, non-cash charges. AOL Time Warner still managed to produce $4.2 billion in free cash flow, and will reduce its debt to $20 billion over the next two years, offering some degree of hope to shell-shocked investors.
The media conglomerate still expects to grow its top line and cash flow in 2003, albeit slightly. The major culprit remains its America Online mother ship. While the subscription side of the online business should hold steady, the company expects a 40% to 50% dip in advertising and commerce revenue this year.