The loss follows the company taking a charge of $45.5 billion
for the last quarter of the past year to write down the value of
its America Online unit.
The fourth quarter charge followed a $54 billion write-down in
the first quarter of 2002, which was mandated by a change in US
accounting rules on estimating the monetary value of a company's
goodwill.
Those adjustments on AOL's balance sheet did not include America
Online, AOL's internet arm. For this reason, the corporation had to
proceed to a further write-down of its assets' value.
The announcement of the record loss follows a year of federal
investigations and declining share prices. Its shares have fallen
70% since the merger between America Online and Time Warner two
years ago, the largest merger in US history.
AOL reported that it expects profits before interest, taxes and
depreciation and amortisation to be "essentially flat
year-over-year" in 2003. Dick Parsons, the corporation's Chief
Executive said that AOL will use its "free cash flow and other
initiatives to reduce debt", in an attempt to obtain "meaningful
strategic capacity", according to the Financial Times.
AOL also said it expects its film and entertainment divisions to
help improve its financial performance.
The company also announced the resignation of Ted Turner as vice
chairman. Turner, the founder of CNN, sold his media group to Time
Warner at the time of the merger, becoming AOL's largest individual
shareholder. Earlier this month, AOL also announced the resignation
of Chairman Steve Case.
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