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.