AOL Awash in Red as Turner Rides Off

Updated from 4:38 p.m. EST

Say this for Ted Turner: He knows how to make an exit.

AOL Time Warner (AOL Quote) on Wednesday announced a staggering amount of bad news, past, present and future. The New York media giant took a $45.5 billion writedown that saddled it with a fourth-quarter loss of $10.04 a share. That news, along with the company's latest reduction in revenue guidance, helped to drive the stock down 10% in after-hours trading.

But by far the biggest stir was caused by the announcement on the company's conference call that Vice Chairman Ted Turner, a highly visible if largely ceremonial presence in the top ranks since Time Warner's 1996 acquisition of Turner Broadcasting, would leave the company this spring to pursue other opportunities, including philanthropic ones.

Turner has been smack in the middle of the tumult surrounding AOL Time Warner since its January 2001 formation from the merger of Time Warner and America Online. Most recently, Turner was seen as an adversary to Steve Case, the AOL Time Warner chairman who recently stepped down, saying he'd rather not distract the company as it deals with its woes.

'Reset'

AOL Time Warner's woes were much in evidence Wednesday as fourth-quarter earnings hit the Street. The multimedia conglomerate said its latest-quarter charge would reduce the carrrying value of goodwill and other intangible assets. The writedown comes on top of a similar $54 billion noncash charge AOL Time Warner took in the first quarter as it implemented new accounting rules to reflect the diminished value of businesses acquired during the Internet boom. Both charges rank among the largest ever taken in corporate history, and together they stuck the company with a 2002 loss of $98.7 billion.

In a postclose earnings release, AOL also projected more grim tidings for growth-hungry shareholders. For full-year 2003, the company's forecast of flat earnings before interest, taxes, depreciation and amortization -- a common bottom-line yardstick for media companies -- was appreciably below prior expectations.