Time Warner Posts Q4, 2008 Losses

NEW YORK: Time Warner has recorded a fourth-quarter loss of $16 billion, from the year-ago profit of $1 billion, and a full-year loss of $13.4 billion from the 2007 profit of $4.4 billion, as a result of one-time $24.2 billion impairment charge.

Revenues for both periods were relatively stable at $47 billion for the year and $12.3 billion for the quarter.

Time Warner Cable saw full-year and quarterly revenue rise 8 percent to $17.2 billion and $4.4 billion, respectively, but the segment posted an $11.8 billion loss in the year and a $13.9 billion loss in the quarter due to a $14.8 billion noncash impairment of cable franchise rights, a $45 million noncash impairment on certain cable systems and a $13 million loss on the sale of those non-core systems. As at the end of the year, the platform had 34.2 million revenue-generating units.

Warner Bros. Entertainment recorded a 2-percent revenue decline in the year to $11.4 billion, with an 11-percent fall in the quarter to $3.1 billion. For the year, operating profit fell 3 percent to $823 million, but profit for the quarter gained 7 percent to $271 million.

Revenues from Turner Broadcasting and HBO rose 9 percent in 2008 to $11.2 billion thanks to gains in both subscription and advertiser revenue, with an operating income up 3 percent to $3.1 billion. In the quarter, meanwhile, revenues gained 9 percent to $2.9 billion but operating income was down by 24 percent to $586 million as a result of a $270 million charge on a trial court judgement related to the sale of Turner’s winter sports teams.

At AOL, revenues were down 20 percent to $4.2 billion, with subscription revenues down 31 percent and ad revenues down 6 percent. The division posted an operating loss of $1.1 billion. AOL’s revenues in Q4 fell 23 percent to $968 million, with an operating loss of $1.9 billion. 

"We’re making progress at Time Warner toward our goals of becoming a more content-focused company and delivering increasing returns to our stockholders," said Jeff Bewkes, the company’s chairman and CEO. "Last year, our priorities were to rationalize our structure and improve our operating performance. Despite the challenging economic environment, we achieved most of what we set out to do. Moving into 2009, we intend to build on those accomplishments. Operationally, we’ll continue to improve the efficiency of our businesses while creating even more of the compelling content that’s becoming increasingly valuable. Structurally, we’ll complete the Time Warner Cable separation soon. At the same time, we’ll strengthen our balance sheet, improve our strategic flexibility and return capital to our stockholders on a consistent basis. Through these steps, we expect to emerge from this downturn in an even stronger competitive position."