AOLTW HEARS SOME SWEET MUSIC FROM 2002 Q4 RESULTS

Music struck a positive note for beleaguered AOLTW, which announced a 2002 loss of nearly $100 billion today, the largest annual loss in U.S. corporate history. That follows a giant $45.5 billion charge in the fourth quarter to write down the value of assets. To top off the day, the company’s Vice Chairman Ted Turner stepped down from his post (see hitsdailydouble, 1/29).

The company’s Warner Music Group proved to be a bright spot, though, with a 2002 EBITDA of $482 million, an increase of 15% over 2001’s $419 million, on revenue of $4.2 billion, representing growth of 4% over last year’s $4.0 billion. For the quarter ended Dec. 31, WMG’s EBITDA rose to $188 million from $151 million in a comparable period last year, an increase of 25%, while total revenue topped $1.3 billion, a rise of 6% over Q4 totals last year of $1.2 billion.

The figures marked the fourth consecutive quarter of increases for WMG.

WMG Chairman/CEO Roger Ames was elated, as he outlined in an e-mail to his troops: "Thanks to our efforts, we made gains in key territories around the globe and finished the year as the No. 2 company in the U.S. While the near-term outlook for the industry remains difficult, I am convinced that effective management, continued fiscal discipline and our proven ability to develop and market our remarkable artists will see us through the difficult times."

Full-year growth was driven by the acquisition of gospel label Word Entertainment in January 2002, lower provisions for returns, favorable currency translation and higher DVD manufacturing volume. The EBITDA increase was credited to revenue increase, the impact of cost-saving measures and restructuring programs and lower bad debt expenses. Warner Music’s domestic album marketshare hovered around 17% for the year, ranking it second to all music companies in the U.S. Top sellers included Red Hot Chili Peppers, Josh Groban, Linkin Park, Faith Hill and Alanis Morissette.

Added Ames: "Our challenge lies in stimulating a legitimate online market for music that takes advantage of the consumers’ voracious appetite for the wide range of offerings from our artists and labels. Already, we’ve made great strides in this direction and, in the coming year, we will implement further important changes."