Giant write-off triggers $45B AOL loss

Contrasting sharply with strong results at most of its media divisions, AOL
Time Warner Inc. posted a $44.9 billion loss after writing down the book value of
many of its divisions -- particularly, of course, the America Online Inc. Internet

The company also said it expects zero growth in operating cash flow for

The big loss isn't financially significant because it doesn't involve actual

It's a bookkeeping issue stemming from the write-off of "goodwill," devaluing
its operations by $45.5 billion.

It follows a $54 billion write-off in early 2002.

But it's yet another reminder of what a terrible mistake Time Warner Inc. made in
selling to AOL for stock in 2001.

Fourth-quarter results were generally strong, with cable systems and Warner
Bros. jumping 13 percent and the Turner Broadcasting System Inc., The WB Television Network and Home Box Office networks surging 46 percent.

Even the dismal music unit posted a 25 percent cash-flow gain.

AOL, however, saw its profits drop 11 percent.

Companywide cash flow grew a strong 16 percent.

Newly christened chairman and CEO Richard Parsons had bad news about the
outlook for 2003: no growth.

Parsons said that Time Warner Cable would collect fewer launch fees from
start-up networks, Warner Music was expected to sag and AOL will not get perky
anytime soon.

Parsons sees companywide cash flow as "essentially flat."