AOL Latin America Reports Reduced Losses for Fourth Quarter 2002; Reports Full-Year 2002 Results.

Business Editors

FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--Feb. 11, 2003

America Online Latin America, Inc. (Nasdaq:AOLA):

-- Continuing Focus on Operating Efficiency Contributed to Tenth Consecutive Quarter of Narrowed Per-Share Losses

-- Losses Reduced by 41% for Full Year 2002 and 45% for Fourth Quarter 2002 Versus Prior Year

-- Available Funds Now Expected to Finance Operations Into the First Quarter of 2004

America Online Latin America, Inc. (Nasdaq:AOLA) today reported narrowed per-share losses for the fourth quarter ended December 31, 2002, contributing to a narrowed full year loss for 2002. These results mark AOL Latin America's tenth straight quarter of narrowed per-share losses. Operational efficiencies implemented during 2002, marketing strategies focused on higher-value members, as well as regional currency devaluations contributed to the Company's reduced losses. As a result of these improvements, AOL Latin America now expects its cash on hand to finance operations into the first quarter of 2004. Another key highlight from the quarter was the revised marketing agreement with Banco Itau which is designed to provide a stronger member acquisition channel for the co-branded AOL Brazil/Itau service.

The Company's fourth quarter net loss applicable to common stockholders narrowed by more than 45% to $38.6 million, or $0.58 per class A common share, basic and diluted, compared with a loss of $70.5 million, or $1.05 per share, for the quarter ended December 31, 2001, and approximately 3% from a loss of $39.9 million, or $0.59 per share, in the third quarter ended September 30, 2002. The Company's fourth quarter net loss before dividends on preferred stock was $33.8 million, or $0.09 per share, on a pro forma fully diluted basis, improving from a loss of $65.8 million, or $0.20 per share, on the same basis a year ago, and a loss of $35.2 million, or $0.10 per share last quarter. Pro forma fully diluted calculations were impacted by a significant increase in potentially dilutive securities during the fourth quarter resulting from the issuance of convertible notes to AOL Time Warner Inc. and the payment of interest on such notes through the issuance of preferred stock.

AOL Latin America reported total revenues of $17.8 million in the fourth quarter, compared to $18.7 million in the quarter ended December 31, 2001, and $17.6 million in the third quarter of 2002. Total revenues during 2002 were negatively impacted by currency devaluations in Argentina, Brazil and Mexico. Excluding currency devaluations, total revenues rose approximately 18% over the prior year quarter and approximately 9% over the third quarter 2002. Although currency devaluations in the region had a negative effect on revenues, they also contributed to a decline in operating expenses during the quarter and the year which more than offset the negative currency effect on revenue versus the prior periods, helping the Company conserve its cash on hand.

Subscription revenue totaled $15.3 million, unchanged from $15.3 million in the December 31, 2001 quarter. Subscription revenue dropped slightly as compared with $15.8 million in the third quarter of 2002 primarily due to currency devaluation.

Advertising and other revenue totaled $2.5 million, compared with $3.4 million in the quarter ended December 31, 2001, and $1.8 million in the third quarter of 2002. Softness in the online advertising markets in the region continued to impact the Company's advertising and other revenues.

For full-year 2002, total revenue was $72.1 million, up from $66.4 million in 2001. Subscription revenue totaled $63.0 million for 2002, compared with $49.9 million for full-year 2001. Advertising and other revenue fell to $9.1 million for 2002, compared with $16.5 million for full-year 2001. AOL Latin America's net loss before dividends on preferred stock for full-year 2002 narrowed by approximately 44% to $161.9 million, or $0.47 per share, on a pro-forma fully-diluted basis, compared with a loss of $290.3 million for 2001. The reported full-year 2002 net loss per class A common share, basic and diluted, was $2.69 per share on $180.6 million of net loss, compared with $4.66 per share on $307.3 million of net loss for full-year 2001.

As a result of the Company's ongoing efforts to reduce the number of members not paying on a timely basis and to target higher value members, AOL Latin America's membership base declined slightly during the quarter. AOL Latin America reported ending the quarter with approximately 1.18 million members, down 2%, or approximately 26,000 members compared to the third quarter of 2002. As with the Company's previous member reports, the 1.18 million members includes those participating in the services' free trial promotional periods, as well as members of the co-branded AOL Brazil service with Banco Itau, whose time online is subsidized by the bank. In line with previous announcements, AOL Latin America's overall efforts to improve the revenue contribution of its membership base, as well as to reduce the number of inactive members of the co-branded service under the revised marketing agreement with Banco Itau, are expected to result in further declines in membership in the near term.

Underscoring these initiatives, in December 2002, AOL Latin America announced a revised agreement to promote the co-branded AOL Brazil/Itau service to Banco Itau's more than 9 million customers. The Company believes this agreement will provide a stronger member acquisition channel for the co-branded service with point-of-sale displays and interactive kiosks, staffed by AOL Brazil promoters, in hundreds of Banco Itau's banking branches throughout Brazil. As part of the agreement, AOL Latin America will now oversee marketing activities, which will be funded by Banco Itau. The revised agreement also restructures subscriber and revenue targets, which are now based solely on the implementation of Itau's marketing commitments and minimum revenue contribution levels.

Over the past year, AOL Latin America has focused on targeting higher value members through more efficient member acquisition channels in an effort to improve the revenue contribution of its member base. These channels have included point of sale displays in key retail partners including Office Depot, Carrefour and Wal-Mart. The Company also implemented member acquisition initiatives that included bundled PC agreements with top manufacturers including Hewlett-Packard in Mexico and Metron, Brazil's largest PC manufacturer.

AOL Latin America announced that as of January 24, 2003, the Company's class A common stock has regained compliance with the required $35 million minimum market capitalization of listed securities. NASDAQ also confirmed that the Company's class A common stock is no longer in a conditional listing period. NASDAQ has also recently granted a 180-day extension to comply with the $1 minimum bid price requirement for continued listing. The Company must now have a closing bid price of $1 or higher for at least ten consecutive trading days commencing no later than June 30, 2003.

Charles Herington, President and CEO of AOL Latin America, said: "Our ongoing initiatives to streamline operations and target higher value members contributed to our tenth consecutive quarter of narrowed losses. We also expect these ongoing initiatives will help us finance operations into the first quarter of 2004. These efforts will be augmented by our revised marketing agreement with Banco Itau, which continues to be an important partner. With these initiatives in place, and having recently remedied our position on the NASDAQ SmallCap Market, AOL Latin America is going in the right direction by building our business for the future."

Other Highlights

Over the past several months, AOL Latin America continued to make progress on several fronts, including:

-- New Content: AOL Latin America continued to enhance its robust

content offerings with several new partners, including a

special promotion with McDonald's in Brazil called "Dancing

with Ronald McDonald," an online music promotion with Sony in

Mexico, and content from Poder and Loft magazines from Zoom

Media. Other offerings have included AOL First Listens,

exclusive worldwide premieres of today's hottest music

artists, and great online content and promotions for Harry

Potter and the Chamber of Secrets and The Lord of the Rings:

The Two Towers.

-- AOL 8.0: AOL Latin America also plans to begin launching

localized versions of the AOL 8.0 software in the first half

of 2003. AOL 8.0 has been a great success in the U.S. with

record adoption levels since its launch in October, 2002. AOL

8.0 is currently available to members in Puerto Rico.

-- Financing: AOL Latin America noted that, as of December 31,

2002, funds from the $160 million March 2002 financing

agreement with AOL Time Warner Inc. were completely drawn as

per the agreement. The Company now expects its cash on hand to

be sufficient to finance operations into the first quarter of

2004.

About AOL Latin America

America Online Latin America, Inc. (Nasdaq:AOLA) is the exclusive provider of AOL-branded services in Latin America and has become one of the leading Internet and interactive services providers in the region. AOL Latin America launched its first service, America Online Brazil, in November 1999, and began as a joint venture of America Online, Inc., a wholly owned subsidiary of AOL Time Warner Inc. (NYSE:AOL), and the Cisneros Group of Companies. Banco Itau, a leading Brazilian bank, is also a minority stockholder of AOL Latin America. The Company combines the technology, brand name, infrastructure and relationships of America Online, the world's leader in branded interactive services, with the relationships, regional experience and extensive media assets of the Cisneros Group of Companies, one of the leading media groups in the Americas. The Company currently operates services in Brazil, Mexico and Argentina and serves members of the AOL-branded service in Puerto Rico. It also operates a regional portal accessible at http://www.aola.com. America Online's 35 million members worldwide can access content and offerings from AOL Latin America through the International Channels on their local AOL services.

This release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding (i) the expected results of initiatives to improve the revenue contribution of our membership base and further operating efficiencies, (ii) future membership levels, (iii) the expected results of the revised agreement with Banco Itau, (iv) our expectation that cash on hand will allow us to continue to finance operations into the first quarter of 2004 and (v) the future launch of AOL 8.0. These forward-looking statements are subject to a number of risks and uncertainties, which are described in our Annual Report on Form 10-K for the period ended December 31, 2001, and from time to time in other reports we file with the SEC, as well as the following risks and uncertainties: our limited cash position, the impact our continued losses will have on our ability to finance our operations, the success of the co-branded Banco Itau service (including new marketing initiatives under the revised agreement with Banco Itau), currency exchange rates, the actions of our competitors, uncertainty relating to our ability to convert our subscribers into paying subscribers, our limited operating history, uncertainty regarding the success of our targeting marketing initiatives, macroeconomic developments in Brazil and Mexico, our ability to penetrate our markets and the timing of development efforts related to the AOL 8.0 client software. Actual results could differ materially from those described in the forward-looking statements.

                          AOL Latin America
                 Press Release Financial Information

                            Three Months Ended     Twelve Months Ended
                               December 31,            December 31,
                               ------------            ------------
                             2002       2001         2002       2001
                             ----       ----         ----       ----
                          (In thousands, except per share information)

CONSOLIDATED CONDENSED OPERATING RESULTS AND EPS
------------------------------------------------

Revenues:
 Subscriptions               $15,304   $15,263     $62,998    $49,918
 Advertising and other         2,541     3,417       9,109     16,525
                            --------- --------- ----------- ----------
  Total revenues              17,845    18,680      72,107     66,443

Costs and expenses:
 Cost of revenues            (18,993)  (32,974)    (98,695)  (128,896)
 Sales and marketing         (21,139)  (39,795)    (97,170)  (191,024)
 General and administrative   (9,109)  (12,048)    (32,871)   (41,591)
                            --------- --------- ----------- ----------
  Total costs and expenses   (49,241)  (84,817)   (228,736)  (361,511)

Loss from operations         (31,396)  (66,137)   (156,629)  (295,068)
Other (expense) income,
  net                         (2,369)      305      (5,163)     4,753
                            --------- --------- ----------- ----------
Loss before income taxes     (33,765)  (65,832)   (161,792)  (290,315)
Income taxes                     (51)        -         (75)         -
                            --------- --------- ----------- ----------
Net loss                     (33,816)  (65,832)   (161,867)  (290,315)
Less: dividends on Series
  B and C preferred shares    (4,769)   (4,651)    (18,724)   (17,005)
                            --------- --------- ----------- ----------
Net loss applicable to
  common stockholders       $(38,585) $(70,483)  $(180,591) $(307,320)
                            ========= ========= =========== ==========

 Loss per common share,
  basic and diluted           $(0.58)   $(1.05)     $(2.69)    $(4.66)
                            ========= ========= =========== ==========

 Weighted average common
  shares outstanding          67,070    67,055      67,068     66,018
                            ========= ========= =========== ==========

       PRO FORMA EPS
       -------------
Pro forma fully diluted
calculation (1):
-----------------------
 Net loss applicable to
  common stockholders       $(38,585) $(70,483)  $(180,591) $(307,320)
 Plus: dividends on Series
  B and C preferred shares     4,769     4,651      18,724     17,005
                            --------- --------- ----------- ----------
 Net loss before dividends
  on Series B and C
  preferred shares          $(33,816) $(65,832)  $(161,867) $(290,315)
 Divided by: Pro forma
  fully diluted shares
  outstanding (2)            356,485   326,919     341,482    314,025
                            --------- --------- ----------- ----------
  Pro forma fully diluted
  loss per share              $(0.09)   $(0.20)     $(0.47)    $(0.92)
                            ========= ========= =========== ==========

Reconciliation of Common
Shares to Pro Forma Shares (2):
-------------------------------
Weighted average number of
  common shares outstanding   67,070    67,055      67,068     66,018
                            --------- --------- ----------- ----------
Plus: effect of potential
  dilutive common shares
  from:
 -- Stock options             16,217    15,899      16,102     15,551
 -- AOL warrant               16,541    16,541      16,541     16,541
 -- Convertible debt          23,494         -      12,899          -
 -- Preferred stock
   -- Series B               121,749   116,010     117,458    110,230
   -- Series C               111,414   111,414     111,414    105,685
                            --------- --------- ----------- ----------
                             289,415   259,864     274,414    248,007
                            --------- --------- ----------- ----------
 Pro forma fully diluted
  shares outstanding         356,485   326,919     341,482    314,025
                            ========= ========= =========== ==========

 Notes:
 ------

(1) - AOL Latin America considers the pro forma fully diluted
earnings per share an important indicator in evaluating its results
of operations, as it provides a better picture of the Company's full
capitalization structure.  However, pro forma fully diluted earnings
per share is a non-GAAP measure and should be considered in addition
to, not as a substitute for, operating loss, net loss, basic and
diluted loss per common share and other measures of financial
performance reported in accordance with generally accepted
accounting principles in the United States.

(2) - On a weighted average basis, includes common stock and assumes
conversion of Series B and C preferred shares, the AOLTW senior
convertible note, the AOL Warrant, and the Employee Stock Option
Plan regardless of whether or not the instrument is dilutive or
antidilutive.

                          AOL Latin America
                 Press Release Financial Information


                                                      As of
                                                      -----
BALANCE SHEETS (In thousands)                December 31, December 31,
                                                2002         2001
                                                ----         ----

 ASSETS
 CURRENT ASSETS:
 Cash and cash equivalents                      $74,586    $45,636
 Short-term money market
  investments                                       915      1,040
                                             ----------- ----------
 Total cash and cash
  equivalents                                    75,501     46,676
 Trade accounts receivable,
  net of allowances                               3,567      6,144
 Other receivables                                2,090      4,713
 Prepaid expenses and other
  current assets                                  7,963      5,410
                                             ----------- ----------
 Total current assets                            89,121     62,943
 Property and equipment,
  net                                             6,983     11,958
 Investments, including
  securities available-for-
  sale                                              158      1,361
 Product development costs
  and other intangible
  assets, net                                       285        988
 Other assets                                     3,727      7,134
                                             ----------- ----------
 TOTAL ASSETS                                  $100,274    $84,384
                                             =========== ==========

 LIABILITIES AND STOCKHOLDERS' EQUITY
  (CAPITAL DEFICIENCY)
 CURRENT LIABILITIES
 Trade accounts payable                          $8,746    $18,114
 Payables to affiliates                           6,893     15,198
 Accrued expenses and other
  current liabilities                            20,481     28,825
                                             ----------- ----------
 Total current liabilities                       36,120     62,137
 Senior convertible notes                       160,000          -
 Deferred revenue and other
  non-current liabilities                         1,239      1,124
                                             ----------- ----------
 Total liabilities                              197,359     63,261

 STOCKHOLDERS' EQUITY (CAPITAL DEFICIENCY)
 Preferred stock, common stock and
  additional paid-in capital , net of
  unearned services                             660,810    614,468
 Accumulated deficit and
  accumulated other
  comprehensive loss                           (757,895)  (593,345)
                                             ----------- ----------
 Total stockholders' equity
  (capital deficiency)                          (97,085)    21,123
                                             ----------- ----------
 TOTAL LIABILITIES AND STOCKHOLDERS'
  EQUITY (CAPITAL DEFICIENCY)                  $100,274    $84,384
                                             =========== ==========