America Online, Inc. FY2000 Second Quarter Income, Fully Taxed and Excluding One-Time Items, Rises 160% to $224 Million, or $0.09 Per Share.Business Editors/Hi-Tech Writers DULLES Dul·les , Allen Welsh 1893-1969. American public official. Director of the CIA (1953-1961), he resigned after the failed invasion of the Bay of Pigs. Noun 1. , Va.--(BUSINESS WIRE)--Jan. 19, 2000 EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become Increases 108% to $453 Million Reported Earnings Per Share, Including One-Time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. Items, Doubles to $0.10 Per Share Second Quarter Revenues Climb More Than 41% to $1.6 Billion Advertising, Commerce and Other Revenues Rise 79% to Record $437 Million Company Adds Record 1.8 Million AOL (A division of Time Warner, Inc., New York, NY, www.aol.com) The world's largest online information service with access to the Internet, e-mail, chat rooms and a variety of databases and services. Subscribers America Online See AOL. , Inc. (NYSE NYSE See: New York Stock Exchange : AOL) today announced results for the second quarter of fiscal 2000 ended December December: see month. 31, 1999 -- setting new records for consolidated revenues, advertising and commerce revenues, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , and quarterly membership growth. The Company's fully taxed net income totaled $224 million, or $0.09 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, excluding one-time items, up from $86 million, or $0.04 per diluted share, on the same basis in fiscal 1999's second quarter. Operating income for the quarter, excluding one-time items, climbed more than 155% over the year-ago quarter to $319 million. Second quarter revenues rose to $1.6 billion, or 41% over last year's second quarter, and advertising, commerce and other revenues reached $437 million, 79% over fiscal 1999's December quarter. Reported earnings per share, including one-time items, increased to $0.10 per diluted share on $271 million of net income, up from $0.05 per share on $115 million of net income in last year's second quarter. The AOL service set a quarterly membership growth record, adding 1.8 million new members worldwide and finishing the quarter with 20.5 million subscribers. The CompuServe An online information service that provides access to the Internet, e-mail, instant messaging and an integrated contact list. Founded in 1969 as a timesharing service, CompuServe is one of the oldest online services, being the first to offer e-mail in 1979 and online chat a year later. 2000 service added 440,000 members during the quarter, bringing the combined CompuServe 2000 and CompuServe Classic membership to 2.5 million, up from 2.2 million last quarter. And, through its October October: see month. agreement with Gateway to operate its custom ISP (1) See in-system programmable. (2) (Internet Service Provider) An organization that provides access to the Internet. Connection to the user is provided via dial-up, ISDN, cable, DSL and T1/T3 lines. , America Online ended the quarter with more than 740,000 subscribers of Gateway.net. As a result, the Company finished the quarter with a total of 23.8 million subscribers in its family of brands. Extending its standing as Europe's leading multinational Internet provider Internet provider - Internet Service Provider , AOL Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). services reached 3.1 million members
reflecting record growth in the key UK and German markets. Media Metrix
ranked the AOL services in Europe No. 1 in online usage during the
quarter the strongest indicator of customer loyalty and e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. potential. In November November: see month. , AOL Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. launched America Online
Brasil, the first local service from the Company's joint
venture with the Cisneros Group The Cisneros Group of Companies is one of the largest, privately held media, entertainment, telecommunications and consumer products organizations in the world. The Group owns or holds interests in companies ranging from broadcast television, networks and pay television businesses of Companies.
The Company's Web-based brands experienced strong growth during the quarter, with registered users more than doubling over last year to over 135 million. ICQ ("I Seek You") A conferencing program for the Internet from Mirabilis, Tel Aviv, Israel (www.icq.com). It provides interactive chat, e-mail and file transfer and can alert you when someone on your predefined list has also come online. added 7.9 million users during the quarter for a total of 53.1 million registered users, including 17.9 million active users. Steve Case Steve Case (born August 21, 1958) is a businessman best known as the co-founder and former chief executive officer and chairman of America Online (AOL). He reached his highest profile when he played an instrumental role in AOL's merger with Time Warner in 2000. , Chairman and Chief Executive Officer said: "This is a momentous mo·men·tous adj. Of utmost importance; of outstanding significance or consequence: a momentous occasion; a momentous decision. time for America Online, as we're announcing the strongest results in our Company's history. During the quarter, we achieved record growth in revenues, advertising and commerce, operating income and subscriber growth -- attracting more than 2.1 million new AOL and CompuServe members and millions more Web users to our family of brands." Mr. Case added: "With Time Warner, we are taking a bold step to extend our leadership as the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the moves into its next wave of explosive growth. Our combined company will be uniquely equipped to take full advantage of the Internet's growth to create value for our shareholders, and we are committed to making the most of this opportunity." Bob Pittman Pittman may refer to: People
The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. said: "Our operating performance this quarter demonstrates that we continue to build enormous value through the creation and development of powerful interactive brands that deliver unmatched benefits to consumers. While our flagship AOL service continues to set subscriber growth and advertising/commerce records in the premium mass market segment, we're also leading the value segment with CompuServe. Our Web-based services like ICQ are growing like wildfire and we are dramatically accelerating our international growth." Mr. Pittman added: "We are also making significant progress with our AOL Anywhere strategy, with initiatives like the upcoming roll-out of AOLTV (America OnLine TV) An Internet TV service from AOL that provides access via a phone line or through the DirecTV satellite from Hughes Electronics. Versions of the AOLTV set-top boxes also include the TiVo technology for digitally recording TV programs. and mobile devices, and this quarter's acquisition of Tegic Communications and agreement to acquire MapQuest Noun 1. MapQuest - a free, widely-used Web Map Server trademark - a formally registered symbol identifying the manufacturer or distributor of a product Verb 1. .com. Our planned merger with Time Warner will help both to accelerate the growth of the full range of our respective businesses and position us to create new businesses with major market opportunities." The Company's final reported earnings of $271 million, or $0.10 per share, reflect one-time items during the quarter. These comprise a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta gain of $111 million from America America [for Amerigo Vespucci], the lands of the Western Hemisphere—North America, Central (or Middle) America, and South America. The world map published in 1507 by Martin Waldseemüller is the first known cartographic use of the name. Online's investment in Sandpiper sandpiper, common name for some members of the large family Scolopacidae, small shore birds, including the snipe and the curlew. Sandpipers are wading birds with relatively long legs and long, slender bills for probing in the sand or mud for their prey—all Networks, which was acquired by Digital Island in December, together with a $30 million marketing expense for the purchase of Gateway.net subscribers and an additional $5 million in merger expenses associated with the Company's acquisition of Tegic Communications. For the six-month period ending December 31, 1999, fully taxed net income, excluding one-time items, was $408 million and total revenues were $3.1 billion, compared to fully taxed net income, on a comparable basis, of $136 million and total revenues of $2.1 billion in the corresponding period of fiscal 1999. Key operating metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. from the quarter included: -- Subscription Revenues: Quarterly subscription revenues reached nearly $1.1 billion, up 36%, from $786 million during fiscal 1999's corresponding quarter. -- AOL Member Usage: AOL members averaged 57 minutes daily online during the quarter, an increase of 19%, or 9 minutes, over last year's second quarter. -- Advertising, Commerce and Other Revenues: Revenues from advertising, commerce and other revenues climbed to $437 million, an increase of 79% from $244 million during the year-ago quarter. -- Backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. : The Company brought its consolidated backlog of advertising and commerce revenue to more than $2.4 billion at the end of the quarter. -- Sales and Marketing Expenses: Consolidated sales and marketing expenses, excluding the one-time item for Gateway.net, declined to 14.3% of revenues, compared with 17.6% in fiscal 1999's second quarter. -- Operating Income: Operating income, excluding one-time items, jumped 155% to $319 million, or 19.7% of revenue, up from 10.9% a year ago. -- EBITDA: EBITDA rose to a record $453 million for the quarter, a 108% increase over a year ago, and EBITDA margins increased to 28%. -- Cash Flow from Operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses : Cash flow from operations increased to $324 million, an 82% increase over fiscal 1999's corresponding quarter. Interactive Services Group Highlights During the quarter, the Company took a number of steps to ensure continued strong momentum in: -- AOL subscriber growth through service enhancements and innovative retail and OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and alliances, including customized ISPs supported by the AOL infrastructure, with Wal-Mart  Editing of this page by unregistered or newly registered users is currently disabled due to vandalism. , Gateway, Circuit City and
Blockbuster block·bust·er n. 1. Something, such as a film or book, that sustains widespread popularity and achieves enormous sales. 2. A high-explosive bomb used for demolition purposes. 3. ; -- Shop@AOL through the signing of more than 160 new agreements with leading retailers to offer their brand-name goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. , bringing the total number of merchant partners to more than 300, and contributing to a banner holiday shopping season; -- Advertising and e-commerce through new partnerships and merchandising merchandising Element of marketing concerned especially with the sale of goods and services to customers. One aspect of merchandising is advertising, which aims to capture the interest of the segment of the population most likely to buy the product. campaigns with companies including Monster.com, Toysrus.com and Stamps.com (Stamps.com, Los Angeles, CA, www.stamps.com) A PC Postage service that lets you print U.S. postage stamps on your own printer. It was one of the first such services approved by the U.S. ; and -- AOL Anywhere strategy through the key acquisition of Tegic and planned acquisition of MapQuest.com, as well as product rollouts, including e-mail over the Palm(R) Computing platform See platform. . The Company announced several new retailing and OEM relationships, which now encompasses more than 7,800 outlets around the world. Wal-Mart, the global leader in retailing, and the Company agreed to create a new co-branded Internet service provider Internet service provider (ISP) Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. that will offer convenient, low-cost access to value-conscious consumers. Wal-Mart also will promote and distribute AOL 5.0 software in the nearly 2,500 Wal-Mart stores across the US. The Company also completed agreements with: Gateway, to accelerate distribution of each company's products and services including DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary access - the AOL service now is featured and marketed on all Gateway PCs, as well as on Gateway's successful ISP, Gateway.net; Circuit City, to promote AOL's products and services in Circuit City's 570 Superstores This is a list of superstores by country. Multi-national
Underscoring the accelerating momentum behind AOL's e-commerce, AOL members spent $2.5 billion online during the 1999 holiday shopping season -- more than double last season's $1.2 billion. The average AOL buyer spent a total of $300 online in goods and services during the holiday season -- up 50% from 1998. Total online spending by AOL members rose to $10 billion in 1999. The Company extended its advertising and e-commerce leadership through a series of agreements during the quarter. In a four-year, $100-million partnership, Monster.com became the exclusive career-search resource across a range of America Online brands. Other new partners included: a two-year agreement with Toysrus.com and an expanded alliance with Stamps.com. The Company advanced its AOL Anywhere strategy through a number of acquisitions and partnerships during the quarter. The acquisition of Tegic, with its T9 Text Input software, will help extend AOL interactive services to mobile telephones, personal digital assistants and MP3 technology. The Company also announced its planned purchase of MapQuest.com to integrate the company's mapping and destination services into commerce and content offerings across AOL's family of brands, and in a variety of mobile devices including smart-phones and PalmPilots. With the next-generation AOL 5.0 software and a series of key content agreements, AOL substantially enhanced its member experience. AOL 5.0 has experienced the fastest member adoption rate ever, with the next-generation software now accounting for nearly 60% of all sessions. Improvements were also made across AOL's content channels. The Personal Finance Channel was enhanced through agreements with: Intuit in·tu·it tr.v. in·tu·it·ed, in·tu·it·ing, in·tu·its Usage Problem To know intuitively. [Back-formation from intuition. , Financial Engines and TheStreet.com TheStreet.com NASDAQ: TSCM is a financial company and website started in 1996 by Jim Cramer and registered on the NASDAQ Stock Market. Its headquarters is at 14 Wall Street in New York City. . The Company also upgraded its games offering with an $81-million, five-year agreement that makes Electronic Arts solely responsible for content on AOL's Games Channel. The quarter also saw additional significant developments among other Interactive Services brands. Through the holiday season, CompuServe 2000, the nation's leading value brand, extended its rebate rebate, partial refund of the total price paid for goods or services. In the United States, rebates were historically given by railroads to favored shippers as a return on transportation charges. program for PCs at CompUSA, and for select Apple computers, including the popular iMac, at CompUSA and J&R ComputerWorld stores. A two-year agreement with Net2Phone provides CompuServe's US members with Net2Phone Internet telephony Another term for IP telephony and VoIP. In the late 1990s, some people made a distinction between Internet Telephony and VoIP: Internet telephony referred to voice over the public Internet, while VoIP referred to voice over private IP networks. calling-card communications services, allowing users to place calls over Net2Phone's IP network to virtually anywhere in the world at reduced rates. And today, Netscape and Citibank announced the introduction of the official Netscape Platinum MasterCard. By the close of 1999, AOL Instant Messenger See AIM. (AIM) and AOL's Buddy List A list of colleagues, workgroup members, friends, etc., that you might wish to communicate with via instant messaging. See instant messaging. service reached 70 million registrants worldwide. AOL also agreed to develop a custom version of AOL Instant Messenger for Lycos's 32 million registered users. Interactive Properties Group Highlights During the quarter, the Interactive Properties Group continued to enhance the market-leading services of ICQ, the world's largest online communications community, and Winamp, the world's favorite music player, which ranked No. 1 and No. 2 in CNET's annual Top 10 Downloads for 1999. In December, ICQ exceeded the 50 million milestone of registered users and continues to add more than 90,000 each day. In addition, time spent with the product continues to grow, with the average user now keeping ICQ on the desktop for three hours and actively using it more than one hour each day. The ICQ network also supports more than 1.2 million peak simultaneous users - second in the world only to the AOL service. During the quarter, America Online launched several new initiatives in online music -- the 1999 America Online/Roper-Starch CyberStudy's most popular activity for the majority of 18 to 24 year-olds online -- including: -- Spinner.com's new Music Download A music download refers to the transferring of a music file from an Internet-facing computer or website to a user's local computer. This term encompasses both legal downloads and downloads of copyright material without permission or payment if required. Service introduced "Playlist-To-Go" to provide convenient access to the Web's best music. Playlist-To-Go offers free downloads of songs; organizes them by genre; and updates them daily. The Music Download Service also offers a custom Music Download Player, created by Nullsoft. -- Winamp redesigned its Internet music site to make downloading downloading - download and listening to quality, customized Internet music easier and more enjoyable than ever. The completely revamped site includes convenient navigation and user-friendly tools, plus a streamlined user interface. Digital City continues to strengthen its lead as the number one local online network, signing up more than 1,300 new local advertisers in the first half of the fiscal year and delivering on the promise of locally targeted opportunities for AOL users and partners. In addition, Digital City announced that it will expand its reach to a market-leading 200 cities from the current 60. With 70% of online consumers preferring to get local entertainment information online, AOL MovieFone has continued to offer consumers the widest access to movie showtimes and tickets, adding the fifth largest movie chain in the US--United Artists--to its roster of movie theater partners. Netscape Enterprise Highlights During the quarter, the Sun-Netscape Alliance (Sun-Netscape Alliance, Santa Clara, CA) A joint venture of Sun and Netscape to market Netscape's Web-based software products. The Alliance was formed when AOL acquired Netscape in 1999 to take advantage of the fact that the bulk of Netscape software was already running on Sun hardware. announced new relationships with Bolsa Mexicana de Valores The Bolsa Mexicana de Valores or BMV is Mexico's only stock exchange. It is headquartered on the prestigious Paseo de la Reforma in central Mexico City, is the second important Stock Exchange in Latin America, behind the São Paulo Stock Exchange - Bovespa. , Cisco Systems “Cisco” redirects here. For other uses, see Cisco (disambiguation). Cisco System,Inc. (NASDAQ: CSCO, HKSE: 4333 ) is an American multinational corporation with 54,000 employees and annual revenue of US $28.48 billion as of 2006. , First Union, Orange and Vanguard Vanguard Any of three unmanned U.S. experimental satellites. Vanguard I (1958), the second U.S. satellite placed in orbit around Earth (after Explorer 1), was a tiny 3.25-lb (1.47-kg) sphere with two radio transmitters. Group. They will leverage the Alliance's iPlanet(TM) portfolio of software and join more than 7,000 companies already using Alliance products to run their Internet businesses. The Alliance emerged as a major vendor in the Internet bill presentment and payment See EBPP. market with the announcement of iPlanet(TM) BillerXpert Consolidator Edition. Combined with the Alliance's e-commerce strategy, this product is enabling banks across the country to offer a seamless electronic bill presentment and payment See EBPP. system so that consumers will only have to use one source to pay all of their bills via the Internet. The Alliance also launched a number of new products to help businesses thrive in the fast-growing Net Economy and develop open digital marketplaces, including iPlanet Application Server See Sun Java System Application Server. 6.0, iPlanet Calendar Server and iPlanet TradingXpert 3.5. In addition, the Alliance opened the current quarter with announcements of relationships with: -- Vodafone AirTouch, which will leverage the iPlanet infrastructure and communications software (communications, software) communications software - Application programs, operating system components, and probably firmware, forming part of a communication system. These different software components might be classified according to the functions within the Open Systems for its global network of wireless carriers; -- IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) , to significantly expand the number of iPlanet Internet infrastructure and e-commerce application products that are ported to the IBM AIX (Advanced Interactive eXecutive) IBM's Unix-based operating system which runs on its Intellistation workstations and pSeries, p5, iSeries and i5 server families. UNIX UNIX Operating system for digital computers, developed by Ken Thompson of Bell Laboratories in 1969. It was initially designed for a single user (the name was a pun on the earlier operating system Multics). platform; and -- Nortel Networks (Nortel Networks Limited, Brampton, Ontario, www.nortelnetworks.com) A world leader in telecommunications products, which includes switching, wireless and broadband systems for service providers and carriers, telephones and systems for residential and business users, computer telephony , to jointly develop a new directory-enabled solution that will allow Internet Service Providers (ISPs) and Application Service Providers (ASPs) to develop a new generation of service bundles. About America Online, Inc. Founded in 1985, America Online, Inc., based in Dulles, Virginia Dulles, Virginia is an unincorporated census-designated place located in Loudoun County, Virginia, part of the Washington Metropolitan Area. The headquarters of AOL, Orbital Sciences Corporation and ODIN technologies and the former headquarters of MCI Inc. are located in Dulles. , is the world's leader in interactive services, Web brands, Internet technologies, and e-commerce services. America Online, Inc. operates: two worldwide Internet services, America Online, with more than 20 million members, and CompuServe, with more than 2.5 million members; several leading Internet brands including ICQ, AOL Instant Messenger and Digital City, Inc.; the Netscape Netcenter and AOL.COM portals; the Netscape Navigator An earlier Web browser for Windows, Macintosh and X Windows from Netscape that provided secure transmission over the Internet. Soon after its introduction in 1994, Navigator, or just "Netscape," as it was commonly called, quickly became the leading browser on the Web. and Communicator browsers; AOL MovieFone, the nation's No. 1 movie listing guide and ticketing service; and Spinner Networks and NullSoft, Inc., leaders in Internet music. Through its strategic alliance with Sun Microsystems Sun Microsystems, Inc. (NASDAQ: JAVA[3]) is an American vendor of computers, computer components, computer software, and information-technology services, founded on 24 February 1982. , the company develops and offers easy-to-deploy, end-to-end end-to-end a pattern of anastomosis in which severed ends are matched and united, in contrast with other patterns such as end-to-side or side-to-side. Usually applied to anastomosis of the intestine. e-commerce and enterprise solutions for companies operating in the Net Economy. The Company's earnings conference call can be heard live on the Internet via AOL.COM at 5:00 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. on Wednesday, January 19. To listen to the call, visit http://www.corp.aol.com/investors.html or AOL Keyword: AOL Earnings. This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These statements are based on management's current expectations or beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The forward-looking statements in this release address the following subjects: future financial and operating results; the proposed AOL/Time Warner merger; subscriber, usage and commerce growth; new markets, products, services, features and content; timing and benefits of acquisitions and other alliances; and availability, benefits, and timing of deployment, of new access and distribution technologies. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: inability to obtain, or meet conditions imposed for, governmental approvals for the merger; failure of the AOL or Time Warner stockholders to approve the merger; the risk that the AOL and Time Warner businesses will not be integrated successfully; costs related to the merger; inability to further identify, develop and achieve commercial success for new products and services and access and distribution technologies; increased competition and its effects on pricing, spending, third-party relationships, the subscriber base and revenues; inability to establish and maintain relationships with commerce, advertising, marketing, technology and content providers; risk of accepting warrants in certain agreements; risks of new and changing regulation in the U.S. and internationally. For a detailed discussion of these and other cautionary statements, please refer to the Company's filings with the Securities and Exchange Commission, especially in the "Forward-Looking Statements" section of the Management's Discussion and Analysis section of the Company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended June 30, 1999 and the Risk Factors section of the Company's S-3 filing S-3 Filing The most simplified registration form. It can only be used by companies that have been required to report under the '34 Act for a minimum of twelve months and have met the timely filing requirements set forth under Form S-2. that became effective in November 1999.
America Online, Inc.
Consolidated Summary of Results
(Amounts in millions, except per share data)
(Unaudited)
Three months ended Six months ended
December 31, December 31,
------------ ------------
1999 1998 1999 1998
---- ---- ---- ----
Revenues:
Subscription services $ 1,067 $ 786 $ 2,062 $ 1,509
Advertising, commerce and
other 437 244 787 419
Enterprise solutions 117 118 239 219
------- ------- ------- -------
Total revenues 1,621 1,148 3,088 2,147
Costs and expenses:
Cost of revenues 830 640 1,621 1,223
Sales and marketing 261 202 470 376
Product development 74 70 141 137
General and administrative 150 95 267 177
Amortization of goodwill and
other intangible assets 17 16 35 32
Merger charge 5 2 5 2
------- ------- ------- -------
Total costs and
expenses 1,337 1,025 2,539 1,947
Income from operations 284 123 549 200
Other income, net 160 16 197 21
------- ------- ------- -------
Income before provision for
income taxes 444 139 746 221
Provision for income taxes (173) (24) (291) (30)
------- ------- ------- -------
Net income $ 271 $ 115 $ 455 $ 191
======= ======= ======= =======
Earnings per share-diluted $ 0.10 $ 0.05 $ 0.18 $ 0.08
Earnings per share-basic $ 0.12 $ 0.06 $ 0.20 $ 0.10
Weighted average shares
outstanding-diluted 2,610 2,444 2,592 2,419
Weighted average shares
outstanding-basic 2,259 2,025 2,240 2,007
America Online, Inc.
Supplemental Information
(Amounts in millions, except per share data)
(Unaudited)
Three months Three months Three months
ended ended ended
12/31/99 12/31/98 9/30/99
-------- -------- -------
Income before taxes $ 444 $ 139 $ 302
Adjustments for one-time items:
Merger costs 5 2 -
Acquisition of Gateway.Net
subscribers 30 - -
Recognized gain related to
investments (111) - -
------ ------ ------
Adjusted income before taxes 368 141 302
====== ====== ======
Assumed tax provision (144) (55) (118)
------ ------ ------
Income net of assumed tax
provision $ 224 $ 86 $ 184
====== ====== ======
Diluted earnings per share
excluding one-time items:
--------------------------
Earnings per share -
diluted (1) $ 0.09 $ 0.04 $ 0.07
Weighted average shares
outstanding - diluted (1) 2,494 2,314 2,461
Other Selected Data
-------------------
EBITDA $ 453 $ 218 $ 386
Net cash provided by
operations $ 324 $ 178 $ 472
Free cash flow $ 109 $ 89 $ 320
Cash Earnings (2) $ 272 $ 130 $ 232
Cash Earnings per share $ 0.11 $ 0.06 $ 0.09
Six months Six months
ended ended
12/31/99 12/31/98
-------- --------
Income (loss) before taxes $ 746 $ 221
Adjustments for one-time items:
Merger costs 5 2
Acquisition of Gateway.Net
subscribers 30 -
Recognized gain related
to investments (111) -
------ ------
Adjusted income before taxes 670 223
====== ======
Assumed tax provision (262) (87)
------ ------
Income net of assumed tax
provision $ 408 $ 136
====== ======
Diluted earnings per share
excluding one-time items:
--------------------------
Earnings per share -
diluted (1) $ 0.17 $ 0.06
Weighted average shares
outstanding - diluted (1) 2,477 2,292
Other Selected Data
-------------------
EBITDA $ 839 $ 371
Net cash provided by
operations $ 796 $ 298
Free cash flow $ 429 $ 136
Cash Earnings (2) $ 504 $ 221
Cash Earnings per share $ 0.20 $ 0.10
(1) Weighted average shares outstanding based on fully taxed
diluted share calculation including common stock equivalents.
(2) Cash earnings equals net income excluding one-time charges and
depreciation and amortization (tax effected)
America Online, Inc.
Consolidated Balance Sheets
(Amounts in millions)
December 31, June 30,
1999 1999
---- ----
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 2,535 $ 887
Short-term investments 518 537
Trade accounts receivable, net 372 323
Other receivables 111 79
Prepaid expenses and other current
assets 280 153
------- -------
Total current assets 3,816 1,979
Property and equipment at cost, net 890 657
Other assets:
Investments including
available-for-sale securities 4,902 2,151
Product development costs, net 122 100
Goodwill and other intangible
assets, net 409 454
Other assets 162 7
------- -------
Total assets $10,301 $ 5,348
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 65 $ 74
Other accrued expenses and
liabilities 1,048 795
Deferred revenue 787 646
Accrued personnel costs 186 134
Deferred network services credit 76 76
------- -------
Total current liabilities 2,162 1,725
Long-term liabilities:
Notes payable 1,581 348
Deferred revenue 131 30
Other liabilities 17 15
Deferred network services credit 159 197
------- -------
Total liabilities 4,050 2,315
Stockholders' equity:
Common stock 23 22
Unrealized gain on available-for-sale
securities 1,467 168
Additional paid-in capital 4,165 2,692
Retained earnings 596 151
------- -------
Total stockholders' equity 6,251 3,033
------- -------
Total liabilities and stockholders'
equity $10,301 $ 5,348
======= =======
America Online, Inc.
Consolidated Statements of Cash Flows
(Amounts in millions)
(Unaudited)
Three months ended Six months ended
December 31, December 31,
------------ ------------
1999 1998 1999 1998
---- ---- ---- ----
Cash flows from operating
activities:
Net income $ 271 $ 115 $ 455 $ 191
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Non-cash restructuring
charges - - 2 -
Amortization of deferred
network services credit (19) (19) (38) (38)
Depreciation and
amortization 78 72 157 139
Compensatory stock options 3 5 6 8
Gain on available-for-sale
securities (124) (2) (124) (2)
Deferred income taxes 172 21 289 27
Changes in assets and
liabilities net of effects
of acquisitions and
dispositions:
Trade accounts
receivable (25) (2) (49) (45)
Other receivables 11 25 (32) (19)
Prepaid expenses and
other current
assets (90) (33) (117) (42)
Other assets (73) (3) (125) 1
Investments including
available-for-sale
securities (50) (23) (149) (19)
Accrued expenses and
other current
liabilities 78 10 282 40
Deferred revenue and
other liabilities 92 12 239 57
----- ----- ----- -----
Total adjustments 53 63 341 107
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Net cash provided by
operating activities 324 178 796 298
Cash flows from investing
activities:
Purchase of property and
equipment (195) (78) (329) (141)
Product development costs (20) (11) (38) (21)
Proceeds from sale of
investments including
available-for-sale
securities 20 12 20 26
Purchase of investments
including
available-for-sale
securities (208) (39) (302) (121)
(Purchase)/proceeds from
S/T investments, net (90) 26 18 115
Proceeds from
acquisition/disposition
of subsidiaries 10 25 10 25
Other investing activities (11) (3) 4 (16)
----- ----- ----- -----
Net cash used in investing
activities (494) (68) (617) (133)
Cash flows from financing
activities:
Proceeds from issuance of
common stock, net 162 61 259 663
Payment of deferred finance
costs and other financing
activities, net (29) 8 (29) 8
Principal and accrued
interest payments on debt (8) (10) (11) (11)
Proceeds from issuance of
debt 1,250 28 1,250 29
----- ----- ----- -----
Net cash provided by
financing activities 1,375 87 1,469 689
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Net increase in cash and
cash equivalents 1,205 197 1,648 854
Cash and cash equivalents at
beginning of period 1,330 1,334 887 677
----- ----- ----- -----
Cash and cash equivalents at
end of period $2,535 $1,531 $2,535 $1,531
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