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News Title: |
AOL Looks To Pick Up $1B in Manufacturing Sale |
| Published on: |
03/08/2003 |
| Published by: |
MediaLineNews |
| Category: |
Companies |
| Description: |
New York-Meeting with analysts and investors on its first quarter results, AOL Time Warner confirmed it is seeking to sell its CD and DVD manufacturing and packaging operations to retire about $1 billion of its massive debt.
According to published reports, three parties were bidding last month for the CD and DVD manufacturing plants, distribution warehouses, and packaging and printing facilities operating under the Warner Media Services umbrella, which is in turn owned by Warner Music Group. Among the bidders is WEA Inc. president/CEO Jim Caparro, who prior to joining the company last November attempted to establish an independent "entertainment distribution center" entity to fulfill several major record labels' manufacturing needs.
Identities of the two other bidders-both reportedly replicators-are not known.
Warner Music Group suffered a 4 percent decline in EBITDA in its first quarter (ended March 31) on a revenue decline of 3 percent. Declines in recorded music shipments related to the ongoing weakness in the worldwide music industry were partially offset by improved performances in DVD manufacturing, the company said.
AOL Time Warner's total debt rose to $26.3 billion, from $25.8 billion at the beginning of the quarter.
Overall revenues for the company increased 6 percent over the same period in 2002 to $10.0 billion, with content revenues up 11 percent to $3.3 billion due to increases at Time Warner's filmed entertainment and HBO divisions.
The quarter's EBITDA rose 14 percent to $2.0 billion. Filmed Entertainment's EBITDA rose 39 percent to $251 million, on an 11 percent increase in revenues in the quarter. The increase was due primarily to continued growth in home video sales, particularly DVDs, where worldwide revenues nearly doubled year over year to $658 million. |
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