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Technology Stocks : America On-Line: will it survive ...? -- Ignore unavailable to you. Want to Upgrade?

To: regine who wrote (6053)	11/20/1997 11:44:00 AM
From: Todd Daniels	Read Replies (1) \| Respond to of 13594

Today, Compuserve announced FY98 Q2 EPS. Attached are subscriber tallies relevant to AOL and updated calculation of Pro-Forma gross revenue impact on AOL. - Subscribers "To AOL" Subscribers CSi Q1 (7/30) Q2 (10/31) Chg U. S. 1,433,000 1,332,000 -7% Europe 872,000 843,000 -3% Other International 332,000 315,000 -5% Total 2,637,000 2,490,000 -6% ---------------------- - Estimate of CSi P/L and Pro-Forma Impact On AOL Including AOL Give-Up of ANS to WCOM AOL Pro-forma Impact (annualized) CSi Loss ($ 72)m calculations below ANS gross rev to WCOM (per AOL FY98 Q2 10Q) ($ 40)m ($112)m **** /100m Primary* ($1.12) gross per AOL share **** /119m Fully Diluted ($0.94) gross per AOL share * FASB: primary shares used when loss ----------------- - Computation of CSi Loss Though CSRV does not break-out P/L by division, it has said that Network Services is profitable. Other input and industry data suggest that Network Services has operating margins of 10%-15%. Adding 12% of Network Services revenue to CSRV's total operating loss, and allocating interest income proportional to gross revenue of the divisions, approximates the loss of the CSi division. Computation of CSi Loss CSRV FY98 Q2 Q1 (10/31) (7/30) millions CSRV Op Loss ( 9) ( 8) Q2 excludes $15m 1x charge + 12% Ntwk Svc (10) (9) + CSi share 41% 37% Interest Inc 1 1 ------ ------ *** CSi Loss ($18)m ($16)m ---------------------------------------------------------------- Revenue CSi $116 $124 Other~ 2 2 Network Svcs 84 75 Interest 3 2 Note: ~ CSRV 'Other Revenue'. Not same as AOL 'Other'. Ad-Commerce is included in CSi Revenue. 'Other' is primarily network services to H&R Block Tax services. $2m is allowance for license fees from Nifty-Serve. CSRV/HRB have stated that these are less than 1% of total CSRV revenue.