During the past year we have taken tremendous strides in the execution of our interactive television strategy, said Lee Masters, President and CEO of Liberty Digital. We recently closed the acquisition of a 50% stake in the Game Show Network (GSN) and with partner Sony Pictures Entertainment are moving full-steam ahead in transforming the network into the world’s first 24-hour fully interactive gaming network. During the fourth quarter we announced an exploration agreement with Discovery Communications towards the possible creation of an interactive travel-oriented channel, further implementing our goal of developing a host of category-specific interactive channels. We will continue to focus in 2001 on the development and distribution of our iTV programming, while also capitalizing on the growth opportunity in our digital music business driven by the pending merger of our DMX subsidiary with AEI Music.
The results of operations of the Company reported for the fourth quarter and year ended December 31, 2000 primarily represent the Company’s Audio and the Interactive Media segments. The Audio segment is engaged in the programming, distribution and marketing of digital music services through Liberty Digital’s wholly owned subsidiary, DMX MUSIC, Inc. The Interactive Media segment consists of developing interactive television programming as well as investing in related technology, infrastructure, and content businesses. To date, the Interactive Media segment has not generated any revenue.
For the quarter ended December 31, 2000, the Company reported revenues from the Audio segment of $29.8 million, a 41.9% increase from $21.0 million for the same period in the prior year. For the year ended December 31, 2000, revenues from our Audio segment totaled $100.7 million, a 21.6% increase from $82.8 million during the prior year. These increases for the quarter and year ended December 31, 2000 resulted primarily from the continued growth in the commercial music subscription business including growth driven by the expansion into 5 new markets during the year. During the fourth quarter, the Company’s adjusted EBITDA (earnings from continuing operations before interest, taxes, depreciation, amortization, stock compensation and other expense, net), increased to $7.6 million from $3.7 million compared to the same period in the prior year. For the year ended December 31, 2000, the Company’s adjusted EBITDA totaled $15.4 million, a 12.6% decrease from $17.7 million during the prior year.
For the quarter ended December 31, 2000, the Company reported a loss from continuing operations of $31.3 million as compared to a loss of $321.7 million for the same period in the prior year. For the year ended December 31, 2000, the Company reported income from continuing operations of $53.3 million as compared to a loss of $456.2 million during the prior year. Results for both 2000 periods included $172.4 million of non-cash charges to write down certain of the Company’s public and private equity securities to fair value.
Results for the quarter and year also reflect to a significant degree decreases in stock compensation expense accruals partially offset by the write down of investments during the periods. In light of the developmental nature of much of the Company’s business, the impact of changes in the Company’s interests in public and private entities that are not consolidated subsidiaries, and the volatile nature of stock compensation expense accruals, reported earnings may continue to fluctuate widely.
A significant portion of Liberty Digital’s current activities are conducted through its interests in public and private entities that are not consolidated subsidiaries. These investments are shown in the attached tables. As the attached Consolidated Statement of Operations does not include the results of these non-consolidated entities, except, in certain cases, as they affect the Company’s interest in the earnings or losses of affiliates, such consolidated statements are not indicative of the underlying results of all the businesses in which Liberty Digital owns an economic interest.
