• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

AOL Time Warner May Restate Earnings

Posted on: Saturday, 29 March 2003, 06:00 CST

By LISA SINGHANIA

NEW YORK (AP) -- AOL Time Warner Inc. indicated Friday that it might have to restate its financial results by as much as another $400 million because of the government investigation into accounting improprieties at its America Online division.

In a filing with the Securities and Exchange Commission, the media conglomerate said it had been notified that the SEC believes that two transactions involving America Online and Bertelsmann AG were accounted for improperly. Those transactions involve advertising revenues and the dispensation of Bertelsmann's stake in AOL Europe.

Such a restatement would be on top of the $190 million adjustment the company announced in October that it planned to make because of incorrect accounting practices at the online division.

The company said in the filing that it believes the Bertelsmann deal was done correctly, and is "engaged in ongoing discussions" with the SEC. But the filing also said the SEC "continues to investigate a range of other transactions principally involving the America Online unit."

The SEC declined to comment, as did an AOL spokeswoman. But in a memo to AOL Time Warner employees, chief executive and chairman-elect Richard Parsons defended the transactions and said the company is cooperating with investigators.

"It is not possible at this time to predict how this issue will ultimately be resolved, or for that matter, to predict the ultimate outcome of either the SEC or DOJ investigations," Parsons wrote. "What I can tell you is this: We are committed to dealing with these questions forthrightly and as expeditiously as possible."

AOL Time Warner announced last summer that it was under investigation by the SEC and Justice Department for transactions at America Online. Since then, AOL Time Warner's stock has tumbled as investors, already unsure about the wisdom of the 2001 merger between America Online and Time Warner, became further disillusioned.

In the fourth quarter of last year, the company took a staggering $45.5 billion charge to account for the its plunging value. For the full year 2002, it lost $98.7 billion.

Trading on the New York Stock Exchange had ended for the day when news of the AOL filing became public. The company's shares ended the regular session down 19 cents, or 1.7 percent, at $11.35.

Also Friday, AOL Time Warner released its proxy statement and announced that board member Daniel F. Akerson was retiring. Akerson, who heads XO Communications, was a board director at AOL prior to the merger. He will not be replaced, bringing the total number of board directors to 13.

---

On the Net:

America Online

More science, space, and technology from RedNova

Copyright © 2003 HealthScoutNews. All rights reserved. The information contained above is intended for general reference purposes only. It is not a substitute for professional medical advice or a medical exam. Always seek the advice of your physician or other qualified health professional before starting any new treatment. Medical information changes rapidly and while Yahoo and its content providers make efforts to update the content on the site, some information may be out of date. No health information on Yahoo, including information about herbal therapies and other dietary supplements, is regulated or evaluated by the Food and Drug Administration and therefore the information should not be used to diagnose, treat, cure or prevent any disease without the supervision of a medical doctor.

More News in this Category