Time Warner AOL troubles
p2pnet.net News:- Continuing Securities and Exchange Commission and Department of Justice probes into America Online’s accounting for some advertising deals, and the way in which it reports subscriber numbers, has forced its parent, Time Warner, to create a $500 million legal reserve.
It will also “restate” the accounting for its stake in its AOL Europe unit for periods prior to 2002, says the company.
“While we’re continuing to work to resolve the government investigations, we’re staying focused on moving the Company forward,” chairman and ceo Dick Parsons in a statement.
Following a review and discussions with the SEC, Time Warner concluded it, “should have included the earnings figures from AOL Europe in its overall results after March 2000,” says an Associated Press story, going on:
“That was when it entered an agreement with the German media company Bertelsmann under which it later acquired Bertelsmann’s 80 percent interest in AOL Europe. concluded that it should have included the earnings figures from AOL Europe in its overall results after March 2000. That was when it entered an agreement with the German media company Bertelsmann under which it later acquired Bertelsmann’s 80 percent interest in AOL Europe.”
The $500 million reserve gives an indication of just how much Time Warner’s involvement with AOL is likely to cost it when the SEC and DoJ wind up their investigations.
AOL has just announced it’s axing 700 employees, mainly from its Virginia operation.
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See:-
legal reserve – Time Warner Inc. Reports Third Quarter 2004 Results; Results Include $500 Million in Legal Reserves Related to the Government Investigations; Company to Restate Accounting for Its Interests in AOL Europe Prior to 2002, Time Warner, November 3, 2004
overall results – Time Warner sets aside $500 million legal reserve for pending investigations of transactions, Associated press, November 3, 2004
Virginia – AOL axes 700 employees, p2pnet, November 2, 2004
