AceWeb
10-24-2002, 02:26 AM
[MSNBC]
Revenue results for past two years to be reduced $190 million
NEW YORK, Oct. 24 — AOL Time Warner Inc. said it will restate its financial results for the past two years, reducing revenue by $190 million, as the company disclosed it has uncovered more questionable advertising transactions at its beleaguered America Online unit.
THE RESTATEMENT STEMS from a months-long internal review of advertising and commerce deals at the America Online unit. The review is continuing, and while the size of the restatement is a tiny proportion of the entertainment giant’s total revenue, it is much bigger than the $49 million of questionable revenue previously disclosed, but not restated, by the company. As a result, the restatement is likely to deepen uncertainty about accounting issues that have dragged down the company in recent months. The Securities and Exchange Commission and the Justice Department are conducting separate investigations into the company’s accounting.
AOL disclosed the restatement, which will also reduce earnings before interest, taxes, depreciation and amortization by $97 million for the same period, while reporting its third-quarter results. They revealed a further slide in the financial performance of the online division, while the former Time Warner units showed growth. Overall, AOL reported net income of $57 million, or a penny a share, compared with a loss of $997 million, or 22 cents a share, a year earlier. Revenue rose 10% to $9.98 billion.
The restatement also confirms how the questionable transactions involved divisions other than the America Online unit. Of the $190 million in revenue being restated, $168 million is coming from ad and commerce revenue at the America Online unit. The other $22 million was reported by other company divisions. AOL said that revenue came “from certain transactions related to the America Online division in which the advertising was delivered by other AOL Time Warner divisions.” AOL refused to elaborate on its comments, citing the ongoing inquiries and litigation.
Revenue results for past two years to be reduced $190 million
NEW YORK, Oct. 24 — AOL Time Warner Inc. said it will restate its financial results for the past two years, reducing revenue by $190 million, as the company disclosed it has uncovered more questionable advertising transactions at its beleaguered America Online unit.
THE RESTATEMENT STEMS from a months-long internal review of advertising and commerce deals at the America Online unit. The review is continuing, and while the size of the restatement is a tiny proportion of the entertainment giant’s total revenue, it is much bigger than the $49 million of questionable revenue previously disclosed, but not restated, by the company. As a result, the restatement is likely to deepen uncertainty about accounting issues that have dragged down the company in recent months. The Securities and Exchange Commission and the Justice Department are conducting separate investigations into the company’s accounting.
AOL disclosed the restatement, which will also reduce earnings before interest, taxes, depreciation and amortization by $97 million for the same period, while reporting its third-quarter results. They revealed a further slide in the financial performance of the online division, while the former Time Warner units showed growth. Overall, AOL reported net income of $57 million, or a penny a share, compared with a loss of $997 million, or 22 cents a share, a year earlier. Revenue rose 10% to $9.98 billion.
The restatement also confirms how the questionable transactions involved divisions other than the America Online unit. Of the $190 million in revenue being restated, $168 million is coming from ad and commerce revenue at the America Online unit. The other $22 million was reported by other company divisions. AOL said that revenue came “from certain transactions related to the America Online division in which the advertising was delivered by other AOL Time Warner divisions.” AOL refused to elaborate on its comments, citing the ongoing inquiries and litigation.