AOL Time Warner Restates Financials

AOL Time Warner Inc. disclosed Wednesday it would restate financial results over two years.

In its third-quarter earnings release, the media and communications giant said the restatements would reduce its earnings by $190 million and cut its EBITDA (earnings before interest, taxes, depreciation and amortization) by $97 million.

AOL Time Warner, which is being investigated by the Securities and Exchange Commission and Justice Department, is restating its financials based on an internal review of advertising and commerce transactions at AOL, said AOL Time Warner chief executive Dick Parsons.

“We have devoted a significant amount of time and resources to our review and, based on the substantial work we have done to date, do not expect any further restatements from it,” Parsons said Wednesday in a statement.

AOL Time Warner posted $10 billion in third-quarter revenue, up six percent from a year ago, but its EBITDA declined one percent from a year ago to $2.2 billion. The company reported $1.4 billion in free cash flow, totaling $4 billion of free cash flow for the first nine months of 2002.

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