AOL Time Warner promises to reverse shares' slide
By David Lieberman
USA Today
NEW YORK — AOL Time Warner executives pleaded with angry investors to be patient yesterday while CEO Richard Parsons tries to correct mistakes that contributed to the 65 percent decline in the share price over the past 12 months.
Bloomberg News Service
"Our AOL business and vision of the new company got off track," Chairman Steve Case said as he opened the annual shareholders meeting at Harlem's Apollo Theater. "We have to work to regain your confidence."
Steve Case, chairman of AOL Time Warner Inc., leaves the company's annual shareholders meeting in New York. AOL executives and investors assembled at Harlem's Apollo Theater yesterday.
In his first public appearance as Gerald Levin's successor, Parsons said the company lost favor because "in the past 18 months, everything changed" about Wall Street's view of the Internet. "Building value for our shareholders is our highest commitment."
To that end, he vowed to:
• Revitalize America Online. Chief operating officer Bob Pittman has been assigned to boost ad sales and subscriptions, particularly on broadband.
• Restore credibility with investors.
AOL got into trouble last year when Levin failed to keep promises to hit ambitious financial targets but "we learned a lesson and won't forget it," Parsons said.
• Keep the balance sheet solid enough to maintain investment-grade status.
• Simplify the company. Parsons said he's negotiating with AT&T to get the nearly 26 percent stake it owns in the Warner Bros. studio, HBO and Time Warner Cable. While he wouldn't give details, he said, "Investors will like the simplicity and clarity of the resulting structure."
• "Re-energize our people," as Parsons put it.
Several shareholders were unmoved by the executives' appeals.
Many applauded investor Michael Hariton when he said that "AOL Time Warner has been a nightmare." He added that "board members have all been sellers. If they thought it was a great thing, they'd be buyers, not sellers. These are our hard-earned dollars, and you've decimated it."
While the meeting was largely devoted to company problems, attendees gave Levin a respectful reception for his farewell to the company he ran for a decade.
"I know the frustration you feel now is real," said Levin, who left without answering questions. "It is aggravated for all of us by the condition of the world in the aftermath of Sept. 11. War, recession, terrorism, financial fraud, religious scandal — an almost endless barrage of tragedy, violence and deception.
"Don't let your frustration turn to cynicism or despair. The advance of human society never moves in a precise linear cause-and-effect fashion. Nor does individual resistance to evil or values-based leadership produce immediate results. Only in retrospect, and in the longer view of history, can we see the forward momentum we all desire. In a word, have faith in this company."
Vice Chairman Ted Turner, who frequently clashed with Levin, initially declined to comment on the former CEO, then said: "We're going to miss him."
