Wednesday, Aug. 3, 2005 | 9:23 a.m.
NEW YORK -- Time Warner Inc., the world's largest media company, is setting aside $3 billion in reserves to settle shareholder lawsuits filed against the company in the wake of its disastrous merger with AOL.
Time Warner announced today it had reached a tentative settlement with the lead group of shareholder plaintiffs, who claimed they were cheated in the merger by inflated revenue claims and improper accounting at AOL.
The company also said it had authorized a program to buy back $5 billion of its own shares over the next two years, a step shareholders had been clamoring for as a way to boost its lagging share price.
The announcement came as Time Warner released its second-quarter earnings report. For the three months ending in June, the company posted a net loss of $321 million, or 7 cents a share, versus a profit of $777 million, or 17 cents a share, for the comparable period a year ago.
Revenue fell 1 percent in the quarter to $10.74 billion from $10.86 billion a year ago.
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