AOL CHIEF CALLS EARNINGS FAILURE 'DISAPPOINTING'

Admits 'Interest' in AT&T Cable Unit

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NEW YORK (AdAge.com) -- AOL Time Warner's chairman speaking at a media conference today said the media giant's failure to meet ambitious earnings expectations it had promised early in 2001 was "obviously a disappointment."

"We believed it was doable," Steve Case told attendees today

at the UBS Warburg's Media Week conference.

Reduced earnings
AOL Time Warner reduced its 2001 earnings expectations Sept. 24. "We probably could have [hit expectations] if we really tried," Mr. Case said, but that doing so would have meant significantly curtailing investments it deemed necessary for the future.

AOL Time Warner units went though rounds of cutbacks this year, including thousands of staff reductions. The company had promised Ebitda -- earnings before interest, taxes, depreciation

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and amortization -- growth of about 31%, to $11 billion, for 2001, and revenue growth of about 10% to $40 billion; the company said in September that Ebitda would likely grow 20% and revenues would grow between 5% and 7%.

Cable unit 'interest'
Mr. Case tried to joke away a question regarding his company's interest in AT&T's cable unit -- "You think I'm going to answer that?" -- but ultimately conceded that "obviously we would define ourselves as an interested party."

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