Bob Brinker: Market Savant & Radio Host Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: wooden ships who started this subject	6/10/2002 9:52:25 PM
From: geode00	Read Replies (1) of 42834

It's not just earnings (my emphasis)... From the WSJ: "Adelphia Communications Corp.'s woes continued to mount as the cable concern disclosed it overstated revenue and cash flow by about $500 million over the past two years. ... The filing shows Adelphia inflated 2000 and 2001 revenue and cash flow -- as measured by earnings before interest, taxes, depreciation and amortization. The finances were inflated by improperly including payments from set-top-box vendors. Adelphia also failed to write down the value of some impaired investments. The set-top-box arrangement boosted Adelphia's cash flow by about $54 million in 2001 and $37 million in 2000, according to the filing. The impaired investments boosted Adelphia's cash flow and revenue by $52 million in 2001 and $28 million in 2000. Adelphia also said it was aggressive in capitalizing labor expenses -- something that helped boost cash flow by $40 million in both 2000 and 2001. Cable companies spend cash to deploy technicians and install service but instead of treating these immediately as operating expenses, many companies capitalize some or all of the expenses -- treating the costs as an asset that can be written down over time, not immediately. This accounting treatment means that the expenditure doesn't affect the operating cash-flow figure. While most cable companies capitalize expenses, analysts said Adelphia's disclosure suggests the cable concern was more aggressive than its peers.... Adelphia said the subscriber numbers were inflated by 47,253. However, people familiar with the situation said a May 24 company report released by a special committee of Adelphia's board and given to the SEC detailed how Adelphia inflated its numbers by close to 450,000. The biggest inflation was the overcounting of 278,000 subscribers who live in multiunit dwellings. The company counted connections to multifamily units as multiple connections -- even though each unit may have had only one paying subscriber...." I tell ya this is getting pretty darn ridiculous! Why would you capitalize labor costs?

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next