Well these shitbags finally fessed up..
Sunday July 28, 10:28 pm Eastern Time
Reuters Business Report
Qwest Says Used Improper Accounting
DENVER (Reuters) - Qwest Communications, already under federal investigation for its accounting practices, said on Sunday it used improper accounting methods in 1999 through 2001 and will restate its financial results.
The dominant local telephone company in 14 states from Minnesota to Washington, Quest Communications International also withdrew its financial forecasts for 2002, citing ongoing weakness in the telecommunications sector, stiff competition and softness in regional economy. It said all areas of its business have been hurt.
"I've heard people predict we're hitting the bottom for the past few quarters and there's been a lot of errors. When I look at the general economy, I don't feel confident making any predictions about recovery," said Qwest's new chairman Dick Notebaert.
The company recently ousted its former chairman, Joseph Nacchio, and replaced him with Notebaert, who headed telecommunications equipment maker Tellabs Inc. Qwest also named a new chief financial officer.
The company also has put up for sale several assets, including its $9 billion QwestDex telephone directory publishing business. It is expected to make a decision on the Dex business shortly, source familiar with the situation said on Sunday.
Qwest said it improperly accounted for about $1.16 billion in sales of optical capacity on its network, as well as sales of communications equipment.
The U.S. Securities and Exchange Commission is already investigating the accounting practices of the Denver-based company. Qwest said it may be required to restate all optical capacity sales. It is not reviewing any results prior to 1999.
It will be several months before Qwest can restate the results. Qwest said it informed its lenders on Sunday about its expected restatement, which takes several months.
A restatement by Qwest, which also faces a criminal probe by the U.S. Justice Department, could jeopardize some of its funding agreements, which require it to maintain a certain ratio of debt-to-EBTIDA (earnings before interest, taxes, depreciation and amortization), the company said.
Qwest had $26.5 billion in debt as of March 31 and has about $6.5 billion in debt maturing in May 2003 through 2004, according to debt-rating agency Standard & Poor's.
"We're still very solvent here," Qwest's new chief financial officer Oren Shaffer said in a telephone interview. "We were in compliance (with funding agreements) in the first quarter and we don't know what the second quarter is going to look like," he said.
The expected restatement of the company's financial statements will also include adjustments for three transactions relating to the sale of communications equipment.
Qwest said its new auditor, KPMG, will not be able to finalize its review of the second quarter financial report. Qwest is one of several telecommunications companies, including bankrupt carriers Global Crossing Ltd. and WorldCom Inc., to come under scrutiny by federal regulators. |
