Given today's performance, the market was expecting some more shoes to drop.
Loss Mushrooms for Charter Communications
Tuesday April 1, 10:04 am ET
biz.yahoo.com
NEW YORK (Reuters) - Charter Communications Inc.(NasdaqNM:CHTR - News), the struggling No. 3 cable TV company, on Tuesday reported a fourth-quarter loss of $1.87 billion after large asset write downs and said it overstated its revenue and cash flow dating back to 2000.
The company, heavily laden with debt and under criminal investigation for its accounting practices, said the errors were uncovered after discussions with the U.S. Securities and Exchange Commission (News - Websites) and audits by its accounting firm, KPMG.
The St. Louis company had said in November that it would need to adjust tax expenses related to acquisitions made in 1999, but it insisted at the time that the adjustments would not affect revenue or cash flow.
But in a statement released in Tuesday's early hours, the company said it needed to correct previous interpretations of generally accepted accounting practices dating back to 2000.
"Certain adjustments were generally required for transactions that lacked appropriate or necessary supporting documentation or instances where mistakes were made in computations or applications of approved policies," the company said in its statement.
Late last year, Charter dismissed its chief financial and chief operating officers in connection with the federal grand jury probe. And this year its treasurer resigned.
The company also said it would seek an extension for filing its 2002 earnings while it completes its financial statements and related filings.
Until the company files financial statements with its lenders, it is unable to borrow money under three of its bank facilities. As of March 31, the company had $450 million in cash, which it said would be enough to cover its operations and debt obligations.
The company said it would pay the interest on its public debt securities due Tuesday, and planned to make the interest payment of its convertible debt on April 15.
Charter also said that Chairman Paul Allen, the billionaire co-founder of Microsoft Corp. (NasdaqNM:MSFT - News), had offered to provide the company a credit line of up to $300 million to assist it in meeting covenants under existing credit facilities.
The company appointed a special committee to evaluate the proposal.
Charter had its credit ratings cut to junk status by ratings agencies over the winter. It carries some $21 billion in debt.
Its shares rose 23 cents to $1.07 on the Nasdaq market early Tuesday.
Charter said it had overstated revenue for the first three quarters of 2002 by 1 percent, or $38 million, its 2001 revenue by 4 percent, or $146 million, and its 2000 revenue by 3 percent, or $108 million.
Adjusted earnings before interest, taxes, depreciation and amortization -- a measurement of cash flow -- was overstated by 8 percent, or $110 million, in the first three quarters of 2002, by 16 percent, or $292 million, in 2001 and by 13 percent, or $195 million, in 2002.
The company defines adjusted EBITDA as revenues minus operating expenses, and selling, general and administrative expenses.
The company's net loss was trimmed by $12 million for the first three quarters of 2002, and $11 million in 2001. Its net loss widened by $29 million in 2000.
For the fourth quarter, the company posted a net loss of $1.87 billion, or $6.36 a share, compared with a loss of $303 million, or $1.03 a share. The wider loss was the result of the write down of the value of cable systems it acquired.
It reported a 13 percent increase in revenue to $1.2 billion from the restated year-ago revenue of $1.1 billion. Adjusted EBITDA rose 14 percent to $457 million from the restated year-ago amount of $402 million. |
