US Cable Firm to Restate Results as SEC Launches Probe

22 November 2002

America’s number-three cable operator Charter Communications – controlled by Microsoft co-founder and billionaire Paul Allen – must restate its financial results for the last two years, as it faces the outcome of an inquiry into accounting practices.

Charter admitted earlier this week it would issue new figures for 2000 and 2001 to take into account an extra $1.4 billion (€1.4bn; £0.9bn) in franchise costs and $1.2bn in deferred income tax liabilities connected with the purchase of eighteen firms.

In a filing with the Securities & Exchange Commission relating to this year’s Q3 results, the cable company also revealed it is being informally investigated by the SEC over the way it deals with subscribers in its accounts.

As revealed in August [WAMN: 20-Aug-02], similar concerns are at the heart of a separate inquiry by the Justice Department.

For the third quarter, Charter posted a loss of $239.5 million, narrowing from $326.6m in the same period last year. However, it lost over 250,000 subscribers over the first nine months of 2002.

The cable firm has not been a successful investment for Allen. Its shares have slumped by an eye-watering 93% since the start of the year.

Data sourced from: New York Times; additional content by WARC staff