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Charter Receives Informal SEC Inquiry

November 20, 2002|Derek Caney | Reuters

NEW YORK — Charter Communications Inc., already facing a criminal investigation of its accounting, said in a regulatory filing Tuesday that it recently had received an informal, nonpublic inquiry from federal regulators.

Earlier in the day, the cable firm acknowledged that it understated its costs and tax liabilities related to acquisitions in 1999 and 2000, requiring a restatement of earnings dating to 2000.

In connection with the criminal investigation, the company has denied wrongdoing.

St. Louis-based Charter, which has about 500,000 subscribers in Southern California, repeated Tuesday that revenue and operating cash flow -- the measurements of performance preferred by cable companies -- would not be affected by the restatements. However, analysts said credibility is an issue.

In its earnings filed Tuesday with the Securities and Exchange Commission, the company disclosed that it had received Nov. 4 an SEC inquiry that concerned "its prior reporting of its customers and policies and procedures relating to its disconnection of customers."

Charter, which is controlled by Microsoft Corp. co-founder Paul Allen, said it would record an additional $1.4 billion in franchise costs and $1.2 billion in deferred tax liabilities. The company said statements for 2000 and 2001 and the first and second quarters of 2002 would be restated, and 2000 and 2001 statements would be re-audited.

In Tuesday's filing, the company reported a loss of $239.5 million, or 81 cents a share, for the quarter ended Sept. 30, compared with a loss of $326.6 million, or $1.11 a share, a year ago.

The company released its quarterly revenue and operating cash flow results this month, before its scheduled conference call with analysts, but it withheld a complete income statement.

Charter's shares rose 1 cent to $1.19 on Nasdaq.

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