Under pressure from federal regulators, Global Crossing Ltd. said Monday it would restate financial results for the first nine months of 2001 to exclude revenue from controversial network capacity deals with other carriers.
The telecommunications company, which filed for bankruptcy protection in January, said the move would erase $19 million in revenue for the first three quarters of last year and would wipe out $1.2 billion each in assets and liabilities from its balance sheet.
The restatement also would increase the company's nine-month net loss by $13 million, to about $4.8 billion.
Global Crossing's changes are largely irrelevant to investors, since the company's stock and other securities lost virtually all of their value when the company entered Bankruptcy Court. In fact, the company has yet to file -- or certify -- full-year results for 2001 or even replace its longtime auditor, Arthur Andersen, which stopped performing audits after being found guilty of obstruction of justice in a case involving Enron Corp.
The accounting practices at Global Crossing, Qwest Communications International Inc. and other carriers have been under investigation by the Justice Department and the Securities and Exchange Commission. The probes have focused on the way the companies booked revenue from reciprocal transactions, or deals in which two carriers essentially exchanged like amounts of fiber-optic capacity and then simply "round-tripped" cash payments.