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Cablevision Posts Loss as Audit Finds Bad Entries

November 12, 2003|From Reuters

Cablevision Systems Corp. said Tuesday that it had found more accounting irregularities as the company reported a wider third-quarter loss because of weakness in its cable television business.

The No. 6 U.S. cable operator said an internal audit had found $15 million in improperly booked expenses in 2002 and earlier, marking the third time since June that the company had disclosed inappropriate accounting.

Although the amount of expenses in question were insignificant compared with Cablevision's total revenue, a widening investigation could delay completion of a planned spinoff of the company's Rainbow television networks and a newly launched satellite broadcasting service, VOOM.

"I think this raises more questions than answers about the spinoff," said Kaufman Bros. cable analyst Mark May.

As a result of the audit, Cablevision said it would restate first-quarter and second-quarter results and revise its third-quarter results released Tuesday to reflect the improperly booked expenses. It said it also was reviewing whether any of its results for the years 2000 to 2002 might need to be restated.

The Bethpage, N.Y.-based company said the $15 million included improperly booked expenses at its Rainbow Media Holdings division, which includes its cable networks, and other units it did not identify.

Cablevision is probing the accounting at Rainbow, as well as the bookkeeping at three of its business segments: telecommunications, Madison Square Garden and corporate.

Cablevision plans to begin operating as two separate companies in January but cannot complete the spinoff until the Securities and Exchange Commission ends its inquiry into the company's accounting practices.

Cablevision, which also owns the New York Knicks basketball team and the New York Rangers hockey team, reported a third-quarter net loss of $104.6 million, or 36 cents a share, compared with a net loss of $79.5 million, or 26 cents, one year ago. Revenue increased 12% to $975.8 million from $872.4 million.

Cablevision shares closed up 2 cents to $20.45 on the New York Stock Exchange.

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