Charter Communication

(CHTR) - Get Report

posted a $1.7 billion loss in the fourth quarter of 2002, citing a huge charge to write down the value of goodwill, and said it is weighing $300 million of additional credit from Paul Allen to help it comply with lending covenants.

Charter, whose shares now trade for less than $1 and whose accounting is under federal investigation, also disclosed a long list of restatements dating back to 2000, reclassifying everything from customer acquisition costs to depreciation related to system upgrades to money paid to programmers to launch new services.

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All told, the adjustments cut revenue for the first three quarters of 2002 by $38 million, and for the years ending Dec. 31, 2001 and 2000 by $146 million and $108 million, respectively. Reported adjusted EBITDA was cut by $110 million for the first three quarters of 2002, and $292 million and $195 million for the years ending Dec. 31, 2001 and 2000, respectively.

Revenue in the fourth quarter of 2002 was about $1.2 billion, up 13% from the restated year-ago amount, on the strength of digital cable and Internet packages, offset by margin compression due to higher programming costs. Fourth quarter adjusted EBITDA rose 14% to $457 million. The per-share loss came out to $6.36 a share.

"The company's plan is to continue its efforts to grow revenue and adjusted EBITDA through the sale of broadband services, principally packages of cable television programming and high-speed data services for both residential and business customers," Charter said. "The company's primary strategy to increase revenue in 2003 is to seek to increase the penetration of its high-speed data packages," adding it plans to slow its digital unit growth and repackage digital program tiers in an effort to raise its return on invested capital in the digital platform.

The company also formed a special committee of its board to consider an offer from Paul Allen, its chairman, to provide a backup credit facility of $300 million.