The nation’s top cable operators last night agreed to support an initiative outlining new financial guidelines aimed to provide more consistency in reporting statistics dealing with capital expenditures and customer relationships. The guidelines come following a year in which communications companies have been lambasted for manipulating the books.
The new guidelines identify six standard reporting categories for capital expenditures: customer premise equipment (CPE); commercial; scalable infrastructure; line extensions; upgrade/rebuild; and support capital. They establish a new definition of customer relationships: “The number of customers that receive at least one level of service, encompassing voice, video, and data services, without regard to which service(s) customers purchase.” And the guidelines create a standard definition for revenue generating units (RGUs): “The sum total of all primary analog video, digital video, high-speed data, and telephony customers, not counting additional outlets.”
CEOs of 11 publicly traded multiple systems operators pledged to follow the new guidelines by the first quarter of next year. The companies that have pledged to implement the new reporting guidelines include Adelphia Communications, AT&T Broadband, CableOne, Cablevision Systems Corp., Charter Communications, Comcast Cable Communications, Cox Communications, General Communications Inc., Insight Communications, Mediacom Communications and Time Warner Cable.
“We’ve voluntary joined together to make our numbers more consistent on a company by company basis,” says Michael Willner, CEO of Insight Communications and chairman of the board of directors of the National Cable & Telecommunications Association, in a statement released Monday. “This is a positive development for our industry and our investors, who we believe will gain a clearer picture of our companies through these actions.”
“The new guidelines are designed as an enhancement to the financial reporting of the companies and will have no impact on continuing corporate adherence to generally accepted accounting principles …,” Willner adds.The cable industry is advocating the improvements to its financial reporting in the aftermath of multibillion dollar accounting scandals that have bloodied such communications giants as Adelphia Communications and WorldCom Inc.
Pennsylvania-based Adelphia, the country’s sixth largest cable company, filed for bankruptcy protection this year and came under fire after the company disclosed loans it guaranteed to partnerships controlled by the Rigas family.
Adelphia founder John Rigas and two of his sons were arrested this summer on felony charges of conspiracy, securities fraud, wire fraud and bank fraud.
