Adelphia's 2002 Figures Wrong, Too


Adelphia Communications Corp. overstated its 2002 cash-flow results by $102
million, according to a restructuring adviser.

Cary Stanford, managing director of Saybrook Restructuring Advisers, said in
bankruptcy court testimony Thursday that Adelphia would restate earnings before
interest, taxes, depreciation and amortization, also known as cash flow, for
2002 to reflect new accounting policies at the company.

Stanford, testifying in U.S. Bankruptcy Court for the Southern District of
New York, said he was told by a source close to Adelphia that the company incorrectly booked costs associated
with reconnecting customers as a capital expense on its balance sheet rather
than an operating expense on its income statement.

Stanford's testimony came on the third day of a bankruptcy-court hearing to
approve Adelphia's plan to hire former AT&T Broadband executives William
Schleyer and Ron Cooper as its chairman and CEO and president and chief
operating officer, respectively.

While there are no hard rules regarding how reconnects are expensed, most
cable companies are leaning toward booking those costs as operating expenses,
which would in effect lower their cash flow. Capitalizing those costs would
allow a company to spread out the expense over a period of time, thus lessening
the impact on the bottom line.

Adelphia is expected to file documents with the Securities and Exchange
Commission regarding its capital-expense policy Friday. However, the company
will hold off releasing hard numbers until its financial audit is completed.

This is the third downward revision to EBITDA that Adelphia has made. In
June, the company said it would reduce 2001 EBITDA by $210 million and by $160
million in 2000 in part because it capitalized subscriber