EchoStar Communications Corp. on Thursday said its annual report may be delayed because securities regulators have raised accounting issues that may require a restatement of its 2001 results.
EchoStar, which settled a contractual dispute with Viacom Inc. early Thursday, also delayed the release of its fourth-quarter earnings. It did report that it added 340,000 subscribers during the quarter.
The company said the Securities and Exchange Commission has told it that the company had over-accrued $17 million and $9 million in 2001 and 2002 for the replacement of so-called smart cards.
The cards, installed in receivers to prevent piracy, became obsolete and the company established a reserve fund between 1996 and 2002 to pay for replacements.
The SEC concluded the fund was appropriate for receivers sold to consumers but not those owned by EchoStar and leased to consumers.
EchoStar said the SEC may require it to restate its results for 2001 because of the accrual reversal, which will increase earnings for both years on a dollar-for-dollar basis.
EchoStar said it will still host a conference call on Thursday but said it will address the dispute settlement with Viacom and not its fourth-quarter results.
