EDINBURG, Va.—Shenandoah Telecommunications Co. announced that it plans to restate its financial results for the years 2003 and 2004, plus the first three quarters of 2005, with a cumulative net pretax impact of about $2.1 million.
Shentel, which is a Sprint Nextel Corp. CDMA affiliate, had been expected to report its financial results in late February but delayed the posting saying that its annual audit was not yet complete. The company indicated today that it would make some financial adjustments, primarily related to its accounting for cell tower operating leases.
“Although the company believes that the impact of the error is not material to any individual period in previously issued financial statements, it determined that the cumulative adjustment required to correct this error was too large to record in 2005,” the company stated.
According to Shentel, the restatements “will reflect a difference in the timing of the recording of rent revenue and rent expense” but “will not affect the company’s historical or future operating cash flows or the timing of payments under the related leases.”
Shentel did not indicate how long the restatements might take, but said that it estimates an increase of $2.2 million in rent expense, along with an increase of about $100,000 in deferred income from leases. The adjustments are expected to decrease stockholders’ total equity by about $1.3 million as of Dec. 31, 2005, the operator noted.
