DirecTV will restate its financial results for the most recent quarter to include a US$1.1 billion pre-tax charge linked to the value of its assets in Venezue la.
The U.S.-based pay TV provider, which became part of AT&T earlier this year, announced in a regulatory filing late last week that its second quarter results "contained an error and should no longer be relied upon."
It noted that its Q2 numbers, for the three months to the end of June, should have been compiled based on an alternative exchange rate for the Venezuelan bolivar, which would have attached a significantly lower valuation to its Venezuelan assets.
DirecTV explained that to date it has used the Sistema Complementario de Administración de Divisas (SICAD) rate, which stood at 12.8 bolivars to the dollar as of 30 June, but has concluded that the Sistema Marginal de Divisas (SIMADI) rate – 197.7 bolivars to the dollar at the same date – would have been the more representative rate for its Q2 numbers and going forward.
As part of the restatement it will "record a pre-tax charge of approximately $1.1 billion related to the remeasurement of the net monetary assets at the SIMADI rate and the associated impairment of the fixed assets of the Venezuelan subsidiary," DirecTV said in its SEC filing.
"DirecTV’s decision to change the exchange rate used to measure the Venezuelan subsidiary is due, in part, to the continued economic uncertainty and lack of liquidity in all three of the official currency exchange mechanisms in Venezuela, as well as the 24 July 2015 acquisition and change in management of DirecTV and review by DirecTV’s new independent accountant," it said.
