Stock-Option Reverb: Apple “Likely” To Restate Four Years Of Results


Two weeks after Apple that it would not need a “material adjustment” to results — unless something else turned up — the company says it is likely to restate four years of earnings because of stock-option grant “irregularities.” Apple started an internal investigation in June; the irregularities that surfaced convinced the board to set up a special committee of outside directors, which, in turn, has hired independent counsel to investigate.
From the company’s statement issued late Thursday afternoon: “Although the investigation is ongoing, the Company has discovered additional evidence of irregularities. In light of this, management has concluded, and the audit committee of the board of directors agrees, that the Company will likely need to restate its historical financial statements to record non-cash charges for compensation expense relating to past stock option grants.”
Apple will postpone filing its FY3Q06 10-Q pending the outcome of the internal and independent investigations.” The company says it filed a form with the SEC Thursday, which doesn’t show up on its site, saying that all financial statements and all earnings and press releases and similar communications issued from Sept. 29, 2002 on “should therefore not be relied upon.” Release.
Option-grant policies that involved backdating are under investigation by the SEC, the IRS and a Bay Area task force formed by Kevin Ryan, the U.S. Attorney for Northern California.
Related: Earnings: Apple Profits Up 47.5 Percent For FY3Q06

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