UPDATED: Apple Computer will restate earnings stretching back to
2002, requiring an $84 million charge, according to updated financial data
filed today with the Securities and Exchange Commission (SEC).
In the filing, Apple said it would adjust earnings by $4 million for fiscal
2006, $7 million for fiscal 2005 and $10 million for fiscal 2004.
“Incorrect measurement dates were used for financial accounting purposes for
certain stock option grants made in prior periods,” Apple explained to
regulators.
The filing completes Apple’s requirements from both the SEC and Nasdaq,
Apple spokesman Steve Dowling said. While Apple’s internal probe is complete, it’s
unknown whether the updated financial information closes the government’s
inquiry, he added.
In a statement, Apple voiced its continued support for Jobs. “The board
of directors is confident that the Company has corrected the problems that
led to the restatement, and it has complete confidence in Steve Jobs and the
senior management team.”
Today’s restatement was hinted at earlier this week when the legal publication “The Recorder” and the legal newswire Law.com reported that Apple’s investigation revealed officials falsified documents
supporting the incorrect stock-option dates.
Apple has not returned a request for comment.
The internal probe, launched in June, concluded the computer maker’s
procedures “did not include sufficient safeguards” to prevent stock option
manipulation.
The investigation identified “a number of grants for which grant dates were
intentionally selected in order to obtain favorable exercise prices,” Apple
said in a statement.
The company discovered that 6,428 grants on 42 dates did not use the proper date.
Apple said while CEO Steve Jobs was aware or recommended some of the
questionable stock-option grants “he did not receive or financially benefit
from these grants or appreciate the accounting implications.”
Despite absolving current leaders of mismanagement, the probe pointed to
“serious concerns” regarding two former officers involved in accounting,
recording and reporting the grants.
Senior management employed between 1998 and 2002, including Jobs, former CFO Fred Anderson and former general counsel Nancy Heinen, were named in a suit filed in August in the U.S. district court of the Northern District of California.
Apple’s stock gained 5 percent on afternoon trading, reaching $85.06, up
from the morning’s $83.95. The stock’s recovery followed Thursday’s close of
$80.87.
