Apple Files Late Annual, Quarterly Reports

 
 
By Scott Ferguson  |  Posted 2006-12-29 Email Print this article Print
 
 
 
 
 
 
 

In a statement, the iPod and Mac maker said it will adjust some earnings and an internal investigation has found no wrongdoing on the part of Steve Jobs and his management team.

After a two-week delay, Apple Computer filed its third-quarter and annual financial reports with the U.S. Securities and Exchange Commission and announced it will adjust some of earnings due to stock options grants. In its Dec. 29 filing with the SEC, the company wrote that CEO Steve Jobs had been aware of some of the favorable stock grants that led to the investigation but he did not receive or financially benefit from these grants.
In a statement, the internal committee that investigated the stocks option grants expressed its confidence in Jobs and his senior management team.
"The special committee, its independent counsel and forensic accountants have performed an exhaustive investigation of Apples stock option granting practices," according to a joint statement by Al Gore, the chairman of special committee, and Jerome York, the chairman of Apples Audit and Finance Committee. "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," according to the statement. Click here to read more about how Apple is looking to gain market share in 2007.
On Oct. 4, the company announced the result of its internal investigation that found some irregularities in how stocks were granted to top employees between 1997 and 2002. Following the reports release, former Apple Chief Financial Officer Fred Anderson resigned from the board of directors and Jobs issued an apology. In its Dec. 29 statement, Apple, which is based in Cupertino, Calif., announced that it will share its finding with the SEC and the federal prosecutors. The internal investigation looked at 42,077 stock option grants that were made on 259 dates from October 1996 to January 2003. The internal investigation also spent 26,500 hours looking at 1 million documents and interviewing 40 people, according to the SEC filing. In its filings with the SEC, Apple said that it will adjust earnings, after tax, by $4 million in 2006, $7 million in 2005 and by $10 million in 2004. Additionally, Apple stated that the company will take an after-tax, noncash stock-based compensation of $84 million. Apple has been under scrutiny all week after The Recorder, a legal trade publication, published a report that claimed federal prosecutors had begun to examine "apparently falsified" stock option documents. That report, along with another from the Financial Times that reported Apple gave Jobs millions of dollars worth of stock options without proper authorization from the board, caused the companys stock price to fluctuate during the week. Still, financial analysts remained confident in Apple and Jobs. Click here to read more about Apples financial fourth-quarter results announced on Oct. 18. In a report to investors on Dec. 29, Gene Munster, an analyst with Piper Jaffray, wrote that Apple, which made significant strides in 2006 with its iPod music player and its Macintosh line of notebooks and desktops, appears to be on solid financial footing. "Apple reiterated that its investigation and the investigation of the special committee did not find any wrongdoing by current management; we view this as a positive given investors concerns that this issue could lead to the removal of Steve Jobs," Munster wrote. Although the SEC has not formally commented on Apples irregularities with its stock option grants, "we believe that any SEC findings would be consistent with Apples findings," according to Munster. Check out eWEEK.coms for the latest news, reviews and analysis on Apple in the enterprise.
 
 
 
 
 
 
 
 
 
 
 

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