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McAfee, American Tower announce restatements are likely; McAfee delays quarterly filing.
Stephen Taub, CFO.com | US
July 28, 2006
Officials at McAfee Inc. said the company will likely restate its financial results in at least one, and potentially several, prior periods, and delay the filing of its June 30 quarterly report. The adjustments and filing delay, made public on Friday, stem from McAfee's previously announced review of stock-option grant practices and related accounting.
The security-software company added that the review will likely result in prior period noncash stock-compensation charges and related tax effects, which could affect second-quarter results.
McAfee elaborated in a press release, which was fired off after Thursday's market close, that the accounting measurement dates for certain stock options granted differ from the measurement dates previously used for the awards. As a result, new accounting measurement dates will apply to the affected option grants. McAfee stressed that the tax consequences that may result from these adjustments have not yet been determined.
The company's stock was down more than 12 percent halfway through Friday's trading session.
In related news, American Tower announced that it may restate prior results after a preliminary internal review found that the actual measurement dates used for financial accounting purposes to record certain stock-option grants likely differ from the recorded grant dates of the awards. The company added that it may need to record additional noncash charges for stock-based compensation expense relating to these option grants.
American Tower officials assured investors that although the impact to its financial results, and the need for restatement, is not yet known, the company does not expect the review to result in material changes to its historical revenues or nonoption-related operating expenses. In addition, the company does not believe the adjustments will have a material effect on the company's cash flow from operations.
American Tower stock was up nearly 2 percent on Friday.