Accounting & Tax

BlackBerry Maker Completes Restatement

Options-related errors largely responsible for a downward revision of $248.2 million.
Stephen TaubMay 18, 2007

Research In Motion, the Waterloo, Ontario-based company best known for its BlackBerry device, has announced it has completed a previously announced restatement largely caused by options-related errors. The company restated results downward for 2005 and 2006 by a total of $248.2 million, in line with its March estimate of about $250 million.

The impact on its fiscal 2007 results was not material, the company added. Fully diluted GAAP earnings per share for the fiscal year ended March 3, 2007, were reduced by just two pennies, to $3.31, from previously reported earnings.

Research In Motion is 1 of more than 200 companies that have investigations into their stock-option practices. In March the company asserted that co-chief executive officer Jim Balsillie was directly involved in approving stock-option grants, “including grants that have been found to have been accounted for incorrectly.” Eventually, more responsibility for approving certain grants was delegated, without explicit conditions or documentation, to chief financial officer Dennis Kavelman and other, less senior employees; some of these grants were also “accounted for incorrectly,” the company added at the time.

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Last month Research In Motion disclosed that an informal Securities and Exchange Commission inquiry into the company’s stock-option practices had been elevated to a formal investigation.