The Restatement Bandwagon

Several corporations, large and small, get current in their filings with revised financials.
Stephen TaubDecember 11, 2007

A flurry of companies announced early this week that they are finally current with their regulatory filings or that they have restated prior results.

• Navistar International said it “achieved a significant milestone” toward becoming a current filer by filing its 2005 annual report, which includes restated financial data for the 2003, 2004 and 2005 fiscal years. The company reported net income of $139 million in 2005, and net losses of $44 million in 2004 and $333 million in 2003.

The truck maker also said its Navistar Financial subsidiary has received a waiver and consent from participants in its $1.42 billion credit agreement dated July 1, 2005, addressing its failure to meet its filing requirements. The waiver expires on November 30, 2008.

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• New Jersey Resources also announced that it is now current with its regulatory filings by filing its annual report for fiscal 2007 and restated net income for fiscal 2005 and 2006.

The electric utility had announced on November 30 that it would restate previously reported, unaudited fiscal 2007 results and audited 2006 and 2005 financial statements as a result of changes in the accounting treatment of derivative financial instruments at unregulated subsidiaries.

• SIFCO Industries, a small metalworker, restated its income tax provision for its fiscal 2007 third quarter, which ended June 30. The company had determined that it incorrectly reflected the accounting for the reversal of its valuation allowance against its net deferred tax assets.

SIFCO also recognized the tax benefit resulting from the utilization in fiscal 2007 of its U.S. net operating loss carryforwards. This caused a $1.8 million understatement of the company’s deferred income tax provision and a corresponding overstatement of income from continuing operations for the nine months ended June 30, 2007.

• In Japan, heavy machinery maker IHI Corp. said it will restate its earnings for the prior year to incorporate about $179 million in losses on plant engineering projects, according to Reuters.