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Stock option questions delay Apple's annual report
2006-12-15
Apple missed the deadline for filing its annual report in order to correct for employee stock option "irregularities," according to a filing with a US regulatory agency. The Cupertino, California, maker of iPod players and Macintosh computers said in the filing it could meet the December 14 deadline because it was adjusting its books to account for employee stock option compensation. Apple told the Securities and Exchange Commission it hoped to get the year-end financial paperwork submitted by 29 December. Apple indicated that it expected revenue, expenses and earnings for the fiscal year ended 30 September 2006 to be "significantly greater" than they were the previous year. Apple conducted a three-month internal investigation into its stock option practices and the findings were delivered to its board of directors in October. Apple explained in the filing that it voluntarily embarked on the investigation after discovering stock options may have been executed in questionable manners. Stock options allow holders to buy shares in a company at preset, usually discounted, prices and are commonly used as employee perks at Silicon Valley technology firms. Firms in Silicon Valley and throughout the United States have been shaken this year by what appeared to be a prevalent practice of manipulating option "strike" dates to enhance stock values without proper bookkeeping. Apple told the SEC it was reviewing the findings of its internal probe and would need to amend past financial statements "to record non-cash charges for compensation expense relating to past stock option grants."
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