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Apple today filed its Form 10-Q for the quarter ended July 1, 2006 and its Form 10-K for the fiscal year ended September 30, 2006 with the Securities and Exchange Commission (“SEC”). Both filings had been delayed pending the conclusion of an independent investigation by the special committee of the board of directors into past stock option practices and the resulting restatement of the Company’s financial results.

I would confess to being very confused about the whole stock issue. You can read more aboout the release today here in an interesting NY Times article.

Apple undertook this investigation on its own initiative and has informed the SEC and the U.S. Attorney’s Office of the results.

Based on an analysis of the findings of the independent investigation, the Company has recognized total additional non-cash stock-based compensation expense of $84 million after tax, including $4 million and $7 million in fiscal years 2006 and 2005, respectively. The restatement arises solely from certain stock option grants made between 1997 and 2002; the investigation found no grants after December 31, 2002 that required accounting adjustments.

“The special committee, its independent counsel and forensic accountants have performed an exhaustive investigation of Apple’s stock option granting practices,” in a joint statement said Al Gore, chair of the special committee, and Jerome York, chair of Apple’s 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.”

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a guest said: January 01, 2007   Votes: +0

The key issue is one of Governance at Apple. The SEC concern, and that of shareholders, centeres aroung the issue that stock options, especially the most recent package for Steve Jobs, were not properly approved by the board and also not fully disclosed to shareholders. For instance, the Financial Times alleges that the Jobs package was not approved by the board and when this became a public issue, documents were created to create the appearance as if there had been board approval. In a company where the stock price has risen sharply over the past few years, these options represent a lot of money and are thus of greater interest to stakeholders and regulators than before. Ther are also income tax implications under the US system.

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