BOSTON—American Tower Corp. confirmed it will restate financial results from 2005 through the first quarter of this year after finding discrepancies in “measurement dates” of certain stock-option grants.
AMT said an internal committee is still reviewing the stock-options backdating matter and plans to submit restatement forms to the Securities and Exchange Commission once the investigation is done. The company’s third-quarter results are scheduled to be released Nov. 8, and AMT said it will provide an update regarding its backdating issues during an earnings conference call.
Troubles concerning AMT’s alleged stock-options backdating arose earlier this year. In late May, AMT received a formal letter of inquiry about its stock-option grants from the SEC, and in response the company’s board created a committee to review the situation. However, the company said at the time that it did not expect the review to result in changes to its revenues, operating expenses or cash flow from operations.
Then, in August, the company released only limited second-quarter results as it vowed to restate its past earnings after investigating its stock option-granting practices. At the time, AMT said its stock-option investigation had cost the company $1.5 million—a number that has likely risen to around $3 million since August.
At issue is the illegal practice of “backdating” stock-option grants for employees, usually high-level executives. By manipulating the stock grant date of stock options, companies can match up a favorable stock price with an option after the stock market has run its course for a particular stock during a specific time period.
Done legally, companies award stock-option grants as incentives, hoping that employees will work hard to ensure that the company performs well, thus increasing its stock value. Backdating the options potentially allows employees to benefit regardless of how the company or the stock performs.
AMT’s plans to restate its results didn’t shake investors too much, as the company’s stock traded down just 37 cents at $37.08 per share.
