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Altera to restate previous financial statements

Posted: 23 Jun 2006 ?? ?Print Version ?Bookmark and Share

Keywords:Altera? restate? financial statement? committee? stock option?

Programmable logic supplier Altera Corp. announced that it expects to restate its previously-issued financial statements to correct errors related to accounting for stock-based compensation expense.

As previously announced, the company's board of directors has established a committee of independent directors to review Altera's historical stock option practices and related accounting. The committee is being assisted by independent legal counsel. At this time, the special committee has not completed its work nor reached its final conclusions and is continuing its review.

The committee has reached a preliminary conclusion that the actual measurement dates for certain stock option grants issued between 1996 and 2000 differ from the recorded grant dates for such awards. As a result, Altera expects to record additional non-cash charges for stock-based compensation expense in prior periods.

Altera said it believes that these charges are material and, accordingly, expects to restate its financial statements for the fiscal years ended 1996 through 2005. The company has not yet determined the tax impact that may result from this matter. Based on information presently available, the company does not anticipate that the restatement will result in a material charge to fiscal year 2005. Because the committee's review is still ongoing, there may be additional years subject to restatement and the impact to fiscal year 2005 may be different than presently anticipated.

Last June 19, the company's audit committee, after consultation with management and the independent committee, determined that Altera's financial statements and any related reports of its independent registered public accounting firm for the fiscal years ended 1996 through 2005 should no longer be relied upon. Altera intends to file its restated financial statements and its quarterly report for the period ended March 31, 2006, as soon as practicable after the completion of the independent committee's investigation.

The audit committee has discussed the above matters with Altera's independent registered public accounting firm. However, as the special committee's review has not been completed, the final conclusions of its review are not yet known to the independent registered public accounting firm.

Any stock-based compensation charges incurred as a result of the restatement would have the effect of decreasing reported income or increasing reported loss from operations, and decreasing reported net income or increasing reported net loss, and decreasing reported retained earnings figures contained in Altera's historical financial statements for the periods mentioned above. Altera said it does not expect that the restatement will have any impact on its historical revenues.

Altera plans to announce second quarter revenue results and third quarter revenue guidance on July 24. The company will not announce additional financial results for the second quarter until the committee has completed its investigation and the company has filed its restated financial statements and its quarterly report for the period ended March 31, 2006.

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