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Apple takes $84 million charge, defends Steve Jobs in options scandal
While Apple's surely enjoying the perks of having a monumental amount of iPods unwrapped just days ago, everything's not exactly kosher in Cupertino. Aside from the mysterious mouse the firm just patented, the company is facing another bevy of off-the-wall lawsuits, all while trying to fish its CEO out of potentially hot water. After the Securities and Exchange Commission found that ole Steve was granted 7.5 million stock options without the proper authorization of Apple's board of directors in 2001, there was widespread speculation that Mr. One More Thing may suffer the same fate as Apple's former CFO Fred Anderson, who resigned after a similar debacle in 2004. It seems, however, that things just might work out okay after all, as Apple finally filed its required forms with SEC, recognizing a "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." Aside from taking the lofty charge, the company also stated that while Jobs was "aware of the favorable grant date recommendations, he did not financially benefit from these grants or appreciate the accounting implications." So all those out there holding your breath to see if Macworld would ever be the same if this went south, it looks like we'll be seeing jeans and a black shirt all over again in just a few weeks.
ATM PINs vulnerable to cracking, Israeli researchers say
Everyone relies on their ATM cards pretty frequently -- after all, there's no better (or, often, more necessary) way to start your evening than with a $40 quickdraw from your favorite local money machine. Well, you may want to think twice (that is, if you're among the paranoid security-minded types) next time you whip out that thin piece of plastic. A group of researchers at Algorithmic Research (ARX), an Israeli security firm, published a paper two weeks ago describing a very serious flaw inherent in most ATMs. Apparently, between the time that you input your PIN and the time that the machine spits out your cash, a dataset containing your PIN and account number is encrypted and decrypted a few times while being routed along the banking network -- and somewhere along that point, it's conceivable that those numbers could be intercepted. MSNBC reports that while no attacks using this method have been detected, the US Secret Service is already on the case, and that while Visa and the American Bankers Association are acknowledging the problem, both are dismissing the hacking scenario as being unlikely. Still, we might consider busting out that money belt sometime soon, getting the USSS on the job means it could be big. [Warning: PDF link][Via MSNBC]
How much is Nintendo really worth? (Clue: very much)
Recent financial figures released by Kyoto's most successful hanafuda manufacturer explain just how sickeningly rich the company is. NCL's total net assets as of September 30th, 2006 stand at US$10.86 billion. Do you know how many Rares you could buy for that? Too many!Nintendo's net sales (nothing to do with this here internet) for this fiscal year, which ends on March 31st, 2007, are forecast to be US$6.378 billion, while net profits (after the taxmen have taken their pieces of the sumptuous pie) for this financial year are expected to total US$862 million. That's quite a lot of money. According to a statement released by Nintendo of Japan's accountants, which we've partially emboldened for scary effect: "In order to expand gaming population in the console business as well, Nintendo will aim to popularize "Wii" (the latest video gaming console to be launched at the end of the calendar year) as an "everyday-use gaming device for all the family" allowing the new emergence of gaming console inseparable from daily lives, under the concept of "brand new days with Wii". As for handheld gaming market, Nintendo will continue to strive to gain more popularity with an expansion in software lineup by launching new types of games that expand user base such as "Touch! Generations" as well as easy accesible games to challenging games in due proportion." Key phrase there, if we've read it correctly, is "inseparable from daily lives." The message is clear and just a bit frightening, dear readers: Nintendo wants your life!Read (.pdf) -- Nintendo.co.jp financial statement
MS reports Q1 earnings, shrugs off 360 doubters
Microsoft released its first fiscal quarter earnings report earlier this week, beating Wall Street estimates to the tune of $10.81 billion in revenue. That's an 11% increase over the same period last year. The Entertainment & Device division, which includes our favorite next-gen console, reported year-to-year growth of 70%, with 6 million next-gen consoles sold worldwide so far. In other positive news, the company boasts of record cumulative attach rates for software and peripherals, with Xbox Live surpassing 4 million members. Shrugging off skepticism from egghead analysts, MS Chief Financial Officer Chris Liddell said the software giant remains confident it will meet its target of 10 million Xbox 360s shipped by the end of 2006. Since this is a fanboy site, we won't quibble with the difference between "shipped" and actually sitting in somebody's living room. Of course, if you're eager to help MS reach the 10 million milestone, you can always buy Xbox 360s for your extended family this Christmas, plus an extra one for the place in Tahoe.
Apple's Special Committee Reports Findings of Stock Option Investigation
Back in August, Apple announced they had found some stock option irregularities and launched an internal investigation to get to the bottom of things. This voluntary audit netted a warning of de-listing from NASDAQ because they had to delay filing their Q3 earnings results (fortuately, NASDAQ cut Apple a break). Today, the big fruit has issued a press release with the findings of this audit, which was performed by a special committee of outside directors, independent counsel and accountants. This crack team had to shuffle through over 650,000 emails and documents (Spotlight to the rescue!), as well as conduct over 40 interviews of current and past employees.In summary, the investigation's results go a little something like this: No misconduct by current members of Apple management was found The most recent evidence of 'irregularities' points to 15 stock option grants made between 1997 and 2002. Said grants were apparently issued before their approval dates Steve Jobs knew about the grant dates, but he apparently didn't know about the slight-of-hand accounting implications, nor did he benefit from any of them The data found 'raises serious concerns' of two former officers related to the accounting, recording and reporting of these grants. Apple will provide details to the SEC Mr J is quoted apologizing to Apple's shareholders and employees for these problems, especially since they happened under his watch, saying "They are completely out of character for Apple." He continues saying "We will now work to resolve the remaining issues as quickly as possible and to put the proper remedial measures in place to ensure that this never happens again," i.e. - somebody's in for a whole lotta iButt woopin'.In the collateral damage department, Fred Anderson, Apple's former CFO from 1996 to 2004 who now serves on the company's board of directors, has decided now might be a good time to resign from said board.Finally, Apple and the audit committee agree that the company will ultimately have to restate their historical financial statements to "record non-cash charges for compensation expense relating to past stock option grants." At this time however, the company is still working to analyze their findings and determine which periods will need restating, as well as the differential amounts.
Reminder: Apple to webcast today's conference call
Later today, at 2pm PT, Apple will webcast their financial conference call for the 2nd quarter of 2006. As Macsimum News notes, a number of analysts are saying that Apple will report their second-best single quarter results ever this afternoon. Stock holders: You may want to get your certificates out and give them a brief hug.
Apple to webcast Q2 financial conference call
Apple has set a date for their financial conference call for the 2nd quarter of 2006 (spoiler alert: things are going well). The whole thing will go down on Wednesday, April 19th at 2pm PT. You can catch the webcast here. Since we don't get live keynotes anymore, this will have to do.[Via MacDailyNews]
