AES announced last night that it would restate its past financial results because of accounting "errors" that it said "would likely be material" for 2006, and it notified the Securities and Exchange Commission that it was seeking an extension to March 16 to report results.
AES said it believes the errors to have been "inadvertent and unintentional."
The Arlington energy firm also said it had retained an outside consulting firm to review accounting related to the expensing of restricted stock and stock options, and said "it is likely that the company incorrectly calculated its share-based compensation expense."
The company said it had treated board approval of such compensation as the measurement date for accounting purposes instead of the date the compensation was communicated to employees. It said nothing about the backdating of options that has been an issue at many other companies recently. It said it was looking at "administrative errors in the granting process, including administrative delays, errors in data entry and communication, and other mistakes."
The company gave no indication about the size of the accounting errors but said that "at this stage of the review, management does not believe that any accounting errors related to long term compensation are the result of any fraudulent practice."
The company's statement said that "at this stage" it did not expect the errors to affect the company's cash balances or materially alter financial statements from 2004 and 2005.