BOSTON—American Tower Corp., the largest wireless network tower company in the nation, reported only partial results for the third quarter that showed rising revenues, but the company also disclosed troubling details of its investigation into its stock-option granting practices.
The company found that most stock options granted from 1998 to 2005 were incorrect as they did not reflect the dates the grants were legally effective. The company acknowledged that certain members of management back-dated grants to use a lower exercise price—effectively increasing the value of their stock options. The back-dated grants were inconsistent with American Tower’s disclosures that the option grants were made at fair market value.
The company described the backdating as flawed practices, and said current company management is working to eliminate the practice. While the company found no intentional misconduct by current management, it said some members of current management should have known that the backdating practice had accounting and legal ramifications.
The company said it would have to restate some of its earnings due to the issue, but did not give details.
American Tower is one of a number of companies caught up in a stock-options backdating scandal.
As for the company’s earnings, American Tower said it would not be able to report third-quarter results by the required Nov. 9 deadline, but would do so by the end of November. On a non-GAAP basis, the company reported that total revenue increased 26 percent to $333.5 million and rental and management revenue grew 25 percent to 326.4 million, of which $113.2 million was attributable to its purchase of SpectraSite.
American Tower’s stock remained relatively unchanged on the news at about $37.40 per share.
