UnitedHealth Group Inc. says the cost of correcting accounting for past stock compensation programs may be much higher than it originally had predicted.
UnitedHealth, Minnetonka, Minn., a large managed care company, has been reviewing the results of a compensation program study commissioned by its board.
“Although the company is not yet able to determine the final amount of the non-cash compensation charges and additional cash charges resulting from potential tax liabilities, the company anticipates that it will be significantly greater than the estimate contained in its Form 10-Q for the quarter ended March 31, 2006,” UnitedHealth says in announcement released today.
Back in March, UnitedHealth suggested that it might have to take a charge of about $286 million.
“The company has concluded that, due solely to the stock option matter, its financial statements and similar communications for the years ended 1994 to 2005 and the interim quarters through Sept. 30, 2006, should no longer be relied upon, and the company will delay filing its Form 10-Q for third quarter 2006,” UnitedHealth says.
In addition, UnitedHealth has “substantially remediated a material weakness in its internal controls relating to stock option plan administration that it has now concluded existed as of Dec. 31, 2005,” the company says.