This excerpt taken from the UNH 8-K filed Mar 6, 2007.
Summary of the Restatement
The financial restatement filed today on Form 10-K covers all years through December 31, 2005, and principally reflects additional stock-based compensation expense and the related tax effects associated with the Companys historic stock options practices under both FAS 123R, the Companys current accounting method, and APB 25, the Companys historical accounting method.
The financial statements presented in the Form 10-K include an estimate of the cash payments required for additional corporate income taxes due for historic periods of approximately $100 million. UnitedHealth Group also expects to record a non-recurring after-tax cash charge of $55 million ($90 million pre-tax), or 4 cents per share, in the first quarter of 2007 for the settlement of I.R.S. Code section 409A surtax liabilities on behalf of non-officer employees who exercised certain options in 2006.
The cumulative pre-tax effect of errors in stock-based compensation accounting was $502 million under FAS 123R for the 12-year period ended December 31, 2005, consistent with the Companys December 2006 estimate of $400 million to $600 million. The cumulative pre-tax effect of these errors was $1.526 billion under APB 25 for all prior years, consistent with the December 2006 estimate of $1.5 billion to $1.7 billion. The following tables summarize the net after-tax earnings impact of all errors under both methods of accounting.
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