Provident Financial Group
, whose shares plummeted in early March after it restated results to reflect accounting mistakes, said a review of that restatement uncovered more errors.
Provident said the way it insures auto leases requires that they be classified as operating leases on its balance sheet -- not direct finance leases -- and as such be treated as equipment leases and not loans for accounting purposes. The reclassification affects leases originated over the last eight years totaling $4.7 billion.
The after-tax restatement amount is $44.4 million for the years 1994 through 2002, which is in addition to the restatements from March 5, 2003. As a result, the company's earnings for the year ended December 31, 2002 were $95.5 million or $1.88 per share, compared with a loss of $1.0 million or 4 cents per share for the year ended Dec. 31, 2001.
Provident also said income to be recognized under its leases in future years will be increased by an amount that is nearly the same as the amount now being restated. It estimated the incremental positive impact of the new restatement will be about 10 cents a share, or $5 million, in 2003, 25 cents a share, or $13 million, in 2004, 20 cents a share, or $10 million, in 2005, and 12 cents a share, or $6 million, in 2006. The remaining benefit will be recognized in years 2007 through 2009.
The company left intact its earnings per share guidance range of $2.30 to $2.50 for the full-year 2003.