Tyco International Ltd. said today that it has recorded pre-tax charges of $382 million in its fiscal 2002 results. This reflects audit adjustments for the 2002 fiscal year as well as corrections of errors in prior years.
charges, $186 million is attributable to the recent modification the company
made to the connection fee recognized for the ADT dealer program at the time a
customer's system is installed. This amount covers the impact during the
fiscal years 1999-2001. As a result of the pre-tax charges, the company's net
loss after taxes for fiscal 2002 increased to $9.4 billion from the $9.1
billion reported on October 24th.
The announcement came as Tyco
filed its annual report on Form 10-K reporting on its financial results for
the fiscal year 2002, which ended on September 30.
The report includes an
unqualified audit opinion from PricewaterhouseCoopers LLP, the company's
independent auditors. The company also filed a Form 8-K report with the
Securities and Exchange Commission regarding the previously announced review
and analysis of the company's accounting and governance practices and
The recent review
included an examination of 15 mergers and acquisitions with an aggregate
purchase price of $30.1 billion excluding debt assumed in connection with
purchase accounting transactions.
In summary, it was concluded that:
1) There was no significant or systemic fraud affecting the company's
prior financial statements;
2) There were a number of accounting entries and treatments that were
incorrect and were required to be corrected;
3) The incorrect accounting entries and treatments are not individually or
in the aggregate material to the overall financial statements of the
4) The company's prior management engaged in a pattern of aggressive
accounting which, even when in accordance with Generally Accepted
Accounting Principles, was intended to increase reported earnings above
what they would have been if more conservative accounting had been
5) Reversal or restatement of prior accounting entries and treatments
resulting from prior management's aggressive accounting would not
adversely affect the company's reported cash flow for 2003 and
thereafter or materially adversely affect the company's reported
revenue and earnings for 2003 and thereafter.