Tyco Says Restating Results Since 1998
Tyco Int’l Ltd. on June 16 said it will restate five-and-a- half years of financial results, citing talks with the U.S. Securities and Exchange Commission over its accounting.
The conglomerate, whose indicted former Chairman Dennis Kozlowski is accused of running an enterprise that stole more than $600 million from the company, said the restatement would push back previously reported charges (Kozlowski has pleaded not guilty).
The company said the restatement would reduce reported results for fiscal 1998 through fiscal 2001 and increase them for fiscal 2002 and the first half of fiscal 2003. Tyco’s fiscal years end in September.
The Pembroke, Bermuda-based company, which operates out of Exeter, New Hampshire, said the restatement relates to the SEC’s previously announced review of its filings. Tyco said it is in talks with the SEC over whether it should push back other charges it took in the quarter ended March 31, including $630 million related to its ADT security alarm unit.
Tyco said pre-tax charges subject to the restatement mainly include $434.5 million for the quarter ended March 31, 2003, and $261.6 million for the quarter ended Dec. 31, 2001.
“The restatement shouldn’t impact their future cash flow and earnings, which should be the main determinant of where their credit ratings will reside,” said George Meyers, a vice president and senior credit officer of Moody’s Investors Service, which assigns high “junk” grades to more than $23 billion of Tyco debt, according to Reuters.
Tyco’s restatement might help the many shareholders claiming Tyco misled them during Kozlowski’s reign. In a lawsuit filed this month, some investors claim Tyco inflated pre-tax profit by more than $6 billion between December 1999 and June 2002, when Kozlowski resigned as Tyco’s chairman and chief executive.
Tyco said no new charges will be required because of the restatement, which should not hurt operating results or cash flow for the rest of fiscal 2003, or in later years.
Since October, Tyco has disclosed $2 billion of accounting-related problems.
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