What is the primary reason for the significant increase in Tyco's total assets and long-term debt between fiscal years 2000 and 2001?

The substantial increase in total assets and long-term debt is primarily due to Tyco's aggressive acquisition strategy during this period. The filing references several significant mergers and acquisitions, including those with AMP Incorporated and United States Surgical Corporation, as well as the proposed acquisition of Sensormatic Electronics Corporation and The CIT Group, Inc. These acquisitions were financed through a combination of equity and significant debt issuance, leading to the observed growth in the balance sheet.

How did the change in revenue recognition policy affect the company's financial statements in fiscal year 2001?

In fiscal year 2001, Tyco changed its revenue recognition accounting policy to comply with SEC Staff Accounting Bulletin No. 101. This change resulted in a cumulative effect adjustment of $653.7 million, net of tax, impacting the company's net income for that year. This adjustment reflects a restatement for prior periods, though pro forma amounts for periods prior to fiscal 2001 were not presented as the effect could not be reasonably determined.

What were the major non-recurring charges impacting the company's income from continuing operations in fiscal years 2000 and 2001?

In fiscal year 2001, income from continuing operations was impacted by a net charge of $418.5 million for restructuring and other unusual charges, $184.3 million for the write-off of in-process R&D, and $120.1 million for the impairment of long-lived assets. In fiscal year 2000, charges included $176.3 million for restructuring and other unusual charges and $99.0 million for the impairment of long-lived assets. These charges are in addition to significant gains from the sale of businesses and subsidiaries reported in both years.

What does the mention of 'pooling of interests method of accounting' mean for the presented financial data?

The mention of the 'pooling of interests method of accounting' indicates that the selected financial data presented reflects the combined results of operations and financial position of Tyco and its significant acquired companies (AMP Incorporated, United States Surgical Corporation, Former Tyco, Keystone International, Inc., and Inbrand Corporation) as if they had always been merged. This method is applied retroactively to all periods presented, meaning the historical financial statements have been restated to reflect these combinations, providing a more consistent view of the combined entity's performance over time.

JCI 10-K FY2001 Annual Report — Revenue, Net Income, EPS

01—Abstract

Summary

Summary of the 10-K/A filed December 31, 2002. Cited figures are marked; the original filing is the authoritative source.

This filing from Johnson Controls International plc (JCI), filed on December 30, 2002, pertains to the fiscal year ending September 29, 2001.

Notably, the filing contains selected financial data for the company previously known as Tyco, indicating a significant period of integration and restructuring following multiple mergers, including AMP Incorporated and United States Surgical Corporation. For the fiscal year 2001, Tyco reported total revenues of $36,388.5 million^a and income from continuing operations of $4,671.1 million, translating to diluted earnings per share of $2.17. The company experienced a significant cumulative effect of accounting changes, primarily related to revenue recognition and SFAS No. 133, resulting in a net charge of $683.4 million in fiscal 2001.

Investors should note the substantial year-over-year growth in total assets, escalating from $40,404.3 million in 2000 to $111,287.3 million^b in 2001, driven by significant acquisitions. This expansion is mirrored by a substantial increase in long-term debt, which grew from $9,461.8 million in 2000 to $38,243.1 million in 2001, reflecting the financing of its aggressive growth strategy.

The company also reported significant charges related to restructuring, impairments, and integration costs across various periods, particularly in fiscal years 1999, 2000, and 2001, which impacted reported income from continuing operations. The filing also lists numerous significant merger and acquisition agreements as exhibits, underscoring the company's acquisitive nature during this period.

02—Key points

Key Highlights

Total revenues for the fiscal year ending September 29, 2001, reached $36,388.5 million, demonstrating significant top-line growth.
Income from continuing operations for fiscal 2001 was $4,671.1 million, with diluted earnings per share of $2.17.
The company underwent a major change in accounting policy for revenue recognition, resulting in a cumulative effect adjustment of $683.4 million (net of tax) in fiscal 2001.
Total assets dramatically increased from $40,404.3 million in fiscal 2000 to $111,287.3 million in fiscal 2001, indicating substantial acquisitions and expansion.
Long-term debt significantly increased from $9,461.8 million in fiscal 2000 to $38,243.1 million in fiscal 2001, supporting the company's growth initiatives.
Fiscal years 1999, 2000, and 2001 included substantial charges for restructuring, mergers, impairments, and other unusual items, impacting net income.
The filing lists numerous merger and acquisition agreements as exhibits, highlighting a period of aggressive M&A activity for the company.

03—Questions

Frequently Asked Questions

What is the primary reason for the significant increase in Tyco's total assets and long-term debt between fiscal years 2000 and 2001?
The substantial increase in total assets and long-term debt is primarily due to Tyco's aggressive acquisition strategy during this period. The filing references several significant mergers and acquisitions, including those with AMP Incorporated and United States Surgical Corporation, as well as the proposed acquisition of Sensormatic Electronics Corporation and The CIT Group, Inc. These acquisitions were financed through a combination of equity and significant debt issuance, leading to the observed growth in the balance sheet.
How did the change in revenue recognition policy affect the company's financial statements in fiscal year 2001?
In fiscal year 2001, Tyco changed its revenue recognition accounting policy to comply with SEC Staff Accounting Bulletin No. 101. This change resulted in a cumulative effect adjustment of $653.7 million, net of tax, impacting the company's net income for that year. This adjustment reflects a restatement for prior periods, though pro forma amounts for periods prior to fiscal 2001 were not presented as the effect could not be reasonably determined.
What were the major non-recurring charges impacting the company's income from continuing operations in fiscal years 2000 and 2001?
In fiscal year 2001, income from continuing operations was impacted by a net charge of $418.5 million for restructuring and other unusual charges, $184.3 million for the write-off of in-process R&D, and $120.1 million for the impairment of long-lived assets. In fiscal year 2000, charges included $176.3 million for restructuring and other unusual charges and $99.0 million for the impairment of long-lived assets. These charges are in addition to significant gains from the sale of businesses and subsidiaries reported in both years.
What does the mention of 'pooling of interests method of accounting' mean for the presented financial data?
The mention of the 'pooling of interests method of accounting' indicates that the selected financial data presented reflects the combined results of operations and financial position of Tyco and its significant acquired companies (AMP Incorporated, United States Surgical Corporation, Former Tyco, Keystone International, Inc., and Inbrand Corporation) as if they had always been merged. This method is applied retroactively to all periods presented, meaning the historical financial statements have been restated to reflect these combinations, providing a more consistent view of the combined entity's performance over time.

04—Continue

← View all 10-K filings