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68
2001 CHARGES
During Fiscal 2001, the Electronics, Healthcare and Specialty
Products and Fire and Security Services segments recorded
charges of $98.6 million, $15.4 million and $6.1 million, respec-
tively, related primarily to the impairment of property, plant and
equipment associated with the closure of facilities.
2000 CHARGES
The Healthcare and Specialty Products segment recorded a
charge of $99.0 million in Fiscal 2000 primarily related to an
impairment in goodwill and other intangible assets associated
with the Company exiting the interventional cardiology busi-
ness of U.S. Surgical.
1999 CHARGES
The Electronics segment recorded a charge of $431.5 million in
Fiscal 1999, which includes $350.1 million related to the write-
down of property, plant and equipment, primarily manufactur-
ing and administrative facilities, associated with facility
closures throughout AMP’s worldwide operations in connection
with its profit improvement plan and the combination of facili-
ties as a result of its merger with the Company, approximately
$143.6 million of which was taken as part of the AMP profit
improvement plan prior to its acquisition by the Company. It
also includes an impairment in the value of goodwill and other
intangible assets of $81.4 million. The Company evaluated the
profitability and products and found that certain product lines
were underperforming relative to expectations. As a result of
this analysis, which was performed in connection with AMP’s
profit improvement plan, the book value of goodwill and other
intangible assets was deemed impaired and written down to
fair value.
The Healthcare and Specialty Products segment recorded a
charge of $76.0 million in Fiscal 1999 relating primarily to the
write-down of property, plant and equipment, principally
administrative facilities, associated with the consolidation of
facilities in U.S. Surgical’s operations in the United States and
Europe as a result of its merger with the Company.
17. EXTRAORDINARY ITEMS
Tyco Industrial recorded an extraordinary item of $17.1 million,
net of tax benefit of $9.2 million, in Fiscal 2001 relating to the
early extinguishment of debt. The extraordinary item in Fiscal
2000 of $0.2 million, net of tax benefit of $0.1 million, and the
extraordinary item in Fiscal 1999 of $45.7 million, net of tax
benefit of $18.0 million, related primarily to the write-off of
unamortized deferred financing costs related to the early
extinguishment of debt.
18. CUMULATIVE EFFECT OF ACCOUNTING CHANGES
In December 1999, the SEC issued SAB 101, in which the SEC
Staff expressed its views regarding the appropriate recognition
of revenue with respect to a variety of circumstances, some of
which are relevant to the Company. As required under SAB 101,
the Company modified its revenue recognition policies with
respect to the installation of electronic security systems (see
“Revenue Recognition” within Note 1). In addition, in response to
SAB 101, the Company undertook a review of its revenue recog-
nition practices and identified certain provisions included in a
limited number of sales arrangements that delayed the recogni-
tion of revenue under SAB 101. During the fourth quarter of Fis-
cal 2001, the Company changed its method of accounting for
these items retroactive to the beginning of the fiscal year to con-
form to the requirements of SAB 101. This was reported as a
$653.7 million after-tax ($1,005.6 million pre-tax) charge for the
cumulative effect of change in accounting principle in the Fiscal
2001 Consolidated Statement of Operations.
The impact of SAB 101 on total revenues in Fiscal 2001 was
a net decrease of $241.1 million, reflecting the deferral of
$520.5 million of Fiscal 2001 revenues, partially offset by the
recognition of $279.4 million of revenue that is included in the
cumulative effect adjustment as of the beginning of the fiscal
year. The Company restated each of the first three quarters of
Fiscal 2001 in the Consolidated Statement of Operations to
reflect the adoption of SAB 101 (see Note 29). Pro forma
amounts for the periods prior to Fiscal 2001 have not been pre-
sented since the effect of the change in accounting principle for
these periods could not be reasonably determined.
The Company recorded a cumulative effect adjustment, a
$29.7 million loss, net of tax, in Fiscal 2001 in accordance with
the transition provisions of SFAS No. 133 (see Note 1).