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Non-Tech : Tyco International Limited (TYC) -- Ignore unavailable to you. Want to Upgrade?

To: Marvin Mansky who wrote (1200)	1/3/2000 8:22:00 AM
From: JDN	Read Replies (2) \| Respond to of 3770

Dear Marvin: I have never heard that TYC was inflating revenues. What I have heard was that once an acquisition was spotted but before it is completed, they were having the acquiree review all assets carefully and either write off or provide reserves for any that were not considered rock solid. Then once the acquisition was completed the reserve might be adjusted yielding a negative expense. Or in the alternative, since so much was written down it reduced the NONCASH expenses of the merged group. Personally, I think its all a bunch of hogwash. First, because it is VERY NORMAL for the acquiree to give a tighter look at its carrying value of assets prior to merger and second because in the big scheme of things this is not a significant item. I only post this as you made a comment about cash flow, and none of above would have any effect on cash flow good or bad. JDN

To: Marvin Mansky who wrote (1200)	1/3/2000 9:00:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 3770

Marvin, Finally, if they were inflating revenues, why has cash flow been consistently at these levels? Cash flow has nothing to do with revenues. That's why it's a good idea to pay closer attention to cash flow statements than to income statements. Howard Schillit wrote a fairly elementary book that covers this subject: Financial Shenanigans. Definitely worth reading. The only cause for concern is the sale for a "profit" of undervalued assets. This is possible under pooling because assets acquired continue to be carried on the books at their historic cost basis. I'm not suggesting that this has happened, nor am I suggesting that even if it occurred, such accounting is improper. I'm just pointing out that it's something to watch for if Dennis K. sells some companies (which I believe he said he would do). TTFN, CTC