ADT 1999 Annual Report Download - page 56

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The effects of applying SFAS 123 in this pro forma disclosure are
not indicative of what the effects may be in future years. SFAS 123
does not apply to awards prior to 1995 and additional awards in future
years are anticipated.
Stock Warrants
During 1999 the Company had outstanding warrants to purchase com-
mon stock at per share exercise prices of $1.49 (the “A Warrants”) and
$1.99 (the “B Warrants”), respectively (together, the “Warrants”). The
Warrants expired on July 7, 1999, at which time 6,960 A Warrants and
4,638 B Warrants remaining outstanding were forfeited. During Fiscal
1999, 175,464 A Warrants and 128,494 B Warrants were exercised.
During Fiscal 1998, 62,794 A Warrants and 29,078 B Warrants were
exercised. During Fiscal 1997, 73,064 A Warrants and 50,000 B War-
rants were exercised.
In July 1996, as part of an agreement to combine with Republic
Industries, Inc. (“Republic”), ADT granted to Republic a warrant (the
“Republic Warrant”) to acquire 28,879,800 common shares of the
Company at an exercise price of $10.39 per common share. Follow-
ing termination of the agreement to combine with Republic, the
Republic Warrant vested and was exercisable by Republic in the six
month period commencing September 27, 1996. In March 1997, the
Republic Warrant was exercised by Republic, and the Company
received $300 million in cash.
Treasury Shares
From time to time the Company, through its subsidiaries, purchases
shares in the open market to satisfy certain stock-based compen-
sation arrangements. Such treasury shares are recorded at cost in the
Consolidated Balance Sheets. During Fiscal 1998, certain executives
sold approximately 5.2 million common shares to the Company at the
shares’ then fair market value. The executives used the after-tax pro-
ceeds from this sale primarily to repay loans that the Company had
made to the executives for the payment of taxes that were due on the
vesting of grants to the executives of shares of restricted stock.
Dividends
Tyco has paid a quarterly cash dividend of $0.0125 per common share
since July 1997. Prior to the merger with ADT, Former Tyco paid a
quarterly cash dividend of $0.0125 in Fiscal 1997. ADT paid no divi-
dends on its common shares in Fiscal 1997. USSC paid quarterly div-
idends of $0.04 per share in Fiscal 1998 and Fiscal 1997. AMP paid
dividends of $0.27 per share in the first two quarters of Fiscal 1999,
$0.26 per share in the first quarter of Fiscal 1998, $0.27 per share in
the last three quarters of Fiscal 1998 and $0.26 per share in each of
the three quarters in Fiscal 1997.
11. Comprehensive Income
During the first quarter of Fiscal 1999, the Company adopted State-
ment of Financial Accounting Standards (“SFAS”) No. 130, “Reporting
Comprehensive Income.” SFAS No. 130 establishes standards for the
reporting and display of comprehensive income (loss) and its compo-
nents in financial statements. The purpose of reporting comprehen-
sive income (loss) is to report a measure of all changes in equity, other
than transactions with shareholders. Total comprehensive income
(loss) is included in the Consolidated Statements of Shareholders’
Equity, and the components of accumulated other comprehensive
income (loss) are as follows:
The following weighted average assumptions were used for Fiscal 1997:
Former
Tyco Tyco Inbrand USSC AMP
Expected stock price volatility 22% 22% 55% 34% 25%
Risk free interest rate 6.07% 6.34% 6.26% 6.45% 6.49%
Expected annual dividend yield per share $0.05 $0.05 — $0.11 1.25%
Expected life of options 5 years 5 years 6.4 years 3.8 years 6.5 years
Accumulated
Currency Unrealized Minimum Other
Translation Gain (Loss) Pension Comprehensive
(in millions) Items on Securities Liability Income (Loss)
Balance at December 31, 1996 $ 66.3 $ 8.9 $ (2.4) $ 72.8
Current period change, gross (230.3) 1.2 (17.0) (246.1)
Income tax benefit 26.9 0.7 8.8 36.4
Balance at September 30, 1997 (137.1) 10.8 (10.6) (136.9)
Current period change, gross (45.0) (21.5) (24.6) (91.1)
Income tax benefit 8.3 5.9 9.9 24.1
Balance at September 30, 1998 (173.8) (4.8) (25.3) (203.9)
Current period change, gross (277.8) 18.6 5.2 (254.0)
Income tax benefit (expense) 19.5 (6.0) (5.7) 7.8
Balance at September 30, 1999 $(432.1) $ 7.8 $(25.8) $(450.1)
Certain prior year amounts within shareholders’ equity have been reclassified as accumulated other comprehensive income (loss) to com-
ply with the reporting requirements of SFAS No. 130.