ADT 2000 Annual Report Download - page 57

FIFTY FIVE
2000 CHARGES AND CREDITS
The Electronics segment recorded a net merger, restructuring and
other non-recurring credit of $90.9 million, which consists of cred-
its of $107.8 million and charges of $16.9 million. The merger,
restructuring and other non-recurring credit of $107.8 million, of
which $6.3 million is included in cost of sales, is related to the
merger with AMP and costs associated with AMP’s profit improve-
ment plan. The $107.8 million credit consists of a revision in esti-
mates of severance reserves of $55.2 million, facility reserves of
$7.8 million and other reserves of $44.8 million. See the table
included in 1999 CHARGES AND CREDITS related to the Electronics
segment for Fiscal 2000 revision in estimates related to Fiscal 1999
charges. The restructuring and other non-recurring charges of $16.9
million, of which $0.9 million is included in cost of sales, is related
to restructuring activities in AMP’s Brazilian operations and wireless
communications business. The following table provides information
about the restructuring and other non-recurring charges related to
the Electronics segment recorded in Fiscal 2000:
SEVERANCE FACILITI ES OTHER
NUMBER OF NU M BER OF
($ IN M I LLIONS) EMPLOYEES RESERVE FACILITIES RESERVE RESERVE TOTAL
Fiscal 2000 charges 941 $4.9 3 $ 4.8 $ 7.2 $16.9
Fiscal 2000 utilization (97) — (3) (1.7) (5.1) (6.8)
Ending balance at September 30, 2000 844 $4.9 — $ 3.1 $ 2.1 $10.1
in 1999 CHARGES AND CREDITS related to the Healthcare and
Specialty Products segment for Fiscal 2000 revision in estimates
related to Fiscal 1999 charges.
The Fire and Security Services segment recorded restructuring
and other non-recurring credits of $11.2 million related to revision
in estimates of the Company’s 1997 restructuring activities for
amounts lower than originally recorded. Actions under the Com-
pany’s 1997 restructuring plans have been substantially completed.
The Telecommunications segment recorded a non-recurring
charge of $13.1 million incurred in connection with the TyCom IPO.
In addition to segment (credits) charges, the Company
recorded non-recurring charges of $275.0 million as a reserve for
certain claims relating to a merged company in the Healthcare busi-
ness and $1.2 million for other non-recurring charges, all of which
remains in other current liabilities in the Consolidated Balance
Sheet at September 30, 2000.
1999 CHARGES AND CREDITS
The Electronics segment recorded net merger, restructuring and
other non-recurring charges of $643.3 million primarily related to the
merger with AMP and costs associated with AMP’s profit improve-
ment plan. The following table provides information about these
charges, in addition to revision in estimates of Fiscal 1999 charges:
The cost of announced workforce reductions of $4.9 million
includes the elimination of 941 positions primarily in Brazil. The
cost of facility closures of $4.8 million consists of the shut-down and
consolidation of 3 facilities. At September 30, 2000, 97 employees
had been terminated and 3 facilities had been shut down. The
remaining facility reserves are primarily for payments on non-can-
cellable lease obligations.
The other charges of $7.2 million consist of the write-off of non-
facility assets and other direct costs.
The Healthcare and Specialty Products segment recorded a net
merger, restructuring and other non-recurring credit of $10.9 mil-
lion. The $10.9 million net credit consists of charges of $11.1 million
related to USSC’s suture business and charges of $7.9 million, of
which $6.4 million is included in cost of sales, related to exiting
USSC’s interventional cardiology business. Substantially all of these
restructuring activities were completed during the year. Also
recorded was a credit of $29.9 million representing a revision in esti-
mates of prior years’ merger, restructuring and other non-recurring
accruals, of which $19.7 million related primarily to the merger with
USSC and $10.2 million related to the Company’s 1997 restructur-
ing accruals. The $19.7 million credit relates to a revision in esti-
mates of severance reserves of $4.2 million, facility reserves of $4.5
million and other reserves of $11.0 million. See the table included
SEVERANCE FACILITI ES OTHER
NUMBER OF NU M BER OF
($ IN M I LLIONS) EMPLOYEES RESERVE FACILITIES RESERVE RESERVE TOTAL
Fiscal 1999 charges 16,139 $ 433.7 87 $ 68.6 $141.0 $ 643.3
Fiscal 1999 utilization (8,410) (359.2) (45) (15.4) (16.8) (391.4)
Fiscal 2000 revision in estimates (5,375) (55.2) (14) (7.8) (44.8) (107.8)
Fiscal 2000 utilization (1,662) (7.9) (17) (14.0) (76.7) (98.6)
Ending balance at September 30, 2000 692 $ 11.4 11 $ 31.4 $ 2.7 $ 45.5