ADT 2001 Annual Report Download - page 58

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consisting primarily of manufacturing plants, distribution facil-
ities, sales offices, corporate administrative facilities and
research and development facilities. At September 30, 2001,
8,201 employees had been terminated and 172 facilities had
been closed or consolidated.
In connection with the purchase acquisitions consum-
mated during Fiscal 2001, liabilities for approximately
$151.5 million for severance and related costs, $330.9 million for
the shutdown and consolidation of acquired facilities and
$108.9 million in transaction and other direct costs remained on
the Consolidated Balance Sheet at September 30, 2001. The
Company expects that the termination of employees and con-
solidation of facilities related to all such acquisitions will be sub-
stantially complete within one year of plan finalization, except
for certain long-term contractual obligations.
During Fiscal 2001, the Company reduced its estimate of
purchase accounting liabilities recorded in prior years by
$68.9 million primarily because costs were less than originally
anticipated. Goodwill and related deferred tax assets were
reduced by an equivalent amount. In addition, the Company
finalized its business plans for the exiting of businesses and the
termination of employees in connection with the Fiscal 2000
acquisitions and integration of the electronic OEM business of
Thomas & Betts, AFC Cable Systems, Inc., Critchley Group PLC
and Siemens Electromechanical Components GmbH & Co. KG,
and as a result recorded $103.7 million of additional purchase
accounting liabilities. The Company has not yet finalized its
business integration plans for recent acquisitions and, accord-
ingly, purchase accounting liabilities are subject to revision in
future quarters. In addition, the Company is still in the process
of obtaining information to finalize estimates for the fair values
of certain assets acquired and liabilities assumed.
In October 2000, the Company sold its ADT Automotive
business to Manheim Auctions, Inc., a wholly-owned subsidiary
of Cox Enterprises, Inc., for approximately $1.0 billion in cash.
The Company recorded a net gain on the sale of businesses and
investments of $406.5 million, principally related to the sale of
ADT Automotive.
The following unaudited pro forma data summarize the
results of operations for the periods indicated as if the Fiscal
2001 acquisitions and divestitures had been completed as of the
beginning of the periods presented. The pro forma data give
effect to actual operating results prior to the acquisitions and
divestitures and adjustments to interest expense, goodwill
amortization and income taxes. No effect has been given to cost
reductions or operating synergies in this presentation. These pro
forma amounts do not purport to be indicative of the results that
would have actually been obtained if the acquisitions and
divestitures had occurred as of the beginning of the periods pre-
sented or that may be obtained in the future.
YEAR ENDED SEPTEMBER 30,
($ IN MILLIONS, EXCEPT PER SHARE DATA) 2001(1) 2000(2)
Total revenues $42,203.8 $43,003.9
Income before extraordinary items and
cumulative effect of accounting changes 4,740.1 4,640.8
Net income 3,987.7 4,600.4
Net income per common share:
Basic 2.10 2.42
Diluted 2.07 2.39
(1) Includes a net gain on sale of businesses and investments of $276.6 million and a net
gain on sale of common shares of a subsidiary of $64.1 million, partially offset by a decrease
of $241.1 million related to a change in revenue recognition policies to conform to SAB 101.
Income also includes net restructuring and other non-recurring and impairment charges of
$538.6 million.
(2) Includes a non-recurring gain of $1,760.0 million on the sale by a subsidiary of its
common shares. Income also includes net non-recurring and impairment charges of
$275.3 million.
On May 30, 2001, a subsidiary of the Company entered into
a definitive agreement to acquire C.R. Bard, Inc. (“Bard”), a
multinational developer, manufacturer and marketer of health-
care products used for vascular, urological and oncological diag-
nosis and intervention, as well as surgical specialties, in a
tax-free stock-for-stock merger, in exchange for approximately
58 million Tyco common shares. The transaction is valued at
approximately $3,200.0 million, including the assumption of net
debt of $72.9 million. The merger has been approved by Bard
shareholders but is still contingent on regulatory clearance
under United States anti-trust laws. If consummated, Bard
would be integrated within the Company’s Healthcare and Spe-
cialty Products segment and the transaction will be accounted
for as a purchase.
FISCAL 2000
During Fiscal 2000, the Company purchased businesses for an
aggregate cost of $4,917.9 million, consisting of $4,246.5 million
in cash, net of cash acquired, and the issuance of approximately
15.6 million common shares valued at $671.4 million. In addi-
tion, $544.2 million of cash was paid during Fiscal 2000 for pur-
chase accounting liabilities related to 2000 and prior years’
acquisitions. The cash portions of the acquisition costs were
funded utilizing cash on hand, the issuance of long-term debt
and borrowings under the Company’s commercial paper pro-
gram. Debt of acquired companies aggregated $244.1 million.
Each of these acquisitions was accounted for as a purchase, and
the results of operations of the acquired companies have been
included in the consolidated results of the Company from their
respective acquisition dates. As a result of acquisitions com-
pleted in Fiscal 2000, and adjustments to the fair values of assets
and liabilities and purchase accounting liabilities recorded for
acquisitions completed prior to Fiscal 2000, the Company
recorded approximately $5,206.8 million in goodwill and other
intangible assets.
In connection with these acquisitions, the Company
recorded purchase accounting liabilities of $426.2 million for
transaction costs and the costs of integrating the acquired