ADT 2001 Annual Report Download - page 72

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70
The cost of announced workforce reductions of $26.0 million includes the elimination of 1,864 positions primarily in the United
States and Europe consisting primarily of manufacturing, general and administrative and sales and marketing personnel. The cost
of facility closures of $62.9 million consists of the shut-down of 196 facilities in the United States, Europe and Canada consisting
primarily of sales offices and manufacturing plants. At September 30, 2001, 862 employees had been terminated and 69 facilities
had been shut down.
2001 CHARGES AND CREDITS
The Electronics segment recorded restructuring and other non-recurring charges of $334.7 million, of which charges of $74.6 million
are included in cost of revenue, related primarily to facility closures within the computer and consumer electronics and communica-
tions industries. The following table provides information about the restructuring and other non-recurring charges related to the Elec-
tronics segment recorded in Fiscal 2001:
SEVERANCE FACILITIES-RELATED OTHER
NUMBER OF NUMBER OF
($ IN MILLIONS) EMPLOYEES RESERVE FACILITIES RESERVE RESERVE TOTAL
Fiscal 2001 charges 10,453 $178.2 42 $120.0 $ 36.5 $ 334.7
Fiscal 2001 utilization (6,096) (71.4) (14) (85.4) (17.5) (174.3)
Ending balance at September 30, 2001 4,357 $106.8 28 $ 34.6 $ 19.0 $ 160.4
The cost of announced workforce reductions of $178.2 million includes the elimination of 10,453 positions primarily in the
United States and Latin America consisting primarily of manufacturing personnel. Facilities-related costs include the shut-down
of 42 facilities primarily in the United States consisting primarily of manufacturing plants and the write-down of the related inven-
tory. At September 30, 2001, 6,096 employees had been terminated and 14 facilities had been shut down.
The other charges of $36.5 million consist primarily of vendor commitment cancellations and payments on non-cancelable
machinery and equipment leases. In addition to the charges above, the Electronics segment recorded a non-recurring charge
of $51.7 million related to the sale of inventory which had been written-up under purchase accounting. The $51.7 million non-
recurring charge has been included in cost of revenue.
The Fire and Security Services segment recorded restructuring and other non-recurring charges of $138.8 million, of which
charges of $14.6 million are included in cost of revenue, related primarily to the restructuring of the existing U.S. security business
and U.S. fire protection business in connection with the acquisitions of SecurityLink and Simplex and, to a lesser extent, a restruc-
turing of the valves and controls business. The following table provides information about the restructuring and other non-
recurring charges related to the Fire and Security Services segment recorded in Fiscal 2001:
SEVERANCE FACILITIES-RELATED OTHER
NUMBER OF NUMBER OF
($ IN MILLIONS) EMPLOYEES RESERVE FACILITIES RESERVE RESERVE TOTAL
Fiscal 2001 charges 1,864 $26.0 196 $ 62.9 $49.9 $138.8
Fiscal 2001 utilization (862) (9.3) (69) (16.1) (5.7) (31.1)
Ending balance at September 30, 2001 1,002 $16.7 127 $ 46.8 $44.2 $107.7