ADT 2002 Annual Report Download - page 101

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
14. Sale of Accounts Receivable (continued)
Also on September 27, 2001, Tyco sold certain accounts receivable to Tyco Capital for net proceeds
of approximately $297.8 million, which is net of a discount of $4.3 million. This sale was eliminated as
an intercompany transaction in Tyco’s Consolidated Financial Statements.
15. Investments
At September 30, 2002 and 2001, Tyco had available-for-sale equity investments with a fair market
value of $24.6 million and $48.8 million and a cost basis of $32.4 million and $152.1 million,
respectively. The gross unrealized losses of $8.2 million and $103.5 million and gross unrealized gains
of $0.4 million and $0.2 million at September 30, 2002 and 2001 have been recorded net of a deferred
tax asset of $2.5 million and $24.2 million at September 2002 and September 2001, respectively. These
amounts have been included as a separate component of shareholders’ equity. See Note 8 for
discussion of realized losses on equity investments. At September 30, 2002, Tyco also had held-to-
maturity investments in other current assets of $93.5 million. Amortized costs approximated fair value.
16. Goodwill and Intangible Assets
Effective October 1, 2001, the beginning of Tyco’s fiscal year 2002, the Company adopted SFAS
No. 142, ‘‘Goodwill and Other Intangible Assets,’’ under which goodwill is no longer amortized but
instead is assessed for impairment at least annually. Goodwill, net was $26,020.5 million and
$23,408.5 million at September 30, 2002 and 2001, respectively. Accumulated amortization amounted to
$1,562.1 million at both September 30, 2002 and 2001. The changes in the carrying amount of goodwill
for fiscal 2002, including a reclassification from intangibles to goodwill upon the adoption of SFAS 142,
are as follows ($ in millions):
Fire and Engineered
Security Products and Plastics and
Services Electronics Healthcare Services Adhesives Total Tyco
Balance at September 30, 2001,
as restated .............. $5,914.3 $ 7,739.6 $6,088.3 $2,924.5 $ 699.1 $23,365.8
Reclassification of intangible
assets .................. — — 42.7 — — 42.7
Balance at September 30, 2001
after reclassification, as
restated ................ 5,914.3 7,739.6 6,131.0 2,924.5 699.1 23,408.5
Goodwill related to acquisitions 2,002.2 1,090.4 471.0 253.2 10.1 3,826.9
Goodwill written-off related to
divestitures .............. (0.3) — (55.4) — — (55.7)
Goodwill impairment ........ — (1,024.5) — (319.2) — (1,343.7)
Currency translation
adjustments ............. 87.5 35.4 2.5 55.6 3.5 184.5
Balance at September 30, 2002,
as restated .............. $8,003.7 $ 7,840.9 $6,549.1 $2,914.1 $ 712.7 $26,020.5
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