ADT 2002 Annual Report Download - page 72

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
2. Acquisitions and Divestitures (continued)
the elimination of an additional 8,570 employees, the closure of an additional 493 facilities, additional
distributor and supplier cancellation fees and other acquisition related costs consisting primarily of
professional fees and other costs.
During fiscal 2002, the Company reduced its estimate of purchase accounting liabilities relating to
fiscal 2001 acquisitions by $130.9 million primarily because actual costs were less than originally
estimated since the Company severed 1,383 fewer employees and closed 242 fewer facilities than
originally anticipated due to revisions to integration plans. Goodwill and related deferred tax assets
were reduced by an equivalent amount.
Also during the year ended September 30, 2002, we reclassified certain fair value adjustments
related to the write-down of assets for fiscal 2001 acquisitions out of purchase accounting accruals and
into the appropriate asset or liability account. In addition, we reclassified certain amounts in the
preceding table related to fiscal 2001 acquisitions to separately classify distributor and supplier
cancellation fees and to correct the categorization of other accruals. These reclassifications had no
effect on the amount of goodwill that was recorded.
In connection with the purchase acquisitions consummated during fiscal 2001, liabilities for
approximately $129.7 million for severance and related costs, $207.5 million for the shutdown and
consolidation of acquired facilities, $28.7 million for distributor and supplier contractual cancellation
fees and $29.1 million in transaction and other direct costs remained on the Consolidated Balance
Sheet at September 30, 2002. The Company expects that the termination of employees and
consolidation of facilities related to all such acquisitions will be substantially complete within one year
of plan finalization, except for long-term non-cancellable lease obligations and certain long-term
severance arrangements.
In fiscal 2001, 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 of $410.4 million principally related to the sale of ADT
Automotive, which is recorded as other income in the Consolidated Statement of Operations.
The following unaudited pro forma data summarize the results of operations for the periods
indicated as if the fiscal 2001 and 2000 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, and
amounts have been revised to reflect the disposition of CIT as discontinued operations (see Note 11).
These pro forma amounts do not purport to be indicative of the results that would have actually been
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