ADT 2002 Annual Report Download - page 84

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
5. Restructuring and Other Charges (Credits), Net (continued)
other charges (excluding impairments of long-lived assets which are discussed in Note 6) related to the
Plastics and Adhesives segment recorded in fiscal 2002 ($ in millions):
Severance Facilities-Related
Number of Number of
Employees Amount Facilities Amount Inventory Other Total
Fiscal 2002 charges ........... 317 $ 4.2 5 $ 3.0 $1.1 $ 1.8 $10.1
Fiscal 2002 utilization ......... (43) (0.2) (1) (0.1) (1.1) (1.8) (3.2)
Ending balance at September 30,
2002 .................... 274 $ 4.0 4 $ 2.9 $ — $ — $ 6.9
The cost of announced workforce reductions of $4.2 million includes the elimination of 317
positions primarily in the United States consisting primarily of manufacturing and sales personnel. The
cost of facility closures of $3.0 million consists of the shutdown of 5 manufacturing and administrative
facilities primarily in the United States. At September 30, 2002, 43 employees had been terminated and
1 facility had been shut down.
In addition to segment charges, the Company recorded net charges of $169.6 million consisting of
$78.6 million for severance and $15.0 million for contract terminations, legal fees and other items
associated with the downsizing of the corporate headquarters and $76.0 million for the write-off of
investment banking fees and other deal costs associated with the terminated break-up plan and certain
acquisitions that were not completed. At September 30, 2002, $49.0 million remained in accrued
expenses and other current liabilities on the Consolidated Balance Sheet.
2001 Charges and Credits
In fiscal 2001, the Fire and Security Services segment recorded a net restructuring and other
charge of $84.1 million. The $84.1 million net charge consists of charges of $85.7 million, of which
charges of $5.4 million are included in cost of sales, 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, partially offset by a credit of $1.6 million representing a revision of estimates
of prior years’ merger, restructuring and other charges. The following table provides information about
the restructuring and other charges (excluding impairments of long-lived assets, which are discussed in
Note 6) related to the Fire and Security Services segment recorded in fiscal 2001 ($ in millions):
Severance Facilities-Related
Number of Number of
Employees Amount Facilities Amount Inventory Other Total
Fiscal 2001 charges .......... 972 $13.0 176 $ 47.6 $ 5.4 $19.7 $ 85.7
Fiscal 2001 utilization ........ (411) (4.8) (53) (1.2) (5.4) (3.3) (14.7)
Ending balance at September 30,
2001 ................... 561 8.2 123 46.4 — 16.4 71.0
Fiscal 2002 reversals ......... (118) (0.3) — (13.9) — — (14.2)
Fiscal 2002 utilization ........ (232) (5.6) (100) (8.1) — (8.0) (21.7)
Ending balance at September 30,
2002 ................... 211 $ 2.3 23 $24.4 $ — $ 8.4 $ 35.1
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