ADT 2002 Annual Report Download - page 86

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
5. Restructuring and Other Charges (Credits), Net (continued)
$40.0 million are included in cost of sales, related primarily to the sale of inventory, which had been
written up under purchase accounting, and the closure of manufacturing plants, partially offset by a
credit of $15.6 million representing a revision in estimates of prior years’ merger, restructuring and
other charges related primarily to the merger with U.S. Surgical. The following table provides
information about the restructuring and other charges (excluding impairments of long-lived assets,
which are discussed in Note 6) related to the Healthcare segment recorded in fiscal 2001 ($ in
millions):
Severance Facilities-Related
Number of Number of
Employees Amount Facilities Amount Inventory Other Total
Fiscal 2001 charges .......... 778 $16.6 2 $ 1.3 $ 40.0 $ 6.1 $ 64.0
Fiscal 2001 utilization ........ (444) (9.2) (2) (0.6) (40.0) (1.2) (51.0)
Ending balance at September 30,
2001 ................... 334 7.4 — 0.7 — 4.9 13.0
Fiscal 2002 reversals ......... (23) (0.5) — (0.1) — (0.1) (0.7)
Fiscal 2002 utilization ........ (311) (6.4) — (0.4) — (4.8) (11.6)
Ending balance at September 30,
2002 ................... — $ 0.5 — $0.2 $ — $ — $ 0.7
The cost of announced workforce reductions of $16.6 million includes the elimination of 778
positions primarily in the United States consisting primarily of manufacturing and sales personnel. The
cost of facility closures of $1.3 million consists of the shutdown of 2 manufacturing and administrative
facilities in the United States. At September 30, 2002, all employees had been terminated and all
facilities had been shut down.
The inventory charges of $40.0 million include a charge of $35.0 million related to the sale of
inventory, which had been written-up under purchase accounting. The other charges of $6.1 million
consist primarily of the cost for lease buyouts and distributor termination fees.
In fiscal 2001, the Engineered Products and Services segment recorded restructuring and other
charges of $57.3 million, of which $9.7 million are included in cost of sales, primarily related to a
restructuring of the valves and controls business. The following table provides information about the
restructuring and other charges (excluding impairments of long-lived assets which are discussed in
84