ADT 2002 Annual Report Download - page 93

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
9. TyCom Ltd. (continued)
employees, which was included on the restructuring and other charges (credits), net line in the
Consolidated Statement of Operations.
During fiscal 2001, the Company recorded a $24.5 million net gain on the sale of approximately
5.6 million common shares of TyCom. This gain is net of direct and incremental costs of the
transaction, as well as $15.0 million of special, bonuses paid to key employees.
On December 18, 2001, the Company completed its amalgamation with TyCom and each of the
approximately 56 million TyCom common shares not owned by Tyco were converted into the right to
receive 0.3133 of a Tyco common share. Upon completion of the amalgamation, TyCom became a
wholly-owned subsidiary of Tyco, and each outstanding option to purchase TyCom common shares is
exercisable for Tyco common shares, with the number of Tyco shares equal to the number of TyCom
common shares issuable upon exercise immediately prior to the consummation multiplied by the
exchange ratio of 0.3133. The per share exercise price for the Tyco common shares issuable upon the
exercise of TyCom options equals the exercise price per TyCom common share, at the price such
options were exercisable prior to the amalgamation, divided by the exchange ratio. In addition, each
outstanding TyCom restricted share was converted into a restricted Tyco common share based on the
exchange ratio. The options and restricted shares are subject to the same terms and conditions that
were applicable immediately prior to the amalgamation.
10. Income Taxes
The provision for income taxes and the reconciliation between the notional United States federal
income taxes at the statutory rate on consolidated income before taxes and the Company’s income tax
provision are as follows ($ in millions), as restated for the adjustments discussed in Note 1:
Year Ended September 30,
2002 2001 2000
(restated) (restated) (restated)
Notional U.S. federal income tax (benefit) expense at the statutory
rate ............................................... $ (920.0) $1,790.1 $2,165.8
Adjustments to reconcile to the Company’s income tax provision:
U.S. state income tax provision, net ........................ 26.1 74.6 45.7
Asset impairments in low-rate jurisdictions ................... 785.3 47.5 6.6
Non-U.S. net earnings .................................. (210.5) (859.0) (473.1)
Nondeductible charges ................................. 541.2 170.4 140.8
Other .............................................. (14.0) (51.3) (34.9)
Provision for income taxes ............................... 208.1 1,172.3 1,850.9
Deferred (benefit) provision ............................. (177.4) 455.4 646.1
Current provision ..................................... $ 385.5 $ 716.9 $1,204.8
The provisions for fiscal 2002, fiscal 2001, and fiscal 2000 include $487.6 million, $514.8 million
and $623.8 million, respectively, for non-U.S. income taxes. The non-U.S. component of income/(loss)
before income taxes was $(646.3) million, $4,005.8 million and $3,219.9 million for fiscal 2002, fiscal
2001, and fiscal 2000, respectively.
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