ADT 2003 Annual Report Download - page 101

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TGN business because it has decided not to invest further in
this industry which it believes is in need of consolidation. The
Company plans to retain ownership of the construction and
maintenance portion of Tyco Submarine Telecommunications.
In connection with the decision to sell the TGN, the Company
has written down the carrying value for the network to net real-
izable value and accordingly, has recorded a loss on impairment
of $664.3 million, which is further discussed in Note 6. Fiscal
2003 revenues and operating loss for the TGN business were
$14.4 million and $799.8 million, respectively. The $799.8 mil-
lion includes the $664.3 million impairment described above
and restructuring charges of $20.1 million. The following table
presents balance sheet information for the TGN business held
for sale at September 30, 2003 ($ in millions):
Accounts receivable $««««9.2
Other current assets 26.4
Other assets 11.9
Total assets $««47.5
Accounts payable $««32.7
Accrued expenses and other current liabilities 120.8
Deferred revenue 63.4
Other long-term liabilities 4.5
Total liabilities $221.4
TYCO INTERNATIONAL LTD.
17.
Goodwill and Intangible Assets
Goodwill was $25,938.7 million and $26,020.5 million at September 30, 2003 and 2002, respectively. The changes in the carrying
amount of goodwill for fiscal 2002 and 2003 are as follows ($ in millions):
ENGINEERED
FIRE AND PRODUCTS AND PLASTICS AND
SECURITY ELECTRONICS HEALTHCARE SERVICES ADHESIVES TOTAL TYCO
Balance at September 30, 2001 $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 8,003.7 7,840.9 6,549.1 2,914.1 712.7 26,020.5
Reversal of purchase accounting
liabilities and fair value adjustments (232.4) (74.1) (131.2) (40.0) (2.8) (480.5)
Goodwill related to acquisitions 4.2 2.6 0.8 10.5 — 18.1
Goodwill written-off related
to divestitures (0.1) — (3.6) — — (3.7)
Goodwill impairment — (278.4) — — — (278.4)
Currency translation adjustments 351.5 96.3 16.4 191.2 7.3 662.7
Balance at September 30, 2003 $8,126.9 $7,587.3 $6,431.5 $3,075.8 $717.2 $25,938.7
FISCAL 2003
As discussed in Note 3, during fiscal 2003, a change was made to
the Company’s internal reporting structure such that the opera-
tions of Tyco’s plastics and adhesives businesses (previously
reported within the Healthcare and Specialty Products segment)
now comprise the Company’s new Plastics and Adhesives
reportable segment. As a result, the goodwill within the previous
Healthcare and Specialty Products segment was reassigned based
on the relative fair value of the new reporting units within each
new segment. No impairments resulted from this reevaluation.
The Company performed its annual impairment assess-
ments for all reporting units as of July 1, 2003. This assessment
also resulted in no goodwill impairment.
In the fourth quarter of fiscal 2003, the Company reorganized
its reporting structure (see Note 1). As part of that reorganiza-
tion, the Company finalized a plan in September 2003, to sell
TGN, the major operating asset of the Tyco Submarine telecom-
munications business previously included in the Electronics
segment. The Company plans to exit the TGN business because
it has decided not to invest further in this industry. The reorgan-
ization resulted in a change in the composition of its reporting
units. As a result, goodwill was reassigned to the new reporting
units using a relative fair value allocation approach, resulting in
the recognition of impairment charges of $278.4 million in
Power Systems, Electrical Contracting Services and the Printed
Circuit Group. This charge was based on a valuation performed