ADT 2003 Annual Report Download - page 45

43
Operating results from the discontinued operations of Tyco
Capital through July 8, 2002 were as follows ($ in millions):
FOR THE PERIOD
FOR THE PERIOD JUNE 2 (DATE OF
OCTOBER 1, 2001 ACQUISITION)
THROUGH THROUGH
JULY 8, 2002 SEPTEMBER 30, 2001
Finance income $««3,327.6 $««1,676.5
Interest expense 1,091.5 597.1
Net finance income 2,236.1 1,079.4
Depreciation on operating
lease equipment 944.4 448.6
Net finance margin 1,291.7 630.8
Provision for credit losses 665.6 116.1
Net finance margin, after provision
for credit losses 626.1 514.7
Other income 741.1 335.1
Operating margin 1,367.2 849.8
Selling, general, administrative and
other costs and expenses 687.8 398.7
Goodwill impairment 6,638.1 —
Operating expenses 7,325.9 398.7
(Loss) income before income taxes
and minority interest (5,958.7) 451.1
Income taxes (316.1) (195.0)
Minority interest (7.7) (3.6)
(Loss) income from discontinued
operations $«(6,282.5) $÷÷«252.5
Average earning assets (“AEA”) (1) $36,269.0 $39,159.2
Net finance margin as a percent
of AEA (annualized) 4.75% 4.83%
(1) Average earning assets is the average of finance receivables, operating lease equip-
ment, finance receivables held for sale and certain investments, less credit balances
of factoring clients.
During fiscal 2003, Tyco recorded income from discontinued
operations of $20.0 million. The $20.0 million represented a
restitution payment made by Frank E. Walsh Jr. (see Note 18 to
the Consolidated Financial Statements). Tyco Capital’s revenues
were $4,068.7 million for the period October 1, 2001 through
July 8, 2002, consisting of finance income of $3,327.6 million
and other income of $741.1 million. Tyco Capital’s revenues for
the period June 2 through September 30, 2001 were $2,011.6
million, consisting of finance income of $1,676.5 million and
other income of $335.1 million. As a percentage of AEA, finance
income was 11.9% and 12.8% for the period October 1, 2001
through July 8, 2002 and for the period June 2 through
September 30, 2001, respectively. For the period October 1,
2001 through July 8, 2002, Tyco Capital’s loss before income
taxes and minority interest was $5,958.7 million. For the period
June 2 through September 30, 2001, Tyco Capital’s income
before income taxes and minority interest was $451.1 million.
Interest expense totaled $1,091.5 million and $597.1 million
for the period October 1, 2001 through July 8, 2002 and for the
period June 2 through September 30, 2001, respectively. As a
percentage of AEA, interest expense was 3.9% and 4.6% for the
period October 1, 2001 through July 8, 2002 and for the period
June 2 through September 30, 2001, respectively.
Other income for Tyco Capital was $741.1 million and
$335.1 million for the period October 1, 2001 through July 8,
2002 and for the period June 2 through September 30, 2001
respectively, as set forth in the following table ($ in millions):
FOR THE PERIOD
FOR THE PERIOD JUNE 2 (DATE OF
OCTOBER 1, 2001 ACQUISITION)
THROUGH THROUGH
JULY 8, 2002 SEPTEMBER 30, 2001
Fees and other income $496.6 $212.3
Factoring commissions 117.8 50.7
Gains on securitizations 119.8 59.0
Gains on sales of leasing equipment 11.0 14.2
Losses on venture capital investments (4.1) (1.1)
Total $741.1 $335.1
Included in fees and other income are miscellaneous fees, syndi-
cation fees and gains from receivable sales.
During the period October 1, 2001 through July 8, 2002,
Tyco Capital recorded charges of $355.0 million relating prima-
rily to a weakness in the competitive local exchange carrier
industry included within its telecommunications portfolio and
the economic reforms instituted by the Argentine government
that converted Tyco Capital’s dollar-denominated receivables
into peso-denominated receivables. These charges have been
included in the provision for credit losses. The provision for
credit losses was $665.6 million, or 2.4% of AEA, and $116.1 mil-
lion, or 0.9% of AEA, for the period October 1, 2001 through
TYCO INTERNATIONAL LTD.