ADT 2003 Annual Report Download - page 81

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79
The following table summarizes the purchase accounting liabilities recorded in connection with fiscal 2002 purchase acquisitions
($ in millions):
SEVERANCE FACILITIES-RELATED ACCRUAL DISTRIBUTOR
AND SUPPLIER
NUMBER OF NUMBER OF CANCELLATION OTHER
EMPLOYEES ACCRUAL FACILITIES ACCRUAL FEES ACCRUAL TOTAL
Balance at September 30, 2002 1,453 $«39.1 82 $«51.8 $«3.1 $«7.4 $101.4
Additions to fiscal 2002 acquisition reserves 570 15.3 22 3.2 0.5 6.8 25.8
Fiscal 2003 utilization (854) (24.3) (62) (11.0) (1.3) (4.6) (41.2)
Foreign currency translation adjustment — 1.1 — 1.9 0.3 0.5 3.8
Reclassifications — (0.1) — 0.6 (1.5) 0.3 (0.7)
Reductions of estimates of
fiscal 2002 acquisition reserves (659) (10.6) (37) (8.2) (0.5) (8.1) (27.4)
Balance at September 30, 2003 510 $«20.5 5 $«38.3 $«0.6 $«2.3 $««61.7
During fiscal 2003, the Company recorded additions to purchase
accounting liabilities as it continued to formulate the integration
plans of fiscal 2002 acquisitions, such as Paragon and Eberle
Controls GmbH. Finalization of components of integration
plans associated with acquisitions resulted in additional purchase
accounting liabilities of $25.8 million and a corresponding
increase to goodwill and deferred tax assets. These additions
reflect the termination of an additional 570 employees, the
closure of an additional 22 facilities, additional distributor and
supplier cancellation fees and other acquisition-related costs
consisting primarily of professional fees and other costs.
During fiscal 2003, the Company reduced its estimate of
purchase accounting liabilities relating to fiscal 2002 acquisi-
tions by $27.4 million primarily because actual costs were less
than originally estimated since the Company severed 659 fewer
employees and closed 37 fewer facilities than originally antici-
pated due to revisions to integration plans. Goodwill and related
deferred tax assets were reduced by an equivalent amount.
Also during fiscal 2003, we reclassified certain fair value
adjustments related to the write down of assets for fiscal 2002
acquisitions out of purchase accounting accruals and into the
appropriate asset or liability account. In addition, we reclassified
certain amounts related to fiscal 2002 acquisitions to separately
classify distributor and supplier cancellation fees and to correct
the categorization of other accruals. These reclassifications had
no effect on the amount of goodwill that was recorded.
Termination of employees and consolidation of facilities
related to fiscal 2002 acquisitions are substantially complete,
except for long-term non-cancellable lease obligations and certain
long-term severance arrangements.
During fiscal 2002, the Company sold certain of its businesses
for net proceeds of $138.7 million in cash that consist primarily
of certain businesses within the Healthcare and Fire and Security
segments. In connection with these dispositions, the Company
recorded a net gain of $23.6 million.
TYCO INTERNATIONAL LTD.