ADT 2003 Annual Report Download - page 83

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During fiscal 2003, the Company reduced its estimate of pur-
chase accounting liabilities relating to fiscal 2001 acquisitions
by $162.8 million primarily because actual costs were less than
originally estimated since the Company severed 897 fewer
employees and closed 25 fewer facilities than originally antici-
pated due to revisions to integration plans. Goodwill and
related deferred tax assets in the aggregate were reduced by an
equivalent amount.
During fiscal 2001, the Company made payments totaling
$20.0 million to Mr. Frank Walsh, a director of Tyco at the time
of the CIT acquisition, and to a charitable organization specified
by such director. The payments were direct and incremental
costs incurred in connection with the acquisition of CIT and,
accordingly, were included as part of the purchase price for CIT.
The payments were refunded to the Company in fiscal 2003
(see Note 18).
In connection with the purchase acquisitions consummated
during fiscal 2001, liabilities for $13.8 million for severance and
related costs, $98.0 million for the shutdown and consolidation
of acquired facilities, $3.6 million for distributor and supplier
contractual cancellation fees and $2.1 million in transaction
and other direct costs remained on the Consolidated Balance
Sheet at September 30, 2003. Termination of employees and
consolidation of facilities related to all such acquisitions are
substantially complete, except for long-term non-cancellable
lease obligations and certain long-term severance arrangements.
In fiscal 2001, the Company sold its ADT Automotive busi-
ness to Manheim Auctions, Inc., a wholly-owned subsidiary of
Cox Enterprises, Inc., for approximately $1.0 billion in cash.
The Company recorded a net gain on the sale of businesses of
$410.4 million principally related to the sale of ADT Auto-
motive, which is recorded as other income in the Consolidated
Statement of Operations.
The following unaudited pro forma data summarize the
results of operations for the periods indicated as if fiscal 2001
acquisitions and divestitures had been completed as of the
beginning of the period presented. The pro forma data give
effect to actual operating results prior to the acquisitions and
divestitures and adjustments to interest expense, goodwill
amortization and income taxes. No effect has been given to cost
reductions or operating synergies in this presentation, and
amounts have been revised to reflect the disposition of CIT as
discontinued operations (see Note 11). These pro forma
amounts do not purport to be indicative of the results that
would have actually been achieved if the acquisitions and
divestitures had occurred as of the beginning of the periods
presented or that may be obtained in the future.
TYCO INTERNATIONAL LTD.
The following table summarizes the purchase accounting liabilities recorded in connection with the fiscal 2001 purchase
acquisitions ($ 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 2,196 $129.7 100 $207.5 $«28.7 $«29.1 $«395.0
Fiscal 2003 utilization (1,281) (56.6) (66) (44.6) (9.4) (11.7) (122.3)
Foreign currency translation adjustment — 8.6 — 0.4 0.5 1.8 11.3
Reclassifications — (0.4) — 3.3 — (6.6) (3.7)
Reductions of estimates of
fiscal 2001 acquisition reserves (897) (67.5) (25) (68.6) (16.2) (10.5) (162.8)
Balance at September 30, 2003 18 $««13.8 9 $««98.0 $«««3.6 $«««2.1 $«117.5
($ IN MILLIONS, EXCEPT PER SHARE DATA) YEAR ENDED SEPTEMBER 30, 2001 (1)
Net revenues $37,135.3
Income from continuing operations 3,790.5
Net income 3,099.1
Basic earnings per common share:
Income from continuing operations $«««««««1.99
Net income 1.63
Diluted earnings per common share:
Income from continuing operations $«««««««1.97
Net income 1.61
(1) Includes a net gain on sale of businesses of $410.4 million related primarily to the
sale of ADT Automotive; a loss of $133.8 million related to the write down of an
investment; a net gain of $24.5 million on the sale of shares of a subsidiary; charges
for the impairment of long-lived assets of $120.1 million; net restructuring and other
charges totaling $585.3 million; loss on the early extinguishment of debt of $26.3
million; income from discontinued operations of $252.5 million, net of tax; and
cumulative effect of accounting changes of $683.4 million, net of tax. Excludes a
charge of $184.3 million for the write off of purchased in-process research and
development associated with the acquisition of Mallinckrodt discussed in Note 7.