ADT 2003 Annual Report Download - page 95

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During fiscal 2003, the Company recognized other expense
of $8.6 million in connection with a bank guarantee on behalf of
an equity investee.
During fiscal 2002, the Company sold certain of its businesses
for net proceeds of approximately $138.7 million in cash that
consist primarily of certain businesses within the Healthcare
and Fire and Security segments. In connection with these dis-
positions, the Company recorded a net gain of $23.6 million. In
fiscal 2001, the Company sold its ADT Automotive business 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 after deducting commissions and other direct
costs, principally related to the sale of ADT Automotive. This
gain is net of direct and incremental costs of the transaction, as
well as $60.7 million of special bonuses paid to key employees.
9.
TyCom Ltd.
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 $15.0 million of special bonuses paid to
key employees.
On December 18, 2001, the Company completed its amalga-
mation with TyCom and each of the approximately 56 million
TyCom common shares not owned by Tyco were converted
into the right to receive 0.3133 of a Tyco common share. Upon
completion of the amalgamation, TyCom became a wholly-
owned subsidiary of Tyco, and each outstanding option to
purchase TyCom common shares is exercisable for Tyco com-
mon shares, with the number of Tyco shares equal to the number
of TyCom common shares issuable upon exercise immediately
prior to the consummation multiplied by the exchange ratio of
0.3133. The per share exercise price for the Tyco common
shares issuable upon the exercise of TyCom options equals the
exercise price per TyCom common share, at the price such
options were exercisable prior to the amalgamation, divided by
the exchange ratio. In addition, each outstanding TyCom
restricted share was converted into a restricted Tyco common
share based on the exchange ratio. The options and restricted
shares are subject to the same terms and conditions that were
applicable immediately prior to the amalgamation.
10.
Income Taxes
The provision for income taxes and the reconciliation between
the notional United States federal income taxes at the statutory
rate on consolidated income before taxes and the Company’s
income tax provision are as follows ($ in millions):
YEAR ENDED SEPTEMBER 30, 2003 2002 2001
Notional U.S. federal income
tax expense (benefit) at
the statutory rate $«631.0 $(920.0) $1,790.1
Adjustments to reconcile to
the Company’s income
tax provision:
U.S. state income tax
(benefit) provision, net (97.4) 26.1 74.6
Asset impairments 120.4 785.3 47.5
Non-U.S. net earnings (1) (242.1) (210.5) (859.0)
Nondeductible charges 383.0 541.2 170.4
Other (30.4) (14.0) (51.3)
Provision for income taxes 764.5 208.1 1,172.3
Deferred provision (benefit) 18.6 123.1 455.4
Current provision $«745.9 $÷«85.0 $«««716.9
(1) Excludes asset impairments, nondeductible charges and other items which are
broken out separately in the table.
The provisions for fiscal 2003, fiscal 2002, and fiscal 2001 include
$805.9 million, $487.6 million, and $514.8 million, respectively,
for non-U.S. income taxes. The non-U.S. component of income
(loss) from continuing operations before income taxes was
$2,835.1 million, $(646.3) million and $4,005.8 million for fiscal
2003, fiscal 2002, and fiscal 2001, respectively.
TYCO INTERNATIONAL LTD.