ADT 2005 Annual Report Download - page 173

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Restructuring and Other Charges (Credits), Net (Continued)
2002 Charges and Credits
Activity for the Company’s 2002 restructuring reserves is summarized as follows ($ in millions):
Employee Facilities
Severance Exit Non-cash
and Benefits Costs Other Charges Total
Balance at September 30, 2002 ................... $168 $181 $419 $115 $883
Utilization ................................. (120) (58) (265) — (443)
Credits .................................... (18) 7 (48) — (59)
Transfers/reclassifications ....................... — — (23) (115) (138)
Currency translation .......................... 5 (1) (2) — 2
Balance at September 30, 2003 ................... 35 129 81 — 245
Utilization ................................. (16) (43) (27) — (86)
Credits .................................... (11) (2) 2 — (11)
Transfers/reclassifications ....................... — (2) — — (2)
Assets held for sale ........................... — (31) (53) — (84)
Currency translation .......................... 1 — — — 1
Balance at September 30, 2004 ................... 9 51 3 — 63
Charges ................................... — 4 2 — 6
Utilization ................................. (7) (16) 1 — (22)
Credits .................................... (1) 1 (5) — (5)
Transfer from held for sale ..................... — 39 — — 39
Balance at September 30, 2005 ................... $ 1 $ 79 $ 1 $ — $ 81
During 2002, the Company approved and announced to employees various plans to exit 193
facilities primarily in the United States, Europe and Latin America which includes the restructuring of
certain operations within the Tyco Submarine Telecommunications business. These plans included the
termination of approximately 13,800 employees and other related exit costs. These decisions resulted in
restructuring charges totaling $1,911 million, including $635 million in cost of sales for the non-cash
write-down in carrying value of inventory and $115 million recorded in selling, general and
administrative expenses for an increase to the bad debt provision. The balance of these charges
includes $377 million for employee severance and benefits, $274 million for facility exit costs, and
$511 million for other related costs. Through September 30, 2005, a total of $284 million, $198 million
and $445 million related to employee severance and benefits, facilities exit costs and other, respectively
have been expended related to these plans. As of September 30, 2005, the Company’s remaining
obligations for the 2002 actions primarily related to long-term non-cancelable lease obligations for
facilities within the Electronics segment totaling $79 million.
2005 Financials 97