ADT 2005 Annual Report Download - page 219

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
26. Tyco International Group S.A.
TIGSA, a wholly owned subsidiary of the Company, has public debt securities outstanding (see
Note 14), which are fully and unconditionally guaranteed by Tyco. The following tables present
condensed consolidated financial information for Tyco, TIGSA and all other subsidiaries. Condensed
financial information for Tyco and TIGSA on a stand-alone basis is presented using the equity method
of accounting for subsidiaries.
During the fourth quarter of 2005, TIGSA completed a tax-free restructuring involving the
issuance of multiple classes of shares and the distribution of certain investments, intercompany loans
and intercompany receivables to Tyco International Ltd. Since the transactions were entirely among
wholly owned subsidiaries of Tyco there was no impact on the consolidated statements of financial
position, operations or cash flows of the Company. The transactions did, however, result in a decrease
to TIGSA’s investment in subsidiaries and intercompany receivables of a combined $18.4 billion. The
effect of these transactions has been reflected below as if they occurred at the beginning of the earliest
period presented.
CONSOLIDATING STATEMENT OF INCOME
For the Year Ended September 30, 2005
($ in millions)
Tyco Tyco
International International Other Consolidating
Ltd. Group S.A. Subsidiaries Adjustments Total
Net revenue ................... $ — $ — $39,727 $ — $39,727
Cost of product sales ............ — — 21,192 — 21,192
Cost of services ................ — — 4,767 — 4,767
Selling, general and administrative
expenses .................... 112 63 8,056 — 8,231
Restructuring and other charges, net . . — — 10 — 10
Impairment of long-lived assets ..... — — 6 — 6
(Gains) losses and impairments on
divestitures, net ............... — — (274) — (274)
Operating (loss) income ......... (112) (63) 5,970 — 5,795
Interest income ................ 1 28 94 — 123
Interest expense ................ — (727) (88) — (815)
Other (expense) income, net ....... — (1,013) 102 — (911)
Equity in net income of subsidiaries . . 4,552 2,895 — (7,447) —
Intercompany interest and fees ...... (1,409) 1,715 (306) — —
Income from continuing operations
before income taxes and minority
interest ................... 3,032 2,835 5,772 (7,447) 4,192
Income taxes .................. — (1) (983) — (984)
Minority interest ................ — — (9) — (9)
Income from continuing operations . 3,032 2,834 4,780 (7,447) 3,199
Loss from discontinued operations, net
of income taxes ............... — — (188) — (188)
Income before cumulative effect of
accounting change ........... 3,032 2,834 4,592 (7,447) 3,011
Cumulative effect of accounting
change, net of income taxes ...... — — 21 — 21
Net income .................. $3,032 $ 2,834 $ 4,613 $ (7,447) $ 3,032
2005 Financials 143