ADT 2006 Annual Report Download - page 174

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. Restructuring and Other Charges (Credits), Net (Continued)
2004 Charges and Credits
Activity in the Company’s 2004 restructuring reserves is summarized as follows ($ in millions):
Employee Facilities
Severance and Exit Non-cash
Benefits Costs Other Charges Total
Charges ........................... $196 $ 60 $ 22 $ 6 $ 284
Utilization ......................... (88) (15) (19) (6) (128)
Credits ............................ (8) — — — (8)
Currency translation .................. 1 1 — — 2
Balance at September 30, 2004 .......... 101 46 3 — 150
Charges ........................... 6 7 6 — 19
Utilization ......................... (77) (21) (7) — (105)
Credits ............................ (13) — — — (13)
Currency translation .................. 1 — — — 1
Balance at September 30, 2005 .......... 18 32 2 — 52
Charges ........................... — 1 — 1
Utilization ......................... (11) (7) (1) — (19)
Credits ............................ (3) (1) — — (4)
Reclass/transfers ..................... — (1) (1) — (2)
Balance at September 29, 2006 .......... $ 4 $24 $— $— $ 28
During 2004, the Company approved and announced to employees various plans to exit 181
facilities primarily in the United States. These plans included the termination of approximately 8,616
employees resulting in restructuring charges totaling $284 million, including $6 million reflected in cost
of sales for the non-cash write-down in carrying value of inventory, $196 million for employee
severance and benefits, $60 million for facility exit costs and $22 million for other related cost. Through
September 29, 2006, a total of $176 million, $43 million and $27 million related to employee severance
and benefits, facilities exit costs and other, respectively, had been expended related to these plans.
Through September 29, 2006, the Company completed certain activities related to these plans for
amounts less than originally estimated, and accordingly the Company reversed $25 million of
restructuring reserves as a restructuring credit.
During 2004, the Company also sold certain cable-laying sea vessels and other assets that were
written down to their expected net realizable value in prior years for amounts greater than originally
estimated and recorded related gains as restructuring credits of $40 million. During 2004, the Company
also completed certain restructuring activities announced in prior years for amounts less than originally
estimated, and accordingly the Company reversed $34 million of restructuring reserves as a
restructuring credit.
Restructuring and other charges (credits), net recorded by each segment were as follows:
During 2004, Fire and Security recorded restructuring charges of $184 million related to 2004
restructuring plans, including $4 million reflected in cost of sales for the non-cash write down in
carrying value of inventory. Additionally, Fire and Security completed certain restructuring activities
announced in prior years for amounts less than originally estimated, and accordingly reversed
$9 million of restructuring reserves as a restructuring credit.
During 2004, Electronics recorded restructuring charges of $15 million related to 2004
restructuring plans, including $1 million reflected in cost of sales for the non-cash write-down in
112 2006 Financials