ADT 2007 Annual Report Download - page 206

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Restructuring and Asset Impairment Charges, Net (Continued)
Activity in the Company’s 2007 restructuring reserves related to actions initiated in 2007 is
summarized as follows ($ in millions):
Employee Facility
Severance and Exit
Benefits Charges Total
Charges ................................. $183 $ 15 $ 198
Reversals ................................ (1) — (1)
Utilization ............................... (53) (6) (59)
Reclass/transfers ........................... (15) (1) (16)
Currency translation ........................ 5 — 5
Balance at September 28, 2007 ................ $119 $ 8 $ 127
2006 Charges and Credits
During 2006, the Company recorded net restructuring and asset impairment charges of $13 million,
which includes $11 million of employee severance and benefits and $2 million of asset impairments.
The restructuring charges related to several restructuring actions and facility exit plans which were
initiated in 2006 for $16 million as well as costs incurred in 2006 related to actions initiated prior to
2006 for $2 million. During 2006, the Company completed restructuring activities announced in prior
years for amounts less than originally estimated, and accordingly reversed $7 million of restructuring
reserves. Most of the restructuring initiatives undertaken during 2006 as well as actions taken in prior
periods, which impact restructuring charges incurred during 2006, relate to the ADT Worldwide and
Safety Products segments.
Through 2007, the Company paid $14 million related to these actions and has $1 million accrued
as of September 28, 2007.
2005 Charges and Credits
During 2005, the Company recorded restructuring and asset impairment charges of $18 million,
including $1 million reflected in cost of sales for the non-cash write down in carrying value of
inventory. The remaining charge is comprised of restructuring charges of $28 million, which includes
$13 million of employee severance and benefits, $11 million of facility exit charges and $4 million of
other charges. These charges related to several restructuring actions and facility exit plans which were
initiated in 2005 as well as incremental costs incurred in 2005 related to actions initiated during 2004.
Of these charges, $13 million related to actions initiated and completed in 2005 while the remaining
$15 million related to actions which commenced prior to 2005. During 2005, the Company completed
restructuring activities announced in prior years for amounts less than originally estimated, and
accordingly reversed $11 million of restructuring reserves as a restructuring credit.
The 2005 restructuring initiatives were largely a result of actions taken by Flow Control, Safety
Products and ADT Worldwide segments which incurred employee severance and benefits of $4 million,
$3 million and $3 million, respectively. Through 2007, the Company has substantially paid these
obligations and has less than $1 million accrued as of September 28, 2007.
114 2007 Financials