ADT 2007 Annual Report Download - page 208

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. Acquisitions
Acquisitions
During 2007, cash paid for acquisitions included in continuing operations, primarily within ADT
Worldwide, Safety Products and Flow Control, totaled $31 million. Cash paid for acquisitions by
businesses included in continuing operations during 2006 and 2005 totaled $5 million and $6 million,
respectively.
These acquisitions were funded utilizing cash from operations. The results of operations of the
acquired companies have been included in Tyco’s consolidated results from the respective acquisition
dates. These acquisitions did not have a material effect on the Company’s financial position, results of
operations or cash flows.
Acquisition Liabilities
At September 28, 2007 and September 29, 2006, acquisition liabilities were included in the
Company’s Consolidated Balance Sheets as follows ($ in millions):
2007 2006
Accrued and other current liabilities ................................. $ 4 $ 7
Other liabilities ................................................ 10 11
$14 $18
Acquisition liabilities relate to facility exit costs, employee severance and benefits, distributor and
supplier cancellation fees and other costs. The Company paid $5 million, $5 million and $9 million to
fund acquisition liabilities during 2007, 2006 and 2005, respectively.
Holdback Liabilities
The Company paid cash of approximately $5 million, $2 million and $5 million during 2007, 2006
and 2005, respectively, relating to holdback liabilities related to certain prior period acquisitions.
Holdback liabilities represent a portion of the purchase price withheld from the seller pending
finalization of the acquisition balance sheet and other contingencies.
At September 28, 2007 and September 29, 2006, holdback liabilities were included in the
Company’s Consolidated Balance Sheets as follows ($ in millions):
2007 2006
Accrued and other current liabilities ................................. $— $ 7
Other liabilities ................................................ 16 9
$16 $16
ADT Dealer Program
During 2007, 2006 and 2005, Tyco paid $409 million, $373 million and $328 million of cash,
respectively, to acquire approximately 415,000, 401,000 and 364,000 customer contracts for electronic
security services through the ADT dealer program.
116 2007 Financials