ADT 2008 Annual Report Download - page 221

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. Acquisitions (Continued)
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 was $5 million.
These acquisitions were funded utilizing cash from operations. The results of operations of the
acquired companies have been included in Tyco’s consolidated results from the respective acquisition
dates. These acquisitions did not have a material effect on the Company’s financial position, results of
operations or cash flows.
The aggregate amounts paid for the acquired businesses have been allocated to assets acquired and
liabilities assumed based on preliminary estimates of fair value at September 26, 2008. The purchase
price allocation remains subject to change based on final valuations of the assets acquired and liabilities
assumed. The Company does not expect the finalization of these matters to have a material effect on
these allocations. The following represents preliminary purchase price allocations for the acquired
businesses ($ in million):
Net working capital and other assets ..................................... $ 21
Property, plant and equipment, net ...................................... 7
Goodwill ......................................................... 140
Intangible assets, net ................................................. 170
Purchase price ..................................................... $338
Payments relating to the reacquisition of unfavorable franchise rights and legal
settlement ....................................................... 64
Aggregate amount paid ............................................... $402
Acquisition Liabilities
At September 26, 2008 and September 28, 2007, acquisition liabilities were included in the
Company’s Consolidated Balance Sheets as follows ($ in millions):
2008 2007
Accrued and other current liabilities ................................. $ 3 $ 4
Other liabilities ................................................ 9 10
$12 $14
Acquisition liabilities relate to facility exit costs, employee severance and benefits, distributor and
supplier cancellation fees and other costs. The Company paid $2 million, $5 million and $5 million to
fund acquisition liabilities during 2008, 2007 and 2006, respectively.
Holdback Liabilities
The Company paid cash of approximately $5 million and $2 million during 2007 and 2006,
respectively, relating to holdback liabilities related to certain prior period acquisitions. There were no
such payments in 2008. Holdback liabilities represent a portion of the purchase price withheld from the
seller pending finalization of the acquisition balance sheet and other contingencies.
At September 26, 2008 and September 28, 2007, holdback liabilities were included in the
Company’s Consolidated Balance Sheets as follows ($ in millions):
2008 2007
Other liabilities ................................................ $18 $16
118 2008 Financials