ADT 2008 Annual Report Download - page 229

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7. Cumulative Effect of Accounting Change (Continued)
($22 million pre-tax), reflecting the accumulated depreciation and accretion that would have been
recognized in prior periods had the provisions of FIN No. 47 been in effect at the time.
8. Earnings Per Share
As discussed in Note 1 in 2007, the Company effected a reverse stock split of Tyco’s common
shares, at a split ratio of one for four. Share and per share data for the 2006 period presented has been
adjusted to reflect the reverse stock split.
The reconciliations between basic and diluted earnings per share for 2008, 2007 and 2006 are as
follows ($ in millions, except per share data):
2008 2007 2006
Per Share Per Share Per Share
Income Shares Amount Loss Shares Amount Income Shares Amount
Basic earnings per share:
Income (loss) from continuing
operations .................. $1,095 484 $2.26 $(2,524) 495 $(5.10) $817 503 $1.63
Share options, restricted share awards
and deferred stock units ......... — 3 — — — 4
Exchange of convertible debt ....... 1 1 — — 12 14
Diluted earnings per share:
Income (loss) from continuing
operations, giving effect to dilutive
adjustments ................. $1,096 488 $2.25 $(2,524) 495 $(5.10) $829 521 $1.59
The computation of diluted earnings per share for 2008 excludes the effect of the potential exercise
of options to purchase approximately 19 million shares and excludes restricted share awards and
deferred stock units of approximately 4 million shares because the effect would be anti-dilutive.
The computation of diluted earnings per share for 2007 and 2006 excludes the effect of the
potential exercise of options to purchase approximately 29 million and 21 million shares, respectively,
and excludes restricted share awards and deferred stock units of approximately 5 million and 2 million,
respectively, because the effect would be anti-dilutive. Additionally, the computation of diluted earnings
per common share for 2007 excludes the impact of convertible debt of approximately 6 million shares
because the effect would be anti-dilutive.
9. Sale of Accounts Receivable
Certain of Tyco’s international businesses utilize the sale of accounts receivable as short-term
financing mechanisms. The aggregate amount outstanding under the Company’s remaining international
accounts receivable programs was $65 million, $76 million and $75 million at September 26, 2008,
September 28, 2007 and September 29, 2006, respectively.
10. Investments
At September 26, 2008 and September 28, 2007, the Company had available-for-sale investments
with a fair value of $303 million and $352 million, and a cost basis of $317 million and $352 million,
respectively.
126 2008 Financials