ADT 2009 Annual Report Download - page 140

proposed tax adjustments. The Company is reviewing and contesting certain of the proposed tax
adjustments. Amounts related to these tax adjustments and other tax contingencies and related interest
have been assessed as uncertain income tax positions and recorded as appropriate.
For a detailed discussion of contingencies related to Tyco’s income taxes, see Note 6 to the
Consolidated Financial Statements.
Divestitures
We have continued to assess the strategic fit of our various businesses and we will pursue
divestiture of businesses that do not align with our long-term strategy.
Held for Sale and Reflected as Continuing Operations
During the fourth quarter of 2009, we approved a plan to sell a business in our ADT Worldwide
segment. This business has been classified as held for sale; however, its results of operations are
presented in continuing operations as the criteria for discontinued operations have not been met. We
have assessed and determined that the carrying value of this business is recoverable and will continue
to assess recoverability based on current fair value, less cost to sell, until the business is sold. Fair value
used for the impairment assessment was based on existing market conditions. We expect to complete
the sale during fiscal 2010.
During the third quarter of 2008, we approved a plan to sell a business in the Safety Products
segment. This business had been classified as held for sale in our historical Consolidated Balance
Sheets. During the second quarter of 2009, due to a change in strategy by management, we decided not
to sell the business. As a result, the business no longer satisfied the requirements to be classified as
held for sale in our Consolidated Balance Sheet as of March 27, 2009. Accordingly, the Consolidated
Balance Sheet as of September 26, 2008 was recast to reclassify the business from held for sale to held
and used. We measured the business at the lower of its (i) carrying amount before it was classified as
held for sale, adjusted for depreciation and amortization expense that would have been recognized had
the business been continuously classified as held and used, or (ii) fair value at the date the decision not
to sell was made. We recorded a charge of $8 million in the second quarter of 2009 relating to the
amount of depreciation and amortization expense that would have been recorded had the asset been
continuously classified as held and used.
Discontinued Operations
As previously reported in our periodic filings, in July 2008, we substantially completed the sale of
our Infrastructure Services business, which met the criteria to be presented as discontinued operations.
In order to complete the sale of Earth Tech Brasil Ltda. (‘‘ET Brasil’’) and Earth Tech UK businesses
and certain assets in China, we were required to obtain consents and approvals to transfer the legal
ownership of the business and assets. On January 22, 2009, we received the necessary consents and
approvals to transfer the legal ownership of our ET Brasil business to Carioca Christiani-Nielsen
Engenharia S.A. and received cash proceeds of $13 million. During the fourth quarter of 2008, we sold
our Earth Tech UK business and received net cash proceeds of $53 million. However, the gain was
deferred until receipt of the necessary consents and approvals. On May 12, 2009, we received the
necessary consents and approvals to transfer the legal ownership of our Earth Tech UK business to
AECOM Technologies Corporation (‘‘AECOM’’) and realized the deferred gain in our Consolidated
Statements of Operations during the third quarter of 2009. Furthermore, on February 27, 2009, we
received the necessary consents to transfer certain of the China assets and received cash proceeds of
$18 million. On May 8, 2009, we received the necessary consents to transfer additional China assets and
received cash proceeds of $6 million. On July 2, 2009 we received the necessary consents and approvals
48 2009 Financials