ADT 2009 Annual Report Download - page 195

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Restructuring and Asset Impairment Charges, Net
During the first quarter of 2007, the Company launched a restructuring program (the ‘‘2007
Program’’) across all of the Company’s segments, including the corporate organization, to streamline
some of the businesses and reduce its operational footprint. Upon initiation of the 2007 Program, the
Company expected to incur aggregate charges related to the program of approximately $350 million to
$400 million primarily through the end of calendar 2008. As of December 26, 2008, the Company had
substantially completed this program.
During fiscal 2009, the Company identified additional opportunities for cost savings through
restructuring activities and workforce reductions in fiscal 2009 and 2010. The Company incurred
restructuring and restructuring related charges of approximately $236 million in fiscal 2009. The
Company expects to incur restructuring and restructuring related charges of approximately $100 million
to $150 million in fiscal 2010.
Restructuring and asset impairment charges, net, during the years ended September 25, 2009,
September 26, 2008 and September 28, 2007 are as follows ($ in millions):
2009 2008 2007
ADT Worldwide ......................................... $ 80 $ 93 $ 76
Flow Control ........................................... 25 8 25
Fire Protection Services .................................... 46 25 24
Electrical and Metal Products ............................... 22 43 7
Safety Products .......................................... 53 73 22
Corporate and Other ...................................... 10 4 40
236 246 194
Charges in cost of sales and selling, general and administrative expenses . . . (32) (22) (7)
Restructuring and asset impairment charges, net .................. $204 $224 $187
During the years ended September 25, 2009, September 26, 2008 and September 28, 2007,
restructuring and asset impairment charges, net were included in the Company’s Consolidated
Statements of Operations as follows ($ in millions):
2009 2008 2007
Cost of sales ............................................ $ 27 $ 20 $ 7
Selling, general and administrative expenses ..................... 5 2 —
Restructuring, asset impairment and divestiture charges, net ......... 204 224 187
$236 $246 $194
2009 Net Restructuring
Net restructuring and asset impairment charges during the year ended September 25, 2009 were
$236 million, which include $32 million of accelerated depreciation of assets directly related to the
underlying restructuring actions. The remaining charge of $204 million consists of $10 million of asset
impairments, $174 million of employee severance and benefits and $38 million of facility exit and other
charges, offset by $18 million of restructuring reversals resulting from the Company completing
restructuring activities announced in prior years for amounts less than originally estimated.
2009 Financials 103