ADT 2010 Annual Report Download - page 188

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. Acquisitions (Continued)
During the year ended September 26, 2008, cash paid for acquisitions included in continuing
operations totaled $347 million, net of cash acquired of $8 million. The Company’s ADT Worldwide
segment acquired Winner Security Services LLC (‘‘Winner’’) for $63 million and Sensormatic Security
Corp. (‘‘SSC’’) for $66 million, which were franchises originally granted by Sensormatic Electronics
Corporation (‘‘Sensormatic’’) and granted Winner rights to sell, install and service certain Sensormatic
products and entitled Winner and SSC to commissions on Sensormatic products sold, installed or
shipped into its franchise territories. Additionally, the Company’s ADT Worldwide segment acquired
FirstService Security for $180 million, net of cash acquired of $7 million. Cash paid for other
acquisitions primarily within the Company’s ADT Worldwide and Safety Products segments totaled
$38 million, net of cash acquired of $1 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.
ADT Worldwide Account Acquisitions
During 2010, 2009 and 2008 Tyco paid $559 million, $543 million and $376 million of cash,
respectively, to acquire approximately 501,000, 512,000 and 370,000 customer contracts for electronic
security services in the Company’s ADT Worldwide segment.
5. Other Expense, Net
Other expense, net of $75 million in 2010 primarily relates to a charge of $87 million as a loss on
extinguishment of debt on the redemption of the Company’s 6.375% public notes due 2011, 7% notes
due 2028 and 6.875% notes due 2029. See Note 11. This loss was partially offset by an $8 million gain
recorded as a result of an increase in the receivables due from Covidien and Tyco Electronics under
the Tax Sharing Agreement. See Note 6.
Other expense, net of $7 million in 2009 primarily relates to a $14 million charge recorded as a
result of a decrease in the receivables due from Covidien and Tyco Electronics under the Tax Sharing
Agreement, which was partially offset by income of $5 million relating to a gain on derivative contracts
used to economically hedge the foreign currency risk related to the Swiss franc denominated dividends.
Other expense, net of $223 million in 2008 primarily relates to a charge of $258 million as a loss
on extinguishment of debt related to the consent solicitation and exchange offers and termination of
the bridge loan facility offset by income of $6 million recorded in connection with the settlement of the
3.125% convertible senior debentures and related financial instruments. The Company also recorded
other-than-temporary impairments and realized losses on the sale of investments of $6 million related
primarily to investments in corporate debt. Additionally, the Company recorded $40 million of income
as a result of an increase in the receivables due from Covidien and Tyco Electronics under the Tax
Sharing Agreement in connection with the adoption of the guidance pertaining to the accounting for
uncertain income taxes. The Company also recorded $6 million of expense for other activity in
accordance with the Tax Sharing Agreement during 2008.
100 2010 Financials