ADT 2010 Annual Report Download - page 192

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. Income Taxes (Continued)
recognized $13 million, $1 million and $9 million of income tax expense for interest and penalties
related to unrecognized tax benefits as of September 24, 2010, September 25, 2009 and September 26,
2008, respectively.
A rollforward of unrecognized tax benefits as of September 24, 2010, September 25, 2009 and
September 26, 2008 is as follows ($ in millions):
2010 2009 2008
Balance as of Beginning of Year .............................. $281 $369 $370
Additions based on tax positions related to the current year .......... 11 10 15
Additions based on tax positions related to prior years ............. 58 3 20
Reductions based on tax positions related to prior years ............ (22) (90) (14)
Reductions related to settlements ............................. (6) (4) (19)
Reductions related to lapse of the applicable statute of limitations ..... (1) (6) (5)
Foreign currency translation adjustments ........................ (3) (1) 2
Balance as of End of Year .................................. $318 $281 $369
Many of Tyco’s uncertain tax positions relate to tax years that remain subject to audit by the taxing
authorities in the U.S. federal, state and local or foreign jurisdictions. Open tax years in significant
jurisdictions are as follows:
Years Open
Jurisdiction To Audit
Australia ..................................................... 2004-2009
Canada ...................................................... 2000-2009
France ....................................................... 1999-2009
Germany ..................................................... 1998-2009
Italy ......................................................... 2004-2009
South Korea ................................................... 2005-2009
Switzerland .................................................... 2000-2009
United Kingdom ................................................ 2000-2009
United States .................................................. 1997-2009
Based on the current status of its income tax audits, the Company believes that it is reasonably
possible that between $18 million and $140 million in unrecognized tax benefits may be resolved in the
next twelve months.
Tax Sharing Agreement and Other Income Tax Matters
In connection with the spin-offs of Covidien and Tyco Electronics from Tyco, Tyco entered into a
Tax Sharing Agreement that generally governs Covidien’s, Tyco Electronics’ and Tyco’s respective rights,
responsibilities, and obligations after the Separation with respect to taxes, including ordinary course of
business taxes and taxes, if any, incurred as a result of any failure of the distribution of all of the shares
of Covidien or Tyco Electronics to qualify as a tax-free distribution for U.S. federal income tax
purposes within the meaning of Section 355 of the Code or certain internal transactions undertaken in
anticipation of the spin-offs to qualify for tax-favored treatment under the Code.
104 2010 Financials