ADT 2010 Annual Report Download - page 285

TYCO INTERNATIONAL LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 24, 2010
(Continued)
13. SUPPLEMENTAL DISCLOSURES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The following disclosures of Tyco International Ltd. are supplemental disclosures to the
consolidated financial statements which are required pursuant to Article 663-663h of the Swiss Code of
Obligations.
a) Personnel Cost for Consolidated Tyco International
Personnel expense reflected in the Company’s Consolidated Statement of Operations was
approximately $6 billion and $3 billion for 2010 and 2009, respectively. The Company considers
personnel expense to be salaries and wages, bonus and other compensation and fringe benefits.
During 2009, it was not practicable for the Company to capture the amount of personnel expense
reflected in cost of product sales and services. However, during 2010 the Company began to report
the portion of personnel expense reflected in both cost of product sales and services and selling,
general and administrative.
b) Fire Insurance Value of Property, Plant and Equipment
The Company’s fire insurance value of its property, plant and equipment was approximately
$5 billion as of September 24, 2010 and as of September 25, 2009.
c) Summary of Risk Assessment Performed by Management
See Note 10 of the accompanying Swiss standalone statutory financial statements for the risk
assessment performed by management.
d) Remuneration of the Board of Directors and Executive Board
See Note 11 of the accompanying Swiss standalone statutory financial statements for remuneration
of the Board of Directors and Executive Board.
14. SUBSEQUENT EVENTS
Consistent with its annual equity compensation practices, on October 12, 2010, the Company
granted Tyco employees 3.9 million share options with a weighted-average grant-date fair value of $9.13
per share at the date of grant. Additionally, the Company granted 1.4 million and 0.6 million restricted
stock units and performance share units with a fair value of $37.29 and $41.17 per share on the date of
grant, respectively. On November 9, 2010, the Company announced that it entered into an agreement
to sell a 51% interest in its Electrical and Metal Products business to an affiliate of the private equity
firm Clayton, Dubilier & Rice, LLC (the ‘‘Investor’’). The Company will form a newly incorporated
holding company, Atkore, to hold the Company’s Electrical and Metal Products business. Upon closing,
Tyco is expected to receive total cash proceeds of approximately $720 million and anticipates
recognizing a gain on the transaction. Pursuant to the Investment Agreement entered into in
connection with the transaction, Tyco and its affiliates have agreed to sell shares of a newly-created
class of cumulative convertible preferred stock of Atkore (the ‘‘Preferred Stock’’) to the Investor for
$306 million. The preferred stock to be sold to Investor will initially represent 51% of the outstanding
capital stock (on an as-converted basis) of Atkore immediately following the closing. Under the terms
of the Investment Agreement, it is anticipated that Atkore will incur new third party indebtedness of
up to $465 million and use such proceeds in part to repay approximately $400 million in intercompany
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