2012 Separation Transaction

12 Months Ended

Sep. 28, 2012

2012 Separation Transaction

2012 Separation Transaction

2. 2012 Separation Transaction

        As discussed in Note 1, the Company completed the spin-offs of ADT and Tyco Flow Control, formerly the North American residential security and flow control businesses of Tyco, respectively, into separate, publicly traded companies in the form of a distribution to Tyco shareholders.

        During fiscal 2012, the Company incurred pre-tax charges of $839 million in connection with activities taken to complete and effectuate the 2012 Separation and to create the revised organizational structure of the Company ("Separation Charges"). The Company has presented $561 million and $278 million of pre-tax charges within income from continuing operations and income from discontinued operations, respectively. The amounts presented within discontinued operations are costs directly related to the 2012 Separation that are not expected to provide a future benefit to the Company. The components of the Separation Charges incurred within continuing operations and discontinued operations consisted of the following ($ in millions):

	For the Year Ended September 28, 2012
	Continuing Operations			Discontinued Operations			Total
Loss on extinguishment of debt (See Note 11)	$	453		$	—		$	453
Professional fees		—			191			191
Non-cash impairment charges		23			—			23
Information technology related costs		—			30			30
Employee compensation costs		74			17			91
Interest expense		—			3			3
Other costs		11			37			48
Total Pre-Tax Separation Charges		561			278			839
Tax-related separation charges		266			(2	)		264
Tax benefit on Pre-Tax Separation Charges		(5	)		(5	)		(10	)
Total Separation Charges, net of tax benefit	$	822		$	271		$	1,093

        During fiscal 2011, the Company incurred $24 million of Separation Charges primarily related to professional fees, which have been presented in income from discontinued operations in the Consolidated Statement of Operations.

        Separation Charges were classified in continuing operations within the Company's Consolidated Statement of Operations as follows ($ in millions):

	For the Year Ended September 28, 2012
Selling, general and administrative expenses ("SG&A")	$	4
Separation costs		71
Restructuring, asset impairments and divestiture charges (gains), net		33
Other expense, net (See Note 6)		453
Total	$	561