-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TAgGcpv25f6NC9+9tgTmlH+8kTxfah8Jst+eRIOG5tr6NrMHjdUQR2IJxlbbUTJl W7K2DJbRO/NAaQo2LEEXAA== 0000950123-97-005471.txt : 19970701 0000950123-97-005471.hdr.sgml : 19970701 ACCESSION NUMBER: 0000950123-97-005471 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970630 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADT LIMITED CENTRAL INDEX KEY: 0000833444 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS BUSINESS SERVICES [7380] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13836 FILM NUMBER: 97632537 BUSINESS ADDRESS: STREET 1: CEDAR HOUSE 41 CEDAR AVE CITY: HAMILTON HM 12 BERMU STATE: D0 BUSINESS PHONE: 8092952244 MAIL ADDRESS: STREET 1: 2255 GLADES RD STE 421A CITY: BOCA RATON STATE: FL ZIP: 334310835 11-K 1 FORM 11-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 -------- FORM 11-K X ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the Fiscal Year ended December 31, 1996 TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the transition period from _________ to _________ Commission File Number 33-26970 ADT SECURITY SERVICES, INC. PROFIT SHARING AND SAVINGS PLAN (Full Title of the Plan) 1750 Clint Moore Road Boca Raton, FL 33431 (Address of Plan) ADT LIMITED (Name of Issuer of the Securities Held Pursuant to the Plan) Cedar House 41 Cedar Avenue Hamilton HM 12, Bermuda (Address of Principal Executive Office) 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. ADT Security Services, Inc. Profit Sharing and Savings Plan (Name of Plan) Date: June 30, 1997 By:/S/ Steve Levine --------------------- Steve Levine Member Profit Sharing and Savings Plan Committee 3 ADT SECURITY SERVICES, INC. PROFIT SHARING AND SAVINGS PLAN --------- INDEX Pages Financial Statements and Exhibits ----- - --------------------------------- Report of Independent Accountants 1-2 Financial Statements: Statements of Net Assets Available for Benefits with Fund Information as of December 31, 1996 and 1995 3-4 Statements of Changes in Net Assets Available for Benefits with Fund Information for the Years Ended December 31, 1996 and 1995 5-7 Notes to Financial Statements 8-15 Supplemental Schedules: Item 27A - Schedule of Assets Held for Investment Purposes as of December 31, 1996 and 1995 16 Item 27D - Schedule of Reportable Transactions for the year ended December 31, 1996 17 Exhibit I - Consent of Independent Accountants 18 4 REPORT OF INDEPENDENT ACCOUNTANTS TO THE ADT SECURITY SERVICES, INC. PROFIT SHARING AND SAVINGS PLAN: We have audited the accompanying statements of net assets available for benefits with fund information of the ADT Security Services, Inc. Profit Sharing and Savings Plan (the "Plan") as of December 31, 1996 and 1995 and the related statements of changes in net assets available for benefits with fund information for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 1996 and 1995, and the changes in net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedules of 1) assets held for investment purposes as of December 31, 1996 and 1995; and 2) reportable transactions for the year ended December 31, 1996 are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The Fund Information in the statements of net assets available for benefits as of December 31, 1996 and 1995 -1- 5 and the statements of changes in net assets available for benefits for the years then ended is presented for purposes of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of each fund. The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. COOPERS & LYBRAND L.L.P. Denver, Colorado June 30, 1997 -2- 6 ADT SECURITY SERVICES, INC. PROFIT SHARING AND SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION as of December 31, 1996
Participant-Directed ----------------------------------------------------------------------- Fund A New Fund B New Fund C New Fund D New Fund E ----------- ------------ ----------- ----------- ---------- ADT Intermediate Disciplined Cash ASSETS: Limited Bond Equity Management Balanced - ------- Share Fund Fund Fund Fund Fund ----------- ------------ ----------- ----------- ---------- Investments, at fair value: ADT Limited Share Fund (cost $42,088,788) $58,210,703* Participation in Fidelity Intermediate Bond Fund (cost $7,999,429) $7,898,693* Participation in Fidelity Disciplined Equity Fund (cost $16,336,798) $16,051,140* Participation in Dreyfus Cash Management Fund (cost $21,432,467) $20,681,767* Participation in Fidelity Puritan Fund (cost $2,343,150) $2,367,484 Participation in Fidelity ContraFund (cost $5,766,012) Participation in Fidelity Worldwide Fund (cost $1,318,387) Participant Loans Due from Broker for Securities Sold 1,049 69,820 7,076 ----------- ---------- ----------- ----------- ---------- Total assets $58,210,703 $7,899,742 $16,051,140 $20,751,587 $2,374,560 LIABILITIES: - ------------ Due to Broker for Securities Purchased $ 33,208 $ 1,845 Administration fees payable 94,171 $ 14,591 27,586 $ 34,269 $ 4,837 ----------- ---------- ----------- ----------- ---------- Total liabilities 127,379 14,591 29,431 $ 34,269 4,837 ----------- ---------- ----------- ----------- ---------- NET ASSETS AVAILABLE FOR BENEFITS $58,083,324 $7,885,151 $16,021,709 $20,717,318 $2,369,723 =========== ========== =========== =========== ==========
Nonparticipant Participant- Directed Directed ----------- ------------ ----------- -------------- New Fund F New Fund G Fund A ----------- ------------ -------------- Aggressive Global Participant ADT Limited Equity Fund Equity Fund Loans Share Fund Total ASSETS: ----------- ------------ ----------- -------------- ------------ - ------- Investments, at fair value: ADT Limited Share Fund (cost $42,088,788) $22,664,797* $ 80,875,500 Participation in Fidelity Intermediate Bond Fund (cost $7,999,429) 7,898,693 Participation in Fidelity Disciplined Equity Fund (cost $16,336,798) 16,051,140 Participation in Dreyfus Cash Management Fund (cost $21,432,467) 750,700* 21,432,467 Participation in Fidelity Puritan Fund (cost $2,343,150) 2,367,484 Participation in Fidelity ContraFund (cost $5,766,012) $6,086,289 6,086,289 Participation in Fidelity Worldwide Fund (cost $1,318,387) $1,388,754 1,388,754 Participant Loans $4,955,194 4,955,194 Due from Broker for Securities Sold 77,945 ---------- ---------- ---------- ----------- ------------ Total assets $6,086,289 $1,388,754 $4,955,194 $23,415,497 $141,133,466 LIABILITIES: - ------------ Due to Broker for Securities Purchased $ 8,810 $ 5,265 $ 14,232 $ 63,360 Administration fees payable 9,534 2,666 42,742 230,396 ---------- ---------- ---------- ----------- ------------ Total liabilities 18,344 7,931 -- $ 56,974 293,756 ---------- ---------- ---------- ----------- ------------ NET ASSETS AVAILABLE FOR BENEFITS $6,067,945 $1,380,823 $4,955,194 $23,358,523 $140,839,710 ========== ========== ========== =========== ============
* Investment value represents 5% or more of the total plan net assets available for benefits. -3- The accompanying notes are an integral part of the financial statements 7 ADT SECURITY SERVICES, INC. PROFIT SHARING AND SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION as of December 31, 1995
Participant-Directed ------------------------------------------------------------------------- Fund A New Fund B New Fund C New Fund D New Fund E ----------- ------------ ----------- ----------- ---------- ADT Intermediate Disciplined Cash Limited Bond Equity Management Balanced ASSETS: Share Fund Fund Fund Fund Fund - ------- ----------- ------------ ----------- ----------- ---------- Investments, at fair value: ADT Limited Share Fund (cost $43,632,962) $39,344,661* Participation in Fidelity Intermediate Bond Fund (cost $10,400,970) $10,573,420* Participation in Fidelity Disciplined Equity Fund (cost $18,033,851) $16,576,656* Participation in Dreyfus Cash Management Fund (cost $24,244,623) $23,243,884* Participation in Fidelity Puritan Fund (cost $868,953) $891,707 Participation in Fidelity ContraFund (cost $2,926,890) Participation in Fidelity Worldwide Fund (cost $396,042) Participant Loans (13,487) (46,292) (33,070) (101) Due from Broker for Securities Sold 26,757 4,487 9,667 1,509 3,836 Company contribution receivable 151,552 ----------- ----------- ----------- ----------- -------- Total assets $39,522,970 $10,564,420 $16,540,031 $23,212,323 $895,442 LIABILITIES: - ------------ Due to Broker for Securities Purchased $ 150,258 $ 58,890 $ 1,840,387 $ 111,777 $ 23,378 Administration fees payable 11,821 5,413 3,428 22,438 4,870 ----------- ----------- ----------- ----------- -------- Total liabilities 162,079 64,303 1,843,815 $ 134,215 $ 28,248 ----------- ----------- ----------- ----------- -------- NET ASSETS AVAILABLE FOR BENEFITS $39,360,891 $10,500,117 $14,696,216 $23,078,108 $867,194 =========== =========== =========== =========== ========
Nonparticipant Participant- Directed Directed ----------- ----------- ----------- -------------- New Fund F New Fund G Fund A ----------- ----------- ----------- Aggressive Global Participant ADT Limited ASSETS: Equity Fund Equity Fund Loans Share Fund Total - ------- ----------- ----------- ----------- --------------- ------------ Investments, at fair value: ADT Limited Share Fund (cost $43,632,962) $15,185,859* $ 54,530,520 Participation in Fidelity Intermediate Bond Fund (cost $10,400,970) 10,573,420 Participation in Fidelity Disciplined Equity Fund (cost $18,033,851) 16,576,656 Participation in Dreyfus Cash Management Fund (cost $24,244,623) 1,000,739* 24,244,623 Participation in Fidelity Puritan Fund (cost $868,953) 891,707 Participation in Fidelity ContraFund (cost $2,926,890) $2,854,149 2,854,149 Participation in Fidelity Worldwide Fund (cost $396,042) $401,439 401,439 Participant Loans (723) (198) $2,430,708 2,336,837 Due from Broker for Securities Sold 46,256 Company contribution receivable 747,266 898,818 ---------- -------- ---------- ----------- ------------ Total assets $2,853,426 $401,241 $2,430,708 $16,933,864 $113,354,425 LIABILITIES: - ------------ Due to Broker for Securities Purchased $ 221,563 $ 4,088 $ 2,410,341 Administration fees payable 7,140 4,175 $ 27,582 86,867 ---------- -------- ---------- ----------- ------------ Total liabilities 228,703 8,263 -- 27,582 2,497,208 ---------- -------- ---------- ----------- ------------ NET ASSETS AVAILABLE FOR BENEFITS $2,624,723 $392,978 $2,430,708 $16,906,282 $110,857,217 ========== ======== ========== =========== ============
*Investment value represents 5% or more of the total plan net assets available for benefits. -4- The accompanying notes are an integral part of the financial statements 8 ADT SECURITY SERVICES, INC. PROFIT SHARING AND SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION as of December 31, 1996
Participant-Directed ------------------------------------------------------------------------------- Fund A New Fund B New Fund C New Fund D New Fund E ------------ ------------ ------------ ------------ ----------- ADT Intermediate Disciplined Cash Limited Bond Equity Management Balanced Share Fund Fund Fund Fund Fund ------------ ------------ ------------ ------------ ----------- Additions: Contributions: Participants $ 5,818,199 $ 871,228 $ 1,555,467 $ 1,555,324 $ 257,631 Company 499,388 Rollover 37,697 617 25,300 386 17,128 ------------ ------------ ------------ ------------ ----------- Total contributions 6,355,284 871,845 1,580,767 1,555,710 274,759 ------------ ------------ ------------ ------------ ----------- Income from investments: Interest 332 Dividends 1,029,928 Net appreciation (depreciation) in fair value of investments 19,325,240 332,338 4,033,775 102,608 267,040 ------------ ------------ ------------ ------------ ----------- Total income (loss) from investments 19,325,240 332,338 4,033,775 1,132,868 267,040 ------------ ------------ ------------ ------------ ----------- Total additions (deductions) 25,680,524 1,204,183 5,614,542 2,688,578 541,799 ------------ ------------ ------------ ------------ ----------- Deductions: Distributions and withdrawals (5,290,968) (1,757,139) (1,976,422) (4,651,292) (250,633) Administration fees (141,131) (21,671) (40,209) (49,602) (6,270) ------------ ------------ ------------ ------------ ----------- Total deductions (5,432,099) (1,778,810) (2,016,631) (4,700,894) (256,903) Transfers between funds (68,189) (1,882,885) (1,960,105) (25,226) 1,247,009 Participant loans (1,457,813) (157,454) (312,313) (323,248) (29,376) ------------ ------------ ------------ ------------ ----------- INCREASE(DECREASE) IN NET ASSETS 18,722,423 (2,614,966) 1,325,493 (2,360,790) 1,502,529 ------------ ------------ ------------ ------------ ----------- NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1995 39,360,901 10,500,117 14,696,216 23,078,108 867,194 ------------ ------------ ------------ ------------ ----------- NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1996 $ 58,083,324 $ 7,885,151 $ 16,021,709 $ 20,717,318 $ 2,369,723 ============ ============ ============ ============ ===========
Nonparticipant Participant-Directed Directed -------------------------------------------- -------------- New Fund F New Fund G Fund A ----------- ----------- ----------- Aggressive Global Participant ADT Limited Equity Fund Equity Fund Loans Share Fund Total ----------- ----------- ------------ -------------- ------------- Additions: Contributions: Participants $ 597,151 $ 171,219 $ 10,826,219 Company $ 1,372,264 1,871,652 Rollover 103,942 61,374 246,444 ----------- ----------- ------------ ------------ ------------- Total contributions 701,093 232,593 $ 1,372,264 12,944,315 ----------- ----------- ------------ ------------ ------------- Income from investments: Interest $ 328,537 328,869 Dividends 1,029,928 Net appreciation (depreciation) in fair value of investments 1,120,240 144,083 8,609,527 33,934,851 ----------- ----------- ------------ ------------ ------------- Total income (loss) from investments 1,120,240 144,083 328,537 8,609,527 35,293,648 ----------- ----------- ------------ ------------ ------------- Total additions (deductions) 1,821,333 376,676 328,537 9,981,791 48,237,963 ----------- ----------- ------------ ------------ ------------- Deductions: Distributions and withdrawals (534,217) (176,592) (196,972) (3,084,839) (17,919,074) Administration fees (13,563) (3,465) (60,485) (336,396) ----------- ----------- ------------ ------------ ------------- Total deductions (547,780) (180,057) (196,972) (3,145,324) (18,255,470) Transfers between funds 2,255,622 817,990 (384,216) -- Participant loans (85,953) (26,764) 2,392,921 -- ----------- ----------- ------------ ------------ ------------- INCREASE(DECREASE) IN NET ASSETS 3,443,222 987,845 2,524,486 6,452,251 29,982,493 ----------- ----------- ------------ ------------ ------------- NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1995 2,624,723 392,978 2,430,708 16,906,272 110,857,217 ----------- ----------- ------------ ------------ ------------- NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1996 $ 6,067,945 $ 1,380,823 $ 4,955,194 $ 23,358,523 $ 140,839,710 =========== =========== ============ ============ =============
-5- The accompanying notes are an integral part of the financial statements 9 ADT SECURITY SERVICES, INC. PROFIT SHARING AND SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION as of December 31, 1995
Participant-Directed -------------------------------------------------------------------------------- Fund A Old Fund B Old Fund C Old Fund D New Fund B ------------ ------------ ------------ ------------ ------------ ADT Fixed General Money Intermediate Limited Income Equity Market Bond Share Fund Fund Fund Fund Fund ------------ ------------ ------------ ------------ ------------ Additions: Contributions: Participants $ 5,281,336 $ 621,236 $ 1,076,317 $ 1,159,312 $ 418,743 Company 461,049 ------------ ------------ ------------ ------------ ------------ Total contributions 5,742,385 621,236 1,076,317 1,159,312 418,743 ------------ ------------ ------------ ------------ ------------ Income from investments: Interest 16,044 12,566 10,889 1,031,400 Dividends Net appreciation (depreciation) in fair value of investments 10,353,393 1,088,729 4,128,386 351,380 ------------ ------------ ------------ ------------ ------------ Total income (loss) from investments 10,369,437 1,101,295 4,139,275 1,031,400 351,380 ------------ ------------ ------------ ------------ ------------ Total additions (deductions) 16,111,822 1,722,531 5,215,592 2,190,712 770,123 ------------ ------------ ------------ ------------ ------------ Deductions: Distributions and withdrawals (3,200,019) (1,075,275) (1,204,393) (2,654,180) (174,622) Administration fees (165,205) (664) (1,941) (23,274) (71,240) ------------ ------------ ------------ ------------ ------------ Total deductions (3,365,224) (1,075,939) (1,206,334) (2,677,454) (245,862) Transfers between funds 761,872 (11,136,845) (18,384,064) (24,662,253) 10,224,368 Participant loans (1,141,620) (248,512) ------------ ------------ ------------ ------------ ------------ INCREASE(DECREASE) IN NET ASSETS 12,366,850 (10,490,253) (14,374,806) (25,148,995) 10,500,117 ------------ ------------ ------------ ------------ ------------ NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1994 26,994,041 10,490,253 14,374,806 25,148,995 ------------ ------------ ------------ ------------ ------------ NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1995 $ 39,360,891 $ 0 $ 0 $ 0 $ 10,500,117 ============ ============ ============ ============ ============
Participant-Directed --------------------------------------------------------------------------- New Fund C New Fund D New Fund E New Fund F New Fund G ------------ --------------- ---------- ----------- ------------- Disciplined Cash Management Balanced Aggressive Global Equity Equity Fund Fund Fund Equity Fund Fund ------------ --------------- ---------- ----------- ------------- Additions: Contributions: Participants $ 690,662 $ 759,923 $ 30,817 $ 78,389 $ 14,328 Company ------------ ------------ --------- ----------- --------- Total contributions 690,662 759,923 30,817 $ 78,389 14,328 ------------ ------------ --------- ----------- --------- Income from investments: Interest Dividends 441,486 Net appreciation (depreciation) in fair value of investments (1,516,543) 13,741 (142,672) (1,987) ------------ ------------ --------- ----------- --------- Total income (loss) from investments (1,516,543) 441,486 13,741 (142,672) (1,987) ------------ ------------ --------- ----------- --------- Total additions (deductions) (825,881) 1,201,409 44,558 (64,283) 12,341 ------------ ------------ --------- ----------- --------- Deductions: Distributions and withdrawals (355,694) (728,732) (1,288) (3,007) (1,201) Administration fees (101,849) (114,555) (5,065) (7,410) (4,215) ------------ ------------ --------- ----------- --------- Total deductions (457,543) (843,287) (6,353) (10,417) (5,416) Transfers between funds 16,345,936 23,312,999 855,998 2,732,647 387,964 Participant loans (366,296) (593,013) (27,009) (33,224) (1,911) ------------ ------------ --------- ----------- --------- INCREASE(DECREASE) IN NET ASSETS 14,696,216 23,078,108 867,194 2,624,723 392,978 ------------ ------------ --------- ----------- --------- NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1994 ------------ ------------ --------- ----------- --------- NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1995 $ 14,696,216 $ 23,078,108 $ 867,194 $ 2,624,723 $ 392,978 ============ ============ ========= =========== =========
-6- The accompanying notes are an integral part of the financial statements. 10 ADT SECURITY SERVICES, INC. PROFIT SHARING AND SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION, Continued as of December 31, 1995
Participant- Nonparticipant Directed Directed Participant ADT Limited Loans Share Fund Total ------------ -------------- ------------ Additions: Contributions: Participants $ $ $ 10,131,063 Company 2,368,964 2,830,013 ------------ ------------ ------------ Total contributions 2,368,964 12,961,076 ------------ ------------ ------------ Income from investments: Interest 1,070,899 Dividends 441,486 Net appreciation (depreciation) in fair value of investments 4,437,169 18,711,596 ------------ ------------ ------------ Total income (loss) from investments 4,437,169 20,223,981 ------------ ------------ ------------ Total additions (deductions) 6,806,133 33,185,057 ------------ ------------ ------------ Deductions: Distributions and withdrawals (1,405,721) (10,804,132) Administration fees (70,802) (566,220) ------------ ------------ ------------ Total deductions (1,476,523) (11,370,352) Transfers between funds (438,622) -- Participant loans 2,430,708 (19,123) -- ------------ ------------ ------------ INCREASE(DECREASE) IN NET ASSETS 2,430,708 4,871,865 21,814,705 ------------ ------------ ------------ NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1994 12,034,417 89,042,512 ------------ ------------ ------------ NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1995 $ 2,430,708 $ 16,906,282 $110,857,217 ============ ============ ============
-7- The accompanying notes are an integral part of the financial statements. 11 ADT SECURITY SERVICES, INC. PROFIT SHARING AND SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS 1. PLAN DESCRIPTION The ADT Security Services, Inc. Profit Sharing and Savings Plan (the "Plan") is administered through a trustee, (the "Trustee"), currently Mellon Bank, and by a committee consisting of employees of ADT Security Services, Inc. (the "Company"). Under the provisions of the Plan, eligible employees may make participating contributions from 1% to 8% of total compensation (including commissions, bonuses and overtime pay), which are eligible for the Company's matching contributions. Such contributions may be made on an after-tax basis or a before-tax basis pursuant to Section 401(k) of the Internal Revenue Code; before-tax contributions being limited to 1% to 4% of compensation. Participants may also elect to make additional after-tax contributions of up to an additional 5% of their compensation, which are not eligible for the Company's matching contributions. The Company makes contributions to the Trustee, of an amount equal to 20% of the aggregate participating contributions (up to 8% of each participant's compensation) of participants (the "basic" contribution). Effective January 1, 1995, the plan was amended to allow the Company, in its sole discretion, to make a supplemental contribution, in any percentage, subject to the maximum limit or elect to make no supplemental contribution. The maximum supplemental contribution is 80% of the aggregate participating contributions of the employees made during the year. The Company made no supplemental contributions for the year ended December 31, 1996 and $947,202 for the year ended December 31, 1995. In 1995, the investment options of the Plan were changed as a result of a Plan amendment. Prior to October 1, 1995, participants were able to elect to have contributions invested in either Fund A - ADT Limited Share Fund which invests in common shares of ADT Limited; Fund B - Fixed Income Fund which consists of investments in the Trustee's pooled fixed income fund which invests in obligations such as U.S. Treasury notes, other federal agency obligations, corporate obligations and temporary investments, which have an average maturity of four to five years; Fund C - General Equity Fund which consists of investments in the Trustee's pooled common stock fund which invests in such industries as automotive, banking, drugs, medical and health, insurance, chemicals, food products, oil and gas, utilities and electronics; and/or, Fund D - Money Market Fund which consists of investments in the Trustee's pooled short term fund of money market instruments which invests in obligations such as discounted, demand 8 12 NOTES TO FINANCIAL STATEMENTS, Continued ------------------ 1. PLAN DESCRIPTION, Continued and interest bearings notes, U.S. Treasury bills and notes, corporate temporary investments, time deposits, and certificates of deposit. The investment options in effect prior to October 1, 1995 are referred to within the statements of net assets with fund information and the statements of changes in net assets with fund information and the notes to financial statements as the Old Fund B, C and D. Effective October 1, 1995, six new mutual funds replaced the old investment however, the ADT Limited Stock Fund remained as an investment option. The new investment options are as follows: Fund B - Intermediate Bond Fund is invested in Fidelity's Intermediate Bond Fund which consists of investments in fixed income obligations in domestic and foreign debt securities, which have an average maturity of three to ten years; Fund C - Equity Fund is invested in Fidelity's Disciplined Equity Fund which consists of investments in domestic common stocks in such industries as energy, banking, health, technology, utilities and consumer products; Fund D - Cash Management Fund is invested in the Dreyfus Cash Management Fund which consists of investments in short-term money market obligations such as U.S. Government securities, certificates of deposit, time deposits, bankers' acceptances, repurchase agreements, commercial paper and other short-term corporate obligations; Fund E - Balanced Fund is invested in Fidelity's Puritan Fund which consists of investments in common stocks and preferred stocks in such industries as energy, finance, durables, basic industries and retail and investments in bonds consisting of investments in U.S. Government and government agency securities, corporate bonds, mortgage securities and foreign bonds; Fund F - Aggressive Equity Fund is invested in Fidelity's Contrafund which consists of investments in common stocks and preferred stocks, generally in small and medium-sized companies, in such industries as finance, technology, energy, durables, and basic industries; Fund G - Global Equity is invested in Fidelity's Worldwide Fund which consists of investments in equity securities issued by companies of all sizes worldwide, in such industries as finance, basic industries, retail, durables, construction and real estate, primarily in such countries as the U.S., the Netherlands, Germany, Japan, France, Switzerland, and Finland. The investment options in effect beginning October 1, 1995 are referred to within the statements of net assets with fund information and statements of changes in net assets with fund information and the notes to the financial statements as the New Fund B, C, D, E, F and G. The old and the 9 13 NOTES TO FINANCIAL STATEMENTS, Continued ------------------ 1. PLAN DESCRIPTION, Continued new funds are collectively referred to as the "Trust Fund", hereafter. Pursuant to the Plan amendment, on October 1, 1995, the balance in each of the participants' accounts, within old funds B, C, and D were transferred into the new funds B, C, and D, respectively. Prior to the Plan amendment, participants were able to change their investment options four times in a 12-month period. Effective October 1, 1995, participants may change their investment options, contribution percentages, and transfer account balances on an unlimited basis. The percentage contributed to each fund must be in increments of 10%. The total number of participants in each fund at December 31, 1996 is as follows: Fund A - ADT Limited Share Fund 5,963 New Fund B - Intermediate Bond Fund 2,020 New Fund C - Equity Fund 2,443 New Fund D - Cash Management Fund 3.021 New Fund E - Balance Fund 492 New Fund F - Aggressive Equity Fund 810 New Fund G - Global Equity Fund 424 The total number of participants in the Plan was 6,275 as of December 31, 1996 which is less than the sum of the number of participants shown above because participants have invested their contributions in more than one fund. Each participant's account is credited with the participant's contributions. The Company's 20% basic contributions, and the Company's supplemental contributions, if any, are invested in the ADT Limited Share Fund and credited to the participant's account. Pension eligible participants are entitled to direct Company contributions. Effective January 1, 1995, the Plan was amended to limit the contributions of "Highly Compensated" associates, as defined under IRS regulations, to the 8% maximum participating contributions only. Plan earnings and losses in each fund are allocated to participant accounts relative to the participant's account balance in each respective fund. Effective November 1, 1995, a loan provision is available to participants in which an active participant may borrow from the participant's vested account balance a mimimum of $1,000 up to 50% of the vested account balance. The maximum amount that can be borrowed is $50,000. Loan transactions are treated as a transfer to (from) the investment fund from 10 14 NOTES TO FINANCIAL STATEMENTS, Continued ------------------ 1. PLAN DESCRIPTION, Continued (to) the Participant Loan Fund. Loan terms range from 1-5 years or up to 15 years for home purchase loans. The loans are collateralized by the balance in the participants' account and bear interest at a rate commensurate with prevailing rates at the beginning of each month and are fixed for the duration of the loan. Principal and interest is paid ratably through payroll deductions. Effective January 1, 1995, the Plan was amended to allow newly hired associates to contribute to the Plan only after they have completed one year of employment service with ADT Security Services or one of its subsidiaries or affiliates. Temporary employees are no longer eligible to participate in the Plan. Termination of service for any reason other than retirement, death, disability or layoff results in the forfeiture of the nonvested portion of a participant's account. Under the terms of the Plan, forfeitures are used to reduce subsequent Company contributions. Forfeitures for 1996 and 1995 were $201,975 and $199,734, respectively. A participant is fully vested at all times in the amount credited to the Plan account attributable to the participant's own contributions. A participant becomes fully vested in the amount attributable to Company contributions after three years of service, as defined in the Plan document. Participants should refer to the Plan document for a more complete description of the Plan's provisions. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Method of Accounting The financial statements of the Plan have been prepared on the accrual basis of accounting. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets available for benefits during the reporting period. Actual results could differ from those estimates. 11 15 NOTES TO FINANCIAL STATEMENTS, Continued ------------------ 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued Risks and Uncertainties The Plan provides for various investment options in a combination of mutual funds and other investment securities. Investment securities are exposed to various risks, such as interest rate, market and credit. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risks in the near term would materially affect participants' account balances and the amounts reported in the statement of net assets available for plan benefits and the statement of changes in net assets available for plan benefits. Security Transactions and Related Investment Income Security transactions are accounted for on the trade date. Dividend income is recorded on the ex-dividend date and interest income is accrued as earned. Fees and Expenses All taxes, expenses, fees and charges of any kind in respect of the Trust Fund and most reasonable expenses of administering the Plan shall be paid by the Plan, unless the Company, at its discretion, elects to pay such taxes, expenses, fees or charges. All administrative fees, other than such costs as direct labor and related support costs, of the Plan were paid by the Plan during 1996 and 1995. Valuation of Investment Assets The Plan's investments are stated at fair value. Investments in ADT Limited common stock are valued based on the closing price of the stock at December 31, 1996 and 1995 as determined by the New York Stock Exchange. Investments in pooled funds of the Trustee are valued at fair value as reported by the Trustee. Quoted market prices are used to value investments in the mutual funds of Fidelity Investments. These investments are valued every business day by the mutual fund manager based on the fund's share price called the net asset value. Investments in the Dreyfus Cash Management Fund are valued at fair value as reported by the Trustee. Derivative Financial Instruments The Plan has only limited involvement with derivative financial instruments and does not use them for trading purposes. During 1996 and 1995, derivative investments comprised an immaterial portion of the total net assets available for benefits. Withdrawals and Distributions Withdrawals and distributions are recorded when paid. 12 16 NOTES TO FINANCIAL STATEMENTS, Continued ------------------ 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued Net Appreciation (Depreciation) in the Fair Value of Investments The Plan presents in the statements of changes in net assets available for benefits the net appreciation (depreciation) in the fair value of its investments, which consists of the realized gains (losses) and the unrealized appreciation (depreciation) on those investments. 3. VALUATION OF PARTICIPANTS' ACCOUNTS Prior to October 1, 1995, participants' accounts are valued at fair value at the end of each calendar month by the Plan Trustee on a cash and share equivalent basis. Effective October 1, 1995, participants' accounts are valued at fair value at the close of each business day by the Plan Trustee on a cash and share equivalent basis. 4. FEDERAL INCOME TAX STATUS On November 21, 1995, a favorable updated determination letter was received from the IRS stating that the Plan is qualified under Sections 401(a) and 401(k) of the Internal Revenue Code and, therefore, the trust established under the Plan is exempt from Federal income tax under Section 501(a) of the Code. As long as the Plan is qualified under the tax laws, participants will not be taxed currently on Company contributions and before tax [401(k)] participant contributions to the Plan or on income earned by the Trust Fund. When a participant, beneficiary or estate of a participant receives a distribution under the Plan, such distribution is taxable, except to the extent such distribution represents the return of the participant's own after-tax contributions. The tax treatment of the balance of such distribution depends on the form and time of payment. 5. PRIORITIES UPON TERMINATION OF THE PLAN The Company can amend the Plan at any time and any amendment may be given retroactive effect as the Company may determine, subject to the qualification that, except for the return of Company contributions under certain circumstances, the assets of the Plan must be used exclusively for the benefit of participants and their beneficiaries, and no participant may be deprived of any vested interest under the Plan. The Plan may be terminated or contributions under the Plan may be permanently discontinued at any time by the Company, in which event the Trustee will continue to act until the Plan's assets shall have been distributed in accordance with the Plan. Upon termination or discontinuance of the Plan, participants shall fully vest in the Plan. 13 17 NOTES TO FINANCIAL STATEMENTS, CONTINUED 6. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500:
DECEMBER 31, DECEMBER 31, 1996 1995 ------------- ------------- Net assets available for benefits per the financial statements $ 140,835,170 $ 110,857,217 Amounts allocated to withdrawing participants (26,595) (61,235) ------------- ------------- Net assets available for benefits per the Form 5500 $ 140,808,575 $ 110,795,982 ============= =============
The following is a reconciliation of benefits paid to participants per the financial statements to the Form 5500:
DECEMBER 31, DECEMBER 31, 1996 1995 ------------ ------------ Benefits paid to participants per the financial statements $ 17,919,074 $ 10,804,132 Add: Amounts allocated to withdrawing participants at December 31, 1996 and 1995 26,595 61,235 Less: Amounts allocated to withdrawing participants at December 31, 1995 and 1994 (61,235) (646,244) ------------ ------------ Benefits paid to participants per the Form 5500 $ 17,884,434 $ 10,219,123 ============ ============
Amounts allocated to withdrawing participants are recorded on the Form 5500 for benefit claims that have been processed and approved for payment prior to December 31, 1996 and 1995 but not yet paid as of that date. The Plan's financial statements reflect amounts allocated to withdrawing participants for benefit claims when paid (see Note 2). 14 18 NOTES TO FINANCIAL STATEMENTS, CONTINUED ------------------ 7. RELATED PARTY TRANSACTIONS Fund A - ADT Limited Share Fund invests in common shares of ADT Limited, the ultimate parent of the Company. As such, these transactions qualify as parties-in interest. The Plan purchased common shares of ADT Limited amounting to $3,841,468 and $7,017,735 during 1996 and 1995, respectively. The Plan sold common shares of ADT Limited amounting to $2,588,148 and $509,653 during 1996 and 1995, respectively. 15 19 ADT SECURITY SERVICES, INC. PROFIT SHARING AND SAVINGS PLAN Item 27A - Schedule of Assets Held for Investment Purposes
Fair Value Cost ------------------------------ ------------------------------ December 31, December 31, December 31, December 31, 1996 1995 1996 1995 ----------- ----------- ----------- ----------- FUND A: ADT Limited Share Fund (rates of return for the years ended December 31, 1996 and 1995 were 50.44% and 38.69%, respectively) $80,875,500 $54,530,520 $42,088,788 $43,632,962 Dreyfus Cash Management Class A Fund (effective interest rate for the year ended December 31, 1996 was 5.42% and for the 3 months ended December 31, 1995 was 1.45%) 750,700 1,000,739 750,700 1,000,739 ----------- ----------- ----------- ----------- $81,626,200 $55,531,259 $42,839,488 $44,633,701 =========== =========== =========== =========== FUND B: Fidelity Commonwealth Trust Intermediate Bond Fund (rate of return for the year ended December 31, 1996 was 4.3% and for the 3 months ended December 31, 1995 was 3.33%) $ 7,898,693 $10,573,420 $ 7,999,430 $10,400,970 FUND C: Fidelity Capital Trust Disciplined Equity Fund (rate of return for the year ended December 31, 1996 was 29.69% and for the 3 months ended December 31, 1995 was <11.41%>) $16,051,140 $16,576,656 $16,336,798 $18,033,851 FUND D: Dreyfus Cash Management Class A Fund (effective interest rate for the year ended December 31, 1996 was 5.42% and for the 3 months ended December 31, 1995 was 1.45%) $20,681,767 $23,243,884 $20,681,767 $23,243,884 FUND E: Fidelity Puritan Fund (rate of return for the year ended December 31, 1996 was 17.97% and for the 3 months ended December 31, 1995 was 2.99%) $ 2,367,484 $ 891,707 $ 2,343,150 $ 868,953 FUND F: Fidelity ContraFund Inc. (rate of return for the year ended December 31, 1996 was 31.16% and for the 3 months ended December 31, 1995 was <5.30%>) $ 6,086,289 $ 2,854,149 $ 5,766,012 $ 2,926,890 FUND G: Fidelity Investment Trust Worldwide Fund (rate of return for the year ended December 31, 1996 was 18.91% and for the 3 months ended December 31, 1995 was .94%) $ 1,388,754 $ 401,439 $ 1,318,387 $ 396,042 PARTICIPANT LOANS: ADT Participant Loans (interest rate of 9.25% - 9.50% for the year ended December 31, 1996 and 9.75% for the 2 months ended December 31, 1995) $ 4,950,654 $ 2,430,708 $ 4,950,654 $ 2,430,708
16 20 ADT SECURITY SERVICES, INC. PROFIT SHARING AND SAVINGS PLAN Item 27D - Schedule of Reportable Transactions for the year ended December 31, 1996 ------------------
Purchases Sales --------------------------- -------------------------------------------- Number of Transaction Expenses Number of Transaction Net Gain Description of Asset Transactions Amount Incurred Transactions Amount (Loss) - -------------------- ------------ ----------- -------- ------------ ----------- --------- Series Transactions: ADT Limited Share Fund 8 $ 3,841,468 $17,830 5 $ 2,588,148 $ 866,559 Fidelity Capital Trust Disciplined Equity Fund 82 $ 3,496,883 - 169 $ 5,038,267 $(200,085) Dreyfus Cash Management Class A Fund 251 $20,919,266 - 296 $23,407,620 - Fidelity ContraFund, Inc. 161 $ 4,231,910 - 87 $ 1,475,007 $ 8,011
17 EX-23.1 2 CONSENT OF COOPERS & LYBRAND, LLP 1 CONSENT OF INDEPENDENT ACCOUNTANTS ADT Security Services, Inc. Profit Sharing and Savings Plan: We consent to the incorporation by reference in the Registration Statement of ADT Security Services, Inc. Profit Sharing and Savings Plan on Form S-8 (File No. 33-26970) of our report dated June 30, 1997 on our audits of the financial statements and financial statement schedules of ADT Security Systems, Inc. Profit Sharing and Savings Plan as of and for the years ended December 31, 1996 and 1995, which report is included in this Annual Report on Form 11-K. Coopers & Lybrand, L.L.P. Denver, Colorado June 30, 1997 18 -----END PRIVACY-ENHANCED MESSAGE-----