ADT 2003 Annual Report Download - page 53

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receivables. The amount outstanding under this program was
$103.2 million at September 30, 2003.
On November 12, 2003, TIG issued $1.0 billion par value 6%
Notes due 2013 in a private placement offering. The Notes are
fully and unconditionally guaranteed by Tyco. The Company
announced its intention to negotiate new revolving bank credit
facilities and, upon negotiation of such facilities, to use the note
proceeds to reduce the $2.0 billion outstanding under the 5-year
revolving credit facility due 2006. In addition, subsequent to
year end, TIG executed LIBOR-in-arrears interest rate swaps on
notional value $875 million against these notes. Under these
swaps Tyco will receive 6% and pay on average 6-month LIBOR
plus 90.3 basis points.
Tyco is currently negotiating a $1.5 billion 3-year revolving
credit facility which includes a $500 million sublimit for the
issuance of standby and commercial letters of credit and a $1.0
billion 364-day revolving credit facility with a 1-year term out
option. These facilities have a variable interest rate based on
LIBOR. The margin over LIBOR payable by TIG can vary
depending upon changes in its credit rating. These new facilities
will replace the $1.5 billion undrawn 364-day revolving credit
facility, due to expire at the end of January 2004, and the $2.0
billion drawn 5-year revolving credit facility, due to expire in
February 2006.
The following table details our debt ratings at September 30, 2003.
SEPTEMBER 30, 2003 SHORT TERM LONG TERM
Moody’s Not prime Ba2
Standard & Poor’s A3 BBB-
Fitch B BB
On December 3, 2003, Fitch upgraded its rating to BB+ on the
senior unsecured debt of Tyco as well as on the unconditionally
guaranteed debt of TIG. Fitch’s upgrade of Tyco’s long-term
debt recognizes the progress made by the Company with
respect to debt reduction and improving cash flow.
On December 11, 2003, Moody’s confirmed the debt ratings
of TIG and raised the rating outlook of Tyco to positive. Moody’s
indicated that this action reflects the progress the Company has
made in addressing recent liquidity concerns through the refi-
nancing/repayment of approximately $11 billion of debt matu-
rities and putable debt in 2003, as well as Moody’s expectation
for continued strong free cash flow generation, profit improve-
ment and debt reduction over the near-to-intermediate-term.
The security ratings set forth above are not a recommendation
to buy, sell or hold securities and may be subject to revision or
withdrawal by the assigning rating organization. Each rating
should be evaluated independently of any other rating.
TYCO INTERNATIONAL LTD.
COMMITMENTS AND CONTINGENCIES
A summary of our contractual obligations and commitments for debt, minimum lease payment obligations under non-cancellable
operating leases and other obligations are as follows ($ in millions):
FISCAL 2004 FISCAL 2005 FISCAL 2006 FISCAL 2007 FISCAL 2008 THEREAFTER
Debt (1) $2,718.4 $2,258.6 $3,949.2 $«««704.0 $122.6 $11,216.3
Operating leases (2) 714.2 563.2 421.4 303.1 227.8 1,030.1
Purchase obligations 23.2 11.6 10.1 8.8 8.3 —
Total contractual cash obligations $3,455.8 $2,833.4 $4,380.7 $1,015.9 $358.7 $12,246.4
(1) Includes capital lease obligations.
(2) Includes obligations under an off-balance sheet leasing arrangement for five cable laying sea vessels.
In addition to the commitments discussed in the table above, a
subsidiary of the Company has the option to buy five cable lay-
ing sea vessels upon expiration of the lease in fiscal 2007 for
approximately $280 million, or return the vessels to the lessor
and, under a guarantee, pay any shortfall in sales proceeds from
a third party in an amount not to exceed $235 million.
At September 30, 2003, the Company had outstanding letters
of credit and letters of guarantee in the amount of $849.2 million.
At September 30, 2003, Tyco had unsecured credit facilities
of $1.5 billion due 2004, all of which is undrawn and available,
and $2.0 billion due 2006, all of which is drawn (see Note 19 to
the Consolidated Financial Statements). In addition, certain of
the Company’s operating subsidiaries have overdraft and similar
types of facilities which total $1.1 billion, of which $0.7 billion
was undrawn and available. These facilities expire at various
dates through the year 2015, most of which are renewable and
are established primarily within international operations.
At September 30, 2003, the Company had a contingent
liability of $80 million related to the fiscal 2001 acquisition of
Com-Net by the Electronics segment. The $80 million is the