ADT 2005 Annual Report Download - page 130

Commitments and Contingencies
Contractual Obligations
A summary of our contractual obligations and commitments for debt, minimum lease payment
obligations under non-cancelable operating leases and other obligations at September 30, 2005 is as
follows ($ in millions):
2006 2007 2008 2009 2010 Thereafter
Debt(1) .................. $1,954 $ 759 $1,383 $1,734 $ 19 $6,705
Operating leases(2) ......... 583 449 344 248 165 548
Purchase obligations(3) ...... 183 29 20 9 9 28
Total contractual cash
obligations(4) ............ $2,720 $1,237 $1,747 $1,991 $193 $7,281
(1) Includes capital lease obligations and excludes interest.
(2) Includes obligations under an off-balance sheet leasing arrangement under which a subsidiary of the Company has the option
to buy five cable laying sea vessels (see Note 17 to the Consolidated Financial Statements).
(3) Purchase obligations consist of commitments for purchases of good and services.
(4) Minimum pension funding requirements are not included as such amounts have not been determined for all periods
presented. The minimum required contributions to our pension plans are expected to be approximately $118 million in 2006.
At September 30, 2005, the Company had outstanding letters of credit and letters of guarantee in
the amount of $1.4 billion.
At September 30, 2005, TIGSA had unsecured credit facilities of $1.5 billion due December 22,
2006, and $1.0 billion due December 16, 2009, both of which were undrawn and available (see Note 15
to the Consolidated Financial Statements). In addition, certain of the Company’s operating subsidiaries
have overdraft and similar types of facilities, which total $605 million, of which $599 million was
undrawn and available at September 30, 2005. These facilities expire at various dates through the year
2013, most of which are renewable and are established primarily within our international operations.
At September 30, 2005, the Company had a contingent purchase price liability of $80 million
related to the 2001 acquisition of Com-Net by Electronics. This represents the maximum amount
payable to the former shareholders of Com-Net only after the construction and installation of a
communications system for the State of Florida is finished and the State has approved the system based
on the guidelines set forth in the contract. A liability for this contingency has not been recorded in
Tyco’s Consolidated Financial Statements as the outcome of this contingency cannot be reasonably
determined.
In June 2004, TIGSA entered into a $500 million 3-year unsecured letter of credit facility. The
facility provides for the issuance of letters of credit, supported by a related line of credit facility.
TIGSA may only borrow under the line of credit agreement to reimburse the bank for obligations with
respect to letters of credit issued under this facility. The covenants under this facility are substantially
similar to TIGSA’s bank credit facilities entered into during December 2003 and the indenture related
to TIGSA’s 6% notes due 2013 issued in November 2003. TIGSA would pay interest on any
outstanding borrowings at a variable interest rate, based on the bank’s base rate or the Eurodollar rate,
as defined. Upon the occurrence of certain credit events, the interest rate on the outstanding
borrowings becomes fixed. The issuance of letters of credit under this facility during 2004 enabled the
Company to release approximately $480 million of restricted cash and investments. As of September 30,
2005, letters of credit in the amount of $488 million have been issued under the $500 million facility
54 2005 Financials