ADT 2006 Annual Report Download - page 123

Also, following the Proposed Separation, it is anticipated that all three companies will be
capitalized to provide financial flexibility to take advantage of future growth opportunities. They are
expected to have financial policies, balance sheet and credit metrics that are commensurate with solid
investment grade ratings. Tyco will continue to follow financial policies that are consistent with its
current credit ratings until the planned transactions take place. The Company’s existing debt is
expected to be allocated among the three companies or refinanced. Any existing or potential liabilities
that cannot be associated with a particular entity will be allocated appropriately to each of the
businesses, and a sharing agreement among the three companies will be established.
The following table details our debt ratings at September 29, 2006 and September 30, 2005:
Short Term Long Term
Moody’s ....................................... Prime-3 Baa 3
Standard & Poor’s ................................ A2 BBB+
Fitch .......................................... F2 BBB+
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.
Commitments and Contingencies
Contractual Obligations
Contractual obligations and commitments for debt, minimum lease payment obligations under
non-cancelable operating leases and other obligations at September 29, 2006 is as follows ($ in
millions):
2007 2008 2009 2010 2011 Thereafter Total
Debt(1) ........................ $ 782 $ 820 $2,555 $ 14 $1,002 $4,833 $10,006
Capital leases ................... 26 27 22 9 7 76 167
Operating leases ................. 516 405 302 214 158 499 2,094
Purchase obligations(2) ............. 222 24 10 10 7 24 297
Total contractual cash obligations(3) . . . $1,546 $1,276 $2,889 $247 $1,174 $5,432 $12,564
(1) Excludes interest.
(2) Purchase obligations consist of commitments for purchases of good and services.
(3) Other long-term liabilities primarily consist of the following: pension and postretirement costs, income taxes, warranty and
environmental liabilities and are excluded from this table. We are unable to estimate the timing of payment for these items
due to the inherent uncertainties of obligations of this type. The minimum required contributions to our pension plans are
expected to be approximately $151 million in 2007 and we expect to pay $26 million in 2007 related to postretirement benefit
plans.
At September 29, 2006, the Company had outstanding letters of credit and bank guarantees in the
amount of $1.3 billion.
At September 29, 2006, TIGSA had unsecured credit facilities of $1.5 billion due December 21,
2007, and $1.0 billion due December 16, 2009, of which $1.8 billion was undrawn and available (see
Note 15 to the Consolidated Financial Statements). In addition, certain of the Company’s operating
subsidiaries have uncommitted overdraft and similar types of facilities, which total $624 million, of
which $606 million was undrawn and available at September 29, 2006. These facilities expire at various
2006 Financials 61