ADT 2008 Annual Report Download - page 174

Our 6.125% public notes due in 2008 and 2009 of $300 million and $215 million mature in the first
and second quarter of fiscal year 2009, respectively. Based on market conditions and our liquidity
needs, we intend to pay down these maturities of such debt either by drawing down on our existing
credit facility or accessing the debt market on terms that are acceptable to the Company. As of
November 12, 2008, the total outstanding balance under our credit facility was $686 million.
On June 24, 2008, Tyco and TIFSA entered into a new $500 million senior unsecured revolving
credit agreement with Citibank, N.A. as administrative agent for the lenders party therto. This credit
agreement has a three-year term. Borrowings under this agreement have a variable interest rate based
on LIBOR or an alternate base rate. The margin over LIBOR can vary based on changes in our credit
rating and facility utilization. Together with the existing $1.25 billion five-year senior revolving credit
agreement, dated as of April 25, 2007, our total commitments under these facilities increased to
$1.75 billion.
As discussed above, as of September 26, 2008, we had total commitments of $1.75 billion under our
revolving credit facilities, $500 million of which matures on June 24, 2011 and $1.25 billion of which
matures on April 25, 2012. Additionally, $60 million worth of commitments under our $1.25 billion
facility are held by Lehman which has defaulted on it obligations under the agreement. As of
September 26, 2008, $286 million was outstanding under our revolving credit facilities, and as of
November 12, 2008, $686 million was outstanding.
At September 26, 2008, we had total outstanding letters of credit and bank guarantees of
$633 million.
In May 2008, TIFSA commenced issuing commercial paper to U.S. institutional accredited investors
and qualified institutional buyers. Borrowings under the commercial paper program are available for
general corporate purposes. As of September 26, 2008, TIFSA had $116 million of commercial paper
outstanding which bore interest at an average rate of 2.95%. At September 26, 2008 we classified
$116 million of short-term borrowings as long-term. Settlement of this debt is not expected to require
the use of working capital in the next year, as we have both the intent and the ability to refinance this
debt on a long-term basis.
In the normal course of business, we are liable for contract completion and product performance.
In the opinion of management, such obligations will not significantly affect our financial position,
results of operations or cash flows.
In connection with the Separation, we entered into a liability sharing agreement regarding certain
class actions that were pending against Tyco prior to the Separation. Under the Separation and
Distribution Agreement, we, Covidien and Tyco Electronics are jointly and severally liable for the full
amount of any judgments resulting from the actions subject to the agreement, which generally relate to
legacy claims (including ERISA, FCPA and securities claims). The Separation and Distribution
Agreement also provides that we will be responsible for 27%, Covidien 42% and Tyco Electronics 31%
of payments to resolve these matters, with costs and expenses associated with the management of these
contingencies being shared equally among the parties. In addition, under the agreement, we will
manage and control all the legal matters related to assumed contingent liabilities as described in the
Separation and Distribution Agreement, including the defense or settlement thereof, subject to certain
limitations.
2008 Financials 71