ADT 2008 Annual Report Download - page 244

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
16. Commitments and Contingencies (Continued)
Following is a schedule of minimum lease payments for non-cancelable leases as of September 26,
2008 ($ in millions):
Operating Capital
Leases Leases
2009 ............................................. $248 $ 29
2010 ............................................. 201 28
2011 ............................................. 166 29
2012 ............................................. 108 9
2013 ............................................. 61 11
Thereafter ......................................... 140 60
$924 166
Less: amount representing interest ....................... 47
Total minimum lease payments ........................ $119
The Company also has purchase obligations related to commitments to purchase certain goods and
services. At September 26, 2008, such obligations were as follows: $53 million in 2009 and $3 million in
2010 and $0 million thereafter.
In the normal course of business, the Company is liable for contract completion and product
performance. In the opinion of management, such obligations will not significantly affect the
Company’s financial position, results of operations or cash flows.
In connection with the Separation, the Company entered into a liability sharing agreement
regarding certain legal actions that were pending against Tyco prior to the Separation. Under the
Separation and Distribution Agreement, the Company, 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, the Company 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.
Tyco has assumed 27%, Covidien has assumed 42% and Tyco Electronics has assumed 31% of
certain Tyco pre-Separation contingent and other corporate liabilities, which include securities class
action litigation, ERISA class action litigation, certain legacy tax contingencies and any actions with
respect to the distributions made in the Separation made or brought by any third party. Any amounts
relating to these contingent and other corporate liabilities paid by Tyco after the Separation that are
subject to the allocation provisions of the Separation and Distribution Agreement will be shared among
Tyco, Covidien and Tyco Electronics pursuant to the same allocation ratio. As described in the
Separation and Distribution Agreement, Tyco, Tyco Electronics and Covidien are jointly and severally
liable for all amounts relating to the previously disclosed securities class action settlement. All costs and
expenses that Tyco incurs in connection with the defense of such litigation, other than the amount of
any judgment or settlement, which will be allocated in the manner described above, will be borne
equally by Covidien, Tyco Electronics and Tyco.
2008 Financials 141