ADT 2008 Annual Report Download - page 256

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
17. Retirement Plans (Continued)
Benefit payments, including those amounts to be paid out of corporate assets and reflecting future
expected service as appropriate, are expected to be paid as follows ($ in millions):
2009 ............................................................. $ 7
2010 ............................................................. 7
2011 ............................................................. 7
2012 ............................................................. 6
2013 ............................................................. 6
2014–2018 ......................................................... 29
For measurement purposes, a 9.4% and 9.6% composite annual rate of increase in the per capita
cost of covered health care benefits was assumed at September 26, 2008 and September 28, 2007,
respectively. At September 26, 2008 and September 28, 2007, the composite annual rate of increase in
health care benefit costs was assumed to decrease gradually to 5.0% by the year 2015 and 2014,
respectively, and remain at that level thereafter. A one-percentage-point change in assumed healthcare
cost trend rates would have the following effects ($ in millions):
1-Percentage-Point 1-Percentage-Point
Increase Decrease
Effect on total of service and interest cost ............. $ — $ —
Effect on postretirement benefit obligation ............ 3 (3)
18. Shareholders’ Equity
Preference Shares—Tyco has authorized 31,250,000 preference shares, par value of $4 per share,
none of which were issued and outstanding at September 26, 2008 and September 28, 2007. Rights as
to dividends, return of capital, redemption, conversion, voting and otherwise with respect to the
preference shares may be determined by Tyco’s Board of Directors on or before the time of issuance.
In the event of the liquidation of the Company, the holders of any preference shares then outstanding
would be entitled to payment to them of the amount for which the preference shares were subscribed
and any unpaid dividends prior to any payment to the common shareholders.
Dividends—On September 9, 2008 Tyco’s Board of Directors approved a quarterly dividend on the
Company’s common shares of $0.20 per share, which was paid on November 3, 2008 to shareholders of
record on October 1, 2008. Tyco paid a quarterly cash dividend of $0.15 per common share during
fiscal year 2008 and $0.40 per common share during fiscal 2007 and fiscal 2006.
Shares Owned by Subsidiaries and Common Shares Held in Treasury—Shares owned by subsidiaries
are treated as treasury shares and are recorded at cost. In connection with the Separation, all such
shares were effectively retired during the third quarter of 2007 and repurchases commenced in the
fourth quarter of 2007. In 2008, the Company amended its bylaws to allow the Company’s Board of
Directors to authorize the Company to purchase and hold its shares in Treasury. As a result, shares
repurchased prior to July 7, 2008 are classified as Shares Owned by Subsidiaries. Shares repurchased
after this date are classified as common shares held in treasury on the Consolidated Balance Sheet as
of September 26, 2008. The Board of Directors may authorize the purchase of the Company’s common
shares, which may be held, canceled, disposed of or transferred for cash or other consideration.
2008 Financials 153