ADT 2010 Annual Report Download - page 225

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
15. Retirement Plans (Continued)
determined by the custodian of the fund. These values are based on the fair value of the underlying net
assets owned by the fund.
Real estate investments include publicly traded real estate investment trusts (‘‘REITS’’) and direct
investments in commercial and residential properties. REITS are valued at the last trade or closing
price in the active market in which the individual securities are traded. Direct real estate properties are
valued using discounted cash flow models which consider long-term lease estimates, future rental
receipts and estimated residual values. Valuation estimates are supplemented by third-party appraisals
on a periodic basis.
Cash and cash equivalents consist primarily of short-term commercial paper, bonds and other cash
or cash-like instruments including settlement proceeds due from brokers, stated at cost, which
approximates fair value.
The following table sets forth a summary of pension plan assets valued using NAV or its equivalent
as of September 24, 2010 ($ in millions):
Fair Redemption Redemption
Investment ($ in millions) Value Frequency Notice Period
U.S equity securities .............. $125 Daily 1 day
Non-U.S. equity securities .......... 183 Daily, Semi-monthly, Monthly 1 day, 5 days, 15 days
Government and government agency
securities ..................... 17 Daily 1 day
Corporate debt securities .......... 124 Daily 1 day, 2 days
Mortgage and other asset-backed
securities ..................... 34 Daily 1 day
$483
The strategy of the Company’s investment managers with regard to the investments valued using
NAV or its equivalent is to either match or exceed relevant benchmarks associated with the respective
asset category. None of the investments valued using NAV or its equivalent contain any redemption
restrictions or unfunded commitments.
During 2010, the Company contributed $82 million to its U.S. and non-U.S. pension plans, which
represented the Company’s minimum required contributions to its pension plans for fiscal year 2010.
The Company did not make any voluntary contributions during 2010 to its U.S. and non-US pension
plans.
The Company’s funding policy is to make contributions in accordance with the laws and customs of
the various countries in which it operates as well as to make discretionary voluntary contributions from
time-to-time. The Company anticipates that it will contribute at least the minimum required to its
pension plans in 2011 of $12 million for the U.S. plans and $52 million for non-U.S. plans. The
Company also anticipates making voluntary contributions of approximately $20 million to its U.S. plans
during 2011.
2010 Financials 137