ADT 2010 Annual Report Download - page 228

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
15. Retirement Plans (Continued)
The Company expects to make contributions to its postretirement benefit plans of $6 million in
2011.
Benefit payments, including those amounts to be paid out of corporate assets and reflecting future
expected service as appropriate, are expected to be paid as follows ($ in millions):
2011 ............................................................. $ 6
2012 ............................................................. 6
2013 ............................................................. 6
2014 ............................................................. 6
2015 ............................................................. 6
2016-2020 ......................................................... 27
For measurement purposes, a 7.7% and 8.0% composite annual rate of increase in the per capita
cost of covered health care benefits was assumed as of September 24, 2010 and September 25, 2009,
respectively. As of September 24, 2010 and September 25, 2009, the composite annual rate of increase
in health care benefit costs was assumed to decrease gradually to 4.6% by the year 2027, and remain at
that level thereafter, for both periods. 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 ............ 4 (4)
16. Tyco Shareholders’ Equity
Dividends
Pursuant to Swiss law, dividend payments made prior to January 1, 2011 are subject to Swiss
withholding taxes unless made in the form of a return of capital from the Company’s registered share
capital. As a result, the Company intends to first pay dividends in the form of a reduction of registered
share capital until at least January 1, 2011. After the last dividend payment is made out of registered
capital in February 2011, the Company expects to make dividend payments in the form of a reduction
in contributed surplus, which are also expected to be made free of Swiss withholding taxes.
On March 10, 2010, the Company’s shareholders approved an annual dividend on the Company’s
common shares of CHF 0.90 per share, which is being paid in the form of a return on capital in four
installments of CHF 0.22 in May 2010, CHF 0.22 in August 2010, CHF 0.23 in November 2010 and
CHF 0.23 in February 2011. The installments will be paid in U.S. dollars converted from Swiss Francs
at the USD/CHF exchange rate in effect shortly before the payment dates. The first three installments
of the annual dividend were or will be paid on May 26, 2010, August 25, 2010 and November 23, 2010.
While certain administrative steps need to occur to effectuate the dividend payment, approval of the
dividend by the shareholders establishes the dividend under Swiss law. As a result, the Company
recorded an accrued dividend of CHF 428 million as of March 10, 2010, which approximated
$399 million based on the exchange rate in effect on that date. The accrued dividend was recorded in
accrued and other current liabilities in the Company’s Consolidated Balance Sheet as of March 26,
2010. On the Company’s Consolidated Balance Sheet, this amount was recorded as a reduction of
140 2010 Financials