ADT 2011 Annual Report Download - page 163

(2) Interest payments consist of interest on our fixed interest rate debt and exclude the impact of our
interest rate swaps. As of September 30, 2011, we had swapped an aggregate of approximately
$1.2 billion of fixed for floating rate debt.
(3) Excludes interest.
(4) Purchase obligations consist of commitments for purchases of goods and services.
(5) Other long-term liabilities excluded from the above contractual obligation table primarily consist of
the following: pension and postretirement costs, income taxes, warranties and environmental
liabilities. We are unable to estimate the timing of payment for these items due to the inherent
uncertainties related to these obligations. However, the minimum required contributions to our
pension plans are expected to be approximately $104 million in 2012 and we expect to pay
$5 million in 2012 related to postretirement benefit plans.
As of September 30, 2011, we recorded gross unrecognized tax benefits of $270 million and gross
interest and penalties of $60 million. We are unable to make a reasonably reliable estimate of the
timing for the remaining payments in future years; therefore, such amounts have been excluded
from the above contractual obligation table. However, based on the current status of our income
tax audits, we believe that is reasonably possible that between nil and $60 million in unrecognized
tax benefits may be resolved in the next twelve months.
As of September 30, 2011, we had total commitments of $1.5 billion under our revolving credit
facilities, $750 million of which expires on March 24, 2015 and $750 million of which expires on
April 25, 2012. As of September 30, 2011, there were no amounts drawn under these revolving credit
facilities.
TIFSA’s bank credit agreements contain customary terms and conditions, and financial covenants
that limit the ratio of our debt to earnings before interest, taxes, depreciation, and amortization and
that limit our ability to incur subsidiary debt or grant liens on our property. Our indentures contain
customary covenants including limits on negative pledges, subsidiary debt and sale/leaseback
transactions. None of these covenants are considered restrictive to our business.
During the second half of fiscal 2011, TIFSA, the Company’s finance subsidiary, issued 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 30, 2011 and
September 24, 2010, TIFSA had no commercial paper outstanding.
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 2007 Separation, we entered into a liability sharing agreement regarding
certain actions that were pending against Tyco prior to the 2007 Separation. Under the Separation and
Distribution Agreement and Tax Sharing Agreement, we have assumed 27%, Covidien has assumed
42% and TE Connectivity has assumed 31% of certain Tyco pre-Separation contingent and other
corporate liabilities, which, as of September 30, 2011, primarily relate to tax contingencies and potential
actions with respect to the spin-offs or the distributions made or brought by any third party.
Backlog
We had a backlog of unfilled orders of $9.7 billion and $9.5 billion as of September 30, 2011 and
September 24, 2010, respectively. We expect that approximately 88% of our backlog as of
60 2011 Financials