ADT 2011 Annual Report Download - page 228

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
12. Debt (Continued)
TIFSA received net proceeds of approximately $745 million after underwriting discounts and offering
expenses of approximately $5 million. The 2019 notes are unsecured and rank equally with TIFSA’s
other unsecured and unsubordinated debt. TIFSA may redeem any of the 2019 notes at any time by
paying the greater of the principal amount of the notes or a ‘‘make-whole’’ amount, plus accrued and
unpaid interest. The holders of the 2019 notes have the right to require TIFSA to repurchase all or a
portion of the notes at a purchase price equal to 101% of the principal amount of the notes
repurchased, plus accrued and unpaid interest upon the occurrence of a change of control triggering
event, which requires both a change of control and a rating event as defined by the Indenture
governing the notes. Additionally, the holders of the 2019 notes have the right to require the Company
to repurchase all or a portion of the 2019 notes on July 15, 2014 at a purchase price equal to 100% of
the principal amount of the notes tendered, plus accrued and unpaid interest. Otherwise, the notes
mature on January 15, 2019. Debt issuance costs will be amortized from the date of issuance to the
earliest redemption date, which is July 15, 2014. Interest is payable semi-annually on January 15th and
July 15th.
On January 15, 2009, TIFSA made a payment of $215 million to extinguish all of its 6.125% notes,
due 2009 which matured on the same date. Additionally, in November 2008, TIFSA made a payment of
$300 million to extinguish all of its 6.125% notes due 2008.
Other Debt Information
The aggregate amounts of principal debt, including capital leases, maturing during the next five
fiscal years and thereafter are as follows ($ in millions): $3 in 2012, $4 in 2013, $661 in 2014, $506 in
2015, $508 in 2016 and $2,409 thereafter.
The weighted-average interest rate on total debt was 5.9% and 6.3% as of September 30, 2011 and
September 24, 2010, respectively, excluding the impact of interest rate swaps. The weighted-average
interest rate on short-term debt was 6.8% as of September 24, 2010. There was no public short-term
debt outstanding as of September 30, 2011. As of September 30, 2011 and September 24, 2010, the
Company had swapped an aggregate of approximately $1.2 billion and $1.5 billion, respectively, of fixed
for floating rate debt. The impact of the Company’s interest rate swap agreements on reported interest
expense was a net decrease of $22 million for 2011, a net decrease of $24 million for 2010, and a net
decrease of $6 million for 2009.
In connection with the acquisition of KEF during the year ended September 30, 2011, the
Company acquired $64 million of debt which was substantially paid as of September 30, 2011.
13. Guarantees
Certain of the Company’s business segments have guaranteed the performance of third-parties and
provided financial guarantees for uncompleted work and financial commitments. The terms of these
guarantees vary with end dates ranging from the current fiscal year through the completion of such
transactions. The guarantees would typically be triggered in the event of nonperformance and
performance under the guarantees, if required, would not have a material effect on the Company’s
financial position, results of operations or cash flows.
There are certain guarantees or indemnifications extended among Tyco, Covidien and TE
Connectivity in accordance with the terms of the Separation and Distribution Agreement and the Tax
2011 Financials 125