ADT 2011 Annual Report Download - page 251

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
16. 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):
2012 ................................................ $ 5
2013 ................................................ 5
2014 ................................................ 5
2015 ................................................ 5
2016 ................................................ 5
2017 - 2021 ........................................... 22
For measurement purposes, a 7.6% and 7.7% composite annual rate of increase in the per capita
cost of covered health care benefits was assumed as of September 30, 2011 and September 24, 2010,
respectively. As of September 30, 2011 and September 24, 2010, the composite annual rate of increase
in health care benefit costs was assumed to decrease gradually to 4.5% and 4.6%, respectively, 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,
decrease/(increase) ..................... 3 (3)
17. Shareholders’ Equity
Dividends
Prior to May 2011, the Company paid dividends in the form of a return of share capital from the
Company’s registered share capital. These payments were made free of Swiss withholding taxes. The
Company now makes dividend payments from its contributed surplus equity position in its Swiss
statutory accounts. These payments are also made free of Swiss withholding taxes. Unlike payments
made in the form of a reduction to registered share capital, which are required to be denominated in
Swiss francs and converted to U.S. dollars at the time of payment, payments from the contributed
surplus account may effectively be denominated in U.S. dollars. At the next annual general meeting of
shareholders, the Board of Directors intends to propose certain changes affecting the contributed
surplus account on the Swiss statutory balance sheets to comply with Swiss tax regulation.
Under Swiss law, the authority to declare dividends is vested in the shareholders, and on March 9,
2011, the Company’s shareholders approved an annual dividend on the Company’s common shares of
$1.00 per share, which will be paid from contributed surplus in four installments of $0.25 per share. As
a result, the Company recorded an accrued dividend of $468 million as of March 9, 2011 and a
corresponding reduction to contributed surplus. The first installment of $0.25 was paid on May 25, 2011
to shareholders of record on April 29, 2011. The second installment of $0.25 was paid on August 24,
2011 to shareholders of record on July 29, 2011. The third installment of $0.25 will be paid on
November 17, 2011 to shareholders of record on October 28, 2011. The Company records its accrued
dividend in accrued and other current liabilities in the Company’s Consolidated Balance Sheet.
148 2011 Financials