ADT 2012 Annual Report Download - page 169

5. Debt
Debt as of September 28, 2012 and September 30, 2011 is as follows ($ in millions):
September 28,
2012
September 30,
2011
Current maturities of long-term debt:
Capital lease obligations ..................... $ 2 $ 1
Current maturities of long-term debt ............ 2 1
Long-term debt:
2.250% notes due July 2017(1) ................. 749 —
3.500% notes due July 2022(1) ................. 998 —
4.875% notes due July 2042(1) ................. 742 —
Allocated debt ............................. — 1,482
Capital lease obligations ..................... 36 24
Total long-term debt ......................... 2,525 1,506
Total debt ................................. $2,527 $1,507
(1) Net of discount of $0.7 million on notes due July 2017, $2.3 million on notes due July 2022 and $8.0
million on notes due July 2042.
Prior to the issuance of its indenture in July 2012, the Company’s working capital requirements and capital
for general corporate purposes, including acquisitions and capital expenditures, were satisfied as part of Tyco’s
company-wide cash management practices. Accordingly, Tyco’s consolidated debt and related interest expense,
exclusive of amounts incurred directly by the Company, were allocated to the Company for periods prior to
July 5, 2012. The amounts allocated were based on an assessment of the Company’s share of Tyco’s external
debt using historical data.
On June 22, 2012, the Company entered into an unsecured senior revolving credit facility with an aggregate
commitment of $750 million, which is available to be used for working capital, capital expenditures and other
corporate purposes. The interest rate for borrowings under the revolving credit facility is based on the London
Interbank Offered Rate (“LIBOR”) or an alternative base rate, plus a spread, based upon the Company’s credit
rating. To date, no amounts have been drawn under the revolving credit facility.
Additionally, on June 22, 2012, the Company entered into a 364-day bridge facility that provided for
aggregate lending commitments in the amount of $2.25 billion. This facility was subsequently terminated on
July 5, 2012 in connection with the $2.5 billion debt issuance discussed below.
On July 5, 2012, the Company issued $2.5 billion aggregate principal amount of unsecured notes, of which
$750 million aggregate principal amount of 2.250% notes will mature on July 15, 2017, $1.0 billion aggregate
principal amount of 3.500% notes will mature on July 15, 2022, and $750 million aggregate principal amount of
4.875% notes will mature on July 15, 2042. Cash proceeds from the issuance of this term indebtedness, net of
debt issuance costs, totaled approximately $2.47 billion and were used primarily to repay intercompany debt and
to make other cash payments to Tyco in conjunction with the Separation. Interest is payable on January 15 and
July 15 of each year, commencing on January 15, 2013. The Company may redeem each series of the notes, in
whole or in part, at any time at a redemption price equal to the principal amount of the notes to be redeemed, plus
a make-whole premium.
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