ADT 2015 Annual Report Download - page 128

FORM 10-K
Liquidity and Capital Resources
Liquidity and Cash Flow Analysis
Significant factors driving our liquidity position include cash flows generated from operating activities and
investments in internally generated subscriber systems and dealer generated customer accounts. Our cash flows
from operations include cash received from monthly recurring revenue and upfront fees received from customers,
less cash costs to provide services to our customers, including general and administrative costs and certain costs
associated with acquiring new customers. Historically, we have generated and expect to continue to generate
positive cash flow from operations.
Liquidity
At September 25, 2015, we had $78 million in cash and cash equivalents and another $415 million available
under our $750 million revolving credit facility. Our primary future cash needs are expected to be for operating
activities, working capital, capital expenditures, strategic investments and dividends. In addition, we may use
cash to repurchase shares of our common stock under our share repurchase programs. We believe our cash
position, amounts available under our revolving credit facility and cash provided by operating activities is and
will continue to be adequate to meet our operational and business needs in the next twelve months.
Revolving Credit Facility
At September 25, 2015, we had $335 million outstanding under our revolving credit facility at an interest
rate of 1.651%. During fiscal year 2015, we borrowed $455 million under the revolving credit facility and repaid
$495 million, using cash proceeds from the senior unsecured notes issued in December 2014 as described below
and cash from operations. Refer to Note 5 for more detail.
Long Term Debt
In addition to the indebtedness outstanding at September 26, 2014, we completed a public offering on
December 18, 2014, of $300 million of our 5.250% senior unsecured notes due March 15, 2020 (the “December
2014 Debt Offering”). Net cash proceeds from the issuance of this term indebtedness totaled $296 million and
were primarily used to repay outstanding borrowings under our revolving credit facility and for general corporate
purposes. Interest is payable on March 15 and September 15 of each year and commenced on March 15, 2015.
We may redeem the notes, in whole or in part, at any time prior to the maturity date at a redemption price equal
to the greater of the principal amount of the notes to be redeemed or a make-whole premium, plus in each case,
accrued and unpaid interest to, but excluding, the redemption date.
As of September 25, 2015, we were in compliance with all covenants on our debt instruments.
See Note 5 to the Consolidated Financial Statements for further information on all of our indebtedness
outstanding as of September 25, 2015.
Share Repurchases
On November 26, 2012, our Board of Directors approved a $2 billion, three-year share repurchase program
(“FY2013 Share Repurchase Program”) expiring November 26, 2015. On November 18, 2013, our Board of
Directors authorized a $1 billion increase to the $2 billion FY2013 Share Repurchase Program that was
previously approved on November 26, 2012. Pursuant to this approval, we may enter into accelerated share
repurchase plans as well as repurchase shares on the open market pursuant to pre-set trading plans meeting the
requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, in private transactions or otherwise.
During fiscal year 2015, we made open market repurchases of 9.8 million shares of our common stock at an
average price of $33.16 per share under the authorized FY2013 Share Repurchase Program. The total cost of
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