ADT 2015 Annual Report Download - page 159

FORM 10-K
Senior Unsecured Notes
Fiscal Year 2015
On December 18, 2014, the Company completed a public offering of $300 million of its 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
the Company’s 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. The Company 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.
Additionally, in December 2014, the Company entered into interest rate swap transactions on all $300
million of the December 2014 Debt Offering. These transactions are designated as fair value hedges with the
objective of managing the exposure to interest rate risk by converting the interest rates on the fixed-rate notes to
floating rates. These transactions did not have a material impact on the Company’s Consolidated Financial
Statements as of September 25, 2015.
Fiscal Year 2014
On October 1, 2013, the Company issued $1 billion aggregate principal amount of 6.250% senior unsecured
notes due October 2021 in a private placement conducted pursuant to Rule 144A and Regulation S under the
Securities Act of 1933, as amended (the “October 2013 Debt Offering”). Net cash proceeds from the issuance of
this term indebtedness totaled $987 million, of which $150 million was used to repay the outstanding borrowings
under the Company’s revolving credit facility. The remaining net proceeds were used primarily for repurchases
of outstanding shares of ADT’s common stock. Interest is payable on April 15 and October 15 of each year and
commenced on April 15, 2014. The Company 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. In
connection with the October 2013 Debt Offering, the Company entered into an exchange and registration rights
agreement with the initial purchasers, and on April 4, 2014 the Company commenced an offer to exchange the $1
billion notes. This exchange offer was completed on May 9, 2014.
On March 19, 2014, the Company completed a public offering of $500 million of its 4.125% senior
unsecured notes due April 2019. Net cash proceeds from the issuance of this term indebtedness totaled $493
million, of which $200 million was used to repay outstanding borrowings under the Company’s revolving credit
facility. The remaining net proceeds were used primarily for general corporate purposes and repurchases of
outstanding shares of ADT’s common stock. Interest is payable on April 15 and October 15 of each year, and
commenced on October 15, 2014. The Company 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.
Additionally, during the year ended September 26, 2014, the Company entered into interest rate swap
transactions to hedge $500 million of its $1 billion October 2013 Debt Offering, and all $500 million of its
4.125% fixed-rate notes due April 2019. These transactions are designated as fair value hedges with the objective
of managing the exposure to interest rate risk by converting the interest rates on the fixed-rate notes to floating
rates. These transactions did not have a material impact on the Company’s Consolidated Financial Statements as
of September 25, 2015 and September 26, 2014.
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