ADT 2013 Annual Report Download - page 145

FORM 10-K
As part of the Company’s issuances of long-term notes in July 2012 and January 2013, the Company
entered into exchange and registration rights agreements with the initial purchasers of the notes. Under each of
these agreements, the Company is obligated to file a registration statement for an offer to exchange the notes for
a new issue of substantially identical notes registered under the Securities Act of 1933, as amended, or provide a
shelf registration statement to cover resales of such notes if the exchange offer is not complete within 365 days
after closing of the respective notes issuance. On April 1, 2013, the Company commenced an offer to exchange
the $2.5 billion notes issued in July 2012, and on April 18, 2013, the Company commenced an offer to exchange
the $700 million notes issued in January 2013. These exchange offers were completed during the third quarter of
fiscal year 2013.
On September 12, 2012 the Company established a $750 million commercial paper program, supported by
its revolving credit facility of the same amount. The Company discontinued this commercial paper program on
July 31, 2013.
The Company’s revolving credit facility contains customary covenants, including a limit on the ratio of debt
to earnings before interest, taxes, depreciation, and amortization (“EBITDA”), a minimum required ratio of
EBITDA to interest expense and limits on incurrence of liens and subsidiary debt. In addition, the indenture
governing the Company’s senior unsecured notes contains customary covenants including limits on liens and
sale/leaseback transactions. Furthermore, acceleration of any obligation under any of the Company’s material
debt instruments will permit the holders of its other material debt to accelerate their obligations. As of
September 27, 2013, the Company was in compliance with all financial covenants on its debt instruments.
Aggregate annual maturities of long-term debt and capital lease obligations are as follows ($ in millions):
Fiscal 2014 ......................................... $ 6
Fiscal 2015 ......................................... 6
Fiscal 2016 ......................................... 6
Fiscal 2017 ......................................... 756
Fiscal 2018 ......................................... 7
Thereafter .......................................... 2,620
Total .............................................. 3,401
Less amount representing discount on notes ........... 10
Less amount representing interest on capital leases ...... 15
Total .............................................. 3,376
Less current maturities of long-term debt ............. 3
Total long-term debt .................................. $3,373
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.
Interest expense totaled $118 million, $93 million and $90 million for the years ended September 27, 2013,
September 28, 2012 and September 30, 2011, respectively. Interest expense for fiscal year 2011 and the first nine
months of fiscal year 2012 includes allocated interest expense of $87 million and $64 million, respectively.
Interest expense for these periods was allocated in the same proportions as debt and included the impact of
Tyco’s interest rate swap agreements designated as fair value hedges. Interest expense for fiscal year 2013 and
the remaining amount of interest expense for fiscal year 2012 primarily represents interest incurred on the
Company’s unsecured notes.
See Note 1 for information on the fair value of the Company’s debt.
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