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Shareholders' Equity and Comprehensive Income
12 Months Ended
Sep. 26, 2014
Stockholders' Equity Note [Abstract]  
Shareholders' Equity and Comprehensive Income
Shareholders' Equity and Comprehensive Income
Dividends
The Company makes dividend payments from its contributed surplus equity position in its Swiss statutory accounts. These payments are made free of Swiss withholding taxes and are effectively denominated in U.S. dollars.
Under Swiss law, the authority to declare dividends is vested in the general meeting of shareholders. On March 5, 2014, the Company's shareholders approved an annual cash dividend of $0.72 per common share. Payment of the dividend is to be made in four quarterly installments of $0.18 from May 2014 through February 2015. As a result, during the quarter ended March 28, 2014, the Company recorded an accrued dividend of $332 million within Accrued and other current liabilities and a corresponding reduction to Contributed surplus on the Company's Consolidated Balance Sheet. The first installment was paid on May 21, 2014 to shareholders of record on April 25, 2014. The second installment was paid on August 20, 2014 to shareholders of record on July 25, 2014. The third installment was paid on November 13, 2014 to stockholders of record on October 24, 2014. The fourth installment will be paid in February 2015.
Upon the closing of the merger transaction between Tyco International Ltd. and its wholly-owned subsidiary, Tyco Ireland, which is expected to occur in November 2014, the Company's jurisdiction of incorporation will change from Switzerland to Ireland. As a result, the authority to declare and pay dividends will be vested in the Board of Directors. The timing, declaration and payment of future dividends to holders of our common shares will be determined by the Company's Board of Directors and will depend upon many factors, including the Company's financial condition and results of operations, the capital requirements of the Company's businesses, industry practice and any other relevant factors.
Under Irish law, dividends may only be paid (and share repurchases and redemptions must generally be funded) out of “distributable reserves,” which Tyco Ireland will not have immediately following the closing of the merger between Tyco International Ltd. and Tyco Ireland. The creation of distributable reserves of Tyco Ireland by way of a capital reduction of Tyco Ireland requires the approval of the Irish High Court and, in connection with seeking such court approval, the Company has obtained the approval of its shareholders to create distributable reserves for Tyco Ireland (through the reduction of the share premium account of Tyco Ireland).
The approval of the Irish High Court is expected within approximately six to twelve weeks following the closing of the merger between Tyco International Ltd. and Tyco Ireland. The Company is not aware of any reason why the Irish High Court would not approve the creation of distributable reserves. However, the issuance of the required order is a matter for the discretion of the Irish High Court. In the event that distributable reserves of Tyco Ireland are not created, no distributions by way of dividends, share repurchases or otherwise will be permitted under Irish law (with the exception of the dividend that is scheduled to be paid in February 2015) until such time as the group has created sufficient distributable reserves from its trading activities.
On March 6, 2013, the Company's shareholders approved a cash dividend of $0.64 per share, payable to shareholders in four quarterly installments of $0.16 in May 2013, August 2013, November 2013 and February 2014. As a result, during the quarter ended March 29, 2013, the Company recorded an accrued dividend of $296 million within Accrued and other current liabilities and a corresponding reduction to Contributed surplus on the Company's Consolidated Balance Sheet. The first installment of $0.16 was paid on May 22, 2013 to shareholders of record on April 26, 2013. The second installment of $0.16 was paid on August 21, 2013 to shareholders of record on July 26, 2013. The third installment of $0.16 was paid on November 14, 2013 to shareholders of record on October 25, 2013. The fourth installment of $0.16 was paid on February 19, 2014 to shareholders of record on January 24, 2014.
On March 7, 2012, the Company's shareholders approved a cash dividend of $0.50 per share, payable to shareholders in two quarterly installments of $0.25 on May 23, 2012 and August 22, 2012. The first installment of $0.25 of the $0.50 dividend was paid on May 23, 2012 to shareholders on record on April 27, 2012. The second installment of $0.25 of the $0.50 dividend was paid on August 22, 2012 to shareholders on record on July 27, 2012. On September 17, 2012, the Company's shareholders approved a cash dividend of $0.30 per share, payable to shareholders in two quarterly installments of $0.15 on November 15, 2012 and February 20, 2013. The $0.30 dividend reflects the impact of the 2012 Separation on the Company's dividend policy. The first installment of $0.15 of the $0.30 dividend was paid on November 15, 2012 to shareholders of record on October 16, 2012. The second installment of $0.15 of the $0.30 dividend was paid on February 20, 2013 to shareholders of record on January 25, 2013. As a result, the Company recorded an accrued dividend of $231 million as of March 7, 2012 and an additional accrued dividend of $139 million as of September 17, 2012 within Accrued and other current liabilities and a corresponding reduction to Contributed surplus on the Company's Consolidated Balance Sheet.
Common Stock
As of September 26, 2014, the Company's share capital amounted to CHF 243,181,525, or 486,363,050 registered common shares with a par value of CHF 0.50 per share. Until March 6, 2015, the Board of Directors may increase the Company's share capital by a maximum amount of CHF 121,500,000 by issuing a maximum of 243,000,000 shares. In addition, (i) the share capital of the Company may be increased by an amount not exceeding CHF 23,964,755 through the issue of a maximum of 47,929,510 shares through the exercise of conversion and/or option or warrant rights granted in connection with bonds, notes or similar instruments and (ii) the share capital of the Company may be increased by an amount not exceeding CHF 23,964,755 through the issue of a maximum of 47,929,510 shares to employees and other persons providing services to the Company. Although the Company states its par value in Swiss francs, it continues to use the U.S. dollar as its reporting currency for preparing its Consolidated Financial Statements.
On March 6, 2013, shareholders of the Company approved a reduction of the Company's registered share capital from CHF 3,258,632,435 to CHF 243,181,525 by reducing the par value of each share from CHF 6.70 to CHF 0.50 per share and correspondingly increasing the Company's contributed surplus by CHF 3,015,450,910. The reduction in registered share capital and corresponding increase in contributed surplus, which did not result in any changes to total Shareholders' Equity, was recorded during the year ended September 27, 2013.
On September 9, 2014, shareholders of the Company approved the merger between the Company and Tyco Ireland, and the merger is expected to be completed in November 2014.  Upon completion of the merger, the Company’s authorized share capital will be $11,000,000 and €40,000, divided into 1,000,000,000 ordinary shares with a par value of $0.01 per share, 100,000,000 preferred shares with a par value of $0.01 per share and 40,000 ordinary A shares with a par value of €1.00 per share. Based on the number of Company shares outstanding as of November 7, 2014, Tyco Ireland is expected to issue 418,465,546 ordinary shares with a nominal value of $0.01 per share to the former shareholders of the Company on the completion of the Merger, which will constitute all of the Company’s outstanding share capital.
Share Repurchase Program
The Company's Board of Directors approved the $1 billion and $1.75 billion 2014 share repurchase programs and the $600 million 2013 share repurchase program in September 2014, March 2014 and January 2013, respectively. Share repurchases reduce the amount of common shares outstanding and decrease the dividends declared on the Consolidated Statement of Shareholders' Equity. Shares repurchased by the Company by fiscal year and share repurchase program are provided below:
 
2014 Share
Repurchase Programs
 
2013 Share
Repurchase Program
 
2011 Share
Repurchase Program
 
Shares
(in millions)
 
Amounts
($ in billions)
 
Shares
(in millions)
 
Amounts
($ in billions)
 
Shares
(in millions)
 
Amounts
($ in billions)
Approved Repurchase Amount
 

 
$
2.8

 
 

 
$
0.6

 
 

 
$
1.0

Repurchases
 
 
 
 
 
 
 
 
 
 
 
Fiscal 2014
30.0

 
1.4

 
12.0

 
0.5

 
 
 
 
Fiscal 2013
N/A

 
N/A

 
3.0

 
0.1

 
7.0

 
0.2

Fiscal 2012
N/A

 
N/A

 
N/A

 
N/A

 
11.0

 
0.5

Fiscal 2011
N/A

 
N/A

 
N/A

 
N/A

 
6.0

 
0.3

Remaining Amount Available
 
 
$
1.4

 
 
 
$

 
 
 
$


Comprehensive Income
 
2014
 
2013
 
2012
Net income
$
1,839

 
$
533

 
$
471

Foreign currency translation
(133
)
 
(85
)
 
92

  Liquidation of foreign entities (1)
(40
)
 
(9
)
 
2

Income tax expense (2)
(1
)
 
(6
)
 
(1
)
Foreign currency translation, net of tax
(174
)
 
(100
)
 
93

Net actuarial (losses) gains
(102
)
 
109

 
(212
)
Amortization reclassified into earnings (3)
22

 
26

 
22

Foreign currency and other
(2
)
 
(2
)
 
(15
)
Income tax benefit (expense)
18

 
(54
)
 
42

Defined benefit and post retirement plans, net of tax
(64
)
 
79

 
(163
)
Unrealized (loss) gain on marketable securities and derivative instruments (4)
(1
)
 
2

 
(1
)
Income tax benefit (expense)
1

 
(2
)
 
1

Unrealized loss on marketable securities and derivative instruments, net of tax

 

 

Total other comprehensive loss, net of tax
(238
)
 
(21
)
 
(70
)
Comprehensive income
1,601

 
512

 
401

Less: comprehensive gain (loss) attributable to noncontrolling interests
1

 
(3
)
 
(1
)
Comprehensive income attributable to Tyco common shareholders
$
1,600

 
$
515

 
$
402

(1)
During the years ended September 26, 2014, September 27, 2013 and September 28, 2012, $40 million of cumulative translation gains, $9 million of cumulative translation gains and $2 million of cumulative translation losses, respectively, were transferred from currency translation adjustments as a result of the sale of foreign entities. Of these amounts, $40 million, nil and $2 million, respectively, are included in Income from discontinued operations in the Consolidated Statements of Operations.
(2)
Income tax expense on the net investment hedge was $1 million, $6 million, and $1 million for the years ended September 26, 2014, September 27, 2013 and September 28, 2012.
(3) 
Reclassified to net periodic benefit cost. See Note 14 Retirement Plans for additional information. During the year ended September 26, 2014, $6 million of net actuarial losses were transferred from amortization of net actuarial losses and included in Income from discontinued operations in the Consolidated Statements of Operations as a result of the sale of foreign entities.
(4) 
Reclassified realized gain (loss) on marketable securities and derivative instruments to Other expense, net.

Accumulated Other Comprehensive Loss
The components of Accumulated other comprehensive loss are as follows ($ in millions):
 
Currency
Translation
Adjustments
 
Retirement
Plans
 
Accumulated Other
Comprehensive Loss
Balance as of September 30, 2011
$
70

 
$
(506
)
 
$
(436
)
Other comprehensive income (loss), net of tax
93

 
(163
)
 
(70
)
Distribution of Tyco Flow Control and ADT
(582
)
 
122

 
(460
)
Balance as of September 28, 2012
(419
)
 
(547
)
 
(966
)
Other comprehensive (loss) income, net of tax
(100
)
 
79

 
(21
)
Balance as of September 27, 2013
(519
)
 
(468
)
 
(987
)
Other comprehensive loss, net of tax
(174
)
 
(64
)
 
(238
)
Balance as of September 26, 2014
$
(693
)
 
$
(532
)
 
$
(1,225
)