Document_and_Entity_Informatio
Document and Entity Information Document | 6 Months Ended | |
Mar. 27, 2015 | Apr. 22, 2015 | |
Entity [Abstract] | ||
Entity Registrant Name | ADT Corp | |
Entity Central Index Key | 1546640 | |
Current Fiscal Year End Date | -16 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | 27-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | ADT | |
Amendment Flag | FALSE | |
Entity Common Stock, Shares Outstanding | 171,296,983 |
Condensed_and_Consolidated_Bal
Condensed and Consolidated Balance Sheets (USD $) | Mar. 27, 2015 | Sep. 26, 2014 |
In Millions, unless otherwise specified | ||
Current Assets: | ||
Cash and cash equivalents | $63 | $66 |
Accounts receivable trade, less allowance for doubtful accounts of $23 and $24, respectively | 98 | 101 |
Inventories | 80 | 76 |
Prepaid expenses and other current assets | 51 | 55 |
Deferred income taxes | 120 | 111 |
Total current assets | 412 | 409 |
Property and equipment, net | 272 | 265 |
Subscriber system assets, net | 2,384 | 2,260 |
Goodwill | 3,694 | 3,738 |
Intangible assets, net | 3,031 | 3,120 |
Deferred subscriber acquisition costs, net | 601 | 571 |
Other assets | 243 | 186 |
Total Assets | 10,637 | 10,549 |
Current Liabilities: | ||
Current maturities of long-term debt | 5 | 4 |
Accounts payable | 183 | 208 |
Accrued and other current liabilities | 244 | 260 |
Deferred revenue | 237 | 236 |
Total current liabilities | 669 | 708 |
Long-term debt | 5,264 | 5,096 |
Deferred subscriber acquisition revenue | 867 | 838 |
Deferred tax liabilities | 705 | 651 |
Other liabilities | 124 | 128 |
Total Liabilities | 7,629 | 7,421 |
Commitments and contingencies | ||
Stockholders' Equity: | ||
Common stock - authorized 1,000,000,000 shares of $0.01 par value; issued and outstanding shares - 171,234,622 as of March 27, 2015 and 174,109,318 as of September 26, 2014 | 2 | 2 |
Additional paid-in capital | 2,544 | 2,643 |
Retained earnings | 512 | 445 |
Accumulated other comprehensive (loss) income | -50 | 38 |
Total Stockholders' Equity | 3,008 | 3,128 |
Total Liabilities and Stockholders' Equity | $10,637 | $10,549 |
Condensed_and_Consolidated_Bal1
Condensed and Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 27, 2015 | Sep. 26, 2014 |
In Millions, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $23 | $24 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 171,234,622 | 174,109,318 |
Common stock, shares outstanding | 171,234,622 | 174,109,318 |
Condensed_and_Consolidated_Sta
Condensed and Consolidated Statements of Operations (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Mar. 27, 2015 | Mar. 28, 2014 | Mar. 27, 2015 | Mar. 28, 2014 |
Income Statement [Abstract] | ||||
Revenue | $890 | $837 | $1,777 | $1,676 |
Cost of revenue | 392 | 356 | 780 | 718 |
Selling, general and administrative expenses | 331 | 307 | 649 | 611 |
Radio conversion costs | 19 | 6 | 42 | 9 |
Separation costs | 0 | 4 | 0 | 9 |
Operating income | 148 | 164 | 306 | 329 |
Interest expense, net | -51 | -46 | -101 | -93 |
Other income | 3 | 0 | 3 | 2 |
Income before income taxes | 100 | 118 | 208 | 238 |
Income tax expense | -32 | -55 | -68 | -98 |
Net income | $68 | $63 | $140 | $140 |
Net income per share: | ||||
Basic | $0.40 | $0.35 | $0.81 | $0.74 |
Diluted | $0.40 | $0.34 | $0.81 | $0.74 |
Weighted-average number of shares: | ||||
Basic | 171 | 182 | 173 | 189 |
Diluted | 172 | 183 | 173 | 190 |
Dividends declared per common share (in US$ per share) | $0.42 | $0.40 | $0.42 | $0.40 |
Condensed_and_Consolidated_Sta1
Condensed and Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Mar. 27, 2015 | Mar. 28, 2014 | Mar. 27, 2015 | Mar. 28, 2014 |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $68 | $63 | $140 | $140 |
Other comprehensive loss: | ||||
Foreign currency translation and other, net of tax | -57 | -8 | -88 | -19 |
Total other comprehensive loss, net of tax | -57 | -8 | -88 | -19 |
Comprehensive income | $11 | $55 | $52 | $121 |
Condensed_and_Consolidated_Sta2
Condensed and Consolidated Statements of Stockholders' Equity (USD $) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive (Loss) Income [Member] |
In Millions, except Share data, unless otherwise specified | |||||
Balance at Sep. 26, 2014 | $3,128 | $2 | $2,643 | $445 | $38 |
Balance, shares at Sep. 26, 2014 | 174,109,318 | 174,000,000 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Other comprehensive loss | -88 | -88 | |||
Net income | 140 | 140 | |||
Dividends declared | -73 | -73 | |||
Common stock repurchases, shares | -4,000,000 | ||||
Common stock repurchases | -138 | -138 | |||
Exercise of stock options and vesting of restricted stock units, shares | 1,000,000 | ||||
Exercise of stock options and vesting of restricted stock units | 27 | 27 | |||
Stock-based compensation expense | 12 | 12 | |||
Balance at Mar. 27, 2015 | $3,008 | $2 | $2,544 | $512 | ($50) |
Balance, shares at Mar. 27, 2015 | 171,234,622 | 171,000,000 |
Condensed_and_Consolidated_Sta3
Condensed and Consolidated Statements of Cash Flows (USD $) | 6 Months Ended | |
In Millions, unless otherwise specified | Mar. 27, 2015 | Mar. 28, 2014 |
Cash Flows from Operating Activities: | ||
Net income | $140 | $140 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and intangible asset amortization | 553 | 509 |
Amortization of deferred subscriber acquisition costs | 69 | 65 |
Amortization of deferred subscriber acquisition revenue | -80 | -74 |
Stock-based compensation expense | 12 | 9 |
Deferred income taxes | 59 | 82 |
Provision for losses on accounts receivable and inventory | 30 | 25 |
Changes in operating assets and liabilities and other | -27 | 1 |
Net cash provided by operating activities | 756 | 757 |
Cash Flows from Investing Activities: | ||
Dealer generated customer accounts and bulk account purchases | -267 | -225 |
Subscriber system assets | -352 | -325 |
Capital expenditures | -50 | -33 |
Other investing | -39 | 28 |
Net cash used in investing activities | -708 | -555 |
Cash Flows from Financing Activities: | ||
Proceeds from exercise of stock options | 27 | 12 |
Repurchases of common stock under approved program | -138 | -1,286 |
Dividends paid | -71 | -62 |
Proceeds from long-term borrowings | 505 | 1,725 |
Repayment of long-term debt | -367 | -376 |
Other financing | -5 | -21 |
Net cash used in financing activities | -49 | -8 |
Effect of currency translation on cash | -2 | 0 |
Net (decrease) increase in cash and cash equivalents | -3 | 194 |
Cash and cash equivalents at beginning of period | 66 | 138 |
Cash and cash equivalents at end of period | $63 | $332 |
Basis_of_Presentation_and_Summ
Basis of Presentation and Summary of Significant Accounting Policies (Notes) | 6 Months Ended | |||||||||||||||
Mar. 27, 2015 | ||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies | |||||||||||||||
Nature of Business—The ADT Corporation ("ADT" or the "Company"), a company incorporated in the state of Delaware, is a leading provider of monitored security, interactive home and business automation and related monitoring services in the United States and Canada. | ||||||||||||||||
Basis of Presentation—The Condensed and Consolidated Financial Statements have been prepared in United States dollars ("USD") and in accordance with generally accepted accounting principles in the United States of America ("GAAP"). The Condensed and Consolidated Financial Statements included herein are unaudited, but in the opinion of management, such financial statements include all adjustments, consisting of normal recurring adjustments, necessary to summarize fairly the Company's financial position, results of operations and cash flows for the interim periods presented. The interim results reported in these Condensed and Consolidated Financial Statements should not be taken as indicative of results that may be expected for the entire year. For a more comprehensive understanding of ADT and its Condensed and Consolidated Financial Statements, please review these interim financial statements in conjunction with the Company's audited financial statements included in its Annual Report on Form 10-K for the fiscal year ended September 26, 2014, which was filed with the U.S. Securities and Exchange Commission (the "SEC") on November 12, 2014. | ||||||||||||||||
The Company has a 52- or 53-week fiscal year that ends on the last Friday in September. Both fiscal years 2015 and 2014 are 52-week years. | ||||||||||||||||
The Company conducts business in one operating segment, which is identified by the Company based on how resources are allocated and operating decisions are made. Management evaluates performance and allocates resources based on the Company as a whole. | ||||||||||||||||
The Company conducts business through its operating entities. All intercompany transactions have been eliminated. The results of companies acquired are included in the Condensed and Consolidated Financial Statements from the effective date of acquisition. | ||||||||||||||||
Radio Conversion Costs—Charges incurred related to a three-year conversion program to replace 2G radios used in many of the Company's security systems are reflected in radio conversion costs in the Company's Condensed and Consolidated Statements of Operations. | ||||||||||||||||
Separation Costs— On September 28, 2012, the Company separated (the "Separation") from Tyco International Ltd. ("Tyco"). Charges incurred directly related to the Separation through the end of fiscal year 2014 are reflected in separation costs in the Company's Condensed and Consolidated Statements of Operations. | ||||||||||||||||
Inventories—Inventories are recorded at the lower of cost or market value. Cost is computed using standard cost, which approximates average cost. Inventories consisted of the following ($ in millions): | ||||||||||||||||
March 27, | September 26, | |||||||||||||||
2015 | 2014 | |||||||||||||||
Work in progress | $ | 2 | $ | 2 | ||||||||||||
Finished goods | 78 | 74 | ||||||||||||||
Inventories | $ | 80 | $ | 76 | ||||||||||||
Financial Instruments—The Company's financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, debt and derivative financial instruments. Due to their short-term nature, the fair value of cash and cash equivalents, accounts receivable and accounts payable approximated their respective carrying values as of March 27, 2015 and September 26, 2014. | ||||||||||||||||
Long-Term Debt Instruments—The fair value of the Company's senior unsecured notes was determined using prices for ADT's securities obtained from external pricing services, which are considered Level 2 inputs. The carrying amount of debt outstanding under the Company's revolving credit facility approximates fair value as interest rates on these borrowings approximate current market rates. | ||||||||||||||||
The carrying value and fair value of the Company's debt that is subject to fair value disclosures as of March 27, 2015 and September 26, 2014 were as follows ($ in millions): | ||||||||||||||||
27-Mar-15 | 26-Sep-14 | |||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||
Value | Value | Value | Value | |||||||||||||
Long-term debt instruments, excluding capital lease obligations | $ | 5,235 | $ | 5,023 | $ | 5,065 | $ | 4,759 | ||||||||
Derivative Instruments—All derivative financial instruments are reported on the Condensed and Consolidated Balance Sheets at fair value. For derivative financial instruments designated as fair value hedges, the changes in fair value of both the derivatives and the hedged items are recognized currently in the Condensed and Consolidated Statements of Operations. The fair values of the Company's derivative financial instruments are not material. | ||||||||||||||||
Accrued and Other Current Liabilities—Accrued and other current liabilities as of March 27, 2015 and September 26, 2014 consisted of the following ($ in millions): | ||||||||||||||||
March 27, | September 26, | |||||||||||||||
2015 | 2014 | |||||||||||||||
Payroll-related accruals | $ | 47 | $ | 45 | ||||||||||||
Accrued interest | 44 | 44 | ||||||||||||||
Insurance-related accruals | 39 | 38 | ||||||||||||||
Accrued dividends | 36 | 35 | ||||||||||||||
Other accrued liabilities | 78 | 98 | ||||||||||||||
$ | 244 | $ | 260 | |||||||||||||
Guarantees—In the normal course of business, the Company is liable for contract completion and product performance. In the opinion of management, such obligations will not significantly affect the Company's financial position, results of operations or cash flows. As of March 27, 2015 and September 26, 2014, there were no material guarantees. | ||||||||||||||||
Recent Accounting Pronouncements—In May 2014, the Financial Accounting Standards Board ("FASB") issued authoritative guidance which sets forth a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The guidance is effective for annual reporting periods, including interim reporting periods within those periods, beginning after December 15, 2016 and early adoption is not permitted. Companies may use either a full retrospective or a modified retrospective approach to adopt this guidance. The Company is currently evaluating the impact of this guidance. | ||||||||||||||||
In April 2015, the FASB issued authoritative guidance to simplify the presentation of debt issuance costs and require that debt issuances costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this guidance. The guidance is to be applied on a retrospective basis and is effective for financial statements issued for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. The adoption of this guidance is not expected to have a material impact on the Company's financial position, results of operations or cash flows. | ||||||||||||||||
In April 2015, the FASB issued authoritative guidance regarding the accounting for fees paid in a cloud computing arrangement. The new standard provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The Company is currently evaluating the impact of this guidance. |
Acquisitions_Notes
Acquisitions (Notes) | 6 Months Ended |
Mar. 27, 2015 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions |
Dealer Generated Customer Accounts and Bulk Account Purchases | |
During the six months ended March 27, 2015 and March 28, 2014, the Company paid $267 million and $225 million, respectively, for customer contracts for electronic security services generated under the ADT dealer program and bulk account purchases. |
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets (Notes) | 6 Months Ended | |||||||||||||||
Mar. 27, 2015 | ||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets | |||||||||||||||
Goodwill | ||||||||||||||||
There were no material changes in the carrying amount of goodwill during the six months ended March 27, 2015. | ||||||||||||||||
Other Intangible Assets | ||||||||||||||||
The following table sets forth the gross carrying amounts and accumulated amortization of the Company's other intangible assets as of March 27, 2015 and September 26, 2014 ($ in millions): | ||||||||||||||||
27-Mar-15 | 26-Sep-14 | |||||||||||||||
Gross Carrying | Accumulated | Gross Carrying | Accumulated | |||||||||||||
Amount | Amortization | Amount | Amortization | |||||||||||||
Amortizable: | ||||||||||||||||
Contracts and related customer relationships | $ | 8,095 | $ | (5,102 | ) | $ | 8,098 | $ | (5,022 | ) | ||||||
Trade names and other | 47 | (9 | ) | 51 | (7 | ) | ||||||||||
Total | $ | 8,142 | $ | (5,111 | ) | $ | 8,149 | $ | (5,029 | ) | ||||||
Changes in the net carrying amount of contracts and related customer relationships during the six months ended March 27, 2015 were as follows ($ in millions): | ||||||||||||||||
Balance as of September 26, 2014 | $ | 3,076 | ||||||||||||||
Customer contract additions, net of dealer charge-backs | 267 | |||||||||||||||
Amortization | (307 | ) | ||||||||||||||
Currency translation and other | (43 | ) | ||||||||||||||
Balance as of March 27, 2015 | $ | 2,993 | ||||||||||||||
Other than goodwill, the Company does not have any other indefinite-lived intangible assets. The weighted-average amortization period for contracts and related customer relationships acquired during the six months ended March 27, 2015 was 15 years. Intangible asset amortization expense for the quarters and six months ended March 27, 2015 and March 28, 2014 was as follows ($ in millions): | ||||||||||||||||
For the Quarters Ended | For the Six Months Ended | |||||||||||||||
March 27, | March 28, | March 27, | March 28, | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Intangible asset amortization expense | $ | 153 | $ | 144 | $ | 309 | $ | 290 | ||||||||
The estimated aggregate amortization expense for intangible assets is expected to be as follows ($ in millions): | ||||||||||||||||
Remainder of fiscal 2015 | $ | 297 | ||||||||||||||
Fiscal 2016 | $ | 522 | ||||||||||||||
Fiscal 2017 | $ | 436 | ||||||||||||||
Fiscal 2018 | $ | 365 | ||||||||||||||
Fiscal 2019 | $ | 315 | ||||||||||||||
Fiscal 2020 | $ | 253 | ||||||||||||||
Debt_Notes
Debt (Notes) | 6 Months Ended |
Mar. 27, 2015 | |
Debt Disclosure [Abstract] | |
Debt | Debt |
5.25% Senior Unsecured Notes Due 2020 | |
On December 18, 2014, the Company completed a public offering of $300 million of its 5.25% 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 Condensed and Consolidated Financial Statements as of and for the six months ended March 27, 2015. | |
Senior Unsecured Revolving Credit Facility | |
As of March 27, 2015, the Company had $215 million outstanding borrowings under its $750 million revolving credit facility compared with $375 million outstanding as of September 26, 2014. During the six months ended March 27, 2015, the Company borrowed $205 million under the revolving credit facility and repaid $365 million, primarily using proceeds from the December 2014 Debt Offering. The interest rate for borrowings under the revolving credit facility is based on the London Interbank Offered Rate or an alternative base rate, plus a spread, based upon the Company's credit rating. The revolving credit facility has a maturity date of June 22, 2017. | |
See Note 1 for information on the fair value of the Company's debt. |
Equity_Notes
Equity (Notes) | 6 Months Ended |
Mar. 27, 2015 | |
Equity [Abstract] | |
Equity | Equity |
Dividends | |
On January 8, 2015, the Company's board of directors authorized a 5% quarterly dividend increase and also declared a quarterly dividend on ADT's common stock of $0.21 per share. This dividend was paid on February 18, 2015 to stockholders of record on January 28, 2015. | |
On March 17, 2015, the Company's board of directors declared a quarterly dividend on ADT's common stock of $0.21 per share. This dividend will be paid on May 20, 2015 to stockholders of record on April 29, 2015. | |
Share Repurchase Program | |
On November 18, 2013, the Company's board of directors authorized a $1 billion increase to the $2 billion, three-year share repurchase program that was previously approved on November 26, 2012. This repurchase program expires November 26, 2015. During the six months ended March 27, 2015, the Company made open market repurchases of 4.2 million shares of ADT's common stock at an average price of $32.91 per share. The total cost of open market repurchases for the six months ended March 27, 2015 was $138 million, all of which was paid during the period. As of March 27, 2015, $243 million remained under the previously approved, $3 billion share repurchase program. | |
The above repurchases were made in accordance with the publicly announced, board approved repurchase program. All of the Company's repurchases were treated as effective retirements of the purchased shares and therefore reduced reported shares issued and outstanding by the number of shares repurchased. In addition, the Company recorded the excess of the purchase price over the par value of the common stock as a reduction to additional paid-in capital. | |
Other | |
During the six months ended March 27, 2015, the Company did not record any material reclassifications out of Accumulated Other Comprehensive (Loss) Income. |
Income_Taxes_Notes
Income Taxes (Notes) | 6 Months Ended |
Mar. 27, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes |
Unrecognized Tax Benefits | |
The Company did not have a significant change to its unrecognized tax benefits during the six months ended March 27, 2015. The Company's uncertain tax positions relate to tax years that remain subject to audit by the taxing authorities in the U.S. federal, state and local and foreign jurisdictions. Based on the current status of its income tax audits, the Company does not believe that the balance of its unrecognized tax benefits will be resolved in the next twelve months. The resolution of certain components of the Company's uncertain tax positions will be partially offset by an adjustment to the receivable from Tyco, which was recorded pursuant to the tax sharing agreement entered into in conjunction with the Separation. See Note 7 for more information on this tax sharing agreement. | |
Effective Tax Rate | |
The Company's income tax expense for the quarter and six months ended March 27, 2015 totaled $32 million and $68 million, respectively, resulting in an effective tax rate for the periods of 32.0% and 32.7%, respectively. The effective tax rate for the quarter and six months ended March 27, 2015 reflects the tax impact of permanent items, state tax expense, changes in tax laws, and non-US net earnings. The effective tax rate can vary from period to period due to permanent tax adjustments, discrete items such as the settlement of income tax audits and changes in tax laws, as well as recurring factors such as changes in the overall effective state tax rate. |
Commitments_and_Contingencies_
Commitments and Contingencies (Notes) | 6 Months Ended |
Mar. 27, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies |
Legal Proceedings | |
The Company is subject to various claims and lawsuits in the ordinary course of business, including from time to time, contractual disputes, employment matters, product and general liability claims, claims that the Company has infringed on the intellectual property rights of others, claims related to alleged security system failures and consumer and employment class actions. The Company has recorded accruals for losses that it believes are probable to occur and are reasonably estimable. While the ultimate outcome of these matters cannot be predicted with certainty, the Company believes that the resolution of any such proceedings (other than matters specifically identified below), will not have a material effect on its financial position, results of operations or cash flows. | |
Environmental Matter | |
On October 25, 2013, the Company was notified by subpoena that the Office of the Attorney General of California, in conjunction with the Alameda County District Attorney, is investigating whether certain of the Company's waste disposal policies, procedures and practices are in violation of the California Business and Professions Code and the California Health and Safety Code. The Company is cooperating fully with the respective authorities. The Company is currently unable to predict the outcome of this investigation or reasonably estimate a range of possible loss. | |
Securities Litigation | |
On April 28, 2014, the Company and certain of its current and former officers and directors were named as defendants in a lawsuit filed in the United States District Court for the Southern District of Florida. The plaintiff alleges violations of the Securities Exchange Act of 1934 and SEC Rule 10b-5, and seeks monetary damages, including interest, and class action status on behalf of all plaintiffs who purchased the Company's common stock during the period between November 27, 2012 and January 29, 2014, inclusive. The claims focus primarily on the Company's statements concerning its financial condition and future business prospects for fiscal 2013 and the first quarter of fiscal 2014, its stock repurchase program in 2012 and 2013 and the buyback of stock from Corvex Management LP ("Corvex") in November 2013. On June 27, 2014, another plaintiff filed a similar action in the same court. On July 14, 2014, the Court entered an order consolidating the two actions under the caption Henningsen v. The ADT Corporation, Case No. 14-80566-CIV-DIMITROULEAS, and appointing IBEW Local 595 Pension and Money Purchase Pension Plans, Macomb County Employees' Retirement System and KBC Asset Management NV as Lead Plaintiffs in the consolidated action. In addition to the Company, the defendants named in the action are Naren Gursahaney, Kathryn A. Mikells, Michael S. Geltzeiler, Keith A. Meister and Corvex. On September 25, 2014, defendants moved to dismiss this action and the parties await the Court's decision on that motion. On November 13, 2014, Mr. Geltzeiler was dismissed as a defendant without prejudice from this action. The Company intends to vigorously defend itself against the allegations in this action and is currently unable to predict the outcome or if legal damages will be awarded. | |
On January 14, 2015, the SEC sent the Company a letter stating that it is investigating the matters at issue in the foregoing litigation and requesting that the Company voluntarily provide the information and documents set forth in the letter concerning the same litigation. The Company is cooperating fully with the SEC in their investigation. | |
Derivative Litigation | |
In May and June 2014, four derivative actions were filed against a number of past and present officers and directors of the Company. Like the securities actions described above, the derivative actions focus primarily on the Company's stock repurchase program in 2012 and 2013, the buyback of stock from Corvex in November 2013 and the Company's statements concerning its financial condition and future business prospects for fiscal 2013 and the first quarter of fiscal 2014. Three of the derivative actions were filed in the United States District Court for the Southern District of Florida. On July 16, 2014, the Court consolidated those three actions under the caption In re The ADT Corporation Derivative Litigation, Lead Case No. 14-80570-CIV-DIMITROULEAS/SNOW, and on September 12, 2014, defendants moved to dismiss the consolidated action and the parties await the Court's decision on that motion. The fourth derivative action, entitled Seidl v. Colligan, Case No. 2014CA007529, was filed in the Circuit Court of the 15th Judicial Circuit, Palm Beach County, Florida. On July 14, 2014, the parties agreed to stay that action pending resolution of motions to dismiss that are expected to be filed in the securities actions described above. The Court approved the stay on July 23, 2014. A fifth derivative action asserting similar claims, entitled Ryan v. Gursahaney, C.A. No. 9992-VCP, was filed in the Delaware Court of Chancery on August 1, 2014, and defendants moved to dismiss that action. In response to defendants' motion, plaintiff filed an amended complaint asserting similar claims and on October 13, 2014 defendants moved to dismiss the amended complaint. On April 28, 2015 the Court granted defendants' motion to dismiss. A sixth derivative action asserting similar claims against the same group of past and present officers and directors was filed in the Delaware Court of Chancery on January 27, 2015 under the caption entitled Binning v. Gursahaney, C.A. No. 10586-VCP. On February 18, 2015, the Delaware Court of Chancery entered an order staying the date for the defendants to respond to the Binning complaint until 45 days after its ruling on defendants' motion to dismiss the Ryan action. | |
Income Tax Matters | |
In connection with the Separation from Tyco, the Company entered into the 2012 Tax Sharing Agreement with Tyco and Pentair Ltd. that governs the rights and obligations of the Company, Tyco and Pentair Ltd. for certain pre-Separation tax liabilities, including Tyco's obligations under the tax sharing agreement among Tyco, Covidien Ltd. ("Covidien") and TE Connectivity Ltd. ("TE Connectivity") entered into in 2007 (the "2007 Tax Sharing Agreement"). The Company is responsible for all of its own taxes that are not shared pursuant to the 2012 Tax Sharing Agreement's sharing formulae. Tyco and Pentair Ltd. are likewise responsible for their tax liabilities that are not subject to the 2012 Tax Sharing Agreement's sharing formulae. Tyco has the right to administer, control and settle all U.S. income tax audits for the periods prior to and including the Separation. | |
With respect to years prior to and including the 2007 separation of Covidien and TE Connectivity by Tyco, tax authorities have raised issues and proposed tax adjustments that are generally subject to the sharing provisions of the 2007 Tax Sharing Agreement and which may require Tyco to make a payment to a taxing authority, Covidien or TE Connectivity. Although Tyco has advised ADT that it has resolved a substantial number of these adjustments, a few significant items raised by the Internal Revenue Service ("IRS") remain open with respect to the audits of the 1997 through 2007 tax years. On July 1, 2013, Tyco announced that the IRS issued Notices of Deficiency to Tyco primarily related to the treatment of certain intercompany debt transactions (the "Tyco IRS Notices"). These notices assert that additional taxes of $883 million plus penalties of $154 million are owed based on audits of the 1997 through 2000 tax years of Tyco and its subsidiaries, as they existed at that time. Further, Tyco reported receiving Final Partnership Administrative Adjustments (the "Partnership Notices") for certain U.S. partnerships owned by its former U.S. subsidiaries, for which Tyco has indicated that it estimates an additional tax deficiency of approximately $30 million will be asserted. The additional tax assessments related to the Tyco IRS Notices and the Partnership Notices exclude interest and do not reflect the impact on subsequent periods if the IRS challenge to Tyco's tax filings is proved correct. Tyco has filed petitions with the U.S. Tax Court to contest the IRS assessments. Consistent with its petitions filed with the U.S. Tax Court, Tyco has advised the Company that it strongly disagrees with the IRS position and believes (i) it has meritorious defenses for the respective tax filings, (ii) the IRS positions with regard to these matters are inconsistent with applicable tax laws and Treasury regulations, and (iii) the previously reported taxes for the years in question are appropriate. No payments with respect to the Tyco IRS Notices would be required until the dispute is resolved in the U.S. Tax Court. A trial date has been set for February 2016. | |
During the quarter ended March 27, 2015, the IRS concluded its field examination of certain of Tyco's U.S. federal income tax returns for the 2008 and 2009 tax years of Tyco and its subsidiaries. Tyco received anticipated Revenue Agents' Reports proposing adjustments to certain Tyco entities' previously filed tax return positions, including the predecessor to ADT, relating primarily to certain intercompany debt. Tyco has advised the Company that it strongly disagrees with the IRS position and intends to vigorously defend its prior filed tax return positions and believes the previously reported taxes for the years in question are appropriate. | |
If the IRS should successfully assert its positions with respect to the matters described above, the Company's share of the collective liability, if any, would be determined pursuant to the 2012 Tax Sharing Agreement. In accordance with the 2012 Tax Sharing Agreement, Tyco is responsible for the first $500 million of tax, interest and penalty assessed against pre-2013 tax years including its 27% share of the tax, interest and penalty assessed for periods prior to Tyco's 2007 spin transaction ("Pre-2007 Spin Periods"). In accordance with the 2012 Tax Sharing Agreement, the amount ultimately assessed against Pre-2007 Spin Periods with respect to the Tyco IRS Notices and the Partnership Notices would have to be in excess of $1.85 billion, including other assessments for unrelated historical tax matters Tyco has, or may settle in the future, before the Company would be required to pay any of the amounts assessed. In addition to the Company's share of cash taxes pursuant to the 2012 Tax Sharing Agreement, the Company's net operating loss ("NOL") carryforwards may be significantly reduced or eliminated by audit adjustments to pre-2013 tax periods. NOL carryforwards may be reduced prior to incurring any cash tax liability, and will not be compensated for under the tax sharing agreement. The Company believes that its income tax reserves and the liabilities recorded in the Condensed and Consolidated Balance Sheet for the 2012 Tax Sharing Agreement continue to be appropriate. However, the ultimate resolution of these matters is uncertain, and if the IRS were to prevail, it could have a material adverse impact on the Company's financial position, results of operations and cash flows, potentially including a significant reduction in or the elimination of the Company's available NOL carryforwards. Further, to the extent ADT is responsible for any liability under the 2012 Tax Sharing Agreement, there could be a material impact on its financial position, results of operations, cash flows or its effective tax rate in future reporting periods. | |
Other liabilities in the Company's Condensed and Consolidated Balance Sheets as of both March 27, 2015 and September 26, 2014 include $19 million for ADT's obligations under certain tax related agreements entered into in conjunction with the Separation. The maximum amount of potential future payments is not determinable as they relate to unknown conditions and future events that cannot be predicted. |
Earnings_Per_Share_Notes
Earnings Per Share (Notes) | 6 Months Ended | |||||||||||||||
Mar. 27, 2015 | ||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||
Earnings Per Share | Earnings Per Share | |||||||||||||||
Basic earnings per share is computed by dividing net income attributable to common shares by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution of securities that could participate in earnings, but not securities that are anti-dilutive. The computations of basic and diluted earnings per share for the quarters and six months ended March 27, 2015 and March 28, 2014 were as follows: | ||||||||||||||||
For the Quarters Ended | For the Six Months Ended | |||||||||||||||
(in millions, except per share amounts) | March 27, | March 28, | March 27, | March 28, | ||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Basic Earnings Per Share | ||||||||||||||||
Numerator: | ||||||||||||||||
Net income | $ | 68 | $ | 63 | $ | 140 | $ | 140 | ||||||||
Denominator: | ||||||||||||||||
Basic weighted-average shares outstanding | 171 | 182 | 173 | 189 | ||||||||||||
Basic earnings per share | $ | 0.4 | $ | 0.35 | $ | 0.81 | $ | 0.74 | ||||||||
For the Quarters Ended | For the Six Months Ended | |||||||||||||||
(in millions, except per share amounts) | March 27, | March 28, | March 27, | March 28, | ||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Diluted Earnings Per Share | ||||||||||||||||
Numerator: | ||||||||||||||||
Net income | $ | 68 | $ | 63 | $ | 140 | $ | 140 | ||||||||
Denominator: | ||||||||||||||||
Basic weighted-average shares outstanding | 171 | 182 | 173 | 189 | ||||||||||||
Effect of dilutive securities: | ||||||||||||||||
Dilutive effect of stock options and restricted stock units | 1 | 1 | — | 1 | ||||||||||||
Diluted weighted-average shares outstanding | 172 | 183 | 173 | 190 | ||||||||||||
Diluted earnings per share | $ | 0.4 | $ | 0.34 | $ | 0.81 | $ | 0.74 | ||||||||
The computation of diluted earnings per share for the quarters ended March 27, 2015 and March 28, 2014 excludes the effect of the potential exercise of options to purchase approximately 2.2 million and 2.3 million shares, respectively, of stock as the effect would have been anti-dilutive. The computation of diluted earnings per share for the six months ended March 27, 2015 and March 28, 2014 excludes the effect of the potential exercise of options to purchase approximately 2.2 million and 1.4 million shares, respectively, of stock as the effect would have been anti-dilutive. |
Basis_of_Presentation_and_Summ1
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Mar. 27, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation—The Condensed and Consolidated Financial Statements have been prepared in United States dollars ("USD") and in accordance with generally accepted accounting principles in the United States of America ("GAAP"). The Condensed and Consolidated Financial Statements included herein are unaudited, but in the opinion of management, such financial statements include all adjustments, consisting of normal recurring adjustments, necessary to summarize fairly the Company's financial position, results of operations and cash flows for the interim periods presented. The interim results reported in these Condensed and Consolidated Financial Statements should not be taken as indicative of results that may be expected for the entire year. For a more comprehensive understanding of ADT and its Condensed and Consolidated Financial Statements, please review these interim financial statements in conjunction with the Company's audited financial statements included in its Annual Report on Form 10-K for the fiscal year ended September 26, 2014, which was filed with the U.S. Securities and Exchange Commission (the "SEC") on November 12, 2014. |
The Company has a 52- or 53-week fiscal year that ends on the last Friday in September. Both fiscal years 2015 and 2014 are 52-week years. | |
The Company conducts business in one operating segment, which is identified by the Company based on how resources are allocated and operating decisions are made. Management evaluates performance and allocates resources based on the Company as a whole. | |
The Company conducts business through its operating entities. All intercompany transactions have been eliminated. The results of companies acquired are included in the Condensed and Consolidated Financial Statements from the effective date of acquisition. | |
Inventories | Inventories—Inventories are recorded at the lower of cost or market value. Cost is computed using standard cost, which approximates average cost. |
Financial Instruments | Financial Instruments—The Company's financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, debt and derivative financial instruments. Due to their short-term nature, the fair value of cash and cash equivalents, accounts receivable and accounts payable approximated their respective carrying values as of March 27, 2015 and September 26, 2014. |
Long-Term Debt Instruments—The fair value of the Company's senior unsecured notes was determined using prices for ADT's securities obtained from external pricing services, which are considered Level 2 inputs. The carrying amount of debt outstanding under the Company's revolving credit facility approximates fair value as interest rates on these borrowings approximate current market rates. | |
Derivatives Instruments | Derivative Instruments—All derivative financial instruments are reported on the Condensed and Consolidated Balance Sheets at fair value. For derivative financial instruments designated as fair value hedges, the changes in fair value of both the derivatives and the hedged items are recognized currently in the Condensed and Consolidated Statements of Operations. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements—In May 2014, the Financial Accounting Standards Board ("FASB") issued authoritative guidance which sets forth a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The guidance is effective for annual reporting periods, including interim reporting periods within those periods, beginning after December 15, 2016 and early adoption is not permitted. Companies may use either a full retrospective or a modified retrospective approach to adopt this guidance. The Company is currently evaluating the impact of this guidance. |
In April 2015, the FASB issued authoritative guidance to simplify the presentation of debt issuance costs and require that debt issuances costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this guidance. The guidance is to be applied on a retrospective basis and is effective for financial statements issued for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. The adoption of this guidance is not expected to have a material impact on the Company's financial position, results of operations or cash flows. |
Basis_of_Presentation_and_Summ2
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 6 Months Ended | |||||||||||||||
Mar. 27, 2015 | ||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||
Schedule of Inventory, Current | Inventories consisted of the following ($ in millions): | |||||||||||||||
March 27, | September 26, | |||||||||||||||
2015 | 2014 | |||||||||||||||
Work in progress | $ | 2 | $ | 2 | ||||||||||||
Finished goods | 78 | 74 | ||||||||||||||
Inventories | $ | 80 | $ | 76 | ||||||||||||
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The carrying value and fair value of the Company's debt that is subject to fair value disclosures as of March 27, 2015 and September 26, 2014 were as follows ($ in millions): | |||||||||||||||
27-Mar-15 | 26-Sep-14 | |||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||
Value | Value | Value | Value | |||||||||||||
Long-term debt instruments, excluding capital lease obligations | $ | 5,235 | $ | 5,023 | $ | 5,065 | $ | 4,759 | ||||||||
Schedule of Accrued Liabilities | Accrued and other current liabilities as of March 27, 2015 and September 26, 2014 consisted of the following ($ in millions): | |||||||||||||||
March 27, | September 26, | |||||||||||||||
2015 | 2014 | |||||||||||||||
Payroll-related accruals | $ | 47 | $ | 45 | ||||||||||||
Accrued interest | 44 | 44 | ||||||||||||||
Insurance-related accruals | 39 | 38 | ||||||||||||||
Accrued dividends | 36 | 35 | ||||||||||||||
Other accrued liabilities | 78 | 98 | ||||||||||||||
$ | 244 | $ | 260 | |||||||||||||
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended | |||||||||||||||
Mar. 27, 2015 | ||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||
Schedule of Finite-Lived Intangible Assets | The following table sets forth the gross carrying amounts and accumulated amortization of the Company's other intangible assets as of March 27, 2015 and September 26, 2014 ($ in millions): | |||||||||||||||
27-Mar-15 | 26-Sep-14 | |||||||||||||||
Gross Carrying | Accumulated | Gross Carrying | Accumulated | |||||||||||||
Amount | Amortization | Amount | Amortization | |||||||||||||
Amortizable: | ||||||||||||||||
Contracts and related customer relationships | $ | 8,095 | $ | (5,102 | ) | $ | 8,098 | $ | (5,022 | ) | ||||||
Trade names and other | 47 | (9 | ) | 51 | (7 | ) | ||||||||||
Total | $ | 8,142 | $ | (5,111 | ) | $ | 8,149 | $ | (5,029 | ) | ||||||
Changes in the net carrying amount of contracts and related customer relationships during the six months ended March 27, 2015 were as follows ($ in millions): | ||||||||||||||||
Balance as of September 26, 2014 | $ | 3,076 | ||||||||||||||
Customer contract additions, net of dealer charge-backs | 267 | |||||||||||||||
Amortization | (307 | ) | ||||||||||||||
Currency translation and other | (43 | ) | ||||||||||||||
Balance as of March 27, 2015 | $ | 2,993 | ||||||||||||||
Schedule of Amortization Expense | Intangible asset amortization expense for the quarters and six months ended March 27, 2015 and March 28, 2014 was as follows ($ in millions): | |||||||||||||||
For the Quarters Ended | For the Six Months Ended | |||||||||||||||
March 27, | March 28, | March 27, | March 28, | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Intangible asset amortization expense | $ | 153 | $ | 144 | $ | 309 | $ | 290 | ||||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The estimated aggregate amortization expense for intangible assets is expected to be as follows ($ in millions): | |||||||||||||||
Remainder of fiscal 2015 | $ | 297 | ||||||||||||||
Fiscal 2016 | $ | 522 | ||||||||||||||
Fiscal 2017 | $ | 436 | ||||||||||||||
Fiscal 2018 | $ | 365 | ||||||||||||||
Fiscal 2019 | $ | 315 | ||||||||||||||
Fiscal 2020 | $ | 253 | ||||||||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 6 Months Ended | |||||||||||||||
Mar. 27, 2015 | ||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||
Computation of Basic and Diluted Earnings Per Share | ||||||||||||||||
For the Quarters Ended | For the Six Months Ended | |||||||||||||||
(in millions, except per share amounts) | March 27, | March 28, | March 27, | March 28, | ||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Basic Earnings Per Share | ||||||||||||||||
Numerator: | ||||||||||||||||
Net income | $ | 68 | $ | 63 | $ | 140 | $ | 140 | ||||||||
Denominator: | ||||||||||||||||
Basic weighted-average shares outstanding | 171 | 182 | 173 | 189 | ||||||||||||
Basic earnings per share | $ | 0.4 | $ | 0.35 | $ | 0.81 | $ | 0.74 | ||||||||
For the Quarters Ended | For the Six Months Ended | |||||||||||||||
(in millions, except per share amounts) | March 27, | March 28, | March 27, | March 28, | ||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Diluted Earnings Per Share | ||||||||||||||||
Numerator: | ||||||||||||||||
Net income | $ | 68 | $ | 63 | $ | 140 | $ | 140 | ||||||||
Denominator: | ||||||||||||||||
Basic weighted-average shares outstanding | 171 | 182 | 173 | 189 | ||||||||||||
Effect of dilutive securities: | ||||||||||||||||
Dilutive effect of stock options and restricted stock units | 1 | 1 | — | 1 | ||||||||||||
Diluted weighted-average shares outstanding | 172 | 183 | 173 | 190 | ||||||||||||
Diluted earnings per share | $ | 0.4 | $ | 0.34 | $ | 0.81 | $ | 0.74 | ||||||||
Basis_of_Presentation_and_Summ3
Basis of Presentation and Summary of Significant Accounting Policies (Details) | 6 Months Ended | |
Mar. 27, 2015 | Mar. 28, 2014 | |
Operating_segment | ||
Accounting Policies [Abstract] | ||
Fiscal reporting period (in weeks) | 364 days | 364 days |
Number of operating segments | 1 | |
Accounting Policies [Line Items] | ||
Fiscal reporting period (in weeks) | 364 days | 364 days |
Number of operating segments | 1 |
Inventories_Details
- Inventories (Details) (USD $) | Mar. 27, 2015 | Sep. 26, 2014 |
In Millions, unless otherwise specified | ||
Inventory, Finished Goods and Work in Process, Net of Reserves [Abstract] | ||
Work in progress | $2 | $2 |
Finished goods | 78 | 74 |
Inventories | $80 | $76 |
Carrying_Values_and_Estimated_
- Carrying Values and Estimated Fair Values of Debt Instruments (Details) (USD $) | Mar. 27, 2015 | Sep. 26, 2014 |
In Millions, unless otherwise specified | ||
Fair Value, Inputs, Level 2 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, fair value | $5,023 | $4,759 |
Carrying (Reported) Amount, Fair Value Disclosure [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | $5,235 | $5,065 |
Basis_of_Presentation_and_Summ4
Basis of Presentation and Summary of Significant Accounting Policies - Accrued and Other Current Liabilities (Details) (USD $) | Mar. 27, 2015 | Sep. 26, 2014 |
In Millions, unless otherwise specified | ||
Accrued and Other Current Liabilities [Abstract] | ||
Employee-related Liabilities, Current | $47 | $45 |
Interest Payable, Current | 44 | 44 |
Accrued Insurance, Current | 39 | 38 |
Dividends Payable, Current | 36 | 35 |
Other Accrued Liabilities, Current | 78 | 98 |
Accrued and other current liabilities | $244 | $260 |
Acquisitions_Details
Acquisitions (Details) (USD $) | 6 Months Ended | |
In Millions, unless otherwise specified | Mar. 27, 2015 | Mar. 28, 2014 |
Business Combinations [Abstract] | ||
Payments For Dealer Generated Customer Accounts And Non Dealer Bulk Account Purchases | $267 | $225 |
Gross_Carrying_Amounts_and_Acc
- Gross Carrying Amounts and Accumulated Amortization of Other Intangible Assets (Details) (USD $) | Mar. 27, 2015 | Sep. 26, 2014 |
In Millions, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $8,142 | $8,149 |
Accumulated amortization | -5,111 | -5,029 |
Contracts and Related Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 8,095 | 8,098 |
Accumulated amortization | -5,102 | -5,022 |
Other Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 47 | 51 |
Accumulated amortization | ($9) | ($7) |
Changes_in_Net_Carrying_Amount
- Changes in Net Carrying Amount of Contracts and Related Customer Relationships (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Mar. 27, 2015 | Mar. 28, 2014 | Mar. 27, 2015 | Mar. 28, 2014 |
Finite-lived Intangible Assets [Roll Forward] | ||||
Amortization | ($153) | ($144) | ($309) | ($290) |
Contracts and Related Customer Relationships [Member] | ||||
Finite-lived Intangible Assets [Roll Forward] | ||||
Balance as of beginning of period | 3,076 | |||
Customer contract additions, net of dealer charge-backs | 267 | |||
Amortization | -307 | |||
Currency translation and other | -43 | |||
Balance as of end of period | $2,993 | $2,993 |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets - Year to Date Amortization Expense (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Mar. 27, 2015 | Mar. 28, 2014 | Mar. 27, 2015 | Mar. 28, 2014 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of Intangible Assets | $153 | $144 | $309 | $290 |
FiniteLived_Intangible_Assets_
- Finite-Lived Intangible Assets Future Amortization Expense (Details) (USD $) | Mar. 27, 2015 |
In Millions, unless otherwise specified | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of fiscal 2015 | $297 |
Fiscal 2016 | 522 |
Fiscal 2017 | 436 |
Fiscal 2018 | 365 |
Fiscal 2019 | 315 |
Fiscal 2020 | $253 |
Goodwill_and_Other_Intangible_3
Goodwill and Other Intangible Assets (Details) (Contracts and Related Customer Relationships [Member]) | 6 Months Ended |
Mar. 27, 2015 | |
Contracts and Related Customer Relationships [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Acquired finite-lived intangible assets, weighted average useful life | 15 years |
Debt_Details
Debt (Details) (Unsecured Debt [Member], USD $) | 6 Months Ended | ||
Mar. 27, 2015 | Sep. 26, 2014 | Dec. 18, 2014 | |
Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $750,000,000 | ||
Long-term debt, carrying value | 215,000,000 | 375,000,000 | |
Proceeds from Lines of Credit | 205,000,000 | ||
Repayments of Lines of Credit | 365,000,000 | ||
5.250% notes due March 2020 [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | 300,000,000 | ||
Debt instrument, interest rate, stated percentage | 5.25% | ||
Proceeds from debt, net of issuance costs | $296,000,000 |
Equity_Details
Equity (Details) (USD $) | 0 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Share data in Millions, except Per Share data, unless otherwise specified | Mar. 17, 2015 | Jan. 08, 2015 | Nov. 26, 2012 | Mar. 27, 2015 | Mar. 28, 2014 | Mar. 27, 2015 | Mar. 28, 2014 | Nov. 18, 2013 |
Class of Stock [Line Items] | ||||||||
Dividend increase percent | 5.00% | |||||||
Common Stock, Dividends, Per Share, Declared | $0.21 | $0.21 | $0.42 | $0.40 | $0.42 | $0.40 | ||
Stock repurchase program, authorized amount | $2,000,000,000 | $3,000,000,000 | $3,000,000,000 | $1,000,000,000 | ||||
Share repurchase program, period in force | 3 years | |||||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | 243,000,000 | 243,000,000 | ||||||
Open Market Share Repurchase [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Stock Repurchased and Retired During Period, Shares | 4.2 | |||||||
Stock repurchased and retired during period, average cost per share | $32.91 | |||||||
Stock repurchased and retired during period, value | $138,000,000 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Mar. 27, 2015 | Mar. 28, 2014 | Mar. 27, 2015 | Mar. 28, 2014 |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $32 | $55 | $68 | $98 |
Effective Income Tax Rate Reconciliation, Percent | 32.00% | 32.70% |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 6 Months Ended | ||
Mar. 27, 2015 | Sep. 26, 2014 | Jul. 01, 2013 | |
Other Liabilities [Member] | Tax Sharing Agreement Obligation [Member] | |||
Commitments and Contingencies [Line Items] | |||
Other Liabilities Under Tax Sharing Agreement | $19,000,000 | $19,000,000 | |
Tax Sharing Agreement 2007 [Member] | |||
Commitments and Contingencies [Line Items] | |||
Proposed assessment of additional federal taxes pursuant to IRS Notice of Deficiency | 883,000,000 | ||
Proposed assessment of penalties pursuant to IRS Notice of Deficiency | 154,000,000 | ||
Proposed assessment of additional federal taxes pursuant to IRS Partnership Notices | 30,000,000 | ||
Tax Sharing Agreement 2012 [Member] | |||
Commitments and Contingencies [Line Items] | |||
Tax liability sharing percent per tax sharing agreement | 27.00% | ||
Minimum amount of assessment that will result in payment by the company | 1,850,000,000 | ||
Tax Sharing Agreement 2012 [Member] | First Five Hundred Million Dollars [Member] | |||
Commitments and Contingencies [Line Items] | |||
Liability threshold under tax sharing agreement | $500,000,000 |
Computation_of_Basic_and_Dilut
- Computation of Basic and Diluted Earnings Per Share (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Mar. 27, 2015 | Mar. 28, 2014 | Mar. 27, 2015 | Mar. 28, 2014 |
Earnings Per Share, Basic [Abstract] | ||||
Net income | $68 | $63 | $140 | $140 |
Basic weighted-average shares outstanding | 171 | 182 | 173 | 189 |
Basic earnings per share | $0.40 | $0.35 | $0.81 | $0.74 |
Earnings Per Share, Diluted [Abstract] | ||||
Net income | $68 | $63 | $140 | $140 |
Basic weighted-average shares outstanding | 171 | 182 | 173 | 189 |
Effect of dilutive securities: | ||||
Stock options / Restricted stock | 1 | 1 | 0 | 1 |
Diluted weighted-average shares outstanding | 172 | 183 | 173 | 190 |
Diluted earnings per share | $0.40 | $0.34 | $0.81 | $0.74 |
Earnings_Per_Share_Details
Earnings Per Share (Details) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Mar. 27, 2015 | Mar. 28, 2014 | Mar. 27, 2015 | Mar. 28, 2014 |
Earnings Per Share [Abstract] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2.2 | 2.3 | 2.2 | 1.4 |