ADT 2006 Annual Report Download - page 74

Our Internet website is www.tyco.com. We make available free of charge on our website our
Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K,
reports filed pursuant to Section 16 and amendments to those reports as soon as reasonably practicable
after we electronically file or furnish such materials to the Securities and Exchange Commission. In
addition, we have posted the charters for our Audit Committee, Compensation and Human Resources
Committee, and Nominating and Governance Committee, as well as our Board Governance Principles
and Guide to Ethical Conduct, on our website under the heading ‘‘Our Commitment—Governance.’’
These charters and principles are not incorporated in this report by reference. We will also provide a
copy of these documents free of charge to shareholders upon request.
Item 1A. Risk Factors
You should carefully consider the risks described below before investing in our publicly traded securities.
The risks described below are not the only ones facing us. Our business is also subject to the risks that
affect many other companies, such as competition, technological obsolescence, labor relations, general
economic conditions, geopolitical events and international operations. Additional risks not currently known
to us or that we currently believe are immaterial also may impair our business operations and our liquidity.
Risks Relating to the Proposed Separation
The cost to complete the transaction could be significant.
Management estimates that the total net economic cost to complete the Proposed Separation is
expected to approximate $1.0 billion and that the corresponding income statement charges would be
larger than net economic cost. However, actual costs could exceed that estimate and could have a
material adverse effect on our results of operations and cash flows.
We may be unable to complete the transaction.
There is no guarantee that the Proposed Separation will be finalized. Completion of the Proposed
Separation is subject to a number of factors and conditions, including:
• changes in business, political and economic conditions in the U.S. and in other countries in
which the Company currently operates;
• changes in governmental regulations and policies and actions of regulatory bodies;
• changes in operating performance of the Company;
• required changes to existing financings, and changes in credit ratings, including those that may
result from the Proposed Separation;
• the Company’s ability to obtain the financing necessary to consummate the Proposed Separation;
and
• the Company’s ability to satisfy certain conditions precedent, including final approval by the Tyco
Board of Directors, receipt of certain tax rulings, necessary opinions of counsel and the filing
and effectiveness of registration statements with the SEC.
12 2006 Financials