ADT 2011 Annual Report Download - page 128

reduction would decrease our ability to pay dividends as a repayment of share capital, which may
subject shareholders to Swiss withholding tax.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
Our operations are conducted in facilities throughout the world aggregating approximately
28 million square feet of floor space, of which approximately 9 million square feet are owned and
approximately 19 million square feet are leased. These facilities house manufacturing, distribution and
warehousing operations, as well as sales and marketing, engineering and administrative offices.
Tyco Security Solutions operates through a network of offices, service and manufacturing facilities
and warehouse and distribution centers located in North America, Central America, South America,
Europe, the Middle East, the Asia-Pacific region and South Africa. The group occupies approximately
8 million square feet, of which 2 million square feet are owned and 6 million square feet are leased.
Tyco Fire Protection operates through a network of offices, manufacturing facilities and warehouse
and distribution centers located in North America, Central America, South America, Europe and the
Asia-Pacific region. The group occupies approximately 9 million square feet, of which 2 million square
feet are owned and 7 million square feet are leased.
Tyco Flow Control has manufacturing facilities, warehouses and distribution centers throughout
North America, South America, Europe, the Middle East and the Asia-Pacific region. The group
occupies approximately 11 million square feet, of which 5 million square feet are owned and 6 million
square feet are leased.
In the opinion of management, our properties and equipment are in good operating condition and
are adequate for our present needs. We do not anticipate difficulty in renewing existing leases as they
expire or in finding alternative facilities. See Note 15 to our Consolidated Financial Statements for a
description of our lease obligations.
Item 3. Legal Proceedings
During the fiscal quarter ended December 24, 2010, certain contingencies related to the previously
disclosed settlement of the Stumpf v. Tyco International Ltd. class action lawsuit elapsed. This matter,
which was subject to the liability sharing provisions of the Separation and Distribution Agreement with
Covidien and TE Connectivity had previously received final court approval for its settlement. As a
result of the lapsing of time periods for certain class members to state a claim against the Company,
the Company adjusted its remaining reserve for this and other legacy securities matters and recognized
a net gain of $7 million during the quarter ended December 24, 2010. Since June 2007, the Company
has resolved substantially all of the legacy claims related to securities fraud and similar matters, with
the exception of the claims related to former management and Mr. Frank Walsh Jr., a former director,
described below.
Tyco is a party to several lawsuits involving disputes with former management, among which are
affirmative cases brought by Tyco against Mr. Dennis L. Kozlowski, Tyco’s former chief executive
officer, Mr. Mark Swartz, its former chief financial officer, and Mr. Frank Walsh Jr., a former director.
In connection with these affirmative actions, Mr. Kozlowski, through counterclaims, and Mr. Swartz,
through demand letters, are seeking an aggregate of approximately $138 million allegedly due in
connection with their compensation and retention arrangements and under ERISA.
2011 Financials 25