ADT 2014 Annual Report Download - page 121

FORM 10-K
feasible and prudent tax planning strategies. These assumptions require significant judgment about the forecasts
of future taxable income and are consistent with the plans and estimates we are using to manage our underlying
businesses.
We do not have any significant valuation allowances against our net deferred tax assets.
Changes in tax laws and rates could also affect recorded deferred tax assets and liabilities in the future.
Management records the effect of a tax rate or law change on our deferred tax assets and liabilities in the period
of enactment. Future tax rate or law changes could have a material effect on our results of operations, financial
condition or cash flows.
In addition, the calculation of our tax liabilities involves dealing with uncertainties in the application of
complex tax regulations in the United States and Canada. We recognize potential liabilities and record tax
liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on our estimate of whether,
and the extent to which, additional taxes will be due. These tax liabilities are reflected net of related tax loss
carryforwards. We adjust these reserves in light of changing facts and circumstances; however, due to the
complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially
different from our current estimate of the tax liabilities. If our estimate of tax liabilities proves to be less than the
ultimate assessment, an additional charge to expense would result. If payment of these amounts ultimately proves
to be less than the recorded amounts, the reversal of the liabilities would result in tax benefits being recognized in
the period when we determine the liabilities are no longer necessary.
Accounting Pronouncements
See Note 1 to the Consolidated and Combined Financial Statements for information about recent accounting
pronouncements.
Cautionary Statement Regarding Forward-Looking Statements
This report contains certain information that may constitute “forward-looking statements” within the
meaning of the U.S. Private Securities Litigation Reform Act of 1995. While we have specifically identified
certain information as being forward-looking in the context of its presentation, we caution you that all statements
contained in this report that are not clearly historical in nature, including statements regarding business strategies,
market potential, future financial performance, the effects of the separation of ADT from Tyco and other matters,
are forward-looking. Without limiting the generality of the preceding sentence, any time we use the words
“anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” and similar expressions, we intend to
clearly express that the information deals with possible future events and is forward-looking in nature. However,
the absence of these words or similar expressions does not mean that a statement is not forward-looking.
Forward-looking information involves risks, uncertainties and other factors that could cause actual results to
differ materially from those expressed or implied in, or reasonably inferred from, such statements. Therefore,
caution should be taken not to place undue reliance on any such forward-looking statements. Much of the
information in this report that looks towards future performance of the Company is based on various factors and
important assumptions about future events that may or may not actually occur. As a result, our operations and
financial results in the future could differ materially and substantially from those we have discussed in the
forward-looking statements included in this report. We assume no obligation (and specifically disclaim any such
obligation) to publicly update or revise any forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
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