ADT 2014 Annual Report Download - page 154

FORM 10-K
Purchase Obligations
The following table provides a schedule of obligations related to commitments to purchase certain goods
and services as of September 26, 2014 ($ in millions):
Fiscal 2015 .......................................... $ 28
Fiscal 2016 .......................................... 9
Fiscal 2017 .......................................... 4
Fiscal 2018 .......................................... —
Fiscal 2019 .......................................... —
Thereafter ........................................... —
Total ............................................... $ 41
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 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 condition, 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. 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.
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