ADT 2014 Annual Report Download - page 83

FORM 10-K
experience more such litigation following future periods of volatility. This type of litigation may be lengthy, and
may result in substantial costs and a diversion of management’s attention and resources. Results cannot be
predicted with certainty and an adverse outcome in such litigation could result in monetary damages or injunctive
relief that could harm our business, results of operations, financial condition or cash flows.
Our business strategy includes making acquisitions and investments that complement our existing
business. These acquisitions and investments could be unsuccessful or consume significant resources,
which could adversely affect our operating results.
We will continue to analyze and evaluate the acquisition of, or investment in strategic businesses or product
lines with the potential to strengthen our industry position or enhance our existing set of products and service
offerings. We cannot assure you that we will identify or successfully complete transactions with suitable
acquisition candidates in the future. Nor can we assure you that completed acquisitions will be successful.
Acquisitions and investments may involve significant cash expenditures, debt incurrence, operating losses
and expenses that could have a material adverse effect on our business, financial condition, results of operations
and cash flows. Acquisitions involve numerous other risks, including:
• diversion of management time and attention from daily operations;
• difficulties integrating acquired businesses, technologies and personnel into our business or achieving
anticipated operations efficiencies or cost savings;
• possibility of litigation or other claims in connection with, or as a result of, an acquisition, including
claims from terminated employees, customers, former stockholders or other third parties;
• inability to obtain required regulatory approvals and/or required financing on favorable terms;
• potential loss of key employees, key contractual relationships or key customers of acquired companies
or of us;
• assumption of the liabilities and exposure to unforeseen liabilities of acquired companies; and
• dilution of interests of holders of shares of our common stock through the issuance of equity securities
or equity-linked securities.
It may be difficult for us to complete transactions quickly and to integrate acquired operations efficiently
into our current business operations. Any acquisitions or investments may ultimately harm our business or
financial condition, as such acquisitions or investments may not be successful and may ultimately result in
impairment charges.
We may pursue business opportunities that diverge from our current business model, which may
adversely affect our business results.
We may pursue business opportunities that diverge from our current business model, including expanding
our products or service offerings, investing in new and unproven technologies, adding customer acquisition
channels and forming new alliances with companies to market our services. We can offer no assurance that any
such business opportunities will prove to be successful. Among other negative effects, our pursuit of such
business opportunities could cause our cost of investment in new customers to grow at a faster rate than our
recurring revenue and fees collected at the time of installation. Additionally, any new alliances or customer
acquisition channels could require developmental investments or have higher cost structures than our current
arrangements, which could reduce operating margins and require more working capital. In the event that working
capital requirements exceed operating cash flow, we might be required to draw on our revolving credit facility or
pursue other external financing, which may not be readily available. Any of these factors could materially and
adversely affect our business, financial condition, results of operations and cash flows.
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