ADT 2015 Annual Report Download - page 113

FORM 10-K
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Introduction
The following discussion and analysis should be read in conjunction with our Consolidated Financial
Statements and the notes thereto included elsewhere in this Annual Report on Form 10-K to enhance the
understanding of our financial condition, changes in financial condition and results of operations. This discussion
and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Actual results
may differ materially from those anticipated in these forward-looking statements as a result of many factors,
including but not limited to, those provided in Item 1A. Risk Factors and under the heading “Cautionary
Statement Regarding Forward-Looking Statements” below.
The Consolidated Financial Statements include the consolidated results of the The ADT Corporation and its
subsidiaries (hereinafter referred to as “we,” “our,” the “Company” or “ADT”). The financial statements have
been prepared in United States dollars (“USD”), in accordance with generally accepted accounting principles in
the United States of America (“GAAP”). Unless otherwise indicated, references to 2015, 2014 and 2013 are to
our fiscal years ended September 25, 2015, September 26, 2014 and September 27, 2013, respectively.
We have a 52- or 53-week fiscal year that ends on the last Friday in September. Fiscal years 2015, 2014 and
2013 are 52-week years. Our next 53-week year will occur in fiscal year 2016.
On October 14, 2015, our Board of Directors approved a change to our fiscal year end from the last Friday
in September to September 30 of each year, and thereafter the end of each fiscal quarter will be the last day of the
calendar month end. The fiscal year change is effective for our 2016 fiscal year, which began on September 26,
2015, the day after the last day of our 2015 fiscal year, and will end on September 30, 2016. This change better
aligns our external reporting with the monthly recurring nature of revenues and expenses associated with our
customer base.
Business Overview
ADT is a leading provider of monitored security, interactive home and business automation and related
monitoring services. We currently serve approximately 6.6 million residential and business customers, making us
the largest company of our kind in both the United States and Canada. With over a 140-year history, the ADT®
brand is one of the most respected, trusted and well-known brands in the monitored security industry today. Our
broad and pioneering set of products and services, including interactive home and business solutions and our
home health services, meet a range of customer needs for today’s active and increasingly mobile lifestyles. Our
partner network is the broadest in the industry, and includes independent, third-party authorized dealers, affinity
organizations and third-party referral companies. ADT delivers an integrated customer experience by
maintaining the industry’s largest sales, installation and service field force as well as a monitoring network, all
backed by the support of approximately 17,100 employees and about 180 sales and service offices.
We conduct business through our operating entities. During the fourth quarter of fiscal year 2015, we
finalized our reporting structure following the acquisition of Protectron, see Note 2 to our Consolidated Financial
Statements for details about this acquisition. In connection with this reporting structure finalization, the manner
in which the Chief Executive Officer, who is the chief operating decision maker, evaluates performance and
makes decisions about how to allocate resources changed, resulting in the reorganization of our operating
segments. We now have two reportable segments, which are our operating segments. Operating results are
reported based on the following two segments:
•United States: Includes sales, installation and monitoring for residential, business, and health
customers in the United States and Puerto Rico, as well as corporate expenses and other operating costs
associated with support functions in the U.S.
•Canada: Includes sales, installation and monitoring for residential, business and health customers in
Canada as well as operating expenses associated with certain support functions in Canada.
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