ADT 2015 Annual Report Download - page 92

FORM 10-K
monitoring facilities could disrupt our ability to provide security monitoring services and monitoring services for
our PERS products. If we experience such disruptions, we may experience customer dissatisfaction and potential
loss of confidence, and liabilities to customers or other third parties, each of which could harm our reputation and
impact future revenues from these customers.
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, and ultimately grow our business. 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 current business operations;
• difficulties integrating acquired businesses, technologies and personnel into our business or achieving
anticipated operations efficiencies, expected synergies or cost savings;
• higher integration costs than anticipated;
• 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 and sales and
marketing channels efficiently into our current business operations. Any acquisitions or investments may
ultimately harm our business as such acquisitions or investments may not be successful and may ultimately result
in impairment charges and have an adverse effect our financial condition, results of operations and cash flows.
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
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