ADT 2015 Annual Report Download - page 107

FORM 10-K
taxes. To the extent we are responsible for any liability under the 2012 Tax Sharing Agreement, there could be a
material adverse impact on our financial condition, results of operations, cash flows or our effective tax rate in
future reporting periods.
If the Separation is determined to be taxable for Swiss withholding tax purposes, we or Tyco could incur
significant Swiss withholding tax liabilities.
Generally, Swiss withholding tax of 35% is due on dividends and similar distributions to our and Tyco’s
shareholders, regardless of the place of residency of the shareholder. As of January 1, 2011, distributions to
shareholders out of qualifying contributed surplus (Kapitaleinlage) accumulated on or after January 1, 1997 are
exempt from Swiss withholding tax, if certain conditions are met (Kapitaleinlageprinzip). Tyco obtained a tax
ruling from the Swiss Federal Tax Administration confirming that the Separation qualifies as payment out of
such qualifying contributed surplus and, therefore, no amount was withheld by Tyco when making the
Separation.
This tax ruling relies on certain facts and assumptions and certain representations and undertakings from
Tyco regarding the past conduct of its businesses and other matters. Notwithstanding this tax ruling, the Swiss
Federal Tax Administration could determine on audit that the Separation should be treated as a taxable
transaction for withholding tax purposes if it determines that any of these facts, assumptions, representations or
undertakings is not correct or has been violated. If the Separation ultimately is determined to be taxable for
withholding tax purposes, we and Tyco could incur material Swiss withholding tax liabilities that could
significantly detract from or eliminate the benefits of the Separation. In addition, we could become liable to
indemnify Tyco for part of any Swiss withholding tax liabilities to the extent provided under the 2012 Tax
Sharing Agreement.
The ownership by some of our executive officers and directors of common shares, options or other equity
awards of Tyco or Pentair may create, or may create the appearance of, conflicts of interest.
Because of their former positions with Tyco, some of our executive officers, including our chief executive
officer and some of our non-employee directors, own common shares of Tyco and Pentair, options to purchase
common shares of Tyco and Pentair or other equity awards in Tyco and Pentair. The individual holdings of
common shares, options to purchase common shares or other equity awards of Tyco and Pentair may be
significant for some of these persons compared to their total assets. These equity interests may create, or appear
to create, conflicts of interest when these directors and officers are faced with decisions that could benefit or
affect the equity holders of Tyco or Pentair in ways that do not benefit or affect us in the same manner.
Item 1B. Unresolved Staff Comments.
None.
Item 2. Properties.
We currently operate through a network of approximately 180 sales and service offices, ten monitoring
facilities, five customer and field support locations, two national sales call centers and one regional distribution
center, located throughout the United States and Canada, the majority of which are leased.
We lease approximately 2 million square feet of space in the United States, including approximately
150,000 square feet of office space for our corporate headquarters located in Boca Raton, Florida. We lease this
property under a long-term operating lease with a third party. We also own approximately 495,000 square feet of
space throughout the United States.
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