ADT 2002 Annual Report Download - page 16

Backlog
At September 30, 2002, we had a backlog of unfilled orders of $11,015.5 million, compared to a
backlog of $11,084.6 million at September 30, 2001. We expect that approximately 76% of our backlog
at September 30, 2002 will be filled during fiscal 2003. Backlog by reportable industry segment is as
follows ($ in millions):
September 30,
2002 2001
(restated)
Fire and Security Services .......................... $ 6,691.5 $ 6,163.4
Engineered Products and Services .................... 1,873.4 2,023.0
Electronics ..................................... 2,076.5 2,719.9
Healthcare ..................................... 239.7 85.5
Plastics and Adhesives ............................. 134.4 92.8
$11,015.5 $11,084.6
Backlog for Fire and Security Services includes recurring ‘‘revenue in force,’’ which represents one
year’s fees for security monitoring and maintenance services under contract. The amount of recurring
revenue in force at September 30, 2002 and 2001 is $3,483.9 million and $3,099.6 million, respectively.
Within the Fire and Security Services segment, backlog increased primarily due to an increase in
recurring revenue in force as a result of growth in certain geographies in the ADT dealer program,
offset in part by the curtailment, and in certain end-markets, the termination of the ADT dealer
program. Backlog also increased due to growth at our U.K. Fire Protection business and the acquisition
of Sensormatic, which resulted in an addition of approximately $57 million to backlog. Fiscal 2002 and
2001 backlog decreased slightly as a result of excluding backlog related to other Tyco businesses.
Backlog for Engineered Products and Services decreased slightly due to contract cancellations in
the non-residential, long-term construction market, partially offset by the impact of acquisitions. Fiscal
2001 backlog for this segment has been increased by $175.1 million as a result of certain long-term
contracts not previously reported offset by an adjustment to reflect net revenues instead of gross
revenues at Tyco Infrastructure Services. Of the $643.4 million decrease within the Electronics segment,
backlog decreased approximately $500 million as there were no new contracts for undersea cable
communication systems signed in fiscal 2002 as a result of the downturn in the telecommunications
industry. Backlog also decreased in the electronics components group due to the cancellation and/or
delay of orders by customers primarily in end-markets including the communications, computer and
consumer electronics industries. Backlog in the Healthcare segment represents unfilled orders, which, in
the nature of the business, are normally shipped shortly after purchase orders are received. We do not
view backlog in the Healthcare segment to be a significant indicator of the level of future sales activity.
Properties
Our operations are conducted in facilities throughout the world aggregating approximately
126.5 million square feet of floor space, of which approximately 69.5 million square feet are owned and
approximately 57.0 million square feet are leased. These facilities house manufacturing, distribution and
warehousing operations, as well as sales and marketing, engineering and administrative offices.
Within the Fire and Security Services segment, the fire protection contracting and service business
operates through a network of offices located in North America, Central America, South America,
Europe, the Middle East and the Asia-Pacific region. Fire protection components are manufactured at
locations in North America, the United Kingdom, Germany, Australia, New Zealand, South Korea and
Japan. The electronic security services business operates through a network of monitoring centers and
sales and service offices and other properties in North America, Europe, the Asia-Pacific region, Latin
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