ADT 2007 Annual Report Download - page 141

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be
read together with the Selected Financial Data and our Consolidated Financial Statements and the
related notes included elsewhere in this Annual Report. This discussion and analysis contains forward-
looking statements that involve risks, uncertainties and assumptions. Our 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 under the headings ‘‘Risk Factors’’ and ‘‘Forward-Looking
Information.’’
Introduction
The Consolidated Financial Statements include the consolidated results of Tyco International Ltd.,
a company organized under the laws of Bermuda, and its subsidiaries (hereinafter collectively referred
to as ‘‘we,’’ the ‘‘Company’’ or ‘‘Tyco’’) and have been prepared in United States dollars, in accordance
with accounting principles generally accepted in the United States (‘‘GAAP’’).
In connection with the Separation, Tyco Healthcare changed its name to Covidien Ltd.
(‘‘Covidien’’). As Covidien and Tyco Electronics historically accounted for 55% of our revenues, we
have realigned our management and segment reporting structure and report financial and operating
information in the following five segments, effective March 31, 2007:
•ADT Worldwide designs, sells, installs, services and monitors electronic security systems to
residential, commercial, industrial and governmental customers.
•Fire Protection Services designs, sells, installs and services fire detection and fire suppression
systems to commercial, industrial and governmental customers.
•Flow Control designs, manufactures, sells and services valves, pipes, fittings, valve automation
and heat tracing products for the water and wastewater markets, the oil, gas and other energy
markets along with general process industries.
•Safety Products designs, manufactures and sells fire protection, security and life safety products,
including fire suppression products, breathing apparatus, intrusion security, access control and
video management systems. In addition, Safety Products manufactures products installed and
serviced by ADT Worldwide and Fire Protection Services.
•Electrical and Metal Products designs, manufactures and sells steel tubing and pipe products, as
well as cable products, including pre-wired armored cable and flexible conduit products for
commercial construction.
We also provide general corporate services to our segments and these costs are reported as
Corporate and Other. During the fourth quarter of 2007, Infrastructure Services, previously reported as
part of Corporate and Other, met the held for sale criteria and has been included in discontinued
operations in all periods presented.
References to the segment data are to the Company’s continuing operations. Prior period amounts
have been reclassified to exclude the results of discontinued operations.
Overview
Effective June 29, 2007, Tyco completed the spin-offs of Covidien and Tyco Electronics, formerly
Healthcare and Electronics businesses, respectively, into separate, publicly traded companies (the
‘‘Separation’’) in the form of a distribution to Tyco shareholders. The distribution was made on
June 29, 2007, to Tyco shareholders of record on June 18, 2007, the record date. Each Tyco shareholder
received 0.25 of a common share of each of Covidien and Tyco Electronics for each Tyco common
share held on the record date. Tyco shareholders received cash in lieu of fractional shares for amounts
2007 Financials 49