ADT 2007 Annual Report Download - page 169

appropriate, briefings concerning additional instances of potential improper payments identified by the
Company in the course of its ongoing compliance activities. Covidien and Tyco Electronics agreed, in
connection with the Separation, to cooperate with the Company in its response to these allegations. To
date, the baseline review has revealed that some business practices may not comply with Tyco and
FCPA requirements. At this time, Tyco cannot predict the outcome of these matters and other
allegations reported to regulatory and law enforcement authorities and therefore cannot estimate the
range of potential loss or extent of risk, if any, that may result from an adverse resolution of these
matters. However, it is possible that the Company may be required to pay judgments, suffer penalties
or incur settlements in amounts that may have a material adverse effect on its financial position, results
of operations or cash flows. For a detailed discussion of contingencies related to Tyco’s compliance
matters, see Item 3. Legal Proceedings—Compliance Matters.
Other Matters
The Company is a party to a contract dispute arising from Earth Tech’s contract with the City of
Phoenix, Arizona for the expansion of the City’s 91st Avenue Waste Water Treatment Plant. Both Earth
Tech and the City of Phoenix have filed lawsuits in the local county superior court alleging the other
party has breached the contract. At this time, Tyco cannot predict the outcome of this matter and
therefore cannot estimate the range of potential loss or extent of risk, if any, that may result from an
adverse resolution of this matter. For a detailed discussion of contingencies related to Tyco’s other
matters, see Item 3. Legal Proceedings—Other Matters.
The Company is a defendant in a number of other pending legal proceedings incidental to present
and former operations, acquisitions and dispositions. The Company does not expect the outcome of
these proceedings, either individually or in the aggregate, to have a material adverse effect on its
financial position, results of operations or cash flows.
Backlog
At September 28, 2007, we had a backlog of unfilled orders of $9.1 billion, compared to a backlog
of $8.2 billion at September 29, 2006. We expect that approximately 86% of our backlog at
September 28, 2007 will be filled during 2008. Backlog by segment at September 28, 2007 and
September 29, 2006 is as follows ($ in millions):
2007 2006
ADT Worldwide ..................................... $6,137 $5,776
Fire Protection Services ................................ 1,108 1,050
Flow Control ........................................ 1,579 1,115
Safety Products ...................................... 144 133
Electrical and Metal Products ............................ 113 101
Corporate and Other .................................. 4 3
$9,085 $8,178
Within ADT Worldwide, backlog increased primarily as a result of strong bookings across all
regions. Backlog for ADT Worldwide also includes recurring revenue-in-force, which represents
12 months’ fees for monitoring and maintenance services under contract in the security business. The
amount of recurring revenue-in-force at September 28, 2007 and September 29, 2006 was $3.93 billion
and $3.65 billion, respectively. Backlog within Fire Protection Services increased primarily as a result of
increased orders in North America. Flow Control had increased bookings mostly in the Asia-Pacific and
Europe regions.
2007 Financials 77