ADT 2009 Annual Report Download - page 127

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 Switzerland, and its subsidiaries (hereinafter collectively
referred to as ‘‘we,’’ the ‘‘Company’’ or ‘‘Tyco’’). The financial statements have been prepared in
United States dollars (‘‘USD’’) and in accordance with accounting principles generally accepted in the
United States (‘‘GAAP’’).
The Company operates in the following business segments:
•ADT Worldwide designs, sells, installs, services and monitors electronic security systems for
residential, commercial, industrial and governmental customers.
•Flow Control designs, manufactures, sells and services valves, pipes, fittings, valve automation
and heat tracing products for the oil, gas and other energy markets along with general process
industries and the water and wastewater markets.
•Fire Protection Services designs, sells, installs and services fire detection and fire suppression
systems for commercial, industrial and governmental customers.
•Electrical and Metal Products designs, manufactures and sells galvanized steel tubing, armored
wire and cable and other metal products for non-residential construction, electrical, fire and
safety and mechanical customers.
•Safety Products designs, manufactures and sells fire suppression, electronic, 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.
We also provide general corporate services to our segments and these costs are reported as
Corporate and Other.
References to the segment data are to the Company’s continuing operations. Certain prior period
amounts have been reclassified to conform to the current period presentation. The Company has
realigned certain business operations as of September 27, 2008, which resulted in certain prior period
segment amounts being recast. See Note 20 to the Consolidated Financial Statements.
Overview and Outlook
Overall, fiscal year 2009 results were negatively affected by the economic downturn, which
adversely impacted our businesses across nearly all geographies and industries. Revenue decreased by
$3.0 billion, or 14.7%, compared to 2008, and goodwill and intangible asset impairment charges were
largely responsible for an operating loss of $1.5 billion for the year, compared to operating income of
$1.9 billion in 2008. Approximately one half of the 2009 revenue decline was due to the general
strengthening of the U.S. dollar during 2009, as over half of our revenue is generated outside the U.S.
The remaining revenue decline was due in large part to our Electrical and Metal Products business,
2009 Financials 35