ADT 2009 Annual Report Download - page 129

ADT Worldwide segment franchise rights were revised downward relative to the estimates used in the
Company’s tests during the fourth quarter of 2008. The results of the impairment test indicated that
the Safety Products Sensormatic tradename and ADT Worldwide franchise rights estimated fair values
were less than their respective carrying amounts. As a result, the Company recorded an aggregate
non-cash impairment charge of $64 million ($40 million after-tax) during the second quarter of 2009.
The non-cash impairment charge was recorded in goodwill and intangible asset impairments in the
Company’s Consolidated Statements of Operations for the quarter ended March 27, 2009.
Operating Results
Net revenue, operating (loss) income and net (loss) income for the years ended September 25,
2009, September 26, 2008 and September 28, 2007 were as follows ($ in millions):
2009 2008 2007
Revenue from product sales .......................... $10,482 $13,064 $11,816
Service revenue ................................... 6,755 7,135 6,661
Net revenue ...................................... $17,237 $20,199 $18,477
Operating (loss) income ............................. $(1,487) $ 1,941 $ (1,732)
Interest income .................................... 44 110 104
Interest expense ................................... (301) (396) (313)
Other expense, net ................................. (7) (224) (255)
(Loss) income from continuing operations before income taxes
and minority interest .............................. (1,751) 1,431 (2,196)
Income tax expense ................................. (78) (335) (324)
Minority interest ................................... (4) (1) (4)
(Loss) income from continuing operations ................ (1,833) 1,095 (2,524)
Income from discontinued operations, net of income taxes .... 35 458 782
Net (loss) income .................................. $(1,798) $ 1,553 $ (1,742)
Net revenue decreased $3.0 billion, or 14.7%, for 2009 as compared to 2008, in large part due to
changes in foreign currency exchange rates, which negatively affected 2009 by $1.5 billion. The
remaining decrease in revenue was driven primarily by lower volume of steel products in our Electrical
and Metal Products segment and weakness in the commercial markets, including the retailer end
market, which negatively impacted our ADT Worldwide and Safety Products segments. Revenues were
positively affected by $110 million for acquisitions and divestitures, primarily in our ADT Worldwide
segment.
2009 Financials 37