ADT 2009 Annual Report Download - page 95

anti-theft systems utilizing acousto magnetic and radio frequency identification (‘‘RFID’’) tags and
labels in the retail industry. Many of the world’s leading retailers use our Sensormatic  anti-theft
systems to help protect against shoplifting and employee theft.
Purchasers of our intrusion systems typically contract for ongoing security system monitoring and
maintenance at the time of initial equipment installation. Systems installed at customers’ premises may
be either owned by ADT Worldwide or by our customers. Monitoring center personnel may respond to
alarms by relaying appropriate information to local fire or police departments, notifying the customer
or taking other appropriate action. In certain markets, ADT Worldwide directly provides the alarm
response services with highly trained and professionally equipped employees. In some instances, alarm
systems are connected directly to local fire or police departments.
Many of our residential customers may purchase security systems as a result of prompting by their
insurance carriers, which may offer lower insurance premium rates if a security system is installed or
require that a system be installed as a condition of coverage.
Customers
ADT Worldwide sells to residential, commercial, educational, governmental and industrial
customers. Our residential customers typically include owners of single-family homes or renters in
multi-family apartment complexes. Our commercial customers include, among others, retail businesses,
financial institutions, commercial/industrial facilities and health care facilities. Our government
customers include federal, state and local governments, defense installations, schools and mass
transportation providers. In addition to advertising, direct mailings and the internet, we market our
electronic security systems and services to these customers through a direct sales force and, with respect
to certain residential customers, through an authorized dealer network. A separate sales force services
large commercial and governmental customers and focuses on key vertical markets such as retail and
banking.
Competition
The electronic security services business is highly competitive and fragmented with a number of
major firms and thousands of smaller regional and local companies. Competition is based primarily on
price in relation to quality of service. Rather than compete purely on price, we emphasize the quality
of our electronic security service, the reputation of our brands and our knowledge of our customers’
security needs. For large commercial, educational, governmental and industrial customers the
comprehensive national and/or global coverage offered by ADT Worldwide can also provide a
competitive advantage. We also have significantly expanded our systems integration capabilities, which
allow ADT Worldwide to offer comprehensive solutions to customers that fully integrate security and
fire offerings into comprehensive IT networks, business operations and management tools, and process
automation and control systems.
Flow Control
Our Flow Control segment 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. We believe we are the world’s leading
manufacturer of flow control products. With 2009 net revenue of $3.8 billion, our Flow Control
segment comprises 22% of our consolidated net revenue. In 2008 and 2007, net revenue totaled
$4.4 billion, or 22%, of our consolidated net revenue and $3.8 billion, or 20%, of our consolidated net
revenue, respectively. Flow Control is a global company with 40% of its sales in Europe, Middle East
and Africa (‘‘EMEA’’), 26% from the Americas, 19% from the Pacific region and 15% from Asia.
2009 Financials 3