ADT 2010 Annual Report Download - page 145

In connection with the Separation, we entered into a liability sharing agreement regarding certain
actions that were pending against Tyco prior to the Separation. Under the Separation and Distribution
Agreement and Tax Sharing Agreement, we have assumed 27%, Covidien has assumed 42% and Tyco
Electronics has assumed 31% of certain Tyco pre-Separation contingent and other corporate liabilities,
which, as of September 24, 2010, primarily relate to tax contingencies and potential actions with respect
to the spin-offs or the distributions made or brought by any third party.
Backlog
As of September 24, 2010 we had a backlog of unfilled orders of $9.5 billion compared to a
backlog of $8.9 billion as of September 25, 2009. We expect that approximately 87% of our backlog as
of September 24, 2010 will be filled during the next 12 months. Backlog by segment was as follows
($ in millions):
September 24, September 25,
2010 2009
ADT Worldwide .............................. $6,589 $5,916
Flow Control ................................ 1,482 1,646
Fire Protection Services ......................... 1,196 1,171
Electrical and Metal Products .................... 88 72
Safety Products ............................... 121 102
$9,476 $8,907
Backlog increased $569 million, or 6.4%, to $9.5 billion as of September 24, 2010. The increase in
backlog was primarily due to an increase in recurring revenue-in-force in our ADT Worldwide segment,
partially offset by decreased bookings in our Flow Control segment. ADT Worldwide’s backlog includes
recurring revenue-in-force and long-term deferred revenue for upfront fees paid by customers for ADT
owned security systems. Revenue-in-force represents 12 months’ revenue associated with monitoring
and maintenance services under contract in the security business. ADT Worldwide’s backlog of
$6.6 billion and $5.9 billion as of September 24, 2010 and September 25, 2009, respectively, consists
primarily of $4.8 billion and $4.0 billion of recurring revenue-in-force as of September 24, 2010 and
September 25, 2009, respectively, and $1.1 billion of deferred revenue for both September 24, 2010 and
September 25, 2009. ADT Worldwide’s backlog increased $673 million primarily driven by an increase
in revenue-in-force of $724 million, including $540 million estimated to be contributed by the
Broadview Security acquisition, and favorable changes in foreign currency of $15 million. These
increases were partially offset by a decrease in bookings of $48 million in our ADT EMEA operations
and a reduction in deferred revenue of $36 million. Flow Control’s backlog decreased by $164 million
primarily due to decreased bookings of $162 million as several large projects were completed during
fiscal 2010. Fire Protection’s backlog increased by $25 million primarily due to an increase of
$100 million in the Asia-Pacific region and favorable changes in foreign currency of $14 million. These
increases were partially offset by decreases experienced in EMEA and North America of $57 million
and $18 million, respectively. Backlog within Safety Products increased $19 million primarily as a result
of increased orders across various businesses.
Off-Balance Sheet Arrangements
Sale of Accounts Receivable
Certain of our international businesses utilize the sale of accounts receivable as short-term
financing mechanisms. The aggregate amount outstanding under our international accounts receivable
programs was not material as of September 24, 2010, September 25, 2009 or September 26, 2008.
2010 Financials 57