ADT 2010 Annual Report Download - page 91

world. We are one of the world’s largest providers of electronic security systems and services. We have
a significant market presence in North and South America, Europe and the Asia-Pacific region. With
2010 net revenue of $7.4 billion, our ADT Worldwide segment comprises 44% of our consolidated net
revenue. In 2009 and 2008, net revenue totaled $7.1 billion, or 42%, of our consolidated net revenue
and $7.8 billion, or 39%, of our consolidated net revenue, respectively.
On May 14, 2010, we acquired all of the outstanding equity of Brink’s Home Security Holdings,
Inc. (‘‘BHS’’ or ‘‘Broadview Security’’) in a cash-and-stock transaction valued at approximately
$2.0 billion, with $585 million in cash being used to fund the acquisition. Broadview Security is being
integrated into the Company’s ADT Worldwide segment. Broadview Security’s core business is to
provide security alarm monitoring services for residential and commercial properties in North America.
It has a large residential recurring customer base, which has enhanced ADT’s presence in the North
American residential security business. Broadview Security is also a leader in technologies and services
which are expected to enhance ADT Worldwide’s service offerings to its customers. In connection with
the integration of Broadview Security into the ADT Worldwide segment, the Broadview Security brand
has been discontinued. We expect to realize cost savings and other synergies through operational
efficiencies including consolidation of both marketing and general and administrative functions. See
Note 4 to the Consolidated Financial Statements.
Services and Products
ADT Worldwide supplies and installs electronic security systems to the residential, commercial,
educational, governmental and industrial markets. It also provides electronic security services, including
monitoring of burglar alarms, fire alarms and other life safety conditions as well as maintenance of
electronic security systems. A significant portion of the components used in our electronic security
systems are manufactured by our Safety Products segment.
Our electronic security systems business involves the installation and use of security systems
designed to detect intrusion, control access and react to movement, fire, smoke, flooding,
environmental conditions, industrial processes and other hazards. These electronic security systems
include detection devices that are usually connected to a monitoring center that receives and records
alarm signals where skilled security monitoring specialists verify alarm conditions and initiate a range of
response scenarios. For most systems, control panels identify the nature of the alarm and the areas
where a sensor was triggered. Our other solutions include: access control systems for sensitive areas
such as government facilities and banks; video surveillance systems designed to deter theft and fraud
and help protect employees and customers; and asset protection and security management systems
designed to monitor and protect physical assets as well as proprietary electronic data. Our offerings
also include 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.
2010 Financials 3