ADT 2011 Annual Report Download - page 106

Tyco Security Solutions
Our Tyco Security Solutions segment designs, sells, installs, services and monitors electronic
security systems for residential, commercial, educational, governmental and industrial customers around
the world primarily operating under the ADT brand name. In addition, Tyco Security Solutions designs,
manufactures and sells security products including intrusion, access control and video management
systems and is one of the world’s largest providers of electronic security systems and services. Tyco
Security Solutions has a significant market presence in North and South America, Europe and the
Asia-Pacific region. With 2011 net revenue of $8.6 billion, our Tyco Security Solutions segment
comprises 49% of our consolidated net revenue. In 2010 and 2009, net revenue totaled $7.7 billion, or
45%, of our consolidated net revenue and $7.4 billion, or 44%, of our consolidated net revenue,
respectively.
On May 14, 2010, we acquired all of the outstanding equity of 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’s core business was to provide security alarm monitoring
services for residential and commercial properties in North America, and it has been integrated into
our Tyco Security Solutions segment. In connection with the integration, the Broadview Security brand
has been discontinued. See Note 5 to the Consolidated Financial Statements.
Services and Products
Tyco Security Solutions 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.
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 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 Tyco Security Solutions 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, Tyco Security Solutions 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.
Recently, Tyco Security Solutions launched Pulse Interactive Solutions (‘‘Pulse’’) for residential and
small business customers. Pulse includes home automation features in addition to interactive remote
security capability for customers. Depending on the plan that is purchased, customers can remotely
access information regarding the security of their home or business, arm and disarm their security
system, adjust lighting or thermostat levels, or view real-time video from cameras covering different
2011 Financials 3