ADT 2011 Annual Report Download - page 147

Operating income of $1.4 billion increased by $271 million, or 24.9%, in the year ended
September 30, 2011 as compared to the year ended September 24, 2010. Operating income and
operating margin for the year ended September 30, 2011 continued to be favorably impacted by higher
sales volume, efficiencies gained through restructuring actions taken in prior years and other cost
containment activities. Changes in foreign currency exchange rates favorably impacted operating income
by $23 million, or 2.1%. Included in operating income for the year ended September 30, 2011 was
$25 million of restructuring charges, net as compared to $62 million of restructuring charges, net for
the year ended September 24, 2010. In addition, included in operating income for the year ended
September 30, 2011 is $33 million of acquisition and integration costs primarily related to the
acquisition of Broadview Security and Signature Security Group, as compared to $32 million of
acquisition and integration costs during the year ended September 24, 2010. Included in the operating
income for the prior year comparable period is a $45 million gain on divestitures, net primarily related
to the sale of our French security business and a curtailment gain of $12 million, which was recognized
upon the freezing of certain defined benefit plans in the United Kingdom, as compared to the absence
of similar charges for the year ended September 30, 2011.
Operating income of $1.1 billion increased by $1.6 billion in the year ended September 24, 2010 as
compared to the year ended September 25, 2009. Operating income for the year ended September 25,
2009 was negatively affected by goodwill impairment charges of $1.3 billion recorded at our ADT
EMEA, Access Controls and Video Systems (‘‘ACVS’’) and Sensormatic Retail Solutions reporting units
and intangible asset impairment charges of $64 million. Operating income for the year ended
September 24, 2010 was positively impacted by the shift to higher margin recurring revenue.
Additionally, 2010 operating income was favorably impacted by the net impact of savings realized
through previous restructuring and cost containment actions, and a curtailment gain of $12 million
recognized when certain defined benefit pension plans were frozen in the United Kingdom. These
increases were partially offset by an increase in the amortization of intangible assets primarily relating
to the Broadview Security acquisition. During the year ended September 24, 2010, $62 million of net
restructuring charges were incurred, of which $14 million related to restructuring actions associated
with the acquisition of Broadview Security, as compared to $118 million of restructuring charges, net
during the year ended September 25, 2009. Additionally, management estimated that $2 million of
additional charges resulting from restructuring actions was incurred during the year ended
September 25, 2009. Fiscal 2010 also included a $45 million gain on divestitures, net primarily related
to the sale of our French security business, and $32 million of acquisition and integration costs related
to the acquisition of Broadview Security, as compared to a $6 million loss on divestitures and nil of
acquisition costs during fiscal 2009. Changes in foreign currency exchange rates favorably impacted
operating income by $33 million, or 6.4%.
44 2011 Financials