ADT 2011 Annual Report Download - page 148

Tyco Fire Protection
Net Revenue
Net revenue for Tyco Fire Protection for the years ended September 30, 2011, September 24, 2010
and September 25, 2009 were as follows ($ in millions):
2011 2010 2009
Revenue from product sales
Systems installation and related products .......... $1,617 $1,621(1) $1,744(1)
Products .................................. 1,320 1,156 1,206
Total revenue from products sales ................. $2,937 $2,777 $2,950
Service revenue .............................. 1,806 1,733(1) 1,670(1)
Net revenue ................................. $4,743 $4,510 $4,620
(1) Revenue related to the sale of certain products is classified as revenue from product
sales. In reporting periods prior to the first quarter of fiscal 2011, revenue related to
certain systems installation products was misclassified as service revenue. The service
revenue and systems installation revenue during the years ended September 24, 2010 and
September 25, 2009 have not been changed for this misclassification, as the effect is not
material. The impact of the misclassification for the years ended September 24, 2010 and
September 25, 2009 would have been to decrease service revenue by $37 million and
$36 million, respectively, with a corresponding increase to systems installation within
revenue from product sales. If the revenue from the sale of these products during the
years ended September 24, 2010 and September 25, 2009 were classified as product sales,
service revenue would have increased $110 million, or 6.5% for the year ended
September 30, 2011, and $62 million, or 3.8% for the year ended September 24, 2010. In
addition, product sales would have increased by $123 million, or 4.4% for the year ended
September 30, 2011, and decreased $172 million, or 5.8% for the year ended
September 24, 2010.
Net revenue for Tyco Fire Protection of $4.7 billion increased by $233 million, or 5.2%, during the
year ended September 30, 2011, as compared to the year ended September 24, 2010. Changes in
foreign currency exchange rates favorably impacted net revenue by $126 million, or 2.8%. In addition,
an estimated $60 million, or 1.3% of revenue is attributable to the additional week in fiscal 2011, while
the deconsolidation of a joint venture in our Fire Protection services business as a result of adopting a
new accounting standard unfavorably impacted net revenue by $72 million, or 1.6%. The remaining
increase in revenue was primarily driven by increased volume in product sales as a result of generally
improved end-market demand, implementation of pricing actions to offset commodity inflationary
pressures, increased services revenue as a result of continued focus on driving recurring revenue and
continued emerging markets expansion, partially offset by a decline in systems installation revenue as a
result of project selectivity across all regions.
Net revenue for Tyco Fire Protection decreased $110 million, or 2.4%, during the year ended
September 24, 2010 compared to the year ended September 25, 2009. Net revenue was unfavorably
impacted by acquisitions and divestitures of $37 million, or 0.8%. Net revenue was favorably impacted
by changes in foreign currency exchange rates of $130 million, or 2.8%. The remaining decrease was
primarily due to weakness in commercial markets and project selectivity resulting from a focus on
higher margin projects.
2011 Financials 45