ADT 2001 Annual Report Download - page 18

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for the new TV and radio antenna on the Chrysler
Building to replace the one destroyed at the World
Trade Center. As part of their Environmental Protection
Agency Region 2 Emergency Response contract, Tyco
Infrastructure Services provided decontamination units
at points on the perimeter of the work zone that each
worker passed through before exiting the site.
In many ways, fiscal 2001 truly tested the determination
of Tyco and its employees. We can’t yet say that the test
is over, but thus far we are pleased with our perform-
ance. It is one thing to have a plan for tough times; it is
quite another to be able to execute under pressure.
This strength was reflected in our earnings. For the
ninth consecutive year, we increased revenues and
earnings substantially. Revenues rose 25 percent to $36.3
billion and earnings grew $1.4 billion to $5.1 billion, a
38 percent increase over the prior year. Our diluted earn-
ings per share increased 29 percent to $2.81. Free cash
flow exceeded $4.7 billion in fiscal 2001 and should
surpass $5 billion next year.
Much of the increase came from organic growth. If Tyco
never made another acquisition, we should be able to
increase our earnings at a solid double-digit rate. We are
fortunate to be in the types of businesses that grow even
during economic slowdowns. For fiscal 2002, we are look-
ing forward to earnings growth of 20 percent or better.
I remain optimistic about Tyco’s future. It’s a cliché
today for a CEO to proclaim that his company is “well-
positioned” but, in truth, we are. We are a global leader
in some of the best growth businesses in the world.
Demographics and technological innovation assure that
healthcare spending will increase. As the world’s sec-
ond-largest medical device company, we will benefit. The
growing concern about security (which has, of course,
intensified since September 11) will lead to more sales of
our security and fire protection products, categories in
which we lead the world. Technological innovation and
the proliferation of electronic devices will drive cus-
tomers to Tyco Electronics, the world’s leading passive
electronic component supplier. Tyco Capital’s diversified
revenue base, broad access to funding markets and cred-
it risk management skills will provide consistent growth.
Fiscal 2001 was a year of many achievements. Among
the highlights:
* Through strong internal growth and acquisitions, we grew our
global electronic security customer base from 4.4 million to 6.7
million. Electronic security has now become a mainstream prod-
uct for people all around the world. Because penetration rates
are even lower outside the United States, the opportunity for
international expansion remains extraordinary.
* We successfully integrated the Mallinckrodt acquisition more
rapidly than expected, more than doubling its profits. We still
see opportunity to increase Mallinckrodt’s profits m uch faster
than its healthy, high single-digit revenue growth rate.
* In virtually all of our businesses, new product introductions
spurred organic growth. It was a great year for innovation at
Tyco. New product launches included Nellcor’s fetal oximeter,
which revolutionizes the way doctors can m onitor a fetus’s
heartbeat; ADT’s Safewatch™ iCenter, an Internet-enabled home
security system; and new autom otive radar sensors that improve
driver safety.
* We acquired The CIT Group, Inc., a leading commercial and
consumer finance com pany with over $50 billion in assets. In
the four months we have owned CIT (now known as Tyco
Capital Corporation), it has performed exceptionally well.
Tyco Capital is a broadly diversified lender—both geo-
graphically and by industry—with powerful franchises
and the ability to grow its earnings in all types of envi-
ronments. It has a large base of recurring revenue.
STOCK PRICE
[September 30] in dollars per share
97 98 99 00 01
$20.52 $27.63 $51.63 $51.88 $45.50