ADT 2001 Annual Report Download - page 21

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19
Tyco Plastics and Adhesives had a good year and made
important moves to position itself for future growth.
Through the acquisition of MacFarlane Plastics in
Scotland and Manuli Tape in Italy, it expanded its
plastics and tape businesses to Europe for the first time.
The fragmented European markets have great potential
for consolidation.
>TYCO CAPITAL
Pre-tax earnings at our Tyco Capital unit, which includes
our subsidiary, Tyco Capital Corporation, were $506 mil-
lion for the period from June 1 (the date we acquired
CIT) to September 30, 2001. Revenues for the same
period were $2.0 billion. Earnings were strong because of
improved margins, operating efficiencies and stable
credit standing following the acquisition by Tyco. Assets
are $51 billion.
Although the rough economy dampened volume growth
at some Tyco Capital businesses (with retail sales soft,
for example, the factoring business showed little
growth), it boosted profitability in other segments. In
2001 banks retreated from the middle market, which
opened up new lending opportunities for us. Tyco
Capital’s business in providing secured restructuring
financing was very strong.
When vendors begin wondering whether their customers
will be able to pay their bills, they seek credit experts
to collect, service or even guarantee their receivables.
This business showed dramatic growth for Tyco Capital
in 2001.
Tyco Capital also divested $5 billion of its loan portfolio,
exiting non-strategic businesses such as manufactured
housing and recreational vehicle lending, as well as
auto leasing. This allows the proceeds to be invested in
higher-margin businesses.
>LOOKING FORWARD
In 2001, Tyco demonstrated that, despite difficult busi-
ness conditions, it could indeed grow its business in vir-
tually any environment. We believe we can continue to
do so, and that we can deliver consistent growth for
investors in the future.
We are in excellent businesses, and everywhere we look
we see opportunities to expand by creating new prod-
ucts, by moving into new markets and sometimes by
acquisitions. We are poised to deliver many years of
exciting returns.
And we have the people who can make it happen. Tyco’s
240,000 employees faced tough challenges last year, but
they came through marvelously. We knew they were
outstanding performers before; we are even more aware
of it now. They are the ones who produce the great
products that improve millions of lives every day. I salute
them for all that they have done in the past year and for
what they will accomplish in the future. My thanks to
one and all.
Sadly, Philip Hampton, a person who greatly helped us
prosper, passed away in April. Phil was a long-time board
member and we are profoundly grateful for his service.
We will all miss his wisdom, judgment, vision and
insight. His contributions were extraordinary.
Thank you again, fellow shareholders, for your support.
L. DENNIS KOZLOWSKI
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
DECEMBER 3, 2001
Results and charts are before non-recurring charges and credits,
extraordinary item s and accounting rule changes.
NET INCOME
$ in billions
97 98 99 00 01
$1.2 $1.4 $2.6 $3.7 $5.1