ADT 2003 Annual Report Download - page 9

Download and view the complete annual report

Please find page 9 of the 2003 ADT annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 132

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132

What a difference a year makes.
When I sat down to write this letter a year ago, Tyco faced
many significant near-term challenges. The company had lost
more than $9 billion in 2002, and was facing a staggering $11 bil-
lion of debt maturing in calendar year 2003.
To d a y, h o w e v e r, Ty c o is not the same company that you read
about last year. Thanks to the tremendous commitment of our
shareholders, employees, customers, suppliers and partners, Tyco
is weathering its challenges to emerge as a very stable company
with bright prospects for the future.
Our fiscal 2003 operating results included record revenue
from continuing operations of $36.8 billion and free cash flow
of $3.2 billion*
—
more than four times our prior-year cash
performance.
While we focused much attention on near-term issues in
2003, we also took important steps to strengthen Tyco’s founda-
tion and to mitigate challenges posed by weakness in the global
economy. Overall, our business segments produced respectable
operating results. Led by a very strong performance from our
Healthcare segment, each of our five segments worked to expand
market share and improve operations.
AMONG OUR 2003 OPERATING HIGHLIGHTS:
•• Fire and Security We revamped our business model, began to
streamline operations globally and put a new leadership
team in place
—
all of which, combined with a portfolio of
very strong brands, sets the stage for future growth in this
vital industry.
•• Electronics We performed well in the face of a very tough
global market. We implemented programs to improve cash
flow, optimize research funding, and streamline manufactur-
ing operations for increased efficiency.
•• Healthcare We increased operating income by 15.2%, driven
by higher sales and operating efficiency, favorable product
mix, and a continued focus on reducing operating expenses.
•• Engineered Products and Services We responded to a tough
global construction market by reducing worldwide inventory
and rationalizing our real estate footprint. To enhance cus-
tomer focus and production quality, we consolidated North
American fire sprinkler manufacturing into a new, state-of-
the-art facility in Lubbock, Texas.
•• Plastics and Adhesives We created Plastics and Adhesives as a
separate business segment, established a business model, and
built strong leadership teams at both the staff and business
unit levels. We also increased sales volume for plastic sheet-
ing and duct tape products, while intensifying our focus on
cash flow and cost productivity.
All of us at Tyco know that we can do better, and we will do
better. However, in a year of such extraordinary challenges,
I am proud of these results because they reflect enormous
07
To Our Stakeholders:
*Free Cash Flow is a non-GAAP measure. See the Free Cash Flow Reconciliation on
page128 of the annual report.