ADT 2004 Annual Report Download

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SUMMARY ANNUAL REPORT

Table of contents

  • Page 1
    SUMMARY ANNUAL REPORT

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    01 IN A SINGLE MOMENT 14 CHAIRMAN'S LETTER 2 0 B U S I N E S S FA C T S 25 TYCO SEGMENT REVIEW 46 BOARD OF DIRECTORS 48 SENIOR MANAGEMENT 4 8 C O R P O R AT E D ATA

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    ... THE TIME IT TAKES TO READ THIS SENTENCE, TYCO'S PRODUCTS AND SERVICES WILL HAVE IMPROVED THE LIVES OF HUNDREDS OF THOUSANDS OF PEOPLE AROUND THE WORLD. THE FOLLOWING PAGES CAPTURE JUST A SMALL ARRAY OF THE ORDINARY AND EXTRAORDINARY, VARIED AND VITAL THINGS THAT TYCO CONTRIBUTES TO YOUR WORLD: IN...

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    HEALTH IS PRESERVED From the most sophisticated hospital operating room to a makeshift medical clinic in a developing nation, Tyco Healthcare is all about making life better and healthier for the millions of people around the world who depend on our innovative healthcare products and services. 02

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    03

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    04

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    CROPS ARE NURTURED As one of the largest extruders of plastic film in the United States, Tyco Plastics & Adhesives' products can be found everywhere from fields and greenhouses to refrigerators and lunchrooms. We're helping to grow and deliver food that nourishes the world. 05

  • Page 8
    ... Today, drivers around the world are safer on the road because of Tyco Electronics. Our automotive long-range radar sensors enable adaptive cruise control and our next-generation sensors will provide increased active safety technology, creating a blanket of protection for drivers and passengers...

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    07

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    THIRST IS QUENCHED Whether for drinking, irrigation, or other uses, Tyco Engineered Products & Services plays an integral part in meeting the world's growing and vital need for potable water. Millions of people globally depend on our valves, controls, piping, and water treatment technology. 08

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    09

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    SECURITY IS STRENGTHENED Tyco Fire & Security is the global leader in advanced monitored security and fire safety solutions. From marine vessels and ports to airports and terminals, our products and services help make the world a safer place. 11

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    LIVES ARE TOUCHED From making people safer and transportation more secure, to enhancing medical care and delivering fresh water and food-every Tyco product and service is united by a common element: to be a vital part of the world around us.

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    EDWARD D. BREEN Chairman and Chief Executive Officer Tyco International Ltd.

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    ... Sigma has become the foundation of Tyco's language and culture. While our initial efforts began in the manufacturing environment, we have expanded to more transactional areas of the company, such as sales, service, and product development. In 2004, we trained approximately 2,400 15 Free cash flow...

  • Page 18
    ... globally and our Six Sigma teams completed nearly 1,100 projects. These efforts generated approximately $270 million of net savings. GROWTH FOCUS Organically, Tyco's revenue increased 5 percent,2 or about $2 billion, in 2004. This performance reflects the success of our new product and service...

  • Page 19
    ... (IN US$ BILLIONS) HEALTHCARE $40.2 $34.8 $36.0 $9.1 ELECTRONICS $11.8 ENGINEERED PRODUCTS & SERVICES $6.0 FIRE & SECURITY $11.5 2002 2003 2004 PLASTICS & ADHESIVES $1.8 TOTAL = $40.2 FREE CASH FLOW* (IN US$ MILLIONS) DILUTED EARNINGS (LOSS) PER SHARE FROM CONTINUING OPERATIONS $1.41...

  • Page 20
    ...2005, Tyco will be better positioned than ever before to achieve sustainable, long-term success. Our 2005 growth priorities include: • Continue to increase investment in research and new product development • Continue to build our sales and marketing presence globally • Accelerate programs to...

  • Page 21
    ...companywide Organization and Leadership Review process for managing talent and building organizational capability. We will continue to place special emphasis on assessing the diversity of our talent across the company to ensure that we better reflect the marketplaces, global regions, and communities...

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    TYCO BUSINESS FACTS: OPERATING MARGIN 13.2% 8.5% 2002 2003 2004 -4.2% 2004 NET REVENUE BY REGION (IN US$ BILLIONS) $ UNITED STATES $21.2 ASIA/PACIFIC $5.8 OTHER AMERICAS $2.2 EUROPE $11.0 BILLION OF TOTAL NET REVENUE IN 2004 40.2 20

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    ...* 10.1% 7.9% 4.8% 5.2% 1.6% 0.1% FIRE & SECURITY ELECTRONICS HEALTHCARE ENGINEERED PRODUCTS & SERVICES PLASTICS & ADHESIVES TOTAL COMPANY * ORGANIC REVENUE GROWTH IS A NON-GAAP FINANCIAL MEASURE. SEE GAAP RECONCILIATION ON INSIDE BACK COVER. SHARE PRICE PERFORMANCE (INDEXED VERSUS 9/30/2002...

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    ... EQUIVALENTS TOTAL DEBT $24.2 $21.0 $16.7 $6.2 $4.2 2002 2003 $4.5 2004 CAPITALIZATION (IN US$ BILLIONS) TOTAL SHAREHOLDERS' EQUITY TOTAL DEBT RESEARCH & DEVELOPMENT (IN US$ MILLIONS) $24.1 $26.4 $30.3 $633 $667 $784 $24.2 $21.0 $16.7 2002 2003 2004 2002 2003 2004 50.2% 44.3% 35...

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    SELECTED FINANCIAL DATA (IN US$ MILLIONS EXCEPT PER SHARE DATA) 2002 2002 2003 2003 2004 2004 NET ...DEVELOPMENT BY SEGMENT (IN US$ MILLIONS) ELECTRONICS $427 FIRE & SECURITY $ $101 HEALTHCARE $209 PLASTICS & ADHESIVES MILLION OF R&D INVESTMENT IN 2004 $7 ENGINEERED PRODUCTS & SERVICES...

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    ... 2004 SIX SIGMA SAVINGS (IN US$ MILLIONS) $0 2002 2003 2004 REAL ESTATE FOOTPRINT NUMBER OF FACILITIES 4,189 2002 231 3,958 2003 $272 390 3,568 2004 $134 SQUARE FOOTAGE (IN MILLIONS) $39 2002 2003 2004 130.8 2002 5.7 125.1 2003 6.7 118.4 2004 2,400 EMPLOYEES TRAINED IN SIX SIGMA IN 2004...

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    ..., COMMON MODE CHOKES, ALARMS FOR HAZARD EAS, HARNESSING DESIGN SOFTWARE, PARKING LOT CABLE, SERIAL CABLE, SERVING TRAYS, PIPE AND TUBE PRODUCTS, AUTOMOTIVE QUALITY INSPECTION EQUIPMENT, SPECI EMICALS, BLOOD COLLECTION PRODUCTS, PROTECTED POWER SWITCHES , SODIUM BICARBONATE-BASED EXTINGUISHING AGENTS...

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    ... ADT provides electronic security services to more than 7 million business, government, and residential customers worldwide. Our integrated security solutions include intrusion, fire protection, closed circuit television, access control, critical condition monitoring, and anti-theft systems. Around...

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    ..., ADT, provides solutions incorporating electronic monitoring, access control, video surveillance, Q: WHAT DISTINGUISHES TYCO FIRE & SECURITY IN THE MARKETPLACE? and anti-theft technologies. Our ADT experts are Our business provides value-added services and there to help our customers continentwide...

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    ... RFID solutions for its groundbreaking program. Tyco Fire & Security helps PROTECT 2 MILLION COMMERCIAL AND GOVERNMENT PROPERTIES as the global leader in electronic security and fire protection. ® Advanced life safety products, such as the integrated SIMPLEX fire alarm and voice evacuation system...

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    ... time, video monitoring. typically own, rather than lease, their security sysIn general, we are continuing to focus on tems. And now the majority of our new customers strengthening our business, doing an even better sign up for service through our direct sales force job of helping our customers, and...

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    ... are focused on maintaining very close customer relationships. Our senior management team and I spend a major part of our time visiting customers around the world. On a day-to-day basis, the strong presence of our global sales force-supported by our product engineers and application specialists, who...

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    ..., the plant achieved a 50 percent improvement in product and process quality, produced less scrap material, lowered costs, reduced delivery times, and was certified for new environmental standards. L TO R: ANDO MASAMI, PRODUCTION DIRECTOR; HAN BANGYAN, MANAGER OF HR & ADMINISTRATION; AND WANG JIJUN...

  • Page 34
    ..., antennas, battery packs, and cable assemblies. High-definition television is enjoying one of the highest growth rates in the consumer electronics marketplace, and Tyco Electronics' High Definition Multimedia Interface (HDMI) connectors are A KEY INTERCONNECT linking TVs and set-top boxes. 32

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    ... EFFECTIVE WAYS TO MANAGE GROWTH IN SUCH A GLOBAL ENTERPRISE? Because we are extremely customer-focused-and because many of our customers have a global presence-our job is to meet their needs wherever they are located. Our global manufacturing footprint, for example, is an important support pillar...

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    ...? centrally managed team of Black Belts. We now Among our significant advances in R&D, we've have Black Belts in every business unit, focused on improved our processes dramatically, and we common as well as business unit-specific priorities. are becoming more disciplined with every new development...

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    ... one of the first products launched as part of Healthcare's reinvigorated new product development efforts and represents a significant opportunity for Kendall's Critical Care division. R: JIM HARR, MANAGER OF RESEARCH AND DEVELOPMENT, PROVIDING TRAINING AT PHELPS MEMORIAL HOSPITAL IN SLEEPY HOLLOW...

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    ...-to-use diagnostic solution for appendicitis. Developed by corporate partner Palatin Technologies, the imaging agent radiolabels white blood cells ...LigaSure® vessel-sealing system is a unique form of electrosurgery that can replace sutures, clips, staples, and other energy-based ligation methods. It...

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    ... a laser-sharp focus on specific customer needs. By using Six Sigma tools to better all our operations, we've aligned our strategies and incentive plans. listen to and hear the "voice of the customer," we guarantee that our product designs accurately represent end-user requirements. Increasingly, we...

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    ... applications. Either through an open architecture wired network or through wireless communications, smart valve systems remove manual processes and provide a new level of management, including real-time data collection and condition monitoring, that increases speed, safety, and total system...

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    ... Products & Services TYCO ENGINEERED PRODUCTS & SERVICES COMPRISES FOUR GLOBAL BUSINESS UNITS: FLOW CONTROL, ELECTRICAL & METAL PRODUCTS, INFRASTRUCTURE SERVICES, AND FIRE & BUILDING PRODUCTS. TYCO'S NEWEST SEGMENT PRESIDENT, TOM LYNCH, TALKS ABOUT HOW TEPS PERFORMED IN 2004 AND HIS TEAM'S FOCUS...

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    Tyco Fire & Building Products is the world leader in supplying products for water-based fire protection systems, manufacturing and distributing more than 28 MILLION SPRINKLERS ANNUALLY. 40

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    ... challenge and a dynamic way to grow. Q: tools will help us find ways to increase manufacturing productivity. We will continue to review our real estate footprint for potential consolidation, and our teams will review product offerings to make sure they truly meet the current needs of our customers...

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    .... One important Over the last two years, we have faced an unusual challenge in the form of sustained cost increases distinction about our leadership team is that 10 of us are trained as Six Sigma Green Belts, Black Belts, for resin, a critical raw ingredient used to make Q: WHAT ARE YOUR KEY TARGET...

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    ...MILLION-DOLLAR CHALLENGE At a Tyco lean pilot course held at the Franklin, Kentucky, U.S.A., Adhesives plant, the eight-person host team took part in Total Productive Maintenance, which involved breaking apart- and putting back together- a machine used in the production of duct tape. In the process...

  • Page 46
    ... retailers in the United States. Retailers know it, dry cleaners know it, and you know it - clothes can't be hung without hangers. This fact is not lost on Tyco Plastics & Adhesives' A&E business, which is the LEADING MANUFACTURER of garment hangers, producing more than 3 billion per year. 44

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    ... and development center staff. Expansion outside of the United States is key for our A&E business, having added more than 50 people in our new office in Hong Kong. Q: TYCO IS PRIMARILY A BUSINESS-TO-BUSINESS COMPANY, WHEREAS MANY OF YOUR PRODUCTS ARE CONSUMER-ORIENTED. WHAT ARE THE CHALLENGES THIS...

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    BOARD OF DIRECTORS BRENDAN O'NEILL Former CEO Imperial Chemical Industries PLC H. CARL McCALL Principal Convent Capital, LLC MACKEY McDONALD Chairman, President & CEO VF Corporation GEORGE BUCKLEY Chairman & CEO Brunswick Corporation EDWARD BREEN Chairman & CEO Tyco International Ltd.

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    ... Former Chairman & CEO E.I. du Pont de Nemours & Company DENNIS BLAIR President & CEO Institute for Defense Analyses BRIAN DUPERREAULT Chairman ACE Limited BRUCE GORDON Former President of Retail Markets Verizon Communications, Inc. SANDRA WIJNBERG Senior VP & CFO Marsh & McLennan Companies, Inc...

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    ... S Mellon Investor Services LLC 85 Challenger Road Ridgefield Park, NJ 07600 800.685.4509 201.329.8660 [email protected] Other shareholder inquiries may be directed to Tyco Shareholder Services at the Company's registered office address. 48 Design: VSA Partners, New York Photos: Chris Buck...

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    ... HM 08, Bermuda. The Form 10-K is also available on the Company's website at www.tyco.com. The Company has filed with the New York Stock Exchange (NYSE) the Certification of its Chief Executive Officer confirming that the Company has complied with the NYSE corporate governance listing standards.

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    TYCO INTERNATIONAL LTD. 2nd Floor 90 Pitts Bay Road Pembroke HM 08, Bermuda www.tyco.com