ADT 2004 Annual Report Download - page 20

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FIVE PRIORITIES FOR THE FUTURE
We had significant and consistent achievement in
2004. But rather than being satisfied with our suc-
cess, we are energized by the magnitude of the
opportunities still ahead. That journey continues
in 2005—by building a stronger operating founda-
tion, by delivering ever-greater value for our cus-
tomers, and by accelerating organic growth. As we
pursue these objectives in 2005, Tyco will be better
positioned than ever before to achieve sustainable,
long-term success.
I. OPERATIONAL EXCELLENCE
We are committed to further expanding our opera-
tional excellence initiatives to drive continued
margin improvement. For many years to come, these
programs will generate savings and cash to fuel
organic growth opportunities as well as to enhance
our bottom-line results. To accelerate our progress,
we will train 2,500 more employees in Six Sigma
and expand our strategic sourcing efforts with
additional teams around the world. Overall, we
expect our 2005 operational excellence programs
to deliver significant savings and improved work-
ing capital performance.
II. CUSTOMER FOCUS & GROWTH
We have no shortage of growth opportunities, and
we know that our continued success is dependent
upon serving our customers even better and grow-
ing our business even faster.
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 gain market share
• Develop more robust service offerings
We are especially excited by our growing pipeline
of new products and our investments to strengthen
the important relationship we have with our cus-
tomers. For example, the Tyco Clinical Institute,
scheduled to open in Shanghai in March, will be
a key platform for our accelerated growth in the
healthcare market in Asia and will serve as one of
the most advanced facilities for training physicians
in leading-edge surgical procedures. It also will be
an important step in helping enhance the quality
of healthcare available to people in China.
III. DISCIPLINED CAPITAL STRATEGY
Our focus on cash generation has delivered proven
results during the past two years, and we will
continue to make this one of our highest priorities
in 2005. We expect to generate at least $4.5 billion
in free cash flow3in 2005, and we are committed
to using our cash as strategically as possible.
Beyond our recently announced dividend increase,
we are evaluating additional investments in research
and development and productivity programs,
continued debt repayment, share repurchase, and
strategic acquisitions.
3 Free cash flow is a non-GAAP financial measure. See discussion of non-GAAP financial measures on inside back cover.
“WE ARE PROUD OF OUR PROGRESS, AND WE
ARE ENERGIZED TO DO EVEN MORE—FOR
OUR CUSTOMERS, OUR SHAREHOLDERS, AND
OUR COMMUNITIES.”