ADT 2005 Annual Report Download - page 5

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In the wake of a very strong fi scal 2004, expectations were
high as we entered 2005 — both internally and externally.
Since 2002, Tyco has signifi cantly reduced its debt burden,
achieved strong investment-grade ratings by stabilizing the
balance sheet, embarked on aggressive cost-cutting and
operational excellence initiatives, and made solid progress
toward building world-class governance standards and
restoring the company’s reputation. What the managers and
employees of the company achieved in a short time is
nothing short of remarkable.
Despite some challenges in 2005, Tyco’s fundamentals
remain strong. Tyco is a company with solid cash fl ow and
a great mix of businesses with market-leading positions.
Let’s take a look back at 2005 to see how our progress will
help to position us for further success in 2006 and beyond.
OPERATIONAL INTENSITY
We continued to derive signifi cant savings from our
Operational Excellence initiatives worldwide, with those
efforts delivering a total of $590 million of cost savings
from our Six Sigma and strategic sourcing efforts. These
programs are increasingly an integral part of the company’s
overall operating rigor.
Strategic sourcing delivered $190 million in savings —
despite headwinds of more than $200 million. The company
trained nearly 2,900 Six Sigma Green Belts, Black Belts, and
Master Black Belts, saving the company nearly $400 million
in 2005.
CHAIRMAN’S LETTER continued
3
DILUTED EARNINGS
PER SHARE FROM
CONTINUING OPERATIONS
$1.38
$0.44
$1.51
2003
2004
2005
CAPITALIZATION
(In US$ Billions)
Total Shareholders’ Equity
Total Debt
2003
2004
2005
$26.4 $30.3 $32.5
$20.8 $16.6
$12.6