ADT 2005 Annual Report Download - page 77

PART I
Item 1. Business
General
Tyco International Ltd. (‘‘we,’’ ‘‘Tyco’’ or the ‘‘Company’’) is a diversified manufacturing and
service company that, through its subsidiaries:
• designs, manufactures, installs, monitors and services electronic security and fire protection
systems;
• designs, manufactures and distributes electrical and electronic components;
• designs, manufactures and distributes medical devices and supplies, imaging agents,
pharmaceuticals and adult incontinence and infant care products; and
• designs, manufactures, distributes and services engineered products, including industrial valves
and controls, as well as steel tubular goods, and provides consulting, engineering and
construction management and operating services.
Tyco International Ltd., which is organized under the laws of Bermuda, was created as a result of
the July 1997 acquisition of Tyco International Ltd., a Massachusetts corporation, by ADT Limited, a
public company organized under the laws of Bermuda in the 1980’s with origins dating back to the
United Kingdom since the early 1900’s, at which time ADT Limited changed its name to Tyco
International Ltd.
Unless otherwise indicated, references in this Annual Report to 2005, 2004 and 2003 are to Tyco’s
fiscal year ended September 30, 2005, 2004 and 2003, respectively.
Strategy
Tyco’s operating strategy is to be a high-quality, low-cost producer and provider in each of the
markets we serve. We promote our leadership positions by investing in existing businesses and
developing new markets. Our current business strategy focuses on enhancing internal growth and
operational efficiency for existing Tyco businesses, and we plan to achieve this goal primarily through
new product innovation, increased market share, and continued geographic expansion. We have
implemented and will continue to implement additional Six Sigma initiatives across our business
segments to achieve best-in-class operating practices. We strive to increase the value of our Company
and our global portfolio of diversified brands by exceeding customers’ expectations and by achieving
market leadership and operating excellence in every segment. We are also committed to being a leader
in corporate governance so that we can continue to earn the respect and confidence of our
shareholders, employees, suppliers and customers as well as the financial community.
Leveraging the strengths of our existing operations, we seek to enhance value for our shareholders
through operational excellence and maximization of cash flows. We plan to use available cash to
continue to fund internal growth and cost reduction opportunities within our businesses. Additionally,
we believe that our cash flow generation capability will allow us to continue to strengthen our balance
sheet and return capital to shareholders. While debt reduction and share repurchase are our focus in
the near term, we will also consider appropriate acquisitions should the opportunity arise.
We continue to pursue the divestiture of certain non-core businesses and may also consider actions
that would alter the current operating structure of the Company. During the year, we divested eighteen
businesses, including the sale of the Tyco Global Network (‘‘TGN’’), our undersea fiber optic
telecommunication network. Additionally, during 2005, we committed to a plan to divest our Plastics &
Adhesives segment, a global manufacturer of plastic film, specialty tapes and adhesives, coated products
2005 Financials 1