ADT 2005 Annual Report Download - page 9

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Electronics to help speed the design and introduction of
new products, while over $230 million was invested
in Healthcare to help advance the pace of innovation in
healthcare settings around the globe.
To further bolster growth, Tyco invested an additional
$315 million in sales and marketing efforts across
the company in 2005. The majority of that additional
investment was concentrated in Fire & Security, with an
11 percent increase over fi scal 2004.
Following a period during which the company intentionally
refrained from making acquisitions in favor of rationalizing
its portfolio and focusing more closely on core businesses,
calendar year 2005 saw Tyco execute two strategic, bolt-
on acquisitions in its Healthcare segment. The company
acquired Vivant Medical Inc., a leading developer of microwave
ablation technology, and also acquired a controlling interest
in Floreane Medical Implants, a manufacturer of surgical
mesh products. Both transactions will strengthen Healthcare’s
surgical product portfolio and are expected to help drive
the segment’s growth rate during 2006 and beyond.
BALANCE SHEET STRENGTH
Tyco’s balance sheet has come a long way, thanks in large
part to the company’s continued strong cash generation. For
the full year, free cash fl ow totaled $4.6 billion — allowing
us to make continued strides in reducing debt. Total debt
declined $4.0 billion to $12.6 billion — and net debt* is
$9.4 billion. The company’s total debt-to-capital ratio
improved to 28 percent, from 35 percent at the close of 2004.
7
CHAIRMAN’S LETTER continued
RESEARCH & DEVELOPMENT
BY SEGMENT
(In US$ Millions)
Electronics
Healthcare
Fire & Security
Engineered Products & Services
Total = $836 million
$440
$232
$119
$45
$3,201
$5,429
$4,623
2003
2004
2005
FREE CASH FLOW*
(In US$ Millions)
*Free Cash Flow and Net Debt are
Non-GAAP Financial Measures.
See GAAP reconciliation on inside
back cover.