ADT 2006 Annual Report Download - page 64

remainder of the $2.0 billion share repurchase program that was approved by the Board of Directors in
May 2006.
We are 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
business strategy focuses on enhancing internal growth and operational efficiency 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 businesses to
achieve best-in-class operating practices. We also remain committed to being a leader in corporate
governance so that we can maintain the respect and confidence of our shareholders, employees,
suppliers and customers as well as the financial community.
Over the past several years, the Company has engaged in a series of restructuring programs
through which we have made our operations more efficient, including exiting certain non-core
businesses or business lines and streamlining general operations. During 2006, we completed the sale of
our Plastics and Adhesives segment and entered into a definitive agreement to sell the Printed Circuit
Group (‘‘PCG’’) business, a business of the Electronics segment. As such, the operations of the Plastics
and Adhesives segment and PCG are reflected as discontinued operations in the Consolidated Financial
Statements.
To further improve operating efficiency, during the first quarter of 2007, we have launched a
restructuring program across all segments including the corporate organization which will streamline
some of the businesses and reduce our operational footprint. We expect to incur charges of
approximately $600 million over the next two years, of which $500 million is expected to be incurred in
2007. We expect that the total cash expenditures for this program will be approximately $450 million, of
which $250 million is expected in 2007. We believe this restructuring program will strengthen our
competitive position over the long term.
Segments
See Note 23 to the Consolidated Financial Statements for certain segment and geographic financial
data relating to our business.
I. Electronics
Tyco is the world’s leading supplier of passive electronic components. With 2006 net revenue of
$12.7 billion, our Electronics businesses comprise 31% of our consolidated net revenue. In 2005 and
2004, net revenue totaled $11.8 billion or 30% of our consolidated net revenue and $11.4 billion or
30% of our consolidated net revenue, respectively. The group’s products and services include:
• designing, engineering and manufacturing electronic/electrical connector systems, fiber optic
components, wireless devices including private radio systems and radar sensors, heat shrink
products, circuit protection devices, magnetic devices, wire and cable, relays, sensors, touch
screens, identification and labeling products, power systems and components, electronic modules,
application tooling, switches and battery assemblies.
Tyco Electronics consists of four business units: Electronic Components, Wireless, Power Systems
and Submarine Telecommunications.
With the exception of Submarine Telecommunications, these businesses design, manufacture and
market a broad range of electronic, electrical and electro-optic passive and active devices and a number
of interconnection systems and connector-intensive assemblies, as well as wireless products including
radar sensors, global positioning satellite systems components, private radio systems, silicon and gallium
arsenide semiconductors and microwave sub-systems. These products have potential uses wherever an
electronic, electrical, computer or telecommunications system is involved. Products are sold under the
2 2006 Financials