ADT 2007 Annual Report Download - page 5

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We will long remember 2007 as the milestone year in
which we completed the spin-offs of our electronics and
healthcare businesses and ushered in the “new” Tyco.
We launched our streamlined company on July 2nd in
the midst of a year of improving revenue growth and
strong cash fl ow, which provide us with a solid fi nancial
foundation. As a more focused enterprise, we are excited
about the long-term outlook for our company as we
write this new chapter in Tyco’s history.
We’re particularly proud of what our people achieved
in executing one of the most complex separations in
corporate history. In early 2006, we announced a plan
to divide Tyco into three independent public companies
to enable each to drive its own business strategies and
ultimately create greater value for our shareholders. We
completed that process and launched Tyco Electronics,
Covidien (previously Tyco Healthcare) and Tyco Inter-
national with strong balance sheets and excellent pros-
pects for growth in their respective markets.
Tyco International today consists of a diverse mix of
businesses whose strength is refl ected in our fi scal 2007
results. Revenues totaled $18.8 billion, up 8% from the
prior fi scal year. Organic revenue growth (i.e., growth
excluding the impact of acquisitions, divestitures and
foreign currency translation) was 5%.
Driving our organic revenue growth was our Flow
Control segment, which grew 14%, as a result of strong
demand across our key end markets, especially energy
and water. Flow Control ended the year with revenue of
$3.8 billion and is now our second largest segment. Our
Fire Protection segment had organic revenue growth of
5%, led by the North American SimplexGrinnell busi-
ness. In our largest segment, ADT Worldwide, organic
revenue growth was 4%, continuing a trend of steady
TO OUR SHAREHOLDERS:
Tyco features a great mix of
companies with market-leading
positions in large, global industries.
improvement over the past few years as a result of our
business model changes. This upward trend refl ects con-
sistent increases in recurring revenue as well as product,
installation and service revenue.
For the year, Tyco International reported a net loss
from continuing operations of $2.5 billion, or $5.09 per
diluted share. The loss was due primarily to a $2.9 billion
agreement we reached in May to settle class-action law-
suits involving the company’s former management team.
Those lawsuits had been our most signifi cant remaining
legacy legal matter. We also incurred charges as part of a
restructuring program we launched in 2007 to streamline
some of our businesses. We expect that this program will
generate annual savings of $150–$200 million by 2009.
Excluding the special items, Tyco posted income from
continuing operations of $1.93 per diluted share—a gain
of 21% from $1.60 in fi scal 2006. Operating income
CHAIRMAN’S LETTER