ADT 2007 Annual Report Download - page 7

5
before special items improved in each of our business
segments except for Electrical and Metal Products. The
decline in that segment was due to lower metal spreads
(the difference between the selling prices of our products
and the original cost of raw materials).
Free cash fl ow—which gives us signifi cant fl exibility
to invest in our businesses and to have cash available for
other purposes—totaled $801 million for fi scal 2007 and
included approximately $322 million of net payments
for special items. Tyco has consistently shown the ability
to generate strong cash fl ow, and this is an important area
of focus for our management team.
The fi nancial fl exibility provided by our free cash fl ow
also enables us to return capital to our shareholders. In
September, we initiated a new $1 billion share repurchase
program, which we expect to complete during fi scal 2008.
Additionally, beginning in November, we increased our
quarterly dividend by 36%, to 15 cents per share.
THE NEW TYCO
While the separation has streamlined the company, we
continue to have considerable breadth and depth in our
portfolio. Our businesses hold market-leading positions
in large and growing global industries. Because these
industries are highly fragmented, they offer additional
opportunities for growth.
About half our fi scal 2007 revenues were generated
outside the United States. With 118,000 employees in
more than 60 countries, we operate on a vast geographical
scale that includes important emerging markets. Among
such markets are high-growth economies such as China
and India, where the opportunities for our company
are substantial.
The company is organized around the following fi ve
business segments:
•ADT Worldwide, the world’s largest provider of elec-
tronic security products and alarm-monitoring services
to residential, commercial, industrial and government
customers.
•Fire Protection Services, the industry leader in fi re detec-
tion, fi re suppression and special-hazard solutions for
commercial, industrial and institutional customers.
•Safety Products, a major global provider of fi re protec-
tion, intrusion security, access control, video manage-
ment, electronic surveillance systems and breathing
apparatuses (for fi refi ghters and other fi rst responders).
•Flow Control, the world’s leader in providing valves,
fi ttings, valve automation, heat-tracing solutions and pipes
for the oil and gas, power, food and beverage, chemical,
water and wastewater, and other process industries.
•Electrical and Metal Products, a major provider of steel
tubes, armored wire and cable, and other metal
products for construction, electrical, fi re and secu-
rity, mechanical and automotive customers.
To better capitalize on the opportunities we see ahead, we
have set a number of strategic goals for the company. These
include expanding the leadership position of our businesses
through organic growth and targeted acquisitions; broad-
ening our range of products and services; continuing to
focus our portfolio; increasing our presence in emerging
markets; and enhancing our effi ciency through Operational
Excellence initiatives.
During 2007, we made selective acquisitions (an area
of limited activity in recent years) to improve our product
CHAIRMAN’S LETTER
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