Tyco Reports Second Quarter Earnings From Continuing Operations Of
$0.11 Per Share * Results Include Charges Totaling $0.37 Per Share
* Cash Flow From Operating Activities of $1.7 Billion; Free Cash
Flow Before Dividends of $1.3 Billion * Tyco to Explore Divestiture
of Plastics & Adhesives Segment PEMBROKE, Bermuda, May 3
/PRNewswire-FirstCall/ -- Tyco International Ltd.
(NYSE:TYC)(BSX:TYC) today reported diluted GAAP earnings per share
(EPS) from continuing operations of $0.11 for the second fiscal
quarter of 2005, compared with $0.37 in the second fiscal quarter
of 2004. Included in EPS from continuing operations were charges
totaling $0.37 per share, consisting of $0.26 for the early
retirement of debt, $0.09 for asset impairment charges in the
A&E business unit of Plastics & Adhesives, and $0.02 to
establish a reserve to reflect the company's estimate for resolving
the previously announced SEC Division of Enforcement investigation
that began in June of 2002. Last year's second quarter results
included net charges totaling $0.04 per share related to the
restructuring and divestiture program. Revenue grew 6.5 percent to
$10.5 billion, with organic revenue growth of 3.4 percent in the
quarter. Cash flow from operating activities was $1.7 billion, and
the company generated free cash flow of $1.3 billion in the
quarter. The company changed the definition of free cash flow to
exclude the impact of cash dividend payments and voluntary pension
contributions made during the year. "Tyco's second quarter results
reflected good year-over-year improvement in four of our five
business segments," said Chairman and Chief Executive Officer Ed
Breen. "Our management team continues to be focused on improving
margins and accelerating organic revenue growth, and we are
confident that the actions we are taking are the right ones for the
long term." Organic revenue growth, free cash flow, and net debt
are non-GAAP financial measures and are described below. For a
reconciliation of these non-GAAP measures, see the attached tables.
To further assist in summarizing and understanding the charges
included in Tyco's GAAP results for fiscal 2005, a detailed
schedule is provided with this press release. CONVERTIBLE DEBT
REPURCHASE ACTIVITY As part of the second quarter debt reduction
activities, the company used $1.5 billion of cash to repurchase
$932 million of convertible debt securities. This action reduced
Tyco's fully diluted shares outstanding by approximately 42 million
shares and generated a $573 million, or $0.26 per share, charge in
the second quarter, for which no tax benefit is available. Since
the company began to repurchase its convertible securities in the
fourth fiscal quarter of 2004, it has used $2.6 billion of cash to
repurchase $1.7 billion of convertible debt securities. In total,
this has reduced the diluted shares outstanding by 76 million
shares. "We accelerated our convertible repurchase activity in the
second quarter," Breen said. "Over the past three quarters, our
repurchases have reduced our share count by 3.4 percent. Assuming
attractive pricing, we expect to continue to repurchase additional
convertible securities over the balance of this fiscal year." TYCO
TO EXPLORE PLASTICS & ADHESIVES DIVESTITURE The company
announced its intent to explore the divestiture of the Plastics
& Adhesives business segment. "Plastics & Adhesives is a
good business with a strong management team, but we have determined
that it is no longer a strategic fit for our vision of Tyco's
future," said Breen. Included in the reported results were $202
million ($181 million after tax), or $0.09 per share, of asset
impairment charges in the A&E business unit of Plastics &
Adhesives. SEC INVESTIGATION UPDATE Results for the quarter
included a $50 million, or $0.02 per share, non- tax deductible
charge reflecting the estimated amount in fines and penalties that
the company will likely pay to resolve matters relating to the
previously announced SEC investigation that began in June of 2002.
The company is in active discussions with the SEC Division of
Enforcement to resolve the matters raised in the investigation. Any
final resolution of these matters is subject to finalizing the
terms of a settlement that the enforcement staff will agree to
recommend to the Commission, the company's submission of an offer
of settlement approved by the Tyco Board of Directors, and the
Commission's approval of a settlement offer. Until such events have
occurred, the final amount is subject to change. SEGMENT RESULTS
The financial results presented in the tables below are in
accordance with GAAP. All dollar amounts are pretax and stated in
millions. All comparisons are to the quarter ended March 31, 2004,
unless otherwise indicated. Prior period amounts have been
reclassified to reflect the impact of discontinued operations
accounting. Fire & Security April 1, 2005 March 31, 2004 $
Change % Change Revenue $2,874 $2,863 $11 0% Operating Income $311
$218 $93 43% Operating Margin 10.8% 7.6% Revenue increased $11
million, with 2 percent organic revenue growth driven primarily by
Worldwide Fire and Tyco Safety Products. The year-over- year
comparison is adversely impacted by $105 million of revenue from
businesses which have since been divested. Operating income
increased by $93 million with improved profitability in Worldwide
Security and Worldwide Fire. Last year's second quarter included
$47 million of net charges related to the restructuring and
divestiture program. Electronics April 1, 2005 March 31, 2004 $
Change % Change Revenue $3,133 $2,846 $287 10% Operating Income
$496 $380 $116 31% Operating Margin 15.8% 13.4% Revenue increased
$287 million, or 10 percent, with organic revenue growth of 2
percent. Prior year results included $84 million of revenue from
the commercial electrical services unit which was divested in
September of 2004. Modest growth in connectors and cable assemblies
was driven by automotive, computer and consumer, and general
industrial markets, as well as strength in Wireless Communications.
Continued weakness in Power Systems and Printed Circuit Boards
partially offset this growth. Operating income increased $116
million, with the operating margin improving to 15.8 percent. Last
year's second quarter results included $44 million of divestiture
related charges associated with the commercial electrical services
unit. Operationally, margins were impacted by 60 basis points of
continued increases in metals and other commodity costs. Healthcare
April 1, 2005 March 31, 2004 $ Change % Change Revenue $2,369
$2,284 $85 4% Operating Income $689 $581 $108 19% Operating Margin
29.1% 25.4% Revenue increased $85 million, or 4 percent. Organic
revenue growth of 2 percent was driven by strong sales in the
International and Surgical businesses, partially offset by declines
in Retail and Respiratory. Operating income increased $108 million
due to increased volume and continued improvement in operating
efficiency, which helped offset commodity pressures. The operating
margin benefited by approximately 80 basis points due to the
refinement of litigation liabilities and related insurance
recoveries. Engineered Products & Services April 1, 2005 March
31, 2004 $ Change % Change Revenue $1,607 $1,392 $215 15% Operating
Income $165 $126 $39 31% Operating Margin 10.3% 9.1% Revenue
increased $215 million, or 15 percent. Organic revenue growth was
12 percent, led by Electrical & Metal Products, Flow Control,
and Fire & Building Products. A decline in Infrastructure
Services partially offset this growth. Operating income increased
$39 million as a result of improved operating margins in Electrical
& Metal Products, Flow Control, and Fire & Building
Products, partially offset by weaker results in Infrastructure
Services. Last year's second quarter operating income included $5
million of net charges related to the restructuring and divestiture
program. Plastics & Adhesives April 1, 2005 March 31, 2004 $
Change % Change Revenue $463 $430 $33 8% Operating Income ($187)
$15 ($202) NM Operating Margin NM 3.5% Revenue increased $33
million, or 8 percent, with organic revenue growth of 2 percent.
Growth in the Plastics business unit was driven by higher selling
prices, partially offset by a revenue decline in A&E. Operating
income in the second quarter decreased versus last year, driven by
$202 million of asset impairment charges in A&E. Last year's
second quarter included $23 million of net charges associated with
restructuring activities. Operationally, income was adversely
impacted by declines in A&E and Ludlow Coated Products. OTHER
ITEMS * The second quarter effective tax rate was 62.2 percent. The
tax rate was adversely impacted by 34.8 percentage points due to
the previously discussed charges for early retirement of debt,
asset impairments, and the SEC investigation. * During the quarter,
the company reduced debt by $1.1 billion to $14.4 billion, and
reduced net debt to $11.5 billion. * The company's debt-to-capital
ratio improved to 31.3 percent at quarter-end versus 35.6 percent
at the end of fiscal 2004. OUTLOOK For the third quarter of 2005,
the company expects to achieve EPS from continuing operations
excluding charges, of $0.47 to $0.49. The company expects full-year
EPS from continuing operations excluding charges, of $1.88 to
$1.93. The high end of the previous EPS guidance range has been
reduced to reflect the impact of increased commodity costs across
the company, anticipated weakness in European automotive
electronics, and continued sales and marketing investment in Fire
& Security. The company expects full-year cash from operating
activities of approximately $6.4 billion and free cash flow of
approximately $4.6 billion. As stated earlier, Tyco changed the
definition of free cash flow to exclude the impact of cash dividend
payments and voluntary pension contributions made during the year.
The cash flow guidance has been reduced from the previous guidance
primarily due to higher-than-anticipated working capital
requirements. "We are pleased with our year-to-date progress, and
despite the commodity pressures we are facing, we still feel good
about Tyco's ability to deliver strong year-over-year earnings
improvements for 2005," commented Breen. EPS from continuing
operations excluding charges, and free cash flow, are non-GAAP
financial measures and are described below. ABOUT TYCO
INTERNATIONAL Tyco International Ltd. is a global, diversified
company that provides vital products and services to customers in
five business segments: Fire & Security, Electronics,
Healthcare, Engineered Products & Services, and Plastics &
Adhesives. With 2004 revenue of $40 billion, Tyco employs
approximately 250,000 people worldwide. More information on Tyco
can be found at http://www.tyco.com/. CONFERENCE CALL AND WEBCAST
The company will hold a conference call for investors today
beginning at 8:30 a.m. ET. The call can be accessed in three ways:
* At Tyco's website: http://investors.tyco.com/. A replay of the
call will be available through May 17, 2005 at the same website. *
By telephone dial-in to participate in a "listen-only" mode. The
telephone dial-in number for participants in the United States is
(866) 254-5935. The telephone dial-in number for participants
outside the United States is (651) 291-3245. The access code for
all "listen- only" callers is 777902. Investors who do not intend
to ask questions should dial this number. * By telephone dial-in
with the capability to participate in the question-and-answer
portion of the call. The telephone dial-in number for participants
in the United States is (888) 423-3280. The telephone dial-in
number for participants outside the United States is (651)
291-0618. An audio replay of the conference call will be available
beginning at 12:00 p.m. on May 3, 2005 and ending at 11:59 p.m. on
May 10, 2005. The dial- in number for participants in the United
States is (800) 475-6701. For participants outside the United
States the dial-in number is (320) 365-3844. The replay access code
for all callers is 777904. NON-GAAP MEASURES "EPS from continuing
operations excluding charges," "free cash flow" (FCF), "organic
revenue growth" and "net debt" are non-GAAP measures and should not
be considered replacements for GAAP results. The company has
forecast its EPS from continuing operations results excluding
charges related to divestitures, asset impairments, early
retirement of debt, the resolution of the SEC investigation, and
other charges that may mask the underlying results and trends and
make it difficult to give investors additional perspective on
underlying business results. Because the company cannot predict the
amount and timing of such items and the associated charges or gains
that will be taken, it is difficult to include the impact of those
items in the forecast. The company has forecast its cash flow
results excluding any voluntary pension contribution because it has
not yet made a determination about the amount and timing of any
such contribution. The difference between cash flows from operating
activities (the most comparable GAAP measure) and FCF (the non-GAAP
measure) consists mainly of significant cash outflows that the
company believes are useful to identify. FCF permits management and
investors to gain insight into the number that management employs
to measure cash that is free from any significant existing
obligation. It is also a significant component in the company's
incentive compensation plans. The difference reflects the impact
from: * the sale of accounts receivable programs, * net capital
expenditures, * acquisition of customer accounts (ADT dealer
program), * cash paid for purchase accounting and holdback/earn-out
liabilities and, * voluntary pension contributions. See the
accompanying tables to this press release for a cash flow statement
presented in accordance with GAAP and a reconciliation presenting
the components of FCF. The impact from the sale of accounts
receivable programs and voluntary pension contributions is added or
subtracted from the GAAP measure because this activity is driven by
economic financing decisions rather than operating activity.
Capital expenditures and the ADT dealer program are subtracted
because they represent long-term commitments. Cash paid for
purchase accounting and holdback/earn-out liabilities is subtracted
from Cash Flow from Operating Activities because these cash
outflows are not available for general corporate uses. The
limitation associated with using FCF is that it subtracts cash
items that are ultimately within management's and the Board of
Directors' discretion to direct and that therefore may imply that
there is less or more cash that is available for the company's
programs than the most comparable GAAP measure. This limitation is
best addressed by using FCF in combination with the GAAP cash flow
numbers. FCF as presented herein may not be comparable to similarly
titled measures reported by other companies. The measure should be
used in conjunction with other GAAP financial measures. Investors
are urged to read the company's financial statements as filed with
the Securities and Exchange Commission, as well as the accompanying
tables to this press release that shows all the elements of the
GAAP measures of Cash Flows from Operating Activities, Cash Flows
from Investing Activities, Cash Flows from Financing Activities and
a reconciliation of the company's total cash and cash equivalents
for the period. "Organic revenue growth" is a useful measure used
by the company to measure the underlying results and trends in the
business. The difference between reported net revenue growth (the
most comparable GAAP measure) and organic revenue growth (the
non-GAAP measure) consists of the impact from foreign currency,
acquisitions and divestitures, and other changes that do not
reflect the underlying results and trends (for example, revenue
reclassifications and changes to the fiscal year). Organic revenue
growth is a useful measure of the company's performance because it
excludes items that: i) are not completely under management's
control, such as the impact of foreign currency exchange; or ii) do
not reflect the underlying growth of the company, such as
acquisition and divestiture activity, or revenue reclassification.
It is also a component of the company's compensation programs. The
limitation of this measure is that it excludes items that have an
impact on the company's revenue. This limitation is best addressed
by using organic revenue growth in combination with the GAAP
numbers. See the accompanying tables to this press release for the
reconciliation presenting the components of organic revenue growth.
Net debt is a non-GAAP measure and should not be considered a
replacement for GAAP results. Net debt is total debt (the most
comparable GAAP measure) minus cash and cash equivalents.
Management believes net debt is an important measure of liquidity,
which it uses as a tool to measure the company's ability to meet
its future debt obligations. Cash and cash equivalents are
subtracted from the GAAP measure because they could be used to
reduce our debt obligations. See the accompanying table to this
press release for the reconciliation of net debt. The limitation
associated with using net debt is that it subtracts cash items and
therefore may imply that there is less company debt than the most
comparable GAAP measure indicates and may include certain cash
items that are not readily available for repaying debt. This
limitation is best addressed by using net debt in combination with
total debt because net debt may be significantly lower than the
GAAP measure. Net debt should be used in conjunction with other
GAAP financial measures. FORWARD-LOOKING STATEMENTS This release
may contain certain "forward-looking statements" within the meaning
of the United States Private Securities Litigation Reform Act of
1995. These statements are based on management's current
expectations and are subject to risks, uncertainty and changes in
circumstances, which may cause actual results, performance or
achievements to differ materially from anticipated results,
performance or achievements. All statements contained herein that
are not clearly historical in nature are forward-looking and the
words "anticipate," "believe," "expect," "estimate," "plan," and
similar expressions are generally intended to identify
forward-looking statements. The forward-looking statements in this
release include statements addressing the following subjects:
future financial condition and operating results. Economic,
business, competitive and/or regulatory factors affecting Tyco's
businesses are examples of factors, among others, that could cause
actual results to differ materially from those described in the
forward-looking statements. Tyco is under no obligation to (and
expressly disclaims any such obligation to) update or alter its
forward-looking statements whether as a result of new information,
future events or otherwise. More detailed information about these
and other factors is set forth in Tyco's Annual Report on Form 10-K
for the fiscal year ended Sept. 30, 2004, and Quarterly Report on
Form 10-Q for the quarterly period ended December 31, 2004. TYCO
INTERNATIONAL LTD. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in
millions, except per share data) (Unaudited) Quarter Ended Six
Months Ended March April 1, 31, April 1, March 31, 2005 2004 2005
2004 Net revenue $10,456 $9,821 $20,521 $19,486 Cost of sales 6,908
6,412 13,549 12,740 Selling, general and administrative expenses
1,999 2,014 4,004 4,084 Goodwill impairment 162 -- 162 --
Restructuring and long-lived asset impairment charges, net 44 52 52
80 Losses and impairments on divestitures, net 2 85 17 85 Operating
income 1,341 1,258 2,737 2,497 Interest income 31 14 68 40 Interest
expense (209) (226) (427) (491) Other (expense) income, net (575) 6
(736) (2) Income from continuing operations before income taxes and
minority interest 588 1,052 1,642 2,044 Income taxes (366) (259)
(676) (527) Minority interest (1) (5) (4) (8) Income from
continuing operations 221 788 962 1,509 Loss from discontinued
operations, net of income taxes (29) (5) (61) (7) Net income $192
$783 $901 $1,502 Basic earnings per common share: Income from
continuing operations $0.11 $0.39 $0.48 $0.76 Loss from
discontinued operations (0.01) -- (0.03) (0.01) Net income $0.10
$0.39 $0.45 $0.75 Diluted earnings per common share: Income from
continuing operations $0.11 $0.37 $0.46 $0.71 Loss from
discontinued operations (0.02) -- (0.03) (0.01) Net income $0.09
$0.37 $0.43 $0.70 Weighted-average number of shares outstanding:
Basic 2,010 1,999 2,009 1,998 Diluted 2,030 (1) 2,218 2,194 2,222
Income Reconciliation for Diluted EPS: Income from continuing
operations $221 $788 $962 $1,509 Add back of interest expense for
convertible debt -- (2) 28 45 59 Income from continuing operations,
giving effect to dilutive adjustments 221 816 1,007 1,568 Loss from
discontinued operations (29) (5) (61) (7) Net income, giving effect
to dilutive adjustments $192 $811 $946 $1,561 (1) Excludes 152
million shares related to the assumed exchange of convertible debt
because the effect would be anti-dilutive. (2) Excludes $21 million
of interest expense related to the assumed exchange of convertible
debt because the effect would be anti- dilutive. NOTE: These
financial statements should be read in conjunction with the
Consolidated Financial Statements and accompanying notes contained
in the Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 2004 and Quarterly Report on Form 10-Q for the
quarterly period ended December 31, 2004. TYCO INTERNATIONAL LTD.
RESULTS OF SEGMENTS (in millions) (Unaudited) Quarter Ended April
1, March 31, 2005 2004 NET REVENUE Fire and Security $2,874 $2,863
Electronics 3,133 2,846 Healthcare 2,369 2,284 Engineered Products
and Services 1,607 1,392 Plastics and Adhesives 463 430 Corporate
and Other 10 6 Total Net Revenue $10,456 $9,821 OPERATING INCOME
& MARGIN Fire and Security $311 10.8% $218 7.6% Electronics 496
15.8% 380 13.4% Healthcare 689 29.1% 581 25.4% Engineered Products
and Services 165 10.3% 126 9.1% Plastics and Adhesives (187) -40.4%
15 3.5% Corporate and Other (133) (62) Operating Income &
Margin $1,341 12.8% $1,258 12.8% Six Months Ended April 1, March
31, 2005 2004 NET REVENUE Fire and Security $5,756 $5,695
Electronics 6,012 5,684 Healthcare 4,688 4,464 Engineered Products
and Services 3,120 2,778 Plastics and Adhesives 927 854 Corporate
and Other 18 11 Total Net Revenue $20,521 $19,486 OPERATING INCOME
& MARGIN Fire and Security $594 10.3% $465 8.2% Electronics 910
15.1% 804 14.1% Healthcare 1,270 27.1% 1,119 25.1% Engineered
Products and Services 337 10.8% 237 8.5% Plastics and Adhesives
(164) -17.7% 27 3.2% Corporate and Other (210) (155) Operating
Income & Margin $2,737 13.3% $2,497 12.8% TYCO INTERNATIONAL
LTD. CONDENSED CONSOLIDATED BALANCE SHEETS (in millions)
(Unaudited) (Unaudited) April 1, December 31, September 30, 2005
2004 2004 Current Assets: Cash and cash equivalents $2,940 $3,440
$4,467 Accounts receivable, net 7,176 6,994 6,463 Inventories 4,747
4,857 4,365 Prepaid expenses and other current assets 2,606 2,858
2,635 Assets held for sale 182 236 615 Total current assets 17,651
18,385 18,545 Property, plant and equipment, net 9,649 9,865 9,635
Goodwill 25,488 25,868 25,510 Intangible assets, net 5,200 5,328
5,335 Other assets 4,784 4,689 4,642 Total Assets $62,772 $64,135
$63,667 Current Liabilities: Loans payable and current maturities
of long-term debt $1,913 $978 $2,116 Accounts payable 2,929 2,927
2,698 Accrued and other current liabilities 5,606 5,556 5,815
Liabilities held for sale 297 295 523 Total current liabilities
10,745 9,756 11,152 Long-term debt 12,497 14,555 14,617 Other
liabilities 7,842 7,699 7,538 Total liabilities 31,084 32,010
33,307 Minority interest 59 57 68 Shareholders' equity 31,629
32,068 30,292 Total Liabilities and Shareholders' Equity $62,772
$64,135 $63,667 NOTE: These financial statements should be read in
conjunction with the Consolidated Financial Statements and
accompanying notes contained in the Company's Annual Report on Form
10-K for the fiscal year ended September 30, 2004 and Quarterly
Report on Form 10-Q for the quarterly period ended December 31,
2004. TYCO INTERNATIONAL LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions) (Unaudited) Quarter Ended Six Months Ended April 1,
March 31, April 1, March 31, 2005 2004 2005 2004 Cash Flows from
Operating Activities: Net income $192 $783 $901 $1,502 Loss from
discontinued operations 29 5 61 7 Income from continuing operations
221 788 962 1,509 Adjustments to reconcile net cash provided by
operating activities: Non-cash restructuring and long- lived asset
impairment charges, net 42 8 38 14 Non-cash (gains) losses and
impairments on divestitures, net (5) 85 13 85 Goodwill impairment
162 -- 162 -- Depreciation and amortization 537 546 1,078 1,094
Deferred income taxes 45 69 139 177 Provision for losses on
accounts receivable and inventory 59 102 131 172 Loss on the
retirement of debt 573 -- 729 5 Other non-cash items 3 3 58 37
Changes in assets and liabilities, net of the effects of
acquisitions and divestitures: Accounts receivable, net (327) 89
(563) (73) Inventories (1) (79) (373) (141) Accounts payable 50 28
160 (19) Accrued and other liabilities 295 141 (35) (18) Other 3
(13) 19 (5) Net cash provided by operations 1,657 1,767 2,518 2,837
Cash Flows from Investing Activities: Capital expenditures, net
(325) (230) (612) (437) Acquisition of businesses, net of cash
acquired 1 -- (10) (14) Acquisition of customer accounts (ADT
dealer program) (68) (61) (135) (131) Purchase accounting and
holdback/earn-out liabilities (7) (23) (24) (72) Divestiture of
businesses, net of cash retained by businesses sold 16 98 182 99
Increase in investments (69) (14) (116) (17) (Increase) decrease in
restricted cash -- (21) 3 191 Other (15) 14 (4) 6 Net cash used in
investing activities (467) (237) (716) (375) Cash Flows from
Financing Activities: Net repayments of debt (1,503) (1,192)
(3,157) (3,530) Proceeds from exercise of share options 75 49 118
59 Dividends paid (201) (25) (225) (50) Other (2) (9) (17) (21) Net
cash used in financing activities (1,631) (1,177) (3,281) (3,542)
Effect of currency translation on cash (32) (7) 48 31 Cash flows
from discontinued operations (27) (9) (96) (37) Net (decrease)
increase in cash and cash equivalents (500) 337 (1,527) (1,086)
Cash and cash equivalents at beginning of period 3,440 2,763 4,467
4,186 Cash and cash equivalents at end of period $2,940 $3,100
$2,940 $3,100 RECONCILIATION TO "FREE CASH FLOW": Net cash provided
by operating activities $1,657 $1,767 $2,518 $2,837 Sale of
accounts receivable 6 25 15 72 Capital expenditures, net (325)
(230) (612) (437) Acquisition of customer accounts (ADT dealer
program) (68) (61) (135) (131) Cash paid for purchase accounting
and holdback/earn-out liabilities (7) (23) (24) (72) Voluntary
pension contributions -- -- -- -- FREE CASH FLOW $1,263 $1,478
$1,762 $2,269 NOTE: Free cash flow is a non-GAAP measure. See
description of non-GAAP measures contained in this release. TYCO
INTERNATIONAL LTD. NET DEBT RECONCILIATION (in millions)
(Unaudited) Quarter Quarter Six months Ended Ended ended December
31, April 1, April 1, 2004 2005 2005 Total debt at beginning of
period $16,733 $15,533 $16,733 Net debt repayments (1,502) (947)
(2,449) Currency translation adjustments on debt 232 (109) 123
Other 70 (67) 3 Total debt at end of period 15,533 14,410 14,410
Less: cash and cash equivalents at end of period (3,440) (2,940)
(2,940) Net debt at end of period $12,093 $11,470 $11,470 NOTE: Net
debt is a non-GAAP measure. See description of non-GAAP measures
contained in this release. TYCO INTERNATIONAL LTD. ORGANIC REVENUE
GROWTH RECONCILIATION (in millions) (Unaudited) Quarter Ended April
1, 2005 Foreign Divestiture and Net Revenue Currency Other Fire and
Security $2,874 0.4% $68 2.4% $(105) -3.8% Electronics 3,133 10.1%
75 2.6% $ 148 (1) 5.4% Healthcare 2,369 3.7% 38 1.7% $(7) -0.4%
Engineered Products and Services 1,607 15.4% 33 2.4% $20 (2) 1.5%
Plastics and Adhesives 463 7.7% 3 0.7% $20 (3) 4.8% Corporate and
Other 10 NM -- NM $-- NM Total Net Revenue $10,456 6.5% $217 2.2%
$76 0.9% Net Revenue for the Quarter Ended March 31, Organic
Revenue Growth 2004 Fire and Security $48 1.8% $2,863 Electronics
64 2.1% 2,846 Healthcare 54 2.4% 2,284 Engineered Products and
Services 162 11.5% 1,392 Plastics and Adhesives 10 2.2% 430
Corporate and Other 4 NM 6 Total Net Revenue $342 3.4% $9,821 Six
Months Ended April 1, 2005 Foreign Divestiture and Net Revenue
Currency Other Fire and Security $5,756 1.1% $175 3.1% $(164) -2.9%
Electronics 6,012 5.8% 195 3.4% (83)(1) -1.5% Healthcare 4,688 5.0%
94 2.1% (14) -0.3% Engineered Products and Services 3,120 12.3% 91
3.3% (27) -1.1% Plastics and Adhesives 927 8.5% 6 0.7% 39 (3) 4.7%
Corporate and Other 18 NM -- NM -- NM Total Net Revenue $20,521
5.3% $561 2.9% $(249) -1.4% Six Months Ended April 1, 2005 Net
Revenue for the Six Months Ended Organic Revenue Growth March 31,
2004 Fire and Security $50 0.9% $5,695 Electronics 216 3.9% 5,684
Healthcare 144 3.2% 4,464 Engineered Products and Services 278
10.1% 2,778 Plastics and Adhesives 28 3.1% 854 Corporate and Other
7 NM 11 Total Net Revenue $723 3.8% $19,486 (1) Effective October
1, 2004, Tyco changed its fiscal year from a calendar year to a
52/53-week year and conformed the closing periods of certain
subsidiaries. To reflect comparable periods, amounts include $232
million and $89 million for the quarter and six months ended April
1, 2005, respectively, related to this change. (2) Effective
October 1, 2004, Tyco changed its fiscal year from a calendar year
to a 52/53-week year and conformed the closing periods of certain
subsidiaries. To reflect comparable periods, amount includes $35
million related to this change. (3) Amounts includes $20 million
and $40 million related to reclassification of customer reimbursed
freight costs from revenue to cost of goods sold in the quarter and
six months ended March 31, 2004, respectively. NOTE: Organic
revenue growth is a non-GAAP measure. See description of non-GAAP
measures contained in this release. TYCO INTERNATIONAL LTD. CHARGES
SUMMARY (in millions) (Unaudited) For the Quarter Ended April 1,
2005 Engineered Products Plastics Fire and and and Security
Electronics Healthcare Services Adhesives Income (Loss) GAAP $311
$496 $689 $165 ($187) Divestiture Losses / (Gains) (1) -- (3) -- --
Debt Retirement -- -- -- -- -- Impairment Charges -- -- -- -- 202
SEC Investigation -- -- -- -- -- Convertible Interest Expense
Addback -- -- -- -- -- Interest Other Corporate Operating Expense,
Income/ Income and Other Income net (Expense, net) Taxes Income
(Loss) GAAP ($133) $1,341 ($178) ($575) ($366) Divestiture Losses/
(Gains) 6 2 -- -- (1) Debt Retirement -- -- -- 573 -- Impairment
Charges -- 202 -- -- (21) SEC Investigation 50 50 -- -- --
Convertible Interest Expense Addback -- -- -- -- -- Income from
Minority Continuing Interest Operations Income (Loss) GAAP ($1)
$221 Divestiture Losses / (Gains) -- 1 Debt Retirement -- 573
Impairment Charges -- 181 SEC Investigation -- 50 Convertible
Interest Expense Addback -- -- Add back Diluted EPS from
Convertible Continuing Interest Operations Expense Income (Loss)
GAAP $0.11 $ -- Divestiture Losses / (Gains) $0.00 -- Debt
Retirement $0.26 -- Impairment Charges $0.09 -- SEC Investigation
$0.02 -- Convertible Interest Expense Addback -- 21 GAAP Diluted
Shares Outstanding 2,030 Underlying Shares of Convertible Debt 152
Guidance Diluted Shares Outstanding 2,182 For the Six Months Ended
April 1, 2005 Engineered Products Plastics Fire and and and
Security Electronics Healthcare Services Adhesives Income (Loss)
GAAP $594 $910 $1,270 $337 ($164) Divestiture Losses / (Gains) 6 --
8 (1) -- Debt Retirement -- -- -- -- -- Impairment Charges -- -- --
-- 202 SEC Investigation -- -- -- -- -- Interest Other Corporate
Operating Expense, Income/ Income and Other Income net (Expense,
net) Taxes Income (Loss) GAAP ($210) $2,737 ($359) ($736) ($676)
Divestiture Losses / (Gains) 7 20 -- -- (5) Debt Retirement -- --
-- 729 -- Impairment Charges -- 202 -- -- (21) SEC Investigation 50
50 -- -- -- For the Six Months Ended April 1, 2005 Income from
Minority Continuing Interest Operations Income (Loss) GAAP ($4)
$962 Divestiture Losses / (Gains) -- 15 Debt Retirement -- 729
Impairment Charges -- 181 SEC Investigation -- 50 Add back Diluted
EPS from Convertible Continuing Interest Operations Expense Income
(Loss) GAAP $0.46 $45 Divestiture Losses / (Gains) $0.01 -- Debt
Retirement $0.33 -- Impairment Charges $0.08 -- SEC Investigation
$0.02 -- Diluted Shares Outstanding 2,194 DATASOURCE: Tyco
International Ltd. CONTACT: Marty Dauer, Media Relations,
+1-609-720-4385, or Ed Arditte, +1-609-720-4621, or John Roselli,
+1-609-720-4624, both of Invester Relations, all for Tyco
International Ltd. Web site: http://www.tyco.com/ Company News
On-Call: http://www.prnewswire.com/comp/897850.html
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