Tyco Reports Second Quarter Earnings of $0.37 Per Share and
Continued Strong Cash Flow * Cash Flow From Operating Activities of
$1.8 Billion; Free Cash Flow of $1.4 Billion PEMBROKE, Bermuda, May
4 /PRNewswire-FirstCall/ -- Tyco International Ltd. today reported
diluted GAAP earnings per share (EPS) of $0.37 for the second
quarter ended March 31, 2004, compared with EPS of $0.06 in the
second quarter of 2003. The company had revenue of $10.0 billion,
compared with $9.0 billion last year, and organic revenue growth of
3.4 percent in the quarter. Net income for the quarter increased to
$782 million from $124 million a year ago. Cash flow from operating
activities totaled $1.8 billion, compared with $1.4 billion a year
ago. The company had free cash flow of $1.4 billion, up from $816
million in last year's second quarter. Organic revenue growth and
free cash flow are non-GAAP financial measures and are described
below. For a reconciliation of these non-GAAP measures, see the
attached tables. "We're quite pleased with our results for the
quarter. They reflect continued progress in our efforts to build
Tyco into a world-class operating company," said Tyco Chairman and
Chief Executive Officer Ed Breen. "We're continuing our focus on
the fundamentals-satisfying our customers, generating cash to
reduce debt, running our operations more efficiently, and
increasing margins to produce earnings growth across the company."
HIGHLIGHTS * The company further reduced debt by $1.2 billion to
$17.7 billion and had cash on hand of $3.1 billion. The
debt-to-capitalization ratio was 38.1 percent at the end of the
second quarter, compared with 40.4 percent last quarter. * Organic
revenue growth was 3.4 percent driven by strong performance at
Electronics, Healthcare, and Engineered Products & Services. *
Backlog in the Electronic Components business increased 8 percent
organically in the quarter and the quarterly book-to-bill ratio was
1.06. * Healthcare continued to invest in its global sales and
marketing organization, adding more than 500 positions over the
last 12 months, and continued to increase its spending on research
and development. * Engineered Products & Services experienced
solid organic revenue and profit growth due to better market
conditions and improved operating efficiencies. * Fire &
Security had improved results in Worldwide Security, including
further improvement in its Continental European security business.
In addition, Tyco Safety Products had double-digit organic revenue
growth in the quarter. RESTRUCTURING AND DIVESTITURE PROGRAM During
the quarter the company continued to make progress on the
restructuring and divestiture program announced in November 2003.
Through March 2004, the company has announced the closure of 110
facilities and a staffing reduction of approximately 4,100
positions related to the restructuring program. The company also
made progress on its plan to divest more than 50 non-core
businesses and has exited 10 businesses since the program was
initiated. Included in the second quarter results were $119 million
of net pretax charges related to the divestiture and restructuring
program consisting of $85 million of divestiture charges and $58
million of restructuring charges offset by $24 million of related
restructuring savings. 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, 2003, unless otherwise
indicated. To assist in comparisons to the prior period, please
note that the results for the quarter ended March 31, 2003 included
$473 million of net pretax charges primarily related to the
intensified internal audit process and other items. These charges
last year consisted of the following: $352 million in Fire &
Security, $8 million in Healthcare, $33 million in Engineered
Products & Services, $5 million in Plastics & Adhesives,
and $105 million in Corporate. Electronics had $30 million of net
restructuring credits related to this process a year ago. To
further assist in summarizing and understanding the charges
included in Tyco's GAAP results for fiscal 2003, the company has
provided a detailed schedule on its website
http://www.tyco.com/investor/investor_news.asp. Fire & Security
March 31, 2004 March 31, 2003 $ Change % Change Revenue $2,987.8
$2,769.6 $218.2 8% Operating Income $219.7 ($178.4) $398.1 NA
Operating Margin 7.4% (6.4%) Revenue increased $218 million, or 8
percent, with foreign currency contributing 7 percent and organic
growth of 1 percent. Growth at Worldwide Security and Tyco Safety
Products was offset by continued weakness in the Worldwide Fire
Services business. Tyco Safety Products had double-digit revenue
growth led by increased demand for breathing systems, video
surveillance, and access control equipment. Worldwide Security
continued to benefit from the strong retailer market environment.
Operating income included $47 million of net charges related to the
divestiture and restructuring program announced in November 2003,
while last year's quarter was impacted by the $352 million of
charges noted above. Operationally, the segment benefited from
increased efficiencies and higher revenue. Electronics March 31,
2004 March 31, 2003 $ Change % Change Revenue $2,846.1 $2,538.1
$308.0 12% Operating Income $380.3 $395.0 ($14.7) (4%) Operating
Margin 13.4% 15.6% Revenue increased $308 million, or 12 percent,
with foreign currency contributing 7 percent and organic revenue
growth of 5 percent. For connectors and cable assemblies, organic
revenue growth was 10 percent driven by strength in the automotive,
industrial, communications, and computer markets. Revenue growth in
connectors and cable assemblies was partially offset by weakness in
battery packs, services, and power systems. Due to a $44 million
divestiture-related charge in the current quarter and a $30 million
net restructuring credit as noted above in last year's second
quarter, operating income declined $15 million. Operationally,
operating income improved due to higher volume and continued
operating efficiencies partially offset by pricing pressure as well
as higher copper and gold costs. Healthcare March 31, 2004 March
31, 2003 $ Change % Change Revenue $2,283.8 $2,098.8 $185.0 9%
Operating Income $580.6 $513.6 $67.0 13% Operating Margin 25.4%
24.5% Revenue increased $185 million, or 9 percent, with foreign
currency contributing 5 percent and organic revenue growth of 4
percent. All of the segment's business units had year-over-year
organic revenue growth led by Pharmaceutical, with higher sales
from new products in dosage narcotics, and Medical, with strong
sales across the product line especially in pre-filled syringes,
safety needles, and wound care. Operating income increased 13
percent and the operating margin expanded 90 basis points, due to
increased volumes and continued cost improvements, partially offset
by a $17 million increase in research and development spending.
Engineered Products & Services March 31, 2004 March 31, 2003 $
Change % Change Revenue $1,446.6 $1,091.1 $355.5 33% Operating
Income $123.0 $72.1 $50.9 71% Operating Margin 8.5% 6.6% Revenue
increased $356 million, or 33 percent, with foreign currency
contributing 8 percent and organic revenue growth of 8 percent with
good growth in all units except Flow Control. The majority of the
remaining 17 percent increase in revenue reflects the impact of
certain subcontract costs previously treated as pass through to
customers at Infrastructure Services that totaled $169 million.
This reclassification had no impact on operating income. Operating
income included $5 million of charges related to the restructuring
and divestiture program announced in November 2003, while the prior
period included $33 million of charges noted above. The improvement
in operating income was driven by improved markets at Electrical
& Metal Products, Fire & Building Products, and
Infrastructure Services partially offset by continued weakness in
Flow Control. Plastics & Adhesives March 31, 2004 March 31,
2003 $ Change % Change Revenue $470.1 $488.5 ($18.4) (4%) Operating
Income $9.9 $41.9 ($32.0) (76%) Operating Margin 2.1% 8.6% Revenue
declined $18 million, or 4 percent, with foreign currency adding 2
percent, offset by a 6 percent organic revenue decline. Revenue was
lower in three of the four business units within this segment.
Operating income declined $32 million, principally due to a $24
million net charge in the quarter associated with restructuring
activities. Prior period operating income included $5 million of
charges noted above. The decline in operating income was due to
lower volume and tighter resin spreads that more than offset
continued cost improvements. OTHER ITEMS * The effective tax rate
was 24.7 percent and included a $23 million favorable non-U.S. tax
adjustment. The company continues to anticipate a full year tax
rate of approximately 27 percent. * Net interest expense was $212
million, down 24 percent from $278 million in the same period a
year ago. OUTLOOK The company expects to achieve EPS of $0.39 to
$0.42 in the third quarter of 2004 and is raising its EPS outlook
for fiscal year 2004 to a range of $1.52 to $1.58. This EPS outlook
excludes the impact from the restructuring and divestiture program
announced in November 2003. The company is also raising its
full-year cash flow guidance and now expects to achieve cash flow
from operating activities of $5.7 billion and free cash flow of
$4.0 billion before any voluntary pension contributions. EPS
excluding charges and cash flow excluding voluntary pension
contributions are non-GAAP measures and are described below. Ed
Breen concluded, "Since the beginning of our fiscal year, we have
seen an improvement in our end markets and we feel better about the
global economy. As a result of these improved business conditions
and our operational progress, we are raising our outlook." 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 2003 revenue of $37 billion, Tyco employs 260,000
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 8:00 a.m.
ET. The call can be accessed in three ways: * At the following
website: http://investors.tyco.com/medialist.cfm. A replay of the
call will be available through May 11, 2004 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) 254-5938. The telephone dial-in number for participants
outside the United States is (612) 326-1016. The access code for
all "listen-only" callers is 726942. 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) 428-4478. The telephone dial-in number for
participants outside the United States is (612) 326- 1011. Due to
capacity limitations on the part of our teleconference service
provider, the number of lines available is limited. If these lines
have reached the limit, investors will need to call the "listen-
only" number provided above. An audio replay of the conference call
will be available beginning at 3:00 p.m. on May 4, 2004 and ending
at 11:59 p.m. on May 11, 2004. 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 726941. NON-GAAP MEASURES "EPS
excluding charges," "cash flow excluding voluntary pension
contributions," "free cash flow" (FCF) and "organic revenue" are
non-GAAP measures and should not be considered replacements for
GAAP results. The company has forecast its EPS results excluding
restructuring and divestiture charges to give investors additional
perspective on the underlying business results. Because the company
cannot predict the amount and timing of divestitures or
restructuring and the associated charges or gains that will be
taken, it is difficult to accurately 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
an investor 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, * construction of the Tyco Global Network (TGN), *
acquisition of customer accounts (ADT dealer program), * cash paid
for purchase accounting and holdback/earn-out liabilities and *
dividends paid See the accompanying table 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 is added or subtracted
from the GAAP measure because this activity is driven by economic
financing decisions rather than operating activity. Capital
expenditures, construction of the TGN, the ADT dealer program and
dividends 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 and the Board's discretion to direct and that therefore
may imply that there is less 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 table 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" is an important measure used by the company to measure the
underlying results and trends in the business. The difference
between reported net revenue (the most comparable GAAP measure) and
organic revenue (the non-GAAP measure) consists of the impact from
foreign currency, acquisitions and divestitures, and revenue
reclassification. Organic revenue is an important 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. 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 in combination with the GAAP numbers. See the
accompanying table to this press release for the reconciliation
presenting the components of Organic Growth. 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 Quarterly Report on Form 10-Q for the fiscal
Quarter ended December 31, 2003. TYCO INTERNATIONAL LTD. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per
share data) (Unaudited) For the Quarters For the Six Months Ended
Ended March 31, March 31, 2004 (1) 2003 2004 (1) 2003 Net revenue
$10,041.2 $8,988.5 $19,920.9 $17,915.9 Cost of sales 6,502.4
5,855.5 12,907.4 11,587.5 Selling, general and administrative
expenses 2,150.0 2,470.3 4,358.7 4,618.9 Restructuring and other
charges (credits), net 35.8 (59.6) 41.1 (63.1) Charges for the
impairment of long-lived assets 16.0 87.2 39.1 87.2 Losses and
impairments on divestitures, net 85.4 - 85.4 - Operating income
1,251.6 635.1 2,489.2 1,685.4 Interest income 14.1 21.8 39.9 47.6
Interest expense (226.1) (299.8) (491.3) (588.8) Other income
(expense), net 5.9 (61.4) (1.8) (60.0) Income from continuing
operations before income taxes and minority interest 1,045.5 295.7
2,036.0 1,084.2 Income taxes (258.2) (170.4) (526.1) (392.3)
Minority interest (4.9) (1.0) (8.3) (1.7) Income from continuing
operations 782.4 124.3 1,501.6 690.2 Income from discontinued
operations of Tyco Capital, net of $0 tax - - - 20.0 Net income
$782.4 $124.3 $1,501.6 $710.2 Basic income per common share: Income
from continuing operations $0.39 $0.06 $0.75 $0.35 Income from
discontinued operations of Tyco Capital, net of tax - - - 0.01 Net
income 0.39 0.06 0.75 0.36 Diluted income per common share: Income
from continuing operations $0.37 $0.06 $0.70 $0.34 Income from
discontinued operations of Tyco Capital, net of tax - - - 0.01 Net
income 0.37 0.06 0.70 0.35 Weighted-average number of common shares
outstanding: Basic 1,998.9 1,994.5 1,998.0 1,994.6 Diluted 2,217.6
2,001.0 2,213.9 2,087.2 (1) Net revenue and cost of sales reflect
the impact of certain subcontract costs previously treated as pass
through to customers at Infrastructure Services of $168.8 million
and $347.8 million for the quarter and six months ended March 31,
2004, respectively. This reclassification had no impact on
operating income. Memo: - Income Reconciliation for Diluted EPS:
Income from continuing operations $782.4 $124.3 $1,501.6 $690.2 Add
back of interest expense for convertible debt 28.4 0.1 55.5 23.5
Income from continuing operations, giving effect to dilutive
adjustments 810.8 124.4 1,557.1 713.7 Income from discontinued
operations of Tyco Capital, net of tax - - - 20.0 Net income,
giving effect to dilutive adjustments $810.8 $124.4 $1,557.1 $733.7
TYCO INTERNATIONAL LTD. RESULTS OF SEGMENTS (in millions, except
per share data) (Unaudited) For the Quarters Ended March 31, 2004
2003 NET REVENUE Fire and Security $2,987.8 $2,769.6 Electronics
2,846.1 2,538.1 Healthcare 2,283.8 2,098.8 Engineered Products and
Services 1,446.6 (1) 1,091.1 Plastics and Adhesives 470.1 488.5
Corporate and Other 6.8 2.4 Total Net Revenue 10,041.2 8,988.5
OPERATING INCOME (LOSS) Fire and Security 219.7 7.4% (178.4) -6.4%
Electronics 380.3 13.4% 395.0 15.6% Healthcare 580.6 25.4% 513.6
24.5% Engineered Products and Services 123.0 8.5% 72.1 6.6%
Plastics and Adhesives 9.9 2.1% 41.9 8.6% 1,313.5 844.2 Less:
Corporate and Other (61.9) (209.1) Operating Income 1,251.6 12.5%
635.1 7.1% Interest Income 14.1 21.8 Interest Expense (226.1)
(299.8) Other Income (Expense), Net 5.9 (61.4) Income from
Continuing Operations Before Taxes and Minority Interest 1,045.5
295.7 Income Taxes (258.2) (170.4) Minority Interest (4.9) (1.0)
Income from continuing operations 782.4 124.3 Income from
Discontinued Operations of Tyco Capital, Net of $0 Tax - - Net
income $782.4 $124.3 Basic income per common share: Income from
continuing operations $0.39 $0.06 Income from discontinued
operations of Tyco Capital, net of tax - - Net income 0.39 0.06
Diluted income per common share: Income from continuing operations
$0.37 $0.06 Income from discontinued operations of Tyco Capital,
net of tax - - Net income 0.37 0.06 Weighted-average number of
common shares outstanding: Basic 1,998.9 1,994.5 Diluted 2,217.6
2,001.0 (1) Net revenue and cost of sales reflect the impact of
certain subcontract costs previously treated as pass through to
customers at Infrastructure Services of $168.8 million and $347.8
million for the quarter and six months ended March 31, 2004,
respectively. This reclassification had no impact on operating
income. TYCO INTERNATIONAL LTD. RESULTS OF SEGMENTS (in millions,
except per share data) (Unaudited) For the Six Months Ended March
31, 2004 2003 NET REVENUE Fire and Security $5,949.9 $5,528.9
Electronics 5,684.2 5,101.2 Healthcare 4,464.3 4,068.0 Engineered
Products and Services 2,881.2 (1) 2,274.9 Plastics and Adhesives
929.8 939.1 Corporate and Other 11.5 3.8 Total Net Revenue 19,920.9
17,915.9 OPERATING INCOME (LOSS) Fire and Security 471.3 7.9% 38.8
0.7% Electronics 804.3 14.1% 717.8 14.1% Healthcare 1,118.4 25.1%
956.7 23.5% Engineered Products and Services 229.2 8.0% 193.1 8.5%
Plastics and Adhesives 20.6 2.2% 85.3 9.1% 2,643.8 1,991.7 Less:
Corporate and Other (154.6) (306.3) Operating Income 2,489.2 12.5%
1,685.4 9.4% Interest Income 39.9 47.6 Interest Expense (491.3)
(588.8) Other Income (Expense), Net (1.8) (60.0) Income from
Continuing Operations Before Taxes and Minority Interest 2,036.0
1,084.2 Income Taxes (526.1) (392.3) Minority Interest (8.3) (1.7)
Income from continuing operations 1,501.6 690.2 Income from
Discontinued Operations of Tyco Capital, Net of $0 Tax - 20.0 Net
income $1,501.6 $710.2 Basic income per common share: Income from
continuing operations $0.75 $0.35 Income from discontinued
operations of Tyco Capital, net of tax - 0.01 Net income 0.75 0.36
Diluted income per common share: Income from continuing operations
$0.70 $0.34 Income from discontinued operations of Tyco Capital,
net of tax - 0.01 Net income 0.70 0.35 Weighted-average number of
common shares outstanding: Basic 1,998.0 1,994.6 Diluted 2,213.9
2,087.2 (1) Net revenue and cost of sales reflect the impact of
certain subcontract costs previously treated as pass through to
customers at Infrastructure Services of $168.8 million and $347.8
million for the quarter and six months ended March 31, 2004,
respectively. This reclassification had no impact on operating
income. TYCO INTERNATIONAL LTD. Condensed Consolidated Balance
Sheets (in millions) (Unaudited) (Unaudited) September March 31,
December 31, 30, 2004 2003 2003 Current Assets: Cash and cash
equivalents $3,103.3 $2,764.6 $4,186.7 Restricted cash 82.3 86.9
141.8 Accounts receivable, net 5,977.0 6,135.5 5,714.8 Inventories
4,462.7 4,456.6 4,292.2 Deferred income taxes 767.9 780.2 855.2
Other current assets 2,054.3 2,111.1 2,048.8 Total current assets
16,447.5 16,334.9 17,239.5 Property, Plant and Equipment, Net
9,968.7 10,308.7 10,299.8 Goodwill 26,171.6 26,309.9 25,938.7
Intangible Assets, Net 5,609.1 5,755.9 5,790.0 Other Assets 4,374.0
4,092.0 4,277.0 Total Assets $62,570.9 $62,801.4 $63,545.0 Current
Liabilities: Loans payable and current maturities of long-term debt
$1,285.1 $1,387.1 $2,718.4 Accounts payable 2,777.5 2,751.0 2,716.7
Accrued expenses and other current liabilities 4,297.2 4,265.4
4,326.7 Deferred revenue 840.9 823.1 810.5 Total current
liabilities 9,200.7 9,226.6 10,572.3 Long-Term Debt 16,429.3
17,519.8 18,250.7 Other Long-Term Liabilities 8,152.8 8,110.7
8,239.7 Total Liabilities 33,782.8 34,857.1 37,062.7 Minority
Interest 67.5 102.9 113.3 Shareholders' Equity 28,720.6 27,841.4
26,369.0 Total Liabilities and Shareholders' Equity $62,570.9
$62,801.4 $63,545.0 TYCO INTERNATIONAL LTD. Debt Reconciliation (in
millions) (Unaudited) For the Quarter For the Six Months Ended
Ended March 31, 2004 March 31, 2004 Total debt at Beginning of
Period $18,906.9 $20,969.1 Less: cash and cash equivalents at
Beginning of Period 2,764.6 4,186.7 Net debt balance at Beginning
of Period 16,142.3 16,782.4 Less the following: Operating cash flow
1,758.9 2,799.9 Purchase of property, plant and equipment, net
(230.3) (438.1) Dividends paid (25.0) (50.0) Acquisition of
customer accounts (ADT dealer programs) (60.2) (130.6) Cash paid
for purchase accounting and holdback/earn-out liabilities (23.6)
(72.0) Acquisition of businesses, net of cash acquired 0.3 (13.6)
Disposal of businesses, net of cash sold 97.8 98.5 (Increase)
decrease in current and non-current restricted cash (21.2) 191.2
Proceeds from the exercise of options 48.6 58.8 Currency
translation adjustments on debt 44.5 (178.4) Impact of adoption of
FIN 46R 65.3 65.3 Other items (123.9) (159.7) 1,531.2 2,171.3 Net
debt balance at March 31, 2004 14,611.1 14,611.1 Plus: cash and
cash equivalents at March 31, 2004 3,103.3 3,103.3 Total debt at
March 31, 2004 $17,714.4 $17,714.4 TYCO INTERNATIONAL LTD.
Condensed Consolidated Statements of Cash Flows (in millions)
(Unaudited) For the Quarters For the Six Months Ended Ended March
31, March 31, 2004 2003 2004 2003 Cash flows from operating
activities: Income from continuing operations $782.4 $124.3
$1,501.6 $690.2 Adjustments to reconcile income from continuing
operations to net cash provided by operating activities: Non-cash
restructuring and other credits, net (7.3) (33.7) (24.6) (33.7)
Charges for the impairment of long-lived assets 16.0 87.2 39.1 87.2
Losses and impairments on divestitures, net 84.8 - 85.1 - (Gain)
loss on investments (2.5) 75.6 (2.5) 75.6 Depreciation 375.5 366.4
752.0 726.8 Intangible assets amortization 175.3 199.9 350.7 368.8
Deferred income taxes 68.9 53.0 176.7 305.6 Provision for losses on
accounts receivable and inventory 101.0 180.1 171.2 286.5 Debt and
refinancing cost amortization 12.9 34.2 33.6 63.4 (Gain) loss on
the early extinguishment of debt (0.1) (24.1) 4.8 (24.1) Other
non-cash items (7.9) 141.5 12.5 157.3 Changes in assets and
liabilities, net of the effects of acquisitions and divestitures:
Accounts receivable 81.6 81.8 (81.8) 118.0 Decrease in sale of
accounts receivable programs (25.2) (16.1) (72.1) (96.5) Contracts
in progress (5.6) (31.0) 1.9 (50.8) Inventories (82.6) 83.0 (146.4)
(56.0) Other current assets (30.8) (45.7) (22.8) (5.3) Accounts
payable 34.4 52.9 (24.8) (420.6) Accrued expenses and other current
liabilities 141.9 (37.7) (43.4) (222.6) Income taxes 0.7 28.6 22.7
111.2 Deferred revenue 7.3 43.2 (10.3) (8.8) Other 38.2 (33.1) 76.7
34.4 Net cash provided by operating activities from continuing
operations 1,758.9 1,330.3 2,799.9 2,106.6 Net cash provided by
operating activities from discontinued operations - 20.0 - 20.0
Total net cash provided by operations 1,758.9 1,350.3 2,799.9
2,126.6 Cash flows from investing activities: Purchase of property,
plant and equipment, net (230.3) (261.3) (438.1) (566.1)
Construction of Tyco Global Network - (2.5) - (89.0) Acquisition of
businesses, net of cash acquired 0.3 (31.7) (13.6) (34.6)
Acquisition of customer accounts (ADT dealer program) (60.2)
(163.7) (130.6) (358.3) Cash paid for purchase accounting and
holdback/earn-out liabilities (23.6) (77.7) (72.0) (189.5) Disposal
of businesses, net of cash sold 97.8 1.8 98.5 5.4 Net sale
(purchase) of short- term investments 12.7 (118.3) 12.3 (278.1) Net
(purchase) sale of long- term investments (26.3) 12.3 (29.4) 54.5
(Increase) decrease in current and noncurrent restricted cash
(21.2) (14.1) 191.2 (310.7) Other 13.7 22.2 5.6 81.4 Net cash used
in investing activities (237.1) (633.0) (376.1) (1,685.0) Cash
flows from financing activities: Net repayments of debt (1,190.3)
(2,506.6) (3,526.4) (2,660.5) Proceeds from exercise of options
48.6 0.7 58.8 2.6 Dividends paid (25.0) (25.2) (50.0) (50.4) Other
(8.8) (3.3) (20.3) (5.4) Net cash used in financing activities
(1,175.5) (2,534.4) (3,537.9) (2,713.7) Effect of currency
translation on cash (7.6) 51.6 30.7 51.6 Net increase (decrease) in
cash and cash equivalents 338.7 (1,765.5) (1,083.4) (2,220.5) Cash
and cash equivalents at beginning of period 2,764.6 5,730.7 4,186.7
6,185.7 Cash and cash equivalents at end of period $3,103.3
$3,965.2 $3,103.3 $3,965.2 RECONCILIATION TO "FREE CASH FLOW": Net
cash provided by operating activities $1,758.9 $1,330.3 $2,799.9
$2,106.6 Sale of accounts receivable programs 25.2 16.1 72.1 96.5
Purchase of property, plant and equipment, net (230.3) (261.3)
(438.1) (566.1) Construction of Tyco Global Network - (2.5) -
(89.0) Acquisition of customer accounts (ADT dealer program) (60.2)
(163.7) (130.6) (358.3) Cash paid for purchase accounting and
holdback/earn- out liabilities (23.6) (77.7) (72.0) (189.5)
Dividends paid (25.0) (25.2) (50.0) (50.4) FREE CASH FLOW $1,445.0
$816.0 $2,181.3 $949.8 Free cash flow is a non-GAAP measure used by
the Company to measure its ability to meet its future debt
obligations and is also one component of measurement used in the
Company's compensation plans. TYCO INTERNATIONAL LTD. Organic
Revenue Reconciliation (in millions) (Unaudited) For the Quarter
Ended March 31, 2004 Net Revenue for the Foreign Quarter Ended
March Currency 31, 2004 Impact Fire and Security $2,987.8 7.9%
$198.4 7.2% Electronics 2,846.1 12.1% 176.3 6.9% Healthcare 2,283.8
8.8% 96.9 4.6% Engineered Products and Services 1,446.6 32.6% 91.9
8.4% Plastics and Adhesives 470.1 -3.8% 8.3 1.7% Corporate and
Other (3) 6.8 183.3% - 0.0% Total Net Revenues $10,041.2 11.7%
$571.8 6.4% TYCO INTERNATIONAL LTD. Organic Revenue Reconciliation
(in millions) (Unaudited) For the Quarter Ended March 31, 2004 Net
Revenue for the Quarter Ended Divestiture and Organic Revenue March
31, Other Impact Growth 2003 Fire and Security $(0.5) 0.0% 20.3
0.7% $2,769.6 Electronics - 0.0% 131.7 5.2% 2,538.1 Healthcare -
0.0% 88.1 4.2% 2,098.8 Engineered Products and Services 178.2
16.3%(1) 85.4 7.8% 1,091.1 Plastics and Adhesives - 0.0% (26.7)
-5.5% 488.5 Corporate and Other(3) - 0.0% 4.4 183.3% 2.4 Total Net
Revenues $177.7 2.0% $303.2 3.4% $8,988.5 For the Six Months Ended
March 31, 2004 Net Revenue for the Foreign Six Months Ended
Currency March 31, 2004 Impact Fire and Security $5,949.9 7.6%
$393.0 7.1% Electronics 5,684.2 11.4% 364.4 7.1% Healthcare 4,464.3
9.7% 192.2 4.7% Engineered Products and Services 2,881.2 26.7%
188.8 8.3% Plastics and Adhesives 929.8 -1.0% 15.4 1.6% Corporate
and Other(3) 11.5 202.6% - 0.0% Total Net Revenues $19,920.9 11.2%
$1,153.8 6.4% (1)Amount consists of $168.8M related to a revenue
reclassification at Infrastructure Services for certain subcontract
costs previously treated as pass through to customers and $9.4M of
Infrastructure Services revenues which resulted from the
consolidation of several joint ventures under FIN 46 during Fiscal
2004. (2)Amount consists of $347.8M related to a revenue
reclassification at Infrastructure Services for certain subcontract
costs previously treated as pass through to customers and $18.0M of
Infrastructure Services revenues which resulted from the
consolidation of several joint ventures under FIN 46 during Fiscal
2004. (3)Revenue relates to the TGN business held for sale. For the
Six Months Ended March 31, 2004 Net Revenue for the Six Months
Divestiture and Organic Revenue Ended March Other Impact Growth 31,
2003 Fire and Security $(1.0) 0.0% 29.0 0.5% $5,528.9 Electronics -
0.0% 218.6 4.3% 5,101.2 Healthcare - 0.0% 204.1 5.0% 4,068.0
Engineered Products and Services 365.8 16.1%(2) 51.7 2.3% 2,274.9
Plastics and Adhesives - 0.0% (24.7) -2.6% 939.1 Corporate and
Other(3) - 0.0% 7.7 202.6% 3.8 Total Net Revenues $364.8 2.0%
$486.4 2.7% $17,915.9 (1)Amount consists of $168.8M related to a
revenue reclassification at Infrastructure Services for certain
subcontract costs previously treated as pass through to customers
and $9.4M of Infrastructure Services revenues which resulted from
the consolidation of several joint ventures under FIN 46 during
Fiscal 2004. (2)Amount consists of $347.8M related to a revenue
reclassification at Infrastructure Services for certain subcontract
costs previously treated as pass through to customers and $18.0M of
Infrastructure Services revenues which resulted from the
consolidation of several joint ventures under FIN 46 during Fiscal
2004. (3)Revenue relates to the TGN business held for sale.
DATASOURCE: Tyco International Ltd. CONTACT: News Media: David
Polk, +1-609-720-4387, or Investor Relations: Ed Arditte,
+1-609-720-4621, or John Roselli, +1-609-720-4624, all of Tyco
International Ltd. Web site: http://www.tyco.com/ Company News
On-Call: http://www.prnewswire.com/comp/897850.html
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