Tyco Reports Fourth Quarter 2012 Earnings From Continuing Operations Before Special Items Of $0.33 Per Share And GAAP Loss Of $1.36 Per Share

Wed Nov 14, 2012 6:00am EST

* Reuters is not responsible for the content in this press release.

Tyco Reports Fourth Quarter 2012 Earnings From Continuing Operations Before Special Items Of $0.33 Per Share And GAAP Loss Of $1.36 Per Share

PR Newswire

SCHAFFHAUSEN, Switzerland, Nov. 14, 2012 /PRNewswire/ --

(Income and EPS amounts are attributable to Tyco common shareholders)

($ millions, except per-share amounts)

 


Q4 2012

Q4 2011*

% Change

FY 12

FY 11*

% Change

Revenue

$2,728

$2,799

(2.5)%

$10,403

$10,557

(1)%

Segment Operating Income

$320

$340

(6)%

$1,183

$1,125

5%

Operating Income

$153

$221


$685

$982


Income from Continuing Operations

$(629)

$174


$(332)

$617


Diluted EPS from Continuing Operations

$(1.36)

$0.37


$(0.72)

$1.29


Special Items

$(1.69)

$(0.06)


$(2.07)

$0.12


Segment Operating Income Before Special Items

$358

$353

1%

$1,324

$1,223

8%

Income from Continuing Ops Before Special Items

$156

$203

(23)%

$635

$562

13%

Diluted EPS from Continuing Ops Before Special Items

$0.33

$0.43

(23)%

$1.35

$1.17

15%

*Due to the timing of our fiscal year-end, the fourth quarter and full year fiscal 2011 includes the impact of an additional week of revenue and related operating results.

Tyco (NYSE: TYC) today reported GAAP diluted loss per share from continuing operations for the fiscal fourth quarter of 2012 of $1.36 and diluted earnings per share (EPS) from continuing operations before special items of $0.33. Revenue in the quarter decreased 2.5% versus the prior year to $2.7 billion. This included a 3% decline due to foreign currency, a 4% decline related to the impact of the benefit of the 53rd week in 2011, and a 4% benefit from acquisitions. Organic revenue grew 1% in the quarter with 9% growth in products, 2% growth in service and a 4% decline in installation revenue.

For the full year, the company reported GAAP diluted loss per share from continuing operations of $0.72 and diluted earnings per share from continuing operations before special items of $1.35. Revenue of $10.4 billion increased 2%, excluding the Electrical and Metals Products business which has been reported as an equity investment following the sale of a majority interest in that business completed on December 22, 2010. Organic revenue growth for the year was 2% with 10% growth in products, 3% growth in service and a 2% decline in installation.

The company previously disclosed on September 17, 2012 that it expected to record additional reserves in the range of $40 to $60 million in the fourth quarter of fiscal 2012 due to the aging of receivables relating to certain security contracts in China that it had determined may not be collectible. Following an investigation to determine the cause of the aging receivables, the company has determined that revenue relating to these contracts in China was improperly recorded. As a result, rather than recording the full impact in the fiscal fourth quarter of 2012, the company has adjusted prior years to eliminate revenue and operating income related to these contracts in its Rest of World Systems Installation and Services segment. The cumulative effect of adjustments related to China is to decrease revenue by $164 million and decrease operating income by $51 million. The company does not expect to record any further adjustments related to this matter.

The table below provides the revenue and operating income decrease for all years impacted.

($millions)

Fiscal 2012


Fiscal 2011


All Periods Prior to

Fiscal 2008-2010


Q4

Full Year


Q4

Full Year



Revenue

$    -

$      (31)


$  (16)

$      (49)


$        (84)

Operating Income

$  (9)

$      (19)


$    (3)

$      (14)


$        (18)

Income from continuing operations in the fourth quarter was negatively impacted by special items totaling $785 million after tax or $1.69 per share. Income for the full year was negatively impacted by special items totaling $967 million after tax or $2.07 per share.

Special Items

Q4

FY

Loss on Extinguishment of Debt

$0.98

$0.98

Tax Related Items

$0.54

$0.61

Separation Costs

$0.12

$0.14

Revaluation of Asbestos Liabilities

$      -

$0.15

Net Restructuring and Impairment Costs

$0.05

$0.15

Other Items

$      -

$0.04

Total Special Items per Share

$1.69

$2.07

Tyco Chief Executive Officer George Oliver said, "I am very excited about the new Tyco.  As the world's largest pure play Fire & Security company, we have the opportunity to leverage our global scale and broad portfolio of products and services to deliver substantial shareholder value.  Our market-leading position and breadth and depth of industry experience differentiates us from our competitors and it is these strengths that make us a leader in the $100 billion global fire and security industry."

"Our full year and fourth quarter results highlight our ability to continue to deliver margin expansion. Our performance this year along with a strong balance sheet and continued investments in the businesses position us well to achieve a 15% to 16% segment operating margin before special items in 2015," Oliver added.

Organic revenue, free cash flow, operating income, operating margin, and diluted EPS from continuing operations before special items are non-GAAP financial measures and are described below. For a reconciliation of these non-GAAP measures, see the attached tables. Additional schedules as well as fourth quarter review slides can be found at www.tyco.com on the Investor Relations portion of Tyco's website.

SEGMENT RESULTS
In connection with the spin-off of ADT and Flow Control, Tyco has realigned its businesses into the following segments: North America Systems Installation & Services, Rest of World Systems Installation & Services, and Global Products.

The financial results presented in the tables below are in accordance with GAAP unless otherwise indicated. All dollar amounts are pre-tax and stated in millions. All comparisons are to the fiscal fourth quarter or full year of 2011 unless otherwise indicated.

North America Systems Installation & Services


Q4 2012

Q4 2011

% Change

FY 12

FY 11

% Change

Revenue

$1,042

$1,095

(5)%

$3,962

$4,022

(1)%

Operating Income

$109

$128

(15)%

$374

$425

(12)%

Operating Margin

10.5%

11.7%


9.4%

10.6%


Special Items

$(19)

$1


$(77)

$(7)


Operating Income Before Special Items

$128

$127

1%

$451

$432

4%

Operating Margin Before Special Items

12.3%

11.6%


11.4%

10.7%


Revenue of $1.0 billion decreased 5% in the quarter primarily driven by the benefit of an additional week of revenue in the prior year.  Service revenue was in-line with the prior year, while installation revenue declined 2% organically for a net organic revenue decline of 1%. Backlog of $2.5 billion increased 5% year-over-year and, due to normal seasonality, declined 1% on a quarter sequential basis, excluding the impact of foreign currency.

Operating income for the quarter was $109 million and the operating margin was 10.5%. Special items of $19 million consisted primarily of restructuring charges. Operating income before special items was $128 million and the operating margin was 12.3%. The 70 basis point improvement in operating margin before special items was driven by a higher mix of service revenue and continued productivity benefits, partially offset by increased investments in sales and marketing, and the benefit of the 53rd week in the prior year.

Revenue for the full year was $4.0 billion decreasing 1% year-over-year on a reported basis due to the benefit of the 53rd week in the prior year. Operating income was $374 million and included $77 million of special items. Operating income before special items was $451 million and the operating margin increased 70 basis points to 11.4%.

Rest of World Systems Installation & Services


Q4 2012

Q4 2011

% Change

FY 12

FY 11

% Change

Revenue

$1,128

$1,219

(7)%

$4,341

$4,434

(2)%

Operating Income

$123

$141

(13)%

$456

$405

13%

Operating Margin

10.9%

11.6%


10.5%

9.1%


Special Items

$(12)

$(13)


$(49)

$(97)


Operating Income Before Special Items

$135

$154

(12)%

$505

$502

1%

Operating Margin Before Special Items

12.0%

12.6%


11.6%

11.3%


Revenue of $1.1 billion decreased 7% in the quarter including a 6% decline due to foreign currency. Organic revenue declined 1% with 4% growth in service and a 7% decline in installation. Backlog of $2.4 billion increased 8% year-over-year and, due to normal seasonality, declined 3% on a quarter sequential basis, excluding the impact of foreign currency.

Operating income for the quarter was $123 million and the operating margin was 10.9%. Operating income before special items was $135 million and the operating margin was 12.0%. The benefit of higher margin service revenue was more than offset by a 70 basis point decline due to adjustments recorded for China and a 40 basis point decline related to the benefit of the 53rd week in the prior year, for a year-over-year operating margin before special items decline of 60 basis points.  

Revenue for the full year was $4.3 billion decreasing 2% year-over-year with organic revenue growth of 2%. Operating income was $456 million and included $49 million of special items. Operating income before special items was $505 million and the operating margin increased 30 basis points to 11.6%.

Global Products


Q4 2012

Q4 2011

% Change

FY 12

FY 11

% Change

Revenue

$558

$485

15%

$2,100

$1,754

20%

Operating Income

$88

$71

24%

$353

$295

20%

Operating Margin

15.8%

14.6%


16.8%

16.8%


Special Items

$(7)

$(1)


$(15)

$6


Operating Income Before Special Items

$95

$72

32%

$368

$289

27%

Operating Margin Before Special Items

17.0%

14.8%


17.5%

16.5%


Revenue of $558 million increased 15% in the quarter including a 3% decline due to foreign currency. Organic revenue grew 9% with 3% growth in fire products, 24% growth in security products and 10% growth in life safety products.

Operating income for the quarter was $88 million and the operating margin was 15.8%. Special items of $7 million consisted primarily of restructuring charges. Operating income before special items was $95 million and the operating margin was 17.0%. The 220 basis point improvement in operating margin before special items was driven by increased volume as well as the benefit of productivity and restructuring actions.

Revenue for the full year was $2.1 billion, increasing 20% year-over-year with organic revenue growth of 10%. Operating income was $353 million and included $15 million of special items. Operating income before special items was $368 million and the operating margin increased 100 basis points to 17.5%.

OTHER ITEMS

  • The company's fiscal 2011 consisted of 53 weeks compared to 52 weeks in fiscal 2012. The additional week contributed an estimated $104 million in revenue in the fourth quarter and full year of fiscal 2011. Organic revenue growth and orders growth have been adjusted to exclude the impact of the additional week in the prior year.
  • Corporate expense before special items was $103 million for the quarter and $331 million for the year.
  • The tax rate before special items was 28.4% for the quarter and 17.7% for the year.
  • The company completed the year with $844 million in cash and cash equivalents, including cash reserved for separation related payments and cash reserved for certain tax liabilities.
  • Cash flow from operating activities for the quarter was $225 million and free cash flow was $109 million, which included a cash outflow of $56 million primarily related to separation and restructuring activities for adjusted free cash flow of $165 million.
  • The Company successfully completed the spin-offs of ADT and Flow Control as well as the merger of Flow Control with Pentair, Inc on September 28, 2012.

ABOUT TYCO
Tyco (NYSE: TYC) is the world's largest pure-play fire protection and security company. Tyco provides more than three million customers around the globe with the latest fire protection and security products and services. A company with $10+ billion in revenue, Tyco has more than 70,000 employees in more than 1,000 locations across 50 countries serving various end markets, including commercial, institutional, governmental, retail, industrial, energy, residential and small business. For more information, visit the new www.tyco.com.

CONFERENCE CALL AND WEBCAST
Management will discuss the company's fourth quarter results for 2012 and outlook for the first quarter and full year of fiscal year 2013 during a conference call and webcast today beginning at 8:00 a.m. ET. Today's conference call for investors can be accessed in the following ways: 

  • At Tyco's website: http://investors.tyco.com.
  • By telephone: For both "listen-only" participants and those participants who wish to take part in the question-and-answer portion of the call, the telephone dial-in number in the United States is (800) 857-9797. The telephone dial-in number for participants outside the United States is (517) 308-9262, passcode "Tyco".
  • An audio replay of the conference call will be available at 10:00 a.m. (ET) on November 14, 2012 and ending at 11:59 p.m. (ET) on November 21, 2012. The replay dial-in number for participants in the United States is (866) 465-0332. For participants outside the United States, the replay dial-in number is (203) 369-1414, passcode 6578.
  • A webcast replay of the conference call will be available on the "Presentations & Webcasts" section of Tyco's website: http://investors.tyco.com.

NON-GAAP MEASURES
Organic revenue, free cash flow (outflow) (FCF), and income from continuing operations, earnings per share (EPS) from continuing operations, operating income, operating margin and corporate expense, in each case "before special items," are non-GAAP measures and should not be considered replacements for GAAP results.

Organic revenue is a useful 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 other changes that do not reflect the underlying results and trends (for example, the 53rd week of operations in fiscal 2011).

The Company's organic growth / decline calculations incorporate an estimate of prior year reported revenue associated with any acquired entities that have been fully integrated within the first year, and exclude prior year revenues associated with entities that do not meet the criteria for discontinued operations which have been divested within the past year. The rate of organic growth or decline is calculated based on the adjusted number to better reflect the rate of growth or decline of the combined business, in the case of acquisitions, or the remaining business, in the case of dispositions. The rate of organic growth or decline for acquired businesses that are not fully integrated within the first year are based on unadjusted historical revenue. Organic revenue and the rate of organic growth or decline as presented herein may not be comparable to similarly titled measures reported by other companies.

Organic revenue 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 results of the company's businesses, such as acquisitions and divestitures. It may be used as 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 in combination with the GAAP numbers. See the accompanying tables to this press release for the reconciliation presenting the components of organic revenue.

FCF is a useful measure of the company's cash that is free from any significant existing obligation. The difference between Cash Flows from Operating Activities (the most comparable GAAP measure) and FCF (the non-GAAP measure) consists mainly of significant cash flows 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, or a measure that is based on it, may be used as a component in the company's incentive compensation plans. The difference reflects the impact from:

  • net capital expenditures,
  • dealer generated accounts and bulk accounts purchased,
  • cash paid for purchase accounting and holdback liabilities, and
  • voluntary pension contributions.

Capital expenditures and dealer generated and bulk accounts purchased are subtracted because they represent long-term commitments. Cash paid for purchase accounting and holdback liabilities is subtracted because these cash outflows are not available for general corporate uses. Voluntary pension contributions are added or subtracted because this activity is driven by economic financing decisions rather than operating activity. In addition, from time to time the company may present adjusted free cash flow, which is free cash flow, adjusted to exclude the cash impact of the special items highlighted below. This number provides information to investors regarding the cash impact of certain items management believes are useful to identify, as described below.

The limitation associated with using FCF is that it adjusts for cash items that are ultimately within management's and the Board of Directors' discretion to direct and 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 show 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. 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 and adjusted FCF.

The company has presented its income and EPS from continuing operations, operating income and margin, and its corporate expense before special items. Special items include charges and gains related to divestitures, acquisitions, restructurings, impairments, certain changes to accounting methodologies, legacy legal and tax charges and other income or charges that may mask the underlying operating results and/or business trends of the company or business segment, as applicable. The company utilizes these measures to assess overall operating performance and segment level core operating performance, as well as to provide insight to management in evaluating overall and segment operating plan execution and underlying market conditions. The Company also presents its effective tax rate as adjusted for special items for consistency. One or more of these measures may be used as components in the company's incentive compensation plans. These measures are useful for investors because they may permit more meaningful comparisons of the company's underlying operating results and business trends between periods. The difference between income and EPS from continuing operations before special items and income and EPS from continuing operations (the most comparable GAAP measures) consists of the impact of the special items noted above on the applicable GAAP measure. Operating income and margin before special items do not reflect any additional adjustments that are not reflected in income from continuing operations before special items. The limitation of these measures is that they exclude the impact (which may be material) of items that increase or decrease the company's reported operating income and margin and operating income and EPS from continuing operations. This limitation is best addressed by using the non-GAAP measures in combination with the most comparable GAAP measures in order to better understand the amounts, character and impact of any increase or decrease on reported results.

Tyco provides general corporate services to its segments and those costs are reported in the "Corporate and Other" segment. This segment's operating income (loss) is presented as "Corporate Expense." Segment Operating Income represents Tyco's operating income excluding the Corporate and Other segment, and reflects the results of Tyco's three operating segments.  Segment Operating Income before special items reflects GAAP operating income adjusted for the special items noted in the paragraph above.

FORWARD-LOOKING STATEMENTS
This press release contains a number of forward-looking statements. Words, and variations of words, such as "expect", "intend", "will", "anticipate", "believe", "propose", "potential", "continue", "opportunity", "estimate", "project" and similar expressions are intended to identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, revenue, operating income and other financial projections, statements regarding the health and growth prospects of the industries and end markets in which Tyco operates, the leadership, resources, potential, priorities, and opportunities for Tyco in the future, statements regarding Tyco's credit profile and capital allocation priorities, and statements regarding Tyco's acquisition, divestiture, restructuring and capital market related activities. The forward-looking statements in this press release are based on current expectations and assumptions that are subject to risks and uncertainties, many of which are outside of our control, and could cause results to materially differ from expectations. Such risks and uncertainties include, but are not limited to: economic, business, competitive, technological or regulatory factors that adversely impact Tyco or the markets and industries in which it competes; unanticipated expenses such as litigation or legal settlement expenses; tax law changes; and industry specific events or conditions that may adversely impact revenue or other financial projections. Actual results could differ materially from anticipated results. Tyco is under no obligation (and expressly disclaims any obligation) to update its forward-looking statements. 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, 2011 and in subsequent filings with the Securities and Exchange Commission.

 

TYCO INTERNATIONAL LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share data)

(Unaudited)














Quarters Ended


Twelve Months Ended




September 28,


September 30,


September 28,


September 30,




2012


2011


2012


2011

Revenue from product sales


$                  1,557


$                  1,579


$                  5,845


$                  5,990

Service revenue


1,171


1,220


4,558


4,567

    Net revenue


$                  2,728


$                  2,799


$                10,403


$                10,557

Cost of product sales 


876


904


3,298


3,542

Cost of services


852


886


3,328


3,348

Selling, general and administrative expenses


749


773


2,903


2,834

Separation


61


-


71


-

Restructuring, asset impairment and divestiture charges (gains), net


37


15


118


(149)

   Operating income 


153


221


685


982

Interest income


5


7


19


27

Interest expense


(33)


(59)


(209)


(240)

Other (expense) income, net


(453)


5


(454)


(5)

(Loss) income from continuing operations before income taxes


(328)


174


41


764

Income tax (expense) benefit


(294)


13


(348)


(134)

Equity (loss) income in earnings of unconsolidated subsidiaries


(7)


(12)


(26)


(12)

   (Loss) income from continuing operations


(629)


175


(333)


618

Income from discontinued operations, net of income taxes


210


223


804


1,102

   Net (loss) income


(419)


398


471


1,720

Less: noncontrolling interest in subsidiaries net income


-


1


(1)


1

   Net (loss) income attributable to Tyco common shareholders


$                   (419)


$                     397


$                     472


$                  1,719











Amounts attributable to Tyco common shareholders:









(Loss) income from continuing operations


$                   (629)


$                     174


$                   (332)


$                     617

Income from discontinued operations


210


223


804


1,102

Net (loss) income attributable to Tyco common shareholders


$                   (419)


$                     397


$                     472


$                  1,719











Basic earnings per share attributable to Tyco common shareholders:









(Loss) income from continuing operations


$                  (1.36)


$                    0.37


$                  (0.72)


$                    1.30

Income from discontinued operations


0.45


0.48


1.74


2.33

Net (loss) income attributable to Tyco common shareholders


$                  (0.91)


$                    0.85


$                    1.02


$                    3.63

Diluted earnings per share attributable to Tyco common shareholders:









(Loss) income from continuing operations


$                  (1.36)


$                    0.37


$                  (0.72)


$                    1.29

Income from discontinued operations


0.45


0.47


1.74


2.30

Net (loss) income attributable to Tyco common shareholders


$                  (0.91)


$                    0.84


$                    1.02


$                    3.59











Weighted-average number of shares outstanding:









  Basic



462


466


463


474

  Diluted 


462


471


463


479































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, 2011 and Quarterly Report on Form 10-Q for the quarterly period ended June 29, 2012.

 

TYCO INTERNATIONAL LTD.

RESULTS OF SEGMENTS 

(in millions)

(Unaudited)












Quarters Ended



Twelve Months Ended



September 28,


September 30,



September 28,


September 30,



2012


2011



2012


2011


NET REVENUE










NA Installation & Services

$              1,042


$              1,095



$             3,962


$             4,022


ROW Installation & Services

1,128


1,219



4,341


4,434


Global Products

558


485



2,100


1,754


Corporate and Other 

-


-



-


347


   Total Net Revenue

$              2,728


$              2,799



$           10,403


$           10,557












OPERATING INCOME AND MARGIN










NA Installation & Services

$                 109

10.5%

$                 128

11.7%


$                374

9.4%

$                425

10.6%

ROW Installation & Services

123

10.9%

141

11.6%


456

10.5%

405

9.1%

Global Products

88

15.8%

71

14.6%


353

16.8%

295

16.8%

Corporate and Other 

(167)

N/M

(119)

N/M


(498)

N/M

(143)

N/M

    Operating Income and Margin

$                 153

5.6%

$                 221

7.9%


$                685

6.6%

$                982

9.3%

 



TYCO INTERNATIONAL LTD.



CONSOLIDATED BALANCE SHEETS



(in millions)



(Unaudited)












September 28,


September 30,





2012


2011


Assets






    Cash and cash equivalents


$844


$1,229


    Accounts receivable, net


1,711


1,547


    Inventories


634


539


    Prepaid expenses and other current assets


850


666


    Deferred income taxes


295


301


    Assets of discontinued operations


-


13,960


      Total current assets


4,334


18,242









Property, plant and equipment, net


1,670


1,609


Goodwill


4,377


4,238


Intangible assets, net


780


745


Other assets


1,204


1,868


      Total Assets


$12,365


$26,702









Liabilities and Equity






    Loans payable and current maturities of long-term debt


$10


$1


    Accounts payable


897


782


    Accrued and other current liabilities


1,788


1,794


    Deferred revenue


402


377


    Liabilities of discontinued operations


-


2,702


      Total current liabilities


3,097


5,656









Long-term debt


1,481


4,105


Deferredrevenue


424


443


Other liabilities


2,341


2,251


      Total Liabilities


7,343


12,455









Redeemable noncontrolling interest


12


-


Redeemable noncontrolling interest of discontinued operations


-


93









Total Tyco shareholders' equity


4,994


14,149


Nonredeemable noncontrolling interest


16


5


      Total Equity


5,010


14,154


      Total Liabilities, Redeemable Noncontrolling Interest and Equity


$12,365


$26,702
















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, 2011 and Form 10-Q for the quarterly period ended June 29, 2012.

 

TYCO INTERNATIONAL LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(Unaudited)
















For the Quarters Ended


For the Years Ended





September 28,


September 30,


September 28,


September 30,





2012


2011


2012


2011

Cash Flows From Operating Activities:








Net (loss) income attributable to Tyco common shareholders

($419)


$397


$472


$1,719


Noncontrolling interest in subsidiaries net income

-


1


(1)


1


Income from discontinued operations, net of income taxes

(210)


(223)


(804)


(1,102)

(Loss) income from continuing operations

(629)


175


(333)


618

Adjustments to reconcile net cash provided by operating activities:









Depreciation and amortization

105


112


418


421


Non-cash compensation expense

48


20


113


89


Deferred income taxes

433


(55)


373


(10)


Provision for losses on accounts receivable and inventory

17


8


55


32


Loss (gain) on divestitures

2


3


14


(224)


Loss on the retirement of debt

453


-


453


-


Other non-cash items

12


27


97


83


Changes in assets and liabilities, net of the effects of acquisitions and divestitures:










Accounts receivable, net

(62)


64


(128)


(47)



Contracts in Process

8


(13)


(46)


(39)



Inventories

2


41


(72)


(42)



Prepaid expenses and other current assets

51


18


(86)


16



Accounts payable

36


61


59


(33)



Accrued and other liabilities

(31)


(92)


(80)


(216)



Income taxes, net

(172)


25


(172)


23



Deferred Revenue

(24)


(5)


(1)


(24)



Other

(24)


(42)


37


14




Net cash provided by operating activities

225


347


701


661




Net cash provided by discontinued operating activities

531


469


1,885


1,767

Cash Flows From Investing Activities:








Capital expenditures

(110)


(112)


(406)


(371)

Proceeds from disposal of assets

4


2


8


6

Acquisition of businesses, net of cash acquired

-


(132)


(217)


(353)

Acquisition of dealer generated customer accounts and bulk account purchases

(10)


(8)


(28)


(33)

Divestiture of businesses, net of cash divested

-


(2)


(5)


709

Other

-


(16)


66


(19)




Net cash used in investing activities

(116)


(268)


(582)


(61)




Net cash used in discontinued investing activities

(311)


(542)


(1,204)


(1,005)

Cash Flows From Financing Activities:








Proceeds from issuance of short-term debt

785


644


2,008


805

Repayment of short-term debt

(785)


(684)


(2,009)


(1,337)

Proceeds from issuance of long-term debt

19


-


19


497

Repayment of long-term debt

(3,040)


-


(3,040)


(1)

Proceeds from exercise of share options

86


12


226


124

Dividends paid

(115)


(116)


(461)


(458)

Repurchase of common shares by treasury

-


-


(500)


(1,300)

Transfer from discontinued operations

2,852


(170)


3,274


726

Other

(3)


(3)


(25)


6




Net cash used in financing activities

(201)


(317)


(508)


(938)




Net cash provided by (used in) discontinued financing activities

174


105


(251)


(793)

Effect of currency translation on cash

14


(22)


4


(4)

Effect of currency translation on cash related to discontinued operations.

5


(11)


4


(2)

Net increase (decrease) in cash and cash equivalents

321


(239)


49


(375)

Net (increase) decrease in cash and cash equivalents related to discontinued operations

(399)


(21)


(434)


33

Decrease in cash and cash equivalents from deconsolidation of variable interest entity

-


-


-


(10)

Cash and cash equivalents at beginning of period

922


1,489


1,229


1,581

Cash and cash equivalents at end of period

$844


$1,229


$844


$1,229












Reconciliation to "Free Cash Flow":








Net cash provided by operating activities

$225


$347


$701


$661

Capital expenditures, net

(106)


(110)


(398)


(365)

Acquisition of dealer generated customer accounts and bulk account purchases

(10)


(8)


(28)


(33)

Purchase accounting and holdback liabilities

-


(11)


(2)


(10)

Voluntary pension contributions

-


-


-


12

Free Cash Flow

$109


$218


$273


$265












Reconciliation to "Adjusted Free Cash Flow":








Free Cash Flow

$109


$218


$273


$265

Cash restructuring costs

24


22


89


90

Cash acquisition/integration costs

1


-


3


-

Cash (receipt) payment from Covidien/TE Connectivity

6


126


19


126

Legal legacy settlements

-


-


-


(1)

Separation costs

17


-


18


-

Separation costs-capital expenditures

8


-


12


-

Adjusted Free Cash Flow

$165


$366


$414


$480























NOTE: Free cash flow is a non-GAAP measure.  See description of non-GAAP measures contained in this release.

 

Tyco International Ltd.

Organic Growth Reconciliation - Revenue

(in millions)

(Unaudited)



























Quarter Ended September 28, 2012






























Base Year
Adjustments




















Net Revenue for the Quarter Ended September 30, 2011


(Divestitures) /
Other (4)


Adjusted 2011 Base Revenue


Foreign Currency


Acquisitions


Other (3)


Organic Revenue (1)


Net Revenue for the Quarter Ended
September 28, 2012
















































NA Installation & Services

$                               1,095


$             -

0.0%


$        1,095


$                (2)

-0.2%


$              1

0.1%


$          (42)

-3.8%


$                (10)

-0.9%


$              1,042

-4.8%


ROW Installation & Services

1,219


(12)

-1.0%


1,207


(68)

-5.6%


33

2.7%


(34)

-2.8%


(10)

-0.8%


1,128

-7.5%


Global Products

485


4

0.8%


489


(13)

-2.7%


68

14.0%


(28)

-5.8%


42

8.6%


558

15.1%


Total Net Revenue

$                               2,799


$           (8)

-0.3%


$        2,791


$              (83)

-3.0%


$          102

3.6%


$        (104)

-3.7%


$                  22

0.8%


$              2,728

-2.5%










































































Twelve Months Ended September 28, 2012





























Base Year
Adjustments




















Net Revenue for the

Twelve Months Ended
September 30, 2011


(Divestitures) /
Other (4)


Adjusted

2011 Base

Revenue


Foreign Currency


Acquisitions


Other (3)


Organic Revenue (1) 


Net Revenue for the

Twelve Months Ended

September 28, 2012
















































NA Installation & Services

$                               4,022


$             -

0.0%


$        4,022


$              (10)

-0.2%


$              4

0.1%


$          (42)

-1.0%


$                (12)

-0.3%


$              3,962

-1.5%


ROW Installation & Services

4,434


(67)

-1.5%


4,367


(178)

-4.0%


105

2.4%


(34)

-0.8%


81

1.9%


4,341

-2.1%


Global Products

1,754


13

0.7%


1,767


(38)

-2.2%


221

12.6%


(28)

-1.6%


178

10.1%


2,100

19.7%


Total before Corporate and Other

$                             10,210


$         (54)

-0.5%


$      10,156


$            (226)

-2.2%


$          330

3.2%


$        (104)

-1.0%


$                247

2.4%


$            10,403

1.9%

























Corporate and Other (2)

347


(347)

-100.0%


-


-

0.0%


-

0.0%


-

0.0%


-

0.0%


-

-100.0%

























Total Net Revenue

$                             10,557


$       (401)

-3.8%


$      10,156


$            (226)

-2.1%


$          330

3.1%


$        (104)

-1.0%


$                247

2.4%


$            10,403

-1.5%
















































(1)

Organic revenue growth percentage based on adjusted 2011 base revenue.


































(2)

Corporate and Other includes the former Electrical and Metal Products business which was divested during Q1 2011.   





























(3)

Amounts represent the impact of the 53rd week of revenue for each segment during fiscal 2011 at fiscal 2012 foreign exchange rates.


























(4)

Amounts include the transfer of certain business from ROW Installation and Services to Global Products.  







 









Earnings Per Share Summary







(Unaudited)















Quarter Ended

Year Ended


Quarter Ended

Year Ended










Sept. 28, 2012

Sept. 28, 2012


Sept. 30, 2011

Sept. 30, 2011
















Diluted EPS from Continuing Operations Attributable to Tyco Shareholders (GAAP)

($1.36)

($0.72)


$0.37

$1.29









expense / (benefit)














Restructuring, net

0.05

0.11


0.01

0.11









Restructuring charges in cost of sales and SG&A

-

-


-

0.01









Separation costs included in SG&A

-

-


-

-









(Gains) / losses on divestitures, net

-

0.03


(0.03)

(0.33)









Acquisition / integration costs

-

0.01


-

0.01









Asset impairment charges

-

0.04


-

-









Change in valuation methodology for asbestos

-

0.15


-

-









Note receivable write-off

-

-


-

0.01









Legacy legal items

-

0.07


0.06

0.04









Former management ERISA reversal

-

(0.07)


-

-









Separation costs

0.12

0.14


-

-









Tax items

0.54

0.61


0.02

0.03









Loss on extinguishment of debt

0.98

0.98


-

-









Total Before Special Items

$0.33

$1.35


$0.43

$1.17

 

Tyco International Ltd.































For the Quarter Ended September 28, 2012





























(in millions, except per share data)































(Unaudited)































expense / (benefit)






























































Segments

































NA Installation



ROW Installation



Global



Segment



Corporate 



Total
















& Service



& Service



Products



Revenue



and Other



Revenue














Revenue (GAAP)


$1,042



$1,128



$558



$2,728






$2,728











































(Loss) income

Diluted






























from

EPS from



Operating Income













Continuing

Continuing






























Operations

Operations












Segment






Total









Equity (loss) in earnings



Attributable

Attributable



NA Installation



ROW Installation



Global



Operating



Corporate 



Operating



Interest


Other


Income


of unconsolidated



to Tyco 

to Tyco 



& Service

Margin


& Service

Margin


Products

Margin


Income

Margin


and Other

Margin


Income

Margin


(Expense), net


(Expense), net


Tax (Expense)


subsidiary



Shareholders

Shareholders

Operating Income (GAAP)


$109

10.5%


$123

10.9%


$88

15.8%


$320

11.7%


($167)

N/M


$153

5.6%


($28)


($453)


($294)


($7)



($629)

($1.36)
































Restructuring, net


17



8



4



29



6



35







(13)





22

0.05
































Separation costs included in SG&A


2









2






2












2

-
































(Gains) / losses on divestitures, net





3






3



(1)



2












2

-
































Acquisition / integration costs








2



2






2







(1)





1

-
































Change in valuation methodology for asbestos














3



3







(2)





1

-
































Legacy legal items














(3)



(3)







1





(2)

-
































Former management ERISA reversal
























1





1

-
































Separation costs





1



1



2



59



61







(5)





56

0.12
































Tax items
























249





249

0.54
































Loss on extinguishment of debt






















453







453

0.98
































Total Before Special Items 


$128

12.3%


$135

12.0%


$95

17.0%


$358

13.1%


($103)

N/M