Tyco International Ltd. Reports Second Quarter Earnings from Continuing Operations Before Special Items of $0.73 Per Share and GAAP Earnings of $0.67 Per Share

SCHAFFHAUSEN, Switzerland, April 28, 2011 /PRNewswire/ --

• Company reports revenue of $4.0 billion, with 6%* revenue growth excluding the Electrical and Metal Products business and 3% organic revenue growth
• Diluted EPS from continuing operations before special items increases 26%
• Operating margin before special items improves 190* basis points to 11.9%*
• Strategic acquisitions strengthen Tyco's presence in core platforms
• Company announces new $1 billion share repurchase program

*Amount excludes results from the Electrical and Metal Products business following the sale of a majority interest in that business completed on Dec. 22, 2010.

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

($ millions, except per-share amounts)

Tyco International Ltd. (NYSE: TYC) today reported $0.67 in diluted earnings per share (EPS) from continuing operations for the fiscal second quarter of 2011 and diluted EPS from continuing operations before special items of $0.73 per share. Excluding the Electrical & Metal Products business, which is now reported as an equity investment, revenue in the quarter of $4.0 billion increased 6% versus the prior year with organic revenue growth of 3%.

Tyco Chairman and Chief Executive Officer Ed Breen said, "The 26% increase in earnings per share we delivered in the second quarter was driven by a stronger operating margin and continued improvement in our end markets. We are encouraged by the order trends in our late-cycle businesses and we expect these trends will help fuel our growth as we finish this fiscal year and enter 2012."

"During the quarter, we also took steps to strengthen our competitive position in Tyco's core platforms by announcing the acquisitions of a leading security provider serving the Australia and New Zealand markets and a majority interest in a fully-integrated valve manufacturing business in the Middle East."

On February 23, 2011, Tyco announced the acquisition of Signature Security for approximately $170 million. The Signature business will be combined with ADT operations in Australia and New Zealand, strengthening Tyco's presence in these two growing markets. The company also announced the acquisition of a 75 percent stake in Dubai-based KEF Holdings for approximately $300 million. KEF is a well-established business in the Middle East region with strong customer relationships in the oil and gas, chemical, mining and power industries. The acquisition provides Tyco with a strategic manufacturing presence in a key emerging market while broadening the company's flow control product portfolio. The Signature transaction is expected to close this week and the KEF acquisition is expected to close within the next few months.

Organic revenue, free cash flow and operating income, operating margin, income 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 Second Quarter Review slides can be found at www.tyco.com on the Investor Relations portion of Tyco's website.

SEGMENT RESULTS

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 second quarter of 2010 unless otherwise indicated.

Revenue of $2.1 billion increased 12% in the quarter with organic revenue growth of 5.5%. Recurring revenue grew 4.5% organically with growth in all geographic regions. Non-recurring revenue grew 7% organically led by increased volume in the North American commercial business.

Operating income was $323 million and the operating margin was 15.5%. Special Items of $12 million consisted primarily of acquisition and integration related costs. Operating income before special items was $335 million and the operating margin improved 170 basis points to 16.1%. The year-over-year operating margin improvement was driven by growth in the higher margin recurring revenue business, increased volume in the commercial business, and the continued benefit of restructuring activities.

Revenue of $1.1 billion increased 2% in the quarter with organic revenue growth of 4%. Organic revenue growth of 4% in service and 11% in fire products was partially offset by an organic revenue decline of 1.5% in systems installation. Backlog of $1.25 billion increased 2% on a quarter sequential basis, excluding the impact of foreign currency.

Operating income was $128 million and the operating margin was 11.5%. Special items of $7 million consisted of restructuring and divestiture charges. Operating income before special items was $135 million and the operating margin was 12.2%. The 190 basis point margin improvement was driven by cost-containment and restructuring actions as well as business mix and selectivity of project work.

Revenue of $804 million declined 2% in the quarter with an organic revenue decline of 5%. Organic revenue growth of 1% in Valves and 5% in Thermal Controls was more than offset by an organic revenue decline of 31% in the Water business. Excluding the impact of foreign currency, orders increased 8% year-over-year and backlog increased 5% to $1.65 billion on a quarter sequential basis.

Operating income was $86 million and the operating margin was 10.7%. Special items of $5 million consisted of restructuring charges. Operating income and operating margin before special items were $91 million and 11.3%, respectively. Severe weather conditions and flooding in Australia throughout the quarter significantly impacted shipments to customers and resulted in lost productivity in the Water business. This reduced revenue by approximately $30 million and operating income by approximately $13 million.

OTHER ITEMS

• Cash from operating activities was $667 million and free cash flow was $342 million, which included a cash outflow of $30 million primarily related to restructuring activities.
• The company completed the quarter with $1.84 billion in cash and cash equivalents.
• Corporate expense excluding special items was $86 million.
• The tax rate before special items was 15.4%.
• During the second quarter, the company repurchased 11 million shares for $500 million and completed its $1 billion share repurchase program initiated in the fourth quarter of 2010. The company today announced a new $1 billion program.
• On March 9, 2011, Tyco shareholders approved an annual dividend increase of approximately 20% from $0.84 to $1.00 per share at the company's annual general meeting.

ABOUT TYCO INTERNATIONAL

Tyco International Ltd. (NYSE: TYC) is a diversified, global company that provides vital products and services to customers around the world. Tyco is a leading provider of security products and services, fire protection and detection products and services, valves and controls, and other industrial products. Tyco had 2010 revenue of $17 billion and has more than 100,000 employees worldwide. More information on Tyco can be found at www.tyco.com.

CONFERENCE CALL AND WEBCAST

Management will discuss the company's second quarter results for 2011 and outlook for the third quarter 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 11:00 a.m. (ET) on April 28, 2011 and ending at 11:59 p.m. (ET) on May 6, 2011. The dial-in number for participants in the United States is (800) 253-1052. For participants outside the United States, the replay dial-in number is (402) 220-9704, passcode 2120.

NON-GAAP MEASURES

"Organic revenue," "free cash flow (outflow)" (FCF), "income from continuing operations before special items," "earnings per share (EPS) from continuing operations before special items," "operating income before special items" and "operating margin 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, revenue reclassifications). Effective the first quarter of fiscal 2011, the Company's organic growth / decline calculations incorporate an estimate of prior year reported revenue associated with acquired entities that have been fully integrated within the first year (such as Broadview Security), 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 will continue to be based on unadjusted historical revenue. Organic revenue and the rate