TYCO INTERNATIONAL LTD.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(in millions, except per share data)
(Unaudited)
For the Quarters
Ended For the Year Ended
09/30/03 09/30/02
09/30/03 09/30/02
(restated) (restated)
Net revenues $9,472.8 $9,372.8
$36,801.3 $35,589.8
Cost of sales 6,290.7 6,414.8
23,891.9 23,065.3
Selling, general and
administrative
expenses 1,994.4 2,325.2
8,813.4 8,181.6
Restructuring and
other
(credits) charges,
net (1.7) 575.2 (74.3) 1,124.3
Charges for the
impairment of
long-lived
assets 737.6 794.6 824.9 3,309.5
Goodwill impairment 278.4 499.3 278.4 1,343.7
Write-off of
purchased in-
process research and
development -- 4.4 -- 17.8
Operating income
(loss) 173.4 (1,240.7)
3,067.0 (1,452.4)
Other expense,
net (11.6) (62.4)
(223.4) (216.6)
Interest expense,
net (251.7) (294.6)
(1,040.8) (959.7)
(Loss) income from
continuing
operations before
income taxes
and minority interest (89.9) (1,597.7) 1,802.8 (2,628.7)
Income taxes (131.1) 203.2
(764.5) (208.1)
Minority
interest (1.0) (0.6) (3.6) (1.4)
(Loss) income from
continuing
operations (222.0) (1,395.1)
1,034.7 (2,838.2)
Income (loss) from
discontinued
operations of Tyco
Capital,
net of tax -- 11.1 20.0 (6,282.5)
Loss on sale of Tyco
Capital,
net of tax -- (58.8) -- (58.8)
(Loss) income before
cumulative
effect of accounting
change (222.0) (1,442.8)
1,054.7 (9,179.5)
Cumulative effect of
accounting
change, net of
tax (75.1) -- (75.1) --
Net (loss)
income $(297.1)
$(1,442.8) $979.6 $(9,179.5)
Basic (loss) income
per common
share:
(Loss) income from
continuing
operations $(0.11) $(0.70) $0.52 $(1.43)
Income (loss) from
discontinued
operations of
Tyco Capital, net
of tax -- 0.01 0.01 (3.16)
Loss on sale of
Tyco
Capital, net of
tax -- (0.03) -- (0.03)
(Loss) income
before
cumulative effect
of
accounting
change (0.11) (0.72) 0.53 (4.62)
Cumulative effect
of a
change in
accounting, net
of tax (0.04) -- (0.04) --
Net (loss)
income (0.15) (0.72) 0.49 (4.62)
Diluted (loss) income
per
common share:
(Loss) income from
continuing
operations $(0.11) $(0.70) $0.52 $(1.43)
Income (loss) from
discontinued
operations of
Tyco Capital, net
of tax -- 0.01 0.01 (3.16)
Loss on sale of
Tyco
Capital, net of
tax -- (0.03) -- (0.03)
(Loss) income
before
cumulative effect
of
accounting
change (0.11) (0.72) 0.53 (4.62)
Cumulative effect
of a
change in
accounting, net
of tax (0.04) -- (0.04) --
Net (loss)
income (0.15) (0.72) 0.49 (4.62)
Weighted-average
number of
common shares
outstanding:
Basic 1,995.9 1,993.8
1,995.0 1,988.5
Diluted 1,995.9
1,993.8 2,002.7 1,988.5
TYCO
INTERNATIONAL LTD.
CONDENSED
CONSOLIDATED BALANCE SHEET
(in
millions)
Preliminary
- Subject to Adjustments
(Unaudited) (Unaudited)
September
30, June 30, September 30,
2003 2003 2002
(restated)
Current Assets:
Cash and cash
equivalents $4,186.7 $3,926.7 $6,185.7
Restricted cash 141.8 210.9 196.2
Accounts receivables,
net 5,714.8 5,898.3 5,831.9
Inventories 4,292.2 4,555.5 4,607.9
Deferred income
taxes 855.2 870.2 1,356.0
Other current
assets 2,048.8 2,140.6 1,461.7
Total current
assets 17,239.5 17,602.2 19,639.4
Tyco Global Network,
Net -- 667.6 581.6
Property, Plant and
Equipment, Net 10,299.8 10,009.8 9,861.0
Goodwill 25,938.7 26,301.8 26,020.5
Intangible Assets,
Net 5,790.0 5,889.9 5,805.8
Other Assets 4,277.0 3,921.5 3,549.2
Total Assets $63,545.0 $64,392.8
$65,457.5
Current Liabilities:
Loans payable and
current maturities
of long-term
debt $2,718.4 $3,639.9 $7,719.0
Accounts payable 2,716.7 2,763.1 3,173.8
Accrued expenses and
other current
liabilities 3,999.1
4,550.6 5,348.7
Contracts in process
- billings in
excess of cost 327.6 464.3 523.6
Deferred revenue 810.5 810.9 758.5
Total current
liabilities 10,572.3 12,228.8 17,523.6
Long-Term Debt 18,250.7 17,567.7 16,486.8
Other Long-Term
Liabilities 8,239.7 7,888.9 7,288.9
Total
Liabilities 37,062.7 37,685.4 41,299.3
Minority
Interest
113.3 74.8 76.9
Shareholders'
Equity 26,369.0 26,632.6 24,081.3
Total Liabilities
and Shareholders'
Equity $63,545.0 $64,392.8 $65,457.5
Note: Certain prior
year amounts have been reclassified to conform with
current year
presentation.
TYCO
INTERNATIONAL LTD.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in
millions)
Preliminary
- Subject to Adjustments
(Unaudited)
For the For the
Quarters Ended Year Ended
09/30/03 09/30/02
09/30/03 09/30/02
(restated) (restated)
Cash flows from
operating
activities:
(Loss) income from
continuing
operations $(222.0) $(1,395.1) $1,034.7 $(2,838.2)
Adjustments to
reconcile net
(loss) income from
continuing
operations to net
cash
provided by
operating
activities:
Non-cash
restructuring and
other charges
(credits), net 1.9 527.0 (45.9) 796.5
Charges for the
impairment of
long-lived
assets 737.6 794.6 824.9 3,309.5
Goodwill
Impairment 278.4 499.3 278.4 1,343.7
Write-off of
purchased in-
process R&D -- 4.4 -- 17.8
Loss on
investments 11.6 123.3 87.2 270.8
Depreciation 387.4 366.7
1,471.9 1,464.1
Amortization of
intangible
assets 176.8 167.1 725.0 620.9
Income taxes -
deferred and
payables 50.4 (186.2) 549.5 (250.1)
Cash spent on
restructuring (132.6) (157.6)
(503.3) (517.5)
(Decrease in)
proceeds under
sale of accounts
receivable
programs (63.1) 57.2
(119.0) (56.4)
Changes in working
capital and
other 549.9 1,017.9
1,042.7 1,250.3
Net cash provided by
operating
activities,
continuing
operations 1,776.3 1,818.6
5,346.1 5,411.4
Net cash provided by
operating
activities,
discontinued
operations --
-- 20.0 1,462.9
Net cash provided by
operating
activities 1,776.3 1,818.6
5,366.1 6,874.3
Cash flows from
investing
activities:
Capital
expenditures, net (265.5) (291.2) (1,115.8)
(1,678.8)
Purchase of
previously leased
TyCom ship -- -- (53.8) --
Tyco Global Network
spending 5.7 (163.4)
(112.7) (1,146.0)
Acquisition of
businesses, net
of cash
acquired (9.4) (1.6)
(44.0) (1,683.8)
Acquisition of
dealer accounts (90.6) (267.6)
(596.8) (1,139.3)
Cash paid for
purchase
accounting and
holdback/earn-
out
liabilities (44.5) (103.3) (271.8) (624.1)
Net proceeds from
the sale of
CIT -- 4,395.4 -- 4,395.4
Disposal of
businesses 0.5 138.7 8.5 138.7
Cash invested in
short-term
investments (40.7) (93.5)
(392.1) (93.5)
Increase in
restricted cash (25.8) (196.2)
(228.4) (196.2)
All other 6.8 76.3 66.9 (18.1)
Net cash (used in)
provided by
investing
activities,
continuing
operations (463.5) 3,493.6
(2,740.0) (2,045.7)
Net cash provided by
investing
activities,
discontinued
operations -- -- -- 2,684.3
Net cash (used in)
provided by
investing
activities (463.5) 3,493.6
(2,740.0) 638.6
Cash flows from
financing
activities:
Net repayments of
debt (1,010.5) (1,862.8) (4,618.6) 1,951.3
Dividends paid (25.3) (25.3)
(100.9) (100.3)
Proceeds from
options
exercises 7.0 -- 14.8 185.7
Repurchase of
shares -- (0.1) (1.2) (789.2)
All other (1.5) (2.9) (8.0) (209.7)
Net cash (used in)
provided by
financing
activities,
continuing
operations (1,030.3) (1,891.1) (4,713.9) 1,037.8
Net cash used in
financing
activities,
discontinued
operations -- -- -- (2,874.6)
Net cash used in
financing
activities (1,030.3) (1,891.1) (4,713.9) (1,836.8)
Effect of currency
translation
on cash (22.5) (30.2) 88.8 2.1
Net increase
(decrease) in cash
and cash
equivalents 260.0 3,390.9
(1,999.0) 5,678.2
Tyco Capital's cash
and cash
equivalents
transferred to
discontinued
operations -- -- -- (1,272.6)
Cash and cash
equivalents at
beginning of
period 3,926.7 2,794.8
6,185.7 1,780.1
Cash and cash
equivalents at end
of period $4,186.7
$6,185.7 $4,186.7 $6,185.7
RECONCILIATION TO
"FREE CASH
FLOW":
Net cash provided by
operating
activities,
continuing
operations $1,776.3 $1,818.6
$5,346.1 $5,411.4
Sale of accounts
receivable
programs 63.1 (57.2) 119.0 56.4
Capital
expenditures, net (265.5) (291.2) (1,115.8) (1,678.8)
Purchase of
previously leased
TyCom ship --
-- (53.8) --
Tyco Global Network
spending 5.7 (163.4)
(112.7) (1,146.0)
Dividends paid (25.3) (25.3)
(100.9) (100.3)
"FREE CASH
FLOW" - OLD
DEFINITION 1,554.3 1,281.5
4,081.9 2,542.7
Acquisition of
dealer accounts (90.6) (267.6)
(596.8) (1,139.3)
Cash paid for
purchase
accounting and
holdback/earn-
out
liabilities (44.5) (103.3)
(271.8) (624.1)
"FREE CASH
FLOW" - NEW
DEFINITION $1,419.2 $910.6
$3,213.3 $779.3
Free cash flow is a
non-GAAP metric 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.
RESULTS OF
SEGMENTS
(in
millions, except per share data)
(Unaudited)
For the For the
Quarters Ended Year Ended
09/30/03 09/30/02
09/30/03 09/30/02
(restated) (restated)
NET REVENUES
Fire and
Security $2,906.7 $2,876.7
$11,292.8 $10,639.0
Electronics 2,656.4 2,566.1
10,355.0 10,464.1
Healthcare 2,216.6 2,118.3
8,571.9 7,899.1
Engineered Products
and
Services 1,224.5 1,334.8
4,684.4 4,709.3
Plastics and
Adhesives 468.6 476.9
1,897.2 1,878.3
Total Net
Revenues 9,472.8 9,372.8
36,801.3 35,589.8
OPERATING PROFIT (LOSS)
Fire and
Security 133.1 223.3 360.2 904.7
Electronics (559.9) (1,888.6) 457.7 (4,245.9)
Healthcare 595.3 500.3
2,127.1 1,846.8
Engineered Products
and
Services 70.0 54.8 355.2 252.5
Plastics and
Adhesives 28.0 (2.7) 167.4 209.2
Total Profit
(Loss) 266.5 (1,112.9)
3,467.6 (1,032.7)
Corporate
Expenses (93.1) (127.8)
(400.6) (419.7)
Operating Income
(Loss) 173.4 (1,240.7)
3,067.0 (1,452.4)
Other Expense,
Net (11.6) (62.4)
(223.4) (216.6)
Interest Expense, Net (251.7) (294.6) (1,040.8) (959.7)
(Loss) Income from
Continuing
Operations Before
Taxes and
Minority
Interest (89.9) (1,597.7)
1,802.8 (2,628.7)
Income Taxes (131.1)
203.2 (764.5) (208.1)
Minority
Interest (1.0) (0.6) (3.6) (1.4)
(LOSS) INCOME FROM
CONTINUING
OPERATIONS (222.0) (1,395.1)
1,034.7 (2,838.2)
Income (loss) from
Discontinued
Operations of Tyco
Capital,
Net of Tax -- 11.1 20.0 (6,282.5)
Loss on Sale of Tyco
Capital,
Net of Tax -- (58.8) -- (58.8)
(LOSS) INCOME BEFORE
CUMULATIVE
EFFECT OF ACCOUNTING
CHANGE (222.0) (1,442.8)
1,054.7 (9,179.5)
Cumulative Effect of
Accounting
Change, Net of
Tax (75.1) -- (75.1) --
NET (LOSS)
INCOME $(297.1) $(1,442.8)
$979.6 $(9,179.5)
BASIC COMMON SHARES
OUTSTANDING: 1,995.9 1,993.8
1,995.0 1,988.5
EPS from Continuing
Operations ($0.11) ($0.70) $0.52 ($1.43)
EPS before
Cumulative Effect (0.11) (0.72) 0.53 (4.62)
EPS Net (Loss)
Income (0.15) (0.72) 0.49 (4.62)
DILUTED COMMON SHARES
OUTSTANDING: 1,995.9 1,993.8
2,002.7 1,988.5
EPS from Continuing
Operations ($0.11) ($0.70) $0.52 ($1.43)
EPS before
Cumulative Effect (0.11) (0.72) 0.53 (4.62)
EPS Net (Loss)
Income (0.15) (0.72)
0.49 (4.62)
TYCO
INTERNATIONAL LTD.
EARNINGS
PER SHARE FROM CONTINUING OPERATIONS
Quarter Ended
December 31, March 31, June 30,
2002 2003
2003
Diluted EPS as
Previously
Reported $0.32 ($0.23) N/A
Customer Contract
Amortization
Method (0.01) 0.08 --
ADT Dealer
Reimbursements (0.01) -- --
Restitution
Payment (0.01) -- --
Q2 Charges Restated
to Prior
Periods (0.01) 0.21 --
Diluted EPS as
Restated
(GAAP)* $0.28 $0.06
$0.27
Intensified
Internal
Audit Process -- 0.15 --
D&O
Insurance -- 0.04 --
Impairment of ADT
Dealer
Accounts --
0.04 --
Debt Retirement
(Drs) -- -- 0.07
Tax Settlement -- --
(0.02)
Impairment &
Restructuring -- -- --
Fire and Security
Reserve
Adjustment -- -- 0.02
Other Corporate
Charges -- -- --
Quarter Ended Year Ended
September
30, September 30,
2003 2003
Diluted EPS as
Previously Reported N/A N/A
Customer Contract
Amortization
Method -- --
ADT Dealer
Reimbursements
-- --
Restitution
Payment
-- --
Q2 Charges Restated
to Prior Periods -- --
Diluted EPS as
Restated (GAAP)*
($0.11) $0.52
Intensified
Internal Audit Process
-- --
D&O
Insurance
-- --
Impairment of ADT
Dealer Accounts -- --
Debt Retirement
(Drs) -- --
Tax Settlement -- --
Impairment & Restructuring $0.43 --
Fire and Security
Reserve Adjustment $0.01 --
Other Corporate
Charges $0.01 --
* The quarters ended
March 31, 2003 and September 30, 2003 do not dilute
because of low
level of earnings these quarters.
TYCO
INTERNATIONAL LTD.
RESTRUCTURING
PROGRAM SUMMARY
$ millions,
except for Employees and Facilities
Quarter Ended Quarter Ended
September 30, 2003 December 31, 2003
Cash Non-Cash Cash Non-Cash
Estimated Costs
Fire and
Security 20 6 45 --
Plastics and
Adhesives -- -- -- 20
Engineered
Products
and Services 12 6 -- --
Corporate 9 -- -- --
Total 41
12 45 20
Estimated Benefits
Fire and
Security -- -- 12 3
Plastics and
Adhesives -- -- -- --
Engineered
Products and
Services -- -- 3 0
Total
15 3
Estimated Employees
Impacted
Fire and
Security -- -- -- --
Plastics and
Adhesives -- -- -- --
Engineered
Products and
Services -- -- -- --
Total -- -- -- --
Estimated Facilities
Reduced
Fire and
Security -- -- -- --
Plastics and
Adhesives -- -- -- --
Engineered
Products and
Services -- -- -- --
Total -- -- -- --
Total Year Ended
September 30, 2004 Total Program
Cash Non-Cash Cash Non-Cash
Estimated Costs
Fire and
Security 150 10 200 40
Plastics and
Adhesives 40 60 40 60
Engineered Products
and
Services 20 -- 30 10
Corporate -- -- 9 --
Total 210 70 279 110
Annualized
Benefits
Estimated
Benefits
Cash Non-Cash
Fire and
Security 80 15 135 25
Plastics and
Adhesives 20 5 35 10
Engineered
Products and
Services 15 -- 25 0
Total 115 20 195 35
Estimated Employees
Impacted
Fire and Security -- -- -- 5,000
Plastics and
Adhesives -- -- -- 1,900
Engineered
Products and
Services -- -- -- 275
Total --
-- -- 7,175
Estimated Facilities
Reduced
Fire and
Security -- -- -- 184
Plastics and
Adhesives -- -- -- 30
Engineered
Products and
Services -- -- -- 5
Total -- -- -- 219