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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

001-13836
(Commission File Number)

TYCO INTERNATIONAL LTD.
(Exact name of Registrant as specified in its charter)

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

        Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ý    No o

        The number of common shares outstanding as of January 28, 2005 was 2,013,208,923.

TYCO INTERNATIONAL LTD.
INDEX TO FORM 10-Q

PART I.    FINANCIAL INFORMATION

Item 1.    Financial Statements

TYCO INTERNATIONAL LTD.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(in millions, except per share data)

See Notes to Consolidated Financial Statements.

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TYCO INTERNATIONAL LTD.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in millions, except share data)

See Notes to Consolidated Financial Statements.

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TYCO INTERNATIONAL LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in millions)

See Notes to Consolidated Financial Statements.

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TYCO INTERNATIONAL LTD.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)

For the Quarters Ended December 31, 2004 and 2003
(in millions)

See Notes to Consolidated Financial Statements.

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TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.    Basis of Presentation and Summary of Significant Accounting Policies

        Basis of Presentation—The unaudited Consolidated Financial Statements include the consolidated accounts of Tyco International Ltd., a company organized under the laws of Bermuda, and its subsidiaries (Tyco and all its subsidiaries, hereinafter collectively referred to as the "Company" or "Tyco").

        The financial statements have been prepared in United States Dollars and in accordance with the instructions to Form 10-Q under the Securities Exchange Act of 1934, as amended, and do not include all of the information and note disclosures required by Generally Accepted Accounting Principles in the United States ("GAAP"). These financial statements should be read in conjunction with the Consolidated Financial Statements and accompanying notes contained in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2004 (the "2004 Form 10-K").

        The Consolidated Financial Statements included herein are unaudited, but in the opinion of management, such financial statements include all adjustments, consisting only of normal recurring adjustments, necessary to summarize fairly the Company's financial position and results of operations for the interim period. The results reported in these Consolidated Financial Statements should not be taken as indicative of results that may be expected for the entire year.

        Change in Fiscal Year and Reporting Calendar Alignment—Effective October 1, 2004, Tyco changed its fiscal year end from a calendar fiscal year ending September 30 to a "52-53 week" year ending on the Friday nearest September 30, such that each quarterly period will be 13 weeks in length. Once every seven years, starting in 2011, the fourth quarter reporting period will be 14 weeks. In addition, certain of the Company's subsidiaries had consistently closed their books up to one month prior to the Company's fiscal period end. These subsidiaries now report results for the same period as the reported results of the consolidated Company. The impact of this change was not material to the Consolidated Financial Statements. This change is also consistent with the Company's ongoing efforts to enhance controls and improve the transparency of its reporting, as this change better aligns the Company's external reporting with the Company's internal operational processes. Net income for the transition period related to this change was $26 million and was reported within Shareholders' Equity.

        Employee Share Option Plans—Tyco measures compensation cost in connection with employee share option plans using the intrinsic value based method and accordingly does not recognize compensation expense for the issuance of options with an exercise price equal to or greater than the market price at the date of grant. Had the fair value based method been adopted by Tyco, the effect on

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net income and earnings per share would have been as follows ($ in millions, except for per share data):

⁽¹⁾

The estimated weighted-average fair value of Tyco options granted was calculated using the Black-Scholes option-pricing model with an expected stock price volatility of 43%, a risk free interest rate of 2.86%, expected average annual dividend per share of $0.37 and an expected option life of 2.03 years for the quarter ended December 31, 2004 and an expected stock price volatility of 55%, a risk free interest rate of 2.77%, expected annual dividend per share of $0.05 and an expected option life of 3.7 years for the quarter ended December 31, 2003.

        Reclassifications—Certain prior period amounts have been reclassified to conform with the current period presentation.

        Accounting Pronouncements—In September 2004, the Emerging Issues Task Force ("EITF") of the Financial Accounting Standards Board ("FASB") reached a consensus on EITF No. 04-8, "The Effect of Contingently Convertible Instruments on Diluted Earnings per Share." This EITF requires that contingently convertible debt securities with a market price trigger be included in diluted earnings per share, regardless of whether the market price trigger has been met. EITF No. 04-8 became effective for Tyco on October 1, 2004 and required retroactive restatement of previously reported earnings per share. The adoption of this EITF did not impact diluted earnings per share for the quarters ended December 31, 2004 or 2003 and is not expected to have a significant impact on earnings per share for the current and prior fiscal year.

        In November 2004, the FASB issued Statement of Financial Accounting Standards ("SFAS") No. 151, "Inventory Costs, an amendment of ARB No. 43, Chapter 4." SFAS No. 151 amends Accounting Research Bulletin ("ARB") No. 43, Chapter 4, to clarify that abnormal amounts of idle facility expense, freight, handling costs and wasted materials (spoilage) should be recognized as current-period charges. In addition, SFAS No. 151 requires that allocation of fixed production overhead to inventory be based on the normal capacity of the production facilities. SFAS No. 151 will be effective in the first quarter of fiscal 2006 for Tyco. The Company is currently assessing the impact that SFAS No. 151 will have on the results of its operations, financial position or cash flows.

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        In December 2004, the FASB issued SFAS No. 123 (Revised 2004), "Share-Based Payment," ("SFAS No. 123R") that will require compensation costs related to share-based payment transactions to be recognized in the financial statements. The compensation cost will be measured based on the grant-date fair value and will be recognized over the vesting period. SFAS No. 123R replaces SFAS No. 123, "Accounting for Stock-Based Compensation," and supersedes Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees." Pro-forma disclosure regarding the effect on net earnings and earnings per share as if we had applied the fair value method of accounting for stock-based compensation is presented in the Employee Share Option Plans section above. SFAS No. 123R will become effective in the fourth quarter of fiscal 2005 for Tyco. The Company is currently assessing the impact that the new standard will have on the results of its operations, financial position or cash flows.

2.    Restructuring, Impairment and Other Charges, Net

2005 Charges

        During the quarter ended December 31, 2004, the Company recorded restructuring, impairment and other charges, net of $8 million. This is comprised of restructuring and other charges of $15 million, which consisted of $8 million of severance, $4 million of facility exit charges and $3 million of other charges. The Company completed restructuring activities announced in prior years for amounts less than originally anticipated and accordingly reversed $3 million of restructuring reserves and also recorded other net non-cash credits of $4 million.

2004 Charges

        During the first quarter of 2004, the Company recorded restructuring, impairment and other charges, net of $28 million.

        During the first quarter of 2004, Electronics recorded net restructuring credits of $20 million, consisting of credits of $24 million related to completing certain restructuring activities for amounts less than originally estimated, partially offset by charges of $4 million for employee severance and benefits.

        During the first quarter of 2004, Fire and Security recorded restructuring, impairment and other charges of $16 million, including charges of $18 million associated with streamlining the business, partially offset by a credit of $2 million. The charges included $11 million for employee severance and benefits and $7 million for facility and other exit costs in connection with the elimination of 43 facilities in Europe, the United States, Latin America and Australia.

        During the first quarter of 2004, Plastics and Adhesives recorded restructuring, impairment and other charges of $30 million. This charge consists of $6 million for employee severance and benefits, $2 million for facility exit costs in connection with the elimination of 4 facilities in the United States and impairment charges of $22 million associated with management's decision to exit these facilities.

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Restructuring Reserves

        The following is a roll forward of restructuring reserves from September 30, 2004 to December 31, 2004 by the year in which the restructuring action was initiated ($ in millions):

        The following table reflects the ending balances of restructuring reserves by segment
($ in millions):

        At December 31, 2004, $196 million of restructuring reserves remained on the Consolidated Balance Sheets, of which $136 million are included in accrued and other current liabilities and $60 million are included in other liabilities. At September 30, 2004, $237 million of restructuring reserves remained on the Consolidated Balance Sheets, of which $171 million are included in accrued and other current liabilities and $66 million are included in other liabilities.

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3.    Divestitures and Discontinued Operations

        During the quarter ended December 31, 2004, the Company recorded net losses and impairments on divestitures of $18 million, including $3 million reflected in cost of sales, in continuing operations. These charges were in connection with the divestiture and liquidation of businesses, as well as the write-down to estimated fair value of certain held for sale businesses. In addition, the Company also recorded losses on the sale of discontinued operations of $47 million ($29 million after tax) to reflect the final losses on sale, including costs to sell, and to write the carrying value of such assets down to their estimated fair value.

        During the quarter ended December 31, 2004, the Company divested four businesses that were reported as continuing operations in Fire and Security and Engineered Products and Services for aggregate proceeds of $19 million in cash. Total assets and total liabilities of the divested businesses were $62 million and $42 million, respectively. The total assets included cash retained by the businesses sold of $9 million.

        Net revenue and net income for the quarter ended December 31, 2004 related to businesses divested in fiscal 2005 that were reported as continuing operations were $24 million and $0 million, respectively. Net revenue and net loss for the quarter ended December 31, 2003 related to businesses divested in fiscal 2005 and 2004 that were reported as continuing operations were $186 million and $(5) million, respectively.

        During the quarter ended December 31, 2004, the Company divested six businesses that were reported as discontinued operations within Fire and Security and Engineered Products and Services for aggregate proceeds of $156 million in cash. Total assets and total liabilities of the divested businesses were $364 million and $166 million, respectively.

        Net revenue of discontinued operations for the quarters ended December 31, 2004 and 2003 was $124 million and $214 million, respectively. Pretax loss of discontinued operations for the quarters ended December 31, 2004 and 2003 was $4 million and $2 million, respectively.

        The following table presents balance sheet information for discontinued operations and other businesses held for sale ($ in millions):

        In November 2004, Tyco agreed to sell the Tyco Global Network ("TGN") to one of India's telephone and internet service providers for $130 million. If the sale is consummated, the Company expects to record a gain. The sale is subject to governmental approval in the United States, India and other countries. The Company has presented the operations of the TGN in continuing operations as the criteria for discontinued operations have not been met.

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4. Acquisitions

        During the quarter ended December 31, 2004, the Company completed three acquisitions within Electronics and Engineered Products and Services for an aggregate cost of $11 million. These acquisitions did not have a material effect on the Company's financial position, results of operations or cash flows.

        At December 31, 2004, $109 million of acquisition liabilities related to acquisitions remained on the Consolidated Balance Sheets, of which $35 million are included in accrued and other current liabilities and $74 million are included in other liabilities. These acquisition liabilities relate to facility exit costs, employee severance and benefits, distributor and supplier cancellation fees and other costs. At September 30, 2004, $123 million of acquisition liabilities remained on the Consolidated Balance Sheets, of which $29 million are included in accrued and other current liabilities and $94 million are included in other liabilities.

5.    Earnings Per Share

        The reconciliations between basic and diluted earnings per share were as follows (in millions, except per share data):

        The computation of diluted earnings per common share for the quarters ended December 31, 2004 and 2003 excludes the effect of the potential exercise of options to purchase approximately 57 million shares and 99 million shares, respectively, because the effect would be anti-dilutive.

6.    Sale of Accounts Receivable

        At December 31, 2004 and September 30, 2004, the availability under corporate accounts receivable programs was $550 million and $625 million, respectively. No amounts were utilized under these corporate programs at December 31, 2004 or September 30, 2004. The aggregate amount outstanding under international accounts receivable programs was $99 million at both December 31, 2004 and September 30, 2004.

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7.    Goodwill and Intangible Assets

        The changes in the carrying amount of goodwill were as follows ($ in millions):

⁽¹⁾

The net decrease in goodwill was primarily related to fair value adjustments and finalization of income taxes related to previously completed acquisitions.

        The following table sets forth the gross carrying amount and accumulated amortization of the Company's intangible assets ($ in millions):

⁽¹⁾

Intangible assets not subject to amortization are excluded from the calculation of the weighted average amortization period.

        As of December 31, 2004 and September 30, 2004, the Company had $673 million and $672 million, respectively, of intangible assets not subject to amortization. As of December 31, 2004, these assets primarily related to intellectual property and consisted of $389 million in tradenames in Healthcare, $262 million in trademarks in Fire and Security and Engineered Products and Services and $22 million of other. As of September 30, 2004, these assets primarily related to intellectual property and consisted of $389 million in tradenames in Healthcare, $261 million in trademarks in Fire and Security and Engineered Products and Services and $22 million of other.

        Intangible asset amortization expense for the quarters ended December 31, 2004 and 2003 was $164 million and $175 million, respectively. The estimated aggregate amortization expense on intangible assets currently owned by the Company is expected to be approximately $500 million for the remainder of 2005, $600 million for 2006, $550 million for 2007, $500 million for 2008, $450 million for 2009, and $400 million for 2010.

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8.    Debt

        Debt was as follows⁽¹⁾ ($ in millions):

⁽¹⁾

Debt maturity dates are presented on a calendar basis, consistent with the respective offering documents.

⁽²⁾

These instruments, plus $53 million of 2.75% convertible senior debentures and $98 million of the amount shown as other, comprise the current portion of long-term debt as of December 31, 2004. These instruments, plus $273 million of the amount shown as other, comprise the current portion of long-term debt as of September 30, 2004.

        On December 16, 2004, Tyco International Group S.A., a wholly-owned subsidiary of the Company organized under the laws of Luxembourg ("TIGSA"), entered into a $1.0 billion 5-year revolving credit facility expiring on December 16, 2009. This facility replaced TIGSA's $1.0 billion 364-day revolving credit facility, which was terminated prior to its scheduled expiration date of December 20, 2004. There were no amounts outstanding under the 364-day revolving credit facility on the date of its termination. TIGSA also holds a $1.5 billion 3-year revolving bank credit facility expiring on December 22, 2006 and a $500 million 3-year unsecured letter of credit facility expiring on June 15, 2007. At December 31, 2004 there were no amounts drawn on these facilities.

        In the first quarter of 2005, the Company repurchased $257 million principal amount of its outstanding 2.75% convertible senior debentures due 2018 with a 2008 put option for $409 million. The

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repurchase resulted in a $156 million loss on the retirement of debt, including the write-off of unamortized debt issuance costs, which is reflected in other expense, net in the Consolidated Statements of Income.

9.    Commitments and Contingencies

        Except as discussed below, the Company's contractual obligations as well as commitments for minimum lease payment obligations under non-cancelable operating leases have not changed materially from those previously discussed in the 2004 Form 10-K.

        At December 31, 2004, the Company had a contingent liability of $80 million related to the 2001 acquisition of Com-Net by Electronics. This represents the maximum amount payable to the former shareholders of Com-Net only after the construction and installation of a communications system for the State of Florida is finished and the State has approved the system based on the guidelines set forth in the contract. No provision has been made in Tyco's Consolidated Financial Statements as the outcome of this contingency cannot be reasonably determined.

        In the normal course of business, the Company is liable for contract completion and product performance. In the opinion of management, such obligations will not significantly affect the Company's financial position, results of operations or cash flows.

Class Actions

        As a result of actions taken by the Company's former senior corporate management, Tyco, some members of the Company's former senior corporate management, former members of the Company's Board of Directors and the Company's current Chief Executive Officer and Chief Financial Officer are named defendants in a number of purported class actions alleging violations of the disclosure provisions of the federal securities laws. Tyco, certain of the Company's current and former employees, some members of the Company's former senior corporate management and some current and former members of the Board of Directors of Tyco International (US), Inc. also are named as defendants in several Employee Retirement Income Security Act ("ERISA") class actions. In addition, Tyco and some members of the Company's former senior corporate management are subject to a SEC inquiry, and some members of the Company's former senior corporate management are named as defendants in criminal cases being prosecuted by the District Attorney of New York County. The findings and outcomes of the prosecutions and the SEC civil action may affect the course of the purported securities class actions and ERISA class actions pending against Tyco. The Company is generally obligated to indemnify its directors and officers and its former directors and officers who are named as defendants in some or all of these matters to the extent required by Bermuda law. In addition, the Company's insurance carriers may decline coverage, or the Company's coverage may be insufficient to cover its expenses and liability, in some or all of these matters. The Company is unable at this time to estimate what its ultimate liability in these matters may be, and it is possible that the Company will be required to pay judgments or settlements and incur expenses, in excess of any insurance coverage, in aggregate amounts that would have a material adverse effect on its financial position, results of operations or cash flows. At this time, it is not possible to estimate the amount of loss or probable losses, if any, that might result from an adverse resolution of these matters.

Investigations

        The Company and others have received various subpoenas and requests from the SEC's Division of Enforcement, the District Attorney of New York County, the United States Department of Labor

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and others seeking the production of voluminous documents in connection with various investigations into the Company's governance, management, operations, accounting and related controls. Certain current and former employees in Fire and Security received subpoenas from the SEC's Division of Enforcement seeking testimony related to past accounting practices regarding the ADT dealer connect fees. As previously reported in the Company's periodic filings, these practices have been discontinued. The Department of Labor is investigating Tyco and the administrators of certain of its benefit plans.    The Company cannot predict when these investigations will be completed, nor can the Company predict what the results of these investigations may be. It is possible that the Company will be required to pay material fines, consent to injunctions on future conduct, lose the ability to conduct business with government instrumentalities (which in turn could negatively impact the Company's business with non-governmental customers) or suffer other penalties, each of which could have a material adverse effect on the Company's business. At this time, it is not possible to estimate the amount of loss, or range of possible loss, if any, that might result from an adverse resolution of these matters.

Intellectual Property Litigation

        The Company is party to a number of patent infringement and antitrust actions that may require the Company to pay damage awards. Tyco has assessed the status of these matters and has recorded liabilities related to certain of these matters where appropriate.

        Mallinckrodt, Inc. ("Mallinckrodt") and Nellcor Puritan Bennett, Inc. ("Nellcor"), plaintiffs/counterdefendants v. Masimo Corporation ("Masimo") et al., defendants/counter-claimants, is a consolidated patent infringement action in the United States District Court for the Central District of California. Nellcor alleges that Masimo infringed one Nellcor patent related to pulse oximeters, which are medical devices used to measure blood oxygen levels in patients, and Masimo alleges that Nellcor infringed four Masimo patents related to pulse oximeters. Trial in the action commenced on February 18, 2004. On March 16, 2004, the jury returned a liability finding that Nellcor willfully infringed the four Masimo patents and that Masimo did not infringe the one Nellcor patent. On March 26, 2004, the jury awarded Masimo $134.5 million in damages for Nellcor's alleged infringement through December 31, 2003. After hearing post-trial motions, the district court issued an order on July 14, 2004 which (i) denied Masimo's request to impose an injunction on the sale of pulse oximeters; (ii) reversed the jury finding of patent infringement for one of the four patents at issue; (iii) ruled that a second patent was unenforceable due to Masimo's inequitable conduct in seeking the patent; and (iv) overturned the jury finding that the infringement was "willful." On August 6, 2004, the district court entered final judgment that included additional damages of $29.5 million for Nellcor's alleged infringement from January 1, 2004 through May 31, 2004. Nellcor is appealing the jury's infringement finding on the remaining two Masimo patents to the United States Court of Appeals for the Federal Circuit. The briefing for the appeal is scheduled to be completed by February 28, 2005. The Court of Appeals has not yet scheduled oral argument for the appeal. Tyco has assessed the status of this matter and has concluded that it is more likely than not that the jury's decision will be overturned and, further, Tyco intends to vigorously pursue all available means to achieve such reversal. Accordingly, no provision has been made in Tyco's Consolidated Financial Statements with respect to this damage award.

        Masimo Corporation v. Tyco Healthcare Group LP ("Tyco Healthcare") and Mallinckrodt, Inc. is a separate lawsuit also pending in the United States District Court for the Central District of California. Tyco Healthcare and Mallinckrodt are subsidiaries of Tyco. In this lawsuit, Masimo alleges violations of antitrust laws against Tyco Healthcare and Mallinckrodt in the markets for pulse oximeter products.

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Masimo alleges that Tyco Healthcare and Mallinckrodt used their market position to prevent hospitals from purchasing Masimo's pulse oximetry products. Masimo seeks injunctive relief and monetary damages, including treble damages. Trial is scheduled to begin on February 22, 2005. At this time, Tyco cannot predict the outcome of the antitrust case and, therefore, it is not possible to estimate the amount of loss or the range of potential losses that might result from an adverse judgment or settlement in this matter. It is possible that Tyco will be required to pay an award of damages in the antitrust lawsuit.

        As previously reported in the Company's periodic filings, Applied Medical Resources Corp. ("Applied Medical") v. United States Surgical ("U.S. Surgical") is a patent infringement action in which U.S. Surgical, a subsidiary of Tyco, is the defendant. In February 2002, the United States District Court for the Central District of California held that U.S. Surgical's VERSASEAL universal seal system, contained in certain surgical trocar and access devices manufactured by U.S. Surgical, infringed certain of the plaintiff's patents. The district court entered a permanent injunction against U.S. Surgical based upon infringement of one of the three patents involved in the suit. The United States Court of Appeals for the Federal Circuit affirmed the district court's permanent injunction ruling in September 2003 for the VERSASEAL product, which is no longer on the market. In October 2003, the district court ruled in U.S. Surgical's favor, holding that two other patents involved in the case were invalid. A trial on damages for the earlier infringement ruling in the district court concluded on July 27, 2004. The jury awarded Applied Medical $43.5 million in damages and returned a finding that the earlier infringement was willful, giving the district court discretion to enhance those damages to up to treble the damages awarded to Applied Medical by the jury. On October 1, 2004, the district court issued post-trial rulings that (i) denied U.S. Surgical's motion to set aside the jury's finding on willfulness; and (ii) granted Applied Medical's motion for enhanced damages, enhancing the jury's damages award by 25%, or $11 million. On January 27, 2005, the district court awarded Applied Medical $10 million in costs, prejudgment interest and attorneys' fees. Thus, Applied Medical's total award is $65 million. U.S. Surgical will appeal the damages award and the willfulness finding to the court of appeals. Tyco has recorded a liability related to this matter and does not expect to incur material losses beyond what has already been accrued.

        On July 31, 2003, Applied Medical filed another patent infringement suit against U.S. Surgical in the United States District Court for the Central District of California. The complaint alleges that U.S. Surgical's VERSASEAL Plus trocar product infringes Applied Medical's U.S. Patent No. 5,385,533. Applied Medical seeks injunctive relief and unspecified monetary damages, including enhanced damages for alleged willful infringement. Applied Medical filed a motion for a preliminary injunction, which the district court denied on December 23, 2003. On February 7, 2005, the district court granted U.S. Surgical's motion for summary judgment.

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Environmental

        Tyco is involved in various stages of investigation and cleanup related to environmental remediation matters at a number of sites. The ultimate cost of site cleanup is difficult to predict given the uncertainties regarding the extent of the required cleanup, the interpretation of applicable laws and regulations and alternative cleanup methods. As of December 31, 2004, Tyco concluded that it was probable that it would incur remedial costs in the range of approximately $169 million to $439 million. As of December 31, 2004, Tyco concluded that the best estimate within this range is approximately $263 million, of which $35 million is included in accrued and other current liabilities and $228 million is included in other liabilities on the Company's Consolidated Balance Sheets. In view of the Company's financial position and reserves for environmental matters of $263 million, the Company believes that any potential payment of such estimated amounts will not have a material adverse effect on its financial position, results of operations or cash flows.

Asbestos

        Like many other companies, Tyco and some of its subsidiaries are named as defendants in personal injury lawsuits based on alleged exposure to asbestos-containing materials. Consistent with the national trend of increased asbestos-related litigation, the Company has observed an increase in the number of these lawsuits in the past several years. The majority of these cases have been filed against subsidiaries in Healthcare and Engineered Products and Services. A limited number of the cases allege premises liability, based on claims that individuals were exposed to asbestos while on a subsidiary's property. A majority of the cases involve product liability claims, based principally on allegations of past distribution of heat-resistant industrial products incorporating asbestos or the past distribution of industrial valves that incorporated asbestos-containing gaskets or packing. Each case typically names between dozens to hundreds of corporate defendants.

        Tyco's involvement in asbestos cases has been limited because its subsidiaries did not mine or produce asbestos. Furthermore, in the Company's experience, a large percentage of these claims were never substantiated and have been dismissed by the courts. The Company will continue to vigorously defend these lawsuits and the Company has not suffered an adverse verdict in a trial court proceeding related to asbestos claims.

        When appropriate, the Company settles claims. However, the total amount paid to date to settle and defend all asbestos claims has been immaterial. As of December 31, 2004, there were approximately 15,000 asbestos liability cases pending against the Company and its subsidiaries.

        The Company believes that it and its subsidiaries have substantial indemnification protection and insurance coverage, subject to applicable deductibles, with respect to asbestos claims. These indemnitors and the relevant carriers typically have been honoring their duty to defend and indemnify. The Company believes that it has valid defenses to these claims and intends to continue to defend them vigorously. Additionally, based on the Company's historical experience in asbestos litigation and an analysis of the Company's current cases, the Company believes that it has adequate amounts recorded for potential settlements and adverse judgments in asbestos-related litigation. While it is not possible at this time to determine with certainty the ultimate outcome of these asbestos-related proceedings, the Company believes that the final outcome of all known and anticipated future claims, after taking into account its substantial indemnification rights and insurance coverage, will not have a material adverse effect on the Company's financial position, results of operations or cash flows.

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Income Tax Matters

        The Company and its subsidiaries' income tax returns are periodically examined by various tax authorities. In connection with such examinations, tax authorities, including the United States Internal Revenue Service, have raised issues and proposed tax deficiencies. The Company is reviewing the issues raised by the tax authorities and are contesting certain of the proposed tax deficiencies. Amounts related to these tax deficiencies and other tax contingencies that management has assessed as probable and estimable have been recorded through the income tax provision.

Other Matters

        The Company is a defendant in a number of other pending legal proceedings incidental to present and former operations, acquisitions and dispositions. The Company does not expect the outcome of these proceedings, either individually or in the aggregate, to have a material adverse effect on its financial position, results of operations or cash flows.

10.    Retirement Plans

        The net periodic benefit cost for all U.S. and non-U.S. defined benefit pension plans was as follows ($ in millions):

        As previously discussed in the 2004 Form 10-K, the Company anticipated that at a minimum it will contribute the minimum required to its pension plans in 2005 of $9 million for U.S plans and $185 million for non-U.S. plans. During the first quarter of 2005, the Company contributed $29 million to its U.S. and non-U.S. pension plans.

        Net periodic postretirement benefit cost was as follows ($ in millions):

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11.    Consolidated Segment Data

        The segment data presented have been reclassified to exclude the results of discontinued operations. In addition, the results of the TGN business held for sale are presented within Corporate and Other. Selected information by business segment is presented in the following tables
($ in millions).

⁽¹⁾

Net revenue relates to the TGN business held for sale.



⁽²⁾

Includes operating loss of $20 million and $18 million for the quarters ended December 31, 2004 and 2003, respectively, related to the TGN business held for sale.

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12.    Supplementary Balance Sheet Information

        Selected supplementary balance sheet information was as follows ($ in millions):