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8-K - 8-K - Johnson Controls International plca11-21731_18k.htm

Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE

 

Contacts:

 

News Media

 

Investor Relations

 

 

Paul Fitzhenry

 

Antonella Franzen

 

 

609-720-4261

 

609-720-4665

 

 

 

 

 

 

 

 

 

Joe Longo

 

 

 

 

609-720-4545

 

TYCO INTERNATIONAL REPORTS THIRD QUARTER EARNINGS
FROM CONTINUING OPERATIONS BEFORE SPECIAL ITEMS OF $0.85 PER SHARE AND GAAP EARNINGS OF $0.76 PER SHARE

 

·                  Company reports revenue of $4.3 billion, with 10.5%* revenue growth and 4% organic growth

 

·                  Operating margin before special items improves 170* basis points to 12.1%*

 

·                  Diluted EPS from continuing operations before special items increases 18%

 


*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)

 

 

 

Q3 2011

 

Q3 2010

 

% Change

 

Revenue

 

$

4,293

 

$

4,274

 

 

Income from Continuing Operations

 

$

364

 

$

250

 

46

%

Diluted EPS from Continuing Operations

 

$

0.76

 

$

0.50

 

 

 

Special Items

 

$

(0.09

)

$

(0.22

)

 

 

Income from Continuing Ops Before Special Items

 

$

402

 

$

357

 

13

%

Diluted EPS from Continuing Ops Before Special Items

 

$

0.85

 

$

0.72

 

 

 

 

1



 

SCHAFFHAUSEN, Switzerland — July 28, 2011 — Tyco International Ltd. (NYSE: TYC) today reported $0.76 in diluted earnings per share (EPS) from continuing operations for the fiscal third quarter of 2011 and diluted EPS from continuing operations before special items of $0.85 per share.  Excluding the Electrical & Metal Products business, which is now reported as an equity investment, revenue in the quarter of $4.3 billion increased 10.5% versus the prior year with organic revenue growth of 4%.  The benefit of foreign currency contributed 5.6 percentage points to overall revenue growth.

 

“We delivered a strong quarter operationally with improved top-line growth and operating margin expansion which drove an 18% year-over-year increase in earnings per share,”  said Tyco Chairman and Chief Executive Officer Ed Breen. “Our solid financial performance and strong balance sheet provides us with the financial flexibility to invest in our businesses, strengthen our core security, fire and flow control platforms and return excess cash to shareholders.”

 

“We recently completed the acquisitions of Signature Security Group and KEF Holdings and last week announced the acquisition of Chemguard to expand our product and service offerings in fire protection. During the third quarter, we continued to return cash to shareholders by repurchasing $300 million under our current $1 billion program.”

 

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 Third 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 third quarter of 2010 unless otherwise indicated.

 

2



 

Security Solutions

 

 

 

Q3 2011

 

Q3 2010

 

% Change

 

Revenue

 

$

2,165

 

$

1,921

 

13

%

Operating Income

 

$

327

 

$

231

 

42

%

Operating Margin

 

15.1

%

12.0

%

 

 

Special Items

 

$

(31

)

$

(54

)

 

 

Operating Income Before Special Items

 

$

358

 

$

285

 

26

%

Operating Margin Before Special Items

 

16.5

%

14.8

%

 

 

 

Revenue of $2.2 billion increased 13% in the quarter with organic revenue growth of 4.5%.  Recurring revenue grew 5% organically while non-recurring revenue grew 4% organically.  Both recurring and non-recurring revenue grew in all geographic regions.

 

Operating income was $327 million and the operating margin was 15.1%. Special Items of $31 million consisted primarily of restructuring charges.  Operating income before special items was $358 million and the operating margin improved 170 basis points to 16.5%.  The year-over-year operating margin improvement was driven by growth in the higher margin recurring revenue business driven by the Broadview acquisition completed in the third quarter of 2010.  The year-over-year improvement in operating margin also reflected the continued benefit of restructuring and productivity initiatives and increased volume in the commercial business.

 

Fire Protection

 

 

 

Q3 2011

 

Q3 2010

 

% Change

 

Revenue

 

$

1,200

 

$

1,114

 

8

%

Operating Income

 

$

146

 

$

134

 

9

%

Operating Margin

 

12.2

%

12.0

%

 

 

Special Items

 

$

(12

)

$

(6

)

 

 

Operating Income Before Special Items

 

$

158

 

$

140

 

13

%

Operating Margin Before Special Items

 

13.2

%

12.6

%

 

 

 

Revenue of $1.2 billion increased 8% in the quarter with organic revenue growth of 5%. Organic revenue increased 5% in service and 11% in fire products while systems installation was flat.  Backlog of $1.26 billion remained flat on a quarter sequential basis, excluding the impact of foreign currency.

 

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Operating income was $146 million and the operating margin was 12.2%.  Special items of $12 million consisted primarily of divestiture charges.  Operating income before special items was $158 million and the operating margin was 13.2%. The 60 basis point margin improvement was driven by increased service and product revenues and selectivity of project work.

 

Flow Control

 

 

 

Q3 2011

 

Q3 2010

 

% Change

 

Revenue

 

$

928

 

$

849

 

9

%

Operating Income

 

$

103

 

$

113

 

(9

)%

Operating Margin

 

11.1

%

13.3

%

 

 

Special Items

 

$

(3

)

$

(6

)

 

 

Operating Income Before Special Items

 

$

106

 

$

119

 

(11

)%

Operating Margin Before Special Items

 

11.4

%

14.0

%

 

 

 

Revenue of $928 million increased 9% in the quarter. Organic revenue was flat for the quarter with growth of 8% in Valves and 23% in Thermal Controls offset by a decline of 31% in the Water business.  Excluding the impact of foreign currency, orders increased 12% year-over-year and backlog increased 4% to $1.75 billion on a quarter sequential basis.

 

Operating income was $103 million and the operating margin was 11.1%.  Operating income and operating margin before special items were $106 million and 11.4%, respectively. The year-over-year decline in operating margin was primarily attributable to the contribution of a large project in the Pacific Water business in the prior-year quarter.

 

OTHER ITEMS

 

·                  Cash from operating activities was $708 million and free cash flow was $366 million, which included a cash outflow of $33 million primarily related to restructuring activities.

 

·                  The company completed the quarter with $1.63 billion in cash and cash equivalents.

 

·                  Corporate expense, excluding special items, was $102 million.

 

·                  The tax rate before special items was 13.9%.

 

·                  During the third quarter, the company repurchased 6 million shares for $300 million under the new $1 billion share repurchase program announced last quarter.

 

·                  On July 19, 2011, Tyco announced the acquisition of Chemguard, Inc., a leader in fire fighting foam concentrates and equipment, foam systems, and specialty chemicals.  The

 

4



 

business will be integrated into Tyco’s Fire Protection Products business upon closing of the transaction which is expected in the second half of calendar 2011.

 

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 third quarter results for 2011 and outlook for the fourth 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 10:00 a.m. (ET) on July 28, 2011 and ending at 11:30 p.m. (ET) on August 5, 2011. The dial-in number for participants in the United States is (800) 925-0258. For participants outside the United States, the replay dial-in number is (203) 369-3861, passcode 8829.

 

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, 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

 

5



 

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 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 which 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,

 

·                  accounts purchased by ADT,

 

·                  cash paid for purchase accounting and holdback liabilities, voluntary pension contributions, and

 

·                  the sale of accounts receivable programs.

 

Capital expenditures and accounts purchased by ADT 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 and the impact from the sale of accounts receivable programs are added or subtracted because this activity is driven by economic financing decisions rather than operating activity.

 

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

 

6



 

release for a cash flow statement presented in accordance with GAAP and a reconciliation presenting the components of 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, 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.”

 

FORWARD-LOOKING STATEMENTS

 

This release may contain certain “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and are subject to risks, uncertainty and changes in circumstances, which may cause actual results, performance or achievements to differ materially from anticipated results, performance or achievements. All statements contained herein and in accompanying conference calls or webcasts that are not clearly historical in nature are forward-looking and the words “anticipate,” “believe,” “expect,” “estimate,” “plan,” and similar expressions are generally intended to identify forward-looking statements. The forward-looking statements in this release and accompanying conference calls generally include, but are not limited to, statements addressing Tyco’s future financial condition and operating results, the health of the industries and end markets in which Tyco operates, and Tyco’s acquisition, divestiture, restructuring and capital market related activities. Such statements are based upon certain assumptions and assessments made by Tyco’s management in light of their experience and their perception of historical trends, current economic and industry conditions, expected future developments and other factors they believe to be appropriate. Economic, business, competitive, technological and/or regulatory factors affecting Tyco’s businesses are examples of factors, among others, that could cause actual results to differ materially from those described in the forward-looking statements. Tyco is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise. More detailed information about these and other factors

 

7



 

is set forth in Tyco’s Annual Report on Form 10-K for the fiscal year ended Sept. 24, 2010 and in subsequent filings with the Securities and Exchange Commission.

 

#  #  #

 

8



 

TYCO INTERNATIONAL LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share data)

(UNAUDITED)

 

 

 

For the

 

For the

 

 

 

Quarters Ended

 

Nine Months Ended

 

 

 

June 24,

 

June 25,

 

June 24,

 

June 25,

 

 

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

Revenue from product sales

 

$

2,336

 

$

2,532

 

$

6,962

 

$

7,366

 

Service revenue

 

1,957

 

1,742

 

5,702

 

5,157

 

Net revenue

 

4,293

 

4,274

 

12,664

 

12,523

 

Cost of product sales

 

1,629

 

1,781

 

4,871

 

5,218

 

Cost of services

 

1,011

 

912

 

2,963

 

2,694

 

Selling, general and administrative expenses

 

1,143

 

1,163

 

3,365

 

3,380

 

Restructuring, asset impairments and divestiture charges (gain), net

 

35

 

43

 

(153

)

26

 

Operating income

 

475

 

375

 

1,618

 

1,205

 

Interest income

 

8

 

7

 

26

 

24

 

Interest expense

 

(59

)

(71

)

(184

)

(221

)

Other expense, net

 

(3

)

(85

)

(9

)

(73

)

Income from continuing operations before income taxes

 

421

 

226

 

1,451

 

935

 

Income tax (expense) benefit

 

(58

)

26

 

(278

)

(78

)

Income from continuing operations

 

363

 

252

 

1,173

 

857

 

(Loss) income from discontinued operations, net of income taxes

 

(5

)

4

 

160

 

14

 

Net income

 

358

 

256

 

1,333

 

871

 

Less: noncontrolling interest in subsidiaries net (loss) income

 

(1

)

2

 

 

5

 

Net income attributable to Tyco common shareholders

 

$

359

 

$

254

 

$

1,333

 

$

866

 

Amounts attributable to Tyco common shareholders:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

364

 

$

250

 

$

1,173

 

$

852

 

(Loss) income from discontinued operations

 

(5

)

4

 

160

 

14

 

Net income attributable to Tyco common shareholders

 

$

359

 

$

254

 

$

1,333

 

$

866

 

Basic earnings per share attributable to Tyco common shareholders:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.78

 

$

0.51

 

$

2.46

 

$

1.77

 

(Loss) income from discontinued operations

 

(0.01

)

0.01

 

0.34

 

0.03

 

Net income attributable to Tyco common shareholders

 

$

0.77

 

$

0.52

 

$

2.80

 

$

1.80

 

Diluted earnings per share attributable to Tyco common shareholders:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.76

 

$

0.50

 

$

2.44

 

$

1.76

 

Income from discontinued operations

 

 

0.01

 

0.33

 

0.03

 

Net income attributable to Tyco common shareholders

 

$

0.76

 

$

0.51

 

$

2.77

 

$

1.79

 

Weighted average number of shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

468

 

492

 

476

 

481

 

Diluted

 

475

 

496

 

481

 

484

 

 

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 24, 2010 and Form 10-Q for the quarter ended March 25, 2011.

 

9



 

TYCO INTERNATIONAL LTD.

CONSOLIDATED BALANCE SHEETS

(in millions)

(Unaudited)

 

 

 

June 24,

 

September 24,

 

 

 

2011

 

2010

 

Assets

 

 

 

 

 

Current Assets:

 

 

 

 

 

Cash and cash equivalents

 

$

1,629

 

$

1,775

 

Accounts receivable, less allowance for doubtful accounts

 

2,470

 

2,493

 

Inventories

 

1,406

 

1,443

 

Prepaid expenses and other current assets

 

946

 

936

 

Deferred income taxes

 

367

 

382

 

Assets held for sale

 

 

324

 

Total current assets

 

6,818

 

7,353

 

Property, plant and equipment, net

 

4,007

 

4,156

 

Goodwill

 

9,895

 

9,577

 

Intangible assets, net

 

3,558

 

3,446

 

Other assets

 

2,699

 

2,596

 

Total Assets

 

$

26,977

 

$

27,128

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

Loans payable and current maturities of long-term debt

 

42

 

536

 

Accounts payable

 

1,230

 

1,340

 

Accrued and other current liabilities

 

2,708

 

2,671

 

Deferred revenue

 

638

 

618

 

Liabilities held for sale

 

 

103

 

Total current liabilities

 

4,618

 

5,268

 

Long-term debt

 

4,145

 

3,652

 

Deferred revenue

 

1,156

 

1,106

 

Other liabilities

 

2,876

 

3,001

 

Total Liabilities

 

$

12,795

 

$

13,027

 

 

 

 

 

 

 

Total Tyco Shareholders’ Equity

 

14,177

 

14,084

 

Noncontrolling interest

 

5

 

17

 

Total Equity

 

14,182

 

14,101

 

 

 

 

 

 

 

 

 

Total Liabilities and Equity

 

$

26,977

 

$

27,128

 

 

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 24, 2010, and Form 10-Q for the quarter ended March 25, 2011.

 

10



 

TYCO INTERNATIONAL LTD.

RESULTS OF SEGMENTS

(in millions)

(Unaudited)

 

 

 

Quarters Ended

 

 

 

Nine Months Ended

 

 

 

 

 

June 24,

 

 

 

June 25,

 

 

 

June 24,

 

 

 

June 25,

 

 

 

 

 

2011

 

 

 

2010

 

 

 

2011

 

 

 

2010

 

 

 

NET REVENUE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tyco Security Solutions

 

$

2,165

 

 

 

$

1,921

 

 

 

$

6,351

 

 

 

$

5,687

 

 

 

Tyco Fire Protection

 

1,200

 

 

 

1,114

 

 

 

3,408

 

 

 

3,308

 

 

 

Tyco Flow Control

 

928

 

 

 

849

 

 

 

2,558

 

 

 

2,505

 

 

 

Electrical and Metal Products

 

 

 

 

390

 

 

 

347

 

 

 

1,023

 

 

 

Corporate and Other

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Net Revenue

 

$

4,293

 

 

 

$

4,274

 

 

 

$

12,664

 

 

 

$

12,523

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME AND MARGIN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tyco Security Solutions

 

$

327

 

15.1

%

$

231

 

12.0

%

$

997

 

15.7

%

$

811

 

14.3

%

Tyco Fire Protection

 

146

 

12.2

%

134

 

12.0

%

362

 

10.6

%

346

 

10.5

%

Tyco Flow Control

 

103

 

11.1

%

113

 

13.3

%

289

 

11.3

%

306

 

12.2

%

Electrical and Metal Products

 

 

 

40

 

10.3

%

7

 

2.0

%

87

 

8.5

%

Corporate and Other

 

(101

)

N/M

 

(143

)

N/M

 

(37

)

N/M

 

(345

)

N/M

 

Operating Income and Margin

 

$

475

 

 

 

$

375

 

 

 

$

1,618

 

 

 

$

1,205

 

 

 

 

11



 

TYCO INTERNATIONAL LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in millions)

 

 

 

For the Quarters Ended

 

For the Nine Months Ended

 

 

 

June 24,

 

June 25,

 

June 24,

 

June 25,

 

 

 

2011

 

2010

 

2011

 

2010

 

Cash Flows From Operating Activities:

 

 

 

 

 

 

 

 

 

Net income attributable to Tyco common shareholders

 

$

359

 

$

254

 

$

1,333

 

$

866

 

Noncontrolling interest in subsidiaries net income

 

(1

)

2

 

 

5

 

Loss (income) from discontinued operations, net of income taxes

 

5

 

(4

)

(160

)

(14

)

Income from continuing operations

 

363

 

252

 

1,173

 

857

 

Adjustments to reconcile net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

331

 

304

 

976

 

869

 

Non-cash compensation expense

 

27

 

30

 

86

 

92

 

Deferred income taxes

 

(3

)

(91

)

119

 

(127

)

Provision for losses on accounts receivable and inventory

 

13

 

29

 

61

 

93

 

Loss (gain) on divestitures

 

6

 

2

 

(227

)

(43

)

Other non-cash items

 

18

 

79

 

54

 

101

 

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

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

(140

)

(65

)

(183

)

 

Inventories

 

(30

)

(61

)

(195

)

(127

)

Prepaid expenses and other current assets

 

(5

)

(8

)

(18

)

12

 

Accounts payable

 

46

 

81

 

(53

)

33

 

Accrued and other liabilities

 

109

 

193

 

(172

)

(6

)

Other

 

(27

)

(85

)

 

(87

)

Net cash provided by operating activities

 

708

 

660

 

1,621

 

1,667

 

Net cash provided by (used in) discontinued operating activities

 

 

9

 

(9

)

12

 

Cash Flows From Investing Activities:

 

 

 

 

 

 

 

 

 

Capital expenditures

 

(187

)

(180

)

(548

)

(512

)

Proceeds from disposal of assets

 

2

 

7

 

7

 

26

 

Acquisition of businesses, net of cash acquired

 

(219

)

(448

)

(228

)

(600

)

Accounts purchased by ADT

 

(172

)

(134

)

(451

)

(400

)

Divestiture of businesses, net of cash divested

 

5

 

(2

)

711

 

26

 

Other

 

(29

)

5

 

(6

)

16

 

Net cash used in investing activities

 

(600

)

(752

)

(515

)

(1,444

)

Net cash (used in) provided by discontinued investing activities

 

 

(4

)

259

 

(7

)

Cash Flows From Financing Activities:

 

 

 

 

 

 

 

 

 

Proceeds from issuance of short-term debt

 

161

 

 

161

 

26

 

Repayment of short-term debt

 

(121

)

1

 

(653

)

(268

)

Proceeds from issuance of long-term debt

 

 

503

 

497

 

1,001

 

Repayment of long-term debt

 

(1

)

(953

)

(3

)

(962

)

Proceeds from exercise of share options

 

48

 

24

 

112

 

33

 

Dividends paid

 

(118

)

(97

)

(342

)

(311

)

Repurchase of common shares by treasury

 

(300

)

(276

)

(1,300

)

(276

)

Transfer from discontinued operations

 

 

5

 

250

 

5

 

Other

 

(1

)

(11

)

9

 

11

 

Net cash used in financing activities

 

(332

)

(804

)

(1,269

)

(741

)

Net cash used in discontinued financing activities

 

 

(5

)

(250

)

(5

)

Effect of currency translation on cash

 

13

 

(14

)

27

 

(13

)

Net decrease in cash and cash equivalents

 

(211

)

(910

)

(136

)

(531

)

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

 

 

 

(10

)

 

Cash and cash equivalents at beginning of period

 

1,840

 

2,733

 

1,775

 

2,354

 

Cash and cash equivalents at end of period

 

$

1,629

 

$

1,823

 

$

1,629

 

$

1,823

 

 

 

 

 

 

 

 

 

 

 

Reconciliation to “Free Cash Flow”:

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

$

708

 

$

660

 

$

1,621

 

$

1,667

 

Sale of accounts receivable

 

 

(1

)

 

1

 

Capital expenditures, net

 

(185

)

(173

)

(541

)

(486

)

Accounts purchased by ADT

 

(172

)

(134

)

(451

)

(400

)

Purchase accounting and holdback liabilities

 

 

 

1

 

(3

)

Voluntary pension contributions

 

15

 

 

15

 

 

Free Cash Flow

 

$

366

 

$

352

 

$

645

 

$

779

 

 

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

 

12



 

Tyco International Ltd.

Organic Growth Reconciliation - Revenue

(in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended June 24, 2011

 

 

 

Net Revenue for the

 

 

 

 

 

Adjusted

 

 

 

 

 

 

 

 

 

Net Revenue for the

 

 

 

Quarter Ended June 25,

 

Base Year Adjustments

 

2010 Base

 

 

 

 

 

 

 

 

 

Quarter Ended June 24,

 

 

 

2010

 

Acquisitions

 

(Divestitures)

 

Revenue

 

Foreign Currency

 

Acquisitions

 

Other

 

Organic Revenue*

 

2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tyco Security Solutions

 

$

1,921

 

$

78

 

4.1

%

$

(18

)

-0.9

%

1,981

 

$

85

 

4.4

%

$

10

 

0.5

%

$

 

0.0

%

$

89

 

4.5

%

$

2,165

 

12.7

%

Tyco Fire Protection

 

1,114

 

 

0.0

%

(9

)

-0.8

%

1,105

 

57

 

5.1

%

 

0.0

%

(18

)

-1.6

%

56

 

5.1

%

1,200

 

7.7

%

Tyco Flow Control

 

849

 

 

0.0

%

(2

)

-0.2

%

847

 

77

 

9.1

%

1

 

0.1

%

 

0.0

%

3

 

0.4

%

928

 

9.3

%

Total before Electrical and Metal Products

 

$

3,884

 

$

78

 

2.0

%

$

(29

)

-0.7

%

$

3,933

 

$

219

 

5.6

%

$

11

 

0.3

%

$

(18

)

-0.5

%

$

148

 

3.8

%

$

4,293

 

10.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Electrical and Metal Products

 

390

 

 

0.0

%

(390

)

-100.0

%

 

 

0.0

%

 

0.0

%

 

0.0

%

 

0.0

%

 

-100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Net Revenue

 

$

4,274

 

$

78

 

1.8

%

$

(419

)

-9.8

%

$

3,933

 

$

219

 

5.1

%

$

11

 

0.3

%

$

(18

)

-0.4

%

$

148

 

3.8

%

$

4,293

 

0.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended June 24, 2011

 

 

 

Net Revenue for the Nine

 

 

 

 

 

 

 

 

 

Adjusted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Revenue for the Nine

 

 

 

Months Ended June 25,

 

Base Year Adjustments

 

2010 Base

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Months Ended June 24,

 

 

 

2010

 

Acquisitions

 

(Divestitures)

 

Revenue

 

Foreign Currency

 

Acquisitions

 

Other

 

Organic Revenue*

 

2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tyco Security Solutions

 

$

5,687

 

$

355

 

6.2

%

$

(128

)

-2.3

%

5,914

 

$

119

 

2.1

%

$

10

 

0.2

%

$

 

0.0

%

$

308

 

5.2

%

$

6,351

 

11.7

%

Tyco Fire Protection

 

3,308

 

 

0.0

%

(32

)

-1.0

%

3,276

 

73

 

2.2

%

 

0.0

%

(55

)

-1.7

%

114

 

3.5

%

3,408

 

3.0

%

Tyco Flow Control

 

2,505

 

 

0.0

%

(10

)

-0.4

%

2,495

 

108

 

4.3

%

6

 

0.2

%

 

0.0

%

(51

)

-2.0

%

2,558

 

2.1

%

Total before Electrical and Metal Products

 

$

11,500

 

$

355

 

3.1

%

$

(170

)

-1.5

%

$

11,685

 

$

300

 

2.6

%

$

16

 

0.1

%

$

(55

)

-0.5

%

$

371

 

3.2

%

$

12,317

 

7.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Electrical and Metal Products

 

1,023

 

 

0.0

%

(726

)

-71.0

%

297

 

2

 

0.2

%

4

 

0.4

%

 

0.0

%

44

 

14.8

%

347

 

-66.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Net Revenue

 

$

12,523

 

$

355

 

2.8

%

$

(896

)

-7.2

%

$

11,982

 

$

302

 

2.4

%

$

20

 

0.2

%

$

(55

)

-0.4

%

$

415

 

3.5

%

$

12,664

 

1.1

%

 


 

*

 Organic revenue growth percentage based on adjusted 2010 base revenue.

 

 

 See “Non-GAAP Measures” for a description of the calculation methodology.

 

13



 

Earnings Per Share Summary

(Unaudited)

 

 

 

Quarter Ended

 

Quarter Ended

 

 

 

June 24, 2011

 

June 25, 2010

 

 

 

 

 

 

 

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

 

$

0.76

 

$

0.50

 

 

 

 

 

 

 

Restructuring, net

 

0.04

 

0.06

 

 

 

 

 

 

 

Acquisition costs

 

0.02

 

0.03

 

 

 

 

 

 

 

Asset impairments and (gains) / losses on divestitures, net

 

0.01

 

 

 

 

 

 

 

 

Tax items

 

0.02

 

0.13

 

 

 

 

 

 

 

Total Before Special Items

 

$

0.85

 

$

0.72

 

 

14



 

Tyco International Ltd.

For the Quarter Ended June 24, 2011

(in millions, except per share data)

(Unaudited)

 

 

 

Tyco

 

Tyco

 

Tyco

 

 

 

 

 

 

 

Security

 

Fire

 

Flow

 

Corporate

 

 

 

 

 

Solutions

 

Protection

 

Control

 

and Other

 

Revenue

 

Revenue (GAAP)

 

$

2,165

 

$

1,200

 

$

928

 

 

$

4,293

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income

 

Diluted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

from

 

EPS from

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing

 

Continuing

 

 

 

Operating Income

 

 

 

 

 

 

 

 

 

 

 

 

 

Operations

 

Operations

 

 

 

Tyco

 

 

 

Tyco

 

 

 

Tyco

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

Attributable

 

Attributable

 

 

 

Security

 

 

 

Fire

 

 

 

Flow

 

 

 

Corporate

 

 

 

Operating

 

 

 

Interest

 

Other

 

Income

 

Noncontrolling

 

to Tyco

 

to Tyco

 

 

 

Solutions

 

Margin

 

Protection

 

Margin

 

Control

 

Margin

 

and Other

 

Margin

 

Income

 

Margin

 

Expense, net

 

Expense

 

Taxes

 

Interest

 

Shareholders

 

Shareholders

 

As Reported (GAAP)

 

$

327

 

15.1

%

$

146

 

12.2

%

$

103

 

11.1

%

$

(101

)

N/M

 

$

475

 

11.1

%

$

(51

)

$

(3

)

$

(58

)

$

1

 

$

364

 

$

0.76

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring, net

 

22

 

 

 

2

 

 

 

2

 

 

 

3

 

 

 

29

 

 

 

 

 

 

 

(10

)

 

 

19

 

0.04

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring charges in cost of sales and SG&A

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Gains) / losses on divestitures, net

 

2

 

 

 

9

 

 

 

 

 

 

 

(5

)

 

 

6

 

 

 

 

 

 

 

(2

)

 

 

4

 

0.01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition costs

 

7

 

 

 

 

 

 

 

1

 

 

 

1

 

 

 

9

 

 

 

 

 

 

 

(2

)

 

 

7

 

0.02

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7

 

 

 

7

 

0.02

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Before Special Items

 

$

358

 

16.5

%

$

158

 

13.2

%

$

106

 

11.4

%

$

(102

)

N/M

 

$

520

 

12.1

%

$

(51

)

$

(3

)

$

(65

)

$

1

 

$

402

 

$

0.85

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Shares Outstanding

 

475

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Shares Outstanding - Before Special Items

 

475

 

 

15



 

Tyco International Ltd.

For the Quarter Ended June 25, 2010

(in millions, except per share data)

(Unaudited)

 

 

 

Tyco

 

Tyco

 

Tyco

 

 

 

 

 

Electrical

 

 

 

 

 

Security

 

Fire

 

Flow

 

Safety

 

Corporate

 

& Metal

 

 

 

 

 

Solutions

 

Protection

 

Control

 

Products

 

and Other

 

Products

 

Revenue

 

Previously Reported Revenue

 

$

1,824

 

$

822

 

$

849

 

$

389

 

 

$

390

 

$

4,274

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Realignment

 

97

 

292

 

 

 

(389

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recasted Revenue (GAAP)

 

$

1,921

 

$

1,114

 

$

849

 

 

 

$

390

 

$

4,274

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income

 

Diluted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

from

 

EPS from

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing

 

Continuing

 

 

 

Operating Income

 

 

 

 

 

 

 

 

 

 

 

 

 

Operations

 

Operations

 

 

 

Tyco

 

 

 

Tyco

 

 

 

Tyco

 

 

 

 

 

 

 

 

 

 

 

Electrical

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

Attributable

 

Attributable

 

 

 

Security

 

 

 

Fire

 

 

 

Flow

 

 

 

Safety

 

 

 

Corporate

 

 

 

& Metal

 

 

 

Operating

 

 

 

Interest

 

Other

 

Income

 

Noncontrolling

 

to Tyco

 

to Tyco

 

 

 

Solutions

 

Margin

 

Protection

 

Margin

 

Control

 

Margin

 

Products

 

Margin

 

and Other

 

Margin

 

Products

 

Margin

 

Income

 

Margin

 

Expense, net

 

Income, net

 

Taxes

 

Interest

 

Shareholders

 

Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As Previously Reported (GAAP)

 

$

222

 

12.2

%

$

80

 

9.7

%

$

113

 

13.3

%

$

63

 

16.2

%

$

(143

)

N/M

 

$

40

 

10.3

%

$

375

 

8.8

%

$

(64

)

$

(85

)

$

26

 

$

(2

)

$

250

 

$

0.50

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Realignment

 

9

 

 

 

54

 

 

 

 

 

 

 

(63

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recasted (GAAP)

 

$

231

 

12.0

%

$

134

 

12.0

%

$

113

 

13.3

%

 

 

$

(143

)

N/M

 

$

40

 

10.3

%

$

375

 

8.8

%

$

(64

)

$

(85

)

$

26

 

$

(2

)

$

250

 

$

0.50

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring, net

 

27

 

 

 

6

 

 

 

6

 

 

 

 

 

 

 

1

 

 

 

2

 

 

 

42

 

 

 

 

 

 

 

(14

)

 

 

28

 

0.06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring charges in cost of sales and SG&A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition costs

 

24

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

24

 

 

 

 

 

 

 

(9

)

 

 

15

 

0.03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Gains) / losses on divestitures, net

 

3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2

)

 

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Separation Costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2

 

 

 

 

 

 

 

2

 

 

 

 

 

 

 

 

 

 

 

2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss on extinguishment of Debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

87

 

(25

)

 

 

62

 

0.13

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Before Special Items

 

$

285

 

14.8

%

$

140

 

12.6

%

$

119

 

14.0

%

 

 

$

(142

)

N/M

 

$

41

 

10.5

%

$

443

 

10.4

%

$

(64

)

$

2

 

$

(22

)

$

(2

)

$

357

 

$

0.72

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Shares Outstanding

 

496

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Shares Outstanding - Before Special Items

 

496

 

 

16