Tyco International Reports Fourth Quarter Earnings from Continuing Operations Before Special Items of $0.81 Per Share and GAAP Earnings of $0.55 Per Share.
$ millions, except per-share amounts)


Q4 Q4 % FY FY %
2008 2007 Change 2008 2007 Change

Revenue $5,284 $4,952 7% $20,199 $18,477 9%
Income (Loss) from
Continuing Operations $264 $209 26% $1,095 ($2,524) N/A
Diluted EPS from Continuing
Operations $0.55 $0.42 31% $2.25 ($5.10) N/A
Special Items ($0.26) ($0.15) ($0.81) ($6.99)
Income from Continuing Ops
Before Special Items $387 $284 36% $1,493 $948 57%
Diluted EPS from Continuing
Ops Before Special Items $0.81 $0.57 42% $3.06 $1.89 62%


-- Revenue increased 7% with organic revenue growth of 4%
-- Company achieved operating margin of 8.1% and operating margin before
special items of 11.0%
-- Company had strong cash flow quarter
-- Quarterly dividend increased 33% during the quarter to $0.20 per share
-- Company's long-term debt rating improved to BBB+

Tyco International Ltd. (NYSE: TYC)(BSX: TYC) today reported $0.55 in diluted earnings per share (EPS) from continuing operations for the fiscal fourth quarter of 2008 and diluted EPS from continuing operations before special items of $0.81. Diluted EPS from continuing operations was negatively impacted by special items which totaled $0.26 per share, primarily for restructuring activities. Diluted EPS from continuing operations before special items increased 42% compared to the fourth quarter of 2007.

Revenue in the quarter increased 7% to $5.3 billion, with organic revenue growth of 4%. The company's operating margin was 8.1% and the operating margin before special items was 11.0%. For the full year, revenue increased 9% to $20.2 billion, with organic revenue growth of 5%. The company's operating margin for the full year was 9.6% and the operating margin before special items was 11.0%.

Cash from operating activities was $1.0 billion in the quarter. The company had free cash flow of $759 million which was negatively impacted by $62 million primarily for restructuring activities.

Tyco Chairman and Chief Executive Officer Ed Breen said, "We delivered solid results in the fourth quarter and for the full year, with good revenue growth and operating income improvement. We continued to make progress on our key initiatives to improve our operations, refine our portfolio and carefully allocate our capital. While we always take a disciplined approach to managing our businesses, this is an area of intense focus in this period of economic uncertainty. Our strong balance sheet and cash flow provide us with flexibility to strengthen our businesses through internal investments and bolt-on acquisitions."

Organic revenue growth, free cash flow, operating income before special items, operating margin before special items, income from continuing operations before special items and diluted EPS from continuing operations before special items are all non-GAAP financial measures and are described below. For a reconciliation of these non-GAAP measures, see the attached tables. Additional schedules can be found at http://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 fourth quarter of 2007 unless otherwise indicated.

ADT Worldwide
Q4 Q4 % FY FY %
2008 2007 Change 2008 2007 Change

Revenue $2,052 $1,989 3% $8,017 $7,648 5%
Operating Income $200 $241 (17%) $910 $842 8%
Operating Margin 9.7% 12.1% 11.4% 11.0%
Special Items ($48) ($16) ($97) ($129)
Operating Income Before
Special Items $248 $257 (4%) $1,007 $971 4%
Operating Margin Before
Special Items 12.1% 12.9% 12.6% 12.7%
Revenue increased 3% in the quarter with organic revenue growth of 0.5%. Recurring revenue grew 5% organically and improved across all regions. Systems installation and service revenue declined 3.5% organically due to weakness in North America and Europe, mostly as a result of lower sales to the retailer end market in North America and Europe and softness in the U.K. commercial market. This was partially offset by continued strong growth in the rest of the world.

Operating income was $200 million in the quarter and the operating margin was 9.7%. Special items consisted of $48 million of restructuring charges. Operating income before special items was $248 million and the operating margin before special items was 12.1% which was negatively impacted by 70 basis points primarily for legal matters and by approximately 40 basis points related to the acquisition of First Service Security.

For the full year, revenue increased 5% to $8 billion with organic revenue growth of 2%. Operating income was $910 million and the operating margin was 11.4%. Operating income before special items increased 4% to more than $1 billion and the operating margin before special items was 12.6%, which was adversely impacted by approximately 50 basis points related to the analog-to- digital conversion.

Flow Control
Q4 Q4 % FY FY %
2008 2007 Change 2008 2007 Change

Revenue $1,188 $1,071 11% $4,418 $3,766 17%
Operating Income $152 $123 24% $618 $457 35%
Operating Margin 12.8% 11.5% 14.0% 12.1%
Special Items ($9) ($12) ($14) ($29)
Operating Income Before
Special Items $161 $135 19% $632 $486 30%
Operating Margin Before
Special Items 13.6% 12.6% 14.3% 12.9%
Revenue increased 11% in the quarter with organic revenue growth of 6.5% led by continued growth in the Valves business, which grew 15% organically. This was offset by a 6% organic revenue decline in the Water business primarily due to reduced water pipeline project activity in Australia.

Operating income was $152 million in the quarter and the operating margin was 12.8%. Operating income before special items increased 19% to $161 million and the operating margin before special items improved by 100 basis points to 13.6%. The increase in the operating income and margin before special items was led by the Valves and Thermal Controls businesses.

For the full year, revenue increased 17% to $4.4 billion with organic revenue growth of 9%. Operating income was $618 million and the operating margin was 14.0%. Operating income before special items increased 30% to $632 million and the operating margin before special items improved by 140 basis points to 14.3% due to higher revenue and productivity improvements.

Fire Protection Services
Q4 Q4 % FY FY %
2008 2007 Change 2008 2007 Change

Revenue $944 $911 4% $3,553 $3,366 6%
Operating Income $74 $80 (8%) $321 $258 24%
Operating Margin 7.8% 8.8% 9.0% 7.7%
Special Items ($30) ($8) ($31) ($23)
Operating Income Before
Special Items $104 $88 18% $352 $281 25%
Operating Margin Before
Special Items 11.0% 9.7% 9.9% 8.3%
Revenue increased 4% in the quarter with organic revenue growth of 2%. The North America SimplexGrinnell business grew 7% organically due to higher levels of service and installation activities. The international fire businesses declined due to the planned exit of certain non-core fire activities.

Operating income was $74 million in the quarter and the operating margin was 7.8%. Special items of $30 million consisted primarily of restructuring charges in Europe. Operating income before special items increased 18% to $104 million and the operating margin before special items increased 130 basis points to 11.0%, with improvements in SimplexGrinnell as well as our international businesses.

For the full year, revenue increased 6% to $3.6 billion with organic revenue growth of 2%. Operating income was $321 million and the operating margin was 9%. Operating income before special items increased 25% to $352 million and the operating margin before special items improved 160 basis points to 9.9%.

Electrical and Metal
more info on www.tyco.com