TYCO INTERNATIONAL LTD. NEUHAUSEN, Switzerland, Nov. 13, 2014 /PRNewswire/ --
-- Revenue in the quarter of $2.7 billion increases 4%, with 3% organic
growth, led by the Global Products segment, which had organic growth of
8%
-- Full year revenue of $10.3 billion increases 3% on a nominal and organic
basis
-- Before special items, segment operating margin improves 20 basis points
for the quarter and increases 90 basis points for the year to 13.9%
-- Diluted EPS from continuing operations before special items increases
19% for the quarter and 20% for the year
-- The company repurchased 23 million shares for $1.0 billion during the
quarter, bringing the full-year total to 42 million shares repurchased
for $1.8 billion
-- As previously announced, the Board of Directors approved an additional
$1.0 billion authorization for share repurchases
(Income and EPS amounts are attributable to Tyco common shareholders)
($ millions, except per-share amounts)
(All prior periods have been recast to reflect certain businesses as discontinued operations)
Q4 2014 Q4 2013 % Change FY14 FY13 % Change
------- ------- -------- ---- ---- --------
Revenue $2,704 $2,610 4% $10,340 $10,073 3%
Segment
Operating
Income $347 $315 10% $1,317 $1,028 28%
Operating
(Loss)
Income $(200) $235 $697 $709
(Loss) Income
from
Continuing
Operations $(76) $135 $794 $443
Diluted EPS
from
Continuing
Operations $(0.17) $0.29 $1.71 $0.94
Special Items $(0.73) $(0.18) $(0.28) $(0.72)
Segment
Operating
Income
Before
Special
Items $383 $365 5% $1,435 $1,308 10%
Income from
Continuing
Ops Before
Special
Items $252 $218 16% $922 $785 17%
Diluted EPS
from
Continuing
Ops Before
Special
Items $0.56 $0.47 19% $1.99 $1.66 20%
Tyco (NYSE: TYC) today reported GAAP diluted loss per share from continuing operations for the fiscal fourth quarter of 2014 of $0.17 and diluted earnings per share (EPS) from continuing operations before special items of $0.56. Revenue in the quarter increased 4% versus the prior year to $2.7 billion. Organic revenue grew 3% in the quarter, with growth across all segments, led by Global Products with an 8% increase from the prior year quarter. Acquisitions contributed 1 percentage point of growth, which was partially offset by the impact of divestitures.
For the full year, the company reported GAAP diluted EPS from continuing operations of $1.71 and diluted EPS from continuing operations before special items of $1.99. Revenue of $10.3 billion increased 3%. Organic revenue growth for the year was 3% led by Global Products with 6% organic growth. Acquisitions contributed 2 percentage points of growth, which was offset by divestitures and changes in foreign currency exchange rates.
"This was another solid quarter and a strong finish to our second year as the new Tyco," said Tyco Chief Executive Officer George Oliver. "Our organic growth in the quarter was led by our strong technology position in our Global Products businesses, where we grew 8%. This, coupled with our continued productivity initiatives and capital allocation, drove a 19% increase in earnings per share for the quarter.
"Overall, I am very pleased with our performance this past year -- we delivered strong results, have taken strategic action with our portfolio management with focused acquisitions and divestitures, and have returned excess cash to shareholders, all of which resulted in a 20% increase in earnings per share for the year," Mr. Oliver added.
As previously disclosed, the company recorded charges totaling $465 million in the quarter ended Sept. 26, 2014, related to legacy asbestos liabilities, including $225 million related to an agreement in principle to settle Yarway claims and $240 million in respect of non-Yarway liabilities.
Organic revenue, free cash flow, operating income, segment operating 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 fourth quarter review slides can be found in the Investor Relations section of Tyco's website at http://investors.tyco.com.
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. As previously disclosed, during the fiscal third quarter the company decided to sell certain businesses previously reported within its Rest of World Installation & Services operating segment. Additionally, in the fiscal third quarter, the company completed the sale of its South Korean security business, ADT Korea. The results of these businesses have been classified as discontinued operations for the current and historical periods. The revenue and operating income results shown below have been adjusted to reflect these changes in all periods presented. All comparisons are to the fiscal fourth quarter or full year of 2013 unless otherwise indicated.
North America Installation & Services
Q4 2014 Q4 2013 % Change FY 14 FY 13 % Change
------- ------- -------- ----- ----- --------
Revenue $1,012 $996 2% $3,876 $3,891 -
Operating
Income $117 $113 4% $450 $388 16%
Operating
Margin 11.6% 11.3% 11.6% 10.0%
Special
Items $(17) $(20) $(64) $(86)
Operating
Income
Before
Special
Items $134 $133 1% $514 $474 8%
Operating
Margin
Before
Special
Items 13.2% 13.4% 13.3% 12.2%
Revenue of $1.0 billion for the quarter increased 2% over the prior year. Installation revenue growth of 6% was partially offset by a 2% decline in service, for total organic revenue growth of 2%. Backlog of $2.5 billion increased 3% year over year and increased 1% on a quarter sequential basis, excluding the impact of foreign currency.
Operating income for the quarter was $117 million and the operating margin was 11.6%. Special items of $17 million consisted primarily of separation and restructuring charges. Before special items, operating income was $134 million and the operating margin was 13.2%. Improved execution and the benefit of restructuring and productivity initiatives were more than offset by a $10 million charge related to a legal matter that arose in 2007, which negatively impacted the operating margin by 100 basis points.
Revenue for the full year of $3.9 billion was relatively consistent with the prior year. Organic growth of 1% and the benefit of acquisitions were offset by the impact of divestitures and changes in foreign currency exchange rates. Operating income was $450 million and included $64 million of special items. Before special items, operating income was $514 million and the operating margin increased 110 basis points to 13.3%.
Rest of World Installation & Services
Q4 2014 Q4 2013 % Change FY 14 FY 13 % Change
------- ------- -------- ----- ----- --------
Revenue $1,011 $987 2% $3,920 $3,843 2%
Operating
Income $101 $83 22% $409 $333 23%
Operating
Margin 10.0% 8.4% 10.4% 8.7%
Special
Items $(17) $(27) $(42) $(80)
Operating
Income
Before
Special
Items $118 $110 7% $451 $413 9%
Operating
Margin
Before
Special
Items 11.7% 11.1% 11.5% 10.7%
Revenue of $1.0 billion for the quarter increased 2% compared to the prior year. Organic revenue growth of 2% consisted of 6% growth in installation, partially offset by a 2% decline in service revenue. Acquisitions contributed 2% to revenue growth, which was offset by the impact of divestitures. Backlog of $2.2 billion increased 6% year over year and, due to normal seasonality, declined 3% on a quarter sequential basis, excluding the impact of foreign currency.
Operating income for the quarter was $101 million and the operating margin was 10.0%. Special items of $17 million consisted primarily of restructuring charges. Before special items, operating income was $118 million, and the operating margin improved 60 basis points to 11.7%.
Revenue for the full year was $3.9 billion, increasing 2% year over year with organic revenue growth of 2%. Acquisitions contributed 3 percentage points of growth, which was offset by the impact of divestitures and changes in foreign currency exchange rates. Operating income was $409 million and included $42 million of special items. Before special items, operating income was $451 million and the operating margin expanded 80 basis points to 11.5%.
Global Products
Q4 2014 Q4 2013 % Change FY 14 FY 13 % Change
------- ------- -------- ----- ----- --------
Revenue $681 $627 9% $2,544 $2,339 9%
Operating
Income $129 $119 8% $458 $307 49%
Operating
Margin 18.9% 19.0% 18.0% 13.1%
Special
Items $(2) $(3) $(12) $(114)
Operating
Income
Before
Special
Items $131 $122 7% $470 $421 12%
Operating
Margin
Before
Special
Items 19.2% 19.5% 18.5% 18.0%
Revenue of $681 million for the quarter increased 9%, including a 1% benefit from acquisitions. Organic revenue grew 8%, with growth across all three product platforms.
Operating income for the quarter was $129 million and the operating margin was 18.9%. Special items totaled $2 million. Before special items, operating income was $131 million and the operating margin was 19.2%. Operating leverage on increased revenue and the benefit of productivity initiatives were more than offset by the timing of incremental R&D investments as well as non-cash purchase accounting. Together, these items impacted the operating margin by 220 basis points.
Revenue for the full year of $2.5 billion increased 9% year over year, with organic revenue growth of 6%. Acquisitions contributed 3 percentage points to growth. Operating income was $458 million and included $12 million of special items. Before special items, operating income was $470 million and the operating margin expanded 50 basis points to 18.5%.
OTHER ITEMS
-- For the full year, cash from operating activities was $831 million and
free cash flow was $528 million, which included a cash outflow of $473
million, primarily related to payments under the company's tax sharing
agreements, as well as restructuring and separation activities. Adjusted
free cash flow for the year was $1.0 billion.
-- Corporate expense was $63 million for the quarter and $230 million for
the year, both before special items. On a GAAP basis, corporate expense
was $547 million for the quarter and $620 million for the year, both of
which included a charge of $465 million related to asbestos liabilities.
-- The tax rate before special items was 17.5% for the quarter and 17.2%
for the year.
-- The company repurchased 23 million shares for $1.0 billion during the
quarter, bringing the full-year total to 42 million shares repurchased
for $1.8 billion. Since the close of the fiscal fourth quarter, the
company repurchased 10 million shares for $417 million. The company now
has $1.0 billion remaining on its share repurchase authorization.
-- Subsequent to the quarter's close, the company completed the previously
announced acquisition of a security business in Brazil.
-- The company expects to complete the change in its jurisdiction of
incorporation to Ireland, which was approved by shareholders on
September 9, 2014, in November 2014.
-- The company will host an investor meeting on November 21, 2014, in New
York to discuss its growth strategy and long-term outlook through fiscal
year 2018. Investors and the general public are invited to attend the
event by registering at http://www.tycid2014.com/ or to view a webcast
of the meeting in listen-only mode through Tyco's website at
http://investors.tyco.com. A replay of the webcast and the supporting
presentation materials will be available at the same website.
ABOUT TYCO
Tyco (NYSE: TYC) is the world's largest pure-play fire protection and security company. Tyco provides more than three million customers around the globe with the latest fire protection and security products and services. A company with $10+ billion in annual revenue, Tyco has over 57,000 employees in more than 900 locations across 50 countries serving various end markets, including commercial, institutional, governmental, retail, industrial, energy, residential and small business. For more information, visit www.tyco.com.
CONFERENCE CALL AND WEBCAST
Management will discuss the company's fourth quarter results for 2014 during a conference call and webcast for investors today beginning at 8:00 a.m. Eastern time (ET), which can be accessed in the following ways:
-- Live via webcast - through the Investor Relations section of Tyco's
website at http://investors.tyco.com,
-- Live via telephone (for "listen-only" participants and those who would
like to ask a question) - by dialing 800-857-9797 (in the United States)
or 517-308-9262 (outside the United States), passcode "Tyco",
-- Replay via telephone - by dialing 866-499-4547 (in the United States) or
203-369-1805 (outside the United States), passcode 7522, from 10:00 a.m.
(ET) on November 13, 2014, until 11:59 p.m. (ET) on November 20, 2014,
and
-- Replay via webcast - through the "Presentations & Webcasts" link on the
Investor Relations section of Tyco's website: http://investors.tyco.com.
NON-GAAP MEASURES
Organic revenue, free cash flow (outflow) (FCF), and income from continuing operations, earnings per share (EPS) from continuing operations, operating income and segment operating income, 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 either do not reflect the underlying results and trends of the Company's businesses or are not completely under management's control. There are limitations associated with organic revenue, such as the fact that, as presented herein, the metric may not be comparable to similarly titled measures reported by other companies. These limitations are best addressed by using organic revenue in combination with the GAAP numbers. Organic revenue may be used as a component in the company's incentive compensation plans.
FCF is a useful measure of the company's cash that permits management and investors to gain insight into the number that management employs to measure cash that is free from any significant existing obligation and is available to service debt and make investments. 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. 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,
-- dealer generated accounts and bulk accounts purchased,
-- cash paid for purchase accounting and holdback liabilities, and
-- voluntary pension contributions.
Capital expenditures and dealer generated and bulk accounts purchased are subtracted because they represent long-term investments that are required for normal business activities. Cash paid for purchase accounting and holdback liabilities is subtracted because these cash outflows are not available for general corporate uses. Voluntary pension contributions are added because this activity is driven by economic financing decisions rather than operating activity. In addition, the company presents adjusted free cash flow, which is free cash flow, adjusted to exclude the cash impact of the special items highlighted below. This number provides information to investors regarding the cash impact of certain items management believes are useful to identify, as described below.
The limitation associated with using these cash flow metrics is that they adjust 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. Furthermore, these non-GAAP metrics may not be comparable to similarly titled measures reported by other companies. These limitations are best addressed by using FCF in combination with the GAAP cash flow numbers.
The company has presented its income and EPS from continuing operations, operating income and segment operating income before special items. Special items include charges and gains related to divestitures, acquisitions, restructurings, impairments, certain changes to accounting methodologies, 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, and presents corporate expense excluding special items. 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. 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 GAAP metrics, and these non-GAAP metrics may not be comparable to similarly titled measures reported by other companies. These limitations are 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.
The company 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." Segment Operating Income represents Tyco's operating income excluding the Corporate and Other segment, and reflects the results of Tyco's three operating segments. Segment Operating Income before special items reflects GAAP operating income adjusted for the special items noted in the paragraph above.
FORWARD-LOOKING STATEMENTS
This press release contains a number of forward-looking statements. In many cases forward-looking statements are identified by words, and variations of words, such as "anticipate", "estimate", "believe", "commit", "confident", "continue", "could", "intend", "may", "plan", "potential", "predict", "positioned", "should", "will", "expect", "objective", "projection", "forecast", "goal", "guidance", "outlook", "effort", "target", and other similar words. However, the absence of these words does not mean the statements are not forward-looking. Examples of forward-looking statements include, but are not limited to, revenue, operating income, earnings per share and other financial projections, statements regarding the health and growth prospects of the industries and end markets in which Tyco operates, the leadership, resources, potential, priorities, and opportunities for Tyco in the future, Tyco's credit profile, capital allocation priorities and other capital market related activities, and statements regarding Tyco's acquisition, divestiture, restructuring and other productivity initiatives. The forward-looking statements in this press release are based on current expectations and assumptions that are subject to risks and uncertainties, many of which are outside of our control, and could cause results to materially differ from expectations. Such risks and uncertainties include, but are not limited to: economic, business, competitive, technological or regulatory factors that adversely impact Tyco or the markets and industries in which it competes; unanticipated expenses such as litigation or legal settlement expenses; tax law changes; and industry specific events or conditions that may adversely impact revenue or other financial projections. Actual results could differ materially from anticipated results. Tyco is under no obligation (and expressly disclaims any obligation) to update its forward-looking statements. More information on potential factors that could affect the Company's financial results is included from time to time in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's public reports filed with the SEC, including the Company's Form 10-K for the fiscal year ended September 27, 2013, subsequent quarterly reports on Form 10-Q, and its Form 10-K for the fiscal year ended September 26, 2014 to be filed with the SEC.
TYCO INTERNATIONAL LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
(Unaudited)
Quarters Ended Twelve Months Ended
-------------- -------------------
September 26, September 27, September 26, September 27,
2014 2013 2014 2013
---- ---- ---- ----
Revenue from product sales $1,668 $1,536 $6,221 $5,855
Service revenue 1,036 1,074 4,119 4,218
----- ----- ----- -----
Net revenue 2,704 2,610 10,340 10,073
Cost of product sales 1,145 1,034 4,253 3,990
Cost of services 577 599 2,302 2,412
Selling, general and administrative expenses 1,162 714 3,040 2,843
Separation costs - (1) 1 8
Restructuring and asset impairment charges, net 20 29 47 111
--- --- --- ---
Operating (loss) income (200) 235 697 709
Interest income 4 3 14 16
Interest expense (24) (25) (97) (100)
Other expense, net 1 1 (1) (29)
--- --- --- ---
(Loss) income from continuing operations before income
taxes (219) 214 613 596
Income tax benefit (expense) 140 (52) (24) (108)
Equity (loss) income in earnings of unconsolidated
subsidiaries - (30) 206 (48)
--- --- --- ---
(Loss) income from continuing operations (79) 132 795 440
(Loss) income from discontinued operations, net of income
taxes (13) 31 1,044 93
--- --- ----- ---
Net (loss) income (92) 163 1,839 533
Less: noncontrolling interest in subsidiaries net (loss)
income (3) (3) 1 (3)
Net (loss) income attributable to Tyco common
shareholders $(89) $166 $1,838 $536
==== ==== ====== ====
Amounts attributable to Tyco common shareholders:
(Loss) income from continuing operations $(76) $135 $794 $443
(Loss) income from discontinued operations (13) 31 1,044 93
Net (loss) income attributable to Tyco common
shareholders $(89) $166 $1,838 $536
==== ==== ====== ====
Basic earnings per share attributable to Tyco common
shareholders:
(Loss) income from continuing operations $(0.17) $0.29 $1.74 $0.96
(Loss) income from discontinued operations (0.03) 0.07 2.30 0.19
----- ---- ---- ----
Net (loss) income attributable to Tyco common
shareholders $(0.20) $0.36 $4.04 $1.15
====== ===== ===== =====
Diluted earnings per share attributable to Tyco common
shareholders:
(Loss) income from continuing operations $(0.17) $0.29 $1.71 $0.94
(Loss) income from discontinued operations (0.03) 0.06 2.26 0.20
Net (loss) income attributable to Tyco common
shareholders $(0.20) $0.35 $3.97 $1.14
====== ===== ===== =====
Weighted average number of shares outstanding:
Basic 438 463 455 465
Diluted 438 471 463 472
Note: These financial statements
should be read in conjunction with
the Consolidated Financial
Statements and accompanying notes
contained in the Company's Current
Report on Form 8-K filed on May
16, 2014 for the fiscal year ended
September 27, 2013 and Quarterly
Report on Form 10-Q for the
quarter ended June 27, 2014.
TYCO INTERNATIONAL LTD.
RESULTS OF SEGMENTS
(in millions)
(Unaudited)
Quarters Ended Twelve Months Ended
-------------- -------------------
September 26, September 27, September 26, September 27,
2014 2013 2014 2013
---- ---- ---- ----
Net Revenue
NA Installation & Services $1,012 $996 $3,876 $3,891
ROW Installation & Services 1,011 987 3,920 3,843
Global Products 681 627 2,544 2,339
--- --- ----- -----
Total Net Revenue $2,704 $2,610 $10,340 $10,073
====== ====== ======= =======
Operating (Loss) Income and Margin
NA Installation & Services $117 11.6% $113 11.3% $450 11.6% $388 10.0%
ROW Installation & Services 101 10.0% 83 8.4% 409 10.4% 333 8.7%
Global Products 129 18.9% 119 19.0% 458 18.0% 307 13.1%
Corporate and Other (547) N/M (80) N/M (620) N/M (319) N/M
---- --- ---- ----
Operating (Loss) Income and Margin $(200) N/M $235 9.0% $697 6.7% $709 7.0%
===== ==== ==== ====
TYCO INTERNATIONAL LTD.
CONSOLIDATED BALANCE SHEETS
(in millions)
(Unaudited)
September 26, September 27,
2014 2013
---- ----
Assets
Current Assets:
Cash and cash equivalents $892 $563
Accounts receivable, net 1,750 1,704
Inventories 628 645
Prepaid expenses and other current assets 1,153 839
Deferred income taxes 307 250
Assets held for sale 21 856
--- ---
Total Current Assets 4,751 4,857
Property, plant and equipment, net 1,269 1,284
Goodwill 4,126 4,162
Intangible assets, net 737 791
Other assets 926 1,082
Total Assets $11,809 $12,176
======= =======
Liabilities and Equity
Current Liabilities:
Loans payable and current maturities of long-term debt $20 $20
Accounts payable 871 848
Accrued and other current liabilities 2,167 1,852
Deferred revenue 400 393
Liabilities held for sale 13 236
--- ---
Total Current Liabilities 3,471 3,349
Long-term debt 1,443 1,443
Deferred revenue 335 370
Other liabilities 1,877 1,881
----- -----
Total Liabilities 7,126 7,043
Redeemable noncontrolling interest 13 12
Total Tyco shareholders' equity 4,647 5,098
Nonredeemable noncontrolling interest 23 23
--- ---
Total Equity 4,670 5,121
----- -----
Total Liabilities, Redeemable Noncontrolling Interest and Equity $11,809 $12,176
======= =======
Note: These financial statements
should be read in conjunction with
the Consolidated Financial
Statements and accompanying notes
contained in the Company's Current
Report on Form 8-K filed on May
16, 2014 for the fiscal year ended
September 27, 2013 and Quarterly
Report on Form 10-Q for the
quarter ended June 27, 2014.
TYCO INTERNATIONAL LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(Unaudited)
For the Quarters Ended For the Twelve Months Ended
---------------------- ---------------------------
September 26, September 27, September 26, September 27,
2014 2013 2014 2013
---- ---- ---- ----
Cash Flows From Operating Activities:
Net (loss) income attributable to Tyco common shareholders $(89) $166 $1,838 $536
Noncontrolling interest in subsidiaries net (loss) income (3) (3) 1 (3)
Income (loss) from discontinued operations, net of income taxes 13 (31) (1,044) (93)
--- --- ------ ---
(Loss) income from continuing operations (79) 132 795 440
Adjustments to reconcile net cash provided by operating activities:
Depreciation and amortization 91 98 361 382
Non-cash compensation expense 24 16 72 63
Deferred income taxes (191) 57 (106) 5
Provision for losses on accounts receivable and inventory 13 18 44 70
Non-cash restructuring and asset impairment charges, net 1 - 2 1
Legacy legal matters - - (92) -
Loss (gain) on divestitures - 10 (2) 20
(Gain) loss on investments (1) 28 (215) 42
Other non-cash items 6 1 25 64
Changes in assets and liabilities, net of the effects of acquisitions and
divestitures:
Accounts receivable, net (54) (43) (93) (75)
Contracts in progress (49) (7) (98) (20)
Inventories - 35 (13) (36)
Prepaid expenses and other assets (52) (15) (91) 31
Accounts payable 38 32 53 (12)
Accrued and other liabilities 565 5 205 (226)
Deferred revenue (11) (31) (24) (32)
Income taxes, net 22 (36) 28 (31)
Other (12) 34 (20) 8
--- --- ---
Net cash provided by operating activities 311 334 831 694
--- ---
Net cash (used in) provided by discontinued operating activities (19) 39 81 156
--- --- --- ---
Cash Flows From Investing Activities:
Capital expenditures (78) (65) (288) (270)
Proceeds from disposal of assets 3 1 10 5
Acquisition of businesses, net of cash acquired (2) (154) (65) (229)
Acquisition of dealer generated customer accounts and bulk account purchases (5) (5) (25) (19)
Divestiture of business, net of cash divested - - 1 17
Sales and maturities of investments - 79 283 182
Purchases of investments (54) (45) (386) (227)
Sale of equity investment - - 250 -
Decrease (increase) in restricted cash 2 1 3 (8)
Other (4) 6 (4) 4
Net cash (used in) provided by investing activities (138) (182) (221) (545)
---- ---- ---- ----
Net cash (used in) provided by discontinued investing activities - (28) 1,789 (110)
--- --- ----- ----
Cash Flows From Financing Activities:
Proceeds from issuance of short-term debt - 95 830 475
Repayment of short-term debt - (114) (831) (505)
Proceeds from exercise of share options 12 28 91 153
Dividends paid (80) (74) (311) (288)
Repurchase of common shares by treasury (1,027) - (1,833) (300)
Purchase of noncontrolling interest (66) - (66) -
Transfer from discontinued operations (19) 11 1,870 76
Other (1) 5 (11) (30)
--- --- --- ---
Net cash (used in) provided by financing activities (1,181) (49) (261) (419)
------ --- ---- ----
Net cash provided by (used in) discontinued financing activities 19 (11) (1,870) (76)
Effect of currency translation on cash (12) 5 (20) (11)
--- --- --- ---
Net (decrease) increase in cash and cash equivalents (1,020) 108 329 (311)
Less: net decrease in cash and cash equivalents related to discontinued
operations - - - (30)
Cash and cash equivalents at beginning of period 1,912 455 563 844
Cash and cash equivalents at end of period $892 $563 $892 $563
==== ==== ==== ====
Reconciliation to "Free Cash Flow":
Net cash provided by operating activities $311 $334 $831 $694
Capital expenditures, net (75) (64) (278) (265)
Acquisition of dealer generated customer accounts and bulk account purchases (5) (5) (25) (19)
Purchase accounting and holdback liabilities - 5 - (2)
Free Cash Flow $231 $270 $528 $408
==== ==== ==== ====
Reconciliation to "Adjusted Free Cash Flow":
CIT settlement $ - $ - $(17) $ -
IRS litigation costs (1) - - -
Separation costs 37 20 108 188
Restructuring and repositioning costs 25 34 104 95
Environmental remediation payments 3 27 63 51
Legal settlements - - 6 46
Net asbestos payments (recoveries) 5 10 18 (14)
Cash payment from Covidien/TE Connectivity - - 149 11
Cash payment from ADT Resi/Pentair 9 - 39 -
Acquisition/integration costs 3 1 3 1
--- --- --- ---
Special Items $81 $92 $473 $378
--- --- ---- ----
Adjusted Free Cash Flow $312 $362 $1,001 $786
==== ==== ====== ====
NOTE: Free cash flow is a
non-GAAP measure. See
description of non-GAAP
measures contained in this
release.
TYCO INTERNATIONAL LTD.
ORGANIC GROWTH RECONCILIATION - REVENUE
(in millions)
(Unaudited)
Quarter Ended September 26, 2014
--------------------------------
Base Year
Net Revenue for the Adjustments Adjusted Net Revenue for the
Quarter Ended Fiscal Quarter Ended
September 27, 2013 2013 Base September 26, 2014
Revenue
-------
Divestitures / Foreign Currency Acquisitions Organic Revenue(1)
Other
-----
NA Installation & Services $996 $ - - % $996 $(5) (0.5)% $5 0.5% $16 1.6% $1,012 1.6%
ROW Installation & Services 987 (20) (2.0)% 967 6 0.6% 20 2.0% 18 1.9% 1,011 2.4%
Global Products 627 - - % 627 (1) (0.2)% 7 1.1% 48 7.7% 681 8.6%
--- --- --- --- --- --- ---
Total Net Revenue $2,610 $(20) (0.8)% $2,590 $ - - % $32 1.2% $82 3.2% $2,704 3.6%
------ ---- ----- ------ --- --- --- --- --- --- --- --- ------ ---
(1) Organic revenue growth
percentage based on adjusted
fiscal 2013 base revenue.
Year Ended September 26, 2014
-----------------------------
Base Year
Net Revenue for the Adjustments Adjusted Net Revenue for the
Twelve Months Ended Fiscal Twelve Months Ended
September 26, 2014
September 27, 2013 2013 Base
Revenue
-------
Divestitures / Foreign Currency Acquisitions Organic Revenue(1)
Other (2)
--------
NA Installation & Services $3,891 $(42) (1.1)% $3,849 $(29) (0.7)% $19 0.5% $37 1.0% $3,876 (0.4)%
ROW Installation & Services 3,843 (67) (1.7)% 3,776 (46) (1.2)% 119 3.1% 71 1.9% 3,920 2.0%
Global Products 2,339 2 0.1% 2,341 (7) (0.3)% 63 2.7% 147 6.3% 2,544 8.8%
----- --- ----- --- --- --- -----
Total Net Revenue $10,073 $(107) (1.1)% $9,966 $(82) (0.8)% $201 2.0% $255 2.6% $10,340 2.7%
------- ----- ----- ------ ---- ----- ---- --- ---- --- ------- ---
(1) Organic revenue growth
percentage based on adjusted
fiscal 2013 base revenue.
(2)Amounts include the
transfer of a business from
NA Installation & Services
to Global Products.
Earnings Per Share Summary
(Unaudited)
Quarter Ended Year Ended Quarter Ended Year Ended
------------- ---------- ------------- ----------
Sept. 26, 2014 Sept. 26, 2014 Sept. 27, 2013 Sept. 27, 2013
-------------- -------------- -------------- --------------
Diluted EPS from Continuing Operations Attributable to Tyco Shareholders (GAAP) $(0.17) $1.71 $0.29 $0.94
expense / (benefit)
Restructuring and repositioning activities 0.05 0.14 0.06 0.21
Separation costs included in SG&A 0.02 0.08 0.02 0.10
(Gains) / losses on divestitures, net included in SG&A - (0.01) 0.02 0.04
Acquisition / integration costs - - - 0.01
Asbestos 0.66 0.63 - 0.03
Environmental remediation - - - 0.13
Tyco share of Atkore impairment - - 0.04 0.03
Legacy legal items - - - 0.04
Loss on sale of investment - 0.02 - -
CIT settlement - (0.03) - -
Settlement with former management - (0.13) - -
Separation costs - - - 0.02
Tax items - 0.03 0.04 0.04
2012 Tax Sharing Agreement - 0.01 - 0.07
Gain on sale of Atkore divestiture - (0.46) - -
Total Before Special Items $0.56 $1.99 $0.47 $1.66
===== ===== ===== =====
Tyco International Ltd.
For the Quarter Ended September 26,
2014
(in millions, except per share
data)
(Unaudited)
expense / (benefit)
Segments
--------
NA ROW Global Segment Corporate Total
Installation Installation Products Revenue and Other Revenue
& Services & Services
Revenue (GAAP) $1,012 $1,011 $681 $2,704 $- $2,704
------------- ------ ------ ---- ------ --- ------
Operating Income
----------------
NA Margin ROW Margin Global Margin Segment Margin Corporate Margin Total Margin Interest Other Income Equity in Noncontrolling (Loss)Income Diluted
from EPS from
Installation Installation Products Operating and Operating (Expense), (Expense), Tax earnings of Interest Continuing Continuing
Operations Operations
& Services & Services Income Other Income net net (Expense) unconsolidated
Attributable to
Tyco
Shareholders Attributable
subsidiaries
to Tyco
Shareholders
------------
Operating Income
(GAAP) $117 11.6% $101 10.0% $129 18.9% $347 12.8% ($547) N/M ($200) N/M ($20) $1 $140 - $3 ($76) ($0.17)
---------------- ---- ---- ---- ---- ---- ---- ---- ---- ----- --- ----- --- ---- --- ---- --- --- ---- ------
Restructuring and
repositioning
activities 6 16 1 23 13 36 (11) 25 0.05
Restructuring charges
in cost of sales and
SG&A 2 2 2 2 -
Separation costs
included in SG&A 11 11 11 (3) 8 0.02
(Gains) /losses on
divestitures, net
included in SG&A (2) (2) -
Acquisition /
integration costs 1 (1) - - (1) (1) -
Asbestos 467 467 (173) 294 0.66
IRS litigation costs 4 4 (2) 2 -
Tax items (1) (1) -
2012 Tax Sharing
Agreement 1 1 -
Total Before $134 13.2% $118 11.7% $131 19.2% $383 14.2% ($63) N/M $320 11.8% ($20) $2 ($53) $- $3 $252 $0.56
Special Items
-------------
Diluted Shares Outstanding 438
--------------------------
Diluted Shares Outstanding - Before Special Items 447
------------------------------------------------- ---
Tyco International Ltd.
For the Year Ended September 26,
2014
(in millions, except per share
data)
(Unaudited)
expense / (benefit)
Segments
--------
NA ROW Global Segment Corporate Total
Installation Installation Products Revenue and Other Revenue
& Services & Services
Revenue (GAAP) $3,876 $3,920 $2,544 $10,340 $- $10,340
------------- ------ ------ ------ ------- --- -------
Operating Income
----------------
NA Margin ROW Margin Global Margin Segment Margin Corporate Margin Total Margin Interest Other Income Equity in Noncontrolling Income Diluted
from EPS from
Installation Installation Products Operating and Other Operating (Expense), (Expense), Tax earnings of Interest Continuing Continuing
Operations Operations
& Services & Services Income Income net net (Expense) unconsolidated
Attributable to
Tyco
Shareholders Attributable
subsidiaries
to Tyco
Shareholders
------------
Operating Income
(GAAP) $450 11.6% $409 10.4% $458 18.0% $1,317 12.7% ($620) N/M $697 6.7% ($83) ($1) ($24) $206 ($1) $794 $1.71
---------------- ---- ---- ---- ---- ---- ---- ------ ---- ----- --- ---- --- ---- --- ---- ---- --- ---- -----
Restructuring and
repositioning
activities 13 31 10 54 37 91 (28) 63 0.14
Restructuring charges
in cost of sales and
SG&A 2 2 2 2 -
Separation costs
included in SG&A 51 51 1 52 (15) 37 0.08
(Gains) /losses on
divestitures, net
included in SG&A 1 1 (3) (2) (2) (4) (0.01)
Acquisition /
integration costs 3 3 3 (1) 2 -
Settlement with former
management (96) (96) 37 (59) (0.13)
Asbestos 462 462 (171) 291 0.63
IRS litigation costs 4 4 (2) 2 -
CIT settlement (16) (16) (16) (0.03)
Loss on sale of
investment 7 7 7 7 0.02
Separation costs 1 1 1 -
Tax items 12 12 0.03
2012 Tax Sharing
Agreement 6 6 0.01
Gain on sale of Atkore
divestiture (216) (216) (0.46)
Total Before $514 13.3% $451 11.5% $470 18.5% $1,435 13.9% ($230) N/M $1,205 11.7% ($83) $5 ($194) ($10) ($1) $922 $1.99
Special Items
-------------
Diluted Shares Outstanding 463
--------------------------
Diluted Shares Outstanding - Before Special Items 463
------------------------------------------------- ---
Tyco International Ltd.
For the Quarter Ended September 27,
2013
(in millions, except per share
data)
(Unaudited)
expense / (benefit)
Segments
--------
NA ROW Global Segment Corporate Total
Installation Installation Products Revenue and Other Revenue
& Services & Services
Revenue (GAAP) $996 $987 $627 $2,610 $- $2,610
------------- ---- ---- ---- ------ --- ------
Operating Income
----------------
NA Margin ROW Margin Global Margin Segment Margin Corporate Margin Total Margin Interest Other Income Equity in Noncontrolling Income Diluted
from EPS from
Installation Installation Products Operating and Operating (Expense), (Expense), Tax earnings of Interest Continuing Continuing
Operations Operations
& Services & Services Income Other Income net net (Expense) unconsolidated
Attributable to
Tyco
Shareholders Attributable
subsidiaries
to Tyco
Shareholders
------------
Operating Income
(GAAP) $113 11.3% $83 8.4% $119 19.0% $315 12.1% ($80) N/M $235 9.0% ($22) $1 ($52) ($30) $3 $135 $0.29
---------------- ---- ---- --- --- ---- ---- ---- ---- ---- --- ---- --- ---- --- ---- ---- --- ---- -----
Restructuring and
repositioning
activities 14 12 2 28 11 39 (14) 25 0.06
Separation costs
included in SG&A 9 9 5 14 (8) 6 0.02
(Gains) /losses on
divestitures, net
included in SG&A (3) 13 10 10 10 0.02
Acquisition /
integration costs 1 1 2 2 2 -
Asset impairment
charges 1 1 1 1 -
Asbestos 2 2 2 -
Tyco share of Atkore
impairment 21 21 0.04
Separation costs (1) (1) (1) -
Tax items 16 16 0.04
2012 Tax Sharing
Agreement 1 1 -
Total Before $133 13.4% $110 11.1% $122 19.5% $365 14.0% ($63) N/M $302 11.6% ($22) $2 ($58) ($9) $3 $218 $0.47
Special Items
-------------
Diluted Shares Outstanding 471
Diluted Shares Outstanding - Before Special Items 471
------------------------------------------------- ---
Tyco International Ltd.
For the Year Ended September 27,
2013
(in millions, except per share
data)
(Unaudited)
expense / (benefit)
Segments
--------
NA ROW Global Segment Corporate Total
Installation Installation Products Revenue and Other Revenue
& Services & Services
Revenue (GAAP) $3,891 $3,843 $2,339 $10,073 $- $10,073
------------- ------ ------ ------ ------- --- -------
Operating Income
----------------
NA Margin ROW Margin Global Margin Segment Margin Corporate Margin Total Margin Interest Other Income Equity in Noncontrolling Income Diluted
from EPS from
Installation Installation Products Operating and Operating (Expense), (Expense), Tax earnings of Interest Continuing Continuing
Operations Operations
& Services & Services Income Other Income net net (Expense) unconsolidated
Attributable to
Tyco
Shareholders Attributable
subsidiaries
to Tyco
Shareholders
------------
Operating Income
(GAAP) $388 10.0% $333 8.7% $307 13.1% $1,028 10.2% ($319) N/M $709 7.0% ($84) ($29) ($108) ($48) $3 $443 $0.94
---------------- ---- ---- ---- --- ---- ---- ------ ---- ----- --- ---- --- ---- ---- ----- ---- --- ---- -----
Restructuring and
repositioning
activities 36 63 12 111 19 130 (33) 97 0.21
Separation costs
included in SG&A 49 49 12 61 (13) 48 0.10
(Gains) /losses on
divestitures, net
included in SG&A 1 14 15 5 20 (2) 18 0.04
Acquisition /
integration costs 2 2 4 4 4 0.01
Asset impairment
charges 1 1 1 1 -
Asbestos 12 12 12 0.03
Environmental
remediation 100 100 100 (39) 61 0.13
Tyco share of Atkore
impairment 21 21 0.03
Legacy legal items 27 27 (9) 18 0.04
Separation costs 8 8 8 0.02
Tax items 22 22 0.04
2012 Tax Sharing
Agreement 32 32 0.07
Total Before $474 12.2% $413 10.7% $421 18.0% $1,308 13.0% ($236) N/M $1,072 10.6% ($84) $3 ($182) ($27) $3 $785 $1.66
Special Items
-------------
Diluted Shares Outstanding 472
--------------------------
Diluted Shares Outstanding - Before Special Items 472
------------------------------------------------- ---
SOURCE Tyco
