Tyco International Reports 30 Percent Increase in Second Quarter Earnings per Share

Earnings Per Share Rise to 65 Cents from 50 Cents



Free Cash Flow is in Excess of $1.0 Billion



Apr 18, 2001, 01:00 ET from Tyco International Ltd.

    PEMBROKE, Bermuda, April 18 /PRNewswire/ -- Tyco International Ltd.
 (NYSE:   TYC, BSX: TYC, LSE: TYI), a diversified manufacturing and service
 company, reported today that diluted earnings per share for its second quarter
 ended March 31, 2001 were 65 cents, a 30 percent increase over earnings of
 50 cents per share in its second quarter of fiscal 2000.  Net income before
 extraordinary items rose to $1.16 billion, an increase of 35 percent compared
 to $853.6 million last year.  Sales for the quarter rose 26 percent to
 $8.9 billion compared with last year's $7.07 billion.  These results are
 before non-recurring items.  After giving effect to such items, diluted
 earnings per share before extraordinary items for the second quarter of fiscal
 2001 were 65 cents, or $1.15 billion, compared to 50 cents, or $855.5 million,
 in the second quarter of fiscal 2000.
     For the first half of fiscal 2001, income before non-recurring items,
 extraordinary items and cumulative effect of accounting change rose to
 $2.16 billion, or $1.22 per diluted share, a 27 percent increase over last
 year's diluted earnings per share of 96 cents.  After giving effect to
 non-recurring items, diluted earnings per share before extraordinary items and
 cumulative effect of accounting change were $1.22, or $2.16 billion, for the
 first half of fiscal 2001 compared to 94 cents, or $1.61 billion, in fiscal
 2000.  Revenues for the first half of fiscal 2001 increased to $16.92 billion,
 23 percent higher than last year's $13.71 billion.
     "The results achieved this quarter by each of our operating units are a
 tribute to the fundamental strength of our businesses," said L. Dennis
 Kozlowski, Tyco's Chairman and Chief Executive Officer.  "We have demonstrated
 that even in the face of a slowing economy, our recurring revenue base,
 long-term contracts and geographic diversity can provide a steady and
 predictable revenue and earnings stream, and the cash flow required to fuel
 future growth."
     "We remain comfortable with the outlook for Tyco for the remainder of
 fiscal 2001," Kozlowski continued.  "Growth in our economically resilient
 recurring revenue base remains brisk at our Security, Fire, and Earth Tech
 businesses.  Our Healthcare operations continue to grow through favorable
 demographics, geographical expansion, and new product introductions.  TyCom's
 backlog of third party sales is stronger than we had anticipated, and the
 build-out of the TyCom Global Network is ahead of schedule.  While the
 Electronics segment will continue to be impacted by weakness in certain of its
 end-markets, we believe that the diversity of our offerings in this area
 leaves us better prepared to weather the current environment and we see
 continued opportunities to improve manufacturing efficiencies.  Finally, we
 look forward to the positive impact of recent acquisitions.  We have
 successfully integrated the Mallinckrodt, Lucent Power Systems and Simplex
 Time Recorder acquisitions, which strengthen the product offerings and
 sustainable growth of each of their respective segments.  We are excited about
 the pending acquisition of The CIT Group and the opportunities it will provide
 for us upon completion.  Integration planning for a smooth transition is well
 underway."
     The quarterly operating profits and margins for the Company's five
 business segments that are presented in the discussions below are stated
 before non-recurring items and goodwill amortization.  All dollar amounts are
 stated in millions.
 
     ELECTRONICS
 
                             March 31, 2001         March 31, 2000
 
     Sales                       $  3,246.2             $  2,373.4
     Operating profits           $    850.0             $    570.4
     Operating margins                 26.2%                  24.0%
 
     Tyco Electronics faced a slowing economic environment during the quarter,
 but achieved a 37 percent in increase in sales, a 49 percent increase in
 operating profits and improved operating margins as a percentage of sales.
 The sales growth was driven by the acquisition of Lucent Power Systems and
 organic growth.  Organic growth was fueled by sales of new products in
 high-speed connectors, wireless components and radar sensors.  Both product
 and geographic diversity also contributed to the year over year growth.
 Softness seen in the U.S. automotive and telecommunication end-markets on a
 sequential quarterly basis was mitigated by strength in the wire and cable,
 energy and European automotive markets.  Margin expansion was driven by the
 integration of acquisitions and a relentless focus on cost control.  The
 current economic environment also presents Tyco Electronics with the
 opportunity to focus on additional cost reductions and facility consolidations
 to continue to improve profitability.
 
     HEALTHCARE AND SPECIALTY PRODUCTS
 
                             March 31, 2001         March 31, 2000
 
     Sales                       $  2,225.0             $  1,584.5
     Operating profits           $    496.3             $    377.1
     Operating margins                 22.3%                  23.8%
 
     Sales in the Healthcare and Specialty Products segment increased by
 40 percent over the prior year as a result of the acquisition of Mallinckrodt
 and organic growth.  New product developments in the areas of feeding pumps
 and laparoscopic instruments and strong sales of incontinence and
 endomechanical products contributed to the organic growth.  These results are
 net of a reduction in sales as a result of the divestiture of ADT Automotive
 and certain healthcare businesses.  Operating profits increased by 32 percent,
 although the inclusion of Mallinckrodt, whose margins are lower than the
 Healthcare average, caused the overall margin percentage to decline.  However,
 Mallinckrodt's margins have increased sequentially from the first quarter of
 this year and the integration of the unit into Tyco Healthcare remains on
 schedule.  The fundamentals of the Healthcare business remain strong as
 demographics continue to be favorable and there is an increasing worldwide
 acceptance of disposable medical products.
 
     FIRE AND SECURITY SERVICES
 
                             March 31, 2001       March 31, 2000
 
     Sales                       $  1,852.4           $  1,466.9
     Operating profits           $    333.1           $    222.1
     Operating margins                 18.0%                15.1%
 
     The 26 percent increase in sales at Tyco Fire and Security was driven by
 growth at Tyco's worldwide security business and further penetration of fire
 protection services, as well as the acquisition of Simplex Time Recorder.  The
 base of recurring security business continues to expand at high-teens rates
 and the backlog of new business at Tyco Fire and Security is at record levels.
 Recurring revenue now represents over 60 percent of the segment's revenue,
 which provides stability to the earnings stream.  Operating profits increased
 50 percent and operating margins expanded primarily due to a more favorable
 mix of service and recurring revenue.
 
     FLOW CONTROL PRODUCTS AND SERVICES
 
                             March 31, 2001       March 31, 2000
 
     Sales                       $  1,008.7             $  991.5
     Operating profits           $    192.7             $  179.2
     Operating margins                 19.1%                18.1%
 
     Tyco Flow Control saw growth over last year's second quarter provided by
 Earth Tech and sales of products for oil and gas projects.  Demand for power
 generation valves and waterworks products continues to be strong worldwide.
 Earth Tech backlog has grown nearly 30 percent since the beginning of the
 fiscal year, and a focus on preventive maintenance packages and
 water/wastewater privatizations bodes well for future recurring revenue
 streams.  Sales this quarter were negatively impacted by lower average selling
 prices at Allied resulting from lower steel prices.  Profit margins improved
 due to cost improvements in the valve and fire suppression areas.
 
     TELECOMMUNICATIONS
 
                             March 31, 2001       March 31, 2000
 
     Sales                         $  566.1             $  653.7
     Operating profits             $   85.1             $  123.4
     Operating margins                 15.0%                18.9%
 
     The decrease in TyCom's sales reflects its transition from solely a
 supplier of undersea telecommunication systems to an owner-supplier of the
 TyCom Global Network ("TGN") as well.  Sales of systems to third parties
 declined from a year ago as manufacturing capacity was allocated to TGN
 deployment.  However, demand for sales of new systems to third parties is
 ahead of expectations for the year and that demand is expected to continue.
 Adding the proposed SEACAN and Flag projects will raise TyCom's backlog of
 third party work to a record $4.5 billion.  The build-out of TGN is proceeding
 ahead of schedule and below budget.  Revenues from the sale of capacity on TGN
 are expected later this fiscal year.  The recently announced combination of
 TGN's network in the Pacific with that of Flag allows us to limit near term
 capital outlays and more rapidly achieve higher utilization rates.
 
     FREE CASH FLOW
     Free cash flow was approximately $1.1 billion (before spending of
 approximately $440 million related to the TyCom Global Network) in the second
 quarter of fiscal 2001.  For the first six months of fiscal 2001, free cash
 flow was approximately $1.6 billion compared to approximately $971 million in
 the first six months of fiscal 2000.  Included as a reduction of operating
 cash flows in the quarter and six months was $44 million and $56 million,
 respectively, related to cash spending on restructuring and other
 non-recurring items.  Tyco refers to the net amount of cash generated from
 operating activities less capital expenditures and dividends as "free cash
 flow."
     In addition, the Company paid out in cash $140 million during the quarter
 and $305 million during the six months, related to purchase accounting
 spending.  Free cash flow is calculated before these expenditures.
 
     CONFERENCE CALL
     The company will discuss second quarter results on a conference call for
 investors today at 9:00 am EST.  The conference call can be accessed at the
 following website -- investors.tycoint.com/medialist.cfm
 
     Tyco International Ltd. is a diversified manufacturing and service
 company.  Tyco is the world's largest manufacturer and servicer of electrical
 and electronic components; the world's largest designer, manufacturer,
 installer and servicer of undersea telecommunications systems; the world's
 largest manufacturer, installer and provider of fire protection systems and
 electronic security services; and the world's largest manufacturer of flow
 control valves.  Tyco also holds strong leadership positions in disposable
 medical products, diagnostic imaging, bulk pharmaceutical, wound closure,
 plastics and adhesives.  Tyco operates in more than 100 countries and has
 expected fiscal 2001 revenues in excess of $36 billion.
 
     FORWARD LOOKING INFORMATION
     This release contains certain "forward-looking statements" within the
 meaning of the Private Securities Litigation Reform Act of 1995.  These
 statements are based on management's current expectations and are subject to
 uncertainty and changes in circumstances.  Actual results may vary materially
 from the expectations contained in the forward-looking statements.  The
 forward-looking statements in this release include statements addressing the
 following subjects:  future financial and operating results and timing and
 benefits of acquisitions.
     Economic, business, competitive 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.
     More detailed information about these factors is set forth in Tyco's
 filings with the Securities and Exchange Commission, including Tyco's Annual
 Report on Form 10-K, for the fiscal year ended September 30, 2000, and Tyco's
 Annual Report to Shareholders.  Tyco is under no obligation to (and expressly
 disclaim any such obligation to) update or alter its forward-looking
 statements whether as a result of new information, future events or otherwise.
 
 
                            TYCO INTERNATIONAL LTD.
 
     RESULTS OF OPERATIONS (before charges) (1)  (2)
     (in millions, except per share data)
 
                                      Three Months Ended    Six Months Ended
                                      03/31/01  03/31/00   03/31/01   03/31/00
     NET SALES
     Electronics                      $3,246.2  $2,373.4  $ 6,180.3  $ 4,490.4
     Healthcare and Specialty
      Products                         2,225.0   1,584.5    4,225.9    3,148.3
     Fire and Security Services        1,852.4   1,466.9    3,412.3    2,916.6
     Flow Control Products and
      Services                         1,008.7     991.5    2,010.9    1,877.6
     Telecommunications                  566.1     653.7    1,089.3    1,275.8
       Total Net Sales                $8,898.4  $7,070.0  $16,918.7  $13,708.7
 
     OPERATING PROFIT
     Electronics                      $  850.0  $  570.4  $ 1,618.1  $ 1,040.8
     Healthcare and Specialty
      Products                           496.3     377.1      919.5      739.3
     Fire and Security Services          333.1     222.1      602.8      466.3
     Flow Control Products and
      Services                           192.7     179.2      369.9      349.8
     Telecommunications                   85.1     123.4      177.9      229.6
       Total Operating Profit          1,957.2   1,472.2    3,688.2    2,825.8
 
     Corporate expenses                  (41.5)    (39.9)    (108.7)     (94.1)
     Goodwill amortization expense      (128.3)    (86.2)    (248.4)    (170.2)
     Interest expense, net              (227.3)   (206.3)    (395.4)    (370.9)
 
     Income before income taxes,
      minority interest,
      extraordinary items
      and cumulative effect of
      accounting change                1,560.1   1,139.8    2,935.7    2,190.6
 
     Income taxes                       (393.1)   (285.1)    (750.9)    (548.4)
     Minority interest                   (11.7)     (1.1)     (24.2)      (4.3)
 
     INCOME BEFORE EXTRAORDINARY
      ITEMS AND CUMULATIVE
      EFFECT OF ACCOUNTING CHANGE     $1,155.3  $  853.6  $ 2,160.6  $ 1,637.9
 
     EARNINGS PER COMMON SHARE:
 
     BASIC                            $   0.66  $   0.51  $    1.24  $    0.97
 
     DILUTED  (3)                     $   0.65  $   0.50  $    1.22  $    0.96
 
     WEIGHTED-AVERAGE COMMON SHARES:
 
     BASIC                             1,748.9   1,686.9    1,742.0    1,690.1
 
     DILUTED                           1,773.9   1,710.7    1,768.0    1,713.8
 
     (1)  Results for three months and six months ended March 31, 2001 include
     a net charge/(credit) of $15.2 million and ($160.4) million ($8.0 million
     charge and $4.1 million charge, after tax) consisting of restructuring and
     other non-recurring (credits)/charges of ($6.4) million and $36.7 million,
     respectively, of which $46.4 million and $71.4 million, respectively, is
     included in cost of sales, the write-off of in-process research and
     development of $184.3 million in the six months ended March 31, 2001 and
     impairment charges of $17.7 million and $25.1 million, respectively,
     primarily related to certain healthcare and electronics businesses.
     Additionally there was a net (loss)/gain on sale of businesses of
     ($3.9) million and $406.5 million in the three and six months ended
     March 31, 2001, principally related to the sale of ADT Automotive.
     Results for the six months ended March 31, 2001 are before cumulative
     effect of change in accounting principle of $29.7 million.  Results for
     the three and six months ended March 31, 2001 are also before
     extraordinary losses of $10.3 million, after tax, relating to the early
     extinguishments of debt.
 
     (2)  Results for the three months and six months ended March 31, 2000
     include a net (credit)/charge of ($1.8) million and $24.6 million
     ($1.9 million credit and $25.2 million charge after tax), respectively,
     consisting of a net merger, restructuring and other non-recurring (credit)
     of ($1.8) million and ($74.4) million, respectively, of which
     ($5.4) million and $1.0 million is included in cost of sales,
     respectively, and impairment charges of $99.0 million in the six months
     ended March 31, 2000, primarily related to exiting the interventional
     cardiology business of US Surgical and changes in estimate associated with
     the AMP merger and AMP's profit improvement plan.  Results for the
     six months ended March 31, 2000 are also before extraordinary losses of
     $0.2 million, after tax, relating to the early extinguishment of debt.
 
     (3)  Diluted earnings per common share assumes conversion of ADT LYONS
     notes.  Accordingly net interest expense of $0.3 million and $0.4 million
     in the three months ended March 31, 2001 and 2000, respectively, and
     $0.4 million and $0.8 million in the six months ended March 31, 2001 and
     2000, respectively, must be added back to income before extraordinary
     items and cumulative effect of accounting change for computing diluted
     earnings per share.
 
 
                            TYCO INTERNATIONAL LTD.
             CONSOLIDATED STATEMENTS OF OPERATIONS (after charges)
                      (in millions, except per share data)
 
                                      Three Months Ended    Six Months Ended
                                      03/31/01  03/31/00   03/31/01   03/31/00
 
 
     Net sales                        $8,898.4  $7,070.0  $16,918.7  $13,708.7
     Cost of sales  (1)                5,540.0   4,455.3   10,488.6    8,647.2
     Selling, general and
      administrative expenses          1,617.4   1,263.2    3,170.4    2,501.0
     Merger, restructuring and other
      non-recurring
      (credits)/charges, net             (52.8)      3.6      (34.7)     (75.4)
     Write-off of purchased
      in-process research and
      development                           --        --      184.3         --
     Charges for the impairment of
      long-lived assets                   17.7        --       25.1       99.0
     Operating Profit                  1,776.1   1,347.9    3,085.0    2,536.9
     Net (loss)/gain on sale of
      businesses                          (3.9)       --      406.5         --
     Interest expense, net              (227.3)   (206.3)    (395.4)    (370.9)
     Income before income taxes,
      minority interest,
      extraordinary items and
      cumulative effect of accounting
      change                           1,544.9   1,141.6    3,096.1    2,166.0
     Income taxes                       (385.9)   (285.0)    (915.4)    (549.0)
     Minority interest                   (11.7)     (1.1)     (24.2)      (4.3)
     Income before extraordinary
      items and cumulative effect of
      accounting change                1,147.3     855.5    2,156.5    1,612.7
     Extraordinary items, net of taxes   (10.3)       --      (10.3)      (0.2)
     Cumulative effect of accounting
      change, net of tax                    --        --      (29.7)        --
     Net income                       $1,137.0  $  855.5  $ 2,116.5  $ 1,612.5
 
     Basic earnings per common share:
       Income before extraordinary
        items and cumulative effect
        of accounting change          $   0.66  $   0.51  $    1.24  $    0.95
       Extraordinary items, net of
        taxes                            (0.01)       --      (0.01)        --
       Cumulative effect of
        accounting change, net of tax       --        --      (0.02)        --
       Net income per common share        0.65      0.51       1.21       0.95
     Diluted earnings per common
      share (2):
       Income before extraordinary
        items and cumulative effect
        of accounting change          $   0.65  $   0.50  $    1.22  $    0.94
       Extraordinary items, net of
        taxes                            (0.01)       --      (0.01)        --
       Cumulative effect of
        accounting change, net of tax       --        --      (0.02)        --
       Net income per common share        0.64      0.50       1.20       0.94
     Weighted-average number of
      common shares outstanding:
     Basic                             1,748.9   1,686.9    1,742.0    1,690.1
     Diluted                           1,773.9   1,710.7    1,768.0    1,713.8
 
     (1)  Includes inventory related charges/(credits) of $46.4 million and
     ($5.4) million in the three months ended March 31, 2001 and 2000,
     respectively, and $71.4 million and $1.0 million in the six months ended
     March 31, 2001 and 2000, respectively.
 
     (2)  Diluted earnings per common share assumes conversion of ADT LYONs
     notes.  Accordingly, net interest expense of $0.3 million and $0.4 million
     in the three months ended March 31, 2001 and 2000, respectively, and
     $0.4 million and $0.8 million in the six months ended March 31, 2001 and
     2000, respectively, must be added back to income before extraordinary
     items and cumulative effect of accounting change for computing diluted
     earnings per share.
 
 

SOURCE Tyco International Ltd.
    PEMBROKE, Bermuda, April 18 /PRNewswire/ -- Tyco International Ltd.
 (NYSE:   TYC, BSX: TYC, LSE: TYI), a diversified manufacturing and service
 company, reported today that diluted earnings per share for its second quarter
 ended March 31, 2001 were 65 cents, a 30 percent increase over earnings of
 50 cents per share in its second quarter of fiscal 2000.  Net income before
 extraordinary items rose to $1.16 billion, an increase of 35 percent compared
 to $853.6 million last year.  Sales for the quarter rose 26 percent to
 $8.9 billion compared with last year's $7.07 billion.  These results are
 before non-recurring items.  After giving effect to such items, diluted
 earnings per share before extraordinary items for the second quarter of fiscal
 2001 were 65 cents, or $1.15 billion, compared to 50 cents, or $855.5 million,
 in the second quarter of fiscal 2000.
     For the first half of fiscal 2001, income before non-recurring items,
 extraordinary items and cumulative effect of accounting change rose to
 $2.16 billion, or $1.22 per diluted share, a 27 percent increase over last
 year's diluted earnings per share of 96 cents.  After giving effect to
 non-recurring items, diluted earnings per share before extraordinary items and
 cumulative effect of accounting change were $1.22, or $2.16 billion, for the
 first half of fiscal 2001 compared to 94 cents, or $1.61 billion, in fiscal
 2000.  Revenues for the first half of fiscal 2001 increased to $16.92 billion,
 23 percent higher than last year's $13.71 billion.
     "The results achieved this quarter by each of our operating units are a
 tribute to the fundamental strength of our businesses," said L. Dennis
 Kozlowski, Tyco's Chairman and Chief Executive Officer.  "We have demonstrated
 that even in the face of a slowing economy, our recurring revenue base,
 long-term contracts and geographic diversity can provide a steady and
 predictable revenue and earnings stream, and the cash flow required to fuel
 future growth."
     "We remain comfortable with the outlook for Tyco for the remainder of
 fiscal 2001," Kozlowski continued.  "Growth in our economically resilient
 recurring revenue base remains brisk at our Security, Fire, and Earth Tech
 businesses.  Our Healthcare operations continue to grow through favorable
 demographics, geographical expansion, and new product introductions.  TyCom's
 backlog of third party sales is stronger than we had anticipated, and the
 build-out of the TyCom Global Network is ahead of schedule.  While the
 Electronics segment will continue to be impacted by weakness in certain of its
 end-markets, we believe that the diversity of our offerings in this area
 leaves us better prepared to weather the current environment and we see
 continued opportunities to improve manufacturing efficiencies.  Finally, we
 look forward to the positive impact of recent acquisitions.  We have
 successfully integrated the Mallinckrodt, Lucent Power Systems and Simplex
 Time Recorder acquisitions, which strengthen the product offerings and
 sustainable growth of each of their respective segments.  We are excited about
 the pending acquisition of The CIT Group and the opportunities it will provide
 for us upon completion.  Integration planning for a smooth transition is well
 underway."
     The quarterly operating profits and margins for the Company's five
 business segments that are presented in the discussions below are stated
 before non-recurring items and goodwill amortization.  All dollar amounts are
 stated in millions.
 
     ELECTRONICS
 
                             March 31, 2001         March 31, 2000
 
     Sales                       $  3,246.2             $  2,373.4
     Operating profits           $    850.0             $    570.4
     Operating margins                 26.2%                  24.0%
 
     Tyco Electronics faced a slowing economic environment during the quarter,
 but achieved a 37 percent in increase in sales, a 49 percent increase in
 operating profits and improved operating margins as a percentage of sales.
 The sales growth was driven by the acquisition of Lucent Power Systems and
 organic growth.  Organic growth was fueled by sales of new products in
 high-speed connectors, wireless components and radar sensors.  Both product
 and geographic diversity also contributed to the year over year growth.
 Softness seen in the U.S. automotive and telecommunication end-markets on a
 sequential quarterly basis was mitigated by strength in the wire and cable,
 energy and European automotive markets.  Margin expansion was driven by the
 integration of acquisitions and a relentless focus on cost control.  The
 current economic environment also presents Tyco Electronics with the
 opportunity to focus on additional cost reductions and facility consolidations
 to continue to improve profitability.
 
     HEALTHCARE AND SPECIALTY PRODUCTS
 
                             March 31, 2001         March 31, 2000
 
     Sales                       $  2,225.0             $  1,584.5
     Operating profits           $    496.3             $    377.1
     Operating margins                 22.3%                  23.8%
 
     Sales in the Healthcare and Specialty Products segment increased by
 40 percent over the prior year as a result of the acquisition of Mallinckrodt
 and organic growth.  New product developments in the areas of feeding pumps
 and laparoscopic instruments and strong sales of incontinence and
 endomechanical products contributed to the organic growth.  These results are
 net of a reduction in sales as a result of the divestiture of ADT Automotive
 and certain healthcare businesses.  Operating profits increased by 32 percent,
 although the inclusion of Mallinckrodt, whose margins are lower than the
 Healthcare average, caused the overall margin percentage to decline.  However,
 Mallinckrodt's margins have increased sequentially from the first quarter of
 this year and the integration of the unit into Tyco Healthcare remains on
 schedule.  The fundamentals of the Healthcare business remain strong as
 demographics continue to be favorable and there is an increasing worldwide
 acceptance of disposable medical products.
 
     FIRE AND SECURITY SERVICES
 
                             March 31, 2001       March 31, 2000
 
     Sales                       $  1,852.4           $  1,466.9
     Operating profits           $    333.1           $    222.1
     Operating margins                 18.0%                15.1%
 
     The 26 percent increase in sales at Tyco Fire and Security was driven by
 growth at Tyco's worldwide security business and further penetration of fire
 protection services, as well as the acquisition of Simplex Time Recorder.  The
 base of recurring security business continues to expand at high-teens rates
 and the backlog of new business at Tyco Fire and Security is at record levels.
 Recurring revenue now represents over 60 percent of the segment's revenue,
 which provides stability to the earnings stream.  Operating profits increased
 50 percent and operating margins expanded primarily due to a more favorable
 mix of service and recurring revenue.
 
     FLOW CONTROL PRODUCTS AND SERVICES
 
                             March 31, 2001       March 31, 2000
 
     Sales                       $  1,008.7             $  991.5
     Operating profits           $    192.7             $  179.2
     Operating margins                 19.1%                18.1%
 
     Tyco Flow Control saw growth over last year's second quarter provided by
 Earth Tech and sales of products for oil and gas projects.  Demand for power
 generation valves and waterworks products continues to be strong worldwide.
 Earth Tech backlog has grown nearly 30 percent since the beginning of the
 fiscal year, and a focus on preventive maintenance packages and
 water/wastewater privatizations bodes well for future recurring revenue
 streams.  Sales this quarter were negatively impacted by lower average selling
 prices at Allied resulting from lower steel prices.  Profit margins improved
 due to cost improvements in the valve and fire suppression areas.
 
     TELECOMMUNICATIONS
 
                             March 31, 2001       March 31, 2000
 
     Sales                         $  566.1             $  653.7
     Operating profits             $   85.1             $  123.4
     Operating margins                 15.0%                18.9%
 
     The decrease in TyCom's sales reflects its transition from solely a
 supplier of undersea telecommunication systems to an owner-supplier of the
 TyCom Global Network ("TGN") as well.  Sales of systems to third parties
 declined from a year ago as manufacturing capacity was allocated to TGN
 deployment.  However, demand for sales of new systems to third parties is
 ahead of expectations for the year and that demand is expected to continue.
 Adding the proposed SEACAN and Flag projects will raise TyCom's backlog of
 third party work to a record $4.5 billion.  The build-out of TGN is proceeding
 ahead of schedule and below budget.  Revenues from the sale of capacity on TGN
 are expected later this fiscal year.  The recently announced combination of
 TGN's network in the Pacific with that of Flag allows us to limit near term
 capital outlays and more rapidly achieve higher utilization rates.
 
     FREE CASH FLOW
     Free cash flow was approximately $1.1 billion (before spending of
 approximately $440 million related to the TyCom Global Network) in the second
 quarter of fiscal 2001.  For the first six months of fiscal 2001, free cash
 flow was approximately $1.6 billion compared to approximately $971 million in
 the first six months of fiscal 2000.  Included as a reduction of operating
 cash flows in the quarter and six months was $44 million and $56 million,
 respectively, related to cash spending on restructuring and other
 non-recurring items.  Tyco refers to the net amount of cash generated from
 operating activities less capital expenditures and dividends as "free cash
 flow."
     In addition, the Company paid out in cash $140 million during the quarter
 and $305 million during the six months, related to purchase accounting
 spending.  Free cash flow is calculated before these expenditures.
 
     CONFERENCE CALL
     The company will discuss second quarter results on a conference call for
 investors today at 9:00 am EST.  The conference call can be accessed at the
 following website -- investors.tycoint.com/medialist.cfm
 
     Tyco International Ltd. is a diversified manufacturing and service
 company.  Tyco is the world's largest manufacturer and servicer of electrical
 and electronic components; the world's largest designer, manufacturer,
 installer and servicer of undersea telecommunications systems; the world's
 largest manufacturer, installer and provider of fire protection systems and
 electronic security services; and the world's largest manufacturer of flow
 control valves.  Tyco also holds strong leadership positions in disposable
 medical products, diagnostic imaging, bulk pharmaceutical, wound closure,
 plastics and adhesives.  Tyco operates in more than 100 countries and has
 expected fiscal 2001 revenues in excess of $36 billion.
 
     FORWARD LOOKING INFORMATION
     This release contains certain "forward-looking statements" within the
 meaning of the Private Securities Litigation Reform Act of 1995.  These
 statements are based on management's current expectations and are subject to
 uncertainty and changes in circumstances.  Actual results may vary materially
 from the expectations contained in the forward-looking statements.  The
 forward-looking statements in this release include statements addressing the
 following subjects:  future financial and operating results and timing and
 benefits of acquisitions.
     Economic, business, competitive 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.
     More detailed information about these factors is set forth in Tyco's
 filings with the Securities and Exchange Commission, including Tyco's Annual
 Report on Form 10-K, for the fiscal year ended September 30, 2000, and Tyco's
 Annual Report to Shareholders.  Tyco is under no obligation to (and expressly
 disclaim any such obligation to) update or alter its forward-looking
 statements whether as a result of new information, future events or otherwise.
 
 
                            TYCO INTERNATIONAL LTD.
 
     RESULTS OF OPERATIONS (before charges) (1)  (2)
     (in millions, except per share data)
 
                                      Three Months Ended    Six Months Ended
                                      03/31/01  03/31/00   03/31/01   03/31/00
     NET SALES
     Electronics                      $3,246.2  $2,373.4  $ 6,180.3  $ 4,490.4
     Healthcare and Specialty
      Products                         2,225.0   1,584.5    4,225.9    3,148.3
     Fire and Security Services        1,852.4   1,466.9    3,412.3    2,916.6
     Flow Control Products and
      Services                         1,008.7     991.5    2,010.9    1,877.6
     Telecommunications                  566.1     653.7    1,089.3    1,275.8
       Total Net Sales                $8,898.4  $7,070.0  $16,918.7  $13,708.7
 
     OPERATING PROFIT
     Electronics                      $  850.0  $  570.4  $ 1,618.1  $ 1,040.8
     Healthcare and Specialty
      Products                           496.3     377.1      919.5      739.3
     Fire and Security Services          333.1     222.1      602.8      466.3
     Flow Control Products and
      Services                           192.7     179.2      369.9      349.8
     Telecommunications                   85.1     123.4      177.9      229.6
       Total Operating Profit          1,957.2   1,472.2    3,688.2    2,825.8
 
     Corporate expenses                  (41.5)    (39.9)    (108.7)     (94.1)
     Goodwill amortization expense      (128.3)    (86.2)    (248.4)    (170.2)
     Interest expense, net              (227.3)   (206.3)    (395.4)    (370.9)
 
     Income before income taxes,
      minority interest,
      extraordinary items
      and cumulative effect of
      accounting change                1,560.1   1,139.8    2,935.7    2,190.6
 
     Income taxes                       (393.1)   (285.1)    (750.9)    (548.4)
     Minority interest                   (11.7)     (1.1)     (24.2)      (4.3)
 
     INCOME BEFORE EXTRAORDINARY
      ITEMS AND CUMULATIVE
      EFFECT OF ACCOUNTING CHANGE     $1,155.3  $  853.6  $ 2,160.6  $ 1,637.9
 
     EARNINGS PER COMMON SHARE:
 
     BASIC                            $   0.66  $   0.51  $    1.24  $    0.97
 
     DILUTED  (3)                     $   0.65  $   0.50  $    1.22  $    0.96
 
     WEIGHTED-AVERAGE COMMON SHARES:
 
     BASIC                             1,748.9   1,686.9    1,742.0    1,690.1
 
     DILUTED                           1,773.9   1,710.7    1,768.0    1,713.8
 
     (1)  Results for three months and six months ended March 31, 2001 include
     a net charge/(credit) of $15.2 million and ($160.4) million ($8.0 million
     charge and $4.1 million charge, after tax) consisting of restructuring and
     other non-recurring (credits)/charges of ($6.4) million and $36.7 million,
     respectively, of which $46.4 million and $71.4 million, respectively, is
     included in cost of sales, the write-off of in-process research and
     development of $184.3 million in the six months ended March 31, 2001 and
     impairment charges of $17.7 million and $25.1 million, respectively,
     primarily related to certain healthcare and electronics businesses.
     Additionally there was a net (loss)/gain on sale of businesses of
     ($3.9) million and $406.5 million in the three and six months ended
     March 31, 2001, principally related to the sale of ADT Automotive.
     Results for the six months ended March 31, 2001 are before cumulative
     effect of change in accounting principle of $29.7 million.  Results for
     the three and six months ended March 31, 2001 are also before
     extraordinary losses of $10.3 million, after tax, relating to the early
     extinguishments of debt.
 
     (2)  Results for the three months and six months ended March 31, 2000
     include a net (credit)/charge of ($1.8) million and $24.6 million
     ($1.9 million credit and $25.2 million charge after tax), respectively,
     consisting of a net merger, restructuring and other non-recurring (credit)
     of ($1.8) million and ($74.4) million, respectively, of which
     ($5.4) million and $1.0 million is included in cost of sales,
     respectively, and impairment charges of $99.0 million in the six months
     ended March 31, 2000, primarily related to exiting the interventional
     cardiology business of US Surgical and changes in estimate associated with
     the AMP merger and AMP's profit improvement plan.  Results for the
     six months ended March 31, 2000 are also before extraordinary losses of
     $0.2 million, after tax, relating to the early extinguishment of debt.
 
     (3)  Diluted earnings per common share assumes conversion of ADT LYONS
     notes.  Accordingly net interest expense of $0.3 million and $0.4 million
     in the three months ended March 31, 2001 and 2000, respectively, and
     $0.4 million and $0.8 million in the six months ended March 31, 2001 and
     2000, respectively, must be added back to income before extraordinary
     items and cumulative effect of accounting change for computing diluted
     earnings per share.
 
 
                            TYCO INTERNATIONAL LTD.
             CONSOLIDATED STATEMENTS OF OPERATIONS (after charges)
                      (in millions, except per share data)
 
                                      Three Months Ended    Six Months Ended
                                      03/31/01  03/31/00   03/31/01   03/31/00
 
 
     Net sales                        $8,898.4  $7,070.0  $16,918.7  $13,708.7
     Cost of sales  (1)                5,540.0   4,455.3   10,488.6    8,647.2
     Selling, general and
      administrative expenses          1,617.4   1,263.2    3,170.4    2,501.0
     Merger, restructuring and other
      non-recurring
      (credits)/charges, net             (52.8)      3.6      (34.7)     (75.4)
     Write-off of purchased
      in-process research and
      development                           --        --      184.3         --
     Charges for the impairment of
      long-lived assets                   17.7        --       25.1       99.0
     Operating Profit                  1,776.1   1,347.9    3,085.0    2,536.9
     Net (loss)/gain on sale of
      businesses                          (3.9)       --      406.5         --
     Interest expense, net              (227.3)   (206.3)    (395.4)    (370.9)
     Income before income taxes,
      minority interest,
      extraordinary items and
      cumulative effect of accounting
      change                           1,544.9   1,141.6    3,096.1    2,166.0
     Income taxes                       (385.9)   (285.0)    (915.4)    (549.0)
     Minority interest                   (11.7)     (1.1)     (24.2)      (4.3)
     Income before extraordinary
      items and cumulative effect of
      accounting change                1,147.3     855.5    2,156.5    1,612.7
     Extraordinary items, net of taxes   (10.3)       --      (10.3)      (0.2)
     Cumulative effect of accounting
      change, net of tax                    --        --      (29.7)        --
     Net income                       $1,137.0  $  855.5  $ 2,116.5  $ 1,612.5
 
     Basic earnings per common share:
       Income before extraordinary
        items and cumulative effect
        of accounting change          $   0.66  $   0.51  $    1.24  $    0.95
       Extraordinary items, net of
        taxes                            (0.01)       --      (0.01)        --
       Cumulative effect of
        accounting change, net of tax       --        --      (0.02)        --
       Net income per common share        0.65      0.51       1.21       0.95
     Diluted earnings per common
      share (2):
       Income before extraordinary
        items and cumulative effect
        of accounting change          $   0.65  $   0.50  $    1.22  $    0.94
       Extraordinary items, net of
        taxes                            (0.01)       --      (0.01)        --
       Cumulative effect of
        accounting change, net of tax       --        --      (0.02)        --
       Net income per common share        0.64      0.50       1.20       0.94
     Weighted-average number of
      common shares outstanding:
     Basic                             1,748.9   1,686.9    1,742.0    1,690.1
     Diluted                           1,773.9   1,710.7    1,768.0    1,713.8
 
     (1)  Includes inventory related charges/(credits) of $46.4 million and
     ($5.4) million in the three months ended March 31, 2001 and 2000,
     respectively, and $71.4 million and $1.0 million in the six months ended
     March 31, 2001 and 2000, respectively.
 
     (2)  Diluted earnings per common share assumes conversion of ADT LYONs
     notes.  Accordingly, net interest expense of $0.3 million and $0.4 million
     in the three months ended March 31, 2001 and 2000, respectively, and
     $0.4 million and $0.8 million in the six months ended March 31, 2001 and
     2000, respectively, must be added back to income before extraordinary
     items and cumulative effect of accounting change for computing diluted
     earnings per share.
 
 SOURCE  Tyco International Ltd.

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