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

FORM 10-Q


ý		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended ~~March 26,~~June 25, 2010
Oror
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

001-13836
(Commission File Number)

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


Switzerland (Jurisdiction of Incorporation)		98-0390500 (I.R.S. Employer Identification Number)
Freier Platz 10, CH-8200 Schaffhausen, Switzerland (Address of registrant's principal executive office)
41-52-633-02-44 (Registrant's telephone number)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer ý		Accelerated filer o		Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

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

The number of common shares outstanding as of ~~April~~July 21, 2010 was ~~475,419,817.~~497,690,945.

Table of Contents

TYCO INTERNATIONAL LTD.
INDEX TO FORM 10-Q

		Page

Part I.	Financial Information
Item 1.	Financial Statements	1
	Consolidated Statements of Operations (Unaudited) for the quarters and ~~six~~nine months ended ~~March 26,~~June 25, 2010 and ~~March 27,~~June 26, 2009	1
	Consolidated Balance Sheets (Unaudited) as of ~~March 26,~~June 25, 2010 and September 25, 2009	2
	Consolidated Statements of Cash Flows (Unaudited) for the ~~six~~nine months ended ~~March 26,~~June 25, 2010 and ~~March 27,~~June 26, 2009	3
	Consolidated Statements of ~~Shareholders'~~ Equity (Unaudited) for the ~~six~~nine months ended ~~March 26,~~June 25, 2010 and ~~March 27,~~June 26, 2009	4
	Notes to Consolidated Financial Statements (Unaudited)	5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	4957
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	7485
Item 4.	Controls and Procedures	7485
Part II.	Other Information
Item 1.	Legal Proceedings	7586
Item 1A.	Risk Factors	7991
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	7991
Item 3.	Defaults Upon Senior Securities	7991
Item 4.	Submission of Matters to a Vote of Security Holders	7991
Item 5.	Other Information	8091
Item 6.	Exhibits	8092
Signatures		8193

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

TYCO INTERNATIONAL LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in millions, except per share data)

		For the Quarters Ended						For the Six Months Ended							For the Quarters Ended						For the Nine Months Ended

		March 26, 2010			March 27, 2009			March 26, 2010			March 27, 2009				June 25, 2010			June 26, 2009			June 25, 2010			June 26, 2009
Revenue from product sales	Revenue from product sales	$	2,469		$	2,518		$	4,997		$	5,286		Revenue from product sales	$	2,532		$	2,454		$	7,366		$	7,576
Service revenue	Service revenue		1,700			1,632			3,418			3,290		Service revenue		1,742			1,698			5,157			4,984

	Net revenue		4,169			4,150			8,415			8,576		Net revenue		4,274			4,152			12,523			12,560
Cost of product sales	Cost of product sales		1,752			1,861			3,557			3,840		Cost of product sales		1,781			1,785			5,218			5,495
Cost of services	Cost of services		907			854			1,783			1,744		Cost of services		912			892			2,694			2,634
Selling, general and administrative expenses	Selling, general and administrative expenses		1,108			1,200			2,248			2,340		Selling, general and administrative expenses		1,163			1,110			3,380			3,422
Goodwill and intangible asset impairments (see Note 7)	Goodwill and intangible asset impairments (see Note 7)		—			2,705			—			2,705		Goodwill and intangible asset impairments (see Note 7)		—			—			—			2,705
Restructuring, asset impairment and (gain)/loss on divestitures, net (see Notes 2 and 3)			(25	)		84			(14	)		88
Restructuring, asset impairment and divestiture charges, net (see Notes 2 and 3)														Restructuring, asset impairment and divestiture charges, net (see Notes 2 and 3)		43			31			26			119

	Operating income (loss)		427			(2,554	)		841			(2,141	)	Operating income (loss)		375			334			1,205			(1,815	)
Interest income	Interest income		7			11			16			23		Interest income		7			9			24			32
Interest expense	Interest expense		(74	)		(78	)		(150	)		(151	)	Interest expense		(71	)		(74	)		(221	)		(225	)
Other income, net			3			7			12			11
Other (expense) income, net														Other (expense) income, net		(85	)		—			(73	)		11

	Income (loss) from continuing operations before income taxes		363			(2,614	)		719			(2,258	)	Income (loss) from continuing operations before income taxes		226			269			935			(1,997	)
Income tax (expense) benefit			(51	)		60			(104	)		(24	)
Income tax benefit (expense)														Income tax benefit (expense)		26			(24	)		(78	)		(47	)

	Income (loss) from continuing operations		312			(2,554	)		615			(2,282	)	Income (loss) from continuing operations		252			245			857			(2,044	)
Loss from discontinued operations, net of income taxes			—			(12	)		—			(7	)
Income from discontinued operations, net of income taxes														Income from discontinued operations, net of income taxes		4			43			14			43

	Net income (loss)		312			(2,566	)		615			(2,289	)	Net income (loss)		256			288			871			(2,001	)
Less: noncontrolling interest in subsidiaries net income	Less: noncontrolling interest in subsidiaries net income		2			1			3			1		Less: noncontrolling interest in subsidiaries net income		2			1			5			2

	Net income (loss) attributable to Tyco common shareholders	$	310		$	(2,567	)	$	612		$	(2,290	)	Net income (loss) attributable to Tyco common shareholders	$	254		$	287		$	866		$	(2,003	)

Amounts attributable to Tyco common shareholders:	Amounts attributable to Tyco common shareholders:													Amounts attributable to Tyco common shareholders:
	Income (loss) from continuing operations	$	310		$	(2,555	)	$	612		$	(2,283	)	Income (loss) from continuing operations	$	250		$	244		$	852		$	(2,046	)
	Loss from discontinued operations		—			(12	)		—			(7	)	Income from discontinued operations		4			43			14			43

	Net income (loss) attributable to Tyco common shareholders	$	310		$	(2,567	)	$	612		$	(2,290	)	Net income (loss) attributable to Tyco common shareholders	$	254		$	287		$	866		$	(2,003	)

Basic earnings per share attributable to Tyco common shareholders:	Basic earnings per share attributable to Tyco common shareholders:													Basic earnings per share attributable to Tyco common shareholders:
	Income (loss) from continuing operations	$	0.65		$	(5.40	)	$	1.29		$	(4.83	)	Income (loss) from continuing operations	$	0.51		$	0.52		$	1.77		$	(4.32	)
	Loss from discontinued operations		—			(0.02	)		—			(0.01	)	Income from discontinued operations		0.01			0.09			0.03			0.09

	Net income (loss) attributable to Tyco common shareholders	$	0.65		$	(5.42	)	$	1.29		$	(4.84	)	Net income (loss) attributable to Tyco common shareholders	$	0.52		$	0.61		$	1.80		$	(4.23	)

Diluted earnings per share attributable to Tyco common shareholders:	Diluted earnings per share attributable to Tyco common shareholders:													Diluted earnings per share attributable to Tyco common shareholders:
	Income (loss) from continuing operations	$	0.65		$	(5.40	)	$	1.28		$	(4.83	)	Income (loss) from continuing operations	$	0.50		$	0.51		$	1.76		$	(4.32	)
	Loss from discontinued operations		—			(0.02	)		—			(0.01	)	Income from discontinued operations		0.01			0.09			0.03			0.09

	Net income (loss) attributable to Tyco common shareholders	$	0.65		$	(5.42	)	$	1.28		$	(4.84	)	Net income (loss) attributable to Tyco common shareholders	$	0.51		$	0.60		$	1.79		$	(4.23	)

Weighted-average number of shares outstanding:
Weighted average number of shares outstanding:														Weighted average number of shares outstanding:
	Basic		476			473			476			473		Basic		492			473			481			473
	Diluted		478			473			479			473		Diluted		496			475			484			473

See Notes to Consolidated Financial Statements.

Table of Contents

TYCO INTERNATIONAL LTD.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in millions, except share data)

			March 26, 2010			September 25, 2009					June 25, 2010			September 25, 2009

Assets	Assets								Assets
Current Assets:	Current Assets:								Current Assets:
	Cash and cash equivalents		$	2,733		$	2,354		Cash and cash equivalents		$	1,823		$	2,354
	Accounts receivable, less allowance for doubtful accounts of $167 and $173, respectively			2,460			2,629		Accounts receivable, less allowance for doubtful accounts of $155 and $167, respectively			2,416			2,544
	Inventories			1,464			1,443		Inventories			1,417			1,370
	Prepaid expenses and other current assets			932			972		Prepaid expenses and other current assets			949			963
	Deferred income taxes			408			413		Deferred income taxes			414			405
	Assets held for sale			—			156		Assets held for sale			310			404

		Total current assets		7,997			7,967			Total current assets		7,329			8,040
Property, plant and equipment, net	Property, plant and equipment, net			3,501			3,497		Property, plant and equipment, net			4,090			3,437
Goodwill	Goodwill			8,665			8,791		Goodwill			9,388			8,791
Intangible assets, net	Intangible assets, net			2,698			2,647		Intangible assets, net			3,417			2,643
Other assets	Other assets			2,611			2,651		Other assets			2,684			2,642

		Total Assets	$	25,472		$	25,553			Total Assets	$	26,908		$	25,553

Liabilities and Equity	Liabilities and Equity								Liabilities and Equity
Current Liabilities:	Current Liabilities:								Current Liabilities:
	Loans payable and current maturities of long-term debt		$	536		$	245		Loans payable and current maturities of long-term debt		$	535		$	245
	Accounts payable			1,164			1,244		Accounts payable			1,213			1,198
	Accrued and other current liabilities			2,441			2,476		Accrued and other current liabilities			2,470			2,438
	Deferred revenue			614			590		Deferred revenue			644			588
	Liabilities held for sale			—			161		Liabilities held for sale			97			277

		Total current liabilities		4,755			4,716			Total current liabilities		4,959			4,746
Long-term debt	Long-term debt			3,995			4,029		Long-term debt			3,633			4,029
Deferred revenue	Deferred revenue			1,110			1,134		Deferred revenue			1,101			1,133
Other liabilities	Other liabilities			2,689			2,720		Other liabilities			3,074			2,691

		Total Liabilities		12,549			12,599			Total Liabilities		12,767			12,599

Commitments and Contingencies (see Note 10)	Commitments and Contingencies (see Note 10)								Commitments and Contingencies (see Note 10)
Tyco Shareholders' Equity:	Tyco Shareholders' Equity:								Tyco Shareholders' Equity:
Common shares, CHF 6.70 par value, 814,801,671 shares authorized, 514,502,770 shares issued as of June 25, 2010; CHF 7.60 par value, 814,801,671 shares authorized, 479,346,720 shares issued as of September 25, 2009.									Common shares, CHF 6.70 par value, 814,801,671 shares authorized, 514,502,770 shares issued as of June 25, 2010; CHF 7.60 par value, 814,801,671 shares authorized, 479,346,720 shares issued as of September 25, 2009.			2,940			3,122
Common shares held in treasury, 10,348,696 and 5,182,984 shares, as of June 25, 2010 and September 25, 2009, respectively									Common shares held in treasury, 10,348,696 and 5,182,984 shares, as of June 25, 2010 and September 25, 2009, respectively			(393	)		(214	)
Contributed surplus									Contributed surplus			12,117			10,940
Accumulated earnings (deficit)									Accumulated earnings (deficit)			46			(820	)
Accumulated other comprehensive loss									Accumulated other comprehensive loss			(585	)		(87	)

										Total Tyco Shareholders' Equity		14,125			12,941
Noncontrolling interest									Noncontrolling interest			16			13
	Common shares, CHF 6.70 par value, 814,801,671 shares authorized, 479,346,720 shares issued as of March 26, 2010; CHF 7.60 par value, 814,801,671 shares authorized, 479,346,720 shares issued as of September 25, 2009			2,723			3,122
	Common shares held in treasury, 4,003,269 and 5,182,984 shares, as of March 26, 2010 and September 25, 2009, respectively			(165	)		(214	)		Total Equity		14,141			12,954
	Contributed surplus			10,963			10,940
	Accumulated deficit			(208	)		(820	)		Total Liabilities and Equity	$	26,908		$	25,553
	Accumulated other comprehensive loss			(406	)		(87	)

		Total Tyco Shareholders' Equity		12,907			12,941
	Noncontrolling interest			16			13

		Total Equity		12,923			12,954

		Total Liabilities and Equity	$	25,472		$	25,553

See Notes to Consolidated Financial Statements.

Table of Contents

TYCO INTERNATIONAL LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in millions)

				For the Six Months Ended									For the Nine Months Ended

				March 26, 2010			March 27, 2009						June 25, 2010			June 26, 2009
Cash Flows From Operating Activities:	Cash Flows From Operating Activities:									Cash Flows From Operating Activities:
Net income (loss) attributable to Tyco common shareholders	Net income (loss) attributable to Tyco common shareholders			$	612		$	(2,290	)	Net income (loss) attributable to Tyco common shareholders			$	866		$	(2,003	)
	Noncontrolling interest in subsidiaries net income				3			1		Noncontrolling interest in subsidiaries net income				5			2
	Loss from discontinued operations, net of income taxes				—			7		Income from discontinued operations, net of income taxes				(14	)		(43	)

Income (loss) from continuing operations	Income (loss) from continuing operations				615			(2,282	)	Income (loss) from continuing operations				857			(2,044	)
Adjustments to reconcile net cash provided by operating activities:	Adjustments to reconcile net cash provided by operating activities:									Adjustments to reconcile net cash provided by operating activities:
	Goodwill and intangible asset impairments				—			2,705
	Depreciation and amortization				569			559		Goodwill and intangible asset impairments				—			2,705
	Non-cash compensation expense				63			52		Depreciation and amortization				869			835
	Deferred income taxes				(35	)		(182	)	Non-cash compensation expense				92			76
	Provision for losses on accounts receivable and inventory				64			69		Deferred income taxes				(127	)		(203	)
	Other non-cash items				(23	)		35		Provision for losses on accounts receivable and inventory				93			113
	Changes in assets and liabilities, net of the effects of acquisitions and divestitures:									Other non-cash items				58			56
		Accounts receivable, net			66			162		Changes in assets and liabilities, net of the effects of acquisitions and divestitures:
		Inventories			(73	)		21			Accounts receivable, net			—			175
		Prepaid expenses and other current assets			20			(287	)		Inventories			(127	)		175
		Accounts payable			(52	)		(376	)		Prepaid expenses and other current assets			12			(180	)
		Accrued and other liabilities			(202	)		190			Accounts payable			33			(386	)
		Income taxes, net			—			22			Accrued and other liabilities			(6	)		(12	)
		Other			(1	)		94			Income taxes, net			(1	)		(3	)
											Other			(86	)		116
			Net cash provided by operating activities		1,011			782
												Net cash provided by operating activities		1,667			1,423
			Net cash used in discontinued operating activities		—			(13	)
												Net cash provided by discontinued operating activities		12			12
Cash Flows From Investing Activities:	Cash Flows From Investing Activities:									Cash Flows From Investing Activities:
Capital expenditures	Capital expenditures				(335	)		(331	)	Capital expenditures				(512	)		(494	)
Proceeds from disposal of assets	Proceeds from disposal of assets				19			4		Proceeds from disposal of assets				26			5
Acquisition of businesses, net of cash acquired	Acquisition of businesses, net of cash acquired				(152	)		(47	)	Acquisition of businesses, net of cash acquired				(600	)		(47	)
Accounts purchased by ADT	Accounts purchased by ADT				(266	)		(231	)	Accounts purchased by ADT				(400	)		(361	)
Divestiture of businesses, net of cash retained	Divestiture of businesses, net of cash retained				28			8		Divestiture of businesses, net of cash retained				26			11
Other	Other				11			(6	)	Other				16			31

			Net cash used in investing activities		(695	)		(603	)			Net cash used in investing activities		(1,444	)		(855	)

			Net cash provided by discontinued investing activities		—			32				Net cash (used in) provided by discontinued investing activities		(7	)		35

Cash Flows From Financing Activities:	Cash Flows From Financing Activities:									Cash Flows From Financing Activities:
Net repayments of short-term debt	Net repayments of short-term debt				(243	)		(551	)	Net repayments of short-term debt				(242	)		(552	)
Proceeds from issuance of long-term debt	Proceeds from issuance of long-term debt				498			2,165		Proceeds from issuance of long-term debt				1,001			2,794
Repayment of long-term debt	Repayment of long-term debt				(9	)		(1,634	)	Repayment of long-term debt				(962	)		(2,259	)
Proceeds from exercise of share options	Proceeds from exercise of share options				9			1		Proceeds from exercise of share options				33			1
Dividends paid	Dividends paid				(214	)		(189	)	Dividends paid				(311	)		(287	)
Repurchase of common shares by subsidiary	Repurchase of common shares by subsidiary				—			(3	)	Repurchase of common shares by subsidiary				—			(3	)
Repurchase of common shares by treasury										Repurchase of common shares by treasury				(276	)		—
Transfer from discontinued operations	Transfer from discontinued operations				—			19		Transfer from discontinued operations				5			47
Other	Other				21			(5	)	Other				11			1

			Net cash provided by (used in) financing activities		62			(197	)			Net cash used in financing activities		(741	)		(258	)

			Net cash used in discontinued financing activities		—			(19	)			Net cash used in discontinued financing activities		(5	)		(47	)

Effect of currency translation on cash	Effect of currency translation on cash				1			(82	)	Effect of currency translation on cash				(13	)		(50	)

Net increase (decrease) in cash and cash equivalents					379			(100	)
Net (decrease) increase in cash and cash equivalents										Net (decrease) increase in cash and cash equivalents				(531	)		260
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period				2,354			1,519		Cash and cash equivalents at beginning of period				2,354			1,519

Cash and cash equivalents at end of period	Cash and cash equivalents at end of period			$	2,733		$	1,419		Cash and cash equivalents at end of period			$	1,823		$	1,779

See Notes to Consolidated Financial Statements.

Table of Contents

TYCO INTERNATIONAL LTD.

CONSOLIDATED STATEMENTS OF ~~SHAREHOLDERS'~~ EQUITY (UNAUDITED)

For the ~~Six~~Nine Months Ended ~~March 26,~~June 25, 2010 and ~~March 27,~~June 26, 2009

(in millions)

				Common Shares at Par Value (see Note 12)			Common Shares $0.80 Par Value			Treasury Shares			Share Premium			Contributed Surplus			Accumulated Earnings (Deficit)			Accumulated Other Comprehensive Income (Loss)			Total Tyco Shareholders' Equity			Noncontrolling Interest			Total Equity						Common Shares at Par Value (see Note 12)			Common Shares $0.80 Par Value			Treasury Shares			Share Premium			Contributed Surplus			Accumulated Earnings (Deficit)			Accumulated Other Comprehensive Income (Loss)			Total Tyco Shareholders' Equity			Noncontrolling Interest			Total Equity

Balance as of September 26, 2008	Balance as of September 26, 2008		473	$	—		$	382		$	(192	)	$	9,236		$	4,711		$	1,125		$	232		$	15,494		$	14		$	15,508		Balance as of September 26, 2008		473	$	—		$	382		$	(192	)	$	9,236		$	4,711		$	1,125		$	232		$	15,494		$	14		$	15,508
Comprehensive income:	Comprehensive income:																																	Comprehensive income:
	Net loss																			(2,290	)					(2,290	)		1			(2,289	)	Net loss																			(2,003	)					(2,003	)		2			(2,001	)
	Currency translation																						(951	)		(951	)		(1	)		(952	)	Currency translation																						(560	)		(560	)					(560	)
	Unrealized gain on marketable securities and derivative instruments net of income taxes of $2 million																						5			5						5		Unrealized gain on marketable securities and derivative instruments, net of income taxes of $4 million																						7			7						7
	Change in unrecognized loss and prior service cost (credit), net of income taxes of $4 million																						7			7						7		Change in unrecognized loss and prior service cost (credit), net of income taxes of $5 million																						11			11						11

	Total comprehensive loss																									(3,229	)					(3,229	)	Total comprehensive loss																									(2,545	)					(2,543	)
Change of Domicile (see Note 12)	Change of Domicile (see Note 12)																																	Change of Domicile (see Note 12)
		Reclassification of shares owned by subsidiaries and cancellation of common shares held in treasury			1						(54	)					53									—						—			Reclassification of shares owned by subsidiaries and cancellation of common shares held in treasury			1						(54	)					53									—						—
		Reverse share split and issuance of fully paid up shares			3,498			(382	)					(3,116	)											—						—			Reverse share split and issuance of fully paid up shares			3,498			(382	)					(3,116	)											—						—
		Reallocation of share premium to contributed surplus												(6,120	)		6,120									—						—			Reallocation of share premium to contributed surplus												(6,120	)		6,120									—						—
Dividends declared (see Note 12)	Dividends declared (see Note 12)				(377	)														(95	)					(472	)					(472	)	Dividends declared (see Note 12)				(377	)														(95	)					(472	)					(472	)
Vesting of share based equity awards tax effect																	(10	)								(10	)					(10	)
Shares issued from treasury for vesting of share based equity awards and other related tax effects																																		Shares issued from treasury for vesting of share based equity awards and other related tax effects										10						(16	)								(6	)					(6	)
Repurchase of common shares by subsidiary	Repurchase of common shares by subsidiary																(3	)								(3	)					(3	)	Repurchase of common shares by subsidiary																(3	)								(3	)					(3	)
Compensation expense	Compensation expense																53									53						53		Compensation expense																77									77						77
Cumulative effect of adopting a new accounting principle, net of income tax benefit of $2 million and income taxes $28 million, respectively, (See Note 11)	Cumulative effect of adopting a new accounting principle, net of income tax benefit of $2 million and income taxes $28 million, respectively, (See Note 11)																			(5	)		61			56						56		Cumulative effect of adopting a new accounting principle, net of income tax benefit of $2 million and income taxes $28 million, respectively, (See Note 11)																			(5	)		61			56						56
Other	Other																(6	)								(6	)		(3	)		(9	)	Other																(6	)								(6	)		(3	)		(9	)

Balance as of March 27, 2009			473	$	3,122		$	—		$	(246	)	$	—		$	10,918		$	(1,265	)	$	(646	)	$	11,883		$	11		$	11,894
Balance as of June 26, 2009																																		Balance as of June 26, 2009		473	$	3,122		$	—		$	(236	)	$	—		$	10,936		$	(978	)	$	(249	)	$	12,595		$	13		$	12,608

			Common Shares at Par Value (See Note 12)			Treasury Shares			Contributed Surplus			Accumulated Earnings (Deficit)			Accumulated Other Comprehensive Income (Loss)			Total Tyco Shareholders' Equity			Noncontrolling Interest		Total Equity							Common Shares at Par Value (see Note 12)			Treasury Shares			Contributed Surplus			Accumulated Earnings (Deficit)			Accumulated Other Comprehensive Income (Loss)			Total Tyco Shareholders' Equity			Noncontrolling Interest			Total Equity

Balance as of September 25, 2009	Balance as of September 25, 2009	474	$	3,122		$	(214	)	$	10,940		$	(820	)	$	(87	)	$	12,941		$	13	$	12,954		Balance as of September 25, 2009		474		$	3,122		$	(214	)	$	10,940		$	(820	)	$	(87	)	$	12,941		$	13		$	12,954
Comprehensive income:	Comprehensive income:																									Comprehensive income:
	Net income												612						612			3		615		Net income														866						866			5			871
	Currency translation															(336	)		(336	)				(336	)	Currency translation																	(565	)		(565	)					(565	)
	Retirement plans, net of income tax benefit of $8 million															17			17					17		Unrealized loss on marketable securities and derivative instruments, net of income taxes																	(2	)		(2	)					(2	)
																										Retirement plans, net of income tax benefit of $39 million																	69			69						69
	Total comprehensive income																		293			3		296
																										Total comprehensive income																				368			5			373
Dividends declared (see Note 12)	Dividends declared (see Note 12)			(399	)														(399	)				(399	)	Dividends declared (see Note 12)					(423	)														(423	)					(423	)
Shares issued from treasury for vesting of share-based equity awards		1					49			(40	)								9					9
Issuance of shares in connection with the acquisition of Brinks Home Security Inc.																										Issuance of shares in connection with the acquisition of Brinks Home Security Inc.		35			241			2			1,119									1,362						1,362
																											Replacement of share based equity awards issued in connection with the acquisition of Brinks Home Security Inc.										27									27						27
Shares issued from treasury for vesting of share based equity awards																										Shares issued from treasury for vesting of share based equity awards		2						95			(62	)								33						33
Repurchase of common shares																										Repurchase of common shares		(7	)					(276	)											(276	)					(276	)
Compensation expense	Compensation expense									63									63					63		Compensation expense											93									93						93
Other																										Other																							(2	)		(2	)
									��
Balance as of March 26, 2010		475	$	2,723		$	(165	)	$	10,963		$	(208	)	$	(406	)	$	12,907		$	16	$	12,923
Balance as of June 25, 2010																										Balance as of June 25, 2010		504		$	2,940		$	(393	)	$	12,117		$	46		$	(585	)	$	14,125		$	16		$	14,141

See Notes to Consolidated Financial Statements.

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TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation—The unaudited Consolidated Financial Statements include the consolidated results of Tyco International Ltd., a corporation organized under the laws of Switzerland, and its subsidiaries (Tyco and all its subsidiaries, hereinafter collectively referred to as the "Company" or "Tyco"). The financial statements have been prepared in United States dollars ("USD") and in accordance with the instructions to Form 10-Q under the Securities Exchange Act of 1934, as amended. The year end condensed balance sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. These financial statements should be read in conjunction with the Consolidated Financial Statements and accompanying notes contained in the Company's Annual Report on Form 10-K for the fiscal year ended September 25, 2009 (the "2009 Form 10-K").

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

Revenue related to the sale of electronic tags and labels utilized in retailer anti-theft systems is classified as revenue from product sales. In reporting periods prior to the first quarter of fiscal 2010, revenue related to the sale of electronic tags and labels utilized in retailer anti-theft systems was misclassified as service revenue. Such item had no effect on net revenue, operating income (loss), net income (loss) and cash flows. No changes have been made to previously filed financial statements or in the comparative quarterly amounts presented herein, as the effect in prior periods is not material. Revenue related to the sale of such electronic tags and labels reflected as service revenue was ~~$65~~$73 million and ~~$142~~$215 million and related cost of services was ~~$40~~$44 million and ~~$87~~$131 million for the quarter and ~~six~~nine months ended ~~March 27,~~June 26, 2009, respectively.

References to 2010 and 2009 are to Tyco's fiscal quarters ending ~~March 26,~~June 25, 2010 and ~~March 27,~~June 26, 2009, respectively, unless otherwise indicated.

Reclassifications—Certain prior period amounts have been reclassified to conform with the current period presentation. Specifically, the Company has reclassified certain businesses which have satisfied the criteria to be presented as discontinued operations to income from discontinued operations in the Consolidated Statements of Operations and assets and liabilities held for sale within the Consolidated Balance Sheets. See Note 2. Additionally, the Company has realigned certain business operations in the first quarter of fiscal 2010, resulting in prior period segment amounts being recast. See Note 14.

Recently Adopted Accounting Pronouncements—In June 2008, the Financial Accounting Standards Board ("FASB") ratified authoritative guidance for determining whether instruments granted in share-based payment transactions are participating securities. The guidance addresses whether instruments granted in share-based payment awards are participating securities prior to vesting and, therefore, must be included in the earnings allocation in calculating earnings per share under the two-class method. The guidance requires that unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend-equivalents be treated as participating securities in calculating earnings per share. The guidance became effective for Tyco in the first quarter of fiscal 2010, and was applied retrospectively to prior periods. The adoption did not have a material impact on the Company's historical annual or quarterly basic and diluted earnings per share. See Note 6 for additional information related to the adoption of the guidance.

~~In December 2007, the FASB revised the authoritative guidance for business combinations. The revised guidance retains the underlying concepts of the existing guidance in that business combinations~~

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
1.    Basis of Presentation and Summary of Significant Accounting Policies (Continued)

        In December 2007, the FASB revised the authoritative guidance for business combinations. The revised guidance retains the underlying concepts of the existing guidance in that business combinations are still accounted for at fair value. However, the accounting for certain other aspects of business combinations will be affected. Acquisition costs will generally be expensed as incurred. Restructuring costs associated with a business combination will generally be expensed subsequent to the acquisition date. In-process research and development will be recorded at fair value as an indefinite-lived intangible at the acquisition date until it is completed or abandoned and its useful life can be determined. Changes in deferred tax asset valuation allowances and uncertain tax positions after the acquisition date will generally impact income tax expense. The revised guidance also expands required disclosures surrounding the nature and financial effects of business combinations. The revised guidance was adopted by the Company in the first quarter of fiscal ~~2010.~~2010, which did not have a material impact on the Company's financial position, results of operations or cash flows. The revised guidance is primarily effective for all business combinations beginning in the first quarter of fiscal 2010 and thereafter, ~~and its adoption did not have a material impact on~~including the ~~Company's financial position, results~~acquisition of ~~operations or cash flows for the quarter and six months ended March 26, 2010.~~Broadview Security. See Note 4.
        In December 2007, the FASB issued authoritative guidance for noncontrolling interests in consolidated financial statements. The guidance requires the recognition of a noncontrolling interest (minority interest prior to the adoption of the guidance) as equity in the Consolidated Financial Statements. The amount of net income attributable to the noncontrolling interest should be included in consolidated net income on the face of the Consolidated Statements of Operations. The guidance also amends certain existing consolidation procedures in order to achieve consistency with the requirements of the revised authoritative guidance for business combinations discussed above. The guidance also includes expanded disclosure requirements regarding the interests of the parent and its noncontrolling interest. The guidance was adopted by Tyco in the first quarter of fiscal 2010 and was applied retrospectively. The adoption did not have a material impact on the Company's financial position, results of operations or cash flows.
        In September 2006, the FASB issued authoritative guidance for fair value measurements, which enhances existing guidance for measuring assets and liabilities at fair value. The guidance defines fair value, establishes a framework for measuring fair value and expands disclosure about fair value measurements. The guidance was adopted in two phases. Tyco adopted the fair value provisions relating to financial assets and liabilities in the first quarter of 2009 and for nonfinancial assets and liabilities in the first quarter of fiscal 2010. The adoption did not have a material impact on the Company's financial position, results of operations or cash flows.
        In April 2008, the FASB issued authoritative guidance for determining the useful life of intangible assets. The guidance amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset. The guidance became effective for Tyco in the first quarter of fiscal 2010. The adoption did not have a material impact on the Company's financial position, results of operations or cash flows.
        Recently Issued Accounting Pronouncements—In September 2009, the FASB issued authoritative guidance for the accounting for revenue arrangements with multiple deliverables. The guidance establishes a selling price hierarchy for determining the selling price of a deliverable. The selling price used for each deliverable will be based on vendor-specific objective evidence if available, third-party evidence if vendor-specific objective evidence is not available, or estimated selling price if neither vendor-specific evidence nor third-party evidence is available. The guidance requires arrangements ~~under which multiple revenue generating activities that are to be performed be allocated at inception. The residual method under the existing accounting guidance has been eliminated. The guidance~~

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
1.    Basis of Presentation and Summary of Significant Accounting Policies (Continued)

under which multiple revenue generating activities to be performed be allocated at inception. The residual method under the existing accounting guidance has been eliminated. The guidance expands the disclosure requirements related to multiple-deliverable revenue arrangements. The guidance becomes effective for revenue arrangements entered into or materially modified beginning in the first quarter of fiscal 2011. The guidance applies on a prospective ~~basis unless the Company specifically elects to apply the guidance retrospectively.~~basis. The Company is currently assessing what impact, if any, the guidance will have on its financial position, results of operations or cash flows.
        In June 2009, the FASB issued authoritative guidance which amended the existing guidance for the consolidation of variable interest entities, to address the elimination of the concept of a qualifying special purpose entity. The guidance also replaces the quantitative-based risks and rewards calculation for determining which enterprise has a controlling financial interest in a variable interest entity with an approach focused on identifying which enterprise has the power to direct the activities of a variable interest entity, and the obligation to absorb losses of the entity or the right to receive benefits from the entity. Additionally, the guidance requires any enterprise that holds a variable interest in ana variable interest entity to provide enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise's involvement in a variable interest entity. The guidance is effective for Tyco in the first quarter of fiscal 2011. The Company is currently assessing what impact, if any, that the guidance will have on its financial position, results of operations or cash flows.
        In December 2008, the FASB issued authoritative guidance for employers' disclosures about postretirement benefit plan assets. The guidance requires additional disclosures about plan assets related to an employer's defined benefit pension or other post-retirement plans to enable investors to better understand how investment decisions are made, the major categories of plan assets, the inputs and valuation techniques used to measure the fair value of plan assets, the effect of fair value measurements using significant unobservable inputs (Level 3) on changes in plan assets for the period, and the significant concentrations of risk within plan assets. The disclosure provisions of the guidance are effective for Tyco in fiscal 2010 and will be adopted ~~concurrently~~concurrent with the pension disclosures associated with the Company's annual valuation process during the fourth quarter of fiscal 2010.
2.    Divestitures
        The Company has continued to assess the strategic fit of its various businesses and has pursued divestiture of certain businesses which do not align with its long-term strategy.
        On April 22, 2010, the Board of Directors approved a plan to pursue a tax-free spin-off of Tyco's Electrical and Metal Products business. The proposed transaction is expected to be structured as a tax-free distribution to Tyco shareholders, and is subject to a number of uncertainties and conditions, including completion of a review process by the Securities and Exchange Commission, final approval by the Tyco Board of Directors and approval by Tyco shareholders. Tyco expects to complete the proposed transaction in the first half of fiscal 2011, at which time the business would be an independent, publicly traded U.S. company. Pending completion of the spin-off, the Electrical and Metal Products business is presented in continuing operations.
During the fourth quarter of 2009, the Company approved a plan to sell its french security business, which was part of the Company's ADT Worldwide segment. This business has been classified as held for sale as of September 25, ~~2009;~~2009, however, its results of operations were presented in continuing operations as the criteria ~~for~~to be presented as discontinued operations have not been met. During ~~March~~the second quarter of 2010, the Company completed the sale and recorded a $53 million

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
2.    Divestitures (Continued)

pre-tax gain within restructuring, asset impairment and ~~(gain)/loss on divestitures,~~divestiture charges, net in the Company's Consolidated Statement of Operations.
        During the third quarter of 2008, the Company approved a plan to sell a business in its Safety Products segment. This business had been classified as held for sale in the Company's historical Consolidated Balance Sheet. During the second quarter of 2009, due to a change in strategy by management, the Company decided not to sell the business. As a result, the business no longer satisfied the requirements to be classified as held for sale. The Company measured the business at the lower of its (i) carrying amount before it was classified as held for sale, adjusted for depreciation and amortization expense that would have been recognized had the business been continuously classified as

~~Table of Contents~~

~~TYCO INTERNATIONAL LTD.~~
~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~
~~2.    Divestitures (Continued)~~

held and used, or (ii) fair value at the date the decision not to sell was made. The Company recorded a charge of $8 million in the second quarter of 2009 relating to the amount of depreciation and amortization expense that would have been recorded had the asset been continuously classified as held and used.
Discontinued Operations
        During the quarter ended June 25, 2010, the Board of Directors approved a plan to sell the Company's European water business, which is part of the Company's Flow Control segment. Subject to the receipt of certain consents and approvals and other customary closing conditions, the Company has agreed to sell the business for approximately $245 million. As of June 25, 2010, the necessary consents and approvals had not been obtained by the Company to transfer the legal ownership of the business. The Company expects to record a gain when the transaction closes, which is expected to occur in the fourth quarter of fiscal 2010. During the quarter ended June 25, 2010, the business met the held for sale and discontinued operations criteria and has been included in discontinued operations in all periods presented. As of June 25, 2010, the Company had assessed and determined that the carrying value of the remaining assets were recoverable based on current fair value, less cost to sell. The Company will continue to assess recoverability until the business is sold. See Note 19.
        In July 2008, the Company substantially completed the sale of its Infrastructure Services business, which met the criteria to be presented as discontinued operations. In order to complete the sale of Earth Tech Brasil Ltda. ("ET Brasil") and Earth Tech UK businesses and certain assets in China, the Company was required to obtain consents and approvals to transfer the legal ownership of the businesses and assets. On January 22, 2009, the Company received the necessary consents and approvals to transfer the legal ownership of its ET Brasil business to ~~Corioca~~Carioca Christiani-Nielsen Engenharia S.A. and received cash proceeds of ~~approximately~~ $13 million. During the fourth quarter of 2008, the Company sold its Earth Tech UK business and received net cash proceeds of $53 million. However, the gain was deferred until receipt of the necessary consents and approvals. On ~~February 27,~~May 12, 2009, the Company received the necessary consents and approvals to transfer the legal ownership of its Earth Tech UK business to AECOM and realized the deferred gain in the Company's Consolidated Statements of Operations during the quarter ended June 26, 2009. Furthermore, on May 8, 2009, the Company received the necessary consents to transfer certain of the China assets and received cash proceeds of ~~$18~~$6 million. ~~At March 27,~~As a result of the above dispositions, a net pre-tax gain of $31 million was recorded in income from discontinued operations, net of income taxes in the Company's Consolidated Statement of Operations. As of June 26, 2009, the necessary consents and approvals for ~~Earth Tech UK and~~ the remaining assets in China had not been obtained by the Company. ~~At March 27,~~As of June 26, 2009, the Company had assessed and determined that the carrying value of the remaining assets were recoverable based on ~~current fair value, less cost to sell. The remaining consents and approvals for the other businesses and assets were obtained during the second half of fiscal 2009.~~
        ~~Net revenue, income from operations, loss on sale and income tax expense for discontinued operations are as follows ($ in millions):~~

For the
Quarter Ended For the
Six Months Ended

March 27,
2009 March 27,
2009
Net revenue
$ 1 $ 8

Pre-tax income from discontinued operations
$ 1 $ 4
Pre-tax loss on sale of discontinued operations
(8 ) (5 )
Income tax expense
(5 ) (6 )

Loss from discontinued operations, net of income taxes
$ (12 ) $ (7 )

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
2.    Divestitures (Continued)

current fair value, less cost to sell. The remaining consents and approvals for the other businesses and assets were obtained during the fourth quarter of fiscal year 2009.
        Net revenue, income from operations, loss on sale and income tax expense for discontinued operations are as follows ($ millions):

For the
Quarters Ended For the
Nine Months Ended

June 25,
2010 June 26,
2009 June 25,
2010 June 26,
2009
Net revenue
$ 82 $ 89 $ 248 $ 259

Pre-tax income from discontinued operations
$ 11 $ 6 $ 22 $ 17
Pre-tax (loss) income on sale of discontinued operations
(5 ) 42 (5 ) 38
Income tax expense
(2 ) (5 ) (3 ) (12 )

Income from discontinued operations, net of income taxes
$ 4 $ 43 $ 14 $ 43

        Balance sheet information for pending divestitures ~~as of September 25, 2009,~~ is as follows ($ in millions):

September 25,
2009
June 25,
2010 September 25,
2009
Accounts receivable, net
$ 39
Accounts receivables, net
Accounts receivables, net
$ 72 $ 124
Inventories
Inventories
2
Inventories
65 74
Prepaid expenses and other current assets
Prepaid expenses and other current assets
22
Prepaid expenses and other current assets
16 38
Property, plant and equipment, net
Property, plant and equipment, net
22
Property, plant and equipment, net
52 82
Goodwill and intangible assets, net
Goodwill and intangible assets, net
9
Goodwill and intangible assets, net
97 14
Other assets
Other assets
62
Other assets
8 72

Total assets
$ 156
Total assets
$ 310 $ 404

Accounts payable
Accounts payable
$ 22
Accounts payable
$ 38 67
Accrued and other current liabilities
Accrued and other current liabilities
67
Accrued and other current liabilities
35 108
Other liabilities
Other liabilities
72
Other liabilities
24 102

Total liabilities
$ 161
Total liabilities
$ 97 $ 277

        During fiscal year 2007, Tyco completed the spin-offs of its Healthcare and Electronics businesses (the "Separation"). The Company has used available information to develop its best estimates for certain assets and liabilities related to the Separation. In limited instances, final determination of the balances will be made in subsequent periods. During the quarter and ~~six~~nine months ended ~~March 27,~~June 26, 2009, nil and $4 million, respectively, of other items was recorded as an increase to shareholders' equity. There were no adjustments during the quarter and ~~six~~nine months ended ~~March 26,~~June 25, 2010. Adjustments in the future for the impact of filing final income tax returns in certain jurisdictions where those returns include a combination of Tyco, Covidien and/or Tyco Electronics legal entities and for certain amended income tax returns for the periods prior to the Separation may be recorded to either equity or the statement of operations depending on the specific item giving rise to the adjustment.

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
2.    Divestitures (Continued)
~~(Gain)/Loss on divestitures, net~~Divestiture Charges, Net
        During the quarter and ~~six~~nine months ended ~~March 26,~~June 25, 2010, the Company recorded a net loss and net gain of ~~$45~~$1 million and ~~$44~~$43 million, respectively, in restructuring, asset impairment and ~~(gain)/loss on divestitures,~~divestiture charges, net in the Company's Consolidated Statements of Operations in connection with the divestiture and write-down to fair value less cost to sell of certain businesses that did not meet the criteria for discontinued operations. The net gain for the ~~quarter and six~~nine months ended ~~March 26,~~June 25, 2010 includes the $53 million gain recognized upon the sale of the Company's french security business.
        During the quarter and ~~six~~nine months ended ~~March 27,~~June 26, 2009, the Company recorded $1a net loss of $3 million ~~gain~~ and $1$5 million, ~~loss,~~ respectively, in restructuring, asset impairment and ~~(gain)/loss on divestitures,~~divestiture charges, net, in the Company's Consolidated Statements of Operations in connection with the divestiture and write-down to fair value of certain businesses that did not meet the criteria for discontinued operations.

~~Table of Contents~~

~~TYCO INTERNATIONAL LTD.~~
~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~
3.    Restructuring and Asset Impairment Charges, Net
2009 Program
        During fiscal 2009 and 2010, the Company identified and pursued opportunities for cost savings through restructuring activities and workforce reductions to improve operating efficiencies across the Company's businesses (the "2009 Program"). The Company expects such actions to be substantially completed by the end of fiscal 2010 and to incur restructuring and restructuring related charges of approximately $100 million ~~to $150 million~~ in fiscal 2010. During the quarter and ~~six~~nine months ended ~~March 26,~~June 25, 2010, the Company incurred charges of ~~$21~~$40 million and ~~$32~~$69 million, respectively. The Company has incurred ~~$261~~$293 million of restructuring charges cumulative to date relating to the 2009 Program.
        Restructuring and asset impairment charges, net, during the quarter and ~~six~~nine months ended ~~March 26,~~June 25, 2010 and ~~March 27,~~June 26, 2009 related to the 2009 Program are as follows ($ in millions):

For the Quarter Ended March 26, 2010

Employee
Severance
and Benefits Facility
Exit and
Other
Charges Charges
Reflected in
Cost of Sales Total
ADT Worldwide
$ 2 $ 2 $ — $ 4
Flow Control
7 1 1 9
Fire Protection Services
5 — — 5
Electrical and Metal Products
— 1 — 1
Safety Products
1 1 — 2

Total
$ 15 $ 5 $ 1 $ 21

For the Quarter Ended March 27, 2009 For the Quarter Ended June 25, 2010

Employee
Severance
and Benefits Facility
Exit and
Other
Charges Charges
Reflected in
Cost of Sales Charges
Reflected in
SG&A Total Employee
Severance and
Benefits Facility Exit
and Other
Charges Charges
Reflected in
Cost of Sales Total
ADT Worldwide
$ 37 $ 9 $ 6 $ 1 $ 53 $ 23 $ 2 $ — $ 25
Flow Control
2 1 1 — 4 3 3 — 6
Fire Protection Services
10 — — — 10 4 1 — 5
Electrical and Metal Products
1 — 4 — 5 — 2 (1 ) 1
Safety Products
15 — 5 — 20 1 1 — 2
Corporate and Other
1 4 — 1 6 1 — — 1

Total
$ 66 $ 14 $ 16 $ 2 $ 98 $ 32 $ 9 $ (1 ) $ 40

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
3.    Restructuring and Asset Impairment Charges, Net (Continued)

For the Six Months Ended March 26, 2010 For the Quarter Ended June 26, 2009

Employee
Severance
and Benefits Facility
Exit and
Other
Charges Charges
Reflected in
Cost of Sales Charges
Reflected in
SG&A Total Employee
Severance and
Benefits Facility Exit
and Other
Charges Charges
Reflected in
Cost of Sales Charges
Reflected in
SG&A Total
ADT Worldwide
$ 6 $ 3 $ — $ — $ 9 $ 7 $ 5 $ 1 $ 1 $ 14
Flow Control
12 2 1 — 15 2 — 1 — 3
Fire Protection Services
7 — — 1 8 3 — — — 3
Electrical and Metal Products
— 1 — — 1 2 — 2 — 4
Safety Products
1 (2 ) — — (1 ) 3 — — — 3
Corporate and Other
— 2 — — 2

Total
$ 26 $ 4 $ 1 $ 1 $ 32 $ 17 $ 7 $ 4 $ 1 $ 29

For the Six Months Ended March 27, 2009 For the Nine Months Ended June 25, 2010

Employee
Severance
and Benefits Facility
Exit and
Other
Charges Charges
Reflected in
Cost of Sales Charges
Reflected in
SG&A Total Employee
Severance and
Benefits Facility Exit
and Other
Charges Charges
Reflected in
Cost of Sales Charges
Reflected in
SG&A Total
ADT Worldwide
$ 37 $ 9 $ 6 $ 3 $ 55 $ 29 $ 5 $ — $ — $ 34
Flow Control
3 1 2 — 6 13 4 1 — 18
Fire Protection Services
10 — — — 10 11 1 — 1 13
Electrical and Metal Products
1 — 5 — 6 — 3 (1 ) — 2
Safety Products
15 — 5 — 20 2 (1 ) — — 1
Corporate and Other
1 4 — 1 6 1 — — — 1

Total
$ 67 $ 14 $ 18 $ 4 $ 103 $ 56 $ 12 $ — $ 1 $ 69

~~Restructuring and asset impairment charges, net incurred cumulative to date from initiation of the 2009 Program are as follows ($ in millions):~~
For the Nine Months Ended June 26, 2009

Employee
Severance
and Benefits Facility
Exit and
Other
Charges Charges
Reflected in
Cost of Sales Charges
Reflected in
SG&A Total Employee
Severance and
Benefits Facility Exit
and Other
Charges Charges
Reflected in
Cost of Sales Charges
Reflected in
SG&A Total
ADT Worldwide
$ 72 $ 22 $ 9 $ 5 $ 108 $ 44 $ 13 $ 8 $ 4 $ 69
Flow Control
30 6 3 — 39 5 1 2 — 8
Fire Protection Services
51 1 — 1 53 13 — — — 13
Electrical and Metal Products
10 3 7 — 20 3 1 7 — 11
Safety Products
24 — 8 — 32 18 — 5 — 23
Corporate and Other
1 8 — — 9 1 6 — 1 8

Total
$ 188 $ 40 $ 27 $ 6 $ 261 $ 84 $ 21 $ 22 $ 5 $ 132

Table of Contents

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
3.    Restructuring and Asset Impairment Charges, Net (Continued)
        Restructuring and asset impairment charges, net incurred cumulative to date from initiation of the 2009 Program are as follows ($ in millions):

Employee
Severance and
Benefits Facility Exit
and Other
Charges Charges
Reflected in
Cost of Sales Charges
Reflected in
SG&A Total
ADT Worldwide
$ 95 $ 24 $ 9 $ 5 $ 133
Flow Control
26 8 3 — 37
Fire Protection Services
55 2 — 1 58
Electrical and Metal Products
10 5 6 — 21
Safety Products
25 1 8 — 34
Corporate and Other
2 8 — — 10

Total
$ 213 $ 48 $ 26 $ 6 $ 293

The rollforward of the reserves related to the 2009 Program from September 25, 2009 to ~~March 26,~~June 25, 2010 is as follows ($ in millions):
Balance as of September 25, 2009
$ 130 $ 126
Charges
40 80
Reversals
(6 ) (7 )
Utilization
(70 ) (98 )
Reclass/transfers
(1 ) (1 )
Currency translation
(5 ) (6 )

Balance as of March 26, 2010
$ 88
Balance as of June 25, 2010
$ 94

        Restructuring reserves for businesses that have met the held for sale criteria are included in liabilities held for sale on the Consolidated Balance Sheets and excluded from the table above. See Note 2.
2007 Program and pre-2006 Actions
        During fiscal 2007 and 2008, the Company launched a restructuring program across all of the Company's segments, including the corporate organization, to streamline some of the businesses and reduce the operational footprint (the "2007 Program"). As of December 26, 2008, the Company had substantially completed this program. The Company maintained a restructuring reserve related to the 2007 Program of ~~$32~~$26 million and $59 million as of ~~March 26,~~June 25, 2010 and September 25, 2009, respectively. The Company utilized ~~$25~~$30 million of the restructuring reserve balance during the ~~six~~nine months ended ~~March 26,~~June 25, 2010. In addition, the Company continues to maintain restructuring reserves related to certain actions initiated prior to 2006. The total amount of these reserves were $14 million as of ~~March 26,~~June 25, 2010 and $15 million as of September 25, 2009. The aggregate remaining reserves related to the 2007 Program and pre-2006 actions include employee severance and benefits as well as facility exit costs for long-term non-cancelable lease obligations with expiration dates ~~which~~that range from 2010 to 2022 primarily within the Company's ADT Worldwide, Safety Products and Fire Protection Services segments. The Company incurred ~~nil~~$1 million and $5$3 million of charges related to the 2007 Program and pre-2006 actions during the quarters ended ~~March 26,~~June 25, 2010 and ~~March 27,~~June 26, 2009, respectively. The Company incurred ~~nil~~$1 million and $5$8 million of charges related to the 2007 Program and pre-2006 actions for the ~~six~~nine months ended ~~March 26,~~June 25, 2010 and ~~March 27,~~June 26, 2009, respectively.

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
3.    Restructuring and Asset Impairment Charges, Net (Continued)
        ~~At March 26,~~As of June 25, 2010 and September 25, 2009, restructuring reserves related to the 2009 Program, 2007 Program and pre-2006 actions, were included in the Company's Consolidated Balance Sheets as follows ($ in millions):

March 26,
2010 September 25,
2009 June 25,
2010 September 25,
2009
Accrued and other current liabilities
$ 92 $ 159 $ 93 $ 155
Other liabilities
42 45 41 45

Total
$ 134 $ 204 $ 134 $ 200

4.    Acquisitions
Acquisition of Brink's Home Security Holdings, Inc.
        On May 14, 2010, the Company's ADT Worldwide segment acquired all of the outstanding equity of Brink's Home Security Holdings, Inc ("BHS" or "Broadview Security"), a publicly traded company that was formerly owned by The Brink's Company, in a cash-and-stock transaction valued at approximately $2.0 billion. Broadview Security is being integrated into the Company's ADT Worldwide segment. Under the terms of the transaction, each outstanding share of BHS common stock was converted into the right to receive: (1) $13.15 in cash and 0.7562 Tyco common shares, for those shareholders who made an all-cash election, (2) 1.0951 Tyco common shares, for those shareholders who made an all stock election or (3) $12.75 in cash and 0.7666 Tyco common shares, for those shareholders who made a mixed cash/stock election or who failed to make an election.
        Broadview Security's core business is to provide security alarm monitoring services for residential and commercial properties in North America. Broadview Security has a large residential recurring customer base, which expands the Company's presence in the North American residential security business. Broadview Security is also a leader in technologies and services, which are expected to enhance ADT Worldwide's service offerings to its customers. The Company expects to realize cost savings and other synergies through operational efficiencies including consolidation of both marketing and general and administrative functions.

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
4.    Acquisitions (Continued)
Fair Value Calculation of Consideration Transferred
        The calculation of the consideration transferred to acquire BHS is as follows. Certain amounts below cannot be recalculated as the exact BHS common share amounts have not been presented. ($ and common share data in millions, except per share data):
Cash consideration

All cash consideration

Number of shares of BHS common shares outstanding as of May 14, 2010 electing all cash
37
Cash consideration per common share outstanding
$ 13.15

Total cash paid to BHS shareholders making all cash election
$ 490
Mixed cash/stock consideration

Number of shares of BHS common shares outstanding as of May 14, 2010 electing mixed consideration or not making an election
7
Cash consideration per common share outstanding
$ 12.75

Total cash paid to BHS shareholders making a mixed election or not making an
election
$ 95

Total cash consideration
$ 585

Stock consideration

All cash consideration

Number of shares of BHS common shares outstanding as of May 14, 2010 electing all cash
37
Exchange ratio
0.7562

Tyco shares issued to BHS shareholders making an all cash election
28
All stock consideration

Number of shares of BHS common shares outstanding as of May 14, 2010 electing all stock
1
Exchange ratio
1.0951

Tyco shares issued to BHS shareholders making an all stock election
1
Mixed cash/stock consideration

Number of shares of BHS common shares outstanding as of May 14, 2010 electing mixed consideration or not making an election
7
Exchange ratio
0.7666

Tyco shares issued to BHS shareholders making a mixed election or not making an
election
6

Total Tyco common shares issued
35

Tyco's average common share price on May 14, 2010
$ 38.73

Total stock consideration
$ 1,362

Fair value of BHS stock option, restricted stock unit and deferred stock unit replacement awards⁽¹⁾
$ 27

Total fair value of consideration transferred
$ 1,974

⁽¹⁾
Represents the fair value of BHS stock option, restricted stock unit and deferred stock unit replacement awards attributable to pre-combination service issued to holders of these awards in the acquisition. The fair value was determined using the Black-Scholes model for stock option awards and Tyco's closing stock price for the restricted and deferred stock unit awards. The fair value of outstanding BHS stock-

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
4.    Acquisitions (Continued)
based compensation awards which, immediately vested at the effective time of the acquisition, was attributed to pre-combination service and was included in the consideration transferred. In addition, there were certain BHS stock-based compensation awards which did not immediately vest upon completion of the acquisition. For those awards, the fair value of the awards attributed to pre-combination service was included as part of the consideration transferred and the fair value attributed to post-combination service is being recognized as compensation expense over the requisite service period in the post-combination financial statements of Tyco.
Fair Value Allocation of Consideration Transferred to Assets Acquired and Liabilities Assumed
        The consideration transferred for BHS has been allocated to identifiable assets acquired and liabilities assumed as of the acquisition date based on preliminary estimates of fair value. The final determination of fair value for certain assets and liabilities remain subject to change based on final valuations of the assets acquired and liabilities assumed. The company does not expect the finalization of these matters to have a material effect on the allocation, which is expected to be completed no later than one year from the acquisition date. The following amounts represent the preliminary determination of the fair value of the identifiable assets acquired and liabilities assumed ($ in millions):
Net current assets⁽¹⁾
68

Subscriber systems
629

Other property, plant and equipment
49

Total property, plant and equipment
678

Contracts and related customer relationships (10-year weighted average useful life)
737

Other intangible assets (4-year weighted average useful life)
12

Total intangible assets
749

Net non-current liabilities⁽²⁾
(441 )

Net assets acquired
1,054
Goodwill⁽³⁾
$ 920

Purchase price
$ 1,974
��
⁽¹⁾
As of the acquisition date, the fair value of accounts receivable approximated book value. Included in net current assets is $32 million of accounts receivable. The gross contractual amount receivable was approximately $35 million of which $3 million was not expected to be collected.

⁽²⁾
Included in net non-current liabilities is approximately $430 million of deferred tax liabilities which are recorded in other liabilities in the Company's Consolidated Balance Sheet as of June 25, 2010.

⁽³⁾
The goodwill recognized is primarily related to expected synergies and other benefits that the Company believes will result from combining the operations of BHS with the operations of ADT Worldwide. All of the goodwill has been allocated to the Company's ADT Worldwide segment. None of the goodwill is expected to be deductible for tax purposes.
The recorded amounts are preliminary and subject to change. Among the items that may change are amounts for certain intangible assets, income taxes and guarantees pending finalization of valuation efforts.

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
4.    Acquisitions (Continued)
Actual BHS Financial Results
        BHS actual results from the acquisition date, May 14, 2010, which are included in the consolidated statement of operations for the quarter and nine months ended June 25, 2010, are as follows ($ in millions):

For the Quarter and
Nine Months Ended

June 25,
2010
Net Revenue
$ 54

Loss from continuing operations attributable to Tyco common shareholders
(26 )

Net loss attributable to Tyco common shareholders
(26 )

Acquisition Related Costs
        Acquisition costs were expensed as incurred. The Company has incurred approximately $14 million and $17 million of costs directly related to the acquisition during the quarter and nine months ended June 25, 2010. In addition, the Company recorded $10 million of integration costs during the quarter and $11 million during the nine months ended June 25, 2010. Both acquisition and integration costs have been recorded within selling, general and administrative expenses in the Company's Consolidated Statement of Operations for the quarter and nine months ended June 25, 2010. The Company's ADT Worldwide segment recorded $24 million and $25 million of acquisition and integration costs for the quarter and nine months ended June 25, 2010, respectively. The Company's Corporate and Other segment recorded nil and $3 million of acquisition costs for the quarter and nine months ended June 25, 2010, respectively. In addition, the Company's ADT Worldwide segment recorded $13 million of restructuring expenses, which have been recorded within restructuring, asset impairments and divestiture charges, net in the Company's Consolidated Statement of Operations for the quarter and nine months ended June 25, 2010.
Supplemental Pro Forma Financial Information (unaudited)
        The supplemental pro forma financial information for the quarter and nine months ended June 25, 2010 and June 26, 2009 is as follows ($ in millions):

For the
Quarter Ended For the
Quarter Ended

June 25,
2010 June 26,
2009
Net revenue
$ 4,342 $ 4,289

Income from continuing operations attributable to Tyco common shareholders
244 251

Net income attributable to Tyco common shareholders
248 294

Income from continuing operations per share:

Basic earnings per share attributable to Tyco common shareholders
$ 0.46 $ 0.49
Diluted earnings per share attributable to Tyco common shareholders
$ 0.46 $ 0.49

Table of Contents

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
4.    Acquisitions (Continued)

For the
Nine Months Ended For the
Nine Months Ended

June 25,
2010 June 26,
2009
Net revenue
$ 12,877 $ 12,952

Income from continuing operations attributable to Tyco common shareholders
870 (2,043 )

Net income attributable to Tyco common shareholders
884 (2,000 )

Income from continuing operations per share:

Basic earnings (loss) per share attributable to Tyco common shareholders
$ 1.69 $ (4.02 )
Diluted earnings (loss) per share attributable to Tyco common shareholders
$ 1.68 $ (4.02 )
        The supplemental pro forma financial information is based on the historical financial information for Tyco and BHS. The supplemental pro forma financial information for the period ended June 25, 2010 utilized BHS' historical financial information for its fiscal fourth quarter ended December 31, 2009 and the pre-acquisition period from January 1, 2010 through the acquisition date. The supplemental pro forma financial information for the period ended June 26, 2009 utilized BHS' historical financial information for its fiscal fourth quarter ended December 31, 2008 and the six months ended June 30, 2009. The supplemental pro forma financial information reflect primarily the following pro forma pre-tax adjustments:
•
Elimination of BHS historical intangible asset amortization and property, plant and equipment depreciation expense;

•
Elimination of BHS historical deferred acquisition costs amortization;

•
Elimination of BHS historical deferred revenue amortization;

•
Additional amortization and depreciation expense related to the fair value of identifiable intangible assets and property, plant and equipment acquired;

•
Reduction of interest income on cash used to fund the acquisition and Tyco dividends assumed to be paid to BHS shareholders; and

•
All of the above pro forma adjustments were tax effected using a statutory tax rate of 39%
        The supplemental pro forma financial information for the quarter and nine months ended June 25, 2010 reflect the following non-recurring adjustments:
•
Direct acquisition costs primarily relating to advisory and legal fees and integration costs; and

•
Restructuring charges primarily related to employee severance and one-time benefit arrangements
        The supplemental pro forma financial information gives effect to the acquisition, but should not be considered indicative of the results that would have occurred in the periods presented above, nor are they indicative of future results. In addition, the supplemental pro forma financial information does not reflect the potential realization of cost savings relating to the integration of the two companies.

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
4.    Acquisitions (Continued)
Acquisitions
        On January 18, 2010, the Company entered into a definitive agreement to acquire Brink's Home Security Holdings, Inc ("BHS"), now operating as Broadview Security, for approximately $2.0 billion or $42.50 per share. The acquisition is expected to be financed with cash of up to approximately $600 million and the issuance of Tyco common shares. The transaction has been unanimously approved by the board of directors of each company. The transaction is expected to close shortly after the special meeting of BHS shareholders scheduled for May 12, 2010 assuming all closing conditions are met or waived. Following the closing of the transaction, the Company intends to combine BHS with its ADT Worldwide segment. In conjunction with the acquisition of BHS, the Company has incurred acquisition costs of $4 million, which are recorded in selling, general and administrative expenses in the Company's Consolidated Statement of Operations for the quarter and six months ended March 26, 2010.
During the quarter and ~~six~~nine months ended ~~March 26,~~June 25, 2010, cash paid for acquisitions included in continuing operations totaled $9$448 million and ~~$152~~$600 million, respectively, net of cash acquired of ~~nil~~$136 million and $1$137 million, respectively, which primarily related to the acquisition of Broadview Security. Net cash paid for Broadview Security totaled $448 million by the Company's ADT Worldwide segment. During the nine months ended June 25, 2010, the Company's Flow Control segment acquired two Brazilian valve companies, including Hiter Industria e Comercio de Controle Termo-Hidraulico Ltda ("Hiter"), a valve manufacturer which serves a variety of industries including the oil and gas, chemical and petrochemical markets. Net cash paid for the Brazilian valve companies totaled $104 ~~million by the Company's Flow Control segment. In addition, the~~million. The Company's Electrical and Metal Products segment acquired certain assets of a business for $39 million and its Safety Products segment acquired a business for $9 ~~million.~~million during the nine months ended June 25, 2010.
        During the quarter and ~~six~~nine months ended ~~March 27,~~June 26, 2009, cash paid for acquisitions included in continuing operations totaled ~~$2 million~~nil and $47 million, respectively, net of cash acquired of ~~$1 million~~nil and $2 million, respectively, which primarily related to the acquisition of Vue Technology, Inc., a provider of radio frequency identification (RFID) technology, for $43 million by the Company's Safety Products segment.
ADT Worldwide Account Acquisitions
        ~~Tyco acquired~~During the quarter and nine months ended June 25, 2010, the Company paid $134 million and $400 million of cash, respectively, to acquire approximately ~~105,000~~122,000 and ~~234,000~~356,000 customer contracts for electronic security services ~~within~~through the ~~Company's~~ ADT ~~Worldwide segment for $120 million and $271 million during~~dealer program.
        During the quarter and ~~six~~nine months ended ~~March~~June 26, ~~2010, respectively. Of these amounts, $113 million and $261 million was paid during the quarter and six months ended March 26, 2010, respectively. Additionally,~~2009, the Company paid $3$130 million ~~during the quarter ended March 26, 2010 for customer contracts acquired during the quarter ended December 25, 2009. The Company also paid $2~~and $361 million ~~during the quarter ended December 25, 2009 for customer contracts acquired during the quarter ended September 25, 2009.~~
        ~~Tyco acquired~~of cash, respectively, to acquire approximately ~~92,000~~116,000 and ~~222,000~~338,000 customer contracts for electronic security services ~~within~~through the ~~Company's~~ ADT Worldwide segment for $98 million and $229 million during the quarter and six months ended March 27, 2009, respectively. Of these amounts, $92 million and $201 million was paid during the quarter and six months ended March 27, 2009, respectively. Additionally, the Company paid $22 million during the quarter ended March 27, 2009 for customer contracts acquired during the quarter ended December 26, 2008. The Company also paid $8 million during the quarter ended December 26, 2008 for customer contracts acquired during the quarter ended September 26, 2008.

~~Table of Contents~~

~~TYCO INTERNATIONAL LTD.~~
~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~dealer program.
5.    Income Taxes
        The Company did not have a significant change to its unrecognized tax benefits during the quarter and nine months ended ~~March 26,~~June 25, 2010.
        Tyco's uncertain tax positions primarily relate to tax years that remain subject to audit by the taxing authorities in U.S. federal, state and local or foreign jurisdictions. Open tax years in significant jurisdictions are as follows:
Jurisdiction
Years Open To
Audit
Australia
2004-2009
Canada
2000-2009
France
1999-2009
Germany
1998-2009
Switzerland
2000-2009
United Kingdom
2000-2009
United States
1997-2009

Table of Contents

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
5.    Income Taxes (Continued)
        Based on the current status of its income tax audits, the Company believes that it is reasonably possible that between nil and $100 million in unrecognized tax benefits may be resolved in the next twelve months.
        At each balance sheet date, management evaluates whether it is more likely than not that the Company's deferred tax assets will be realized and if sufficient future taxable income will be available by assessing current period and projected operating results and other pertinent data. ~~At March 26,~~As of June 25, 2010, the Company had recorded deferred tax assets of ~~$1.5~~$1.6 billion, net of valuation allowances of ~~$804~~$747 million. Depending on prevailing economic conditions future taxable income of entities with deferred tax assets may be negatively impacted, which may require additional valuation allowances to be recorded in future reporting periods related to the Company's deferred tax assets.
Tax Sharing Agreement
        In connection with the spin-offs of Covidien and Tyco Electronics from Tyco, Tyco entered into a Tax Sharing Agreement that generally governs Covidien's, Tyco Electronics' and Tyco's respective rights, responsibilities, and obligations after the Separation with respect to taxes, including ordinary course of business taxes and taxes, if any, incurred as a result of any failure of the distribution of all of the shares of Covidien or Tyco Electronics to qualify as a tax-free distribution for U.S. federal income tax purposes within the meaning of Section 355 of the Code or certain internal transactions undertaken in anticipation of the spin-offs to qualify for tax-favored treatment under the Code.
        Under the Tax Sharing Agreement, the Company shares responsibility for certain of Tyco's, Covidien's and Tyco Electronics' income tax liabilities, which result in cash payments, based on a sharing formula for periods prior to and including June 29, 2007. More specifically, Tyco, Covidien and Tyco Electronics share 27%, 42% and 31%, respectively, of shared income tax liabilities that arise from adjustments made by tax authorities to Tyco's, Covidien's and Tyco Electronics' U.S. and certain non-U.S. income tax returns. All costs and expenses associated with the management of these shared tax liabilities are shared equally among the parties. In conjunction with estimating its Tax Sharing obligations, Tyco has recorded a net receivable from Covidien and Tyco Electronics representing their estimated share of the Tax Sharing obligations of $117 million and $106 million, as of ~~March 26,~~June 25, 2010

~~Table of Contents~~

~~TYCO INTERNATIONAL LTD.~~
~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~
~~5.    Income Taxes (Continued)~~

and September 25, 2009, respectively. As of ~~March 26,~~June 25, 2010 and September 25, 2009, ~~$114~~$113 million and $103 million, respectively, are included in other ~~noncurrent~~ assets and $3$4 million and $3 million, respectively, are included in prepaid expenses and other current ~~assets.~~assets on the Consolidated Balance Sheet. Other liabilities include $554 million as of ~~March 26,~~June 25, 2010 and September 25, 2009 for Tyco's obligations under the Tax Sharing Agreement. Tyco assesses the shared tax liabilities and related guaranteed liabilities at each reporting period. The receivable and liability were initially recognized with an offset to shareholders' equity in 2007. During the quarter ended ~~March 26,~~June 25, 2010 and ~~March 27,~~June 26, 2009, the Company recorded no income ~~of $2 million and $1 million, respectively,~~ in accordance with the Tax Sharing agreement. For the ~~six~~nine months ended ~~March 26,~~June 25, 2010 and ~~March 27,~~June 26, 2009, the Company recorded income of $11 million and $5 million, respectively, in accordance with the Tax Sharing Agreement. Tyco will provide payment to Covidien and Tyco Electronics under the Tax Sharing Agreement as the shared income tax liabilities are settled. Settlement is expected to occur as the audit process by applicable taxing authorities is completed for the impacted years and cash payments are made. Given the nature of the shared liabilities, the maximum amount of potential future payments is not determinable. Such cash payments, when they occur, will reduce the guarantor liability as such payments represent an equivalent reduction of risk. The Company also assesses the sufficiency of the Tax Sharing Agreement guarantee liability on a

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
5.    Income Taxes (Continued)

quarterly basis and will increase the liability when it is probable that cash payments expected to be made under the Tax Sharing Agreement exceed the recorded balance.
        During the fourth quarter of 2009, the Company, as Audit Management Party under the Tax Sharing Agreement, reached a settlement agreement with the Internal Revenue Service ("IRS") on certain deductions taken by Tyco, Covidien and Tyco Electronics on pre-separation tax returns filed for the periods 2001 to 2004. The settlement did not have a material effect to the Company's results of operations, financial position or cash flows. Additionally, the Company considered the potential impact of the settlement as part of its quarterly assessment of the guarantee liability and concluded that no adjustment to the liability was needed.
        In the event the Separation is determined to be taxable and such determination was the result of actions taken after the Separation by Tyco, Covidien or Tyco Electronics, the party responsible for such failure would be responsible for all taxes imposed on each company as a result thereof. If such determination is not the result of actions taken by any of the three companies after the Separation, then Tyco, Covidien and Tyco Electronics would be responsible for 27%, 42% and 31%, respectively, of any taxes imposed on any of the companies as a result of such determination. Such tax amounts could be significant. The Company is responsible for all of its own taxes that are not shared pursuant to the Tax Sharing Agreement's sharing formula. In addition, Covidien and Tyco Electronics are responsible for their tax liabilities that are not subject to the Tax Sharing Agreement's sharing formula.
        If any party to the Tax Sharing Agreement were to default in its obligation to another party to pay its share of the distribution taxes that arise as a result of no party's fault, each non-defaulting party would be required to pay, equally with any other non-defaulting party, the amounts in default. In addition, if another party to the Tax Sharing Agreement that is responsible for all or a portion of an income tax liability were to default in its payment of such liability to a taxing authority, the Company could be liable under applicable tax law for such liabilities and required to make additional tax payments. Accordingly, under certain circumstances, the Company may be obligated to pay amounts in excess of its agreed-upon share of Tyco's, Covidien's and Tyco Electronics' tax liabilities. See Note 17 for further discussion of guarantees and indemnifications extended between Tyco, Covidien and Tyco Electronics.

~~Table of Contents~~

~~TYCO INTERNATIONAL LTD.~~
~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~
~~5.    Income Taxes (Continued)~~
Other Income Tax Matters
        The Company and its subsidiaries' income tax returns are examined periodically by various tax authorities. In connection with these examinations, tax authorities, including the IRS, have raised issues and proposed tax adjustments. The Company is reviewing and contesting certain of the proposed tax adjustments. The Company has continuing ~~dialog~~dialogue with the IRS related to these proposed adjustments with the objective of resolving some or all of these matters. Management has assessed the issues related to these adjustments and has recorded unrecognized tax benefits pursuant to the guidance for accounting for uncertain income tax positions. The ultimate resolution of these matters is uncertain and could result in a material impact to the Company's financial position, results of operations, cash flows or the effective tax rate in future reporting periods.
        In 2004, in connection with the IRS audit of the 1997 through 2000 years, the Company submitted to the IRS proposed adjustments to certain prior period U.S. federal income tax returns resulting in a reduction in the taxable income previously filed. During 2006, the IRS accepted substantially all of the proposed adjustments. Subsequently, the Company developed proposed amendments to U.S. federal

Table of Contents

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
5.    Income Taxes (Continued)

income tax returns for additional periods through 2006. On the basis of previously accepted amendments, the Company has determined that these adjustments will more-likely-than-not be accepted and, accordingly, has recorded such adjustments in the Consolidated Financial Statements. Such adjustments did not have a material impact on the Company's financial condition, results of operations or cash flows. While the final adjustments cannot be determined until the IRS review is completed, the Company believes that any resulting adjustments will not have a material impact on its financial condition, results of operations or cash flows.
        The IRS proposed civil fraud penalties against a prior subsidiary that was distributed to Tyco Electronics in connection with the Separation. The penalties allegedly arise from actions of former executives taken in connection with intercompany transfers of stock of Simplex Technologies in 1998 and 1999. Based on statutory guidelines, the Company estimates the proposed penalties could range between $30 million and $50 million. The Company, as Audit Management Party as specified in the Tax Sharing Agreement, intends to vigorously oppose the assertion of any such penalties against Tyco Electronics, in part, because beginning in 2003 the Company discovered, investigated and reported the conduct at issue to the IRS and fully cooperated in the criminal prosecution of the Company's former Chief Tax Officer on a charge of willful filing of a false tax return. This is a pre-Separation shared tax matter under the Tax Sharing Agreement.
        Except for earnings that are currently distributed, no additional material provision has been made for U.S. or non-U.S. income taxes on the undistributed earnings of subsidiaries or for unrecognized deferred tax liabilities for temporary differences related to investments in subsidiaries, since the earnings are expected to be permanently reinvested, the investments are essentially permanent in duration, or the Company has concluded that no additional tax liability will arise as a result of the distribution of such earnings. A liability could arise if amounts are distributed by such subsidiaries or if such subsidiaries are ultimately disposed. It is not practicable to estimate the additional income taxes related to permanently reinvested earnings or the basis differences related to investments in subsidiaries.
        The calculation of the Company's tax liabilities involves dealing with uncertainties in the application of complex tax regulations in a multitude of jurisdictions across the Company's global operations. The Company records tax liabilities for anticipated tax audit issues in the U.S. and other

~~Table of Contents~~

~~TYCO INTERNATIONAL LTD.~~
~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~
~~5.    Income Taxes (Continued)~~

tax jurisdictions based on its estimate of whether, and the extent to which, additional taxes will be due. These tax liabilities are reflected net of related tax loss carryforwards. The Company adjusts these liabilities in light of changing facts and circumstances; however, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the Company's current estimate of the tax liabilities. If the Company's estimate of tax liabilities proves to be less than the ultimate assessment, an additional charge to expense would result. If payment of these amounts ultimately proves to be less than the recorded amounts, the reversal of the liabilities may result in income tax benefits being recognized in the period when the Company determines the liabilities are no longer necessary. Substantially all of these potential tax liabilities are recorded in other liabilities on the Consolidated Balance Sheets as payment is not expected within one year.
6.    Earnings Per Share
        As discussed in Note 1, the Company adopted the authoritative guidance for determining whether instruments granted in share-based payment transactions are participating securities in the first quarter

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
6.    Earnings Per Share (Continued)

of fiscal 2010. The Company historically issued certain restricted stock awards that vest over a period of three years which contained non-forfeitable rights to dividends and should be treated as participating securities. These types of awards were last issued during fiscal 2006. Awards containing such rights that are unvested are considered to be participating securities and are included in the computation of earnings per share pursuant to the two-class method. All of these awards were vested as of September 25, 2009. As a result, the Company is not required to compute earnings per share for fiscal 2010 using the two-class method unless new awards are granted. The retrospective application of this guidance did not have an impact on the Company's historically reported earnings per share for the quarter ~~and six~~ended June 26, 2009. In addition, the retrospective application of this guidance for the nine months ended ~~March 27,~~June 26, 2009 did not have an impact on the Company's historically reported earnings per share as the effects would be anti-dilutive because the Company reported a loss from continuing operations.
        The reconciliations between basic and diluted earnings per share attributable to Tyco common shareholders are as follows (in millions, except per share data):

Quarter Ended
March 26, 2010 Quarter Ended
March 27, 2009
For the
Quarter Ended
June 25, 2010 For the
Quarter Ended
June 26, 2009

Income Shares Per Share
Amount Loss Shares Per Share
Amount
Income Shares Per Share
Amount Income Shares Per Share
Amount
Basic earnings per share attributable to Tyco common shareholders:
Basic earnings per share attributable to Tyco common shareholders:

Basic earnings per share attributable to Tyco common shareholders:

Income (loss) from continuing operations
$ 310 476 $ 0.65 $ (2,555 ) 473 $ (5.40 )
Income from continuing operations
$ 250 492 $ 0.51 $ 244 473 $ 0.52

Less: Income allocated to participating securities
NA ⁽¹⁾ — NA ⁽²⁾ —
Less: Income allocated to participating securities
NA ⁽¹⁾ — — ⁽²⁾ —

Share options and restricted share awards
— 2 —
Share options, restricted share awards and deferred stock units
— 4 — 2
Diluted earnings per share attributable to Tyco common shareholders:

Diluted earnings per share attributable to Tyco common shareholders:
Diluted earnings per share attributable to Tyco common shareholders:

Add: Income allocated to participating securities
NA ⁽¹⁾ — NA ⁽²⁾ —
Add: Income allocated to participating securities
NA ⁽¹⁾ — — ⁽²⁾ —

Income (loss) from continuing operations attributable to Tyco common shareholders, giving effect to dilutive adjustments
$ 310 478 $ 0.65 $ (2,555 ) 473 $ (5.40 )
Income from continuing operations attributable to Tyco common shareholders, giving effect to dilutive adjustments
Income from continuing operations attributable to Tyco common shareholders, giving effect to dilutive adjustments
$ 250 496 $ 0.50 $ 244 475 $ 0.51

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
6.    Earnings Per Share (Continued)

Six Months
Ended March 26, 2010 Six Months
Ended March 27, 2009
For the
Nine Months Ended
June 25, 2010 For the
Nine Months Ended
June 26, 2009

Income Shares Per Share
Amount Loss Shares Per Share
Amount
Income Shares Per Share
Amount Loss Shares Per Share
Amount
Basic earnings per share attributable to Tyco common shareholders:
Basic earnings per share attributable to Tyco common shareholders:

Basic earnings per share attributable to Tyco common shareholders:

Income (loss) from continuing operations
$ 612 476 $ 1.29 $ (2,283 ) 473 $ (4.83 )
Income (loss) from continuing operations
$ 852 481 $ 1.77 $ (2,046 ) 473 $ (4.32 )

Less: Income allocated to participating securities
NA ⁽¹⁾ — NA ⁽²⁾ —
Less: Income allocated to participating securities
NA ⁽¹⁾ — NA ⁽³⁾ —

Share options and restricted share awards
— 3 —
Share options, restricted share awards and deferred stock units
— 3 — —
Diluted earnings per share attributable to Tyco common shareholders:
Diluted earnings per share attributable to Tyco common shareholders:

Diluted earnings per share attributable to Tyco common shareholders:

Add: Income allocated to participating securities
NA ⁽¹⁾ — NA ⁽²⁾ —
Add: Income allocated to participating securities
NA ⁽¹⁾ — NA ⁽³⁾ —

Income (loss) from continuing operations attributable to Tyco common shareholders, giving effect to dilutive adjustments
Income (loss) from continuing operations attributable to Tyco common shareholders, giving effect to dilutive adjustments
$ 612 479 $ 1.28 $ (2,283 ) 473 $ (4.83 )
Income (loss) from continuing operations attributable to Tyco common shareholders, giving effect to dilutive adjustments
$ 852 484 $ 1.76 $ (2,046 ) 473 $ (4.32 )

⁽¹⁾
The two-class method is not applicable for the quarter and ~~six~~nine months ended ~~March 26,~~June 25, 2010 as all participating securities were vested as of September 25, 2009.

⁽²⁾
Income allocated to participating securities rounds to zero.

⁽³⁾
The two-class method is not applicable for the ~~quarter and six~~nine months ended ~~March 27,~~June 26, 2009 as the effects would be anti-dilutive because the Company reported a loss from continuing operations for ~~both periods.~~this period.
        The computation of diluted earnings per share for the quarter and ~~six~~nine months ended ~~March 26,~~June 25, 2010 excludes the effect of the potential exercise of share options to purchase approximately 14 million and 16 million shares, ~~in both periods~~respectively, and excludes restricted share awards of approximately 2 million shares in both periods because the effect would be anti-dilutive.
        The computation of diluted earnings per share for the quarter and ~~six~~nine months ended ~~March 27,~~June 26, 2009 excludes the effect of the potential exercise of share options to purchase approximately 23 million and 27 million shares, ~~in both periods~~respectively, and excludes restricted share awards of approximately 5 million and 6 million shares, ~~in both periods~~respectively, because the effect would be anti-dilutive.
7.    Goodwill and Intangible Assets
Goodwill
        Annually, in the fiscal fourth quarter, and more frequently if triggering events occur, the Company tests goodwill for impairment by comparing the fair value of each reporting unit with its carrying amount. Fair value for each reporting unit is determined utilizing a discounted cash flow analysis based on the Company's forecast cash flows discounted using an estimated weighted-average cost of capital of market participants. A market approach is utilized to corroborate the discounted cash flow analysis performed at each reporting unit. If the carrying amount of a reporting unit exceeds its fair value, goodwill is considered potentially impaired. In determining fair value, management relies on and

~~Table of Contents~~

~~TYCO INTERNATIONAL LTD.~~
~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~
~~7.    Goodwill and Intangible Assets (Continued)~~

considers a number of factors, including operating results, business plans, economic projections, including expectations and assumptions regarding the timing and degree of any economic recovery, anticipated future cash flow, comparable market transactions (to the extent available), other market data and the Company's overall market capitalization.

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
7.    Goodwill and Intangible Assets (Continued)
        During the first ~~six~~nine months of fiscal 2010, the Company continued to monitor the recoverability of its goodwill. The Company considered and evaluated its market capitalization as well as the other factors described above and concluded its remaining goodwill balance of ~~$8.7~~$9.4 billion as of ~~March 26,~~June 25, 2010 is recoverable. As part of the Company's ongoing monitoring efforts, the Company will continue to consider the global economic environment and volatility in the stock market as well as in the Company's own stock price in assessing goodwill recoverability. Given the current economic environment and the uncertainties regarding the potential impact on the Company's business, there can be no assurance that the Company's estimates and assumptions regarding forecast cash flows of certain of its reporting units, as well as the duration of the ongoing economic downturn, or the period or strength of recovery, made for purposes of the annual goodwill impairment test performed during the fourth quarter of 2009, will prove to be accurate predictions of the future. At the last annual goodwill testing date, the Company had certain reporting units within the Company's ADT Worldwide and Safety Products segments with less than a ten percent excess of fair value over carrying value based on the discounted cash flow analyses. ~~As discussed above, the~~The Company monitored the recoverability of its goodwill and concluded none of the aforementioned reporting units experienced a triggering event which would require goodwill to be tested for impairment on an interim basis. The goodwill balance for these reporting units was approximately ~~$842~~$838 million as of ~~March 26,~~June 25, 2010. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the annual goodwill impairment test will prove to be accurate predictions of the future. While historical performance and current expectations have resulted in fair values of goodwill in excess of carrying values, if our assumptions are not realized, it is possible that in the future an impairment charge may need to be recorded. However, it is not possible at this time to determine if anfuture impairment ~~charge would result~~charges will be required or if such ~~a charge~~charges would be material.
        During fiscal 2010, businesses were realigned among the ADT Worldwide and Fire Protection Services segments, ADT Worldwide and Safety Products segments and Fire Protection Services and Safety Products segments. As a result of these realignments, goodwill was reallocated as detailed below. As part of the realignment the Company tested the related goodwill balances for recoverability and determined goodwill was recoverable.
        The changes in the carrying amount of goodwill by segment are as follows ($ in millions):

ADT
Worldwide Flow
Control Fire
Protection
Services Safety
Products Total
Balance as of September 25, 2009
$ 4,302 $ 1,993 $ 1,334 $ 1,162 $ 8,791
Acquisitions
920 76 — — 996
Divestitures
(4 ) (5 ) (1 ) (9 ) (19 )
Goodwill transfer due to realignment
112 — 23 (135 ) —
Held for sale reclass
— (93 ) — — (93 )
Currency translation
(110 ) (156 ) (2 ) (19 ) (287 )

Balance as of June 25, 2010
$ 5,220 $ 1,815 $ 1,354 $ 999 $ 9,388

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
7.    Goodwill and Intangible Assets (Continued)
        ~~The changes in the carrying amount of goodwill by segment are as follows ($ in millions):~~

ADT
Worldwide Flow
Control Fire
Protection
Services Safety
Products Total
Balance as of September 25, 2009
$ 4,302 $ 1,993 $ 1,334 $ 1,162 $ 8,791
Acquisitions
— 76 — — 76
Divestitures
(4 ) (5 ) (1 ) (9 ) (19 )
Goodwill transfer due to realignment
113 — 23 (136 ) —
Currency translation
(85 ) (91 ) 4 (11 ) (183 )

Balance as of March 26, 2010
$ 4,326 $ 1,973 $ 1,360 $ 1,006 $ 8,665

Second Quarter 2009 Goodwill Impairment
        The Company began to experience a decline in revenue during the first quarter of 2009 in its ADT Worldwide, Fire Protection Services and Safety Products segments as a result of a slowdown in the commercial markets including the retailer end market as well as a decline in sales volume at its Electrical and Metal Products segment due to the slow down in the non-residential construction market. Although the Company considered and concluded that these factors did not constitute triggering events during the first quarter of 2009, the continued existence of these conditions during the second quarter of 2009, along with downward revisions to forecast results, restructuring actions and weaker industry outlooks, caused the Company to conclude that sufficient indicators of impairment existed for certain reporting units in the above mentioned businesses. The Company determined that these events and changes in circumstances constituted triggering events for the following six reporting units: Europe, Middle East and Africa ("EMEA") Security and EMEA Fire reporting units within the ADT Worldwide and Fire Protection Services segments, respectively, Electrical and Metal Products reporting unit within the Electrical and Metal Products segment and Access Control and Video Systems ("ACVS"), Life Safety, and Sensormatic Retail Solutions ("SRS") reporting units within the Safety Products segment. As a result of the triggering events, the Company assessed the recoverability of each of the reporting unit's long-lived assets and concluded that the carrying amounts were recoverable at March 27, 2009. Subsequently, the Company performed the first step of the goodwill impairment test for these reporting units.
        To perform the first step of the goodwill impairment test for the six reporting units with triggering events, the Company compared the carrying amounts of these reporting units to their estimated fair values. Fair value for each reporting unit was determined utilizing a discounted cash flow analysis based on forecast cash flows (including estimated underlying revenue and operating income growth rates) discounted using an estimated weighted average cost of capital of market participants. A market approach, utilizing observable market data such as comparable companies in similar lines of business that are ~~publically~~publicly traded or which are part of a public or private transaction (to the extent available), was used to corroborate the discounted cash flow analysis performed at each reporting unit. If the carrying amount of a reporting unit exceeded its fair value, goodwill was considered potentially impaired. In determining fair value, management relied on and considered a number of factors, including operating results, business plans, economic projections, including expectations and assumptions regarding the timing and degree of any economic recovery, anticipated future cash flow,

~~Table of Contents~~

~~TYCO INTERNATIONAL LTD.~~
~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~
~~7.    Goodwill and Intangible Assets (Continued)~~

comparable market transactions (to the extent available), other market data and the Company's overall market capitalization.
        As described above, the Company utilized a discounted cash flow analysis for determining the fair value of each of the reporting units where triggering events had occurred. Based on the factors described above, actual and anticipated reductions in demand for the reporting unit's products and services as well as increased risk due to current economic uncertainty, the estimates of future cash flows used in the second quarter of 2009 discounted cash flow analyses were revised downward from the Company's most recent test conducted during the fourth quarter of 2008. The range of the weighted-average cost of capital utilized was increased to reflect increased risk due to current economic

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
7.    Goodwill and Intangible Assets (Continued)

volatility and uncertainties related to demand for the Company's products and services. The weighted-average cost of capital were as follows:

Second Quarter
of 2009 Fourth Quarter
of 2008
Weighted-Average Cost of Capital
10.9% to 12.8% 10.0% to 11.7%
        The results of the first step of the goodwill impairment test indicated there was a potential impairment of goodwill in each of the six reporting units identified with triggering events, as the carrying amounts of the reporting units exceeded their respective fair values. As a result, the Company performed the second step of the goodwill impairment test for these reporting units. In the second step of the goodwill impairment test, the Company compared the implied fair value of reporting unit goodwill with the carrying amount of the reporting unit's goodwill. The implied fair values of goodwill were determined by allocating the fair values of each reporting unit to all of the assets and liabilities of the applicable reporting unit including any unrecognized intangible assets as if the reporting unit had been acquired in a business combination. The results of the second step of the goodwill impairment test indicated that the implied goodwill amount was less than the carrying amount of goodwill for each of the aforementioned reporting units. The Company recorded an aggregate non-cash impairment charge of $2.6 billion ($2.6 billion after-tax) which was recorded in goodwill and intangible asset impairments in the Company's Consolidated Statement of Operations for the quarter ~~and six months~~ ended March 27, 2009. Specifically, the Company recorded the following non-cash goodwill impairment charges at the following reporting units ($ in millions):
Reporting Unit
Pre-tax
Charge After-tax
Charge Pre-tax
Charge After-tax
Charge
EMEA Fire
$ 180 $ 179 $ 180 $ 179
EMEA Security
613 610 613 610
Electrical and Metal Products
935 913 935 915
ACVS
327 321 327 321
Life Safety
240 236 240 236
SRS
346 340 346 340

Total
$ 2,641 $ 2,599 $ 2,641 $ 2,601

~~Table of Contents~~

~~TYCO INTERNATIONAL LTD.~~
~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~
~~7.    Goodwill and Intangible Assets (Continued)~~
Intangible Assets
        During the first ~~six~~nine months of fiscal 2010, the Company continued to monitor the recoverability of its indefinite lived intangible assets. Based on its evaluation, the Company concluded that its indefinite lived intangible asset balance of ~~$305~~$304 million as of ~~March 26,~~June 25, 2010 continues to be recoverable. Indefinite lived intangible assets consisting primarily of trade names are tested for impairment using the relief from royalty method. However, fair value determinations require considerable judgment and are sensitive to change. In light of current economic conditions and the downturn within the retail industry, impairments to intangible assets could occur in future periods. However, it is not possible at this time to determine if an impairment charge would result or if such a charge would be material.

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
7.    Goodwill and Intangible Assets (Continued)
        The following table sets forth the gross carrying amount and accumulated amortization of the Company's intangible assets as of ~~March 26,~~June 25, 2010 and September 25, 2009 ($ in millions):

March 26, 2010 September 25, 2009
June 25, 2010 September 25, 2009

Gross
Carrying
Amount Accumulated
Amortization Weighted Average
Amortization
Period Gross
Carrying
Amount Accumulated
Amortization Weighted Average
Amortization
Period
Gross Carrying Amount Accumulated Amortization Weighted Average Amortization Period Gross Carrying Amount Accumulated Amortization Weighted Average Amortization Period
Amortizable:
Amortizable:

Amortizable:

Contracts and related customer relationships
$ 6,809 $ 4,498 14 years $ 6,529 $ 4,275 14 years
Contracts and related customer relationships
$ 7,633 $ 4,607 14 years $ 6,529 $ 4,275 14 years

Intellectual property
552 473 20 years 552 462 20 years
Intellectual property
544 472 20 years 545 459 18 years

Other
15 12 10 years 17 13 10 years
Other
27 12 6 years 17 13 10 years

Total
$ 7,376 $ 4,983 14 years $ 7,098 $ 4,750 14 years
Total
$ 8,204 $ 5,091 14 years $ 7,091 $ 4,747 14 years

Non-Amortizable:
Non-Amortizable:

Non-Amortizable:

Intellectual property
$ 213 $ 212
Intellectual property
$ 213 $ 212

Other
92 87
Other
91 87

Total
$ 305 $ 299
Total
$ 304 $ 299

        Intangible asset amortization expense for the quarters ended ~~March 26,~~June 25, 2010 and ~~March 27,~~June 26, 2009 was ~~$127~~$141 million and ~~$129~~$127 million, respectively. Intangible asset amortization expense ~~was $256 million~~ for ~~both~~ the ~~six~~nine months ended ~~March 26,~~June 25, 2010 and ~~March 27,~~June 26, 2009 was $397 million and $383 million, respectively.
        The estimated aggregate amortization expense on intangible assets is expected to be approximately ~~$247~~$150 million for the remainder of 2010, ~~$409~~$525 million for 2011, ~~$343~~$425 million for 2012, ~~$293~~$375 million for 2013, ~~$243~~$325 million for 2014 and ~~$199~~$275 million for 2015.
Second Quarter 2009 Intangible Asset Impairment
        The Company began to experience a decline in revenue during the first quarter of 2009 at its ADT Worldwide and Safety Products segments due to a slowdown in the commercial markets including the retailer end market. Although the Company considered and concluded these factors did not constitute triggering events during the first quarter of 2009, the continued existence of these conditions during the second quarter of 2009, along with downward revisions to forecast results, restructuring actions and weaker industry outlooks, caused the Company to conclude that sufficient indicators of impairment existed for certain indefinite-lived intangible assets. This deterioration of the business environment

~~Table of Contents~~

~~TYCO INTERNATIONAL LTD.~~
~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~
~~7.    Goodwill and Intangible Assets (Continued)~~

related to the retailer business of the Company's ADT Worldwide and Safety Products segments resulted in a further lowering of management's projections of revenues from the retailer end market during the second quarter of 2009.
        Based on these factors and uncertainties ~~and factors~~ described above, estimates of future cash flows used in determining the fair value of the Company's Safety Products Sensormatic tradename as well as its ADT Worldwide franchise rights relating to Winner and Sensormatic Security Corp ("SSC") during the second quarter of 2009 were revised downward relative to the estimates used in the Company's most recent test during the fourth quarter of 2008. The range of the discount rates utilized was increased to

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
7.    Goodwill and Intangible Assets (Continued)

reflect increased risk due to current economic volatility and uncertainties related to demand for the Company's products and services. The discount rates were as follows:

Second Quarter
of 2009 Fourth Quarter
of 2008
Discount Rate
12.0% to 12.3% 10.4 %
        The results of the impairment test indicated that the Safety Products Sensormatic tradename and ADT Worldwide Winner and SSC franchise rights estimated fair values were less than their respective carrying amounts. As such, the Company recorded an aggregate non-cash impairment charge of $64 million ($40 million after-tax) which was recorded in goodwill and intangible asset impairments in the Company's Consolidated Statement of Operations for the quarter ended March 27, 2009. Specifically, the Company recorded the following non-cash intangible asset impairment charges to reduce the carrying amount of the following indefinite-lived intangible assets (in millions):
Intangible Asset
Pre-tax
Charge After-tax
Charge
Sensormatic tradename
$ 42 $ 26
Winner franchise rights
14 9
SSC franchise rights
8 5

Total
$ 64 $ 40

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
8.    Debt
        Debt as of ~~March 26,~~June 25, 2010 and September 25, 2009 is as follows ($ in millions):

March 26,
2010 September 25,
2009 June 25, 2010 September 25, 2009
Commercial paper⁽²⁾
$ — $ 200 $ — $ 200
6.75% public notes due 2011⁽¹⁾
516 516 516 516
6.375% public notes due 2011
849 849 — 849
Revolving senior credit facility due 2011
— — — —
Revolving senior credit facility due 2012
— — — —
6.0% public notes due 2013
655 655 655 655
4.125% public notes due 2014
498 — 499 —
3.375% public notes due 2015
498 —
8.5% public notes due 2019
750 750 750 750
7.0% public notes due 2019
433 434 433 434
6.875% public notes due 2021
716 716 716 716
7.0% public notes due 2028
7 14 — 14
6.875% public notes due 2029
21 21 — 21
Other⁽¹⁾⁽²⁾
86 119 101 119

Total debt
4,531 4,274 4,168 4,274
Less current portion
536 245 535 245

Long-term debt
$ 3,995 $ 4,029 $ 3,633 $ 4,029

⁽¹⁾
6.75% public notes due 2011, plus ~~$20~~$19 million of the amount shown as other, comprise the current portion of the Company's total debt as of ~~March 26,~~June 25, 2010.

⁽²⁾
Commercial paper, plus $45 million of the amount shown as other, comprise the current portion of the Company's total debt as of September 25, 2009.
        The carrying amount of Tyco's debt subject to the fair value disclosure requirements as of ~~March 26,~~June 25, 2010 and September 25, 2009 was ~~$4,445~~$4,067 million and $4,155 million, respectively. The Company has determined the fair value of such debt to be ~~$4,933~~$4,603 million and $4,578 million as of ~~March 26,~~June 25, 2010 and September 25, 2009, respectively. The Company utilizes various valuation methodologies to determine the fair value of its debt, which is primarily dependent on the type of market in which the Company's debt is traded. When available, the Company uses quoted market prices to determine the fair value of its debt ~~which~~that is traded in active markets. As of ~~March 26,~~June 25, 2010 and September 25, 2009, the fair value of the Company's debt ~~which is~~that was actively traded was ~~$4,901~~$4,603 million and $4,338 million, respectively. When quoted market prices are not readily available or representative of fair value, the Company utilizes market information of comparable debt with similar terms, such as maturities, interest rates and credit risk to determine the fair value of its debt ~~which~~that is traded in markets that are not active. As of ~~March 26,~~June 25, 2010, all of the Company's debt was actively traded as a result of the redemption of all of the public notes due 2028 and 2029, which were redeemed during the third quarter of 2010. As of September 25, 2009, the fair value of the Company's debt ~~which is~~that was not actively traded was ~~$32 million and~~ $40 ~~million, respectively.~~million. Additionally, the Company believes the carrying amount of its commercial paper of $200 million as of September 25, 2009 approximated fair value based on the short-term nature of such debt.

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
8.    Debt (Continued)
        In May 2008, Tyco International Finance S.A. ("TIFSA") commenced issuing commercial paper to U.S. institutional accredited investors and qualified institutional buyers. Borrowings under the commercial paper program are available for general corporate purposes. As of ~~March 26,~~June 25, 2010, TIFSA

~~Table of Contents~~

~~TYCO INTERNATIONAL LTD.~~
~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~
~~8.    Debt (Continued)~~

had no commercial paper outstanding. As of September 25, 2009, TIFSA had $200 million of commercial paper outstanding, which bore interest at an average rate of 0.33%.
        The Company's ~~total~~ committed revolving credit ~~line was~~facilities totaled $1.69 billion as of ~~March 26,~~June 25, 2010. These revolving credit facilities may be used for working capital, capital expenditures and general corporate purposes. As of ~~March 26,~~June 25, 2010, there were no amounts drawn under these facilities. On January 29, 2009, the Company repaid $686 million to extinguish the entire outstanding balance under its revolving credit facilities. As of September 25, 2009, there were no amounts drawn under these facilities, although the Company had dedicated $200 million of availability to backstop its outstanding commercial paper.
        On May 5, 2010, TIFSA issued $500 million aggregate principal amount of 3.375% notes due on October 15, 2015, which are fully and unconditionally guaranteed by the Company (the "2015 notes"). TIFSA received net proceeds of approximately $495 million after deducting debt issuance costs of approximately $3 million and a debt discount of approximately $2 million. The net proceeds, along with other available funds, were used to redeem all of the Company's outstanding 6.375% notes due October 2011. The 2015 notes are unsecured and rank equally with TIFSA's other unsecured and unsubordinated debt. TIFSA may redeem any of the 2015 notes at any time by paying the greater of the principal amount of the notes or a "make-whole" amount, plus accrued and unpaid interest. The holders of the 2015 notes have the right to require TIFSA to repurchase all or a portion of the notes at a purchase price equal to 101% of the principal amount of the notes repurchased, plus accrued and unpaid interest upon the occurrence of a change of control triggering event which requires the occurrence of both a change of control and a rating event, each as defined in the Indenture governing the notes. The debt issuance costs will be amortized from the date of issuance to the maturity date. Interest is payable semiannually on April 15^th and October 15^th.
        On May 28, 2010, the Company redeemed all of its 6.375% public notes due 2011 (the "2011 notes"), 7% notes due 2028 and 6.875% notes due 2029, outstanding at that time, which aggregated $878 million in principal amount. As a result of the debt redemption, the Company recorded an $87 million charge to other expense, net as a loss on extinguishment of debt. The charge is comprised of the make-whole premium, write-off of the unamortized debt issuance costs and discount related to the extinguished bonds and a net loss recognized upon termination of the associated interest rate swap contracts related to the 2011 notes.
        On October 5, 2009, TIFSA issued $500 million aggregate principal amount of 4.125% notes due on October 15, 2014, which are fully and unconditionally guaranteed by the Company (the "2014 notes"). TIFSA received net proceeds of approximately $495 million after deducting debt issuance costs of approximately $3 million and a debt discount of approximately $2 million. The 2014 notes are unsecured and rank equally with TIFSA's other unsecured and unsubordinated debt. TIFSA may redeem any of the 2014 notes at any time by paying the greater of the principal amount of the notes or a "make-whole" amount, plus accrued and unpaid interest. The holders of the 2014 notes have the right to require TIFSA to repurchase all or a portion of the notes at a purchase price equal to 101% of the principal amount of the notes repurchased, plus accrued and unpaid interest upon the occurrence of a change of control triggering event, which requires both a change of control and a rating event,

Table of Contents

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
8.    Debt (Continued)

each as defined byin the Indenture governing the notes. The debt issuance costs will be amortized from the date of issuance to the maturity ~~date, which is October 15, 2014.~~date. Interest is payable semiannually on April 15^th and October 15^th.
        On January 9, 2009, TIFSA issued $750 million aggregate principal amount of 8.5% notes due on January 15, 2019, which are fully and unconditionally guaranteed by the Company (the "2019 notes"). TIFSA received net proceeds of approximately $745 million after underwriting discounts and offering expenses. The Company may be required to repurchase all or part of the 2019 Notes at par in July of 2014 at the option of the noteholders.
        On January 15, 2009, TIFSA made a payment of $215 million to extinguish all of its 6.125% notes, due 2009 which matured on the same date. Additionally, in November 2008, TIFSA made a payment of $300 million to extinguish all of its 6.125% notes due 2008.
9.    Financial Instruments
        The Company's financial instruments consist primarily of cash and cash equivalents, accounts receivable, investments, accounts payable, debt and derivative financial instruments. The fair value of cash and cash equivalents, accounts receivable and accounts payable approximated book value as of ~~March 26,~~June 25, 2010 and September 25, 2009. The fair value of derivative financial instruments was not material to any of the periods presented. See below for the fair value of investments and Note 8 for debt.
Derivative Instruments
        In the normal course of business, Tyco is exposed to market risk arising from changes in currency exchange rates, interest rates and commodity prices. The Company uses derivative financial instruments to manage exposures to foreign currency, interest rate and commodity price risks. The Company's objective for utilizing derivative financial instruments is to manage these risks using the most effective methods to eliminate or reduce the impacts of these exposures.
        For derivative instruments that are designated and qualify as fair value hedges, the Company documented the relationships between the hedging instruments and hedged items and linked derivatives designated as fair value hedges to specific debt issuances. For transactions designated as hedges, the Company also assessed and documented at the hedge's inception whether the derivatives used in hedging transactions were effective in offsetting changes in fair values associated with the hedged items. The fair value hedges did not result in any hedge ineffectiveness for the quarter and nine months ended June 25, 2010. The Company does not use derivative financial instruments for trading or speculative purposes.
        All derivative financial instruments are reported on the Consolidated Balance Sheet at fair value with changes in the fair value of the derivative financial instruments recognized currently in earnings with the exception of net investment hedges for which changes in fair value are reported in the cumulative translation component of accumulated other comprehensive income to the extent the hedges are effective. The ineffective portion of the hedge, if any, is recognized in the Company's Consolidated Statement of Operations. The derivative financial instruments and impact of such changes in the fair value of the derivative financial instruments was not material to the Consolidated Balance Sheets as of June 25, 2010 and September 25, 2009 or Consolidated Statements of Operations and Cash Flows for the quarters and nine months ended June 25, 2010 and June 26, 2009.

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
9.    Financial Instruments (Continued)

objective for utilizing derivative financial instruments is to manage these risks using the most effective methods to eliminate or reduce the impacts of these exposures. During fiscal 2010, the Company entered into commodity swaps for copper which are not designated as hedging instruments for accounting purposes, which did not have a material impact on the Company's financial position, results of operations or cash flows.Foreign Currency Exposures
        The Company manages foreign currency exchange rate risk through the use of derivative financial instruments comprised principally of forward contracts on foreign currency, which are not designated as hedging instruments for accounting purposes. The objective of those derivatives instruments is to minimize the income statement impact and potential variability in cash flows associated with intercompany loans and accounts receivable, accounts payable and forecasted transactions that are denominated in certain foreign currencies. As of ~~March 26,~~June 25, 2010 and September 25, 2009, the total gross notional amount of the Company's foreign exchange contracts was ~~$715~~$881 million and $525 million, respectively. Effective March 17, 2009, Tyco changed its jurisdiction of incorporation from Bermuda to Switzerland. Until January 1, 2011 Tyco intends to make dividend payments in the form of a reduction of capital, denominated in Swiss francs. However, the Company expects to actually pay dividends in U.S. dollars, based on exchange rates in effect shortly before the payment date. Fluctuations in the value of the U.S. dollar compared to the Swiss franc between the date the dividend is declared and paid will increase or decrease the U.S. dollar amount required to be paid. The Company manages the potential variability in cash flows associated with the dividend payments by entering into derivative financial instruments used as economic hedges of the underlying risk.
        During the third quarter of 2010, the Company hedged its net investment in certain foreign operations through the use of foreign exchange forward contracts. The objective is to minimize the exposure to changes in the value of the foreign currency denominated net investment. The aggregate notional amount of these hedges was approximately $245 million as of June 25, 2010. As of September 25, 2009, the Company did not hedge any net investments in foreign operations.
Interest Rate Exposures
The Company manages interest rate risk through the use of interest rate swap transactions with financial institutions acting as principal counterparties, which are designated as fair value hedges for accounting purposes. During the third quarter of 2009, first quarter of 2010 and ~~the first~~third quarter of 2010, the Company entered into interest rate swap transactions with the objective of managing the exposure to interest rate risk by converting the interest rates on $1.4 billion, $500 million, and ~~$500~~$501 million respectively, of fixed-rate debt to variable rates. In these contracts, the Company agrees with financial institutions acting as principal counterparties to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated on an agreed-upon notional principal amount. In connection with the redemption of all of the 6.375% public notes due 2011 during the third quarter of 2010, the Company terminated the corresponding interest rate swaps. As of ~~March 26,~~June 25, 2010 and September 25, 2009, the total gross notional amount of the Company's interest rate swap contracts was ~~$1.9~~$1.5 billion and $1.4 billion, respectively.
        ~~For derivative instruments that are designated and qualify as fair value hedges,~~Commodity Exposures
        During fiscal 2010, the Company ~~documented the relationships between the~~entered into commodity swaps for copper, which are not designated as hedging instruments and hedged items and linked derivatives designated as fair value hedges to specific debt issuances. For transactions designated as hedges, the Company also assessed and documented at the hedge's inception whether the derivatives used in hedging transactions were effective in offsetting changes in fair values associated with the hedged items. The fair value hedgesfor accounting purposes. These swaps did not ~~result in any hedge ineffectiveness for the quarter and six months ended March 26, 2010.~~
        ~~The Company does not use derivative financial instruments for trading or speculative purposes.~~
        ~~All derivative financial instruments are reported~~have a material impact on the ~~Consolidated Balance Sheet at fair value with changes in the fair value~~Company's financial position, results of the derivative financial instruments recognized currently in earnings. The derivative financial instruments and impact of such changes in the fair value of the derivative financial instruments was not material to the Consolidated Balance Sheets as of March 26, 2010 and September 25, 2009operations or ~~Consolidated Statements of Operations for the quarters and six months ended March 26, 2010 and March 27, 2009.~~cash flows.

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
9.    Financial Instruments (Continued)
Counterparty Credit Risk
        The use of derivative financial instruments exposes the Company to counterparty credit risk. If the counterparty fails to perform, the Company is exposed to losses if the derivative is in an asset position. When the fair value of a derivative instrument is an asset, the counterparty has to pay the Company to settle the contract. This exposes the Company to credit risk. However, when the fair value of a derivative instrument is a liability, the Company has to pay the counterparty to settle the contract and therefore there is no counterparty credit risk. Tyco has established policies and procedures to limit the potential for counterparty credit risk, including establishing limits for credit exposure and continually assessing the creditworthiness of counterparties. As a matter of practice, the Company deals with major banks worldwide having long-term Standard & Poor's and Moody's credit ratings of A-/A3 or higher. To further reduce the risk of loss, the Company generally enters into International Swaps and Derivatives Association master agreements with substantially all of its counterparties. Master netting agreements provide protection in bankruptcy in certain circumstances and, in some cases, enable receivables and payables with the same counterparty to be offset on the Consolidated Balance Sheets, providing for a more meaningful balance sheet presentation of credit exposure. The Company's derivative contracts do not contain any credit risk related contingent features and do not require collateral or other security to be furnished by the Company or the counterparties.
        The Company's exposure to credit risk associated with its derivative instruments is measured on an individual counterparty basis, as well as by groups of counterparties that share similar attributes. As of ~~March 26,~~June 25, 2010, the Company was exposed to industry concentration with financial institutions as well as risk of loss if an individual counterparty or issuer failed to perform its obligations under contractual terms. The maximum amount of loss that the Company would incur as of ~~March 26,~~June 25, 2010 without giving consideration to the effects of legally enforceable master netting agreements, was approximately ~~$17~~$28 million.
Fair Value of Financial Instruments
        Authoritative guidance for fair value measurements establishes a three-level hierarchy that ranks the quality and reliability of information used in developing fair value estimates. The hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data. In cases where two or more levels of inputs are used to determine fair value, a financial instrument's level is determined based on the lowest level input that is considered significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are summarized as follows:
•
Level 1—inputs are based upon quoted prices (unadjusted) in active markets for identical assets or liabilities which are accessible as of the measurement date.

•
Level 2—inputs are based upon quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and model-derived valuations for the asset or liability that are derived principally from or corroborated by market data for which the primary inputs are observable, including forward interest rates, yield curves, credit risk and exchange rates.

•
Level 3—inputs for the valuations are unobservable and are based on management's estimates of assumptions that market participants would use in pricing the asset or liability. The fair values ~~are therefore determined using model-based techniques such as option pricing models and discounted cash flow models.~~

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
9.    Financial Instruments (Continued)
are therefore determined using model-based techniques such as option pricing models and discounted cash flow models.
Investments
        Investments primarily include cash equivalents, U.S. government obligations, U.S. government agency securities and corporate debt securities.
        When available, the Company uses quoted market prices to determine the fair value of investment securities. Such investments are included in Level 1. When quoted market prices are not readily available, pricing determinations are made based on the results of market approach valuation models using observable market data such as recently reported trades, bid and offer information and benchmark securities. These investments are included in Level 2 and consist primarily of U.S. government agency securities and corporate debt securities.
Derivative Financial Instruments
        As described above, under the caption "Derivative Instruments" derivative assets and liabilities consist principally of forward foreign currency exchange contracts and interest rate swaps. The fair values for these derivative financial instruments are derived from market approach pricing models that take into account the contractual terms and features of each instrument, forward foreign currency rates for the Company's foreign exchange contracts and yield curves for the Company's interest rate swaps existing at the end of the period. Valuations are adjusted to reflect creditworthiness of the counterparty for assets and the creditworthiness of the Company for liabilities. Such adjustments are based on observable market evidence and are categorized as Level 2 exposures. Derivative financial instruments are not presented in the following tables as the derivative financial instruments were not material to any of the periods presented.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
        The following tables present the Company's assets and liabilities measured at fair value on a recurring basis as of ~~March 26,~~June 25, 2010 and September 25, 2009 by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the valuation.

As of March 26, 2010
June 25, 2010
($ in millions)
($ in millions)
Level 1 Level 2 Total
($ in millions)
Level 1 Level 2 Total
Assets
Assets

Assets

Available-for-Sale Securities:
Available-for-Sale Securities:

Available-for-Sale Securities:

Corporate debt securities
$ — $ 91 $ 91
Corporate debt securities
$ — $ 82 $ 82

U.S. Government debt securities
62 177 239
U.S. Government debt securities
104 135 239

Other debt securities
— 4 4
Other debt securities
— 8 8

Total
Total
$ 62 $ 272 $ 334
Total
$ 104 $ 225 $ 329

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
9.    Financial Instruments (Continued)

As of September 25, 2009
September 25, 2009
($ in millions)
($ in millions)
Level 1 Level 2 Total
($ in millions)
Level 1 Level 2 Total
Assets
Assets

Assets

Available-for-Sale Securities:
Available-for-Sale Securities:

Available-for-Sale Securities:

Corporate debt securities
$ — $ 104 $ 104
Corporate debt securities
$ — $ 104 $ 104

U.S. Government debt securities
60 171 231
U.S. Government debt securities
60 171 231

Other debt securities
— 5 5
Other debt securities
— 5 5

Total
Total
$ 60 $ 280 $ 340
Total
$ 60 $ 280 $ 340

        During the quarter and ~~six~~nine months ended ~~March 26,~~June 25, 2010, the Company did not have any significant transfers within the fair value hierarchy.
Other
        The Company ~~has~~had $2.9 billion and $3.0 billion of intercompany loans designated as permanent in nature as of ~~March 26,~~June 25, 2010 and September 25, 2009, respectively. For the quarters ended ~~March 26,~~June 25, 2010 and ~~March 27,~~June 26, 2009, the Company recorded ~~$78~~$59 million and ~~$29~~$230 million, respectively, of cumulative ~~transaction~~translation loss through accumulated other comprehensive income (loss) related to these loans. For the ~~six~~nine months ended ~~March 26,~~June 25, 2010 and ~~March 27,~~June 26, 2009, the Company recorded ~~$115~~$174 million and ~~$353~~$123 million, respectively, of cumulative ~~transaction~~translation loss through accumulated other comprehensive income (loss) related to these loans.
10.    Commitments and Contingencies
        In connection with the Separation, the Company entered into a liability sharing agreement regarding certain legal actions that were pending against Tyco prior to the Separation. Under the Separation and Distribution Agreement, the Company, Covidien and Tyco Electronics are jointly and severally liable for the full amount of any judgments resulting from the actions subject to the agreement, which generally relate to legacy matters that are not specific to the business operations of any of the companies. The Separation and Distribution Agreement also provides that the Company will be responsible for 27%, Covidien 42% and Tyco Electronics 31% of payments to resolve these matters, with costs and expenses associated with the management of these contingencies being shared equally among the parties. In addition, under the agreement, the Company will manage and control all the legal matters related to assumed contingent liabilities as described in the Separation and Distribution Agreement, including the defense or settlement thereof, subject to certain limitations. Additionally, at the time of the Separation, the Company, Covidien and Tyco Electronics agreed to allocate responsibility for certain legacy tax claims pursuant to the same formula under the Tax Sharing Agreement. See Note 5.
Legacy Securities Matters
        As previously reported, Tyco and some members of the Company's former senior corporate management are named defendants in a number of lawsuits alleging violations of the disclosure provisions of the federal securities laws. In June 2007, the Company settled 32 purported securities

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10.    Commitments and Contingencies (Continued)

class action lawsuits arising from actions alleged to have been taken by prior management. The June 2007 class action settlement did not purport to resolve all legacy securities cases.
        During the second quarter of 2009, the Company concluded that its best estimate of probable loss for the legacy securities matters outstanding at the time was $375 million in the aggregate, which the

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~~TYCO INTERNATIONAL LTD.~~
~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~
~~10.    Commitments and Contingencies (Continued)~~

Company recorded as a liability in accrued and other current liabilities in the Consolidated Balance Sheet as of March 27, 2009. Due to the sharing provisions in the Separation and Distribution Agreement, the Company also recorded receivables from Covidien and Tyco Electronics in the amounts of $158 million and $116 million, respectively, which were recorded in other current assets in the Company's Consolidated Balance Sheet as of March 27, 2009. As a result, the Company recorded a net charge of $101 million related to legacy securities matters during the quarter ended March 27, 2009 in selling, general, and administrative expenses in the Consolidated Statements of Operations.
        In the second half of fiscal 2009, the Company agreed to settle with all of the remaining plaintiffs that had opted-out of the class action settlement as well as plaintiffs who had brought ~~ERISA~~Employee Retirement Income Security Act ("ERISA") related claims for a total of $271 million. Pursuant to the Separation and Distribution Agreement, the Company's share of the settlement amount was approximately $73 million, with Covidien and Tyco Electronics responsible for approximately $114 million and $84 million, respectively. This settlement activity did not result in the Company recording a charge to its Consolidated Statements of Operations as the Company had established a reserve for its best estimate of the amount of loss during the second quarter of 2009 as discussed above. Since the June 2007 class action settlement, the Company has resolved all of its significant legal claims stemming from allegations of securities laws violations, with the exception of the matters noted below.
        The most significant outstanding legacy securities matter isStumpf v. Tyco International Ltd.,which is a class action lawsuit in which the plaintiffs alleged that Tyco, among others, violated the disclosure provisions of the federal securities laws. The matter arose from Tyco's July 2000 initial public offering of common stock of TyCom Ltd, and alleged that the TyCom registration statement and prospectus relating to the sale of common stock were inaccurate, misleading and failed to disclose facts necessary to make the registration statement and prospectus not misleading. The complaint further alleged the defendants violated securities laws by making materially false and misleading statements and omissions concerning, among other things, executive compensation, TyCom's business prospects and Tyco's and TyCom's finances. On May 6, 2010, the United States District Court for the District of New Jersey ~~will hear arguments on a motion requesting~~granted preliminary approval of settlement of theStumpfmatter. The proposed settlement is subject to final court approval ~~and the Court has not yet set~~at a ~~date~~hearing scheduled for ~~the final approval hearing. If the~~August 25, 2010. Any settlement ~~receives final court approval, it~~ will be subject to the liability sharing provisions of the Separation and Distribution Agreement with Covidien and Tyco Electronics. The Company believes its remaining reserve related to legacy securities matters is sufficient to satisfy the resolution of this matter.
        In addition to theStumpfmatter, Tyco is a party to several lawsuits involving disputes with former management, among which are affirmative cases brought by Tyco against Mr. Dennis L. Kozlowski, Tyco's former chief executive officer, Mr. Mark Swartz, its former chief financial officer, and Mr. Frank Walsh Jr., a former director. In connection with these affirmative actions, Messrs. Kozlowski and Swartz have made claims seeking amounts allegedly due in connection with their compensation and retention arrangements and under ERISA, and Mr. Walsh has made claims alleging that Tyco is required to

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
10.    Commitments and Contingencies (Continued)

indemnify him for his defense costs arising from his role as a Tyco director. Tyco intends to vigorously defend each of these actions.
        Tyco has reserved its best estimate of probable loss for these legacy matters. However, their ultimate resolution could differ materially from these estimates and could have a material adverse effect on Tyco's financial position, results of operations or cash flows.

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~~TYCO INTERNATIONAL LTD.~~
~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~
~~10.    Commitments and Contingencies (Continued)~~
Environmental Matters
        Tyco is involved in various stages of investigation and cleanup related to environmental remediation matters at a number of sites. The ultimate cost of site cleanup is difficult to predict given the uncertainties regarding the extent of the required cleanup, the interpretation of applicable laws and regulations and alternative cleanup methods. As of ~~March 26,~~June 25, 2010, Tyco concluded that it was probable that it would incur remedial costs in the range of approximately ~~$28~~$25 million to ~~$81~~$86 million. As of ~~March 26,~~June 25, 2010, Tyco concluded that the best estimate within this range is approximately ~~$37~~$35 million, of which ~~$14~~$18 million is included in accrued and other current liabilities and ~~$23~~$17 million is included in other liabilities in the Company's Consolidated Balance Sheet. In view of the Company's financial position and reserves for environmental matters, the Company believes that any potential payments of such estimated amounts will not have a material adverse effect on its financial position, results of operations or cash flows.
Asbestos Matters
        The Company and certain of its subsidiaries are named as defendants in personal injury lawsuits based on alleged exposure to asbestos-containing materials. These cases typically involve product liability claims based primarily on allegations of manufacture, sale or distribution of industrial products that either contained asbestos or were attached to or used with asbestos-containing components manufactured by third-parties. Each case typically names between dozens to hundreds of corporate defendants. While the Company has observed an increase in the number of these lawsuits over the past several years, including lawsuits by plaintiffs with mesothelioma-related claims, a large percentage of these suits have not presented viable legal claims and, as a result, have been dismissed by the courts. The Company's strategy has been, and continues to be, to mount a vigorous defense aimed at having unsubstantiated suits dismissed, and, where appropriate, settling suits before trial. Although a large percentage of litigated suits have been dismissed, the Company cannot predict the extent to which it will be successful in resolving lawsuits in the future. Of the lawsuits that have proceeded to trial since 2005, the Company has won or settled all but one case, with that one case returning an adverse jury verdict for approximately $7.7 million, which included both compensatory and punitive damages. The Company has appealed the verdict and believes that it will ultimately be overturned. As of ~~March 26,~~June 25, 2010, there were approximately ~~4,400~~3,500 lawsuits pending against the Company and its subsidiaries. Each lawsuit typically includes several claims, and the Company has determined that there were approximately ~~5,600~~4,300 claims outstanding as of ~~March 26,~~June 25, 2010, which amount reflects the Company's current estimate of the number of ~~viable~~active claims made against it or its affiliates, and includes adjustments for claims that are not actively being prosecuted, identify incorrect defendants or are duplicative of other actions.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
10.    Commitments and Contingencies (Continued)
        Annually, the Company performs an analysis to update its estimated asbestos-related assets and liabilities. The Company's estimate of the liability and corresponding insurance recovery for pending and future claims and defense costs is based on claim experience over the past five years and covers claims expected to be filed, including related defense costs, over the next seven years on an undiscounted basis. On a quarterly basis, the Company re-evaluates the assumptions used to perform the annual analysis and records an expense as necessary to reflect any changes in its estimated liability and related insurance asset for the seven year horizon at each balance sheet date. Due to a high degree of uncertainty regarding the pattern and length of time over which claims will be made and other factors, the Company has concluded that estimating the liability beyond the seven year period will not provide a reasonable ~~estimate.~~estimate, as these uncertainties increase as the projection period lengthens. The Company's estimate of asbestos-related insurance recoveries represents estimated amounts due to the Company for previously paid and settled claims and the probable reimbursements relating to its estimated liability for pending and future claims. In determining the amount of insurance recoverable, the Company considers available insurance, allocation methodologies, solvency and creditworthiness of the insurers.

~~Table~~        The Company performed its annual analysis of ~~Contents~~

~~TYCO INTERNATIONAL LTD.~~
~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~
~~10.    Commitments~~asbestos-related liabilities and ~~Contingencies (Continued)~~
insurance assets during the third quarter of 2010. During the third quarter of 2010, the Company settled a higher than expected number of claims at above average amounts as compared to the estimates used during the Company's valuation performed during fiscal 2009. Based on the company's claim experience over the past 5 years, including the impact of the above mentioned increase in settlements and average settlement amounts during fiscal 2010, the Company increased its estimated net liability, which resulted in the Company recording a net charge of approximately $52 million during the quarter ended June 25, 2010. As of ~~March 26,~~June 25, 2010, the Company's estimated net liability of ~~$51~~$104 million was recorded within the Company's Consolidated Balance Sheet as a liability for pending and future claims and related defense costs of ~~$227~~$317 million, and separately as an asset for insurance recoveries of ~~$176~~$213 million. Similarly, as of September 25, 2009, the Company's estimated net liability of $49 million was recorded within the Company's Consolidated Balance Sheet as a liability for pending and future claims and related defense costs of $240 million, and separately as an asset for insurance recoveries of $191 million. The estimated insurance asset increased due to the responsiveness of pertinent insurance policies that cover a portion of the increased liability.
        The amounts recorded by the Company for asbestos-related liabilities and insurance-related assets are based on currently available information as well as estimates and assumptions. Key variables and assumptions include the number and type of new claims that are filed each year, the average cost of resolution of claims, the resolution of coverage issues with insurance carriers, amount of available insurance and the solvency risk with respect to the Company's insurance carriers. Furthermore, predictions with respect to these variables are subject to greater uncertainty in the later portion of the projection period. Other factors that may affect the Company's liability and cash payments for asbestos-related matters include uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case, reforms of state or federal tort legislation and the applicability of insurance policies among subsidiaries. The Company believes that its asbestos-related reserves as of ~~March 26,~~June 25, 2010 are appropriate. However, actual liabilities or insurance recoveries could be significantly higher or lower than those recorded if assumptions used in the Company's calculations vary significantly from actual results.

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
10.    Commitments and Contingencies (Continued)
Compliance Matters
        As previously reported in the Company's periodic filings, the Company has received and responded to various allegations and other information that certain improper payments were made by the Company's subsidiaries and agents in recent years. For example, two subsidiaries in the Company's Flow Control business in Italy have been charged, along with numerous other parties, in connection with the Milan public prosecutor's investigation into allegedly improper payments made to certain Italian entities, and the Company has reported to German authorities potentially improper conduct involving agents retained by the Company's EMEA water business. The Company has since resolved ~~these matters~~this matter with German authorities. The Company ~~has~~ reported to the U.S. Department of Justice ("DOJ") and the SEC the investigative steps and remedial measures that it has taken in response to these allegations and its internal investigations. ~~The~~In 2005, the Company ~~also~~ informed the DOJ and the SEC that it ~~has~~ retained outside counsel to perform a Company-wide baseline review of its policies, controls and practices with respect to compliance with the Foreign Corrupt Practices Act ("FCPA"), and that it would continue to investigate and make periodic progress reports to these agencies. The Company has and will continue to communicate with the DOJ and SEC to provide updates on the baseline review and follow-up investigations, including, as appropriate, briefings concerning additional instances of potential improper conduct identified by the Company in the course of its ongoing compliance activities. The baseline review, which has been ~~substantially~~ completed, has revealed that some business practices may not comply with Tyco and FCPA requirements, and in February 2010, the Company ~~has~~ initiated discussions with the DOJ and SEC aimed at resolving these matters. While these discussions are ongoing, the Company cannot predict their outcome and cannot estimate the range of potential loss or the form of penalty, ~~if any,~~ that may result from an adverse resolution. It is possible that the Company may be required to pay material fines, consent to injunctions on future conduct, or suffer other criminal or civil penalties or adverse impacts, each of which may have a material adverse effect on the Company's financial position, results of operations or cash flows.

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~~TYCO INTERNATIONAL LTD.~~
~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~
~~10.    Commitments and Contingencies (Continued)~~
        Covidien and Tyco Electronics agreed, in connection with the Separation, to cooperate with the Company in its responses regarding these matters. Any judgment required to be paid or settlement or other cost incurred by the Company in connection with the FCPA investigations matters would be subject to the liability sharing provisions of the Separation and Distribution Agreement, which assigned liabilities primarily related to the former Healthcare and Electronics businesses of the Company to Covidien and Tyco Electronics, respectively, and provides that the Company will retain liabilities primarily related to its continuing operations. Any liabilities not primarily related to a particular segment will be shared equally among the Company, Covidien and Tyco Electronics.
        The German Federal Cartel Office ("FCO") charged in early 2007 that certain German subsidiaries in the Company's Flow Control business had engaged in anti-competitive practices, in particular with regard to its hydrant, valve, street box and fittings business. The Company investigated this matter and determined that the conduct may have violated German anti-trust law. The Company is cooperating with the FCO in its investigation of this violation, which is ongoing. The Company cannot estimate the range of potential loss that may result from this violation. It is possible that the Company may be subject to civil or criminal proceedings and may be required to pay judgments, suffer penalties or incur settlements in amounts that may have a material adverse effect on its financial position, results of operations or cash flows.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
10.    Commitments and Contingencies (Continued)
ERISA Partial Withdrawal Liability Assessment and Demand
        On June 8, 2007, SimplexGrinnell received a notice alleging that it had partially withdrawn from the National Automatic Sprinkler Industry Pension Fund (the "Fund"). Under Title IV of ERISA, if the Fund can prove that an employer completely or partially withdraws from a multi-employer pension plan such as the Fund, the employer is liable for withdrawal liability equal to its proportionate share of the plan's unfunded vested benefits. The alleged withdrawal results from a 1994 labor dispute between Grinnell Fire Protection Systems, SimplexGrinnell's predecessor, and Road Sprinkler Fitters Local Union No. 669.
        ERISA requires that payment of withdrawal liability be made in full or in quarterly installments commencing upon receipt of a liability assessment from the plan. A plan's assessment of withdrawal liability generally may be challenged only in arbitration, and ERISA requires that quarterly payments must continue to be made during the pendency of the arbitration. If the employer prevails in arbitration (and any subsequent appeals), its quarterly withdrawal liability payments are refunded with interest. The Fund's total withdrawal liability assessment against SimplexGrinnell is approximately $25 million. The quarterly withdrawal liability payments are $1.1 million, $13.2 million of which ~~had~~has been cumulatively paid ~~to date.~~through June 25, 2010. While the ultimate outcome is uncertain, SimplexGrinnell believes that it has strong arguments that no withdrawal liability is owed to the Fund, and it plans to vigorously defend against the Fund's withdrawal liability assessment. The matter is currently in arbitration. The Company has made no provision for this contingency and believes that its quarterly payments are recoverable.
BHS Contingency
        On May 14, 2010, the Company acquired BHS, which is a business that was formerly owned by The Brink's Company. Under the Coal Industry Retiree Health Benefit Act of 1992, as amended (the "Coal Act"), The Brink's Company and its majority-owned subsidiaries at July 20, 1992 (including certain legal entities acquired in the BHS acquisition) are jointly and severally liable with certain of The Brink's Company's other current and former subsidiaries for health care coverage obligations provided for by the Coal Act. A Voluntary Employees' Beneficiary Associate trust has been established by The Brink's Company to pay for these liabilities, although the trust may have insufficient funds to satisfy all future obligations. At the time of its spin-off from The Brink's Company, BHS entered into an agreement in which The Brink's Company agreed to indemnify BHS for any and all liabilities and expenses related to The Brink's Company's former coal operations, including any health care coverage obligations. The Brink's Company has agreed that this indemnification survives the Company's acquisition of BHS. The Company has evaluated its potential liability under the Coal Act as a contingency in light of all known facts, including the funding of the Voluntary Employees' Beneficiary Association ("VEBA"), and indemnification provided by The Brink's Company. The Company has concluded that no accrual is necessary due to the existence of the indemnification and its belief that The Brink's Company and the VEBA will be able to satisfy all future obligations under the Coal Act.
Other Matters
        As previously reported, in 2002, the SEC's Division of Enforcement conducted an investigation related to past accounting practices for dealer connect fees that ADT had charged to its authorized

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
10.    Commitments and Contingencies (Continued)

dealers upon purchasing customer accounts. The investigation related to accounting practices employed by the Company's former management, which were discontinued in 2003. Although the Company settled with the SEC in 2006, a number of former dealers and related parties have filed lawsuits against

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~~TYCO INTERNATIONAL LTD.~~
~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~
~~10.    Commitments and Contingencies (Continued)~~

the Company, including a class action lawsuit filed in the District Court of Arapahoe County, Colorado, alleging breach of contract and other claims related to ADT's decision to terminate certain authorized dealers in 2002 and 2003. In February 2010, the Court granted a directed verdict in ADT's favor dismissing a number of the ~~plaintiff's~~plaintiffs' key claims. The plaintiffs have appealed this verdict. While it is not possible at this time to predict the final outcome of these lawsuits, the Company does not believe these claims will have a material adverse effect on the Company's financial position, results of operations or cash flows.
        In addition to the foregoing, the Company is subject to claims and suits, including from time to time, contractual disputes and product and general liability claims, incidental to present and former operations, acquisitions and dispositions. With respect to many of these claims, the Company either self-insures or maintains insurance through third-parties, with varying deductibles. While the ultimate outcome of these matters cannot be predicted with certainty, the Company believes that the resolution of any such proceedings, whether the underlying claims are covered by insurance or not, will not have a material adverse effect on the Company's financial condition, results of operations or cash flows beyond amounts recorded for such matters.
11.    Retirement Plans
        Defined Benefit Pension Plans—The Company adopted the measurement date provisions of the authoritative guidance for the employers' accounting for defined benefit pension and other postretirement plans on September 27, 2008. As a result, Tyco measured its plan assets and benefit obligations on September 26, 2008 and adjusted its opening balances of accumulated earnings (deficit) and accumulated other comprehensive income (loss) for the change in net periodic benefit cost and fair value, respectively, from the previously used measurement date of August 31, 2008. The adoption of the measurement date provisions resulted in a net decrease to accumulated earnings (deficit) of $5 million, net of an income tax benefit of $2 million, and a net increase to accumulated other comprehensive income (loss) of $61 million, net of income taxes of $28 million.

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
11.    Retirement Plans (Continued)
        The Company sponsors a number of pension plans. The following disclosures exclude the impact of plans which are immaterial individually and in the aggregate. The net periodic benefit cost for the Company's material U.S. and non-U.S. defined benefit pension plans is as follows ($ in millions):

U.S. Plans U.S. Plans

For the Quarters Ended For the Six Months Ended For the
Quarters Ended For the Nine
Months Ended

March 26,
2010 March 27,
2009 March 26,
2010 March 27,
2009 June 25,
2010 June 26,
2009 June 25,
2010 June 26,
2009
Service cost
$ 3 $ 2 $ 5 $ 5 $ 3 $ 2 $ 7 $ 7
Interest cost
12 12 24 25 12 12 34 37
Expected return on plan assets
(12 ) (12 ) (24 ) (25 ) (12 ) (12 ) (36 ) (37 )
Amortization of prior service cost
— 1 — 1 — 1 1 1
Amortization of net actuarial loss
6 2 13 4 6 2 20 7

Net periodic benefit cost
$ 9 $ 5 $ 18 $ 10 $ 9 $ 5 $ 26 $ 15

~~Table of Contents~~

~~TYCO INTERNATIONAL LTD.~~
~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~
~~11.    Retirement Plans (Continued)~~

Non-U.S. Plans Non-U.S. Plans

For the Quarters Ended For the Six Months Ended For the
Quarters Ended For the Nine
Months Ended

March 26,
2010 March 27,
2009 March 26,
2010 March 27,
2009 June 25,
2010 June 26,
2009 June 25,
2010 June 26,
2009
Service cost
$ 7 $ 8 $ 14 $ 17 $ 5 $ 9 $ 19 $ 26
Interest cost
19 21 38 41 19 20 56 61
Expected return on plan assets
(17 ) (18 ) (34 ) (36 ) (18 ) (18 ) (52 ) (54 )
Amortization of prior service cost
(1 ) (1 ) (2 ) (2 ) — (1 ) (1 ) (2 )
Amortization of net actuarial loss
7 5 14 10 6 5 20 14
Plan settlements and curtailments termination benefits
— (1 ) — (1 ) (22 ) — (22 ) (1 )

Net periodic benefit cost
$ 15 $ 14 $ 30 $ 29 $ (10 ) $ 15 $ 20 $ 44

        During the quarter ended June 25, 2010, the Company adopted plan amendments that froze pension plan benefits for certain of its defined benefit arrangements in the United Kingdom, which resulted in the Company recognizing a curtailment gain of approximately $22 million in selling, general and administrative expenses within the Consolidated Statement of Operations.
        The estimated net loss and prior service cost for U.S. pension benefit plans that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost over the current fiscal year are expected to be $26 million and $1 million, respectively.
        The estimated net loss and prior service credit for non-U.S. pension benefit plans that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost over the current fiscal year are expected to be ~~$29~~$27 million and $3$2 million, respectively.
        The Company's funding policy is to make contributions in accordance with the laws and customs of the various countries in which it operates ~~as well as~~and to make discretionary voluntary contributions from time-to-time. The Company anticipates that it will contribute at least the minimum required to its pension plans in fiscal year 2010 of $4 million for U.S. plans and $76 million for non-U.S. plans.

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
11.    Retirement Plans (Continued)

During the ~~six~~nine months ended ~~March 26,~~June 25, 2010 the Company contributed $2$3 million to its U.S. pension plans and ~~$44~~$60 million to its non-U.S. pension plans, respectively.
        Postretirement Benefit Plans—Net periodic postretirement benefit cost was insignificant for both periods.
12.    Shareholders' Equity
Dividends
        Pursuant to Swiss law, dividend payments made prior to January 1, 2011 are subject to Swiss withholding taxes unless made in the form of a return of capital from the Company's registered share capital. As a result, the Company intends to first pay dividends in the form of a reduction of registered share capital until at least January 1, 2011. After January 1, 2011, the Company expects to make dividend payments in the form of a reduction in contributed surplus, which are also ~~may~~expected to be made free of Swiss withholding taxes.
        On March 10, 2010, the Company's shareholders approved an annual dividend on the Company's common shares of CHF 0.90 per share, which will be paid in the form of a return on capital in four installments of CHF 0.22, CHF 0.22, CHF 0.23 and CHF 0.23. The first installment of CHF 0.22 ~~will be~~was paid on May 26, 2010 to shareholders of record on May 14, 2010. While certain administrative steps need to occur to effectuate the dividend payment, approval of the dividend by the shareholders establishes the dividend under Swiss law. As a result, the Company recorded an accrued dividend of CHF 428 million as of March 10, 2010, which approximated $399 million based on the exchange rate in

~~Table of Contents~~

~~TYCO INTERNATIONAL LTD.~~
~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~
~~12.    Shareholders' Equity (Continued)~~

effect on that date. The accrued dividend iswas recorded in accrued and other current liabilities in the Company's Consolidated Balance Sheet as of March 26, 2010. On the Company's Consolidated Balance Sheet, this amount iswas recorded as a reduction of common shares, which reduces the par value of the Company's common shares from CHF 7.60 to CHF 6.70. The installments will be paid in U.S. dollars converted from Swiss Francs at the USD/CHF exchange rate in effect shortly before the payment dates. ~~Assuming~~
        On May 14, 2010, the ~~BHS acquisition closes before May 26, 2010,~~Company acquired all of the outstanding equity of BHS. BHS shareholders who ~~elect to receive~~received Tyco common stock as consideration in the merger ~~will be entitled to receive~~were included in the first installment of dividend payments ~~commencing~~that were paid on May 26, 2010. As a result, the Company recorded an accrued dividend of CHF 32 million as of May 14, 2010, which is approximately $28 million based on the exchange rate in effect on that date.
        On March 12, 2009, the Company's shareholders approved an annual dividend on the Company's common shares of CHF 0.93 per share, which was paid in the form of a return on capital in four installments of CHF 0.23, CHF 0.23, CHF 0.23 and CHF 0.24 to shareholders of record on April 30, 2009, July 31, 2009, October 30, 2009 and January 29, 2010, respectively. ~~While certain administrative steps need to occur to effectuate the dividend payment, approval by the shareholders establishes the dividend under Swiss law. As a result, the~~The Company recorded an accrued dividend of CHF 440 as of March 12, 2009, which approximated $377 million based on the exchange rate in effect on that date. On the Company's Consolidated Balance Sheet, this amount was recorded as a reduction of common shares, which reduced the par value of the Company's common shares from CHF 8.53 to CHF 7.60. The installments were paid in U.S. dollars converted from Swiss Francs at the USD/CHF exchange rate in effect shortly before the payment dates.
        Prior to the Change of Domicile, on December 4, 2008, the Company's Board of Directors declared a quarterly dividend on the Company's common shares of $0.20 per share, which was paid on

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
12.    Shareholders' Equity (Continued)

February 2, 2009 to shareholders of record on January 5, 2009. This amount was recorded as a reduction of accumulated earnings.
Common Stock
        As of ~~March 26,~~June 25, 2010, the Company's share capital amounted to CHF ~~3,642,642,767.60,~~3,796,649,494.38, or ~~479,295,101~~514,451,151 registered common shares with a par value of CHF ~~7.60~~7.38 per share. Until March 12, 2011, the Board of Directors may increase the Company's share capital by a maximum amount of CHF ~~1,821,321,380~~1,509,147,270 by issuing a maximum of ~~239,647,550~~204,491,500 shares. In addition, until March 12, 2011, (i) the share capital of the Company may be increased by an amount not exceeding CHF ~~364,264,276~~353,719,784 through the issue of a maximum of 47,929,510 shares through the exercise of conversion and/or option or warrant rights granted in connection with bonds, notes or similar instruments including convertible debt instruments and (ii) the share capital of the Company may be increased by an amount not exceeding CHF ~~364,264,276~~353,719,784 through the issue of a maximum of 47,929,510 shares to employees and other persons providing services to the Company. Although the Company states its par value in Swiss francs it continues to use the U.S. dollar as its reporting currency for preparing its Consolidated Financial Statements.
Change in Domicile
        Effective March 17, 2009, the Company changed its jurisdiction of incorporation from Bermuda to the Canton of Schaffhausen, Switzerland. In connection with the Change of Domicile and pursuant to the laws of Switzerland, the par value of the Company's common shares increased from $0.80 per share to 8.53 Swiss Francs (CHF) per share (or $7.21 based on the exchange rate in effect on March 17, 2009). The Change of Domicile was approved at a special general meeting of shareholders held on

~~Table of Contents~~

~~TYCO INTERNATIONAL LTD.~~
~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~
~~12.    Shareholders' Equity (Continued)~~
March 12, 2009. The following steps occurred in connection with the Change of Domicile, which did not result in a change to total Shareholders' Equity:
(1)
approximately 21 million shares held directly or indirectly in treasury were cancelled;

(2)
the par value of common shares of the Company was increased from $0.80 to CHF 8.53 through an approximate 1-for-9 reverse share split, followed by the issuance of approximately eight fully paid up shares so that the same number of shares were outstanding before and after the Change of Domicile, which reduced share premium and increased common shares; and

(3)
the remaining amount of share premium was eliminated with a corresponding increase to contributed surplus.
Share Repurchase Program
        On July 10, 2008, Tyco's Board of Directors approved a $1.0 billion share repurchase program. During the third quarter of 2010, the Company repurchased approximately 7.5 million shares for $276 million under this program. As of June 25, 2010, the 2008 share repurchase program had approximately $624 million of authorized capacity remaining available.

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
13.    Share Plans
        On May 14, 2010, Tyco acquired BHS. In connection with the acquisition, the Company agreed to replace outstanding BHS share-based payment awards with approximately 2 million Tyco share-based payment awards. See Note 4. The Tyco share-based payment awards were issued from shares available under the Tyco International Ltd. 2004 Stock and Incentive Plan (the "2004 Plan"). As of June 25, 2010, there were approximately 21 million shares available for future grants under the 2004 Plan.
        During the quarter ended December 25, 2009, the Company issued its annual share-based compensation grants. The total number of awards issued was approximately 6 million, of which 4 million were share options, 1 million were restricted unit awards and 1 million were performance share unit awards. The options and restricted stock units vest in equal annual installments over a period of 4 years, and the performance share unit awards vest after a period of 3 years based on the level of attainment of the applicable performance metrics, which are determined by the Compensation and Human Resources Committee of the Board. The weighted-average grant-date fair value of the share options, restricted unit awards and performance share unit awards was $9.17, $33.75 and $40.19, respectively. The weighted-average assumptions used in the Black-Scholes option pricing model included an expected stock price volatility of 34%, a risk free interest rate of 2.47%, an expected annual dividend per share of $0.80 and an expected option life of 5.4 years.
        During the quarter ended December 26, 2008, the Company issued its annual share-based compensation grants. The total number of awards issued was approximately 8 million, of which 5 million were share options, 2 million were restricted unit awards and 1 million were performance share unit awards. The options and restricted stock units vest in equal annual installments over a period of 4 years, and the performance share unit awards vest after a period of 3 years based on the level of attainment of the applicable performance metrics, which are determined by the Compensation and Human Resources Committee of the Board. The weighted-average grant-date fair value of the share options, restricted unit awards and performance share unit awards was $7.15, $29.00 and $27.84, respectively. The weighted-average assumptions used in the Black-Scholes option pricing model included an expected stock price volatility of 32%, a risk free interest rate of 2.71%, an expected annual dividend per share of $0.80 and an expected option life of 5.2 years.
14.    Consolidated Segment Data
        The Company, from time to time, may realign businesses and management responsibility within its operating segments based on considerations such as opportunity for market or operating synergies and/or to more fully leverage existing capabilities and enhance development for future products and services. During the first quarter of fiscal 2010, the manufacturing operations which support the ADT retail business, historically included in the Safety Products segment, were transferred to the ADT Worldwide segment. In addition, certain smaller businesses were transferred between segments; from the Company's Safety Products segment to the Company's Fire Protection Services segment in Asia

~~Table of Contents~~

~~TYCO INTERNATIONAL LTD.~~
~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~
~~14.    Consolidated Segment Data (Continued)~~

Pacific; from the Company's Fire Protection Services segment to the Company's ADT Worldwide segment in EMEA and Latin America. Further, certain overhead costs were transferred from Corporate and Other to the Company's ADT Worldwide segment. During the third quarter of fiscal 2010 the Company reclassified certain businesses which have satisfied the criteria to be presented as discontinued operations to income from discontinued operations in the Consolidated Statement of Operations and assets and liabilities held for sale within the Consolidated Balance Sheets. See Note 2. As a result of the realignment of these business activities and the ~~revenue and operating income for~~reclassification of businesses, the ~~period ending March 27, 2009 have been recast to reflect the realignments discussed above. Selected information by segment is presented in the following tables ($ in millions):~~

For the Quarters Ended For the Six Months Ended

March 26,
2010 March 27,
2009 March 26,
2010 March 27,
2009
Net revenue⁽¹⁾:

ADT Worldwide
$ 1,767 $ 1,705 $ 3,602 $ 3,516

Flow Control
899 927 1,822 1,886

Fire Protection Services
807 813 1,640 1,652

Electrical and Metal Products
336 330 633 746

Safety Products
360 375 718 776

Corporate and Other
— — — —

Net revenue
$ 4,169 $ 4,150 $ 8,415 $ 8,576

⁽¹⁾
~~Revenue by operating segment excludes intercompany transactions.~~

For the Quarters Ended For the Six Months Ended

March 26,
2010 March 27,
2009 March 26,
2010 March 27,
2009
Operating income (loss):

ADT Worldwide
$ 305 $ (867 ) $ 564 $ (640 )

Flow Control
93 133 205 270

Fire Protection Services
62 (121 ) 126 (65 )

Electrical and Metal Products
24 (961 ) 47 (934 )

Safety Products
47 (537 ) 101 (457 )

Corporate and Other
(104 ) (201 ) (202 ) (315 )

Operating income (loss)
$ 427 $ (2,554 ) $ 841 $ (2,141 )

~~15.    Inventory~~
        ~~Inventories consisted of the following ($ in millions):~~

March 26,
2010 September 25,
2009
Purchased materials and manufactured parts
$ 517 $ 514
Work in process
205 207
Finished goods
742 722

Inventories
$ 1,464 $ 1,443

Table of Contents

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
14.    Consolidated Segment Data (Continued)

revenue and operating income for the quarter and nine months ending June 26, 2009 have been recast to reflect the above. Selected information by segment is presented in the following tables ($ in millions):

For the
Quarters Ended For the Nine
Months Ended

June 25,
2010 June 26,
2009 June 25,
2010 June 26,
2009
Net revenue⁽¹⁾:

ADT Worldwide
$ 1,824 $ 1,741 $ 5,426 $ 5,257

Flow Control
849 866 2,505 2,584

Fire Protection Services
822 855 2,462 2,507

Electrical and Metal Products
390 320 1,023 1,066

Safety Products
389 370 1,107 1,146

Net revenue
$ 4,274 $ 4,152 $ 12,523 $ 12,560

⁽¹⁾
Revenue by operating segment excludes intercompany transactions.

For the
Quarters Ended For the Nine
Months Ended

June 25,
2010 June 26,
2009 June 25,
2010 June 26,
2009
Operating income (loss):

ADT Worldwide
$ 222 $ 220 $ 786 $ (420 )

Flow Control
113 115 306 376

Fire Protection Services
80 69 206 4

Electrical and Metal Products
40 (16 ) 87 (950 )

Safety Products
63 43 164 (414 )

Corporate and Other
(143 ) (97 ) (344 ) (411 )

Operating income (loss)
$ 375 $ 334 $ 1,205 $ (1,815 )

15.    Inventory ~~(Continued)~~
        Inventories consisted of the following ($ in millions):

June 25,
2010 September 25,
2009
Purchased materials and manufactured parts
$ 524 $ 482
Work in process
184 194
Finished goods
709 694

Inventories
$ 1,417 $ 1,370

        Inventories are recorded at the lower of cost (primarily first-in, first-out) or market value.

Table of Contents

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
16.    Property, Plant and Equipment
        Property, plant and equipment consisted of the following ($ in millions):

March 26,
2010 September 25,
2009
June 25,
2010 September 25,
2009
Land
Land
$ 156 $ 156
Land
$ 144 $ 144
Buildings
Buildings
806 788
Buildings
773 745
Subscriber systems
Subscriber systems
5,375 5,309
Subscriber systems
6,063 5,309
Machinery and equipment
Machinery and equipment
2,431 2,398
Machinery and equipment
2,360 2,324
Property under capital leases⁽¹⁾
Property under capital leases⁽¹⁾
62 62
Property under capital leases⁽¹⁾
62 62
Construction in progress
Construction in progress
149 164
Construction in progress
173 164
Accumulated depreciation⁽²⁾
Accumulated depreciation⁽²⁾
(5,478 ) (5,380 )
Accumulated depreciation⁽²⁾
(5,485 ) (5,311 )

Property, Plant and Equipment, net
$ 3,501 $ 3,497
Property, Plant and Equipment, net
$ 4,090 $ 3,437

⁽¹⁾
Property under capital leases consists primarily of buildings.

⁽²⁾
Accumulated amortization of capital lease assets was ~~$31~~$33 million and $28 million as of ~~March 26,~~June 25, 2010 and September 25, 2009, respectively.
17.    Guarantees
        Certain of the Company's business segments have guaranteed the performance of third-parties and provided financial guarantees for uncompleted work and financial commitments. The terms of these guarantees vary with end dates ranging from the current fiscal year through the completion of such transactions. The guarantees would typically be triggered in the event of nonperformance and performance under the guarantees, if required, would not have a material effect on the Company's financial position, results of operations or cash flows.
        There are certain guarantees or indemnifications extended among Tyco, Covidien and Tyco Electronics in accordance with the terms of the Separation and Distribution Agreement and the Tax Sharing Agreement. The guarantees primarily relate to certain contingent tax liabilities included in the Tax Sharing Agreement. At the time of the Separation, Tyco recorded a liability necessary to recognize the fair value of such guarantees and indemnifications. In the absence of observable transactions for identical or similar guarantees, the Company determined the fair value of these guarantees and indemnifications utilizing expected present value measurement techniques. Significant assumptions utilized to determine fair value included determining a range of potential outcomes, assigning a probability weighting to each potential outcome and estimating the anticipated timing of resolution. The probability weighted outcomes were discounted using the Company's incremental borrowing rate. As of ~~March 26,~~June 25, 2010 and September 25, 2009, the Company maintained a liability of $554 million, which reflected the fair value of the guarantees and indemnification under the Tax Sharing Agreement and was recorded in other liabilities on the Company's Consolidated Balance Sheets. The guarantees primarily relate to certain contingent tax liabilities included in the Tax Sharing Agreement. See Note ~~5 for further discussion of the Tax Sharing Agreement.~~

~~Table of Contents~~

~~TYCO INTERNATIONAL LTD.~~
~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)~~
~~17.    Guarantees (Continued)~~5.
        In addition, Tyco historically provided support in the form of financial and/or performance guarantees to various Covidien and Tyco Electronics operating entities. In connection with the Separation, the Company worked with the guarantee counterparties to cancel or assign these guarantees to Covidien or Tyco Electronics. To the extent these guarantees were not assigned prior to

Table of Contents

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
17.    Guarantees (Continued)

the Separation date, Tyco assumed primary liability on any remaining such support. The ~~estimated fair value of these~~Company's obligations iswere $4 million, which ~~are~~were included in other liabilities on the Company's Consolidated Balance Sheets as of ~~March 26,~~June 25, 2010 and September 25, 2009, respectively, with an offset to shareholders' equity on the Separation date.
        In disposing of assets or businesses, the Company often provides representations, warranties and/or indemnities to cover various risks including, for example, unknown damage to the assets, environmental risks involved in the sale of real estate, liability to investigate and remediate environmental contamination at waste disposal sites and manufacturing facilities and unidentified tax liabilities and legal fees related to periods prior to disposition. The Company has no reason to believe that these uncertainties would have a material adverse effect on the Company's financial position, results of operations or cash flows.
        The Company has recorded liabilities for known indemnifications included as part of environmental liabilities. See Note ~~10 for a discussion of these liabilities.~~10.
        In the normal course of business, the Company is liable for contract completion and product performance. In the opinion of management, such obligations will not significantly affect the Company's financial position, results of operations or cash flows.
        The Company records estimated product warranty costs at the time of sale. The changes in the carrying amount of the Company's warranty accrual from September 25, 2009 to ~~March 26,~~June 25, 2010 were as follows ($ in millions):
Balance as of September 25, 2009
$ 81 $ 79
Warranties issued
17 21
Changes in estimates
(6 ) (9 )
Settlements
(24 ) (32 )
Currency translation
(3 ) (4 )

Balance as of March 26,2010
$ 65
Balance as of June 25, 2010
$ 55

        Warranty accruals for businesses that have met the held for sale criteria are included in liabilities held for sale on the Consolidated Balance Sheets and excluded from the table above. See Note 2.
        In 2001, a division of Safety Products initiated a Voluntary Replacement Program ("VRP") associated with the acquisition of Central Sprinkler. The VRP relates to the replacement of certain O-ring seal sprinkler heads which were originally manufactured by Central Sprinkler prior to Tyco's acquisition. Under this program, the sprinkler heads are being replaced free of charge to property owners. On May 1, 2007, the Consumer Product Safety Commission and the Company announced an August 31, 2007 deadline for filing claims to participate in the VRP. The Company will fulfill all valid claims for replacement of qualifying sprinklers received up to August 31, 2007. Settlements during the quarter and ~~six~~nine months ended ~~March 26,~~June 25, 2010 include cash expenditures of $3$1 million and $7$8 million respectively, related to the VRP. The Company believes the remaining recorded liability is sufficient to cover the cost required to complete the VRP as of ~~March 26,~~June 25, 2010, which is not material.

Table of Contents

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
18.    Tyco International Finance S.A.
        TIFSA, a wholly-owned subsidiary of the Company, has public debt securities outstanding (see Note 8) which are fully and unconditionally guaranteed by Tyco. The following tables present condensed consolidating financial information for Tyco, TIFSA and all other subsidiaries. Condensed financial information for Tyco and TIFSA on a stand-alone basis is presented using the equity method of accounting for subsidiaries.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Quarter Ended ~~March 26,~~June 25, 2010

($ in millions)

Tyco
International
Ltd. Tyco
International
Finance S.A. Other
Subsidiaries Consolidating
Adjustments Total
Tyco
International
Ltd. Tyco
International
Finance S.A. Other
Subsidiaries Consolidating
Adjustments Total
Net revenue
Net revenue
$ — $ — $ 4,169 $ — $ 4,169
Net revenue
$ — $ — $ 4,274 $ — $ 4,274
Cost of product sales and services
Cost of product sales and services
— — 2,659 — 2,659
Cost of product sales and services
— — 2,693 — 2,693
Selling, general and administrative expenses
Selling, general and administrative expenses
5 2 1,101 — 1,108
Selling, general and administrative expenses
2 3 1,158 — 1,163
Restructuring, asset impairment and (gain)/loss on divestitures, net
— — (25 ) — (25 )
Restructuring, asset impairment and divestiture charges, net
Restructuring, asset impairment and divestiture charges, net
— — 43 — 43

Operating (loss) income
(5 ) (2 ) 434 — 427
Operating (loss) income
(2 ) (3 ) 380 — 375
Interest income
Interest income
— — 7 — 7
Interest income
— — 7 — 7
Interest expense
Interest expense
— (74 ) — — (74 )
Interest expense
— (70 ) (1 ) — (71 )
Other income, net
3 — — — 3
Other (expense) income, net
Other (expense) income, net
— (87 ) 2 — (85 )
Equity in net income of subsidiaries
Equity in net income of subsidiaries
658 273 — (931 ) —
Equity in net income of subsidiaries
595 301 — (896 ) —
Intercompany interest and fees
Intercompany interest and fees
(346 ) 155 191 — —
Intercompany interest and fees
(343 ) 86 257 — —

Income from continuing operations before income taxes
310 352 632 (931 ) 363
Income from continuing operations before income taxes
250 227 645 (896 ) 226
Income tax expense
— (22 ) (29 ) — (51 )
Income tax benefit
Income tax benefit
— 22 4 — 26

Income from continuing operations
310 330 603 (931 ) 312
Income from continuing operations
250 249 649 (896 ) 252
Income from discontinued operations, net of income taxes
Income from discontinued operations, net of income taxes
— — — — —
Income from discontinued operations, net of income taxes
4 4 4 (8 ) 4

Net income
310 330 603 (931 ) 312
Net income
254 253 653 (904 ) 256
Less: noncontrolling interest in subsidiaries net income
Less: noncontrolling interest in subsidiaries net income
— — 2 — 2
Less: noncontrolling interest in subsidiaries net income
— — 2 — 2

Net income attributable to Tyco common shareholders
$ 310 $ 330 $ 601 $ (931 ) $ 310
Net income attributable to Tyco common shareholders
$ 254 $ 253 $ 651 $ (904 ) $ 254

Table of Contents

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
18.    Tyco International Finance S.A. (Continued)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Quarter Ended ~~March 27,~~June 26, 2009

($ in millions)

Tyco
International
Ltd. Tyco
International
Finance S.A. Other
Subsidiaries Consolidating
Adjustments Total
Tyco
International
Ltd. Tyco
International
Finance S.A. Other
Subsidiaries Consolidating
Adjustments Total
Net revenue
Net revenue
$ — $ — $ 4,150 $ — $ 4,150
Net revenue
$ — $ — $ 4,152 $ — $ 4,152
Cost of product sales and services
Cost of product sales and services
— — 2,715 — 2,715
Cost of product sales and services
— — 2,677 — 2,677
Selling, general and administrative expenses
Selling, general and administrative expenses
122 5 1,073 — 1,200
Selling, general and administrative expenses
8 (1 ) 1,103 — 1,110
Goodwill and intangible asset impairments
— — 2,705 — 2,705
Restructuring, asset impairment and (gain)/loss on divestitures, net
2 — 82 — 84
Restructuring, asset impairment and divestiture charges, net
Restructuring, asset impairment and divestiture charges, net
— — 31 — 31

Operating loss
(124 ) (5 ) (2,425 ) — (2,554 )
Operating (loss) income
(8 ) 1 341 — 334
Interest income
Interest income
— — 11 — 11
Interest income
— — 9 — 9
Interest expense
Interest expense
— (76 ) (2 ) — (78 )
Interest expense
— (73 ) (1 ) — (74 )
Other income, net
5 2 — — 7
Equity in net loss of subsidiaries
(2,082 ) (2,360 ) — 4,442 —
Other income (expense), net
Other income (expense), net
1 — (1 ) — —
Equity in net income of subsidiaries
Equity in net income of subsidiaries
592 283 — (875 ) —
Intercompany interest and fees
Intercompany interest and fees
(354 ) 38 316 — —
Intercompany interest and fees
(341 ) 33 308 — —

Loss from continuing operations before income taxes
(2,555 ) (2,401 ) (2,100 ) 4,442 (2,614 )
Income from continuing operations before income taxes
244 244 656 (875 ) 269
Income tax benefit
— 14 46 — 60
Income tax benefit (expense)
Income tax benefit (expense)
— 15 (39 ) — (24 )

Loss from continuing operations
(2,555 ) (2,387 ) (2,054 ) 4,442 (2,554 )
Income from continuing operations
244 259 617 (875 ) 245
Loss from discontinued operations, net of income taxes
(12 ) (13 ) (12 ) 25 (12 )
Income from discontinued operations, net of income taxes
Income from discontinued operations, net of income taxes
43 42 43 (85 ) 43

Net loss
(2,567 ) (2,400 ) (2,066 ) 4,467 (2,566 )
Net income
287 301 660 (960 ) 288
Less: noncontrolling interest in subsidiaries net income
Less: noncontrolling interest in subsidiaries net income
— — 1 — 1
Less: noncontrolling interest in subsidiaries net income
— — 1 — 1

Net loss attributable to Tyco common shareholders
$ (2,567 ) $ (2,400 ) $ (2,067 ) $ 4,467 $ (2,567 )
Net income attributable to Tyco common shareholders
$ 287 $ 301 $ 659 $ (960 ) $ 287

Table of Contents

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
18.    Tyco International Finance S.A. (Continued)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the ~~Six~~Nine Months Ended ~~March 26,~~June 25, 2010

($ in millions)

Tyco
International
Ltd. Tyco
International
Finance S.A. Other
Subsidiaries Consolidating
Adjustments Total
Tyco
International
Ltd. Tyco
International
Finance S.A. Other
Subsidiaries Consolidating
Adjustments Total
Net revenue
Net revenue
$ — $ — $ 8,415 $ — $ 8,415
Net revenue
$ — $ — $ 12,523 $ — $ 12,523
Cost of product sales and services
Cost of product sales and services
— — 5,340 — 5,340
Cost of product sales and services
— — 7,912 — 7,912
Selling, general and administrative expenses
Selling, general and administrative expenses
9 3 2,236 — 2,248
Selling, general and administrative expenses
11 6 3,363 — 3,380
Restructuring, asset impairment and (gain)/loss on divestitures, net
— — (14 ) — (14 )
Restructuring, asset impairment and divestiture charges, net
Restructuring, asset impairment and divestiture charges, net
— — 26 — 26

Operating (loss) income
(9 ) (3 ) 853 — 841
Operating (loss) income
(11 ) (6 ) 1,222 — 1,205
Interest income
Interest income
— — 16 — 16
Interest income
— — 24 — 24
Interest expense
Interest expense
— (147 ) (3 ) — (150 )
Interest expense
— (217 ) (4 ) — (221 )
Other income, net
12 — — — 12
Other income (expense), net
Other income (expense), net
12 (87 ) 2 — (73 )
Equity in net income of subsidiaries
Equity in net income of subsidiaries
1,289 582 — (1,871 ) —
Equity in net income of subsidiaries
1,874 873 — (2,747 ) —
Intercompany interest and fees
Intercompany interest and fees
(680 ) 170 510 — —
Intercompany interest and fees
(1,023 ) 256 767 — —

Income from continuing operations before income taxes
612 602 1,376 (1,871 ) 719
Income from continuing operations before income taxes
852 819 2,011 (2,747 ) 935
Income tax expense
— (4 ) (100 ) — (104 )
Income tax benefit (expense)
Income tax benefit (expense)
— 18 (96 ) — (78 )

Income from continuing operations
612 598 1,276 (1,871 ) 615
Income from continuing operations
852 837 1,915 (2,747 ) 857
Income from discontinued operations, net of income taxes
Income from discontinued operations, net of income taxes
— — — — —
Income from discontinued operations, net of income taxes
14 14 14 (28 ) 14

Net income
612 598 1,276 (1,871 ) 615
Net income
866 851 1,929 (2,775 ) 871
Less: noncontrolling interest in subsidiaries net income
Less: noncontrolling interest in subsidiaries net income
— — 3 — 3
Less: noncontrolling interest in subsidiaries net income
— — 5 — 5

Net income attributable to Tyco common shareholders
$ 612 $ 598 $ 1,273 $ (1,871 ) $ 612
Net income attributable to Tyco common shareholders
$ 866 $ 851 $ 1,924 $ (2,775 ) $ 866

Table of Contents

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
18.    Tyco International Finance S.A. (Continued)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the ~~Six~~Nine Months Ended ~~March 27,~~June 26, 2009

($ in millions)

Tyco
International
Ltd. Tyco
International
Finance S.A. Other
Subsidiaries Consolidating
Adjustments Total
Tyco
International
Ltd. Tyco
International
Finance S.A. Other
Subsidiaries Consolidating
Adjustments Total
Net revenue
Net revenue
$ — $ — $ 8,576 $ — $ 8,576
Net revenue
$ — $ — $ 12,560 $ — $ 12,560
Cost of product sales and services
Cost of product sales and services
— — 5,584 — 5,584
Cost of product sales and services
— — 8,129 — 8,129
Selling, general and administrative expenses
Selling, general and administrative expenses
136 5 2,199 — 2,340
Selling, general and administrative expenses
144 4 3,274 — 3,422
Goodwill and intangible asset impairments
Goodwill and intangible asset impairments
— — 2,705 — 2,705
Goodwill and intangible asset impairments
— — 2,705 — 2,705
Restructuring, asset impairment and (gain)/loss on divestitures, net
2 — 86 — 88
Restructuring, asset impairment and divestiture charges, net
Restructuring, asset impairment and divestiture charges, net
2 — 117 — 119

Operating loss
(138 ) (5 ) (1,998 ) — (2,141 )
Operating loss
(146 ) (4 ) (1,665 ) — (1,815 )
Interest income
Interest income
— 1 22 — 23
Interest income
— 1 31 — 32
Interest expense
Interest expense
— (146 ) (5 ) — (151 )
Interest expense
— (219 ) (6 ) — (225 )
Other income, net
Other income, net
5 2 4 — 11
Other income, net
6 2 3 — 11
Equity in net loss of subsidiaries
Equity in net loss of subsidiaries
(1,441 ) (2,027 ) — 3,468 —
Equity in net loss of subsidiaries
(856 ) (1,750 ) — 2,606 —
Intercompany interest and fees
Intercompany interest and fees
(709 ) 69 640 — —
Intercompany interest and fees
(1,050 ) 102 948 — —

Loss from continuing operations before income taxes
(2,283 ) (2,106 ) (1,337 ) 3,468 (2,258 )
Loss from continuing operations before income taxes
(2,046 ) (1,868 ) (689 ) 2,606 (1,997 )
Income tax benefit (expense)
Income tax benefit (expense)
— 34 (58 ) — (24 )
Income tax benefit (expense)
— 49 (96 ) — (47 )

Loss from continuing operations
(2,283 ) (2,072 ) (1,395 ) 3,468 (2,282 )
Loss from continuing operations
(2,046 ) (1,819 ) (785 ) 2,606 (2,044 )
Loss from discontinued operations, net of income taxes
(7 ) (11 ) (7 ) 18 (7 )
Income from discontinued operations, net of income taxes
Income from discontinued operations, net of income taxes
43 37 43 (80 ) 43

Net loss
(2,290 ) (2,083 ) (1,402 ) 3,486 (2,289 )
Net loss
(2,003 ) (1,782 ) (742 ) 2,526 (2,001 )
Less: noncontrolling interest in subsidiaries net income
Less: noncontrolling interest in subsidiaries net income
— — 1 — 1
Less: noncontrolling interest in subsidiaries net income
— — 2 — 2

Net loss attributable to Tyco common shareholders
$ (2,290 ) $ (2,083 ) $ (1,403 ) $ 3,486 $ (2,290 )
Net loss attributable to Tyco common shareholders
$ (2,003 ) $ (1,782 ) $ (744 ) $ 2,526 $ (2,003 )

Table of Contents

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
18.    Tyco International Finance S.A. (Continued)

CONDENSED CONSOLIDATING BALANCE SHEET

As of ~~March 26,~~June 25, 2010

($ in millions)

Tyco
International
Ltd. Tyco
International
Finance S.A Other
Subsidiaries Consolidating
Adjustments Total
Tyco
International
Ltd. Tyco
International
Finance S.A. Other
Subsidiaries Consolidating
Adjustments Total
Assets
Assets

Assets

Current Assets:
Current Assets:

Current Assets:

Cash and cash equivalents
$ 15 $ 1 $ 1,807 $ — $ 1,823

Cash and cash equivalents
$ — $ 5 $ 2,728 $ — $ 2,733
Accounts receivable, net
— — 2,416 — 2,416

Accounts receivable, net
— — 2,460 — 2,460
Inventories
— — 1,417 — 1,417

Inventories
— — 1,464 — 1,464
Intercompany receivables
1,085 74 15,061 (16,220 ) —

Intercompany receivables
1,079 43 15,102 (16,224 ) —
Prepaid expenses and other current assets
97 1 851 — 949

Prepaid expenses and other current assets
81 2 849 — 932
Deferred income taxes
— — 414 — 414

Deferred income taxes
— — 408 — 408
Assets held for sale
213 213 310 (426 ) 310

Total current assets
1,160 50 23,011 (16,224 ) 7,997
Total current assets
1,410 289 22,276 (16,646 ) 7,329
Property, plant and equipment, net
Property, plant and equipment, net
— — 3,501 — 3,501
Property, plant and equipment, net
— — 4,090 — 4,090
Goodwill
Goodwill
— — 8,665 — 8,665
Goodwill
— — 9,388 — 9,388
Intangible assets, net
Intangible assets, net
— — 2,698 — 2,698
Intangible assets, net
— — 3,417 — 3,417
Investment in subsidiaries
Investment in subsidiaries
44,529 15,953 — (60,482 ) —
Investment in subsidiaries
44,789 15,958 — (60,747 ) —
Intercompany loans receivable
Intercompany loans receivable
— 10,286 18,695 (28,981 ) —
Intercompany loans receivable
591 11,299 20,386 (32,276 ) —
Other assets
Other assets
114 298 2,199 — 2,611
Other assets
114 297 2,273 — 2,684

Total Assets
$ 45,803 $ 26,587 $ 58,769 $ (105,687 ) $ 25,472
Total Assets
$ 46,904 $ 27,843 $ 61,830 $ (109,669 ) $ 26,908

Liabilities and Equity
Liabilities and Equity

Liabilities and Equity

Current Liabilities:
Current Liabilities:

Current Liabilities:

Loans payable and current maturities of long-term debt
$ — $ 517 $ 18 $ — $ 535

Loans payable and current maturities of long-term debt
$ — $ 518 $ 18 $ — $ 536
Accounts payable
14 — 1,199 — 1,213

Accounts payable
— — 1,164 — 1,164
Accrued and other current liabilities
422 66 1,982 — 2,470

Accrued and other current liabilities
515 52 1,874 — 2,441
Deferred revenue
— — 644 — 644

Deferred revenue
— — 614 — 614
Intercompany payables
10,487 4,589 1,144 (16,220 ) —

Intercompany payables
10,161 4,951 1,112 (16,224 ) —
Liabilities held for sale
— — 97 — 97

Total current liabilities
10,676 5,521 4,782 (16,224 ) 4,755
Total current liabilities
10,923 5,172 5,084 (16,220 ) 4,959
Long-term debt
Long-term debt
— 3,934 61 — 3,995
Long-term debt
— 3,574 59 — 3,633
Intercompany loans payable
Intercompany loans payable
21,654 81 7,246 (28,981 ) —
Intercompany loans payable
21,290 1,912 9,074 (32,276 ) —
Deferred revenue
Deferred revenue
— — 1,110 — 1,110
Deferred revenue
— — 1,101 — 1,101
Other liabilities
Other liabilities
566 — 2,123 — 2,689
Other liabilities
566 — 2,508 — 3,074

Total Liabilities
32,896 9,536 15,322 (45,205 ) 12,549
Total Liabilities
32,779 10,658 17,826 (48,496 ) 12,767

Tyco Shareholders' Equity:
Tyco Shareholders' Equity:

Tyco Shareholders' Equity:

Preference shares
— — 2,500 (2,500 ) —
Preference shares
— — 2,500 (2,500 ) —

Common shares
2,723 — — — 2,723
Common shares
2,940 — — — 2,940

Common shares held in treasury
— — (165 ) — (165 )
Common shares held in treasury
(250 ) — (143 ) — (393 )

Other shareholders' equity
10,184 17,051 41,096 (57,982 ) 10,349
Other shareholders' equity
11,435 17,185 41,631 (58,673 ) 11,578

Total Tyco Shareholders' Equity
12,907 17,051 43,431 (60,482 ) 12,907
Total Tyco Shareholders' Equity
14,125 17,185 43,988 (61,173 ) 14,125

Noncontrolling interest
— — 16 — 16
Noncontrolling interest
— — 16 — 16

Total Equity
12,907 17,051 43,447 (60,482 ) 12,923
Total Equity
14,125 17,185 44,004 (61,173 ) 14,141

Total Liabilities and Equity
$ 45,803 $ 26,587 $ 58,769 $ (105,687 ) $ 25,472
Total Liabilities and Equity
$ 46,904 $ 27,843 $ 61,830 $ (109,669 ) $ 26,908

Table of Contents

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
18.    Tyco International Finance S.A. (Continued)
CONDENSED CONSOLIDATING BALANCE SHEET

As of September 25, 2009

($ in millions)

Tyco
International
Ltd. Tyco
International
Finance S.A. Other
Subsidiaries Consolidating
Adjustments Total
Tyco
International
Ltd. Tyco
International
Finance S.A. Other
Subsidiaries Consolidating
Adjustments Total
Assets
Assets

Assets

Current Assets:
Current Assets:

Current Assets:

Cash and cash equivalents
$ — $ — $ 2,354 $ — $ 2,354
Cash and cash equivalents
$ — $ — $ 2,354 $ — $ 2,354

Accounts receivable, net
— — 2,629 — 2,629
Accounts receivable, net
— — 2,544 — 2,544

Inventories
— — 1,443 — 1,443
Inventories
— — 1,370 — 1,370

Intercompany receivables
1,069 29 14,646 (15,744 ) —
Intercompany receivables
1,069 29 14,646 (15,744 ) —

Prepaid expenses and other current assets
114 — 858 — 972
Prepaid expenses and other current assets
114 — 849 — 963

Deferred income taxes
— — 413 — 413
Deferred income taxes
— — 405 — 405

Assets held for sale
— — 156 — 156
Assets held for sale
127 127 404 (254 ) 404

Total current assets
1,183 29 22,499 (15,744 ) 7,967
Total current assets
1,310 156 22,572 (15,998 ) 8,040
Property, plant and equipment, net
Property, plant and equipment, net
— — 3,497 — 3,497
Property, plant and equipment, net
— — 3,437 — 3,437
Goodwill
Goodwill
— — 8,791 — 8,791
Goodwill
— — 8,791 — 8,791
Intangible assets, net
Intangible assets, net
— — 2,647 — 2,647
Intangible assets, net
— — 2,643 — 2,643
Investment in subsidiaries
Investment in subsidiaries
43,490 16,071 — (59,561 ) —
Investment in subsidiaries
43,358 15,939 — (59,297 ) —
Intercompany loans receivable
Intercompany loans receivable
— 9,765 18,695 (28,460 ) —
Intercompany loans receivable
— 9,765 18,695 (28,460 ) —
Other assets
Other assets
96 303 2,252 — 2,651
Other assets
96 303 2,243 — 2,642

Total Assets
$ 44,769 $ 26,168 $ 58,381 $ (103,765 ) $ 25,553
Total Assets
$ 44,764 $ 26,163 $ 58,381 $ (103,755 ) $ 25,553

Liabilities and Equity
Liabilities and Equity

Liabilities and Equity

Current Liabilities:
Current Liabilities:

Current Liabilities:

Loans payable and current maturities of long-term debt
$ — $ 200 $ 45 $ — $ 245
Loans payable and current maturities of long-term debt
$ — $ 200 $ 45 $ — $ 245

Accounts payable
— — 1,244 — 1,244
Accounts payable
— — 1,198 — 1,198

Accrued and other current liabilities
338 54 2,084 — 2,476
Accrued and other current liabilities
338 54 2,046 — 2,438

Deferred revenue
— — 590 — 590
Deferred revenue
— — 588 — 588

Intercompany payables
9,476 5,177 1,091 (15,744 ) —
Intercompany payables
9,476 5,177 1,091 (15,744 ) —

Liabilities held for sale
5 5 161 (10 ) 161
Liabilities held for sale
— — 277 — 277

Total current liabilities
9,819 5,436 5,215 (15,754 ) 4,716
Total current liabilities
9,814 5,431 5,245 (15,744 ) 4,746
Long-term debt
Long-term debt
— 3,951 78 — 4,029
Long-term debt
— 3,951 78 — 4,029
Intercompany loans payable
Intercompany loans payable
21,450 80 6,930 (28,460 ) —
Intercompany loans payable
21,450 80 6,930 (28,460 ) —
Deferred revenue
Deferred revenue
— — 1,134 — 1,134
Deferred revenue
— — 1,133 — 1,133
Other liabilities
Other liabilities
559 — 2,161 — 2,720
Other liabilities
559 — 2,132 — 2,691

Total Liabilities
31,828 9,467 15,518 (44,214 ) 12,599
Total Liabilities
31,823 9,462 15,518 (44,204 ) 12,599

Tyco Shareholders' Equity:
Tyco Shareholders' Equity:

Tyco Shareholders' Equity:

Preference shares
— — 2,500 (2,500 ) —
Preference shares
— — 2,500 (2,500 ) —

Common shares
3,122 — — — 3,122
Common shares
3,122 — — — 3,122

Common shares held in treasury
— — (214 ) — (214 )
Common shares held in treasury
— — (214 ) — (214 )

Other shareholders' equity
9,819 16,701 40,564 (57,051 ) 10,033
Other shareholders' equity
9,819 16,701 40,564 (57,051 ) 10,033

Total Tyco Shareholders' Equity
12,941 16,701 42,850 (59,551 ) 12,941
Total Tyco Shareholders' Equity
12,941 16,701 42,850 (59,551 ) 12,941

Noncontrolling interest
— — 13 — 13
Noncontrolling interest
— — 13 — 13

Total Equity
12,941 16,701 42,863 (59,551 ) 12,954
Total Equity
12,941 16,701 42,863 (59,551 ) 12,954

Total Liabilities and Equity
$ 44,769 $ 26,168 $ 58,381 $ (103,765 ) $ 25,553
Total Liabilities and Equity
$ 44,764 $ 26,163 $ 58,381 $ (103,755 ) $ 25,553

Table of Contents

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
18.    Tyco International Finance S.A. (Continued)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the ~~Six~~Nine Months Ended ~~March 26,~~June 25, 2010

($ in millions)

Tyco
International
Ltd. Tyco
International
Finance S.A. Other
Subsidiaries Consolidating
Adjustments Total
Tyco
International
Ltd. Tyco
International
Finance S.A. Other
Subsidiaries Consolidating
Adjustments Total
Cash Flows From Operating Activities:
Cash Flows From Operating Activities:

Cash Flows From Operating Activities:

Net cash (used in) provided by operating activities
$ (54 ) $ (670 ) $ 2,391 $ — $ 1,667

Net cash (used in) provided by operating activities
$ (13 ) $ (330 ) $ 1,354 $ — $ 1,011
Net cash provided by discontinued operating activities
— — 12 — 12
Cash Flows From Investing Activities:
Cash Flows From Investing Activities:

Cash Flows From Investing Activities:

Capital expenditures
Capital expenditures
— — (335 ) — (335 )
Capital expenditures
— — (512 ) — (512 )
Proceeds from disposal of assets
Proceeds from disposal of assets
— — 19 — 19
Proceeds from disposal of assets
— — 26 — 26
Acquisition of businesses, net of cash acquired
Acquisition of businesses, net of cash acquired
— — (152 ) — (152 )
Acquisition of businesses, net of cash acquired
— — (600 ) — (600 )
Accounts purchased by ADT
Accounts purchased by ADT
— — (266 ) — (266 )
Accounts purchased by ADT
— — (400 ) — (400 )
Divestiture of businesses, net of cash retained
Divestiture of businesses, net of cash retained
— — 28 — 28
Divestiture of businesses, net of cash retained
— — 26 — 26
Net increase in intercompany loans
— (410 ) — 410 —
(Increase) decrease in investment in subsidiaries
(2 ) 457 — (455 ) —
Net decrease in intercompany loans
Net decrease in intercompany loans
— 378 — (378 ) —
Decrease (increase) in investment in subsidiaries
Decrease (increase) in investment in subsidiaries
913 457 (1,500 ) 130 —
Other
Other
— — 11 — 11
Other
— — 16 — 16

Net cash (used in) provided by investing activities
(2 ) 47 (695 ) (45 ) (695 )
Net cash provided by (used in) in investing activities
913 835 (2,944 ) (248 ) (1,444 )

Net cash used in discontinued investing activities
— — (7 ) — (7 )
Cash Flows From Financing Activities:
Cash Flows From Financing Activities:

Cash Flows From Financing Activities:

Net borrowings (repayments) of debt
— 291 (45 ) — 246
Net repayments of debt
Net repayments of debt
— (158 ) (45 ) — (203 )
Proceeds from exercise of share options
Proceeds from exercise of share options
— — 9 — 9
Proceeds from exercise of share options
— — 33 — 33
Dividends paid
Dividends paid
(214 ) — — — (214 )
Dividends paid
(311 ) — — — (311 )
Net intercompany loan borrowings
204 — 206 (410 ) —
Decrease in equity from parent
— — (455 ) 455 —
Repurchase of common shares by treasury
Repurchase of common shares by treasury
(250 ) — (26 ) — (276 )
Net intercompany loan repayments
Net intercompany loan repayments
(301 ) — (77 ) 378 —
Increase in equity from parent
Increase in equity from parent
— — 130 (130 ) —
Transfer from discontinued operations
Transfer from discontinued operations
— — 5 — 5
Other
Other
25 (3 ) (1 ) — 21
Other
18 (6 ) (1 ) — 11

Net cash (used in) provided by financing activities
(844 ) (164 ) 19 248 (741 )

Net cash provided by (used in) financing activities
15 288 (286 ) 45 62
Net cash used in discontinued financing activities
— — (5 ) — (5 )
Effect of currency translation on cash
Effect of currency translation on cash
— — 1 — 1
Effect of currency translation on cash
— — (13 ) — (13 )

Net increase in cash and cash equivalents
— 5 374 — 379
Net increase (decrease) in cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
15 1 (547 ) — (531 )
Cash and cash equivalents at beginning of period
Cash and cash equivalents at beginning of period
— — 2,354 — 2,354
Cash and cash equivalents at beginning of period
— — 2,354 — 2,354

Cash and cash equivalents at end of period
Cash and cash equivalents at end of period
$ — $ 5 $ 2,728 $ — $ 2,733
Cash and cash equivalents at end of period
$ 15 $ 1 $ 1,807 $ — $ 1,823

Table of Contents

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
18.    Tyco International Finance S.A. (Continued)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the ~~Six~~Nine Months Ended ~~March 27,~~June 26, 2009

($ in millions)

Tyco
International
Ltd. Tyco
International
Finance S.A. Other
Subsidiaries Consolidating
Adjustments Total
Tyco
International
Ltd. Tyco
International
Finance S.A. Other
Subsidiaries Consolidating
Adjustments Total
Cash Flows From Operating Activities:
Cash Flows From Operating Activities:

Cash Flows From Operating Activities:

Net cash provided by (used in) operating activities
$ 9 $ (511 ) $ 1,284 $ — $ 782
Net cash (used in) provided by operating activities
$ (61 ) $ (334 ) $ 1,818 $ — $ 1,423

Net cash used in discontinued operating activities
— — (13 ) — (13 )
Net cash provided by discontinued operating activities
— — 12 — 12
Cash Flows From Investing Activities:
Cash Flows From Investing Activities:

Cash Flows From Investing Activities:

Capital expenditures
Capital expenditures
— — (331 ) — (331 )
Capital expenditures
— — (494 ) — (494 )
Proceeds from disposal of assets
Proceeds from disposal of assets
— — 4 — 4
Proceeds from disposal of assets
— — 5 — 5
Acquisition of businesses, net of cash acquired
Acquisition of businesses, net of cash acquired
— — (47 ) — (47 )
Acquisition of businesses, net of cash acquired
— — (47 ) — (47 )
Accounts purchased by ADT
Accounts purchased by ADT
— — (231 ) — (231 )
Accounts purchased by ADT
— — (361 ) — (361 )
Divestiture of businesses, net of cash retained
Divestiture of businesses, net of cash retained
— — 8 — 8
Divestiture of businesses, net of cash retained
— — 11 — 11
Net increase in intercompany loans
Net increase in intercompany loans
— (864 ) — 864 —
Net increase in intercompany loans
— (1,044 ) — 1,044 —
(Increase) decrease in investment in subsidiaries
(Increase) decrease in investment in subsidiaries
(18 ) 1,352 — (1,334 ) —
(Increase) decrease in investment in subsidiaries
(18 ) 1,352 — (1,334 ) —
Other
Other
— — (6 ) — (6 )
Other
— — 31 — 31

Net cash (used in) provided by investing activities
(18 ) 488 (603 ) (470 ) (603 )
Net cash (used in) provided by investing activities
(18 ) 308 (855 ) (290 ) (855 )

Net cash provided by discontinued investing activities
— — 32 — 32
Net cash provided by discontinued investing activities
— — 35 — 35
Cash Flows From Financing Activities:
Cash Flows From Financing Activities:

Cash Flows From Financing Activities:

Net borrowings (repayments) of debt
Net borrowings (repayments) of debt
— 25 (45 ) — (20 )
Net borrowings (repayments) of debt
— 28 (45 ) — (17 )
Proceeds from exercise of share options
Proceeds from exercise of share options
— — 1 — 1
Proceeds from exercise of share options
— — 1 — 1
Dividends paid
Dividends paid
(189 ) — — — (189 )
Dividends paid
(287 ) — — — (287 )
Repurchase of common shares by subsidiary
Repurchase of common shares by subsidiary
— — (3 ) — (3 )
Repurchase of common shares by subsidiary
— — (3 ) — (3 )
Net intercompany loan borrowings
Net intercompany loan borrowings
197 — 667 (864 ) —
Net intercompany loan borrowings
365 — 679 (1,044 ) —
Decrease in equity from parent
Decrease in equity from parent
— — (1,334 ) 1,334 —
Decrease in equity from parent
— — (1,334 ) 1,334 —
Transfer from discontinued operations
Transfer from discontinued operations
— — 19 — 19
Transfer from discontinued operations
— — 47 — 47
Other
Other
— (3 ) (2 ) — (5 )
Other
— (3 ) 4 — 1

Net cash provided by (used in) financing activities
8 22 (697 ) 470 (197 )
Net cash provided by (used in) financing activities
78 25 (651 ) 290 (258 )

Net cash used in discontinued financing activities
— — (19 ) — (19 )
Net cash used in discontinued financing activities
— — (47 ) — (47 )
Effect of currency translation on cash
Effect of currency translation on cash
— — (82 ) — (82 )
Effect of currency translation on cash
— — (50 ) — (50 )

Net decrease in cash and cash equivalents
(1 ) (1 ) (98 ) — (100 )
Net (decrease) increase in cash and cash equivalents
Net (decrease) increase in cash and cash equivalents
(1 ) (1 ) 262 — 260
Cash and cash equivalents at beginning of period
Cash and cash equivalents at beginning of period
1 1 1,517 — 1,519
Cash and cash equivalents at beginning of period
1 1 1,517 — 1,519

Cash and cash equivalents at end of period
Cash and cash equivalents at end of period
$ — $ — $ 1,419 $ — $ 1,419
Cash and cash equivalents at end of period
$ — $ — $ 1,779 $ — $ 1,779

19.    Subsequent Events
        On ~~April 12,~~July 29, 2010, ~~Standard & Poor's Rating Services raised~~ the ~~Company's long-term debt rating~~Company entered into a definitive agreement to ~~A- from BBB+.~~sell its European water business. The Company has not obtained all of the necessary regulatory approvals to transfer the legal ownership, which are expected to be received during the fourth quarter of fiscal 2010.
        ~~On April 22,~~Since June 25, 2010, the Company repurchased approximately 8.2 million common shares for $299 million under the $1.0 billion share repurchase program approved by the Board of Directors approved a plan to pursue a tax-free spin-off of Tyco's Electrical and Metal Products business. The proposed transaction is expected to be structured as a tax-free distribution to Tyco shareholders, and is subject to a number of conditions including completion of a review process by the Securities and Exchange Commission, final approval by the Tyco Board of Directors and approval by Tyco shareholders. Tyco expects to complete the proposed transaction in ~~the first half of fiscal 2011.~~July 2008.

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Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations
        The following discussion and analysis of the Company's financial condition and results of operations should be read together with our Consolidated Financial Statements and the related notes included in this Quarterly Report. The Company does not believe that its historical operating results will be indicative of future operating results. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. The Company's actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including but not limited to those under the headings "Risk Factors" and "Forward-Looking Information."
Introduction
        The unaudited Consolidated Financial Statements include the consolidated results of Tyco International Ltd., a company organized under the laws of Switzerland, and its subsidiaries (hereinafter collectively referred to as "we," the "Company" or "Tyco"). The financial statements have been prepared in United States dollars ("USD"), in accordance with accounting principles generally accepted in the United States ("GAAP").
        The Company operates in the following business segments:
•
ADT Worldwide designs, sells, installs, services and monitors electronic security systems for residential, commercial, industrial and governmental customers. In addition, ADT Worldwide manufactures certain products related to retailer anti-theft systems.

•
Flow Control designs, manufactures, sells and services valves, pipes, fittings, valve automation and heat tracing products for the oil, gas and other energy markets along with general process industries and the water and wastewater markets.

•
Fire Protection Services designs, sells, installs and services fire detection and fire suppression systems for commercial, industrial and governmental customers.

•
Electrical and Metal Products designs, manufactures and sells galvanized steel tubing, armored wire and cable and other metal products for non-residential construction, electrical, fire and safety and mechanical customers.

•
Safety Products designs, manufactures and sells fire suppression, electronic, security and life safety products, including fire suppression products, breathing apparatus, intrusion security, access control and video management systems. In addition, Safety Products manufactures products installed and serviced by ADT Worldwide and Fire Protection Services.
        We also provide general corporate services to our segments and these costs are reported as Corporate and Other.
        On May 14, 2010, we acquired all of the outstanding equity of Brink's Home Security Holdings, Inc. ("BHS" or "Broadview Security") in a cash-and-stock transaction valued at approximately $2.0 billion, with $585 million in cash being used to fund the acquisition. Broadview Security is being integrated into the Company's ADT Worldwide segment. Broadview Security's core business is to provide security alarm monitoring services for residential and commercial properties in North America. It has a large residential recurring customer base, which is expected to expand ADT's presence in the North American residential security business. Broadview Security is also a leader in technologies and services which are expected to enhance ADT Worldwide's service offerings to its customers. In connection with the integration of Broadview Security into the ADT Worldwide segment, the Broadview Security brand will be discontinued, and we expect to realize cost savings and other

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synergies through operational efficiencies including consolidation of both marketing and general and administrative functions.
��       During the quarter and nine months ended June 25, 2010, Broadview Security had an immaterial impact on our results of operations, as it contributed approximately $54 million to consolidated net revenue and a loss from continuing operations of $26 million. The Company has incurred approximately $14 million and $17 million of costs directly related to the acquisition during the quarter and nine months ended June 25, 2010. In addition, the Company recorded $10 million and $11 million of integration costs during the quarter and nine months ended June 25, 2010, respectively. Both acquisition and integration costs have been recorded within selling, general and administrative expenses in the Company's Consolidated Statement of Operations for the quarter and nine months ended June 25, 2010. The Company's ADT Worldwide segment recorded $24 million and $25 million of acquisition and integration costs for the quarter and nine months ended June 25, 2010, respectively. The Company's Corporate and Other segment recorded nil and $3 million of acquisition costs for the quarter and nine months ended June 25, 2010, respectively. In addition, the Company's ADT Worldwide segment recorded $13 million of restructuring expenses, which have been recorded within restructuring, asset impairments and divestiture charges, net in the Company's Consolidated Statement of Operations for the quarter and nine months ended June 25, 2010.
        Also, on April 27, 2010, we announced our intention to pursue a tax-free spin-off of our Electrical and Metal Products business. The transaction is subject to a number of uncertainties and conditions, but is expected to be completed in the first half of fiscal 2011, at which time the business would be an independent, publicly traded U.S. company. Pending completion of the spin-off, the Electrical and Metal Products business is presented in continuing operations.
References to the segment data are to the Company's continuing operations. Certain prior period amounts have been reclassified to conform with the current period presentation. Specifically, the Company has reclassified certain businesses which have satisfied the criteria to be presented as discontinued operations to income from discontinued operations in the Consolidated Statements of Operations and assets and liabilities held for sale within the Consolidated Balance Sheets. See Note 2 to the Consolidated Financial Statements. Additionally, the Company has realigned certain business operations during the first quarter of fiscal 2010 resulting in prior period segment amounts being recast. See Note 14 to the Consolidated Financial Statements.
Overview
        Net revenue increased ~~$19~~$122 million, or ~~0.5%~~2.9%, for the quarter ended ~~March 26,~~June 25, 2010 as compared to the quarter ended ~~March 27,~~June 26, 2009. The increase in revenue for the quarter ended ~~March 26,~~June 25, 2010 was primarily driven by ~~favorable changes~~recurring revenue growth in our ADT Worldwide segment. Higher selling prices for steel and armored cable products in our Electrical and Metal Products also contributed to the increase in net revenue. Changes in foreign currency exchange rates of ~~$275~~$102 million favorably impacted net revenue as the U.S. dollar weakened against most major ~~currencies as nearly~~currencies. Nearly 50% of our net revenue is generated outside the

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United States. The increase in net revenue was partially offset by reduced volume, primarily in the valves business within our Flow Control ~~segment and~~segment. Furthermore, continued weakness in commercial markets ~~which~~ negatively impacted our ADT Worldwide and Fire Protection Services ~~and Safety Products segments.~~segments, which declined at a slower rate than the same period in the prior year. Service revenue, which is principally derived from our ADT Worldwide and Fire Protection Services businesses, remained relatively flat ~~sequentially and grew compared to the same period in the prior year. Service revenue,~~ as a percentage of our overall revenue ~~was~~at 41% for the quarter ended ~~March 26,~~June 25, 2010.
        Net revenue for the ~~six~~nine months ended ~~March 26,~~June 25, 2010 decreased ~~$161~~$37 million, or ~~1.9%~~0.3%, as compared to the ~~six~~nine months ended ~~March 27,~~June 26, 2009. The net revenue decrease ~~in revenue for the six months ended March 26, 2010 was driven~~ primarily ~~by lower selling prices of steel products in our Electrical and Metal Products segment, reduced volume in our Flow Control segment and~~related to weakness in the commercial ~~markets, which negatively impacted~~end market in our ADT Worldwide, Fire Protection and Safety Products ~~segments. Service~~

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segments and reduced volume in the valves business within our Flow Control segment. Although net revenue decreased, service revenue grew as a percentage of our overall revenue to 41% for the ~~six~~nine months ended ~~March 26,~~June 25, 2010 as compared to the same period in the prior year. Partially offsetting the net revenue ~~decrease~~decreases were favorable changes in foreign currency exchange rates of ~~$539~~$627 million for the ~~six~~nine months ended ~~March 26,~~June 25, 2010 as the U.S. dollar weakened against most major currencies.
        Operating income for the quarter and ~~six~~nine months ended ~~March 26,~~June 25, 2010 was ~~$427~~$375 million and ~~$841 million,~~$1.2 billion, respectively, compared to an operating income of $334 million and an operating loss of ~~$2.6 billion and $2.1~~$1.8 billion for the quarter and ~~six~~nine months ended ~~March 27, 2009.~~June 26, 2009, respectively. Operating income in 2009 was negatively affected by goodwill and intangible asset impairment charges of approximately $2.7 billion ~~recorded during the quarter ended March 27, 2009~~ as well as legacy legal settlement charges of approximately ~~$102 and $110~~$109 million for the ~~quarter and six~~nine months ended ~~March 27,~~June 26, 2009. Operating income in 2010 was favorably impacted by efficiencies gained from cost containment actions taken ~~by us~~ in fiscal 2010 and 2009 and ~~2008 as well as~~ restructuring actions taken in prior years. Restructuring and asset impairment charges ~~declined from $104 million and $109~~increased to $41 million for the quarter ended June 25, 2010 compared to $32 million during the quarter ended June 26, 2009. Restructuring and ~~six~~asset impairment charges decreased to $70 million during the nine months ended ~~March 27, 2009, respectively, to $21~~June 25, 2010 from $141 million ~~and $32 million for~~during the ~~quarter and six~~nine months ended ~~March~~June 26, ~~2010, respectively. In addition, operating~~2009. Operating income for the quarter and ~~six~~nine months ended ~~March 26,~~June 25, 2010 was unfavorably impacted by a net loss on divestitures of $1 million and favorably impacted by net gains on divestitures of ~~approximately $45 million and $44~~$43 million, respectively, as compared to ~~a $1~~losses on divestitures of $3 million ~~gain~~ and $1$5 million ~~loss on divestitures~~ for the quarter and ~~six~~nine months ended ~~March 27,~~June 26, 2009, respectively. ~~Also, lower volumes across all~~We also incurred acquisition and integration charges of ~~our segments in~~$24 million and $28 million for the quarter and ~~six~~nine months ended ~~March 26,~~June 25, 2010, ~~negatively impacted operating income as compared~~respectively, related to ~~the same periods in the prior year.~~our acquisition of Broadview Security on May 14, 2010. Changes in foreign currency exchange rates favorably impacted operating income by ~~$36~~$8 million and ~~$70~~$78 million for the quarter and ~~six~~nine months ended ~~March 26,~~June 25, 2010, respectively.
        As of ~~March 26,~~June 25, 2010, our cash balance was ~~$2.7~~$1.8 billion, as compared to $2.4 billion as of September 25, 2009. ~~The increase was primarily due to~~We generated approximately $1.7 billion of cash ~~flow generated~~ from operating activities, ~~of approximately $1.0 billion and proceeds of $498 million received from the issuance of long-term debt partially~~which was more than offset ~~by $753~~by: $600 million of cash used for acquisitions net of cash acquired, primarily related to our acquisition of Broadview Security described above; accounts purchased by ADT and capital expenditures of $912 million; $276 million to repurchase our common shares under our existing $1.0 billion share repurchase program approved by our board of directors on July 10, 2008; and the net debt repayment of ~~$243 million of short-term debt.~~$203 million. We expect to continue to use our cash to fund internal growth opportunities, improve productivity across all of our businesses, make acquisitions that strategically fit within our ADT Worldwide, Fire Protection Services and Flow Control businesses and return capital to shareholders. ~~In fiscal 2010, we expect to use up to approximately $600 million of cash to fund the acquisition of Brink's Home Security Holdings, Inc. ("BHS"), as described below.~~
        On January 18, 2010, we entered into a definitive agreement to acquire BHS, now operating as Broadview Security, for approximately $2.0 billion or $42.50 per share. The acquisition is expected to be financed with cash of up to approximately $600 million and the issuance of Tyco common shares. The transaction has been unanimously approved by the board of directors of each company. The transaction is expected to close shortly after the special meeting of BHS shareholders scheduled for May 12, 2010 assuming all closing conditions are met or waived. Following the closing of the transaction, we intend to combine BHS with our ADT Worldwide segment.

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        In 2010, we also expect to continue our portfolio refinement efforts by exiting areas that have not provided, and are not expected to provide, an adequate return on investment and take advantage of restructuring opportunities that are expected to provide ~~significant~~ future cost savings. During the quarter and ~~six~~nine months ended ~~March 26,~~June 25, 2010, we incurred approximately ~~$21~~$41 million and ~~$32~~$70 million of restructuring and asset impairment charges, respectively. We expect to incur total restructuring and restructuring related charges of approximately $100 ~~million to $150~~ million in fiscal 2010.
        We continue to assess the strategic fit of our various businesses and are considering additional divestitures where businesses do not align with our long term vision. We will explore a number of strategic alternatives for under-performing or non-strategic businesses, including divestiture. As part of our portfolio refinement efforts, we sold our french security business, which was part of our ADT Worldwide segment, resulting in a pre-tax gain of $53 million for the quarter ended March 26, 2010. The gain and results of operations of the french security business were presented in continuing operations as the criteria for discontinued operations had not been met. Additionally, during the quarter ended June 25, 2010, our board of directors approved a plan to sell our water business in Europe, which is part of our Flow Control segment. The business met the held for sale and

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discontinued operations criteria and has been included in discontinued operations for all periods presented. We expect to complete the sale during the fourth quarter of 2010.
Goodwill and Intangible Asset Impairments
        Annually, in the fiscal fourth quarter, and more frequently if triggering events occur, the Company tests goodwill and indefinite-lived intangible assets for impairment by comparing the fair value of each reporting unit or indefinite-lived intangible assets with its carrying amount.
        As discussed above, the operating loss for the ~~three and six~~nine months ended ~~March 27,~~June 26, 2009 included an aggregate pre-tax goodwill and intangible asset impairment charge of approximately $2.7 billion. During the first half of 2009, we experienced a decline in revenue in our ADT Worldwide, Fire Protection Services and Safety Products segments as a result of a slowdown in the commercial markets, including the retailer end market as well as a decline in sales volume primarily due to the downturn in the non-residential construction market at our Electrical and Metal Products segment. We determined that these events and changes in circumstances, along with downward revisions to forecasted results, restructuring actions and weaker industry outlooks, constituted triggering events for the following six reporting units: EMEA Security and EMEA Fire reporting units within the ADT Worldwide and Fire Protection Services segments, respectively, Electrical and Metal Products reporting unit within the Electrical and Metal Products segment and Access Control and Video Systems ("ACVS"), Life Safety and Sensormatic Retail Solutions ("SRS") reporting units within the Safety Products segment. Furthermore, we determined that certain indefinite-lived intangible assets required impairment testing based on the events and changes in circumstances described as well as the continued deterioration of the business environment related to the retailer end market of our ADT Worldwide and Safety Products segments. As a result of the triggering events, we performed long-lived asset, goodwill and intangible asset impairment tests for these reporting units and certain of our trade names and franchise rights.
        Fair value of each reporting unit was determined utilizing a discounted cash flow analysis based on our forecast cash flows and revenue and operating income growth rates discounted ~~used~~using an estimated weighted-average cost of capital for market participants. In determining fair value, management relied on and considered a number of factors, including operating results, business plans, economic projections including expectations and assumptions regarding the timing and degree of any economic recovery, anticipated cash flow forecasts, comparable market transactions (to the extent available), other market data, and our overall market capitalization. Our estimated future cash flows (including estimated underlying revenue and operating income growth rates) and weighted-average cost of capital were the primary assumptions resulting in the carrying values of certain reporting units to exceed their respective fair values. Based on the factors described above, actual and anticipated reductions in demand for the reporting unit's products and services as well as increased risk due to economic uncertainty, the estimates of future cash flows used in the second quarter of 2009 discounted cash flow analyses were revised downward from the most recent test conducted during the fiscal fourth quarter of

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2008. Furthermore, the range of the weighted-average cost of capital utilized was increased to reflect increased risk due to current economic volatility and uncertainties related to demand for our products and services. The results of the goodwill impairment tests indicated that the implied goodwill amount was less than the carrying amount of goodwill for each of the aforementioned reporting units. We recorded an aggregate non-cash impairment charge of $2.6 billion ($2.6 billion after-tax) during the second quarter of 2009. The non-cash impairment charge was recorded in goodwill and intangible asset impairments in the Consolidated Statements of Operations for the quarter ended March 27, 2009.
        Indefinite-lived intangible assets consisting primarily of trade names are tested for impairment using either a relief from royalty method or excess earnings method. In determining the fair value of our indefinite-lived intangible assets, management relied on and considered a number of factors, including the selection of discount rates, royalty rates and terminal year growth rate assumptions,

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economic projections including expectations and assumptions regarding the timing and degree of any economic recovery and estimates of the amount and timing of future cash flows attributable to the underlying intangible assets. Based on the factors described above, actual and anticipated reductions in demand as well as increased risk due to economic uncertainty, the estimates of future cash flows used in determining the fair value of our Safety Products segment Sensormatic tradename as well as certain ADT Worldwide segment franchise rights were revised downward relative to the estimates used in the tests during the fourth quarter of 2008. Furthermore, the range of the discount rates utilized was increased to reflect increased risk due to current economic volatility and uncertainties related to demand for our products and services. The results of the impairment test indicated that the Safety Products Sensormatic tradename and ADT Worldwide franchise rights estimated fair values were less than their respective carrying amounts. As a result, we recorded an aggregate non-cash impairment charge of $64 million ($40 million after-tax) during the second quarter of 2009. The non-cash impairment charge was recorded in goodwill and intangible asset impairments in the Consolidated Statements of Operations for the quarter ended March 27, 2009.

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Operating Results

For the Quarters Ended For the Six Months Ended For the
Quarters Ended For the Nine
Months Ended

March 26,
2010 March 27,
2009 March 26,
2010 March 27,
2009 June 25,
2010 June 26,
2009 June 25,
2010 June 26,
2009
Revenue from product sales
$ 2,469 $ 2,518 $ 4,997 $ 5,286 $ 2,532 $ 2,454 $ 7,366 $ 7,576
Service revenue
1,700 1,632 3,418 3,290 1,742 1,698 5,157 4,984

Net revenue
$ 4,169 $ 4,150 $ 8,415 $ 8,576 $ 4,274 $ 4,152 $ 12,523 $ 12,560

Operating income (loss)
$ 427 $ (2,554 ) $ 841 $ (2,141 ) $ 375 $ 334 $ 1,205 $ (1,815 )
Interest income
7 11 16 23 7 9 24 32
Interest expense
(74 ) (78 ) (150 ) (151 ) (71 ) (74 ) (221 ) (225 )
Other income, net
3 7 12 11
Other (expense) income, net
(85 ) — (73 ) 11

Income (loss) from continuing operations before income taxes
363 (2,614 ) 719 (2,258 ) 226 269 935 (1,997 )
Income tax (expense) benefit
(51 ) 60 (104 ) (24 )
Income tax benefit (expense)
26 (24 ) (78 ) (47 )

Income (loss) from continuing operations
312 (2,554 ) 615 (2,282 ) 252 245 857 (2,044 )
Loss from discontinued operations, net of income taxes
— (12 ) — (7 )
Income from discontinued operations, net of income taxes
4 43 14 43

Net income (loss)
$ 312 $ (2,566 ) $ 615 $ (2,289 ) $ 256 $ 288 $ 871 $ (2,001 )
Less: Noncontrolling interest in subsidiaries net income
2 1 3 1 2 1 5 2

Net income (loss) attributable to Tyco common shareholders
$ 310 $ (2,567 ) $ 612 $ (2,290 ) $ 254 $ 287 $ 866 $ (2,003 )

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Quarter Ended ~~March 26,~~June 25, 2010 Compared to Quarter Ended ~~March 27,~~June 26, 2009
ADT Worldwide
        Net revenue, ~~goodwill and intangible asset impairments,~~ operating income ~~(loss)~~ and operating margin for ADT Worldwide were as follows ($ in millions):

For the Quarters Ended
For the Quarters Ended

March 26,
2010 March 27,
2009 % Change June 25,
2010 June 26,
2009 % Change
Revenue from product sales
$ 557 $ 537 3.7% ⁽¹⁾ $ 585 $ 533 9.8% ⁽¹⁾
Service revenue
1,210 1,168 3.6% ⁽¹⁾ 1,239 1,208 2.6% ⁽¹⁾

Net revenue
$ 1,767 $ 1,705 3.6 % $ 1,824 $ 1,741 4.8 %

Goodwill and intangible asset impairments
$ — $ 1,023 — ⁽²⁾
Operating income (loss)
$ 305 $ (867 ) — ⁽²⁾
Operating income
$ 222 $ 220 0.9 %
Operating margin
17.3 % — ⁽²⁾ 12.2 % 12.6 %
⁽¹⁾
As discussed in Note 1 to the Consolidated Financial Statements, revenue related to the sale of electronic tags and labels has been classified as revenue from product sales during the quarter ended ~~March 26,~~June 25, 2010. During the quarter ended ~~March 27,~~June 26, 2009, the sale of the electronic tags and labels ~~were~~was misclassified as service revenue. The service revenue and revenue from product sales during the quarter ended ~~March 27,~~June 26, 2009 have not been changed for this misclassification, as the effect is not material. The impact of the misclassification in the first, second, third and fourth quarters of fiscal 2009 would have been to decrease service revenue by $77 million, $65 million, $73 million and $71 million, respectively, with corresponding increases to revenue from product sales.

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⁽²⁾
~~Certain operating margins and percentages have not been presented as management believes such calculations are not meaningful.~~
        Revenue from product sales includes sales and installation of electronic security and other life safety systems as well as products related to retailer anti-theft systems. Service revenue is comprised of electronic security services and maintenance, including the monitoring of burglar alarms, fire alarms and other life safety systems as well as other security services.
        Net revenue by geographic area for ADT Worldwide was as follows ($ in millions):

For the Quarters Ended
For the Quarters Ended

March 26,
2010 March 27,
2009 % Change June 25,
2010 June 26,
2009 % Change
North America
$ 1,033 $ 1,031 0.2 % $ 1,123 $ 1,035 8.5 %
Europe, Middle East and Africa ("EMEA")
446 446 — % 397 459 (13.5 )%
Rest of World
288 228 26.3 % 304 247 23.1 %

$ 1,767 $ 1,705 3.6 % $ 1,824 $ 1,741 4.8 %

        Net revenue for ADT Worldwide increased ~~$62~~$83 million, or ~~3.6%~~4.8%, during the quarter ended ~~March 26,~~June 25, 2010, as compared to the quarter ended ~~March 27,~~June 26, 2009. ~~Net~~The increase in net revenue was ~~favorably impacted by~~primarily the result of growth in recurring revenue and the favorable impact of changes in foreign currency exchange rates of ~~$101 million, while growth in recurring~~$32 million. Net revenue was ~~more than~~favorably impacted by the net impact of acquisitions and divestitures of $4 million, or 0.2%, which was primarily the result of $54 million in net revenue contributed by the BHS acquisition partially offset by ~~lower systems installation, product sales and other service revenue.~~$46 million of divested revenue relating to our french security business. Approximately 58% and ~~55%~~56% of ADT Worldwide's total net revenue for the quarters ended ~~March 26,~~June 25, 2010 and ~~March 27,~~June 26, 2009, respectively, represents revenue associated with monitoring and maintenance services under contractual arrangements, which is considered recurring revenue. Recurring revenue increased by ~~$86~~$97 million, or ~~9.2%~~10.0%, to approximately ~~$1.0~~$1.1 billion ~~primarily~~ as a result of growth in customer accounts of approximately ~~112,000,~~1.5 million, or ~~1.5%~~20.6%, to a total of ~~7.4~~

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8.9 million accounts as of ~~March 26,~~June 25, 2010. Approximately 1.4 million customer accounts were acquired as of May 14, 2010, due to the closing of the Broadview acquisition and approximately 122,000 customer accounts were acquired through the ADT dealer program during the quarter ended June 25, 2010. Changes in foreign currency exchange rates and the net impact of acquisitions and divestitures favorably impacted recurring revenue by ~~$51~~$21 million, or ~~5.4%.~~2.2% and $34 million, or 3.5%, for the quarters ended June 25, 2010 and June 26, 2009, respectively. Systems installation, product sales and other service revenue ~~declined~~decreased by ~~$24~~$14 million, or ~~3.1%~~1.8%, to ~~$743~~$758 million due to ~~lower sales volume primarily as~~ the ~~result of~~ continued weakness in the commercial ~~and retailer end markets,~~market, which declined at a slower rate than the same period in the prior ~~year.~~year, partially offset by improvement in the retailer end market across all regions. Changes in foreign currency exchange rates favorably impacted systems installation, product sales and other service revenue by ~~$50~~$11 million, or ~~6.5%~~1.4%, while the net impact of acquisitions and divestitures resulted in an unfavorable impact of ~~$11~~$30 million or ~~1.5%~~3.9%.
        Geographically, North America net revenue increased $2$88 million, or ~~0.2%~~8.5%, due to an increase in recurring revenue and the favorable impact of changes in foreign currency exchange rates of ~~$17~~$13 million, or ~~1.6%~~1.3%. Partially offsetting these increases was a decline in systems installation, product sales and other service revenue primarily as the result of continued weakness in the commercial ~~and retailer end markets,~~market, which has declined at a slower rate than the same period in the prior ~~year.~~year partially offset by improvement in the retailer end market. Net revenue in EMEA ~~was flat~~decreased $62 million, or 13.5%, when compared to the quarter ended ~~March 27,~~June 26, 2009. ~~Changes in foreign currency exchange rates favorably impacted EMEA net revenue by $43 million, or 9.6%.~~ This ~~increase~~decrease was ~~offset by~~primarily the result of a decline in systems installation, product sales and other service revenue as a result of continued weakness in the commercial market and ~~retailer end markets. Additionally, net~~to a lesser extent a decline in recurring revenue as compared to the quarter ended June 26, 2009. Net revenue was unfavorably impacted by ~~$14~~$50 million for the net impact of ~~acquisitions~~divestitures and ~~divestitures. Recurring~~changes in foreign currency exchange rates unfavorably impacted EMEA net revenue ~~in EMEA was relatively flat as compared to the quarter ended March 27, 2009.~~by $5 million or 1.1%. Rest of World net revenue increased ~~$60~~$57 million, or ~~26.3%~~23.1%, ~~primarily~~ due to both systems installation, product sales and other service revenue and recurring revenue ~~growth~~growth. Rest of World experienced an increase in systems installation, product sales and other service revenue primarily in the Asia Pacific region and to a lesser extent the Latin American region. Additionally, recurring revenue grew in both the Asia Pacific and Latin American regions as ADT Worldwide continues to focus on building its customer account and recurring revenue base in these markets. Net revenue in the Rest of World was also favorably impacted by changes in foreign currency exchange rates of ~~$41~~$24 million, or ~~18.0%~~9.7%. ~~Additionally, the Rest of World experienced an increase in systems installation, product sales and other~~

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~~service revenue primarily in the Asia Pacific region, which was partially offset by a decrease in the Latin American region due to continued slowdown in commercial and retailer end markets.~~
        Trailing 12-month attrition rates decreased sequentially ~~as well as~~when compared to the quarter ended September 25, 2009 as shown in the following table:

For the Quarters Ended

March 26,
2010 December 25,
2009 September 25,
2009
Trailing 12-month basis attrition
13.1 % 13.4 %⁽¹⁾ 13.3 %⁽¹⁾

For the Quarters Ended

June 25,
2010 September 25,
2009 June 26,
2009
Trailing 12-month basis attrition
12.8 % 13.3% ⁽¹⁾ 13.2% ⁽¹⁾
⁽¹⁾
The trailing 12-month basis attrition rates for the quarters ended ~~December~~September 25, 2009 and ~~September 25,~~June 26, 2009 have been recast to reflect the divestiture of our french security business and acquisition of BHS, which resulted in a reduction of 0.1% and 0.2% in the amounts previously reported for ~~both periods.~~September 25, 2009 and June 26, 2009.

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        Operating income increased ~~by approximately $1.2 billion~~$2 million in the quarter ended ~~March 26,~~June 25, 2010 as compared to the same period in the prior year. Operating margin ~~was 17.3%~~increased to 12.2% in the quarter ended ~~March 26, 2010. Operating income~~June 25, 2010 as compared to 12.6% for the quarter ended March 27, 2009 was negatively affected by goodwill impairment charges of $959 million recorded at its ADT EMEA and Sensormatic Retail Solutions reporting units and intangible asset impairment charges of $64 million related to certain franchise rights within North America and tradenames.June 26, 2009. Operating income was ~~also~~ positively impacted by the shift to higher margin recurring revenue discussed ~~above. Additionally,~~above, a curtailment gain of $12 million recognized upon adoption of plan amendments that froze pension plan benefits for certain of its defined benefit pension plans in the United Kingdom and lower intangible asset amortization related to certain tradenames. In addition, operating income was favorably impacted by ~~$51 million of a net gain on divestitures primarily relating to the divesture of ADT's french security business,~~ the net impact of savings realized through previous restructuring actions and savings realized through cost containment ~~actions and lower intangible asset amortization related to certain tradenames.~~actions. During the quarter ended ~~March 26,~~June 25, 2010, $4$29 million of restructuring, asset impairment and divestiture charges, net were incurred, of which $13 million relate to restructuring actions associated with the acquisition of BHS, as compared to ~~$55~~$15 million ~~during~~for the quarter ended ~~March 27,~~June 26, 2009. During the quarter ended June 26, 2009, $2 million of additional charges resulting from restructuring actions were incurred. Changes in foreign currency exchange rates favorably impacted operating income by ~~$12~~$6 million. Operating income was negatively impacted by $24 million of acquisition costs incurred during the quarter ended June 25, 2010 as compared to nil for the quarter ended June 26, 2009.
Flow Control
        Net revenue, operating income and operating margin for Flow Control were as follows ($ in millions):

For the Quarters Ended
For the Quarters Ended

March 26,
2010 March 27,
2009 % Change June 25,
2010 June 26,
2009 % Change
Revenue from product sales
$ 835 $ 868 (3.8 )% $ 781 $ 797 (2.0 )%
Service revenue
64 59 8.5 % 68 69 (1.4 )%

Net revenue
$ 899 $ 927 (3.0 )% $ 849 $ 866 (2.0 )%

Operating income
$ 93 $ 133 (30.1 )% $ 113 $ 115 (1.7 )%
Operating margin
10.3 % 14.3 % 13.3 % 13.3 %
        Net revenue for Flow Control decreased ~~$28~~$17 million, or ~~3.0%~~2.0%, in the quarter ended ~~March 26,~~June 25, 2010 compared to the quarter ended ~~March 27,~~June 26, 2009. The decrease in net revenue was primarily driven by reduced volume and the absence of large project work in the valves business ~~across all regions~~primarily within the EMEA and ~~to a lesser extent reduced~~Asia Pacific regions. This decrease was partially offset by large project ~~activity~~work in the water business in Australia and in the thermal controls business. ~~These decreases were offset by favorable~~Additionally, changes in foreign currency exchange rates ~~of $92 million and a slight increase of project activity within the thermal controls business.~~favorably impacted net revenue by $40 million.
        The decrease in operating income of ~~$40~~$2 million, or ~~30.1%~~1.7%, in the quarter ended ~~March 26,~~June 25, 2010, as compared to the same period in the prior year, was primarily due to decreased volume in the valves

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business, ~~as well as an expected loss related to completion of a long-term construction project and~~partially offset by an increase of ~~product warranty reserves~~project activity in the water ~~business, primarily in the Asia Pacific region.~~and thermal controls business. The decline in operating income was partially offset by savings realized through cost containment and restructuring actions. During the quarter ended June 25, 2010, $6 million of restructuring charges, net were incurred as compared to restructuring and divestiture charges of $4 million for the quarter ended June 26, 2009. Additionally, $4 million of additional charges resulting from restructuring actions were incurred during the quarter ended June 26, 2009. Changes in foreign currency exchange rates favorably impacted operating income by ~~$14~~$4 million.

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Fire Protection Services
        Net revenue, ~~goodwill impairment,~~ operating income ~~(loss)~~ and operating margin for Fire Protection Services were as follows ($ in millions):

For the Quarters Ended

March 26,
2010 March 27,
2009 % Change
Revenue from product sales
$ 385 $ 411 (6.3 )%
Service revenue
422 402 5.0 %

Net revenue
$ 807 $ 813 (0.7 )%

Goodwill impairment
$ — $ 180 — ⁽¹⁾
Operating income (loss)
62 (121 ) — ⁽¹⁾
Operating margin
7.7 % — ⁽¹⁾
⁽¹⁾
~~Certain operating margins and percentage changes have not been presented as management believes such calculations are not meaningful.~~

For the Quarters Ended

June 25,
2010 June 26,
2009 % Change
Revenue from product sales
$ 390 $ 438 (11.0 )%
Service revenue
432 417 3.6 %

Net revenue
$ 822 $ 855 (3.9 )%

Operating income
80 69 15.9 %
Operating margin
9.7 % 8.1 %
        Revenue from product sales includes sales and installation of fire protection and other systems. Service revenue consists of inspection, maintenance, service and monitoring of fire detection and suppression systems.
        Net revenue by geographic area for Fire Protection Services was as follows ($ in millions):

For the Quarters Ended
For the Quarters Ended

March 26,
2010 March 27,
2009 % Change June 25,
2010 June 26,
2009 % Change
North America
$ 466 $ 486 (4.1 )% $ 480 $ 496 (3.2 )%
International
341 327 4.3 % 342 359 (4.7 )%

Net revenue
$ 807 $ 813 (0.7 )% $ 822 $ 855 (3.9 )%

        Net revenue for Fire Protection Services decreased $6$33 million, or ~~0.7%~~3.9%, during the quarter ended ~~March 26,~~June 25, 2010 compared to the quarter ended ~~March 27,~~June 26, 2009. This decrease was primarily due to continued weakness in commercial markets, which more than offset the favorable changes in foreign currency exchange rates of ~~$51~~$18 million, or ~~6.3%~~2.1%. Geographically, net revenue in North America decreased ~~$20~~$16 million, or ~~4.1%~~3.2%, primarily due to the continued decline in systems installation and upgrade activity ~~as well as a decline in service revenue~~ in the sprinkler business. Changes in foreign currency exchange rates favorably impacted revenue in North America by ~~$10~~$7 million, or ~~2.1%~~1.4%. Net revenue in our international fire businesses ~~increased~~decreased by ~~$14~~$17 million, or ~~4.3% largely due to the favorable impact of changes in foreign currency exchange rates of $41 million, or 12.5%~~4.7%, ~~partially offset by a decrease in revenue~~primarily due to continued weakness in the European commercial ~~markets.~~markets and greater discipline adhering to operating margin requirements for new construction projects and a greater focus on recurring, higher margin revenue streams. Changes in foreign currency exchange rates favorably impacted revenue in our international fire business by $11 million, or 3.1%.
        Operating income increased ~~$183~~$11 million in the quarter ended ~~March 26,~~June 25, 2010 as compared to the same period in the prior year. Operating income ~~for the quarter ended March 27, 2009 was negatively affected by goodwill impairment charges of $180 million recorded at its EMEA Fire reporting unit. Operating income~~ was favorably impacted by a curtailment gain of $7 million recognized upon adoption of plan amendments that froze pension plan benefits for certain defined benefit pension plans in the United Kingdom, savings realized through cost containment actions, as well as greater discipline adhering to operating margin requirements for new construction projects and

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a greater focus on recurring, higher margin revenue streams and, to a lesser extent, favorable changes in foreign currency exchange rates of $4$2 million. The increase was partially offset by the decreased sales volume discussed above. During the quarter ended ~~March 26,~~June 25, 2010, $4$5 million of restructuring charges were incurred as compared to ~~$11~~$3 million of restructuring charges in the quarter ended ~~March 27,~~June 26, 2009.

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Electrical and Metal Products
        Net revenue, ~~goodwill impairment,~~ operating income (loss) and operating margin for Electrical and Metal Products were as follows ($ in millions):

For the Quarters Ended

March 26,
2010 March 27,
2009 % Change
Revenue from product sales
$ 335 $ 329 1.8 %
Service revenue
1 1 — %

Net revenue
$ 336 $ 330 1.8 %

Goodwill impairment
$ — $ 935 — ⁽¹⁾
Operating income (loss)
24 (961 ) — ⁽¹⁾
Operating margin
7.1 % — ⁽¹⁾
⁽¹⁾
~~Certain operating margins and percentage changes have not been presented as management believes such calculations are not meaningful.~~

For the Quarters Ended

June 25,
2010 June 26,
2009 % Change
Revenue from product sales
$ 389 $ 319 21.9 %
Service revenue
1 1 —

Net revenue
$ 390 $ 320 21.9 %

Operating income (loss)
40 (16 ) 350.0 %
Operating margin
10.3 % (5.0 )%
        Net revenue for Electrical and Metal Products increased $6$70 million, or ~~1.8%~~21.9%, in the quarter ended ~~March 26,~~June 25, 2010 compared to the quarter ended ~~March 27,~~June 26, 2009. The increase in revenue was primarily due to increased ~~volume~~selling prices for both steel products and ~~higher selling prices of~~ armored cable products. These increases were partially offset by lower volume for armored cable ~~products and lower selling prices~~products. Net revenue was favorably impacted by $14 million as a result of ~~steel products. Changes~~an acquisition. Additionally, changes in foreign currency exchange rates had a favorable impact of ~~$13~~$9 million.
        Operating income increased ~~$985~~$56 million in the quarter ended ~~March 26,~~June 25, 2010 as compared to the same period in the prior year. Operating income increased primarily as a result of higher spreads for ~~the quarter ended March 27, 2009 was negatively affected by goodwill impairment charges of $935 million recorded at its Electrical~~steel products resulting from higher selling prices and ~~Metal Products reporting unit. Also contributing to the~~lower raw material costs. The increase in operating income was ~~the increased volume as well as higher~~partially offset by lower volumes and lower spreads for ~~steel products. Lower~~armored cable products as higher raw material costs more than offset ~~lower~~higher selling ~~prices which resulted in higher spreads for steel products.~~prices. During the quarter ended June 25, 2010, $1 million of restructuring charges were incurred compared to $9 million of restructuring and divestiture charges during the quarter ended June 26, 2009. Additionally, $1 million of additional charges resulting from restructuring actions were incurred during the quarter ended June 26, 2009 as compared to no additional charges during the quarter ended June 25, 2010.
Safety Products
        Net revenue, ~~goodwill impairments,~~ operating income ~~(loss)~~ and operating margin for Safety Products were as follows ($ in millions):

For the Quarters Ended
For the Quarters Ended

March 26,
2010 March 27,
2009 % Change June 25,
2010 June 26,
2009 % Change
Revenue from product sales
$ 357 $ 373 (4.3 )% $ 387 $ 367 5.4 %
Service revenue
3 2 50.0 % 2 3 (33.3 )%

Net revenue
$ 360 $ 375 (4.0 )% $ 389 $ 370 5.1 %

Goodwill impairments
$ — $ 567 — ⁽¹⁾
Operating income (loss)
$ 47 $ (537 ) — ⁽¹⁾ $ 63 $ 43 46.5 %
Operating margin
13.1 % — ⁽¹⁾ 16.2 % 11.6 %
⁽¹⁾
~~Certain operating margins and percentage changes have not been presented as management believes such calculations are not meaningful.~~

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        Net revenue for Safety Products ~~decreased $15~~increased $19 million, or ~~4.0%~~5.1%, during the quarter ended ~~March 26,~~June 25, 2010 as compared to the quarter ended ~~March 27,~~June 26, 2009. The ~~decrease~~increase in net revenue is primarily due to ~~lower~~higher volume in our ~~fire suppression and~~ electronic security and life safety businesses. The ~~decrease~~increase in our ~~fire suppression~~electronic security business was due to higher volume primarily related to the introduction of several new products. The increase in our life safety business was primarily due to ~~reduced spending~~the commencement of shipping a new defense related product in the commercial construction market. The electronic security business decrease was primarily due to the continued slow down in the retail sector, as retail capital projects and new store openings continue to be canceled or delayed.EMEA. Net revenue was favorably impacted by changes in foreign

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currency exchange rates of ~~$18~~$3 million or, 0.8%, and ~~was~~ unfavorably impacted by $6 million for the net impact of acquisitions and divestitures.
        Operating income increased ~~$584~~$20 million during the quarter ended ~~March 26,~~June 25, 2010 compared to the same period in the prior year. ~~Operating~~The increase in operating income ~~for~~is attributable to the ~~quarter ended March 27, 2009 was negatively affected by goodwill impairment charges of $567 million recorded at its ACVS~~increased sales volume discussed above and ~~Life Safety reporting units. Additionally, restructuring and divestiture charges, net was $5 million during the quarter ended March 26, 2010 as compared~~a shift in product mix to ~~$21 million of restructuring charges during the quarter ended March 27, 2009.~~higher margin products. Savings realized through cost containment and restructuring actions also contributed to the increase in operating ~~income, although partially offset by~~income. Restructuring charges, net was $2 million during the ~~sales volume decline~~quarter ended June 25, 2010 as ~~discussed above.~~compared to $3 million of restructuring charges during the quarter ended June 26, 2009. Additionally, $3 million of additional charges resulting from restructuring actions were incurred during the quarter ended June 26, 2009 as compared to no additional charges during the quarter ended June 25, 2010.
Corporate and Other
        Corporate expense ~~decreased~~increased $46 million, or 47.4%, to $143 million during the quarter ended June 25, 2010 compared to $97 million ~~or 48.3%,~~during the quarter ended June 26, 2009. During the quarter ended June 25, 2010, the Company performed a valuation of its asbestos-related liabilities and insurance assets, and as a result of higher than expected settlements, the Company recorded a net charge of approximately $52 million to ~~$104~~adjust its estimated liability for existing and potential future asbestos claims. For more information, see Note 10 to the Consolidated Financial Statements. Gains on divestitures of $2 million, net, were incurred in the quarter ended ~~March 26,~~June 25, 2010 as compared to ~~$201 million~~nil in the quarter ended ~~March 27,~~June 26, 2009. The decrease in expense relates primarily to $101 million of charges to establish a reserve related to unresolved legacy securities matters during the quarter ended March 27, 2009. Additionally, during the second quarter ended March 27, 2009, we agreed to settle two legacy securities matters for $17 million, which was partially offset by a $16 million benefit related to a settlement reached with a former executive. Additionally, Corporate expense for the quarter ended ~~March 27,~~June 26, 2009 included $6$2 million of restructuring charges as compared to ~~nil~~net charges of $1 million for the quarter ended ~~March 26,~~June 25, 2010. Corporate expense for the quarter ended March 26, 2010 included $4 million relating to divestiture charges and $3 million related to acquisition costs as compared to nil for the quarter ended March 27, 2009.
Interest Income and Expense
        Interest income was $7 million and ~~$11~~$9 million during the quarters ended ~~March 26,~~June 25, 2010 and ~~March 27,~~June 26, 2009, respectively. The decrease in interest income is primarily related to lower investment yields.
        Interest expense was $71 million in the quarter ended June 25, 2010 compared to $74 million in the quarter ended ~~March~~June 26, ~~2010 compared to $78 million in the quarter ended March 27,~~ 2009. The decrease in interest expense is primarily related to savings from interest rate swaps partially offset by higher debt balances outstanding ~~credit facility and commercial paper balances~~ during the quarter ended ~~March 27,~~June 26, 2009.
Other ~~Income,~~Expense, Net
        Other ~~income,~~expense, net was $3$85 million and ~~$7 million~~nil during the quarters ended ~~March~~June 25, 2010 and June 26, ~~2010, March 27,~~ 2009, respectively. Other ~~income,~~expense, net for the quarter ended ~~March 26,~~June 25, 2010 primarily relates to ~~an increase in receivables~~a charge of $87 million as a loss on extinguishment of debt on the redemption of our 6.375% public notes due ~~from Covidien~~2011, 7% notes due 2028 and ~~Tyco Electronics under~~6.875% notes due 2029. See Note 8 to the ~~Tax Sharing Agreement.~~Consolidated Financial Statements.
Effective Income Tax Rate
        Our effective income tax rate ~~was 14.0%~~ during the quarter ended ~~March 26, 2010. The effective income tax rate for the second quarter~~June 25, 2010 was a benefit of ~~2009 was not meaningful~~11.5% primarily as a result of ~~the loss driven by goodwill impairment charges~~a release of ~~$2.6 billion for which almost no~~deferred tax ~~benefit was available.~~valuation allowance. Taxes were also positively impacted by ~~a non-recurring benefit to income taxes related to~~increased profitability in lower tax rate jurisdictions during the ~~Company's on-going~~quarter. Our effective income tax ~~audits as well as limited tax on certain business dispositions for~~rate was 8.8% during the quarter ended ~~March~~June 26, ~~2010.~~2009.

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~~Six~~Nine Months Ended ~~March 26,~~June 25, 2010 Compared to ~~Six~~Nine Months Ended ~~March 27,~~June 26, 2009
ADT Worldwide
        Net revenue, goodwill and intangible asset impairments, operating income (loss) and operating margin for ADT Worldwide were as follows ($ in millions):

For the Six Months Ended
For the Nine Months Ended

March 26,
2010 March 27,
2009 % Change June 25,
2010 June 26,
2009 % Change
Revenue from product sales
$ 1,188 $ 1,173 1.3% ⁽¹⁾ $ 1,773 $ 1,706 3.9% ⁽¹⁾
Service revenue
2,414 2,343 3.0% ⁽¹⁾ 3,653 3,551 2.9% ⁽¹⁾

Net revenue
$ 3,602 $ 3,516 2.4 % $ 5,426 $ 5,257 3.2 %

Goodwill and intangible asset impairments
$ — $ 1,023 — ⁽²⁾ $ — $ 1,023 — ⁽²⁾
Operating income (loss)
564 (640 ) — ⁽²⁾ 786 (420 ) — ⁽²⁾
Operating margin
15.7 % — ⁽²⁾ 14.5 % — ⁽²⁾
⁽¹⁾
As discussed in Note 1 to the Consolidated Financial Statements, revenue related to the sale of electronic tags and labels has been classified as revenue from product sales for the ~~six~~nine months ended ~~March 26,~~June 25, 2010. During the ~~six~~nine months ended ~~March 27,~~June 26, 2009, the sale of the electronic tags and labels ~~were~~was misclassified as service revenue. The service revenue and revenue from product sales during the quarter ended ~~March 27,~~June 26, 2009 have not been changed for this misclassification, as the effect is not material. The impact of the misclassification in the first, second, third and fourth quarters of fiscal 2009 would have been to decrease service revenue by $77 million, $65 million, $73 million and $71 million, respectively, with corresponding increases to revenue from product sales.

⁽²⁾
Certain operating margins and percentages have not been presented as management believes such calculations are not meaningful.
        Revenue from product sales includes sales and installation of electronic security and other life safety systems as well as products related to retailer anti-theft systems. Service revenue is comprised of electronic security services and maintenance, including the monitoring of burglar alarms, fire alarms and other life safety systems as well as other security services.
        ~~Net revenue by geographic area for ADT Worldwide was as follows ($ in millions):~~

For the Six Months Ended
For the Nine Months Ended

March 26,
2010 March 27,
2009 % Change June 25,
2010 June 26,
2009 % Change
North America
$ 2,089 $ 2,100 (0.5 )% $ 3,211 $ 3,135 2.4 %
Europe, Middle East and Africa ("EMEA")
931 930 0.1 % 1,329 1,389 (4.3 )%
Rest of World
582 486 19.8 % 886 733 20.9 %

$ 3,602 $ 3,516 2.4 % $ 5,426 $ 5,257 3.2 %

        Net revenue for ADT Worldwide increased ~~$86~~$169 million, or ~~2.4%~~3.2%, for the ~~six~~nine months ended ~~March 26,~~June 25, 2010, as compared to the same period ended ~~March 27,~~June 26, 2009. Net revenue was favorably impacted by changes in foreign currency exchange rates of ~~$190 million, while growth in recurring revenue was more than offset by lower systems installation, product sales~~$222 million. Approximately 58% and ~~other service revenue. Approximately 57% and 53%~~54% of ADT Worldwide's total net revenue for the ~~six~~nine months ended ~~March 26,~~June 25, 2010 and ~~March 27,~~June 26, 2009, respectively, represents revenue associated with monitoring and maintenance services under contractual arrangements, which is considered recurring revenue. Recurring revenue increased by ~~$175~~$272 million, or ~~9.3%~~9.5%, to approximately ~~$2.1~~$3.1 billion as a result of growth in customer accounts of ~~112,000,~~approximately 1.5 million, or ~~1.5%~~20.6%, to a total of approximately ~~7.4~~8.9 million accounts as of ~~March 26,~~June 25, 2010. Approximately 1.4 million customer accounts were acquired as of May 14, 2010 due to the closing of

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the Broadview acquisition and approximately 356,000 customer accounts were acquired through the ADT dealer program for the nine months ended June 25, 2010. Changes in foreign currency exchange rates and the impact of acquisitions and divestitures favorably impacted recurring revenue by ~~$92~~$113 million, or ~~4.9%.~~4.0% and $30 million or 1.1%, respectively. Systems installation, product sales and other service revenue declined by ~~$89~~$103 million, or ~~5.4%~~4.3%, to approximately ~~$1.5~~$2.3 billion due to lower sales volume primarily as the result of continued weakness in the commercial ~~and retailer~~ end ~~markets,~~market, which ~~have~~has declined at a slower rate than the same period in the prior year. Changes in foreign currency exchange rates favorably impacted systems installation, product sales and other service revenue by ~~$98~~$109 million, or ~~6.0%~~4.5%, while the net impact of acquisitions and divestitures resulted in an unfavorable impact of ~~$16~~$45 million, or ~~1.0%~~1.9%.
        Geographically, North America net revenue ~~decreased $11~~increased $76 million, or ~~0.5%~~2.4%, due to improvement in the retailer market. Partially offsetting this increase was a decline in systems installation, product sales and other service revenue as the result of continued weakness in the commercial ~~and retailer end markets. This decrease was partially offset by an increase~~market, which has declined at a slower rate than the same period in ~~recurring revenue and favorable changes~~the prior year. Changes in foreign currency exchange rates ~~of $29~~favorably impacted net revenue by $42 million, or ~~1.4%~~1.3% and the impact of acquisitions and divestitures favorably impacted net revenue by $54 million, or 1.7%. Net revenue in EMEA ~~remained relatively flat~~decreased as favorable changes in foreign currency exchange rates of ~~$88~~$83 million, or ~~9.5%~~6.0%, were ~~almost entirely~~more than offset by a decline in systems installation, product sales and other service revenue as a result of continued weakness in the commercial ~~and retailer~~ end ~~markets,~~market, which has declined at a slower rate than the same period in the prior year. Additionally, EMEA net revenue was unfavorably impacted by ~~$19~~$69 million for the net impact of acquisitions and divestitures. Recurring revenue in EMEA ~~remained relatively flat~~declined when compared to the ~~six~~nine months ended ~~March 27,~~June 26, 2009. Net revenue increased ~~$96~~$153 million, or ~~19.8%~~20.9%, in the Rest of World geographies primarily due to recurring revenue growth in both ~~the~~Latin American and Asia Pacific ~~and Latin American~~ regions as ADT Worldwide continues to focus on building its customer account and recurring revenue base in these markets. This increase was partially offset by a decline in ~~system~~systems installation, products sales and other service revenue in the Latin American region due to the continued slowdown in commercial and retailer end markets. Net revenue in the Rest of World ~~geographics~~geographies was also favorably impacted by changes in foreign currency exchange rates of ~~$73~~$97 million, or ~~15.0%~~13.2%.
        Trailing 12-month attrition rates decreased as compared to the quarters ended September 25, 2009 and ~~March 27,~~June 26, 2009 as shown in the following table:

For the Quarters Ended

March 26,
2010 September 25,
2009 March 27,
2009
Trailing 12-month basis attrition
13.1 % 13.4 %⁽¹⁾ 13.3 %⁽¹⁾

For the Quarters Ended

June 25,
2010 September 25,
2009 June 26,
2009
Trailing 12-month basis attrition
12.8 % 13.3% ⁽¹⁾ 13.2% ⁽¹⁾
⁽¹⁾
The trailing 12-month basis attrition rates for the quarters ended ~~December~~September 25, 2009 and ~~September 25,~~June 26, 2009 have been recast to reflect the divestiture of our french security business and acquisition of BHS which resulted in a reduction of 0.1% and 0.2% in the amounts previously reported for ~~both periods.~~September 25, 2009 and June 26, 2009.
        Operating income increased by approximately $1.2 billion for the ~~six~~nine months ended ~~March 26,~~June 25, 2010 as compared to the same period in the prior year. Operating margin was ~~15.7%~~14.5% for the ~~six~~nine months ended ~~March 26,~~June 25, 2010. Operating income for the ~~six~~nine months ended ~~March 27,~~June 26, 2009 was negatively affected by goodwill impairment charges of $959 million recorded at ~~its~~the ADT EMEA and Sensormatic Retail Solutions reporting units and intangible asset impairment charges of $64 million related to certain franchise rights within North America and tradenames. Operating income was also positively impacted by the shift to higher margin recurring revenue ~~discussed above.~~and the improvement in the retailer end market. Additionally, operating income was favorably impacted by the net impact of savings realized through previous restructuring actions and savings realized through cost containment actions, ~~and~~ lower intangible asset amortization related to certain ~~tradenames.~~tradenames and a curtailment gain of $12 million

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recognized upon adoption of plan amendments that froze pension plan benefits for certain defined benefit pension plans in the United Kingdom. For the ~~six~~nine months ended ~~March 26,~~June 25, 2010, $9$35 million of restructuring charges were incurred, of which $13 million relate to restructuring actions associated with the acquisition of BHS, as compared to ~~$56~~$71 million of restructuring ~~and asset impairment~~ charges, net during the ~~six~~nine months ended ~~March 27,~~June 26, 2009. The ~~six~~nine months ended ~~March 26,~~June 25, 2010 also included a ~~$51~~$48 million gain on divestitures, net primarily related to the sale of ~~its~~ADT's french security ~~business.~~business, and $25 million of acquisition costs related to the acquisition of BHS as compared to no gain on divestiture and acquisition costs incurred during the nine months ended June 26, 2009. Changes in foreign currency exchange rates favorably impacted operating income by ~~$22~~$28 million.

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Flow Control
        Net revenue, operating income and operating margin for Flow Control were as follows ($ in millions):

For the Six Months Ended
For the Nine Months Ended

March 26,
2010 March 27,
2009 % Change June 25,
2010 June 26,
2009 % Change
Revenue from product sales
$ 1,673 $ 1,760 (4.9 )% $ 2,292 $ 2,392 (4.2 )%
Service revenue
149 126 18.3 % 213 192 10.9 %

Net revenue
$ 1,822 $ 1,886 (3.4 )% $ 2,505 $ 2,584 (3.1 )%

Operating income
$ 205 $ 270 (24.1 )% $ 306 $ 376 (18.6 )%
Operating margin
11.3 % 14.3 % 12.2 % 14.6 %
        Net revenue for Flow Control decreased ~~$64~~$79 million, or ~~3.4%~~3.1%, for the ~~six~~nine months ended ~~March 26,~~June 25, 2010 compared to the same period ended ~~March 27,~~June 26, 2009. The decrease in net revenue was primarily driven by reduced volume in the valves business across all regions and to a lesser extent the absence of large project work in the thermal controls business ~~as well as~~and reduced project activity in the water business. Changes in foreign currency exchange rates favorably impacted net revenue by ~~$188~~$214 million.
        The decrease in operating income of ~~$65~~$70 million, or ~~24.1%~~18.6%, for the ~~six~~nine months ended ~~March 26,~~June 25, 2010, as compared to the same period in the prior year, was primarily due to decreased volume across all regions in the valves business and the absence of large project work in the thermal controls business, which was partially offset by ~~margin improvements in the water business within the EMEA region and~~ favorable changes in foreign currency exchange rates of ~~$29~~$31 million. Operating income was negatively impacted by $14 million of restructuring charges for the six months ended March 26, 2010 as compared to $10 million of restructuring and divestiture charges, net during the same period ended March 27, 2009. The decline in operating income was also partially offset by savings realized through cost containment and restructuring actions. Operating income was negatively impacted by $17 million and $14 million of restructuring and divestiture charges, net for the nine months ended June 25, 2010 and June 26, 2009, respectively. Additionally, $4 million of additional charges resulting from restructuring actions were incurred during the nine months ended June 26, 2009.

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Fire Protection Services
        Net revenue, goodwill impairment, operating income ~~(loss)~~ and operating margin for Fire Protection Services were as follows ($ in millions):

For the Six Months Ended
For the Nine Months Ended

March 26,
2010 March 27,
2009 % Change June 25,
2010 June 26,
2009 % Change
Revenue from product sales
$ 792 $ 837 (5.4 )% $ 1,182 $ 1,275 (7.3 )%
Service revenue
848 815 4.0 % 1,280 1,232 3.9 %

Net revenue
$ 1,640 $ 1,652 (0.7 )%
Net Revenue
$ 2,462 $ 2,507 (1.8 )%

Goodwill impairment
$ — $ 180 — ⁽¹⁾ $ — $ 180 — ⁽¹⁾
Operating income (loss)
126 (65 ) — ⁽¹⁾
Operating income
206 4 — ⁽¹⁾
Operating margin
7.7 % — ⁽¹⁾ 8.4 % — ⁽¹⁾
⁽¹⁾
Certain operating margins and percentage changes have not been presented as management believes such calculations are not meaningful.
        Revenue from product sales includes sales and installation of fire protection and other systems. Service revenue consists of inspection, maintenance, service and monitoring of fire detection and suppression systems.

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        Net revenue by geographic area for Fire Protection Services was as follows ($ in millions):

For the Six Months Ended
For the Nine Months Ended

March 26,
2010 March 27,
2009 % Change June 25,
2010 June 26,
2009 % Change
North America
$ 935 $ 977 (4.3 )% $ 1,415 $ 1,473 (3.9 )%
International
705 675 4.4 % 1,047 1,034 1.3 %

Net revenue
$ 1,640 $ 1,652 (0.7 )% $ 2,462 $ 2,507 (1.8 )%

        Net revenue for Fire Protection Services decreased ~~$12~~$45 million, or ~~0.7%~~1.8%, during the ~~six~~nine months ended ~~March 26,~~June 25, 2010 compared to the same period ended ~~March 27,~~June 26, 2009. This decrease was primarily due to continued weakness in commercial markets, which more than offset the favorable changes in foreign currency exchange rates of ~~$100~~$118 million, or ~~6.1%~~4.7%. Geographically, net revenue in North America decreased ~~$42~~$58 million, or ~~4.3%~~3.9%, primarily due to the continued decline in systems installation and upgrade activity in the sprinkler and electronic businesses, as well as service revenue in the sprinkler and suppression businesses, which were partially offset by an increase in service revenue in the electronic business. Changes in foreign currency exchange rates favorably impacted revenue in North America by ~~$17~~$24 million, or ~~1.7%~~1.6%. Net revenue in our international fire businesses increased by ~~$30~~$13 million, or ~~4.4%~~1.3%, largely due to the favorable impact of changes in foreign currency exchange rates of ~~$83~~$94 million, or ~~12.3%~~9.1%, partially offset by a decrease in revenue due to continued weakness in the European commercial markets.
        Operating income increased ~~$191~~$202 million for the ~~six~~nine months ended ~~March 26,~~June 25, 2010 as compared to the same period in the prior year. Operating income for the ~~six~~nine months ended ~~March 27,~~June 26, 2009 was negatively affected by a goodwill impairment ~~charges~~charge of $180 million recorded at ~~its~~the EMEA Fire reporting unit. Additionally, operating income was favorably impacted by savings realized through cost containment actions, a reduction in legal costs and, to a lesser extent, ~~favorable changes~~a curtailment gain of approximately $7 million recognized upon adoption of plan amendments that froze pension plan benefits for certain defined benefit pension plans in ~~foreign currency exchange rates of $7 million.~~the United Kingdom. During the ~~six~~nine months ended ~~March 26,~~June 25, 2010, $4$9 million of restructuring and divestiture charges, net were incurred as compared

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to ~~$11~~$14 million of restructuring charges in the ~~six~~nine months ended ~~March 27,~~June 26, 2009. Changes in foreign currency exchange rates favorably impacted operating income by $9 million. The net increase in revenue was partially offset by the decreased sales volume discussed above.
Electrical and Metal Products
        Net revenue, goodwill impairment, operating income (loss) and operating margin for Electrical and Metal Products were as follows ($ in millions):

For the Six Months Ended
For the Nine Months Ended

March 26,
2010 March 27,
2009 % Change June 25,
2010 June 26,
2009 % Change
Revenue from product sales
$ 631 $ 744 (15.2 )% $ 1,019 $ 1,064 (4.2 )%
Service revenue
2 2 — % 4 2 100.0 %

Net revenue
$ 633 $ 746 (15.1 )%
Net Revenue
$ 1,023 $ 1,066 (4.0 )%

Goodwill impairment
$ — $ 935 — ⁽¹⁾ $ — $ 935 — ⁽¹⁾
Operating income (loss)
$ 47 $ (934 ) — ⁽¹⁾ 87 (950 ) — ⁽¹⁾
Operating margin
7.4 % — ⁽¹⁾ 8.5 % — ⁽¹⁾
⁽¹⁾
Certain operating margins and percentage changes have not been presented as management believes such calculations are not meaningful.
        Net revenue for Electrical and Metal Products decreased ~~$113~~$43 million, or ~~15.1%~~4.0%, for the ~~six~~nine months ended ~~March 26,~~June 25, 2010 compared to the same period ended ~~March 27,~~June 26, 2009. The decrease in revenue was primarily due to lower selling prices of steel ~~products, partially offset by higher volume of steel~~ products. Also contributing to the decline were lower volumes for armored cable products

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partially offset by higher selling prices for armored cable products. Changes in foreign currency exchange rates had a favorable impact of ~~$25~~$34 million. Additionally, net revenue was favorably impacted by $12 million for the net impact of acquisitions and divestitures.
        Operating income increased ~~$981~~$1,037 million for the ~~six~~nine months ended ~~March 26,~~June 25, 2010 as compared to the same period in the prior year. Operating income for the ~~six~~nine months ended ~~March 27,~~June 26, 2009 was negatively affected by goodwill impairment charges of $935 million recorded at ~~its~~the Electrical and Metal Products reporting unit. Also contributing to the increase in operating income was ~~the increased volume as discussed above as well as~~ higher spreads for steel products. Lower raw material costs more than offset lower selling prices, which resulted in higher spreads for steel products. These increases in operating income were partially offset by lower volumes and lower spreads for armored cable products. Higher raw material costs more than offset higher selling prices which resulted in lower spreads for armored cable products. During the nine months ended June 25, 2010, $3 million of restructuring charges were incurred compared to $12 million of restructuring and divestiture charges during the same period ended June 26, 2009. Additionally, $1 million of additional charges resulting from restructuring actions were incurred during the nine months ended June 26, 2009 as compared to no additional charges during the nine months ended June 25, 2010.

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Safety Products
        Net revenue, goodwill impairments, operating income (loss) and operating margin for Safety Products were as follows ($ in millions):

For the Six Months Ended
For the Nine Months Ended

March 26,
2010 March 27,
2009 % Change June 25,
2010 June 26,
2009 % Change
Revenue from product sales
$ 713 $ 772 (7.6 )% $ 1,100 $ 1,139 (3.4 )%
Service revenue
5 4 25.0 % 7 7 —

Net revenue
$ 718 $ 776 (7.5 )%
Net Revenue
$ 1,107 $ 1,146 (3.4 )%

Goodwill impairments
$ — $ 567 — ⁽¹⁾ $ — $ 567 — ⁽¹⁾
Operating income (loss)
$ 101 $ (457 ) — ⁽¹⁾ $ 164 $ (414 ) — ⁽¹⁾
Operating margin
14.1 % — ⁽¹⁾ 14.8 % — ⁽¹⁾
⁽¹⁾
Certain operating margins and percentage changes have not been presented as management believes such calculations are not meaningful.
        Net revenue for Safety Products decreased ~~$58~~$39 million, or ~~7.5%~~3.4%, for the ~~six~~nine months ended ~~March 26,~~June 25, 2010 as compared to the same period ended ~~March 27,~~June 26, 2009. The decrease in net revenue is primarily due to lower volume in our fire suppression partially offset by the favorable impact of changes in foreign currency exchange rates of $39 million and ~~electronic security businesses.~~to a lesser extent higher volume experienced in our life safety business. The decrease in our fire suppression business was primarily due to reduced spending in the commercial construction market. Net revenue was also unfavorably impacted by $19 million for the impact of divestitures. The ~~electronic security~~net revenue increase in our life safety business ~~decrease~~ was primarily due to the ~~continued slow down~~commencement of shipping a defense related product in the retail sector, as retail capital projects and new store openings continue to be canceled or delayed. Net revenue was favorably impacted by changes in foreign currency exchange rates of $36 million and was unfavorably impacted by $12 million for the net impact of acquisitions and divestitures.EMEA.
        Operating income increased ~~$558~~$578 million ~~during~~for the ~~quarter~~nine months ended ~~March 26,~~June 25, 2010 compared to the same period in the prior year. Operating income for the ~~six~~nine months ended ~~March 27,~~June 26, 2009 was negatively affected by goodwill impairment charges of $567 million recorded at ~~its~~the ACVS and Life Safety reporting units. Additionally, restructuring, asset impairment and divestiture charges, net was $4$6 million during the ~~six~~nine months ended ~~March 26,~~June 25, 2010 as compared to ~~$22~~$25 million of restructuring, asset impairment and divestiture charges, net during the nine months ended June 26, 2009. Additionally, $7 million of additional charges resulting from restructuring actions were incurred during the nine months ended June 26, 2009 as compared to no additional charges during the ~~six~~nine months ended ~~March 27, 2009.~~June 25, 2010. Savings realized through cost containment and restructuring actions also contributed to the increase in operating income and was partially offset by the fire suppression sales volume decline as discussed above. Changes in foreign currency exchange rates also favorably impacted operating income by $6 million.
Corporate and Other
        Corporate expense decreased ~~$113~~$67 million, or ~~35.9%~~16.3%, to ~~$202~~$344 million for the ~~six~~nine months ended ~~March 26,~~June 25, 2010 compared to ~~$315~~$411 million in the same period ended ~~March 27,~~June 26, 2009. The decrease in Corporate expense for the ~~six~~nine months ended ~~March 26,~~June 25, 2010 primarily relates to $126 million of charges related to legacy securities matters, partially offset by a $16 million benefit related to a settlement reached with a former executive, both of which were recorded during the ~~six~~nine months ended ~~March 27,~~June 26, 2009. Restructuring charges decreased $7 million to $1 million for the nine months ended June 25, 2010, as compared to $8 million in the nine months ended June 26, 2009. During the quarter ended June 25, 2010, the Company performed a valuation of its asbestos-related liabilities and insurance assets, and as a result of higher than expected settlements, the Company recorded a net charge of approximately $52 million to adjust its estimated liability for existing and potential future asbestos claims. In addition, $4 million of divestiture charges, net and $3 million of acquisition costs

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~~Additionally, Corporate expense for~~were recorded during the ~~six~~nine months ended ~~March 27, 2009 included $6 million of restructuring charges,~~June 25, 2010 as compared to $2 million of divestiture charges, net, and nil of acquisition costs for the ~~six~~nine months ended ~~March~~June 26, ~~2010.~~2009. The remaining decrease in Corporate expense is primarily related to savings realized through cost containment actions. Corporate expense for the six months ended March 26, 2010 also includes $6 million of net divestiture charges and $3 million of acquisition costs as compared to $2 million of divestiture charges, net for the six months ended March 27, 2009.
Interest Income and Expense
        Interest income was ~~$16~~$24 million and ~~$23~~$32 million for the ~~six~~nine months ended ~~March 26,~~June 25, 2010 and ~~March 27,~~June 26, 2009, respectively. The decrease in interest income is primarily related to lower investment yields.
        Interest expense was ~~$150~~$221 million for the ~~six~~nine months ended ~~March 26,~~June 25, 2010 as compared to ~~$151~~$225 million for the same period in the prior year. The decrease in interest expense is primarily related to savings from interest rate swaps partially offset by higher debt balances outstanding during the nine months ended June 25, 2010.
Other (Expense) Income, Net
        Other (expense) income, net was ~~$12~~$73 million of expense for the ~~six~~nine months ended ~~March 26,~~June 25, 2010 as compared to $11 million of income for the same period in the prior year. Other expense, net for the nine months ended June 25, 2010 primarily relates to a charge of $87 million as a loss on extinguishment of debt on the redemption of our 6.375% public notes due 2011, 7% notes due 2028 and 6.875% notes due 2029. See Note 8 to the Consolidated Financial Statements. The amount at June 26, 2009, primarily relates to gains on derivative contracts used to economically hedge the foreign currency risk related to the Swiss Franc denominated dividends.
Effective Income Tax Rate
        Our effective income tax rate was ~~14.5%~~8.3% for the ~~six~~nine months ended ~~March 26,~~June 25, 2010. The effective income tax rate for the ~~six~~nine months ended ~~March 27,~~June 26, 2009 was not meaningful primarily as a result of the loss driven by goodwill impairment charges of $2.6 billion for which almost no tax benefit was available. Taxes were positively impacted by limited tax on certain business dispositions, beneficial enacted tax law changes, a release of deferred tax valuation allowance and a non-recurring item generating a tax benefit for the ~~six~~nine months ended ~~March 26,~~June 25, 2010.
Divestitures
        ~~We have~~The Company has continued to assess the strategic fit of ~~our~~its various businesses and has pursued divestiture of certain businesses which do not align with ~~our~~its long-term strategy.
        On April 22, 2010, the Board of Directors approved a plan to pursue a tax-free spin-off of Tyco's Electrical and Metal Products business. The proposed transaction is expected to be structured as a tax-free distribution to Tyco shareholders, and is subject to a number of uncertainties and conditions, including completion of a review process by the Securities and Exchange Commission, final approval by the Tyco Board of Directors and approval by Tyco shareholders. Tyco expects to complete the proposed transaction in the first half of fiscal 2011, at which time the business would be an independent, publicly traded U.S. company. Pending completion of the spin-off, the Electrical and Metal Products business is presented in continuing operations.
        During the fourth quarter of 2009, the Company approved a plan to sell its french security business, which was part of the Company's ADT Worldwide segment. This business has been classified as held for sale as of September 25, 2009, however, its results of operations were presented in continuing operations as the criteria ~~for~~to be presented as discontinued operations have not been met. During March 2010, the Company completed the sale and recorded a $53 million pre-tax gain within restructuring, asset impairment and ~~(gain)/loss on~~ divestitures charges, net in the Company's Consolidated Statement of Operations.

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        During the third quarter of 2008, the Company approved a plan to sell a business in its Safety Products segment. This business had been classified as held for sale in the Company's historical Consolidated Balance Sheet. During the second quarter of 2009, due to a change in strategy by management, the Company decided not to sell the business. As a result, the business no longer satisfied the requirements to be classified as held for sale. The Company measured the business at the lower of its (i) carrying amount before it was classified as held for sale, adjusted for depreciation and amortization expense that would have been recognized had the business been continuously classified as held and used, or (ii) fair value at the date the decision not to sell was made. The Company recorded a charge of $8 million in the second quarter of 2009 relating to the amount of depreciation and amortization expense that would have been recorded had the asset been continuously classified as held and used.

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Discontinued Operations
        During the quarter ended June 25, 2010, the Board of Directors approved a plan to sell the Company's European water business, which is part of the Company's Flow Control segment. Subject to the receipt of certain consents and approvals and other customary closing conditions, the Company has agreed to sell the business for approximately $245 million. As of June 25, 2010, the necessary consents and approvals had not been obtained by the Company to transfer the legal ownership of the business. The Company expects to record a gain when the transaction closes, which is expected to occur in the fourth quarter of fiscal 2010. During the quarter ended June 25, 2010, the business met the held for sale and discontinued operations criteria and has been included in discontinued operations in all periods presented. As of June 25, 2010, the Company had assessed and determined that the carrying value of the remaining assets were recoverable based on current fair value, less cost to sell. The Company will continue to assess recoverability until the business is sold. See Note 19 to the Consolidated Financial Statements.
        In July 2008, the Company substantially completed the sale of its Infrastructure Services business, which met the criteria to be presented as discontinued operations. In order to complete the sale of Earth Tech Brasil Ltda. ("ET Brasil") and Earth Tech UK businesses and certain assets in China, the Company was required to obtain consents and approvals to transfer the legal ownership of the ~~businesses~~business and assets. On January 22, 2009, the Company received the necessary consents and approvals to transfer the legal ownership of its ET Brasil business to ~~Corioca~~Carioca Christiani-Nielsen Engenharia S.A. and received cash proceeds of ~~approximately~~ $13 million. During the fourth quarter of 2008, the Company sold its Earth Tech UK business and received net cash proceeds of $53 million. However, the gain was deferred until receipt of the necessary consents and approvals. On ~~February 27,~~May 12, 2009, the Company received the necessary consents and approvals to transfer the legal ownership of its Earth Tech UK business to AECOM and realized the deferred gain in the Company's Consolidated Statements of Operations during the quarter ended June 26, 2009. Furthermore, on May 8, 2009, the Company received the necessary consents to transfer certain of the China assets and received cash proceeds of ~~$18~~$6 million. ~~At March 27,~~As a result of the above dispositions, a net pre-tax gain of $31 million was recorded in income from discontinued operations, net of income taxes in the Company's Consolidated Statement of Operations. As of June 26, 2009, the necessary consents and approvals for ~~Earth Tech UK and~~ the remaining assets in China had not been obtained by the Company. ~~At March 27,~~As of June 26, 2009, the Company had assessed and determined that the carrying value of the remaining assets were recoverable based on current fair value, less cost to sell. The remaining consents and approvals for the other businesses and assets were obtained during the ~~second half~~fourth quarter of fiscal year 2009.
Acquisitions
        On January 18, 2010, the Company entered into a definitive agreement to acquire Brink's Home Security Holdings, Inc ("BHS"), now operating as Broadview Security, for approximately $2.0 billion or $42.50 per share. The acquisition is expected to be financed with cash of up to approximately $600 million, and the issuance of Tyco common shares. The transaction has been unanimously approved by the board of directors of each company. The transaction is expected to close shortly after the special meeting of BHS shareholders scheduled for May 12, 2010 assuming all closing conditions are met or waived. Following the closing of the transaction, the Company intends to combine BHS with its ADT Worldwide segment. In conjunction with the acquisition of BHS, the Company has incurred acquisition costs of $4 million, which are recorded in selling, general and administrative expenses in the Company's Consolidated Statement of Operations for the quarter and six months ended March 26, 2010.
During the quarter and ~~six~~nine months ended ~~March 26,~~June 25, 2010, cash paid for acquisitions included in continuing operations totaled $9$448 million and ~~$152~~$600 million, respectively, net of cash acquired of ~~nil~~

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$136 million and $1$137 million, respectively, which primarily related to the acquisition of Broadview Security. Net cash paid for Broadview Security totaled $448 million by the Company's ADT Worldwide segment. During the nine months ended June 25, 2010, the Company's Flow Control segment acquired two Brazilian valve companies, including Hiter Industria e Comercio de Controle Termo-Hidraulico Ltda ("Hiter"), a valve manufacturer which serves a variety of industries including the oil and gas, chemical and petrochemical markets. Net cash paid for the Brazilian valve companies totaled $104 ~~million by the Company's Flow Control segment. In addition, the~~million. The Company's Electrical and ~~Metals~~Metal Products segment acquired certain assets of a business for $39 million and its Safety Products segment acquired a business for $9 ~~million.~~million during the nine months ended June 25, 2010.
        During the quarter and ~~six~~nine months ended ~~March 27,~~June 26, 2009, cash paid for acquisitions included in continuing operations totaled ~~$2 million~~nil and $47 million, respectively, net of cash acquired of ~~$1 million~~nil and $2 million, respectively, which primarily related to the acquisition of Vue Technology, Inc., a provider of radio frequency identification (RFID) technology, for $43 million by the Company's Safety Products segment.
Critical Accounting Policies and Estimates
        The preparation of the Consolidated Financial Statements in conformity with US GAAP requires management to use judgment in making estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses. We believe that our accounting policies for depreciation and amortization methods of security monitoring-related assets, revenue recognition, loss contingencies, income taxes, goodwill and indefinite-lived intangible assets, long-lived assets and pension and postretirement benefits are based on, among other things, judgments and assumptions made by management that include inherent risks and uncertainties. During the three months ended ~~March 26,~~June 25, 2010, there were no significant changes to

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these policies or in the underlying accounting assumptions and estimates used in the above critical accounting policies from those disclosed in the Consolidated Financial Statements and accompanying notes contained in the Company's Annual Report on Form 10-K for the fiscal year ended September 25, 2009 (the "2009 Form 10-K"). See Note 1 to the Consolidated Financial Statements for the adoption of new accounting standards during the first quarter of 2010.

Liquidity and Capital Resources
        On ~~October~~May 5, ~~2009,~~2010, Tyco International Finance S.A. ("TIFSA") issued $500 million aggregate principal amount of 3.375% notes due 2015 ("the 2015 notes"), which are fully and unconditionally guaranteed by the Company. TIFSA received net proceeds of approximately $495 million after deducting debt issuance costs and a debt discount.
        On May 28, 2010, the Company used the net proceeds of the aforementioned offering and additional cash on hand to redeem all of its 6.375% public notes due 2011, 7% notes due 2028 and 6.875% notes due 2029, outstanding at that time, which aggregated $878 million in principal amount.
        On October 5, 2009, TIFSA issued $500 million aggregate principle amount of 4.125% notes due 2014 (the "2014 notes"), which are fully and unconditionally guaranteed by the Company. TIFSA received net proceeds of approximately $495 million after deducting debt issuance costs and a debt discount.
        On January 9, 2009, TIFSA issued $750 million aggregate principal amount of 8.5% notes due 2019 (the "2019 notes"), which are fully and unconditionally guaranteed by the Company. TIFSA received net proceeds of approximately $745 million after underwriting discounts and offering expenses. The Company may be required to repurchase all or part of the 2019 ~~Notes~~notes at par in July of 2014 at the option of the noteholders.

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        The net proceeds of the aforementioned offerings ~~may be used~~were not limited to specific uses and were available for general corporate purposes, ~~which may include~~including repayment of indebtedness, acquisitions, additions to working capital, repurchase of common shares, capital expenditures and investments in the Company's subsidiaries.
        As of ~~March 26,~~June 25, 2010, there were no amounts drawn under our revolving credit facilities. As of ~~March 26,~~June 25, 2010, the aggregate available commitment under our senior revolving credit facilities was $1.69 billion. We continually monitor developments regarding the availability of funds under our revolving credit facilities. Although there is some risk that financial institutions will fail to perform their contractual obligations, particularly in times of credit market distress, we believe that the lenders under our revolving credit facilities are capable of meeting any borrowing requests we may make for the foreseeable future.
        During the first quarter of 2010, TIFSA had made payments of $200 million to extinguish all of its commercial paper outstanding. As of ~~March 26,~~June 25, 2010, there was no commercial paper outstanding.
        In addition to our available cash and operating cash flows, additional sources of potential liquidity include committed credit lines, our commercial paper program, public debt and equity markets as well as the ability to sell trade accounts receivable. We continue to balance our operating, investing and financing uses of cash through investment in our existing core businesses, strategic acquisitions and divestitures, dividends and share repurchases. We believe our cash position, amounts available under our credit facilities and cash provided by operating activities will be adequate to cover our operational and business needs.
        We continue to monitor market conditions and assess the impact, if any, on our financial position, results of operations or cash flows. Approximately 100% of our U.S. and more than 95% of our non-U.S. funded pension plans are invested in marketable investments, including publicly-traded equity and fixed income securities. Although we do not believe we will be required to make materially higher cash contributions in the next 12 months, if market conditions worsen, we may be required to make incremental cash contributions under local statutory law.

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        The sources of our cash flow from operating activities and the use of a portion of that cash in our operations were as follows ($ in millions):

For the Quarters Ended For the Six Months Ended For the Quarters Ended For the Nine Months Ended

March 26,
2010 March 27,
2009 March 26,
2010 March 27,
2009 June 25,
2010 June 26,
2009 June 25,
2010 June 26,
2009
Cash flows from operating activities:

Operating income (loss)
$ 427 $ (2,554 ) $ 841 $ (2,141 ) $ 375 $ 334 $ 1,205 $ (1,815 )
Goodwill and intangible asset impairments
— 2,705 — 2,705 — — — 2,705
Depreciation and amortization⁽¹⁾
282 284 569 559 304 279 869 835
Non-cash compensation expense
32 23 63 52 30 24 92 76
Deferred income taxes
(39 ) (165 ) (35 ) (182 ) (91 ) (23 ) (127 ) (203 )
Provision for losses on accounts receivable and inventory
30 35 64 69 29 46 93 113
Other, net
(23 ) 24 (11 ) 46 (4 ) 21 (15 ) 67
Net change in working capital
41 381 (242 ) (174 ) 55 51 (175 ) (115 )
Interest income
7 11 16 23 7 9 24 32
Interest expense
(74 ) (78 ) (150 ) (151 ) (71 ) (74 ) (221 ) (225 )
Income tax expense
(51 ) 60 (104 ) (24 ) 26 (24 ) (78 ) (47 )

Net cash provided by operating activities
$ 632 $ 726 $ 1,011 $ 782 $ 660 $ 643 $ 1,667 $ 1,423

Other cash flow items:

Capital expenditures, net⁽²⁾
$ (167 ) $ (170 ) $ (316 ) $ (327 ) $ (173 ) $ (165 ) $ (486 ) $ (489 )
Decrease in the sale of accounts receivable
3 7 2 10
(Increase) / decrease in the sale of accounts receivable
(1 ) 3 1 13
Accounts purchased by ADT
(116 ) (114 ) (266 ) (231 ) (134 ) (130 ) (400 ) (361 )
Purchase accounting and holdback liabilities
(3 ) (1 ) (3 ) (1 ) — (1 ) (3 ) (2 )
Voluntary pension contributions
— 6 — 6
Voluntary Pension Contributions
— — — 6
⁽¹⁾
The quarters ended ~~March 26,~~June 25, 2010 and ~~March 27,~~June 26, 2009 included depreciation expense of ~~$155~~$163 million and ~~$155~~$152 million, respectively, and amortization of intangible assets of ~~$127~~$141 million and ~~$129~~$127 million, respectively. The ~~six~~nine months ended ~~March 26,~~June 25, 2010 and ~~March 27,~~June 26, 2009 included depreciation expense of ~~$313~~$472 million and ~~$303~~$452 million, respectively, and amortization of intangible assets of ~~$256~~$397 million and ~~$256~~$383 million, respectively.

⁽²⁾
Included net proceeds received for the sale/disposition of property, plant and equipment of $3$7 million and $2 million for the quarters ended ~~March 26,~~June 25, 2010 and ~~March 27,~~June 26, 2009, respectively, as well as ~~$19~~$26 million and $4$5 million for the ~~six~~nine months ended ~~March 26,~~June 25, 2010 and ~~March 27,~~June 26, 2009, respectively.
        The net change in working capital increased operating cash flow by ~~$41~~$55 million in the quarter ended ~~March 26,~~June 25, 2010. The significant changes in working capital included a ~~$73~~$193 million increase in ~~deferred revenue, a $19~~accrued expenses and other current liabilities and an $81 million increase in accounts payable, ~~and an $18 million decrease in prepaid expenses and other current assets,~~ offset by a ~~$29 million increase in inventories, a $22~~$65 million increase in accounts receivable, ~~as well as~~and a ~~$14~~$61 million ~~decrease~~increase in ~~contracts in process.~~inventories.
        The net change in working capital decreased operating cash flow by ~~$242~~$175 million in the ~~six~~nine months ended ~~March 26,~~June 25, 2010. The significant changes in working capital included a ~~$202 million decrease in accrued expenses and other current liabilities, a $73~~$127 million increase in inventories and a ~~$52~~$32 million ~~decrease~~net increase in ~~accounts payable, offset by a $66 million decrease~~contracts in ~~accounts receivable.~~process.
        During the quarter and ~~six~~nine months ended ~~March 26,~~June 25, 2010, we paid approximately ~~$48~~$37 million and ~~$97~~$131 million (inclusive of $2 million for the nine months ended June 25, 2010 relating to the french security business classified as held for sale), respectively, in cash related to restructuring activities as compared to cash paid related to restructuring activities of ~~$37~~$59 million and ~~$57~~$115 million for the quarter and ~~six~~nine months ended ~~March 27,~~June 26, 2009, respectively. See Note 3 to our Consolidated Financial Statements for further information regarding our restructuring activities.

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        Income taxes paid, net of refunds, related to continuing operations were ~~$90~~$66 million and ~~$139~~$206 million during the quarter and ~~six~~nine months ended ~~March 26,~~June 25, 2010 and ~~$103~~$69 million and ~~$176~~$242 million for the quarter and ~~six~~nine months ended ~~March 27,~~June 26, 2009, respectively.
        The primary uses and sources of cash flows from investing activities during the nine months ended June 25, 2010 were as ~~follows~~follows: ($ in millions):
        We continue to fund capital expenditures to grow our business, improve the cost structure of our businesses, to invest in new processes and technology, and to maintain high quality production standards. During the six months ended March 26, 2010, we made capital expenditures of ~~$335~~$512 million as compared to ~~$331~~$494 million during the comparable prior period. The level of capital expenditures in fiscal year 2010 is expected to exceed the spending levels in fiscal year 2009 and is also expected to exceed depreciation.
        We acquired approximately ~~105,000~~122,000 and ~~234,000~~356,000 customer contracts for electronic security services within our ADT Worldwide segment for ~~$120~~$134 million and ~~$271~~$400 million during the quarter and ~~six~~nine months ended ~~March 26,~~June 25, 2010, respectively. ~~Of these amounts, $113 million and $261 million was~~
        We paid during the quarter and six months ended March 26, 2010, respectively. Additionally, we paid $3 million during the quarter ended March 26, 2010 for customer contracts acquired during the quarter ended December 25, 2009. We also paid $2 million during the quarter ended December 25, 2009 for customer contracts acquired during the quarter ended September 25, 2009.
        ~~During the six months ended March 26, 2010,~~ cash ~~paid~~ for acquisitions included in continuing operations ~~totaled $152~~totaling $600 million, net of cash acquired of $1$137 million, which primarily related to the acquisition of Broadview Security. Net cash paid for Broadview Security totaled $448 million by the Company's ADT Worldwide segment. Additionally, the Company's Flow Control segment acquired two Brazilian valve companies, including Hiter Industria e Comercio de Controle Termo-Hidraulico Ltda ("Hiter"), a valve manufacturer which serves a variety of industries including the oil and gas, chemical and petrochemical markets. Net cash paid for ~~Hiter~~the Brazilian valve companies totaled $104 ~~million by our Flow Control segment. In addition, our~~million. The Company's Electrical and Metal Products segment acquired certain assets of a business for $39 million and ~~our~~its Safety Products segment acquired a business for $9 million.
        ~~During the six months ended March 26, 2010, we~~We received cash proceeds in the amount of ~~$28~~$26 million for divestitures included in continuing operations, net of cash divested of $14 million.
        We will continue to divest businesses that do not align with our overall strategy. We expect to use the proceeds from these sales, as well as the cash generated by our operations, to continue to make investments in our businesses that are intended to grow revenue and profitability, and improve productivity, including funding restructuring actions. We expect to also use cash to selectively pursue acquisitions. As disclosed in Note 4 to our Consolidated Financial Statements, we entered into a definitive agreement to acquire BHS for approximately $2.0 billion. We expect to finance this acquisition using cash up to approximately $600 million and the issuance of our common shares. The transaction is expected to close shortly after the special meeting of BHS shareholders scheduled for May 12, 2010 assuming all conditions are met or waived.
The primary uses and sources of cash flows from financing activities during the nine months ended June 25, 2010 were as ~~follows~~follows: ($ in millions):
        On May 5, 2010, we issued $500 million aggregate principal amount of 3.375% notes due on October 15, 2015 and received net cash proceeds of approximately $495 million.
        On October 5, 2009, we issued $500 million aggregate principal amount of 4.125% notes due on October 15, 2014 and received net cash proceeds of approximately $495 million. ~~During the six months ended March 26, 2010, net~~
        Net repayments of short-term debt were approximately ~~$243~~$242 million, which primarily related to the extinguishment of our outstanding commercial paper. Additionally, ~~during~~repayments of long-term debt were $962 million, which primarily related to the ~~six months ended March 26, 2010, we paid cash dividends~~redemption of all of the 6.375% public notes due 2011, 7% notes due 2028, and 6.875% notes due 2029. The repayments of long-term debt were more than offset by approximately ~~$214 million.~~$1.0 billion of proceeds received from the issuance of long-term debt.
        Pursuant to our share repurchase program, we may repurchase Tyco shares from time to time in open market purchases at prevailing market prices, in negotiated transactions off the market, or pursuant to an approved 10b5-1 trading plan in accordance with applicable regulations. During the quarter ended June 25, 2010, we repurchased approximately 7.5 million common shares for $276 million under our existing $1.0 billion share repurchase program approved by our board of directors on July 10, 2008. See Note 19 to the Consolidated Financial Statements.
        On March 10, 2010, our shareholders approved an annual dividend on our common shares of CHF 0.90 per share, which will be paid in the form of a return on capital in four installments of CHF 0.22, CHF 0.22, CHF 0.23 and CHF 0.23. During nine months ended June 25, 2010, we paid cash dividends of approximately $311 million.

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        Management believes that cash generated by or available to us should be sufficient to fund our capital and liquidity needs for the foreseeable future, including quarterly dividend payments. ~~During~~

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fiscal 2010, we expect to resume repurchasing under our existing $1.0 billion share repurchase program approved by our Board of Directors on July 10, 2008 in accordance with applicable law and depending on credit market conditions, macroeconomic factors and expectations regarding future cash flows. As also disclosed in Note 12 to our Consolidated Financial Statements, on March 10, 2010, our shareholders approved an annual dividend on our common shares of 0.90 CHF per share, which will be paid in the form of a return on capital in four installments of CHF 0.22, CHF 0.22, CHF 0.23 and CHF 0.23.
Capitalization
        Our shareholders' equity was ~~$12.9~~$14.1 billion, or ~~$27.17~~$28.03 per share, as of ~~March 26,~~June 25, 2010, compared to $12.9 billion, or $27.30 per share, as of September 25, 2009. Our shareholders' equity ~~remained relatively flat~~increased primarily due to $1.4 billion in shares issued as consideration for the Broadview Security acquisition and net income attributable to our common shareholders of ~~$612~~$866 million, partially offset by dividends declared of ~~$399~~$423 million and unfavorable changes in foreign currency exchange rates of ~~$336~~$565 million. Total debt was ~~$4.5~~$4.2 billion as of ~~March 26,~~June 25, 2010, as compared to $4.3 billion as of September 25, 2009. Total debt as a percentage of total capitalization (total debt and shareholders' equity) was ~~26%~~23% as of ~~March 26,~~June 25, 2010 and 25% as of September 25, 2009.
        Our cash balance ~~increased~~decreased to ~~$2.7~~$1.8 billion as of ~~March 26,~~June 25, 2010, as compared to $2.4 billion at September 25, 2009. The ~~increase~~decrease was primarily due to $1.5 billion of cash used for business acquisitions, capital expenditures, accounts purchased by ADT and total net debt repayments of $203 million. The decrease was also due to dividend payments of $311 million and share repurchases of $276 million. These decreases were partially offset by cash flow generated from operating activities of $1.0 billion and proceeds of $498 million received from the issuance of long-term debt, partially offset by $753 million of cash used for capital expenditures, accounts purchased by ADT, business acquisitions and the net repayment of $243 million of short-term debt.
        ~~The following table details our long-term and short-term debt ratings as of March 26, 2010 and September 25, 2009:~~

~~Short-Term~~
~~Debt~~
~~Ratings~~ ~~Long Term~~
~~Debt Ratings~~
~~Moody's~~
~~P-2~~ ~~Baa1~~
~~Standard & Poor's~~
~~A-2~~ ~~BBB+~~
~~Fitch~~
F2 ~~BBB+~~
        ~~On April 12, 2010, Standard & Poor's Rating Services raised our long term debt ratings to A- from BBB+.~~
The security ratings set forth above are not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal by the assigning rating organization. Each rating should be evaluated independently of any other rating.$1.7 billion.

Commitments and Contingencies
        For a detailed discussion of contingencies related to our litigation matters and governmental investigations related to us, see Note 10 to our Consolidated Financial Statements.
Backlog
        As of ~~March 26,~~June 25, 2010, we had a backlog of unfilled orders of ~~$9.0~~$9.4 billion compared to a backlog of ~~$9.0~~$8.9 billion as of September 25, 2009. We expect that approximately ~~86%~~87% of our backlog as of

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~~March 26,~~ June 25, 2010 will be filled during the next 12 months. Backlog by segment was as follows ($ in millions):

March 26,
2010 September 25,
2009 June 25,
2010 September 25,
2009
ADT Worldwide
$ 5,956 $ 5,916 $ 6,462 $ 5,916
Flow Control
1,629 1,698 1,482 1,646
Fire Protection Services
1,163 1,171 1,211 1,171
Electrical and Metal Products
95 72 87 72
Safety Products
134 102 140 102

$ 8,977 $ 8,959 $ 9,382 $ 8,907

        Backlog increased ~~by $18~~$475 million, or ~~0.2%~~5.3%, to ~~$9.0~~$9.4 billion as of ~~March 26,~~June 25, 2010. The increase in backlog was primarily due to an increase in recurring revenue-in-force at ~~our~~ ADT Worldwide ~~segment~~and increased orders at Safety Products partially offset by decreased bookings in Flow Control and unfavorable changes in foreign currency exchange rates of ~~$80~~$190 million. ADT Worldwide's backlog includes recurring revenue-in-force and long-term deferred revenue for upfront fees paid by customers for ADT owned security systems. Revenue-in-force represents 12 months' revenue associated with monitoring and maintenance services under contract in the security business. ADT Worldwide's backlog of ~~$6.0~~$6.5 billion and $5.9 billion as of ~~March 26,~~June 25, 2010 and September 25, 2009, respectively, primarily consists of ~~$4.1~~$4.6 billion and $4.0 billion of recurring revenue-in-force as of ~~March 26,~~June 25, 2010 and September 25, 2009, respectively, and $1.1 billion of deferred revenue for both ~~March 26,~~June 25, 2010 and September 25, 2009. ADT Worldwide's backlog increased ~~$40~~$546 million primarily driven by aan increase

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in revenue-in-force of ~~$64~~$589 million, which includes $509 million due to the Broadview Security acquisition, and was partially offset by ~~a decrease in deferred revenue of $26 million and~~ unfavorable changes in foreign exchange rates of ~~$33~~$84 million. Flow Control's backlog decreased by ~~$69~~$164 million primarily due to decreased bookings of ~~$36~~$84 million as several large projects were completed during ~~the first half of~~ fiscal 2010 and unfavorable exchange rates of ~~$33~~$80 million. ~~Electrical and Metal Products' backlog increased $23 million primarily related to the acquisition of a business during the first quarter of fiscal 2010.~~ Backlog within Safety Products increased ~~$32~~$37 million due to increased orders across various businesses partially offset by unfavorable changes in foreign currency exchange rates of $4$6 million.

Off-Balance Sheet Arrangements
Sale of Accounts Receivable
        Certain of our international businesses utilize the sale of accounts receivable as short-term financing mechanisms. The aggregate amount outstanding under our international accounts receivable programs was ~~$48 million and $55 million~~not material as of ~~March 26,~~June 25, 2010 ~~and~~or September 25, ~~2009, respectively.~~2009.
Guarantees
        Certain of our business segments have guaranteed the performance of third-parties and provided financial guarantees for uncompleted work and financial commitments. The terms of these guarantees vary with end dates ranging from the current fiscal year through the completion of such transactions. The guarantees would typically be triggered in the event of nonperformance and performance under the guarantees, if required, would not have a material effect on our financial position, results of operations or cash flows.
        There are certain guarantees or indemnifications extended among Tyco, Covidien and Tyco Electronics in accordance with the terms of the Separation and Distribution Agreement and the Tax Sharing Agreement. The guarantees primarily relate to certain contingent tax liabilities included in the Tax Sharing Agreement. At the time of the Separation, we recorded a liability necessary to recognize the fair value of such guarantees and indemnifications. See Note 5 to the Consolidated Financial

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Statements for further discussion of the Tax Sharing Agreement. In addition, prior to the Separation we provided support in the form of financial and/or performance guarantees to various Covidien and Tyco Electronics operating entities. To the extent these guarantees were not assigned in connection with the Separation, we assumed primary liability on any remaining such support. ~~The estimated fair value of these~~These obligations ~~was~~were not material to us as of ~~March 26,~~June 25, 2010.
        In disposing of assets or businesses, we often provide representations, warranties and/or indemnities to cover various risks including, for example, unknown damage to the assets, environmental risks involved in the sale of real estate, liability to investigate and remediate environmental contamination at waste disposal sites and manufacturing facilities, and unidentified tax liabilities and legal fees related to periods prior to disposition. We have no reason to believe that these uncertainties would have a material adverse effect on our financial position, results of operations or cash flows. We have recorded liabilities for known indemnifications included as part of environmental liabilities. See Note 10 to the Consolidated Financial Statements for a discussion of these liabilities.

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        In the normal course of business, we are liable for contract completion and product performance. We record estimated product warranty costs at the time of sale. In the opinion of management, such obligations will not significantly affect our financial position, results of operations or cash flows.
        For a detailed discussion of guarantees and indemnifications, see Note 17 to the Consolidated Financial Statements.

Accounting Pronouncements
        Recently Adopted Accounting Pronouncements—In June 2008, the Financial Accounting Standards Board ("FASB") ratified authoritative guidance for determining whether instruments granted in share-based payment transactions are participating securities. The guidance addresses whether instruments granted in share-based payment awards are participating securities prior to vesting and, therefore, must be included in the earnings allocation in calculating earnings per share under the two-class method. The guidance requires that unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend-equivalents be treated as participating securities in calculating earnings per share. The guidance became effective for Tyco in the first quarter of fiscal 2010, and was applied retrospectively to prior periods. The adoption did not have a material impact on our historical annual or quarterly basic and diluted earnings per share. See Note 6 to the Consolidated Financial ~~Statements for additional information related to the adoption of the guidance.~~Statements.
        In December 2007, the FASB revised the authoritative guidance for business combinations. The revised guidance retains the underlying concepts of the existing guidance in that business combinations are still accounted for at fair value. However, the accounting for certain other aspects of business combinations will be affected. Acquisition costs will generally be expensed as incurred. Restructuring costs associated with a business combination will generally be expensed subsequent to the acquisition date. In-process research and development will be recorded at fair value as an indefinite-lived intangible at the acquisition date until it is completed or abandoned and its useful life can be determined. Changes in deferred tax asset valuation allowances and uncertain tax positions after the acquisition date will generally impact income tax expense. The revised guidance also expands required disclosures surrounding the nature and financial effects of business combinations. We adopted the revised guidance in the first quarter of fiscal ~~2010.~~2010, which did not have a material impact on our financial position, results of operations or cash flows. The revised guidance is primarily effective for all business combinations beginning in the first quarter of fiscal 2010 and thereafter, ~~and its adoption did not have a material impact on~~including our ~~financial position, results~~acquisition of ~~operations or cash flows for~~Broadview Security. See Note 4 to the ~~quarter and six months ended March 26, 2010.~~Consolidated Financial Statements.
        In December 2007, the FASB issued authoritative guidance for noncontrolling interests in consolidated financial statements. The guidance requires the recognition of a noncontrolling interest (minority interest prior to the adoption of the guidance) as equity in the Consolidated Financial

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Statements. The amount of net income attributable to the noncontrolling interest should be included in consolidated net income on the face of the Consolidated Statements of Operations. The guidance also amends certain existing consolidation procedures in order to achieve consistency with the requirements of the revised authoritative guidance for business combinations discussed above. The guidance also includes expanded disclosure requirements regarding the interests of the parent and its noncontrolling interest. The guidance was adopted by Tyco in the first quarter of fiscal 2010 and was applied retrospectively. The adoption did not have a material impact on our financial position, results of operations or cash flows.
        In September 2006, the FASB issued authoritative guidance for fair value measurements, which enhances existing guidance for measuring assets and liabilities at fair value. The guidance defines fair value, establishes a framework for measuring fair value and expands disclosure about fair value measurements. The guidance was adopted in two phases. We adopted the fair value provisions relating to financial assets and liabilities in the first quarter of 2009 and for nonfinancial assets and liabilities in

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the first quarter of fiscal 2010. The adoption did not have a material impact on ~~our~~the Company's financial position, results of operations or cash flows.
        In April 2008, the FASB issued authoritative guidance for determining the useful life of intangible assets. The guidance amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset. The guidance became effective for Tyco in the first quarter of fiscal 2010. The adoption did not have a material impact on our financial position, results of operations or cash flows.
        Recently Issued Accounting Pronouncements—In September 2009, the FASB issued authoritative guidance for the accounting for revenue arrangements with multiple deliverables. The guidance establishes a selling price hierarchy for determining the selling price of a deliverable. The selling price used for each deliverable will be based on vendor-specific objective evidence if available, third-party evidence if vendor-specific objective evidence is not available, or estimated selling price if neither vendor-specific evidence nor third-party evidence is available. The guidance requires arrangements under which multiple revenue generating activities ~~that are~~ to be performed be allocated at inception. The residual method under the existing accounting guidance has been eliminated. The guidance expands the disclosure requirements related to multiple-deliverable revenue arrangements. The guidance becomes effective for revenue arrangements entered into or materially modified beginning in the first quarter of fiscal 2011. The guidance applies on a prospective ~~basis unless the Company specifically elects to apply the guidance retrospectively.~~basis. We are currently assessing what impact, if any, the guidance will have on our financial position, results of operations or cash flows.
        In June 2009, the FASB issued authoritative guidance which amended the existing guidance for the consolidation of variable interest entities, to address the elimination of the concept of a qualifying special purpose entity. The guidance also replaces the quantitative-based risks and rewards calculation for determining which enterprise has a controlling financial interest in a variable interest entity with an approach focused on identifying which enterprise has the power to direct the activities of a variable interest entity, and the obligation to absorb losses of the entity or the right to receive benefits from the entity. Additionally, the guidance requires any enterprise that holds a variable interest in ana variable interest entity to provide enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise's involvement in a variable interest entity. The guidance is effective for Tyco in the first quarter of fiscal 2011. We are currently assessing what impact, if any, that the guidance will have on ~~our~~its financial position, results of operations or cash flows.
        In December 2008, the FASB issued authoritative guidance for employers' disclosures about postretirement benefit plan assets. The guidance requires additional disclosures about plan assets related to an employer's defined benefit pension or other post-retirement plans to enable investors to better understand how investment decisions are made, the major categories of plan assets, the inputs

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and valuation techniques used to measure the fair value of plan assets, the effect of fair value measurements using significant unobservable inputs (Level 3) on changes in plan assets for the period, and the significant concentrations of risk within plan assets. The disclosure provisions of the guidance are effective for Tyco in fiscal 2010 and will be adopted ~~concurrently~~concurrent with the pension disclosures associated with our annual valuation process during the fourth quarter of fiscal 2010.

Forward-Looking Information
        Certain statements in this report are "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. All forward-looking statements involve risks and uncertainties. All statements contained herein that are not clearly historical in nature are forward-looking, and the words "anticipate," "believe," "expect," "estimate," "project" and similar expressions are generally intended to identify forward-looking statements. Any forward-looking statement contained herein, in press releases, written statements or other documents filed with the Securities and Exchange Commission ("SEC"), or in Tyco's communications and discussions with investors and analysts in the

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normal course of business through meetings, webcasts, phone calls and conference calls, regarding expectations with respect to sales, earnings, cash flows, operating and tax efficiencies, product expansion, backlog, the consummation and benefits of acquisitions and divestitures, as well as financings and repurchases of debt or equity securities, are subject to known and unknown risks, uncertainties and contingencies. Many of these risks, uncertainties and contingencies are beyond our control, and may cause actual results, performance or achievements to differ materially from anticipated results, performances or achievements. Factors that might affect such forward-looking statements include, among other things:
•
overall economic and business conditions;

•
the demand for Tyco's goods and services;

•
competitive factors in the industries in which Tyco competes;

•
changes in tax requirements (including tax rate changes, new tax laws or treaties and revised tax law interpretations);

•
results and consequences of Tyco's internal investigations and governmental investigations concerning the Company's governance, management, internal controls and operations including its business operations outside the United States;

•
the outcome of litigation, arbitrations and governmental proceedings;

•
effect of income tax audit ~~settlements;~~settlement and appeals;

•
our ability to repay or refinance our outstanding indebtedness as it matures;

•
our ability to operate within the limitations imposed by financing arrangements and to maintain our credit ratings;

•
interest rate fluctuations and other changes in borrowing costs;

•
other capital market conditions, including availability of funding sources and currency exchange rate fluctuations;

•
availability of and fluctuations in the prices of key raw materials, including steel and copper;

•
economic and political conditions in international markets, including governmental changes and restrictions on the ability to transfer capital across borders;

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•
the ability to achieve cost savings in connection with the Company's strategic restructuring and Six Sigma initiatives; and our ability to execute our portfolio refinement and acquisition strategies;

•
potential further impairment of our goodwill, intangibles and/or our long-lived assets;

•
the impact of fluctuations in the price of Tyco common shares;

•
risks associated with the change in our jurisdiction of incorporation from Bermuda to Switzerland, including the possibility of reduced flexibility with respect to certain aspects of capital management, increased or different regulatory burdens, and the possibility that we may not realize anticipated tax benefits;

•
changes in U.S. and non-U.S. government laws and regulations; and

•
the possible effects on Tyco of future legislation in the United States that may limit or eliminate potential U.S. tax benefits resulting from Tyco International's jurisdiction of incorporation or deny U.S. government contracts to Tyco based upon its jurisdiction of incorporation.

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Item 3.    Quantitative and Qualitative Disclosures About Market Risk
        The Company's exposure to market risk from changes in interest rates, foreign currency exchange rates and commodity prices has not changed materially from our exposure discussed in the 2009 Form 10-K. In order to manage the volatility relating to our more significant market risks, we currently enter into forward foreign currency exchange contracts, interest rate swaps and commodity swaps for copper. During fiscal 2010, the Company entered into commodity swaps for copper, which did not have a material impact on the Company's financial position, results of operations or cash flows.
        We utilize established risk management policies and procedures in executing derivative financial instrument transactions. We do not execute transactions or hold derivative financial instruments for trading or speculative purposes. Derivative financial instruments related to non-functional currency cash flows are used with the goal of mitigating a significant portion of these exposures when it is cost effective to do so. Counterparties to derivative financial instruments are limited to financial institutions with at least an A-/A3 long-term debt rating.
Item 4.    Controls and Procedures
        The Company, under the supervision and with the participation of its management, including its Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures (as such term is defined under Rule 13a-15 of the Securities and Exchange Act (the Exchange Act)) as of the end of the period covered by this report. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of ~~March 26,~~June 25, 2010, the Company's disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
        There has been no change in our internal control over financial reporting during the quarter ended ~~March 26,~~June 25, 2010 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II. OTHER INFORMATION
Item 1.    Legal Proceedings
        Except as discussed below, there have been no material developments in the Company's legal proceedings that have occurred during the quarter ended ~~March 26,~~June 25, 2010. For a description of the Company's previously reported legal proceedings, refer to Part I, Item 3.Legal Proceedings, in the 2009 Form 10-K.
        In connection with the Separation, wethe Company entered into a liability sharing agreement regarding certain legal actions that were pending against Tyco prior to the Separation. Under the Separation and Distribution Agreement, ~~we,~~the Company, Covidien and Tyco Electronics are jointly and severally liable for the full amount of any judgments resulting from the actions subject to the agreement, which generally relate to legacy matters that are not specific to the business operations of any of the companies. The Separation and Distribution Agreement also provides that wethe Company will be responsible for 27%, Covidien 42% and Tyco Electronics 31% of payments to resolve these matters, with costs and expenses associated with the management of these contingencies being shared equally among the parties. In addition, under the agreement, wethe Company will manage and control all the legal matters related to assumed contingent liabilities as described in the Separation and Distribution Agreement, including the defense or settlement thereof, subject to certain limitations. Additionally, at the time of the Separation, the Company, Covidien and Tyco Electronics agreed to allocate responsibility for certain legacy tax claims pursuant to the same formula under the Tax Sharing Agreement. See Note 5 to the Consolidated Financial ~~Statements for additional information related to the Tax Sharing Agreement.~~Statements.
Legacy Securities Matters
        As previously reported, Tyco and some members of the Company's former senior corporate management are named defendants in a number of lawsuits alleging violations of the disclosure provisions of the federal securities laws. In June 2007, the Company settled 32 purported securities class action lawsuits arising from actions alleged to have been taken by prior management. The June 2007 class action settlement did not purport to resolve all legacy securities cases.
        During the second quarter of 2009, wethe Company concluded that ~~our~~its best estimate of probable loss for the legacy securities matters outstanding at the time was $375 million in the aggregate, which wethe Company recorded as a liability in accrued and other current liabilities in ~~our~~the Consolidated Balance Sheet as of March 27, 2009. Due to the sharing provisions in the Separation and Distribution Agreement, wethe Company also recorded receivables from Covidien and Tyco Electronics in the amounts of $158 million and $116 million, respectively, which were recorded in other current assets in ~~our~~the Company's Consolidated Balance Sheet as of March 27, 2009. As a result, wethe Company recorded a net charge of $101 million related to legacy securities matters during the quarter ended March 27, 2009 in selling, general, and administrative expenses in ~~our~~the Consolidated Statements of Operations.
        In the second half of fiscal 2009, wethe Company agreed to settle with all of the remaining plaintiffs that had opted-out of the class action settlement as well as plaintiffs who had brought ERISA related claims for a total of $271 million. Pursuant to the Separation and Distribution Agreement, ~~our~~the Company's share of the settlement amount was approximately $73 million, with Covidien and Tyco Electronics responsible for approximately $114 million and $84 million, respectively. This settlement activity did not result in usthe Company recording a charge to ~~our~~its Consolidated Statements of Operations as wethe Company had established a reserve for ~~our~~its best estimate of the amount of loss during the second quarter of 2009 as discussed above. Since the June 2007 class action settlement, ~~we have~~the Company has resolved all of ~~our~~its significant legal claims stemming from allegations of securities laws violations, with the exception of the matters noted below.

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        The most significant outstanding legacy securities matter isStumpf v. Tyco International Ltd., which is a class action lawsuit in which the plaintiffs alleged that Tyco, among others, violated the disclosure

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provisions of the federal securities laws. The matter arose from Tyco's July 2000 initial public offering of common stock of TyCom Ltd, and alleged that the TyCom registration statement and prospectus relating to the sale of common stock were inaccurate, misleading and failed to disclose facts necessary to make the registration statement and prospectus not misleading. The complaint further alleged the defendants violated securities laws by making materially false and misleading statements and omissions concerning, among other things, executive compensation, TyCom's business prospects and Tyco's and TyCom's finances. On May 6, 2010, the United States District Court for the District of New Jersey ~~will hear arguments on a motion requesting~~granted preliminary approval of settlement of theStumpf matter. The proposed settlement is subject to final court approval ~~and the Court has not yet set~~at a ~~date~~hearing scheduled for ~~the final approval hearing. If the~~August 25, 2010. Any settlement ~~received final court approval, it~~ will be subject to the liability sharing provisions of the Separation and Distribution Agreement with Covidien and Tyco Electronics. ~~We believe our~~The Company believes its remaining reserve related to legacy securities matters is sufficient to satisfy the resolution of this matter.
        In addition to theStumpf matter, Tyco is a party to several lawsuits involving disputes with former management, among which are affirmative cases brought by Tyco against Mr. Dennis L. Kozlowski, Tyco's former chief executive officer, Mr. Mark Swartz, its former chief financial officer, and Mr. Frank Walsh Jr., a former director. In connection with these affirmative actions, Messrs. Kozlowski and Swartz have made claims seeking amounts allegedly due in connection with their compensation and retention arrangements and under ERISA, and Mr. Walsh has made claims alleging that Tyco is required to indemnify him for his defense costs arising from his role as a Tyco director. Tyco intends to vigorously defend each of these actions.
        Tyco has reserved its best estimate of probable loss for these legacy matters. However, their ultimate resolution could differ materially from these estimates and could have a material adverse effect on Tyco's financial position, results of operations or cash flows.
        Under the terms of the Separation and Distribution Agreement, each of Tyco, Covidien and Tyco Electronics are jointly and severally liable for the full amount of any legacy securities matters (excluding the claims brought by Messrs. Kozlowski, Swartz and Walsh.)
Environmental Matters
        Tyco is involved in various stages of investigation and cleanup related to environmental remediation matters at a number of sites. The ultimate cost of site cleanup is difficult to predict given the uncertainties regarding the extent of the required cleanup, the interpretation of applicable laws and regulations and alternative cleanup methods. As of ~~March 26,~~June 25, 2010, Tyco concluded that it was probable that it would incur remedial costs in the range of approximately ~~$28~~$25 million to ~~$81~~$86 million. As of ~~March 26,~~June 25, 2010, Tyco concluded that the best estimate within this range is approximately ~~$37~~$35 million, of which ~~$14~~$18 million is included in accrued and other current liabilities and ~~$23~~$17 million is included in other liabilities in the Company's Consolidated Balance Sheet. In view of the Company's financial position and reserves for environmental matters, the Company believes that any potential payments of such estimated amounts will not have a material adverse effect on its financial position, results of operations or cash flows.
Asbestos Matters
        The Company and certain of its subsidiaries are named as defendants in personal injury lawsuits based on alleged exposure to asbestos-containing materials. These cases typically involve product liability claims based primarily on allegations of manufacture, sale or distribution of industrial products that either contained asbestos or were attached to or used with asbestos-containing components manufactured by third-parties. Each case typically names between dozens to hundreds of corporate

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defendants. While the Company has observed an increase in the number of these lawsuits over the past

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several years, including lawsuits by plaintiffs with mesothelioma-related claims, a large percentage of these suits have not presented viable legal claims and, as a result, have been dismissed by the courts. The Company's strategy has been, and continues to be, to mount a vigorous defense aimed at having unsubstantiated suits dismissed, and, where appropriate, settling suits before trial. Although a large percentage of litigated suits have been dismissed, the Company cannot predict the extent to which it will be successful in resolving lawsuits in the future. Of the lawsuits that have proceeded to trial since 2005, the Company has won or settled all but one case, with that one case returning an adverse jury verdict for approximately $7.7 million, which included both compensatory and punitive damages. The Company has appealed the verdict and believes that it will ultimately be overturned. As of ~~March 26,~~June 25, 2010, there were approximately ~~4,400~~3,500 lawsuits pending against the Company and its subsidiaries. Each lawsuit typically includes several claims, and the Company has determined that there were approximately ~~5,600~~4,300 claims outstanding as of ~~March 26,~~June 25, 2010, which amount reflects the Company's current estimate of the number of ~~viable~~active claims made against it or its affiliates, and includes adjustments for claims that are not actively being prosecuted, identify incorrect defendants or are duplicative of other actions.
        For a detailed discussion of asbestos-related matters, see Note 10 of the Consolidated Financial Statements.
Income Tax Matters
        The Company and its subsidiaries' income tax returns periodically are examined ~~periodically~~ by various tax authorities. In connection with these examinations, tax authorities, including the Internal Revenue Service ("IRS"), have raised issues and proposed tax adjustments. We are reviewing and contesting certain of the proposed tax adjustments. Amounts related to these tax adjustments and other tax contingencies and related interest that management has assessed for uncertain income tax positions have been recorded through the income tax provision, equity or goodwill, as appropriate. The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations in a multitude of jurisdictions across our global operations. We record tax liabilities for anticipated tax audit issues in the United States and other tax jurisdictions based on our estimate of whether, and the extent to which, additional income taxes will be due. These tax liabilities are reflected net of related tax loss carryforwards. We adjust these liabilities in light of changing facts and circumstances.
        In 2004, in connection with the IRS audit of the 1997 through 2000 years, the Company submitted to the IRS proposed adjustments to certain prior period U.S. federal income tax returns resulting in a reduction in the taxable income previously filed. During 2006, the IRS accepted substantially all of the proposed adjustments. Subsequently, the Company developed proposed amendments to U.S. federal income tax returns for additional periods through 2006. On the basis of previously accepted amendments, the Company has determined that these adjustments will more-likely-than-not be accepted and, accordingly, has recorded such adjustments in the Consolidated Financial Statements. Such adjustments did not have a material impact on the Company's financial condition, results of operations or cash flows. While the final adjustments cannot be determined until the IRS review is completed, the Company believes that any resulting adjustments will not have a material impact on its financial condition, results of operations or cash flows. For a detailed discussion of income tax matters, see Note 5 to the Consolidated Financial Statements.
Compliance Matters
        As previously reported in the Company's periodic filings, the Company has received and responded to various allegations and other information that certain improper payments were made by the Company's subsidiaries and agents in recent years. For example, two subsidiaries in the Company's

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Flow Control business in Italy have been charged, along with numerous other parties, in connection with the Milan public prosecutor's investigation into allegedly improper payments made to certain

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Italian entities, and the Company has reported to German authorities potentially improper conduct involving agents retained by the Company's EMEA water business. The Company has since resolved ~~these matters~~this matter with German authorities. The Company ~~has~~ reported to the U.S. Department of Justice ("DOJ") and the SEC the investigative steps and remedial measures that it has taken in response to these allegations and its internal investigations. ~~The~~In 2005, the Company ~~also~~ informed the DOJ and the SEC that it ~~has~~ retained outside counsel to perform a Company-wide baseline review of its policies, controls and practices with respect to compliance with the Foreign Corrupt Practices Act ("FCPA"), and that it would continue to investigate and make periodic progress reports to these agencies. The Company has and will continue to communicate with the DOJ and SEC to provide updates on the baseline review and follow-up investigations, including, as appropriate, briefings concerning additional instances of potential improper conduct identified by the Company in the course of its ongoing compliance activities. The baseline review, which has been ~~substantially~~ completed, has revealed that some business practices may not comply with Tyco and FCPA requirements, and in February 2010, the Company ~~has~~ initiated discussions with the DOJ and SEC aimed at resolving these matters. While these discussions are ongoing, the Company cannot predict their outcome and cannot estimate the range of potential loss or the form of penalty, ~~if any,~~ that may result from an adverse resolution. It is possible that the Company may be required to pay material fines, consent to injunctions on future conduct, or suffer other criminal or civil penalties or adverse impacts, each of which may have a material adverse effect on the Company's financial position, results of operations or cash flows.
        Covidien and Tyco Electronics agreed, in connection with the Separation, to cooperate with the Company in its responses regarding these matters. Any judgment required to be paid or settlement or other cost incurred by the Company in connection with the FCPA investigations matters would be subject to the liability sharing provisions of the Separation and Distribution Agreement, which assigned liabilities primarily related to the former Healthcare and Electronics businesses of the Company to Covidien and Tyco Electronics, respectively, and provides that the Company will retain liabilities primarily related to its continuing operations. Any liabilities not primarily related to a particular segment will be shared equally among the Company, Covidien and Tyco Electronics.
        The German Federal Cartel Office ("FCO") charged in early 2007 that certain German subsidiaries in the Company's Flow Control business had engaged in anti-competitive practices, in particular with regard to its hydrant, valve, street box and fittings business. The Company investigated this matter and determined that the conduct may have violated German anti-trust law. The Company is cooperating with the FCO in its investigation of this violation, which is ongoing. The Company cannot estimate the range of potential loss that may result from this violation. It is possible that the Company may be subject to civil or criminal proceedings and may be required to pay judgments, suffer penalties or incur settlements in amounts that may have a material adverse effect on its financial position, results of operations or cash flows.
ERISA Partial Withdrawal Liability Assessment and Demand
        On June 8, 2007, SimplexGrinnell received a notice alleging that it had partially withdrawn from the National Automatic Sprinkler Industry Pension Fund (the "Fund"). Under Title IV of ERISA, if the Fund can prove that an employer completely or partially withdraws from a multi-employer pension plan such as the Fund, the employer is liable for withdrawal liability equal to its proportionate share of the plan's unfunded vested benefits. The alleged withdrawal results from a 1994 labor dispute between Grinnell Fire Protection Systems, SimplexGrinnell's predecessor, and Road Sprinkler Fitters Local Union No. 669.
        ERISA requires that payment of withdrawal liability be made in full or in quarterly installments commencing upon receipt of a liability assessment from the plan. A plan's assessment of withdrawal

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liability generally may be challenged only in arbitration, and ERISA requires that quarterly payments must continue to be made during the pendency of the arbitration. If the employer prevails in

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arbitration (and any subsequent appeals), its quarterly withdrawal liability payments are refunded with interest. The Fund's total withdrawal liability assessment against SimplexGrinnell is approximately $25 million. The quarterly withdrawal liability payments are $1.1 million, $13.2 million of which had been cumulatively paid ~~to date.~~through June 25, 2010. While the ultimate outcome is uncertain, SimplexGrinnell believes that it has strong arguments that no withdrawal liability is owed to the Fund, and it plans to vigorously defend against the Fund's withdrawal liability assessment. The matter is currently in arbitration. The Company has made no provision for this contingency and believes that its quarterly payments are recoverable.
BHS Contingency
        On May 14, 2010, the Company acquired BHS, which is a business that was formerly owned by The Brink's Company. Under the Coal Industry Retiree Health Benefit Act of 1992, as amended (the "Coal Act"), The Brink's Company and its majority-owned subsidiaries at July 20, 1992 (including certain legal entities acquired in the BHS acquisition) are jointly and severally liable with certain of The Brink's Company's other current and former subsidiaries for health care coverage obligations provided for by the Coal Act. A Voluntary Employees' Beneficiary Associate trust has been established by The Brink's Company to pay for these liabilities, although the trust may have insufficient funds to satisfy all future obligations. At the time of its spin-off from The Brink's Company, BHS entered into an agreement in which The Brink's Company agreed to indemnify BHS for any and all liabilities and expenses related to The Brink's Company's former coal operations, including any health care coverage obligations. The Brink's Company has agreed that this indemnification survives the Company's acquisition of BHS. The Company has evaluated its potential liability under the Coal Act as a contingency in light of all known facts, including the funding of the VEBA; and indemnification provided by The Brink's Company. The Company has concluded that no accrual is necessary due to the existence of the indemnification and its belief that The Brink's Company and the Voluntary Employee's Beneficiary Association ("VEBA") will be able to satisfy all future obligations under the Coal Act.
Other Matters
        As previously reported, in 2002, the SEC's Division of Enforcement conducted an investigation related to past accounting practices for dealer connect fees that ADT had charged to its authorized dealers upon purchasing customer accounts. The investigation related to accounting practices employed by the Company's former management, which were discontinued in 2003. Although the Company settled with the SEC in 2006, a number of former dealers and related parties have filed lawsuits against the Company, including a class action lawsuit filed in the District Court of Arapahoe County, Colorado, alleging breach of contract and other claims related to ADT's decision to terminate certain authorized dealers in 2002 and 2003. In February 2010, the Court granted a directed verdict in ADT's favor dismissing a number of the ~~plaintiff's~~plaintiffs' key claims. The plaintiffs have appealed the verdict. While it is not possible at this time to predict the final outcome of these lawsuits, the Company does not believe these claims will have a material adverse effect on ~~our~~the Company's financial position, results of operations or cash flows.
        In addition to the foregoing, the Company is subject to claims and suits, including from time to time, contractual disputes and product and general liability claims, incidental to present and former operations, acquisitions and dispositions. With respect to many of these claims, the Company either self-insures or maintains insurance through third-parties, with varying deductibles. While the ultimate outcome of these matters cannot be predicted with certainty, the Company believes that the resolution of any such proceedings, whether the underlying claims are covered by insurance or not, will not have a

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material adverse effect on ~~our~~the Company's financial condition, results of operations or cash flows beyond amounts recorded for such matters.
Item 1A.    Risk Factors
        Tyco's significant business risks are described in Part I, Item 1A in our 2009 Form 10-K, to which reference is made herein. Management does not believe that there have been any significant changes in the Company's risk factors since the Company filed the 2009 Form 10-K.
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
Period
Total Number
of Shares
Purchased Average
Price Paid
Per Share Total Number of
Shares Purchased
as Part of Publicly
Announced
Plans or Programs Maximum Approximate
Dollar Value of
Shares that May
Yet Be Purchased
Under Publicly Announced
Plans or Programs
3/27/10–4/23/10
— — — —
4/24/10–5/28/10
972,000 $ 36.94 972,000 —
5/29/10–6/25/10
6,544,000 $ 36.75 6,544,000 $ 623,700,000
        ~~During~~The transactions described in the ~~quarter,~~table above represent the ~~Company did not~~ repurchase ~~any~~of common shares on the NYSE as part of the $1.0 billion share repurchase program approved by the Board of Directors in July 2008 ("2008 Share Repurchase Program"). The average price paid per share is calculated by dividing the total cash paid for the shares by the total number of shares repurchased. Approximately ~~$900~~$624 million remained outstanding under the 2008 Share Repurchase Program as of ~~March 26,~~June 25, 2010.
Item 3.    Defaults Upon Senior Securities
        None.
Item 4.    Submission of Matters to a Vote of Security Holders
        None.

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Item 5.    Other Information
        None.

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Item 6.    Exhibits
Exhibit
Number Exhibit
~~2.1~~3.1 Agreement and Plan of Merger, dated as of January 18, 2010, among Tyco International Ltd., Barricade Merger Sub, Inc., ADT Security Services, Inc. and Brink's Home Security Holdings, Inc. (incorporated by reference to Item 2.1 of Tyco's Current Report on Form 8-K filed on January 19, 2010).

~~2.2~~

Amendment No. 1 to the Agreement and Plan of Merger, dated as of March 22, 2010, by and among Tyco International Ltd., Barricade Merger Sub, Inc., Brink's Home Security Holdings, Inc. and ADT Security Services, Inc. (incorporated by reference to Item 2.1 of Tyco's Current Report on Form 8-K filed on March 22, 2010).

~~2.3~~

~~Registration of securities issued in business combination transactions (incorporated by reference to Tyco's Registration Statement on Form S-4/A filed on March 26, 2010).~~

~~3.1~~

Articles of Association of Tyco International Ltd. (Tyco International AG) (Tyco International SA), as amended (incorporated by reference to Item 9.01 of Tyco's Current Report on Form 8-K filed on ~~March 12,~~May 28, 2010).

~~12.1~~

~~Statement of computation of Ratio of Earnings to Fixed Charges (Filed herewith).~~

~~22.1~~

~~Submission of Matters to a Vote of Security Holders (incorporated by reference to Item 5.07 of Tyco's Current Report on Form 8-K filed on March 12, 2010).~~

31.1

Certification by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith).

31.2

Certification by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith).

32.1

Certification by the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Filed herewith).

101

Financial statements from the quarterly report on Form 10-Q of Tyco International Ltd. for the quarter ended ~~March 26,~~June 25, 2010 formatted in XBRL: (i) the Consolidated Statements of Operations, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Cash Flows, (iv) the Consolidated Statements of Shareholders' Equity, and (v) the Notes to Consolidated Financial ~~Statements tagged as blocks of text.~~Statements.

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SIGNATURES
        Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
TYCO INTERNATIONAL LTD.

By:

/s/ CHRISTOPHER J. COUGHLIN
Christopher J. Coughlin
Executive Vice President
and Chief Financial Officer
(Principal Financial Officer)
Date: ~~April 27,~~July 29, 2010

		September 25, 2009			June 25, 2010		September 25, 2009

Accounts receivable, net		$	39
Accounts receivables, net				Accounts receivables, net	$	72	$	124
Inventories	Inventories		2	Inventories		65		74
Prepaid expenses and other current assets	Prepaid expenses and other current assets		22	Prepaid expenses and other current assets		16		38
Property, plant and equipment, net	Property, plant and equipment, net		22	Property, plant and equipment, net		52		82
Goodwill and intangible assets, net	Goodwill and intangible assets, net		9	Goodwill and intangible assets, net		97		14
Other assets	Other assets		62	Other assets		8		72

	Total assets	$	156	Total assets	$	310	$	404

Accounts payable	Accounts payable	$	22	Accounts payable	$	38		67
Accrued and other current liabilities	Accrued and other current liabilities		67	Accrued and other current liabilities		35		108
Other liabilities	Other liabilities		72	Other liabilities		24		102

	Total liabilities	$	161	Total liabilities	$	97	$	277

	For the Quarter Ended March 26, 2010

	Employee Severance and Benefits		Facility Exit and Other Charges		Charges Reflected in Cost of Sales		Total
ADT Worldwide	$	2	$	2	$	—	$	4
Flow Control		7		1		1		9
Fire Protection Services		5		—		—		5
Electrical and Metal Products		—		1		—		1
Safety Products		1		1		—		2

Total	$	15	$	5	$	1	$	21

	Employee Severance and Benefits		Facility Exit and Other Charges		Charges Reflected in Cost of Sales		Charges Reflected in SG&A		Total		Employee Severance and Benefits		Facility Exit and Other Charges		Charges Reflected in Cost of Sales		Charges Reflected in SG&A		Total

											For the Nine Months Ended June 26, 2009
ADT Worldwide	$	72	$	22	$	9	$	5	$	108	$	44	$	13	$	8	$	4	$	69
Flow Control		30		6		3		—		39		5		1		2		—		8
Fire Protection Services		51		1		—		1		53		13		—		—		—		13
Electrical and Metal Products		10		3		7		—		20		3		1		7		—		11
Safety Products		24		—		8		—		32		18		—		5		—		23
Corporate and Other		1		8		—		—		9		1		6		—		1		8

Total	$	188	$	40	$	27	$	6	$	261	$	84	$	21	$	22	$	5	$	132


Balance as of September 25, 2009	$	130		$	126
Charges		40			80
Reversals		(6	)		(7	)
Utilization		(70	)		(98	)
Reclass/transfers		(1	)		(1	)
Currency translation		(5	)		(6	)

Balance as of March 26, 2010	$	88
Balance as of June 25, 2010				$	94


*Cash consideration*
All cash consideration
Number of shares of BHS common shares outstanding as of May 14, 2010 electing all cash				37
Cash consideration per common share outstanding			$	13.15

	Total cash paid to BHS shareholders making all cash election		$	490
Mixed cash/stock consideration
Number of shares of BHS common shares outstanding as of May 14, 2010 electing mixed consideration or not making an election				7
Cash consideration per common share outstanding			$	12.75

	Total cash paid to BHS shareholders making a mixed election or not making an election		$	95

		Total cash consideration	$	585

*Stock consideration*
All cash consideration
Number of shares of BHS common shares outstanding as of May 14, 2010 electing all cash				37
Exchange ratio				0.7562

	Tyco shares issued to BHS shareholders making an all cash election			28
All stock consideration
Number of shares of BHS common shares outstanding as of May 14, 2010 electing all stock				1
Exchange ratio				1.0951

	Tyco shares issued to BHS shareholders making an all stock election			1
Mixed cash/stock consideration
Number of shares of BHS common shares outstanding as of May 14, 2010 electing mixed consideration or not making an election				7
Exchange ratio				0.7666

	Tyco shares issued to BHS shareholders making a mixed election or not making an election			6

Total Tyco common shares issued				35

Tyco's average common share price on May 14, 2010			$	38.73

		Total stock consideration	$	1,362

Fair value of BHS stock option, restricted stock unit and deferred stock unit replacement awards⁽¹⁾			$	27

Total fair value of consideration transferred			$	1,974


Net current assets⁽¹⁾				68
	Subscriber systems			629
	Other property, plant and equipment			49

		Total property, plant and equipment		678

	Contracts and related customer relationships (10-year weighted average useful life)			737
	Other intangible assets (4-year weighted average useful life)			12

		Total intangible assets		749

Net non-current liabilities⁽²⁾				(441	)

	Net assets acquired			1,054
Goodwill⁽³⁾			$	920

Purchase price			$	1,974
��

	For the Quarter and Nine Months Ended

	June 25, 2010
Net Revenue	$	54

Loss from continuing operations attributable to Tyco common shareholders		(26	)

Net loss attributable to Tyco common shareholders		(26	)

Jurisdiction		Years Open To Audit

Australia			2004-2009
Canada			2000-2009
France			1999-2009
Germany			1998-2009
Switzerland			2000-2009
United Kingdom			2000-2009
United States			1997-2009

		Quarter Ended March 26, 2010							Quarter Ended March 27, 2009									For the Quarter Ended June 25, 2010							For the Quarter Ended June 26, 2009

		Income			Shares		Per Share Amount		Loss			Shares		Per Share Amount				Income			Shares		Per Share Amount		Income			Shares		Per Share Amount
Basic earnings per share attributable to Tyco common shareholders:	Basic earnings per share attributable to Tyco common shareholders:																Basic earnings per share attributable to Tyco common shareholders:
	Income (loss) from continuing operations	$	310			476	$	0.65	$	(2,555	)		473	$	(5.40	)	Income from continuing operations	$	250			492	$	0.51	$	244			473	$	0.52
	Less: Income allocated to participating securities		NA	⁽¹⁾		—				NA	⁽²⁾		—				Less: Income allocated to participating securities		NA	⁽¹⁾		—				—	⁽²⁾		—
	Share options and restricted share awards		—			2				—							Share options, restricted share awards and deferred stock units		—			4				—			2
Diluted earnings per share attributable to Tyco common shareholders:
Diluted earnings per share attributable to Tyco common shareholders:																	Diluted earnings per share attributable to Tyco common shareholders:
	Add: Income allocated to participating securities		NA	⁽¹⁾		—				NA	⁽²⁾		—				Add: Income allocated to participating securities		NA	⁽¹⁾		—				—	⁽²⁾		—

Income (loss) from continuing operations attributable to Tyco common shareholders, giving effect to dilutive adjustments		$	310			478	$	0.65	$	(2,555	)		473	$	(5.40	)
Income from continuing operations attributable to Tyco common shareholders, giving effect to dilutive adjustments																	Income from continuing operations attributable to Tyco common shareholders, giving effect to dilutive adjustments	$	250			496	$	0.50	$	244			475	$	0.51

	ADT Worldwide			Flow Control			Fire Protection Services			Safety Products			Total

Balance as of September 25, 2009	$	4,302		$	1,993		$	1,334		$	1,162		$	8,791
Acquisitions		920			76			—			—			996
Divestitures		(4	)		(5	)		(1	)		(9	)		(19	)
Goodwill transfer due to realignment		112			—			23			(135	)		—
Held for sale reclass		—			(93	)		—			—			(93	)
Currency translation		(110	)		(156	)		(2	)		(19	)		(287	)

Balance as of June 25, 2010	$	5,220		$	1,815		$	1,354		$	999		$	9,388

		Second Quarter of 2009		Fourth Quarter of 2008

Weighted-Average Cost of Capital		10.9% to 12.8%		10.0% to 11.7%

Reporting Unit	Pre-tax Charge		After-tax Charge		Pre-tax Charge		After-tax Charge

EMEA Fire	$	180	$	179	$	180	$	179
EMEA Security		613		610		613		610
Electrical and Metal Products		935		913		935		915
ACVS		327		321		327		321
Life Safety		240		236		240		236
SRS		346		340		346		340

Total	$	2,641	$	2,599	$	2,641	$	2,601

		March 26, 2010					September 25, 2009						June 25, 2010						September 25, 2009

		Gross Carrying Amount		Accumulated Amortization		Weighted Average Amortization Period	Gross Carrying Amount		Accumulated Amortization		Weighted Average Amortization Period		Gross Carrying Amount		Accumulated Amortization		Weighted Average Amortization Period		Gross Carrying Amount		Accumulated Amortization		Weighted Average Amortization Period
Amortizable:	Amortizable:											Amortizable:
	Contracts and related customer relationships	$	6,809	$	4,498	14 years	$	6,529	$	4,275	14 years	Contracts and related customer relationships	$	7,633	$	4,607		14 years	$	6,529	$	4,275		14 years
	Intellectual property		552		473	20 years		552		462	20 years	Intellectual property		544		472		20 years		545		459		18 years
	Other		15		12	10 years		17		13	10 years	Other		27		12		6 years		17		13		10 years

	Total	$	7,376	$	4,983	14 years	$	7,098	$	4,750	14 years	Total	$	8,204	$	5,091		14 years	$	7,091	$	4,747		14 years

Non-Amortizable:	Non-Amortizable:											Non-Amortizable:
	Intellectual property	$	213				$	212				Intellectual property	$	213					$	212
	Other		92					87				Other		91						87

	Total	$	305				$	299				Total	$	304					$	299

Intangible Asset	Pre-tax Charge		After-tax Charge

Sensormatic tradename	$	42	$	26
Winner franchise rights		14		9
SSC franchise rights		8		5

Total	$	64	$	40

	March 26, 2010		September 25, 2009		June 25, 2010		September 25, 2009

Commercial paper⁽²⁾	$	—	$	200	$	—	$	200
6.75% public notes due 2011⁽¹⁾		516		516		516		516
6.375% public notes due 2011		849		849		—		849
Revolving senior credit facility due 2011		—		—		—		—
Revolving senior credit facility due 2012		—		—		—		—
6.0% public notes due 2013		655		655		655		655
4.125% public notes due 2014		498		—		499		—
3.375% public notes due 2015						498		—
8.5% public notes due 2019		750		750		750		750
7.0% public notes due 2019		433		434		433		434
6.875% public notes due 2021		716		716		716		716
7.0% public notes due 2028		7		14		—		14
6.875% public notes due 2029		21		21		—		21
Other⁽¹⁾⁽²⁾		86		119		101		119

Total debt		4,531		4,274		4,168		4,274
Less current portion		536		245		535		245

Long-term debt	$	3,995	$	4,029	$	3,633	$	4,029

		As of March 26, 2010							June 25, 2010

($ in millions)	($ in millions)	Level 1		Level 2		Total		($ in millions)	Level 1		Level 2		Total
Assets	Assets							Assets
Available-for-Sale Securities:	Available-for-Sale Securities:							Available-for-Sale Securities:
	Corporate debt securities	$	—	$	91	$	91	Corporate debt securities	$	—	$	82	$	82
	U.S. Government debt securities		62		177		239	U.S. Government debt securities		104		135		239
	Other debt securities		—		4		4	Other debt securities		—		8		8

Total	Total	$	62	$	272	$	334	Total	$	104	$	225	$	329

	U.S. Plans												U.S. Plans

	For the Quarters Ended						For the Six Months Ended						For the Quarters Ended						For the Nine Months Ended
	March 26, 2010			March 27, 2009			March 26, 2010			March 27, 2009			June 25, 2010			June 26, 2009			June 25, 2010			June 26, 2009
Service cost	$	3		$	2		$	5		$	5		$	3		$	2		$	7		$	7
Interest cost		12			12			24			25			12			12			34			37
Expected return on plan assets		(12	)		(12	)		(24	)		(25	)		(12	)		(12	)		(36	)		(37	)
Amortization of prior service cost		—			1			—			1			—			1			1			1
Amortization of net actuarial loss		6			2			13			4			6			2			20			7

Net periodic benefit cost	$	9		$	5		$	18		$	10		$	9		$	5		$	26		$	15

		March 26, 2010		September 25, 2009

Purchased materials and manufactured parts		$	517	$	514
Work in process			205		207
Finished goods			742		722

	Inventories	$	1,464	$	1,443

		March 26, 2010			September 25, 2009				June 25, 2010			September 25, 2009

Land	Land	$	156		$	156		Land	$	144		$	144
Buildings	Buildings		806			788		Buildings		773			745
Subscriber systems	Subscriber systems		5,375			5,309		Subscriber systems		6,063			5,309
Machinery and equipment	Machinery and equipment		2,431			2,398		Machinery and equipment		2,360			2,324
Property under capital leases⁽¹⁾	Property under capital leases⁽¹⁾		62			62		Property under capital leases⁽¹⁾		62			62
Construction in progress	Construction in progress		149			164		Construction in progress		173			164
Accumulated depreciation⁽²⁾	Accumulated depreciation⁽²⁾		(5,478	)		(5,380	)	Accumulated depreciation⁽²⁾		(5,485	)		(5,311	)

	Property, Plant and Equipment, net	$	3,501		$	3,497		Property, Plant and Equipment, net	$	4,090		$	3,437


Balance as of September 25, 2009	$	81		$	79
Warranties issued		17			21
Changes in estimates		(6	)		(9	)
Settlements		(24	)		(32	)
Currency translation		(3	)		(4	)

Balance as of March 26,2010	$	65
Balance as of June 25, 2010				$	55

	For the Quarters Ended									For the Quarters Ended

	March 26, 2010			March 27, 2009			% Change			June 25, 2010			June 26, 2009			% Change
Revenue from product sales	$	557		$	537			3.7%	⁽¹⁾	$	585		$	533			9.8%	⁽¹⁾
Service revenue		1,210			1,168			3.6%	⁽¹⁾		1,239			1,208			2.6%	⁽¹⁾

Net revenue	$	1,767		$	1,705			3.6	%	$	1,824		$	1,741			4.8	%

Goodwill and intangible asset impairments	$	—		$	1,023			—	⁽²⁾
Operating income (loss)	$	305		$	(867	)		—	⁽²⁾
Operating income										$	222		$	220			0.9	%
Operating margin		17.3	%		—	⁽²⁾					12.2	%		12.6	%

	For the Quarters Ended

	March 26, 2010			December 25, 2009			September 25, 2009
Trailing 12-month basis attrition		13.1	%		13.4	%⁽¹⁾		13.3	%⁽¹⁾

		~~Long Term~~ ~~Debt Ratings~~

~~Moody's~~	~~P-2~~	~~Baa1~~
~~Standard & Poor's~~	~~A-2~~	~~BBB+~~
~~Fitch~~	F2	~~BBB+~~

	March 26, 2010		September 25, 2009		June 25, 2010		September 25, 2009

ADT Worldwide	$	5,956	$	5,916	$	6,462	$	5,916
Flow Control		1,629		1,698		1,482		1,646
Fire Protection Services		1,163		1,171		1,211		1,171
Electrical and Metal Products		95		72		87		72
Safety Products		134		102		140		102

	$	8,977	$	8,959	$	9,382	$	8,907

Period		Average Price Paid Per Share			Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under Publicly Announced Plans or Programs

3/27/10–4/23/10	—		—	—		—
4/24/10–5/28/10	972,000	$	36.94	972,000		—
5/29/10–6/25/10	6,544,000	$	36.75	6,544,000	$	623,700,000

Exhibit Number		Exhibit

~~2.1~~3.1		Agreement and Plan of Merger, dated as of January 18, 2010, among Tyco International Ltd., Barricade Merger Sub, Inc., ADT Security Services, Inc. and Brink's Home Security Holdings, Inc. (incorporated by reference to Item 2.1 of Tyco's Current Report on Form 8-K filed on January 19, 2010).
~~2.2~~		Amendment No. 1 to the Agreement and Plan of Merger, dated as of March 22, 2010, by and among Tyco International Ltd., Barricade Merger Sub, Inc., Brink's Home Security Holdings, Inc. and ADT Security Services, Inc. (incorporated by reference to Item 2.1 of Tyco's Current Report on Form 8-K filed on March 22, 2010).
~~2.3~~		~~Registration of securities issued in business combination transactions (incorporated by reference to Tyco's Registration Statement on Form S-4/A filed on March 26, 2010).~~
~~3.1~~		Articles of Association of Tyco International Ltd. (Tyco International AG) (Tyco International SA), as amended (incorporated by reference to Item 9.01 of Tyco's Current Report on Form 8-K filed on ~~March 12,~~May 28, 2010).
~~12.1~~		~~Statement of computation of Ratio of Earnings to Fixed Charges (Filed herewith).~~
~~22.1~~		~~Submission of Matters to a Vote of Security Holders (incorporated by reference to Item 5.07 of Tyco's Current Report on Form 8-K filed on March 12, 2010).~~
31.1		Certification by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith).
31.2		Certification by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith).
32.1		Certification by the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Filed herewith).
101		Financial statements from the quarterly report on Form 10-Q of Tyco International Ltd. for the quarter ended ~~March 26,~~June 25, 2010 formatted in XBRL: (i) the Consolidated Statements of Operations, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Cash Flows, (iv) the Consolidated Statements of Shareholders' Equity, and (v) the Notes to Consolidated Financial ~~Statements tagged as blocks of text.~~Statements.


		TYCO INTERNATIONAL LTD.
		By:		/s/ CHRISTOPHER J. COUGHLIN Christopher J. Coughlin Executive Vice President and Chief Financial Officer (Principal Financial Officer)