ADT 2011 Annual Report Download

Download and view the complete annual report

Please find the complete 2011 ADT annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 313

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188
  • 189
  • 190
  • 191
  • 192
  • 193
  • 194
  • 195
  • 196
  • 197
  • 198
  • 199
  • 200
  • 201
  • 202
  • 203
  • 204
  • 205
  • 206
  • 207
  • 208
  • 209
  • 210
  • 211
  • 212
  • 213
  • 214
  • 215
  • 216
  • 217
  • 218
  • 219
  • 220
  • 221
  • 222
  • 223
  • 224
  • 225
  • 226
  • 227
  • 228
  • 229
  • 230
  • 231
  • 232
  • 233
  • 234
  • 235
  • 236
  • 237
  • 238
  • 239
  • 240
  • 241
  • 242
  • 243
  • 244
  • 245
  • 246
  • 247
  • 248
  • 249
  • 250
  • 251
  • 252
  • 253
  • 254
  • 255
  • 256
  • 257
  • 258
  • 259
  • 260
  • 261
  • 262
  • 263
  • 264
  • 265
  • 266
  • 267
  • 268
  • 269
  • 270
  • 271
  • 272
  • 273
  • 274
  • 275
  • 276
  • 277
  • 278
  • 279
  • 280
  • 281
  • 282
  • 283
  • 284
  • 285
  • 286
  • 287
  • 288
  • 289
  • 290
  • 291
  • 292
  • 293
  • 294
  • 295
  • 296
  • 297
  • 298
  • 299
  • 300
  • 301
  • 302
  • 303
  • 304
  • 305
  • 306
  • 307
  • 308
  • 309
  • 310
  • 311
  • 312
  • 313

TYCO
INTERNATIONAL
2011 ANNUAL
REPORT

Table of contents

  • Page 1
    Tyco InTernaTIonal 2011 AnnuAl RepoRt

  • Page 2

  • Page 3
    ...business customers to strengthen our position in this important segment of the security industry. aDT Pulse makes it possible for anyone with a web-enabled device to remotely access and control not only a security system, but also lights, thermostats, video cameras and other appliances in their home...

  • Page 4
    ... support of our company. Positioning Tyco for the Future We are on track with our plan to separate Tyco International into three independent, publicly-traded companies, consisting of a standalone aDT north america residential and small business security company; a standalone flow control company...

  • Page 5
    ... UNITED STATES $4.0 EUROPE, MIDDLE EAST, AFRICA $3.2 $1.8 OTHER AMERICAS ASIA PACIFIC 2011 REVENUE BY SEGMENT (In US$ millions) B A Tyco Security Solutions B Tyco Fire Protection A C Tyco Flow control D electrical and metal Products* C net revenue $8,626 4,743 3,639 347 $17,355 D * Tyco sold...

  • Page 6
    ... tyco International is pursuing a plan to separate into three independent public companies. these standalone companies- all with leading positions in large and growing industries-will have great flexibility to pursue their own focused strategies and create significant value for shareholders...

  • Page 7
    ...security systems, installation and monitoring Small business security systems, installation and monitoring Premise control and management services Personal emergency response system and home health services KEY BRANDS aDT aDT companion Service aDT custom home Services aDT Pulse Interactive Services...

  • Page 8
    ... commercial customers Global fire and security systems integrator providing design, installation and after-market services KEY BRANDS aDT (outside north america) american Dynamics ansul DSc Grinnell VALUE DRIVERS Scott Safety Sensormatic Simplex SimplexGrinnell Software house Total Walther Tyco...

  • Page 9
    ... GEOGRAPHY END MARKETS "I am proud of the great work of our entire flow control team to get us to a point where we are well positioned to take the next step as a standalone public company." - PATRICK DECKER chIeF eXecUTIVe oFFIcer 41% ASIA PACIFIC 30% eurOPe, MIddle eAST, AFrICA 29% AMerICAS 37...

  • Page 10
    ... results and/or business trends of the company. the company utilizes these financial measures before special items to assess overall operating performance and segment-level core operating performance, and to provide insight to management in evaluating operating plan execution and underlying market...

  • Page 11
    ...of Annual General Meeting and Proxy Statement. We hope you are planning to attend the meeting. Your vote is important. Whether or not you are able to attend, it is important that your common shares be represented at the meeting. Accordingly, we ask that you please complete, sign, date and return the...

  • Page 12
    ... common shares are represented at the meeting. Tyco shareholders of record who attend the meeting may vote their common shares personally, even though they have sent in proxies. By Order of the Board of Directors, 16JAN200911072691 Judith A. Reinsdorf Executive Vice President and General Counsel...

  • Page 13
    ... out of capital contribution reserve ...PROPOSAL NUMBER SIX-ADVISORY VOTE ON EXECUTIVE COMPENSATION ...PROPOSAL NUMBER SEVEN-AMENDMENTS TO ARTICLES OF ASSOCIATION ...GOVERNANCE OF THE COMPANY ...Our Corporate Governance Principles ...Board of Directors ...Director Independence ...Director Service...

  • Page 14
    ... Summary ...Change in Control and Severance Benefits ...Role of Independent Compensation Consultant ...Risk Assessment of Compensation Programs ...Stock Ownership Guidelines ...Pay Recoupment Policy ...Tax Deductibility of Executive Compensation ...Compensation and Human Resources Committee Report...

  • Page 15
    ... plans. Who is entitled to vote? January 9, 2012 is the record date for the Annual General Meeting. On January 9, 2012, there were 461,674,772 common shares outstanding and entitled to vote at the Annual General Meeting. Shareholders registered in our share register with voting rights at the close...

  • Page 16
    ... of a common share on the record date will be entitled to one vote per share for each Director to be elected at the Annual General Meeting and to one vote per share on each other matter presented at the Annual General Meeting. However, if you own ''Controlled Shares'' representing voting power of...

  • Page 17
    ... right to attend the Annual General Meeting. You must return your proxy cards by the times and dates set forth below under ''Returning Your Proxy Card'' in order for your vote to be counted. How do I appoint and vote via an independent proxy? If you are a shareholder of record as of the record date...

  • Page 18
    ...Board of Directors. Whether or not you plan to attend the Annual General Meeting, we urge you to submit your proxy. Returning the proxy card or submitting your vote electronically will not affect your right to attend the Annual General Meeting. You must return your proxy cards by the times and dates...

  • Page 19
    ...cast (in person or by proxy) at the Annual General Meeting, not counting the votes of any member of the Company's Board of Directors or any executive officer of the Company or any votes represented by the Company. • Election of the Board of Directors. The election of each director nominee requires...

  • Page 20
    ... properly presented at the Annual General Meeting, the proxies received from our shareholders give the proxy holders the authority to vote on the matter at their discretion, and such proxy holders will vote in accordance with the recommendations of the Board of Directors. What constitutes a quorum...

  • Page 21
    ... Financial Solutions will act as the inspector of election and will tabulate the votes. Important notice regarding the availability of proxy materials for the shareholder meeting to be held on March 7, 2012: Our proxy statement for the 2012 Annual General Meeting, form of proxy card and 2011 Annual...

  • Page 22
    ...who have sold their shares prior to the Annual General Meeting are not entitled to vote those shares. Granting of Proxy If you are a shareholder of record and do not wish to attend the Annual General Meeting, you have the right to grant your voting proxy directly to the Company officers named in the...

  • Page 23
    ...asked to inform the Company of the number of the shares they represent as soon as possible, but no later than March 7, 2012, 2:00 p.m. Central European time at the Registered Shareholders check-in area. Tyco Annual Report The Tyco International Ltd. 2011Annual Report containing the Company's audited...

  • Page 24
    ... of Tyco International Ltd. (which do not consolidate the results of operations for Tyco's subsidiaries) and the Company's consolidated financial statements for the year ended September 30, 2011, and contains the reports of our statutory auditor and our independent registered public accounting firm...

  • Page 25
    ...represented at the Annual General Meeting in person or by proxy, whereby abstentions, broker non-votes, blank and invalid votes are disregarded in establishing the number of votes cast. The Board unanimously recommends that shareholders vote FOR the discharge of the members of the Board of Directors...

  • Page 26
    ...a number of leadership positions in sales, marketing, and services, and was general manager of several sales and services businesses, including IBM's Sales and Distribution operations in the United States, Canada and Latin America, its Global Services team in the Asia Pacific region, Product Support...

  • Page 27
    ...Son, Ltd., a provider of international financial services. Mr. Duperreault's qualifications to serve on the board include his extensive experience as an executive and board member of publicly traded companies, his experience in risk management and his global business experience and leadership. Bruce...

  • Page 28
    ... companies and his financial acumen and understanding of accounting principles. Dinesh Paliwal-age 53, serves as Chairman of the Board, Chief Executive Officer and President of Harman International, a company that designs, manufactures and markets a wide range of audio and information solutions...

  • Page 29
    ... corporate governance experience gained as the chief executive and director of a large publicly traded company in the pharmaceutical industry. The Board unanimously recommends that shareholders vote FOR the election of all of the nominees for Director to serve until the next Annual General Meeting...

  • Page 30
    ... public accounting firm for purposes of United States securities law reporting for the year ending September 30, 2011. The Audit Committee is responsible for the annual retention of our independent registered public accounting firm, subject to shareholder approval at the Annual General Meeting...

  • Page 31
    ...30, 2011 and September 24, 2010 were for professional services rendered for the integrated audits of our consolidated financial statements and internal controls over financial reporting, quarterly reviews of the condensed consolidated financial statements included in Tyco's Quarterly Reports on Form...

  • Page 32
    ...abstentions are included in establishing the number of votes cast. The Audit Committee and the Board unanimously recommend that shareholders vote FOR the appointment of PricewaterhouseCoopers AG (Z¨ urich) as the Company's special auditing firm until our next annual general meeting. 18 2012 Proxy...

  • Page 33
    ... entitled ''reserve from capital contributions'' in order to preserve the Company's ability to return such contributions to shareholders free of Swiss withholding tax. The Board of Directors therefore proposes to consolidate the general reserve, the reserve for treasury shares and the contributed...

  • Page 34
    ... Cash Dividend As a result of the proposed spin-offs of the Company's flow control and North American residential security businesses, which are expected to be completed by October 2012, the Board of Directors is proposing that shareholders approve dividends through the fourth fiscal quarter of...

  • Page 35
    ... reduction to the capital contribution reserve shall be increased for any shares issued, and decreased for any shares acquired, after the Annual General Meeting and before the record date for the applicable dividend installment payment. The Board's proposal is accompanied by a report by the auditor...

  • Page 36
    ... shares represented at the Annual General Meeting in person or by proxy, whereby abstentions, broker non-votes, blank and invalid votes are disregarded in establishing the number of votes cast. Although the vote is non-binding, our Board and the Compensation Committee will review the voting results...

  • Page 37
    ... representing the shares be printed and delivered. Proposed version Article 7: Share Certificates (1) The Company may issue its registered shares in the form of single certificates, global certificates or uncertificated securities. The shareholder has no right to demand a conversion of the form...

  • Page 38
    Current version Proposed version registered shares on behalf of the shareholders may be notified by the Company of the assignment. Intermediated securities based on registered shares of the Company cannot be transferred by way of assignment. (4) Registered shares not physically represented by ...

  • Page 39
    ... on the Company's legal or tax status in Switzerland. The Board of Directors proposes to amend article 1 of the articles of association as follows: Current version Article 1: Corporate Name, Registered Office and Duration Under the corporate name Tyco International Ltd. (Tyco International AG) (Tyco...

  • Page 40
    ... majority of the votes cast (in person or by proxy) at the Annual General Meeting, whereby abstentions, broker non-votes, blank and invalid votes are disregarded in establishing the number of votes cast. The Board unanimously recommends that shareholders vote FOR these proposals. 26 2012 Proxy...

  • Page 41
    ...shareholders and consistent with good corporate citizenship. In carrying out its responsibilities, the Board selects and monitors top management, provides oversight for financial reporting and legal compliance, determines Tyco's governance principles and implements its governance policies. The Board...

  • Page 42
    ... personal responsibility for all actions and results. We create an operating discipline of continuous improvement that is an integral part of our culture. Tyco Goals: What We Seek to Achieve Governance: Adhere to the best standards of corporate governance for the Company by establishing processes...

  • Page 43
    ... risk management and control procedures are in place; • selecting, monitoring, evaluating, compensating and, if necessary, replacing the Chief Executive Officer and other senior executives, and seeing that organizational development and succession plans are maintained for these executive positions...

  • Page 44
    ... current corporate structure. Upon completion of the Separation, Mr. Breen is expected to remain as non-executive chairman of the Board of the Company, a director of the flow control company, and a consultant to the North American residential security company. In addition, current Tyco directors are...

  • Page 45
    ... with the Company's Annual General Meeting and Board members are required to be in attendance at the Annual General Meeting either in person or by telephone. The lead Director, in consultation with the Chairman of the Board / Chief Executive Officer, is responsible for setting meeting agendas with...

  • Page 46
    ... the Audit Committee chair. A report summarizing all items received resulting in cases is prepared for the Board. The Corporate Ombudsman directs cases to the applicable department (such as customer service, human resources or in the case of accounting or control issues, forensic audit) and follows...

  • Page 47
    ... relationship with the Company; • do not work for, nor does any immediate family member work for, consult with, or otherwise provide services to, another publicly traded company on whose Board of Directors the Tyco Chief Executive Officer or other member of senior management serves; 2012 Proxy...

  • Page 48
    ... present (in person or by proxy) at a duly called shareholder meeting. Directors are expected to inform the Nominating and Governance Committee of any significant change in their employment or professional responsibilities and are required to offer their resignation to the Board in the event of such...

  • Page 49
    ...'s expense. Other Directorships, Conflicts and Related Party Transactions In order to provide sufficient time for informed participation in their board responsibilities: • non-executive Directors who are employed as chief executive officer of a publicly traded company are required to limit their...

  • Page 50
    ...well as any waivers for executive officers or Directors on our website at www.tyco.com under the heading ''Corporate Citizenship-Governance.'' Charitable Contributions The Board understands that its members, or their immediate family members, serve as directors, trustees, executives, advisors and in...

  • Page 51
    ... includes the value of the discount on home security systems installed by the Company in Directors' homes and discounts on security monitoring services. These discounts did not exceed $1,950 for any Director in fiscal 2011. For Mr. Paliwal, all other compensation includes $20,000 of fees paid to...

  • Page 52
    ... General Meeting of shareholders, developing and recommending to the Board a set of corporate governance principles, and playing a general leadership role in Tyco's corporate governance. In addition, the Nominating and Governance Committee oversees our environmental, health and safety management...

  • Page 53
    ... Committee reviews and approves compensation and benefits policies and objectives, determines whether Tyco's officers, Directors and employees are compensated according to these objectives, and carries out certain of the Board's responsibilities relating to the compensation of Tyco's executives. The...

  • Page 54
    .... To be considered by the Nominating and Governance Committee for nomination and inclusion in the Company's proxy statement for the 2013 Annual General Meeting of Shareholders, shareholder recommendations for Director must be received by Tyco's Corporate Secretary no later than September 21, 2012...

  • Page 55
    ... and Investor Relations groups. Prior to joining Tyco, Mr. Nayar spent six years at PepsiCo, Inc., most recently as Chief Financial Officer of Operations, and before that as Vice President and Assistant Treasurer of Capital Markets. Mr. Nayar serves as a director on the board of Atkore International...

  • Page 56
    ... Tyco in 2006, Mr. Oliver served in operational roles of increasing responsibility at several General Electric divisions. Mr. Oliver serves as a director on the board of Atkore International, Inc., an equity investment of the Company. Judith A. Reinsdorf-Ms. Reinsdorf, age 48, has been our Executive...

  • Page 57
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth the number of shares of common stock beneficially owned as of December 31, 2011 by each current Director, nominee for Director, executive officer named in the Summary Compensation Table under ''Executive ...

  • Page 58
    .... Number of Common Shares Beneficially Owned Percentage of Common Stock Outstanding on December 31, 2011 Name and Address of Beneficial Owner BlackRock Inc...40 East 52nd Street New York, NY 10022 Capital World Investors ...333 South Hope Street Los Angeles, CA 90071 Dodge & Cox ...555 California...

  • Page 59
    ... rewarding executives commensurate with business results. The Committee believes that the best way to align the CEO's compensation with shareholder interests is to place the majority of his compensation at-risk-in the form of long-term performance based equity awards and annual incentive opportunity...

  • Page 60
    ... of fiscal 2011, and envisaged a return to organic revenue growth across all of our businesses and operating margin improvements predicated on volume growth and aggressive cost management. For our CEO, the target performance goals were (i) growth in earnings per share before special items (''EPS...

  • Page 61
    ... $252 million of cash payments related to special items. Free cash flow was reduced in 2011 due in part to an increased use of cash to fund working capital resulting from increased business activity, although working capital days were in line with fiscal 2010. The Company used its excess cash to...

  • Page 62
    .... Over this period, the Company's total shareholder return, as calculated under the performance share plan, was 13.16%*, which was better than 60% of the companies in the S&P 500 Industrials Index and resulted in a pay-out at the end of fiscal 2011 of 144% of the target shares granted to Mr. Breen...

  • Page 63
    ... Officer, the terms of the employment agreement that he entered in 2002 govern in these scenarios. • The Company eliminated tax gross-ups on supplemental benefits for all named executive officers effective January 1, 2010. Effective December 2010, supplemental life, disability and long-term care...

  • Page 64
    ... lines, number of employees, and various performance and financial measures. The Compensation Committee did not make any changes to the peer group in fiscal 2011 after updating the peer group in fiscal 2010. The peer group consists of 17 industrial and service companies that reflect the competitive...

  • Page 65
    ... utilizing tally sheets prepared by company management for each named executive officer. Tally sheets identify the value of each pay element, including base salary, annual bonus, sign-on or other cash payments, long-term incentives, and benefit and perquisite payments, and help the Compensation...

  • Page 66
    ... Stock and Incentive Plan (the ''2004 SIP''). Annual incentive compensation rewards the named executive officers for their execution of the operating plan and other strategic initiatives, as well as for financial performance that benefits the Company's business and drives long-term shareholder value...

  • Page 67
    ... pension contributions and then deducting net capital expenditures (including accounts purchased from the ADT dealer network), and then adding back the special items that increased or decreased cash flows. Working capital days are generally calculated by dividing annualized average working capital...

  • Page 68
    ... portion of the officer's total pay opportunity to share price. It provides long-term accountability for named executive officers, and it offers the incentive of performance-based opportunities for capital accumulation in lieu of a pension plan for most of the Company's executive management. For...

  • Page 69
    ... pension benefits under his employment agreement. Our named executive officers are eligible to participate in the Tyco Supplemental Savings and Retirement Plan, which is a deferred compensation plan that permits the elective deferral of base salary and performance-based bonus for executives earning...

  • Page 70
    ... two times base salary, and allows the named executive officer to elect to pay additional premiums into the plan. Our executive disability insurance program ensures salary continuation above the $15,000 monthly benefit limit provided by our broad based disability plan. The executive long-term care...

  • Page 71
    ... value of the benefits available under the severance plans in effect as of our fiscal year-end. Severance Arrangements Not in Connection with a Change in Control Description Chief Executive Officer Named Executive Officers Governing document: Employment agreement. Termination events triggering...

  • Page 72
    ... Executive Officer Named Executive Officers Pension benefits consisting of accrued amounts in supplemental retirement plans: Prorated bonus in year of termination: Voluntary termination by Mr. Breen without Good Reason or termination by the Company with Cause prior to age 60-vested pension...

  • Page 73
    ... and vest pro rata based on the number of full months of service completed from the grant date through the employment termination date. Certain officers, including the Company's named executive officers, will continue to be eligible for one additional year's worth of stock option vesting if they are...

  • Page 74
    ... following events: • Assignment to Mr. Breen of any duties inconsistent in any material respect with his position (including titles and reporting relationships), authority, duties or responsibilities as contemplated by the employment agreement, or any other action by the Company, which results in...

  • Page 75
    ... in Control Description Chief Executive Officer Named Executive Officers Governing document: Employment agreement. Additional events triggering severance cash benefits and benefits continuation: Severance cash benefit: Executive must sign release to receive severance benefits Health and...

  • Page 76
    ...-disparagement covenants Under Mr. Breen's employment agreement, Mr. Breen's resignation for any reason is treated as a termination for ''Good Reason'' if such resignation occurs within the 30-day period commencing on the first anniversary of the change in control. 62 2012 Proxy Statement

  • Page 77
    ...generally defines ''Good Reason Resignation'' as any retirement or termination of employment by an executive that is not initiated by the Company and that is caused by any one or more of the following events, provided the event occurs in the period beginning 60 days before the change in control date...

  • Page 78
    ... required to report trading in Tyco securities under the Securities and Exchange Act) and employees, it is the Chief Executive Officer and the Senior Vice President, Human Resources and Internal Communications, who develop the pay strategies and recommendations, which the Compensation Committee then...

  • Page 79
    ... with effective internal controls and the risk management policies; and are supported by the oversight and administration of the Compensation Committee with regard to executive compensation programs. Stock Ownership Guidelines In 2003, the Board established stock ownership and share retention...

  • Page 80
    ...Company-issued stock option. The policy also restricts trading for a limited group of Company employees (including named executive officers and directors) to defined window periods that follow our quarterly earnings releases. Tax Deductibility of Executive Compensation Section 162(m) of the Internal...

  • Page 81
    ... executive officer's election. Summary Compensation Table Change in Pension Value and Non-Equity Nonqualified Incentive Deferred Plan Compensation All Other Compensation Earnings Compensation (3) (4 5) (g) (h) (i) Name and Principal Position (a) Year (b) Salary ($) (c) Bonus ($)(1) (d) Stock...

  • Page 82
    ...Pension Benefits'' table. All Other Compensation: The amounts reported in column (i) for each named executive officer represent cash perquisites, insurance premiums paid by the Company for the benefit of the officer (and, in some cases, the officer's spouse), costs related to personal use of Company...

  • Page 83
    ... insurance benefits and the reimbursement of state taxes owed by him to New York for Tyco work performed in that State. Generally, with respect to compensation awarded to Mr. Breen prior to 2009, the Company pays the additional taxes (including a gross-up) that Mr. Breen owes as a result of working...

  • Page 84
    ... (3) Amounts reported in columns (d) through (f) represent potential annual performance bonuses that the named executive officers could have earned under the Company's annual incentive plan for fiscal 2011. The Board approved a maximum bonus payout of 0.50% of net income before special items for...

  • Page 85
    ...Other named executive officers also received a mix of stock options, performance share units and restricted stock units. When the Company grants stock options, the exercise price equals the fair market value of our common stock on the date of grant. Stock options generally vest in equal installments...

  • Page 86
    ... Dollar amounts are based on the NYSE closing price of $40.75 for the Company's common stock on September 30, 2011. Option Awards Stock Awards Equity Incentive Equity Incentive Plan Awards: Plan Awards: Market or Number of Payout Value of Unearned Unearned Shares, Units Shares, Units or Other Rights...

  • Page 87
    ...number and market value of RSUs which had been granted as of September 30, 2011, but which remained subject to additional vesting requirements (the officer's continued employment with the Company). Scheduled vesting of all RSUs for each of the named executive officer is as follows: Vesting Date 2011...

  • Page 88
    ... 2010 through August 2011 pursuant to a Rule 10b5-1 stock trading plan. Mr. Breen entered into the plan as part of his personal long-term financial, estate and tax planning strategy, and to provide for the orderly liquidation of his stock options prior to their expiration. 74 2012 Proxy Statement

  • Page 89
    ...only named executive officer of the Company with a pension benefit. Number of Years Credited Service (#) (c) Present Value of Accumulated Benefit ($) (d) Payments During Last Fiscal Year ($) (e) Name (a) Plan Name (b) Edward D. Breen ...(1) Employment Agreement 9.17 $23,660,000 $ - The terms...

  • Page 90
    ... up to 50% of his or her base salary and up to 100% of his or her performance bonus. Amounts in column (d) include earnings or (losses) on the named executive officer's notional account in the SSRP and in the Company's Supplemental Executive Retirement Plan (the ''SERP''). The SERP was frozen with...

  • Page 91
    ... are based on Tyco's closing NYSE share price of $40.75 on such date. For Mr. Breen, termination benefits are governed by his employment agreement. For each of the other named executive officers, the CIC Severance Plan governs termination benefits for change in control triggering events, and the...

  • Page 92
    ... ''Elements of Compensation-Annual Incentive Compensation.'' Upon a triggering event, Mr. Breen's employment agreement provides for continued participation in health and welfare plans over the same time period for which severance is payable, subject to an 18-month limit on medical benefits. If...

  • Page 93
    ...month the termination date is prior to age 60. The amount shown in column (b) does not reflect any reduction in benefits related to an election to receive payments earlier than age 60. Amounts represent the Company-provided supplemental life insurance benefit for each of the named executive officers...

  • Page 94
    ... oversees Tyco's financial reporting process on behalf of the Board. Management has the primary responsibility for the financial statements and the reporting process. Management assures that the Company develops and maintains adequate financial controls and procedures, and monitors compliance...

  • Page 95
    ... statutory financial statements of Tyco International Ltd. be included in Tyco's annual report to shareholders for the fiscal year ended September 30, 2011. Submitted by the Audit Committee, Brendan R. O'Neill, Chair Michael E. Daniels Dinesh Paliwal William S. Stavropoulos 2012 Proxy Statement 81

  • Page 96
    ... Commission Reports Copies of our Annual Report on Form 10-K for the fiscal year ended September 30, 2011, as filed with the SEC (without exhibits), are available to shareholders free of charge on our website at www.tyco.com or by writing to Attn: Tyco Shareholder Services, Tyco International...

  • Page 97
    ... receivable programs. Capital expenditures and accounts purchased by ADT are subtracted because they represent long-term commitments. Cash paid for purchase accounting and holdback liabilities is subtracted because these cash outflows are not available for general corporate uses. Voluntary pension...

  • Page 98
    ... for the Twelve Months Ended September 30, 2011(3) $ 8,626 4,743 3,639 $17,008 347 $17,355 11.5% 5.2% 7.9% 8.9% -75.2% 2.0% Tyco Security Solutions ...Tyco Fire Protection ...Tyco Flow Control ... Total before Electrical and Metal Products ... Electrical and Metal Products ... Total Net Revenue...

  • Page 99
    Annex A TYCO INTERNATIONAL LTD. For the Twelve Months Ended September 30, 2011 (in millions, except per share data) (Unaudited) Tyco Security Solutions Revenue Tyco Fire Protection Tyco Flow Control Corporate and Other Electrical & Metal Products Revenue (GAAP) ...$17,355 $8,626 $4,743 $3,639 ...

  • Page 100
    ... Statement Annex A TYCO INTERNATIONAL LTD. For the Twelve Months Ended September 24, 2010 (in millions, except per share data) (Unaudited) Tyco Security Solutions Safety Products Revenue Tyco Fire Protection Tyco Flow Control Corporate and Other Electrical & Metal Products Previously Reported...

  • Page 101
    Annex A TYCO INTERNATIONAL LTD. SUPPLEMENTAL FREE CASH FLOW INFORMATION (in millions) Fiscal 2011 YTD (In millions) Net cash provided by operating activities ...Sale of accounts receivable ...Capital Expenditures, net (Including Proceeds Accounts purchased by ADT ...Purchase accounting and ...

  • Page 102
    ...,224 The number of common shares outstanding as of November 7, 2011 was 461,979,698 DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant's proxy statement filed within 120 days of the close of the registrant's fiscal year in connection with the registrant's 2012 annual general meeting of...

  • Page 103
    ... ...Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ...Controls and Procedures ...Other Information ...Directors, Executive Officers and Corporate Governance ...Executive Compensation ...Security Ownership of Certain Beneficial Owners and Management and Related...

  • Page 104
    ..., a public company organized under the laws of Bermuda, at which time ADT Limited changed its name to Tyco International Ltd. Effective March 17, 2009, following shareholder and Board of Director approval on March 12, 2009, the Company ceased to exist as a Bermuda corporation and 2011 Financials 1

  • Page 105
    ...Financial Statements. On September 19, 2011, the Company announced that its Board of Directors approved a plan to separate the Company into three separate, publicly traded companies consisting of the Company's North American residential security business, its flow control business and its commercial...

  • Page 106
    ... products including intrusion, access control and video management systems and is one of the world's largest providers of electronic security systems and services. Tyco Security Solutions has a significant market presence in North and South America, Europe and the Asia-Pacific region. With 2011...

  • Page 107
    ... security products for homes and businesses ranging from burglar alarms to a full range of security systems including alarm control panels, keypads, sensors and central station receiving equipment used in security monitoring centers. Customers Tyco Security Solutions sells to residential, commercial...

  • Page 108
    ... market our fire detection and fire suppression systems to the majority of these customers through a direct sales force. Customers for our fire sprinkler, fire detection and fire suppression products include distributors, commercial builders and contractors that install and service 2011 Financials...

  • Page 109
    ...of product line, price, training and support and delivery. The principal competitors are specialty products manufacturing companies based in the United States, with other smaller competitors in Europe and Asia. Tyco Flow Control Our Tyco Flow Control segment designs, manufactures, sells and services...

  • Page 110
    ... See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations for information relating to our backlog. Intellectual Property Patents, trademarks, copyrights and other proprietary rights are important to our business. We also rely upon trade secrets, manufacturing...

  • Page 111
    ..., government contracts, international trade, environmental protection, labor and employment, tax, licensing and others. For example, most U.S. states in which we operate have licensing laws directed specifically toward the alarm and fire suppression industries. Our Tyco Security Solutions business...

  • Page 112
    ... unions are generally good. Available Information Tyco is required to file annual, quarterly and special reports, proxy statements and other information with the SEC. Investors may read and copy any document that Tyco files, including this Annual Report on Form 10-K, at the SEC's Public Reference...

  • Page 113
    ... operate in global markets that are characterized by rapidly changing technologies, evolving industry standards and potential new entrants in our markets. For example, a number of cable and other telecommunications companies have introduced security services offerings, including interactive security...

  • Page 114
    ... to gain market acceptance, the potential for product defects or the obsolescence of our products and services could significantly reduce our revenues, increase our operating costs or otherwise adversely affect our financial condition, results of operations or cash flows. Our Tyco Security Solutions...

  • Page 115
    ... could increase the costs of manufacturing our products and providing our services. We may not be able to pass on these costs to our customers or otherwise effectively manage price volatility and this could have a material adverse effect on our financial condition, results of operations or...

  • Page 116
    operations. Increasingly, our security products and services are accessed through the Internet, and security breaches in connection with the delivery of our services via the Internet may affect us and could be detrimental to our reputation, business, operating results and financial condition. We ...

  • Page 117
    ... spin-offs of our North American residential security business and our flow control business are complex in nature, subject to various conditions, and may be affected by unanticipated developments or changes in market conditions. We expect to file Registration Statements on Form 10 with the SEC...

  • Page 118
    ...of our common stock who is subject to U.S. federal income tax who receives shares of our North American residential security and flow control businesses would generally be treated as receiving taxable distributions of property in an amount equal to the fair market value of the shares received. Those...

  • Page 119
    ...operates in multiple markets with a diversified product and services portfolio. If the proposed spin-off transactions are completed, shares of our common stock will represent an investment in a smaller company with its business concentrated in the commercial fire and security industry. These changes...

  • Page 120
    ... by a number of federal, state and local governmental agencies with respect to safety of operations and equipment, labor and employment matters and financial responsibility. Intrastate operations in the United States are subject to regulation by state regulatory authorities, and our international...

  • Page 121
    ... our financial position, results of operations or cash flows. Our failure to satisfy international trade compliance regulations may adversely affect us. Our global operations require importing and exporting goods and technology across international borders on a regular basis. Certain of the products...

  • Page 122
    ... lawsuits in the future and we continue to evaluate different strategies related to asbestos claims filed against the Company. Unfavorable rulings, judgments or settlement terms could have a material adverse impact on our business, financial condition, results of operations and cash flows. We record...

  • Page 123
    ...action and may require that we reimburse the government or otherwise pay for the cost of cleanup of those sites and/or for natural resource damages. We have projects underway at a number of current and former manufacturing facilities to investigate and remediate environmental contamination resulting...

  • Page 124
    ...may access credit markets for general corporate purposes, which may include repayment of indebtedness, acquisitions, additions to working capital, repurchase of common shares, capital expenditures and investments in the Company's subsidiaries. Although we believe we have sufficient liquidity to meet...

  • Page 125
    ... the amount we expected to receive for pre-Separation uncertain tax positions. We also established liabilities representing the fair market value of our share of their estimated obligations under the Tax Sharing Agreement. As of September 30, 2011, we had recorded $73 million in other assets...

  • Page 126
    ... our financial position, results of operations or cash flows. If the distribution of Covidien and TE Connectivity common shares to our shareholders or certain internal transactions undertaken in connection with the 2007 Separation are determined to be taxable for U.S. federal income tax purposes...

  • Page 127
    ... law, we generally may not issue registered shares for an amount below par value. As of November 7, 2011 the closing price of our ordinary shares on the New York Stock Exchange (''NYSE'') was $46.47. In the event there is a need to raise common equity capital at a time when the trading price of our...

  • Page 128
    ... sales and marketing, engineering and administrative offices. Tyco Security Solutions operates through a network of offices, service and manufacturing facilities and warehouse and distribution centers located in North America, Central America, South America, Europe, the Middle East, the Asia-Pacific...

  • Page 129
    ... on its financial position, results of operations or cash flows. Asbestos Matters The Company and certain of its subsidiaries along with numerous other companies are named as defendants in personal injury lawsuits based on alleged exposure to asbestos-containing materials. These cases typically...

  • Page 130
    ... of other actions. For a detailed discussion of asbestos-related matters, see Note 15 of the Consolidated Financial Statements. Income Tax Matters In connection with the 2007 spin-offs of Covidien and TE Connectivity from Tyco, Tyco entered into a Tax Sharing Agreement that governs the rights and...

  • Page 131
    ... of this matter, as the Company may be required to pay material fines, suffer penalties or incur settlements in amounts that may have a material adverse effect on its financial position, results of operations or cash flows. During the fourth quarter of 2011, the Company has concluded that its best...

  • Page 132
    ... 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...

  • Page 133
    ... amount in four quarterly installments, on dates determined by our Board of Directors. The timing, declaration and payment of future dividends to holders of our common shares will depend upon many factors, including our financial condition and results of operations, the capital requirements of our...

  • Page 134
    ... of Cumulative Five Year Total Return $150 $100 $50 $0 2006 2007 Tyco International Ltd. 2008 2009 S&P 500 Index 2010 2011 S&P 500 Industrials 28NOV201112231304 Total Return To Shareholders (Includes reinvestment of dividends) Company/Index Annual Return Percentage Years Ended 9/07 9/08...

  • Page 135
    ... the Tyco Employee Stock Purchase Plan (''ESPP''), which represents the number of remaining shares registered for issuance under this plan. All of the shares delivered to participants under the ESPP were purchased in the open market. The ESPP was suspended indefinitely during the fourth quarter of...

  • Page 136
    ... events, including a change of control. The shares granted under the LTIP II will be issued at vesting under the 2004 Stock and Incentive Plan. (5) The Tyco International Ltd. United Kingdom (''UK'') Savings Related Share Option Plan (''SAYE'') is a UK Inland Revenue approved plan for UK employees...

  • Page 137
    ... in the table above represent shares acquired by the Company from certain employees in order to satisfy employee tax withholding requirements in connection with the vesting of restricted shares during the quarter ended September 30, 2011. The average price paid per share is calculated by dividing...

  • Page 138
    ... should be read in conjunction with Tyco's Consolidated Financial Statements and related Notes included elsewhere in this Annual Report as well as the section of this Annual Report titled Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. 2011 2010 2009...

  • Page 139
    ...security, access control, electronic article surveillance and video management systems. • Tyco Fire Protection designs, manufactures, sells, installs and services fire detection and fire suppression systems and building and life safety products for commercial, industrial and governmental customers...

  • Page 140
    ... primarily included $1.3 billion to repurchase our common shares, $788 million of capital expenditures, $656 million for acquisitions, net of cash acquired, $614 million to purchase customer contracts in our Tyco Security Solutions segment and $458 million to pay cash dividends. 2011 Financials 37

  • Page 141
    ... 19, 2011, the Company announced that its Board of Directors approved a plan to separate the Company into three separate, publicly traded companies consisting of the Company's North American residential security business, its flow control business, and its commercial fire and security business...

  • Page 142
    ... is no annual discussion relating to the Electrical and Metal Products business. This information has been provided in order to reconcile to the above net revenue and operating income for the years ended September 30, 2011, September 24, 2010, and September 25, 2009. Segment Results The segment...

  • Page 143
    ... in North America and Rest of World (''ROW''), and strength in our non-recurring businesses related to construction project activity and security system upgrades in North America and retail store expansion activity in ROW. Net revenue for Tyco Security Solutions of $7.7 billion increased by...

  • Page 144
    ... sales and installation of electronic security and products related to retailer anti-theft systems, as well as other life safety systems) and from services such as the provisioning of armored guards and one-time repair, security system upgrades or inspection jobs. Non-recurring net revenue increased...

  • Page 145
    ...of Broadview Security. Commercial net revenue decreased by 4.8% due to the decline in systems installation and product sales as the result of weakness in the commercial market, although the rate of decline was slower than the same period in the prior year. Europe, Middle East, and Africa Net revenue...

  • Page 146
    ...Asia Pacific regions resulting from customer account growth. The Asia-Pacific region experienced an increase in system installation, products sales and other service revenue which was partially offset by a decrease in the Latin American region due to a slowdown in commercial and retailer end markets...

  • Page 147
    ... charges of $1.3 billion recorded at our ADT EMEA, Access Controls and Video Systems (''ACVS'') and Sensormatic Retail Solutions reporting units and intangible asset impairment charges of $64 million. Operating income for the year ended September 24, 2010 was positively impacted by the shift...

  • Page 148
    ... as a result of adopting a new accounting standard unfavorably impacted net revenue by $72 million, or 1.6%. The remaining increase in revenue was primarily driven by increased volume in product sales as a result of generally improved end-market demand, implementation of pricing actions to offset...

  • Page 149
    ... systems installation revenue by $56 million, or 3.2%. Despite the favorable impact of foreign currency, revenue decreased due to decreased upgrade activity from customers, and project selectivity resulting from a focus on higher margin project across all regions. Product sales Revenue from product...

  • Page 150
    ... increased sales volume, implementation of pricing actions to offset commodity inflationary pressures in the products business, project selectivity in the systems installation business, and cost-containment initiatives. These increases were partially offset by additional environmental remediation...

  • Page 151
    ...was more than offset by decreased revenues due to reduced volume in the Valves and Controls business driven by decreased demand in end markets. Operating Income and Operating Margin Operating income and operating margin for Tyco Flow Control for the years ended September 30, 2011, September 24, 2010...

  • Page 152
    ... public notes due 2011, 7% notes due 2028 and 6.875% notes due 2029. See Note 12 to the Consolidated Financial Statements. This loss was partially offset by an $8 million gain recorded as a result of an increase in the receivables due from Covidien and TE Connectivity under the Tax Sharing Agreement...

  • Page 153
    ... in revenue during the first quarter of 2009 in our Tyco Security Solutions and Tyco Fire Protection 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 our Electrical Metal Products segments. Although we considered...

  • Page 154
    ... related to the retailer end market of our Tyco Security Solutions 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...

  • Page 155
    ...uncertainties inherent in long-term contracts. Provisions for anticipated losses are made in the period in which they become determinable. Sales of security monitoring systems may have multiple elements, including equipment, installation, monitoring services and maintenance agreements. We assess our...

  • Page 156
    ... in the future. Management records the affect of a tax rate or law change on the Company's deferred tax assets and liabilities in the period of enactment. Future tax rate or law changes could have a material effect on the Company's financial condition, results of operations or cash flows. In...

  • Page 157
    ... are assessed for impairment annually and more frequently if triggering events occur. In performing these assessments, management relies on various factors, including operating results, business plans, economic projections including expectations and assumptions regarding the timing and degree of any...

  • Page 158
    ... expectations as well as current and future economic conditions in determining the expected long-term return on plan assets. A 25 basis point decrease in the expected long-term return on plan assets would increase our annual pension expense by approximately $4 million. 2011 Financials 55

  • Page 159
    ... ratio of total debt to total capital (the sum of our short- and long-term debt and shareholders' equity) was 23% as of both September 30, 2011 and September 24, 2010, respectively. This ratio is a measure of our long-term liquidity and is an indicator of financial flexibility. On January 12, 2011...

  • Page 160
    ... received for the sale/disposition of property, plant and equipment of $9 million, $29 million, and $12 million in 2011, 2010 and 2009, respectively (2) The net change in working capital decreased operating cash flow by $584 million in 2011. The significant changes in working capital included...

  • Page 161
    ... our Tyco Security Solutions segment and Hiter within our Tyco Flow Control segment. During 2011, we received cash proceeds, net of cash divested of approximately $1 billion for divestitures. The cash proceeds primarily related to the sale of a majority interest in our Electrical and Metal Products...

  • Page 162
    ... Consolidated Financial Statements for further information. Management believes that cash generated by or available to us should be sufficient to fund our capital and operational business needs for the foreseeable future, including capital expenditures, quarterly dividend payments, share repurchases...

  • Page 163
    ... 30, 2011 and September 24, 2010, TIFSA had no commercial paper outstanding. In the normal course of business, we are liable for contract completion and product performance. In the opinion of management, such obligations will not significantly affect our financial position, results of operations or...

  • Page 164
    ...force and long-term deferred revenue for upfront fees paid by customers for Tyco Security Solutions' owned security systems. Revenue-in-force represents 12 months' revenue associated with monitoring and maintenance services under contract in the security business. Tyco Security Solutions' backlog of...

  • Page 165
    ... 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. As of September 30, 2011, we had total outstanding...

  • Page 166
    ...• 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...

  • Page 167
    ...result in a $39 million net increase in the fair value of the contracts. However, gains or losses on these derivative instruments are economically offset by the gains or losses on the underlying transactions. During the third quarter of 2010, Tyco International Finance, S.A. (''TIFSA''), the Company...

  • Page 168
    ... accounting purposes. These swaps did not have a material impact on the Company's financial position, results of operations or cash flows. Additionally, a 100 basis point increase or decrease in the price of copper as of September 30, 2011 would not have a material impact on the Company's financial...

  • Page 169
    ... our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to...

  • Page 170
    .... Management reviewed the results of its assessment with the Audit Committee of our Board of Directors. Based on our assessment and those criteria, management believes that the Company maintained effective internal controls over financial reporting as of September 30, 2011. Our internal control over...

  • Page 171
    ...be found under the captions ''Executive Officer Compensation,'' ''Compensation of Non-Employee Directors,'' and ''Governance of the Company'' of our 2012 Proxy Statement. Such information is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and...

  • Page 172
    ... guarantor, and Deutsche Bank Trust Company Americas, as trustee relating to the issuer's 8.5% notes due 2019 (Incorporated by reference to Exhibit 4.1 to Tyco International Ltd.'s Current Report on Form 8-K filed on January 9, 2009). 3.1 3.2 4.1 4.2 4.3 4.4 4.5 4.6 4.7 2011 Financials 69

  • Page 173
    ... Tyco International Ltd.'s Registration Statement on Form S-8 (No. 333-75037) filed March 25, 1999).(1) Change in Control Severance Plan for Certain U.S. Officers and Executives dated January 1, 2005, as amended (Incorporated by reference to Exhibit 10.3 to Tyco International Ltd.'s Quarterly Report...

  • Page 174
    ... to Tyco International Ltd.'s Current Report on March 28, 2011). Tax Sharing Agreement by and among Tyco International Ltd., Covidien Ltd., and Tyco Electronics Ltd., dated June 29, 2007 (Incorporated by reference to Exhibit 10.1 to Tyco International Ltd.'s Current Report on Form 8-K filed on July...

  • Page 175
    ...of 2002 (Filed herewith). Financial statements from the Annual Report on Form 10-K of Tyco International Ltd. for the fiscal year ended September 30, 2011 formatted in XBRL: (i) the Consolidated Statements of Operations, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Cash...

  • Page 176
    ... duly authorized. TYCO INTERNATIONAL LTD. By: /s/ FRANK S. SKLARSKY Frank S. Sklarsky Executive Vice President and Chief Financial Officer (Principal Financial Officer) Date: November 16, 2011 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below...

  • Page 177
    ... by signing her name hereto, does sign this document on behalf of the above noted individuals, pursuant to powers of attorney duly executed by such individuals, which have been filed as Exhibit 24.1 to this Report. By: /s/ JUDITH A. REINSDORF Judith A. Reinsdorf Attorney-in-fact 74 2011 Financials

  • Page 178
    TYCO INTERNATIONAL LTD. Index to Consolidated Financial Statements Page Management's Responsibility for Financial Statements ...Reports of Independent Registered Public Accounting Firm . Consolidated Statements of Operations ...Consolidated Balance Sheets ...Consolidated Statements of Shareholders'...

  • Page 179
    ... resources to maintain and improve our internal controls and corporate governance. Our Audit Committee meets regularly and separately with management, Deloitte & Touche LLP, our independent auditors, and our internal auditors to discuss financial reports, controls and auditing. We, our Board...

  • Page 180
    ..., in all material respects, the information set forth therein. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of September 30, 2011, based on the criteria established...

  • Page 181
    ... opinion. A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other...

  • Page 182
    TYCO INTERNATIONAL LTD. CONSOLIDATED STATEMENTS OF OPERATIONS Years Ended September 30, 2011, September 24, 2010 and September 25, 2009 (in millions, except per share data) 2011 2010 2009 Revenue from product sales ...Service revenue ...Net revenue ...Cost of product sales ...Cost of services ......

  • Page 183
    ... ...Property, plant and equipment, net . Goodwill ...Intangible assets, net ...Other assets ...Liabilities and Equity Current Liabilities: Loans payable and current Accounts payable ...Accrued and other current Deferred revenue ...Liabilities held for sale . . Total current liabilities Long-term...

  • Page 184
    ... ...Dividends declared (see Note 17) . Shares issued from treasury for vesting of share based equity awards and other related tax effects ...Repurchase of common shares by subsidiary ...Compensation expense ...Cumulative effect of adopting a new accounting principle, net of income tax benefit of...

  • Page 185
    ... standard (See Note 1) ...Currency translation ...Unrealized loss on marketable securities and derivative instruments, net of income tax expense of $2 million ...Retirement plans, net of income tax benefit of $12 million ...Total comprehensive income ...Cancellation of treasury shares ...Dividends...

  • Page 186
    ... paid ...$ Income taxes paid, net of refunds ...Supplementary Non-Cash Investing Information: Issuance of shares in connection with the acquisition of Brinks Home Security Holdings, Inc...$ 228 $ 196 267 $ 255 294 281 - - $ 1,362 $ See Notes to Consolidated Financial Statements. 2011 Financials 83

  • Page 187
    ... the Company has three core businesses: Tyco Security Solutions, Tyco Fire Protection and Tyco Flow Control. 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...

  • Page 188
    ..., sales of security systems, billings for monitoring and maintenance services and contract sales. Revenue from the sales of products is recognized at the time title and risks and rewards of ownership pass. This is generally when the products reach the free-on-board shipping point, the sales price is...

  • Page 189
    ... or long-term liabilities, as appropriate. Contract sales for the installation of fire protection systems, large security intruder systems and other construction-related projects are recorded primarily under the percentage-of-completion method. Profits recognized on contracts in process are...

  • Page 190
    ...). Subscriber system assets include installed property, plant and equipment for which Tyco retains ownership and deferred costs directly related to the customer acquisition and system installation. Subscriber system assets represent capitalized equipment (e.g. security control panels, touchpad...

  • Page 191
    ...-line method with a 14-year life for non-pooled subscriber system assets (primarily in Europe and Asia) and related deferred revenue, with remaining balances written off upon customer termination. Long-Lived Asset Impairments-Tyco reviews long-lived assets, including property, plant and equipment...

  • Page 192
    ... result from purchasing residential security monitoring contracts from an external network of independent dealers who operate under the ADT dealer program. Acquired contracts and related customer relationships are recorded at their contractually determined purchase price. During the first six months...

  • Page 193
    TYCO INTERNATIONAL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 1. Basis of Presentation and Summary of Significant Accounting Policies (Continued) Product Warranty-The Company records estimated product warranty costs at the time of sale. Products are warranted against defects in ...

  • Page 194
    TYCO INTERNATIONAL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 1. Basis of Presentation and Summary of Significant Accounting Policies (Continued) Insurable Liabilities-The Company records liabilities for its workers' compensation, product, general and auto liabilities. The ...

  • Page 195
    ...to receive benefits that may be significant to the VIE. The guidance became effective for Tyco in the first quarter of fiscal 2011. The Company's population of VIE's is primarily composed of joint ventures that are not material to the Company's consolidated operations, financial position, results of...

  • Page 196
    ... 19, 2011, the Company announced that its Board of Directors approved a plan to separate the Company into three separate, publicly traded companies consisting of the Company's North American residential security business, its flow control business, and its commercial fire and security business...

  • Page 197
    ...quarter of 2008, the Company approved a plan to sell a business in its Tyco Security Solutions 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...

  • Page 198
    .... By the fourth quarter of 2009, the Company received all the necessary consents and approvals to transfer the legal ownership of the businesses and assets and received cash proceeds of $61 million. As a result of the fiscal 2009 dispositions, a net pre-tax gain of $33 million was recorded in income...

  • Page 199
    ...to sell of certain businesses that did not meet the criteria for discontinued operations. The net gain for the year ended September 30, 2011 includes a gain of $248 million, net of working capital adjustments, recognized in conjunction with the sale of a majority interest in the Company's Electrical...

  • Page 200
    ... 30, 2011 are as follows ($ in millions): Employee Severance and Benefits For the Year Ended September 30, 2011 Facility Exit Charges Charges and Other Reflected in Reflected in Charges Cost of Sales SG&A Total Tyco Security Solutions . Tyco Fire Protection ...Tyco Flow Control ...Corporate and...

  • Page 201
    ... Program are as follows ($ in millions): For the Year Ended September 30, 2011 Employee Facility Exit Severance and and Other Benefits Charges Total Tyco Security Solutions ...Tyco Fire Protection ...Tyco Flow Control ...Total ... $(10) 1 (1) $(10) $ 7 3 - $10 $ (3) 4 (1) $- 98 2011 Financials

  • Page 202
    ...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 Tyco Security Solutions Tyco Fire Protection . . Tyco Flow Control ...Electrical and Metal Products ...Corporate and Other . Total ... $119...

  • Page 203
    ...and pre-2006 programs primarily relate to facility exit costs for long-term non-cancelable lease obligations with expiration dates that range from 2011 to 2022 primarily within the Company's Tyco Security Solutions segment. Total Restructuring Reserves As of September 30, 2011 and September 24, 2010...

  • Page 204
    ... recorded within cost of product sales within the Company's Consolidated Statements of Operations. ADT Account Acquisitions During the year ended September 30, 2011, the Company paid $614 million of cash to acquire approximately 565,000 customer contracts for electronic security services in the Tyco...

  • Page 205
    ... provide security alarm monitoring services for residential and commercial properties in North America. 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...

  • Page 206
    ... ratio ...Tyco shares issued to BHS shareholders making an all cash election ...All stock consideration Number of shares of BHS common shares outstanding as of May 14, 2010 electing all stock . Exchange ratio ...Tyco shares issued to BHS shareholders making an all stock election ...Mixed cash/stock...

  • Page 207
    TYCO INTERNATIONAL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 5. Acquisitions (Continued) awards and Tyco's closing stock price for the restricted and deferred stock unit awards. The fair value of outstanding BHS stock-based compensation awards that immediately vested at the ...

  • Page 208
    TYCO INTERNATIONAL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 5. 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 year ended September 24, 2010 ...

  • Page 209
    ... 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...

  • Page 210
    ... favorable audit resolutions in multiple jurisdictions during 2011. Included in the Non-U.S. net earnings for 2010 is a $20 million tax benefit as a result of the Company's disposition of its French security business and a nonrecurring item generating a $30 million tax benefit. 2011 Financials 107

  • Page 211
    TYCO INTERNATIONAL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 7. Income Taxes (Continued) Included in the nondeductible charges for 2009 is the loss driven by the goodwill impairment charges of $2.6 billion, for which almost no tax benefit is available. Deferred income taxes result...

  • Page 212
    ... tax benefits may be resolved in the next twelve months. Tax Sharing Agreement and Other Income Tax Matters In connection with the spin-offs of Covidien and TE Connectivity, Tyco entered into a Tax Sharing Agreement that generally governs Covidien's, TE Connectivity's and Tyco's respective rights...

  • Page 213
    ... the execution of the Tax Sharing Agreement, Tyco established a net receivable from Covidien and TE Connectivity representing the amount Tyco expected to receive for pre-Separation uncertain tax positions, including amounts owed to the Internal Revenue Service (''IRS''). As of September 30, 2011 and...

  • Page 214
    ... Sharing Agreement, reached a settlement agreement with the IRS on certain deductions taken by Tyco, Covidien and TE Connectivity 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...

  • Page 215
    ...2009. As a result, the Company was not required to compute earnings per share for fiscal 2011 and 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 2009 as...

  • Page 216
    TYCO INTERNATIONAL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 8. Earnings Per Share (Continued) The reconciliations between basic and diluted earnings per share attributable to Tyco common shareholders for 2011, 2010 and 2009 are as follows (in millions, except per share data): ...

  • Page 217
    TYCO INTERNATIONAL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 9. Investments The cost and fair market value of the Company's available-for-sale investments which are primarily held by our captive insurance company by type of security and classification in the Company's Consolidated...

  • Page 218
    ... INTERNATIONAL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 10. Goodwill and Intangible Assets Fiscal 2011 and 2010 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...

  • Page 219
    TYCO INTERNATIONAL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 10. Goodwill and Intangible Assets (Continued) The changes in the carrying amount of goodwill by segment for 2011 and 2010 are as follows ($ in millions): As of September 25, 2009 Acquisitions/ Purchase Accounting ...

  • Page 220
    .... 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 reporting units, Access Control and Video Systems (''ACVS''), and Sensormatic Retail Solutions (''SRS...

  • Page 221
    ...increased risk due to economic 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...

  • Page 222
    TYCO INTERNATIONAL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 10. Goodwill and Intangible Assets (Continued) 2009. Specifically, the Company recorded the following non-cash goodwill impairment charges at the following reporting units ($ in millions): Reporting Unit Pre-tax Charge ...

  • Page 223
    ... at its Tyco Security Solutions segment 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...

  • Page 224
    ... engaged in the sale of Tyco securities in the State of New York. The SEC action alleged that Mr. Walsh knew that the registration statement covering the sale of Tyco securities as part of the CIT Group acquisition contained a material misrepresentation concerning fees payable in connection with...

  • Page 225
    .... This action is subject to the liability sharing provisions of the Separation and Distribution Agreement. During 2011, 2010 and 2009, the Company engaged in commercial transactions in the normal course of business with companies where the Company's Directors were employed and served as officers...

  • Page 226
    ...CONSOLIDATED FINANCIAL STATEMENTS (Continued) 12. Debt (Continued) and September 24, 2010, the fair value of the Company's debt which was actively traded was $4,689 million and $4,730 million, respectively. Commercial Paper As of September 30, 2011 and September 24, 2010, Tyco International Finance...

  • Page 227
    ... occurrence of a change of control triggering event, which requires 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...

  • Page 228
    ... 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 TE Connectivity in accordance with the terms of the Separation and Distribution Agreement and the Tax 2011 Financials 125

  • Page 229
    ...'s financial position, results of operations or cash flows. As of September 30, 2011, the Company had total outstanding letters of credit and bank guarantees of approximately $724 million. The Company records estimated product warranty costs at the time of sale. See Note 1. 126 2011 Financials

  • Page 230
    ... Balance Sheet at fair value with changes in the fair value of the derivative financial instruments recognized currently in the Company's Statement of Operations, with the exception of net investment hedges for which changes in fair value are reported in the cumulative translation component...

  • Page 231
    ... to Switzerland. Tyco made the final dividend payment in the form of a reduction of capital in February 2011, denominated in Swiss francs (See Note 17). The Company paid dividends in U.S. dollars, based on the exchange rate in effect shortly before the payment date. Fluctuations in the value of the...

  • Page 232
    ...obligations under contractual terms. The maximum amount of loss that the Company would incur as of September 30, 2011 without giving consideration to the effects of legally enforceable master netting agreements was approximately $60 million. Fair Value of Financial Instruments Authoritative guidance...

  • Page 233
    ... 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...

  • Page 234
    ...-for-Sale Securities: Corporate debt securities ...U.S. Government debt securities ...Other debt securities ...Total ... $- 95 - $95 $ 60 122 6 $188 $ 60 217 6 $283 During 2011 and 2010, the Company did not have any significant transfers within the fair value hierarchy. Other The Company had...

  • Page 235
    ... Tyco International Ltd. class action lawsuit elapsed. This matter, which was subject to the liability sharing provisions of the Separation and Distribution Agreement with Covidien and TE Connectivity had previously received final court approval for its settlement. As a result of the lapsing of time...

  • Page 236
    ... on its financial position, results of operations or cash flows. Asbestos Matters The Company and certain of its subsidiaries along with numerous other companies are named as defendants in personal injury lawsuits based on alleged exposure to asbestos-containing materials. These cases typically...

  • Page 237
    .... 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...

  • Page 238
    TYCO INTERNATIONAL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 15. 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 ...

  • Page 239
    ... time of its spin-off from The Brink's Company, Broadview Security entered into an agreement in which The Brink's Company agreed to indemnify it 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...

  • Page 240
    ... 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...

  • Page 241
    ......Amortization of prior service cost (credit) ...Amortization of net actuarial loss ...Plan settlements, curtailments and special termination benefits ...Weighted-average assumptions used pension cost during the year: Discount rate ...Expected return on plan assets . . Rate of compensation increase...

  • Page 242
    ... value of plan assets as of end of year ...Funded status ...Net amount recognized ... 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...

  • Page 243
    TYCO INTERNATIONAL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 16. Retirement Plans (Continued) tax benefit of $2 million, and a net increase to accumulated other comprehensive loss of $61 million, net of income taxes of $28 million. U.S. Plans 2011 2010 Non-U.S. Plans 2011 2010 ...

  • Page 244
    TYCO INTERNATIONAL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 16. Retirement Plans (Continued) In determining the expected return on plan assets, the Company considers the relative weighting of plan assets by asset class, historical performance of asset classes over long-term ...

  • Page 245
    TYCO INTERNATIONAL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 16. Retirement Plans (Continued) 2011 and September 24, 2010 are presented in the table below for the Company's material defined benefit plans. ($ in millions) September 30, 2011 Level 1 Level 2 Total Equity securities:...

  • Page 246
    ...and direct investments in commercial and residential properties. REITS are valued at the last trade or closing price in the active market in which the individual securities are traded. Direct real estate properties are valued using discounted cash flow models which consider long-term lease estimates...

  • Page 247
    TYCO INTERNATIONAL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 16. Retirement Plans (Continued) The following tables set forth a summary of pension plan assets valued using NAV or its equivalent as of September 30, 2011 and September 24, 2010 ($ in millions): September 30, 2011 Fair...

  • Page 248
    .... Deferred compensation expense was not material for 2011, 2010 and 2009. Postretirement Benefit Plans-The Company generally does not provide postretirement benefits other than pensions for its employees. However, certain acquired operations provide these benefits to 2011 Financials 145

  • Page 249
    ... TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 16. Retirement Plans (Continued) employees who were eligible at the date of acquisition, and a small number of U.S. and Canadian operations provide ongoing eligibility for such benefits. Net periodic postretirement benefit cost for 2011, 2010 and...

  • Page 250
    TYCO INTERNATIONAL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 16. Retirement Plans (Continued) The components of the accrued postretirement benefit obligations, substantially all of which are unfunded as of September 30, 2011 and September 24, 2010 are as follows ($ in millions): ...

  • Page 251
    ...-Point Increase 1-Percentage-Point Decrease Effect on total of service and interest cost ...Effect on postretirement benefit obligation, decrease/(increase) ...17. Shareholders' Equity Dividends $- 3 $- (3) Prior to May 2011, the Company paid dividends in the form of a return of share capital...

  • Page 252
    ... 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...

  • Page 253
    ... at a special general meeting of shareholders held on 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...

  • Page 254
    ... in selling, general and administrative expenses. The Company has recognized a related tax benefit associated with its share-based compensation arrangements during 2011, 2010 and 2009 of $31 million, $35 million and $25 million, respectively. During 2004, the Tyco International Ltd. 2004 Stock and...

  • Page 255
    TYCO INTERNATIONAL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 18. Share Plans (Continued) The grant-date fair value of each option grant is estimated using the Black-Scholes option pricing model. The fair value is then amortized on a straight-line basis over the requisite service ...

  • Page 256
    ... are granted subject to certain restrictions. Conditions of vesting are determined at the time of grant under the 2004 Plan. Restrictions on the award generally lapse upon normal retirement, if more than twelve months from the grant date, death or disability of the employee. 2011 Financials 153

  • Page 257
    ... rights and may receive DEUs depending on the terms of the grant. A summary of the activity of the Company's restricted share awards including performance shares as of September 30, 2011 and changes during the year then ended is presented in the tables below: Weighted-Average Grant-Date Fair Value...

  • Page 258
    ... the right to receive dividend equivalent units. Conditions of vesting are determined at the time of grant. Under the 2004 Plan, grants made to executives generally vested in equal annual installments over three years while DSUs granted to the Board of Directors were immediately vested. The Company...

  • Page 259
    ...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 2011, the Company...

  • Page 260
    ... sells, installs, services and monitors electronic security systems for residential, educational, commercial, governmental and industrial customers. In addition, Tyco Security Solutions designs, manufactures and sells security products including intrusion, access control and video management systems...

  • Page 261
    TYCO INTERNATIONAL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 21. Consolidated Segment Data (Continued) 2011 2010 2009 Operating income (loss): Tyco Security Solutions ...Tyco Fire Protection ...Tyco Flow Control ...Electrical and Metal Products Corporate and Other(1) ... ... ... ...

  • Page 262
    TYCO INTERNATIONAL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 21. Consolidated Segment Data (Continued) 2011 2010 2009 Capital expenditures Tyco Security Solutions ...Tyco Fire Protection ...Tyco Flow Control ...Electrical and Metal Products Corporate and Other ... ... ... ... ......

  • Page 263
    ...September 30, 2011 September 24, 2010 Purchased materials and manufactured parts ...Work in process ...Finished goods ...Inventories ... $ 477 211 656 $1,344 $ 504 192 747 $1,443 Inventories are recorded at the lower of cost (primarily first-in, first-out) or market value. 160 2011 Financials

  • Page 264
    TYCO INTERNATIONAL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 24. Property, Plant and Equipment Property, plant and equipment consisted of the following ($ in millions): September 30, 2011 September 24, 2010 Land ...Buildings ...Subscriber systems ...Machinery and equipment ......

  • Page 265
    TYCO INTERNATIONAL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 25. Summarized Quarterly Financial Data (Unaudited) (Continued) 2010 2nd Qtr. 3rd Qtr. 1st Qtr. 4th Qtr. Revenue ...Gross Profit ...Income from continuing operations attributable to Tyco common shareholders ...Income ...

  • Page 266
    ...CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS For the Year Ended September 30, 2011 ($ in millions) Tyco International Ltd. Tyco International Finance S.A. Other Subsidiaries Consolidating Adjustments Total Net revenue ...Cost of product sales and services . . Selling, general and administrative...

  • Page 267
    ...CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS For the Year Ended September 24, 2010 ($ in millions) Tyco International Ltd. Tyco International Finance S.A. Other Subsidiaries Consolidating Adjustments Total Net revenue ...Cost of product sales and services . . Selling, general and administrative...

  • Page 268
    ...CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS For the Year Ended September 25, 2009 ($ in millions) Tyco International Ltd. Tyco International Finance S.A. Other Subsidiaries Consolidating Adjustments Total Net revenue ...Cost of product sales and services . . Selling, general and administrative...

  • Page 269
    ... LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 26. Tyco International Finance S.A. (Continued) CONDENSED CONSOLIDATING BALANCE SHEET As of September 30, 2011 ($ in millions) Tyco Tyco International International Other Consolidating Ltd. Finance S.A. Subsidiaries Adjustments...

  • Page 270
    ... LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 26. Tyco International Finance S.A. (Continued) CONDENSED CONSOLIDATING BALANCE SHEET As of September 24, 2010 ($ in millions) Tyco Tyco International International Other Consolidating Ltd. Finance S.A. Subsidiaries Adjustments...

  • Page 271
    ... LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 26. Tyco International Finance S.A. (Continued) CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the Year Ended September 30, 2011 ($ in millions) Tyco Tyco International International Other Consolidating Ltd. Finance S.A. Subsidiaries...

  • Page 272
    ... of debt ...Proceeds from exercise of share options ...Dividends paid ...Intercompany dividend to parent ...Repurchase of common shares by treasury ...Net intercompany loan (repayments) borrowings Increase in equity from parent ...Transfer from discontinued operations ...Other ...Net cash (used in...

  • Page 273
    ... (repayments) of debt ...Proceeds from exercise of share options ...Dividends paid ...Repurchase of common shares by subsidiary Net intercompany loan repayments ...Decrease in equity from parent ...Transfer from discontinued operations ...Other ... $ (160 1,654 - - - 1,654 - - - (388) - (1,123...

  • Page 274
    TYCO INTERNATIONAL LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 27. Subsequent Events Consistent with its annual equity compensation practices, on October 12, 2011, the Company granted Tyco employees 3.4 million share options with a weighted-average grant-date fair value of $12.45 ...

  • Page 275
    TYCO INTERNATIONAL LTD. SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS ($ in millions) Balance at Beginning of Year Additions Charged to Income Divestitures and Other Balance at End of Year Description Deductions Accounts Receivable: Year Ended September 25, 2009 ...Year Ended September 24, 2010 ...

  • Page 276
    ..., with specialized corporate functions such as financial reporting and accounting, treasury, and environmental, health and safety providing support to the business segments. d) 1) Remuneration of the Board of Directors and Executive Board Basis of presentation The following information sets forth...

  • Page 277
    ... Board Accounting Standards Codification (ASC) Topic 718, excluding estimated forfeitures. The fair value of RSUs is computed by multiplying the total number of shares subject to the award by the closing market price of Tyco common stock on the date of grant. RSUs granted to Board members generally...

  • Page 278
    ...years. In addition, all other compensation includes the value of the discount on home security systems installed by the Company in Directors homes and discounts on security monitoring services. These discounts did not exceed $1,950 and $356 for any Director in fiscal 2011 and 2010, respectively. For...

  • Page 279
    .... All Other Compensation: The amounts reported in column (i) for each named executive officer represent cash perquisites, insurance premiums paid by the Company for the benefit of the officer (and, in some cases, the officer's spouse), costs related to personal use of Company aircraft, tax gross-up...

  • Page 280
    TYCO INTERNATIONAL LTD., SCHAFFHAUSEN Report of the Statutory Auditor on the Consolidated Financial Statements for the Fiscal Year Ended September 30, 2011

  • Page 281
    (This page has been left blank intentionally.)

  • Page 282
    ...financial statements of Tyco International Ltd., which comprise the consolidated balance sheet, statement of operations, statement of shareholders' equity, cash flow statement and notes (2011 Financials pages 79 to 171) for the fiscal year ended September 30, 2011. Board of Directors' Responsibility...

  • Page 283
    TYCO INTERNATIONAL LTD. Report of the Statutory Auditor for the Fiscal Year Ended September 30, 2011 29NOV201115560575 Report on other legal requirements We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) and independence (article 728 Swiss ...

  • Page 284
    TYCO INTERNATIONAL LTD., SCHAFFHAUSEN Financial Statements and Report of the Statutory Auditor for the Fiscal Year Ended September 30, 2011

  • Page 285
    (This page has been left blank intentionally.)

  • Page 286
    ... Report on the financial statements As statutory auditor, we have audited the accompanying financial statements of Tyco International Ltd., which comprise the balance sheet, statement of operations and notes for the fiscal year ended September 30, 2011. Board of Directors' Responsibility The Board...

  • Page 287
    ...item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of financial statements according to the instructions of the Board of Directors. We recommend that the financial statements submitted to you be approved. Deloitte...

  • Page 288
    TYCO INTERNATIONAL LTD. BALANCE SHEET AS OF SEPTEMBER 30, 2011 SWISS FRANCS Sep. 30, 2011 Sep. 24, 2010 NOTES ASSETS CURRENT ASSETS Cash ...Accounts receivable from third parties ...Accounts receivable from affiliated companies . Own shares ...Prepaid expenses ...7,052 19,670,364 989,807,437 - 1,...

  • Page 289
    TYCO INTERNATIONAL LTD. STATEMENT OF OPERATIONS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 SWISS FRANCS Sep. 30, 2011 Sep. 24, 2010 NOTES INCOME Dividend income ...Other income ...Gain from sale of subsidiaries ...Interest income from affiliated companies EXPENSES ...Administration expenses ......

  • Page 290
    ... LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 1. BASIS OF PRESENTATION Tyco International Ltd. (Tyco or the Company) is the holding company of Tyco Group with a listing on the New York Stock Exchange (NYSE). Tyco International Ltd.'s principal activity is...

  • Page 291
    ... in the Tax Sharing Agreement. In addition, Tyco historically provided support in the form of financial and/or performance guarantees to various Covidien and TE Connectivity operating entities. In connection with the 2007 Separation, the Company worked with the guarantee counterparties to cancel or...

  • Page 292
    ...Tyco International Ltd. class action lawsuit elapsed. This matter, which was subject to the liability sharing provisions of the Separation and Distribution Agreement with Covidien and TE Connectivity, had previously received final court approval for its settlement. As a result of the lapsing of time...

  • Page 293
    ... Company's financial condition, results of operations or cash flows beyond amounts recorded for such matters. 5. 2012 SEPARATION TRANSACTION On September 19, 2011, the Company announced that its Board of Directors approved a plan to separate the Company into three separate, publicly traded companies...

  • Page 294
    ... method of accounting in the Company's consolidated financial statements. 7. ACQUISITIONS On May 14, 2010, the Company's Tyco Security Solutions segment acquired all of the outstanding equity of Brink's Home Security Holdings, Inc. (''BHS'' or ''Broadview Security''), a publicly traded company that...

  • Page 295
    ...to May 2011, the Company paid dividends in the form of a return of share capital from the Company's registered share capital. These payments were made free of Swiss withholding taxes. The Company now makes dividend payments from its contributed surplus equity position in its Swiss statutory accounts...

  • Page 296
    TYCO INTERNATIONAL LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 (Continued) 9. SHAREHOLDERS' EQUITY (Continued) On March 10, 2010, the Company's Board of Directors declared a quarterly dividend on the Company's common shares of CHF 0.22 per share, which was ...

  • Page 297
    .... Organizationally, the responsibility for risk assessment and management for business operations is allocated to the business segments, with specialized corporate functions such as financial reporting and accounting, treasury, and environmental, health and safety providing support to the business...

  • Page 298
    ... an amount of $1,500 per day for each special committee meeting that he or she attends. No such fees were paid in fiscal 2011 or 2010. A Director who is also an employee receives no additional remuneration for services as a Director. In fiscal 2010, the Company changed the date on which it makes its...

  • Page 299
    ...FOR 2011 (Continued) 2009 and March 2010. Because Mr. Yost received his first equity grant in March 2009 and because Mr. Daniels was not a Board member during this time period, they did not receive this grant. Fees Earned or Paid in Cash ($)(1) Stock Awards ($)(2) All Other Compensation ($)(3) Name...

  • Page 300
    .... In addition, all other compensation includes the value of the discount on home security systems installed by the Company in Directors' homes and discounts on security monitoring services. These discounts did not exceed $1,950 and $356 for any Director in fiscal 2011 and 2010, respectively. For...

  • Page 301
    ...statements. All Other Compensation: The amounts reported in column (i) for each named executive officer represent cash perquisites, insurance premiums paid by the Company for the benefit of the officer (and, in some cases, the officer's spouse), costs related to personal use of Company aircraft, tax...

  • Page 302
    ..., 2011 by each current Director, the Company's executive board, as determined by the Board of Directors and reflected in the Commercial Register for the Canton of Schaffhausen. Number of Common Shares Beneficially Owned(1) Beneficial Owner Title Percentage of Class Officers and Directors Edward...

  • Page 303
    ...Director, the Company's executive board, as of the end of fiscal year 2010, as determined by the Board of Directors and reflected in the Commercial Register for the Canton of Schaffhausen. Number of Common Shares Beneficially Owned(1) (4) (5) Beneficial Owner Title Percentage of Class Officers...

  • Page 304
    ... termination or change in control, as the case may be, the Company will issue the number of Tyco common shares equal to the aggregate number of vested DSUs credited to the individual, including DSUs received through the accrual of dividend equivalents. Includes the maximum number of shares for which...

  • Page 305
    ... of Common Stock Outstanding on October 31, 2011 Number of Common Shares Beneficially Owned 2010 Percentage of Common Stock Outstanding on October 31, 2010 Name and Address of Beneficial Owner BlackRock Inc...40 East 52nd Street New York, NY 10022 Capital World Investors ...333 South Hope Street...

  • Page 306
    ... financial statements for remuneration of the Board of Directors and Executive Board. 15. SUBSEQUENT EVENTS Consistent with its annual equity compensation practices, on October 12, 2011 the Company granted Tyco employees 3.4 million share options with a weighted-average grant-date fair value...

  • Page 307
    (This page has been left blank intentionally.)

  • Page 308
    TYCO INTERNATIONAL LTD., SCHAFFHAUSEN Confirmation of the Statutory Auditor to the 2012 Annual General Meeting of Shareholders Regarding Agenda Item No. 5(c)-Proposal of an Ordinary Cash Dividend

  • Page 309
    (This page has been left blank intentionally.)

  • Page 310
    ... (the ''dividend'') of Tyco International Ltd. to the Annual General Meeting of Shareholders to be held on March 7, 2012. The compliance with Swiss law and the Company's articles of incorporation for the proposed dividend is the responsibility of the Board of Directors. Our responsibility is to...

  • Page 311
    ... reduction to the capital contribution reserve shall be increased for any shares issued, and decreased for any shares acquired, after the Annual General Meeting and before the record date for the applicable dividend installment payment. The Board's proposal is accompanied by a report by the auditor...

  • Page 312
    ... llP Two World Financial center new york, ny 10281-1414 Shareholder Services registered shareholders (shares held in your own name) with questions, such as change of address, lost certificates or dividend checks, should contact Tyco's transfer agent at: Bny Mellon Shareowner Services 480 Washington...

  • Page 313
    Tyco InTernaTIonal lTD. FreIer PlaTz 10 cH-8200 ScHaFFHauSen SWITzerlanD WWW.Tyco.coM/2011annualrePorT