ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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

Second Floor, 90 Pitts Bay Road, Pembroke, HM 08, Bermuda
(Address of Registrant's principal executive offices)
441-292-8674
(Registrant's telephone number)

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

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

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

		Page
Part I.	Financial Information
Item 1.	Financial Statements
	Consolidated Statements of Income (Unaudited) for the quarters and six months ended March 30, 2007 and March 31, 2006, as restated	1
	Consolidated Balance Sheets (Unaudited) as of March 30, 2007 and September 29, 2006	2
	Consolidated Statements of Cash Flows (Unaudited) for the six months ended March 30, 2007 and March 31, 2006, as restated	3
	Consolidated Statements of Shareholders' Equity (Unaudited) for the six months ended March 30, 2007 and March 31, 2006, as restated	4
	Notes to Consolidated Financial Statements (Unaudited)	5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	40
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	65
Item 4.	Controls and Procedures	66
Part II.	Other Information
Item 1.	Legal Proceedings	67
Item 1A.	Risk Factors	76
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	88
Item 3.	Defaults Upon Senior Securities	89
Item 4.	Submission of Matters to a Vote of Security Holders	89
Item 5.	Other Information	90
Item 6.	Exhibits	91
Signatures	92

TYCO INTERNATIONAL LTD.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(in millions, except per share data)

TYCO INTERNATIONAL LTD.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in millions, except share data)

TYCO INTERNATIONAL LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in millions)

TYCO INTERNATIONAL LTD.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)

For the Six Months Ended March 30, 2007 and March 31, 2006

(in millions)

1. Basis of Presentation, Restatement and Summary of Significant Accounting Policies

Basis of Presentation—The unaudited Consolidated Financial Statements include the consolidated accounts of Tyco International Ltd., a company organized under the laws of Bermuda, and its subsidiaries (Tyco and all its subsidiaries, hereinafter collectively referred to as the "Company" or "Tyco").

The financial statements have been prepared in United States dollars and in accordance with the instructions to Form 10-Q under the Securities Exchange Act of 1934, as amended. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all of the information and note disclosures required by accounting principles generally accepted in the United States ("GAAP"). These financial statements should be read in conjunction with the Consolidated Financial Statements and accompanying notes contained in the Company's Annual Report on Form 10-K/A for the fiscal year ended September 29, 2006 (the "2006 Form 10-K/A").

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

References to 2007 and 2006 are to Tyco's fiscal quarters ending March 30, 2007 and March 31, 2006 respectively, unless otherwise indicated.

During the second quarter of 2007, the Company identified certain errors in its income tax accounting primarily related to maintaining and tax effecting jurisdictional data and the classification of tax amounts in the Consolidated Balance Sheets. In addition, certain errors had been recorded and disclosed in the period in which they were identified rather than in the period in which they occurred since they were immaterial. While these errors are immaterial both individually and in the aggregate to Tyco's Consolidated Financial Statements, the Company has determined that these errors will become material to Tyco's income from continuing operations upon completion of the Proposed Separation. In anticipation of the Proposed Separation, the Company has restated its Consolidated Financial Statements.

The total impact of these errors is an increase of income tax expense of $127 million and $104 million for the quarter and six months ended March 31, 2006, respectively. The Company has restated its reported results to reflect the impact on income taxes.

The following tables reflect the impact of the income tax restatement on the Company's Consolidated Statements of Income. The amounts previously reported are derived from the Form 10-Q

for the quarter ended March 31, 2006 filed on May 9, 2006 and have been reclassified for the effects of discontinued operations.

The following table reflects the impact of the income tax restatement on the Company's Consolidated Statement of Cash Flow for the six months ended March 31, 2006. The amounts previously reported are derived from the Form 10-Q for the quarter ended March 31, 2006 filed on May 9, 2006 and have been reclassified for the effects of discontinued operations as well as other reclassifications to conform with current period presentation.

Reclassifications—Certain prior period amounts have been reclassified to conform with the current period presentation.

Recently Issued Accounting Pronouncements—In February 2007, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities." SFAS No. 159 permits an entity, on a contract-by-contract basis, to make an irrevocable election to account for certain types of financial instruments and warranty and insurance contracts at fair value, rather than historical cost, with changes in the fair value, whether realized or unrealized, recognized in earnings. SFAS No. 159 is effective for Tyco in the first quarter of fiscal 2009. The Company is currently assessing the impact that SFAS No. 159 will have on the results of its operations, financial position or cash flows.

In September 2006, the FASB issued SFAS No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106 and 132(R)." SFAS No. 158 requires that employers recognize the funded status of defined benefit pension and other postretirement benefit plans as a net asset or liability on the balance sheet and recognize as a component of other comprehensive income, net of tax, the gains or losses and prior service costs or credits that arise during the period but are not recognized as a component of net periodic benefit cost. Under SFAS No. 158, companies are required to measure plan assets and benefit obligations as of their fiscal year end. The Company presently uses a measurement date of August 31st. SFAS No. 158 also requires additional disclosure in the notes to the financial statements. The recognition provisions of SFAS No. 158 are effective at the end of fiscal 2007, while the measurement date provisions become effective in fiscal 2009. The Company is currently assessing the impact of SFAS No. 158 on its consolidated financial statements. Based on the funded status of defined benefit and other postretirement plans as of September 29, 2006, the Company estimates that it would recognize a net $356 million liability through a reduction in shareholders' equity. The ultimate amounts recorded are highly dependent on various estimates and assumptions including, among other things, the discount rate selected, future compensation levels and performance of plan assets. Changes in these assumptions could increase or decrease the estimated impact of implementing SFAS No. 158.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements," which enhances existing guidance for measuring assets and liabilities at fair value. SFAS No. 157 defines fair value, establishes a framework for measuring fair value and expands disclosure about fair value measurements. SFAS No. 157 is effective for Tyco beginning in fiscal 2009. The Company is currently assessing the impact, if any, that SFAS No. 157 will have on the results of its operations, financial position or cash flows.

In June 2006, the FASB issued FASB Interpretation ("FIN") No. 48, "Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109." This Interpretation prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. FIN No. 48 is effective for Tyco in the first quarter of fiscal 2008. The Company is currently assessing the impact that FIN No. 48 will have on the results of its operations, financial position or cash flows.

On January 13, 2006, the Company announced that its Board of Directors approved a plan to separate the Company into three separate, publicly traded companies—Tyco Healthcare, Tyco Electronics and a combination of Tyco Fire and Security and Engineered Products and Services (the "Proposed Separation"). The Company intends to accomplish the Proposed Separation through tax-free stock dividends to Tyco shareholders. Following the Proposed Separation, Tyco's shareholders will own 100% of the equity in all three companies.

In connection with the Proposed Separation, the Company estimates that it will incur income statement charges at the high end of the previously disclosed range of $1.2 billion to $1.6 billion, after tax, related primarily to debt refinancing, tax restructuring, professional services and employee-related costs. During the quarters ended March 30, 2007 and March 31, 2006, the Company incurred pre-tax costs related to the Proposed Separation of $106 million and $25 million, respectively. During the six months ended March 30, 2007 and March 31, 2006, the Company incurred pre-tax costs related to the Proposed Separation of $191 million and $33 million, respectively.

Consummation of the Proposed Separation is subject to certain conditions, including final approval by the Tyco Board of Directors, receipt of certain tax rulings, necessary opinions of counsel, the effectiveness of Registration Statements filed with the Securities and Exchange Commission ("SEC") and the completion of any necessary debt refinancings. Approval by the Company's shareholders is not required as a condition to the consummation of the Proposed Separation. Tyco has received an initial private letter ruling from the Internal Revenue Service ("IRS") and an opinion from outside counsel regarding the U.S. federal income tax consequences of the Proposed Separation noting it will qualify for favorable tax treatment. In January 2007, Tyco filed initial Registration Statements with the SEC to register the equity of Tyco Healthcare and Tyco Electronics. In April 2007, amended Registration Statements were filed. The Company expects the Proposed Separation to occur in the second calendar quarter of 2007 subject to the conditions discussed above.

During the fourth quarter of 2006, the Company entered into a definitive sale agreement to divest the Printed Circuit Group ("PCG") business, a component of the Electronics segment. During the first quarter of 2007, the Company consummated the sale of its PCG business for $231 million in net cash proceeds and recorded a pre-tax gain on the sale of $45 million.

During the first quarter of 2007, the operations of Aguas Industriales de Jose, C.A. ("AIJ"), a majority owned Engineered Products and Services segment joint venture in Venezuela, was sold for $42 million in net cash proceeds and a pre-tax gain on sale of $19 million was recorded.

During the first quarter of 2007, the Company also collected a $30 million receivable due from the purchaser of the Plastics, Adhesives and Ludlow Coated Products businesses related to the decline in average resin prices.

respective sales agreements, recorded pre-tax impairment charges of $275 million and $17 million related to the Plastics, Adhesives and Ludlow Coated Products businesses and the A&E Products business, respectively, to write the businesses down to fair values less costs to sell.

During the second quarter of 2006, the Company closed the sale of the Plastics, Adhesives and Ludlow Coated Products businesses for $975 million in gross cash proceeds. Estimated working capital and other adjustments resulted in net proceeds of $907 million, subject to settlement of the final working capital adjustment. The Company recognized a pre-tax loss on sale of approximately $10 million, during the second quarter of 2006.

Also, during the second quarter of 2006, the Company reassessed the recoverability of the carrying value for the A&E Products Group in conjunction with the terms and conditions included in the definitive sale agreement entered into during the quarter. As a result of this reassessment, the Company recorded an additional pre-tax impairment charge of $5 million to write the business down to its fair value less costs to sell.

The PCG, AIJ, Plastics, Adhesives and Ludlow Coated Products and A&E Products businesses all met the held for sale and discontinued operations criteria and have been included in discontinued operations in all periods presented.

Net revenue, income (loss) from operations, income (loss) on sale and income tax (expense) benefit for discontinued operations are as follows ($ in millions):

	For the Six Months Ended
	March 30, 2007			March 31, 2006
Net revenue	$	30		$	955

Pre-tax (loss) income from discontinued operations	$	(2	)	$	34
Pre-tax income (loss) on sale of discontinued operations		56			(310	)
Income tax expense		(6	)		(22	)

Income (loss) from discontinued operations, net of income taxes	$	48		$	(298	)

During the quarter and six months ended March 30, 2007, the Company recorded $9 million of divestiture charges in continuing operations in connection with the divestiture or write-down to fair-value of certain businesses.

During the six months ended March 31, 2006, the Company divested four businesses that were reported as continuing operations in Fire and Security and Healthcare. The Company recorded net gains on divestitures of $46 million in connection with the divestiture of these businesses, less $5 million of divestiture charges related to the write-down to estimated fair value and costs to sell certain other held for sale businesses primarily in Electronics.

Balance sheet information for discontinued operations and other businesses and assets held for sale, included in other current assets and accrued and other current liabilities in the Consolidated Balance Sheets, is as follows ($ in millions):

		March 30, 2007		September 29, 2006
Accounts receivable, net		$	—	$	86
Inventories			6		58
Other current assets			—		19
Property, plant and equipment, net			2		171
Goodwill and other intangibles, net			1		—
Other non-current assets			1		7

	Total assets	$	10	$	341

Current maturities of long-term debt		$	—	$	8
Accounts payable			—		38
Accrued and other current liabilities			—		21
Long-term debt			—		25
Other liabilities			—		3

	Total liabilities	$	—	$	95

During the fourth quarter of 2006, Tyco's Healthcare segment acquired over 50% ownership of Airox S.A. ("Airox") for $59 million, net of cash acquired of $4 million. During the first quarter of 2007, Tyco's Healthcare segment acquired the remaining outstanding shares of Airox in a mandatory tender offer for approximately $46 million in cash, and now owns 100% of the business. During the first quarter of 2007, the Company also recorded an additional $8 million in-process research and development charge, included within restructuring and asset impairment charges, net in the Consolidated Statements of Income, in conjunction with the acquisition. In-process research and development charges for the entire acquisition totaled $19 million. These charges relate to the development of second generation technology which has not yet obtained regulatory approval. As of the acquisition date, the in-process research and development was not considered to be technologically feasible or to have any alternative future use.

During the six month ended March 31, 2006, Tyco's Healthcare segment acquired over 90% ownership in Floreane Medical Implants, S.A. ("Floreane") for approximately $122 million, net of cash acquired of $3 million. During the second quarter of 2007, the Company acquired additional outstanding shares for approximately $9 million in cash, and now has over 95% ownership. During the six months ended March 31, 2006, the Company recorded a $3 million in-process research and development charge, included within restructuring and asset impairment charges, net in the Consolidated Statements of Income, in conjunction with the acquisition. These charges primarily relate to the development and replacement of certain core technologies. As of the acquisition date, the in-process research and development was not considered to be technologically feasible or to have any alternative future use.

Cash paid for other acquisitions, primarily within Healthcare and Fire and Security, during the six months ended of March 30, 2007 totaled $30 million. Cash paid for other acquisitions, primarily within Fire and Security, during the six months ended March 31, 2006 totaled $12 million.

These acquisitions were funded utilizing cash from operations. The results of operations of the acquired companies have been included in the consolidated results from the respective acquisition dates. These acquisitions did not have a material effect on the Company's financial position, results of operations or cash flows.

At March 30, 2007, $37 million of acquisition liabilities remained on the Consolidated Balance Sheets, of which $12 million are included in accrued and other current liabilities and $25 million are included in other liabilities. These acquisition liabilities relate to facility exit costs, employee severance and benefits, distributor and supplier cancellation fees and other costs. At September 29, 2006, $40 million of acquisition liabilities remained on the Consolidated Balance Sheets, of which $14 million are included in accrued and other current liabilities and $26 million are included in other liabilities.

During the six months ended March 30, 2007 and March 31, 2006, the Company paid cash of approximately $20 million and $86 million, respectively, relating to purchase accounting and holdback liabilities related to certain prior period acquisitions. Of the total cash paid during the six months ended March 31, 2006, $75 million was reported in discontinued operations. Holdback liabilities represent a portion of the purchase price that is withheld from the seller pending finalization of the acquisition balance sheet and other contingencies. At March 30, 2007, holdback liabilities on our Consolidated Balance Sheets were $105 million, of which $14 million are included in accrued and other current liabilities and $91 million are included in other liabilities. At September 29, 2006 holdback liabilities on our Consolidated Balance Sheets were $112 million, of which $23 million are included in accrued and other current liabilities and $89 million are included in other liabilities. Approximately $55 million and $53 million of the total holdback liabilities at March 30, 2007 and September 29, 2006, respectively, are retained liabilities of discontinued operations.

Restructuring and asset impairment charges, net during the quarters and six months ended March 30, 2007 and March 31, 2006 are as follows ($ in millions):

During the first quarter of 2007, the Company launched a restructuring program across all segments including the corporate organization which will streamline some of the businesses and reduce the operational footprint. The Company expects to incur charges of approximately $600 million over the next two years related to the restructuring program. The $600 million program includes actions of approximately $270 million at Fire & Security; $150 million at Healthcare; $80 million at Engineered Products & Services; $60 million at Electronics and $40 million at Corporate.

The restructuring program includes numerous actions which are designed to improve operating efficiency and strengthen the Company's competitive position in the future. During 2007, many of the actions initiated related to improving field efficiencies and consolidating certain administrative functions in the European operations of Fire & Security. In addition, Healthcare began to consolidate certain facilities in the United States and Corporate began to consolidate certain headquarter functions. The restructuring actions were largely reductions in workforce and are expected to be completed by the end of 2008.

During the six months ended March 30, 2007, the Company recorded net restructuring and asset impairment charges of $167 million, which includes $1 million reflected in cost of sales for the non-cash write down in carrying value of inventory and $8 million for an in-process research and development charge at Healthcare. The remaining charge is comprised of restructuring charges of $149 million, which include $144 million of severance and $5 million of facility exit charges and other cash charges, and $9 million of asset impairments. Net restructuring and asset impairment charges during the second quarter were $76 million comprised of restructuring charges of $67 million, which include $65 million of severance and $2 million of facility exit charges and other cash charges, and $9 million of asset impairments.

During the six months ended March 31, 2006, the Company recorded net restructuring and asset impairment charges of $21 million, which include $2 million reflected in cost of sales for the non-cash write down in carrying value of inventory and a $3 million in-process research and development charge at Healthcare. The remaining charge is comprised of net restructuring charges of $12 million and impairments of long-lived assets of $4 million. Net restructuring and asset impairment charges during the second quarter were $8 million, which include $7 million of severance and impairments of long-lived assets of $1 million.

Restructuring reserves from September 29, 2006 to March 30, 2007 by the year in which the restructuring action was initiated are as follows ($ in millions):

	Year of Restructuring Action
	2007			2006			2005		2004 and Prior			Total
Balance at September 29, 2006	$	—		$	9		$	1	$	97		$	107
Charges		149			2			—		1			152
Reversals		(2	)		—			—		(1	)		(3	)
Utilization		(19	)		(6	)		—		(10	)		(35	)
Reclass/transfers		(2	)		(1	)		—		1			(2	)
Currency translation		—			—			—		1			1

Balance at March 30, 2007	$	126		$	4		$	1	$	89		$	220

	March 30, 2007		September 29, 2006
Electronics	$	87	$	71
Fire and Security		93		28
Healthcare		13		—
Engineered Products and Services		15		5
Corporate		12		3

	$	220	$	107

At March 30, 2007, $150 million of restructuring reserves are included on the Consolidated Balance Sheets in accrued and other current liabilities and $70 million are included in other liabilities. At September 29, 2006, $33 million of restructuring reserves are included on the Consolidated Balance Sheets in accrued and other current liabilities and $74 million are included in other liabilities.

During 2006, the Company adopted FIN No. 47, "Accounting for Conditional Asset Retirement Obligations—an interpretation of FASB Statement No. 143." FIN No. 47 clarifies the timing of liability recognition for legal obligations associated with an asset retirement when the timing and (or) method of settling the obligation are conditional on a future event that may or may not be within the control of the entity and clarifies when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation. FIN No. 47 requires that conditional asset retirement obligations, along with the associated capitalized asset retirement costs, be initially reported at their fair values. Upon adoption, the Company recognized a liability of $32 million for asset retirement obligations and an increase of $10 million in the carrying amount of the related assets. The initial recognition resulted in a cumulative effect of accounting change of $22 million pre-tax loss ($14 million after-tax), reflecting the accumulated depreciation and accretion that would have been recognized in prior periods had the provisions of FIN No. 47 been in effect at the time.

The reconciliations between basic and diluted earnings per share are as follows (in millions, except per share data):

The computation of diluted earnings per common share for the quarter and six months ended March 30, 2007 excludes the effect of the potential exercise of options to purchase approximately

54 million shares and 61 million shares, respectively because the effect would be anti-dilutive. The computation of dilutive earnings per common share for the quarter and six months ended March 30, 2007 excludes restricted share awards of approximately 2 million shares and 5 million shares respectively, because the effect would be anti-dilutive.

The computation of diluted earnings per common share for the quarter and six months ended March 31, 2006 excludes the effect of the potential exercise of options to purchase approximately 91 million shares for both periods because the effect would be anti-dilutive. The computation of diluted earnings per common share for the quarter and six months ended March 31, 2006 excludes restricted share awards of approximately 8 million shares and 9 million shares respectively, because the effect would be anti-dilutive.

The following table sets forth the gross carrying amount and accumulated amortization of the Company's intangible assets ($ in millions):

Intangible asset amortization for the quarters ended March 30, 2007 and March 31, 2006 was $169 million and $164 million, respectively. Intangible asset amortization for the six months ended March 30, 2007 and March 31, 2006 was $337 million and $326 million, respectively. The estimated aggregate amortization expense on intangible assets currently owned by the Company is expected to be approximately $300 million for the remainder of 2007, $600 million for 2008, $550 million for 2009, $450 million for 2010, $400 million for 2011 and $350 million for 2012.

Tyco International Group S.A., a wholly-owned subsidiary of the Company organized under the laws of Luxembourg ("TIGSA"), holds a $1.0 billion 5-year revolving credit facility expiring on December 16, 2009 and a $1.5 billion 3-year revolving bank credit facility expiring on December 21, 2007. Additionally, TIGSA holds a $500 million 3-year unsecured letter of credit facility expiring on June 15, 2007. At March 30, 2007, letters of credit of $494 million have been issued under the $500 million facility and $6 million remains available for issuance. At March 30, 2007, $700 million has been borrowed under the $1.5 billion 3-year revolving bank credit facility. There were no amounts borrowed under the other credit facility at March 30, 2007.

At September 29, 2006, the Company had interest rate swaps in a net loss position of $6 million designated as fair value hedges with expiration dates in 2011. During the first quarter of 2007, the Company terminated the interest rate swaps. Since the interest rate swaps were designated as hedging instruments of outstanding debt, the related loss will be amortized over the remaining life of the related debt instruments. At September 29, 2006, the Company also had interest rate and foreign currency swap agreements in a net gain position of $52 million designated as a fair value hedge with an expiration date in 2011. During the first quarter of 2007, the Company terminated these agreements. The settlement of these swaps and $17 million of swaps in a gain position that were terminated in the fourth quarter of 2006 resulted in a net cash inflow of $63 million in the first quarter of 2007.

The Company hedges its net investment in certain foreign operations. The cumulative translation adjustment component of other comprehensive income includes a net loss of $28 million and $284 million during the quarter and six months ended March 30, 2007, respectively, for hedges of the foreign currency exposure of the Company's net investment in certain foreign operations.

In December 2006, due to required changes to the legal entity structure to facilitate the Proposed Separation, the Company determined that it will no longer consider certain intercompany foreign currency transactions to be long-term investments. As a result, the related foreign currency transaction gains and losses on such investments were recorded in the income statement subsequent to this determination rather than to the currency translation component of shareholders' equity. Forward contracts that were previously designated as hedges of these net investments, with notional value of $4.9 billion at the time of de-designation, will continue to be used to manage this exposure but will no longer be designated as net investment hedges.

At March 30, 2007, the Company had a contingent purchase price of $80 million related to the 2001 acquisition of Com-Net by Electronics. This represents the maximum amount payable to the former shareholders of Com-Net only after the construction and installation of a communications system for the State of Florida is finished and the State has approved the system based on the guidelines set forth in the contract. A liability for this contingency has not been recorded in Tyco's Consolidated Financial Statements as the outcome of this contingency cannot be reasonably determined.

In the normal course of business, the Company is liable for contract completion and product performance. In the opinion of management, such obligations will not significantly affect the Company's financial position, results of operations or cash flows.

As a result of actions taken by the Company's former senior corporate management, Tyco, some members of the Company's former senior corporate management, former members of our Board of Directors and former General Counsels and the Company's current Chief Executive Officer and former Chief Financial Officer are named defendants in a number of purported class actions alleging violations of the disclosure provisions of the federal securities laws. Tyco, certain of the Company's current and former employees, some members of the Company's former senior corporate management and some former members of the Company's Board of Directors also are named as defendants in several Employee Retirement Income Security Act ("ERISA") class actions. In addition, some members of the Company's former senior corporate management are subject to a SEC inquiry. The findings and outcomes of the SEC inquiry may affect the course of the purported securities class actions and ERISA class actions pending against Tyco. The Company is generally obligated to indemnify its directors and officers and its former directors and officers who are named as defendants in some or all of these matters to the extent required by Bermuda law. In addition, the Company's insurance carriers may decline coverage, or the Company's coverage may be insufficient to cover its expenses and liability, in some or all of these matters. While the Company has from time to time engaged plaintiffs' counsel in settlement discussions, the Company is unable at this time to estimate what its ultimate liability in these matters may be, and it is possible that the Company will be required to pay judgments or settlements and incur expenses, in excess of any insurance coverage, in aggregate amounts that would have a material adverse effect on its financial position, results of operations or cash flows. At this time, it is not possible to estimate the amount of loss or probable losses, if any, that might result from an adverse resolution of these matters.

The Company and others have received various subpoenas and requests from the SEC's Division of Enforcement, the United States Department of Labor, the General Service Administration and others seeking the production of voluminous documents in connection with various investigations into the Company's governance, management, operations, accounting and related controls. The Department of Labor is investigating Tyco and the administrators of certain of its benefit plans. The Company cannot predict when these investigations will be completed, nor can the Company predict what the results of these investigations may be. It is possible that the Company will be required to pay material fines, consent to injunctions on future conduct, lose the ability to conduct business with government entities or instrumentalities (which in turn could negatively impact the Company's business with non-governmental customers) or suffer other penalties or adverse impacts, each of which could have a material adverse effect on the Company's business. It is not possible to estimate the amount of loss, or range of possible loss, if any, that might result from an adverse resolution of these matters.

As previously disclosed in our periodic filings, the Company is a party to a number of patent infringement and antitrust actions that may require the Company to pay damage awards. Tyco has assessed the status of these matters and has recorded liabilities related to certain of these matters where appropriate.

Masimo Corporation v. Tyco Healthcare Group LP ("Tyco Healthcare") and Mallinckrodt, Inc. is a separate lawsuit filed on May 22, 2002 pending in the United States District Court for the Central District of California. Tyco Healthcare and Mallinckrodt are subsidiaries of Tyco. In this lawsuit, Masimo alleges violations of antitrust laws against Tyco Healthcare and Mallinckrodt in the markets for pulse oximeter products. Masimo alleges that Tyco Healthcare and Mallinckrodt used their market

position to prevent hospitals from purchasing Masimo's pulse oximetry products. Masimo seeks injunctive relief and monetary damages, including treble damages. Trial in this case began on February 22, 2005. The jury returned its verdict on March 21, 2005, and awarded Masimo $140 million in damages. The damages are automatically trebled under the antitrust statute to an award of $420 million. If ultimately successful, Masimo's attorneys are entitled to an award of reasonable fees and costs in addition to the verdict amount. The district court held a hearing on June 28, 2005 regarding post-trial motions.

On March 22, 2006, the district court issued its Memorandum of Decision regarding the post-trial motions. In the Memorandum, the district court (i) vacated the jury's liability findings on two business practices; (ii) affirmed the jury's liability finding on two other business practices; (iii) vacated the jury's damage award in its entirety; and (iv) ordered a new trial on damages. The district court held the new trial on the damages on October 18 and 19, 2006. On January 25, 2007, the district court ordered an additional hearing on the issue of damages, which took place on March 22, 2007. Tyco has assessed the status of this matter and has concluded that it is more likely than not that the remainder of the jury's decision will be overturned, and, further, Tyco intends to vigorously pursue all available means to achieve such reversal. Accordingly, no provision has been made in the Consolidated Financial Statements with respect to this damage award.

Beginning on August 29, 2005 with Natchitoches Parish Hospital Service District v. Tyco International, Ltd., twelve consumer class actions have been filed against Nellcor in the United States District Court for the Central District of California. The remaining eleven actions are Allied Orthopedic Appliances, Inc. v. Tyco Healthcare Group LP, and Mallinckrodt Inc. filed on August 29, 2005, Scott Valley Respiratory Home Care v. Tyco Healthcare Group LP, and Mallinckrodt Inc. filed on October 27, 2005, Brooks Memorial Hospital et al v. Tyco Healthcare Group LP filed on October 18, 2005, All Star Oxygen Services, Inc. et al v. Tyco Healthcare Group, et al filed on October 25, 2005, Niagara Falls Memorial Medical Center, et al v. Tyco Healthcare Group LP filed on October 28, 2005, Nicholas H. Noyes Memorial Hospital v. Tyco Healthcare and Mallinckrodt filed on November 4, 2005, North Bay Hospital, Inc. v. Tyco Healthcare Group, et al filed on November 15, 2005, Stephen Skoronski v. Tyco International, Ltd., et al filed on November 21, 2005, Abington Memorial Hospital v. Tyco Int'l Ltd.; Tyco Int'l (US) Inc.; Mallinckrodt In.; Tyco Healthcare Group LP filed on November 22, 2005, South Jersey Hospital, Inc. v. Tyco International, Ltd., et al filed on January 24, 2006 and Deborah Heart and Lung Center v. Tyco International, Ltd., et al filed on January 27, 2006. In all twelve complaints the putative class representatives, on behalf of themselves and others, seek to recover overcharges they allege they paid for pulse oximetry products as a result of anticompetitive conduct by Nellcor in violation of the federal antitrust laws. The Company will respond to these complaints and intends to vigorously defend the actions. At this time, it is not possible to estimate the amount of loss or probable losses, if any, that might result from an adverse resolution of these matters.

district court denied on December 23, 2003. On February 7, 2005, the district court granted U.S. Surgical's motion for summary judgment. Applied Medical appealed the summary judgment ruling. On May 15, 2006, the United States Court of Appeals for the Federal Circuit issued a decision on the appeal vacating the district court's grant of summary judgment and remanding the case for further proceedings. On January 9, 2007, the district court entered an order that denied both parties' motion for summary judgment on the ground that material facts remain in dispute. The district court has scheduled trial in this case for July 10, 2007. It is not possible to estimate the amount of loss or probable losses, if any, that might result from an adverse resolution of this matter.

Tyco is involved in various stages of investigation and cleanup related to environmental remediation matters at a number of sites. The ultimate cost of site cleanup is difficult to predict given the uncertainties regarding the extent of the required cleanup, the interpretation of applicable laws and regulations and alternative cleanup methods. As of March 30, 2007, Tyco concluded that it was probable that it would incur remedial costs in the range of approximately $146 million to $348 million. As of March 30, 2007, Tyco concluded that the best estimate within this range is approximately $186 million, of which $28 million is included in accrued and other current liabilities and $158 million is included in other liabilities on our Consolidated Balance Sheets. In view of the Company's financial position and reserves for environmental matters of $186 million, the Company believes that any potential payment of such estimated amounts will not have a material adverse effect on its financial position, results of operations or cash flows.

Tyco has recorded obligations according to the provisions of SFAS No. 143, "Accounting for Asset Retirement Obligations," and FIN No. 47 for the estimated future costs associated with legal obligations to decommission two nuclear facilities and retire certain other assets. As of March 30, 2007 and September 29, 2006, the Company's AROs were $113 million and $111 million, respectively. The Company recorded an insignificant amount of accretion and foreign currency translation related to AROs during the quarter and six months ended March 30, 2007. The Company believes that any potential payment of such estimated amounts will not have a material adverse effect on its financial position, results of operations or cash flows. See further discussion on the implementation of FIN No. 47 in Note 6.

Tyco and some of its subsidiaries are named as defendants in personal injury lawsuits based on alleged exposure to asbestos-containing materials. Consistent with the national trend of increased asbestos-related litigation, the Company has observed an increase in the number of these lawsuits in the past several years. The majority of these cases have been filed against subsidiaries in Healthcare and Engineered Products and Services. A limited number of the cases allege premises liability, based on claims that individuals were exposed to asbestos while on a subsidiary's property. A majority of the cases involve product liability claims, based principally on allegations of past distribution of heat-resistant industrial products incorporating asbestos or the past distribution of industrial valves that incorporated asbestos-containing gaskets or packing. Each case typically names between dozens to hundreds of corporate defendants.

Tyco's involvement in asbestos cases has been limited because its subsidiaries did not mine or produce asbestos. Furthermore, in the Company's experience, a large percentage of these claims were never substantiated and have been dismissed by the courts. The Company will continue to vigorously defend these lawsuits and the Company has not suffered an adverse verdict in a trial court proceeding related to asbestos claims. When appropriate, the Company settles claims; however, the total amount paid in any year to settle and defend all asbestos claims has been immaterial. As of March 30, 2007, there were approximately 15,500 asbestos liability cases pending against the Company and its subsidiaries.

The Company estimates its pending asbestos claims and claims that were incurred but not reported, as well as related insurance and indemnification recoveries. The Company's estimate of the liability for pending and future claims is based on claim experience over the past five years and covers claims expected to be filed over the next seven years. The Company believes that it has adequate amounts recorded related to these matters. While it is not possible at this time to determine with certainty the ultimate outcome of these asbestos-related proceedings, the Company believes that the final outcome of all known and anticipated future claims, after taking into account its substantial indemnification rights and insurance coverage, will not have a material adverse effect on the Company's financial position, results of operations or cash flows.

The Company and its subsidiaries' income tax returns are periodically examined by various tax authorities. In connection with such examinations, tax authorities, including the Internal Revenue Service ("IRS"), have raised issues and proposed tax adjustments. The Company is reviewing and contesting certain of the proposed tax adjustments. While the timing and ultimate resolution of these matters is uncertain, the Company anticipates that certain of these matters could be resolved during 2007. Amounts related to these tax adjustments and other tax contingencies and related interest that management has assessed as probable and estimable have been recorded.

The IRS continues to audit the years 1997 through 2000. In 2004 the Company submitted to the IRS proposed adjustments to these prior period U.S. federal income tax returns resulting in a reduction in the taxable income previously filed. During 2006, the IRS accepted substantially all of the proposed adjustments. Also during 2006, the Company developed proposed amendments to U.S. federal income tax returns for additional periods through 2002. On the basis of previously accepted amendments, the Company has determined that acceptance of these adjustments is probable and, accordingly, has recorded them in the Consolidated Financial Statements. Such adjustments did not have a material impact on the Company's financial condition, results of operations or cash flows.

The Company has yet to complete proposed amendments to its U.S. federal income tax returns for periods subsequent to 2002, which will primarily reflect the roll forward through 2006 of the amendments for the periods 1997 to 2002. When the Company's tax return positions are updated additional adjustments may be identified and recorded in the Consolidated Financial Statements. While the final adjustments cannot be determined until the income tax return amendment process is completed, the Company believes that any resulting adjustments will not have a material impact on its financial condition, results of operations or cash flows.

Tyco has received and responded to various allegations and other information suggesting that certain improper payments were made by Tyco subsidiaries in recent years. During 2005 and 2006, Tyco reported to the U.S. Department of Justice ("DOJ") and the SEC the investigative steps and remedial measures that it has taken in response to such allegations and information. Tyco also informed the DOJ and the SEC that it retained outside counsel to perform a company-wide baseline review of its policies, controls and practices with respect to compliance with the Foreign Corrupt Practices Act ("FCPA"), that it would continue to make periodic progress reports to these agencies, and that it would present its factual findings upon conclusion of the baseline review. The Company has and will continue to have communications with the DOJ and SEC to provide updates on the baseline review being conducted by outside counsel, including, as appropriate, briefings concerning additional instances of potential improper payments identified by the Company in the course of its ongoing compliance activities. To date, the baseline review has revealed that some business practices may not comply with Tyco and FCPA requirements. At this time, Tyco cannot predict the outcome of other allegations reported to regulatory and law enforcement authorities and therefore cannot estimate the range of potential loss or extent of risk, if any, that may result from an adverse resolution of any or all of these matters. However, it is possible that the Company may be required to pay judgments, suffer penalties or incur settlements in amounts that may have a material adverse effect on its financial position, results of operations or cash flows.

Earth Tech v. City of Phoenix is a contract dispute arising from Earth Tech's contract with the City of Phoenix, Arizona for expansion of the City's 91^st Avenue Waste Water Treatment Plant. On December 21, 2005, Earth Tech filed a lawsuit against the City of Phoenix in the Maricopa County Superior Court alleging $3 million in damages plus interest for the City's failure to pay dewatering and computer systems costs related to the 91^st Avenue project. After the City rejected Earth Tech's administrative claim against the City, Earth Tech filed and served a First Amended Complaint upon the City of Phoenix. In its First Amended Complaint, Earth Tech alleged eighteen causes of action and requested the following: (i) a recovery of at least $73 million for the value of the services performed by Earth Tech in connection with the contract; (ii) a rescission of the contract; (iii) an equitable adjustment of the Contract price for additional dewatering services and the Computer Control System; and (iv) costs for demobilization and termination of the contract. The City of Phoenix filed a Motion to Dismiss rather than filing an answer to the First Amended Complaint on May 18, 2006. The Court granted the City's Motion to Dismiss without prejudice on September 19, 2006 allowing Earth Tech 30 days to file a Second Amended Complaint. Earth Tech filed its Second Amended Complaint against the City of Phoenix on September 25, 2006.

On December 29, 2005, the City of Phoenix filed a lawsuit against Earth Tech, Inc., its surety, Federal Insurance Company and other unnamed parties in the Maricopa County Superior Court, The City of Phoenix v. Earth Tech, Inc., Federal Insurance Company and John Does 1-50. The lawsuit is in connection with the City of Phoenix's termination on August 12, 2005 of Earth Tech's contract with the City of Phoenix, Arizona for expansion of the City's 91^st Avenue Waste Water Treatment Plant. The City alleges the following causes of action: (i) Earth Tech breached its Pre-Construction Services and Construction Management at Risk Contracts; (ii) Earth Tech did not properly, reasonably or timely manage, supervise or inspect the work under the Contracts; (iii) Federal Insurance breached the terms and conditions of the performance bond; and (iv) Federal Insurance failed to investigate the City's Bond Claims. The City requested unspecified general, consequential, incidental, special and liquidated damages plus interest as its relief. On February 8, 2006, Earth Tech filed a Motion to Dismiss the City's Complaint in which Federal Insurance Company joined. The Court denied Earth Tech's Motion to Dismiss on September 25, 2006. The City of Phoenix filed an Amended Complaint against Earth Tech and Federal Insurance on September 25, 2006. In the Amended Complaint, the City of Phoenix alleged damages of $128 million.

The Presiding Judge of Maricopa County Superior Court on July 11, 2006 consolidated all of the pending lawsuits related to this dispute on the Court's complex litigation docket. At this time, Tyco cannot predict the outcome of this matter and therefore cannot estimate the range of potential loss or extent of risk, if any, that may result from an adverse resolution of this matter.

The Company is a defendant in a number of other pending legal proceedings incidental to present and former operations, acquisitions and dispositions. The Company does not expect the outcome of these proceedings, either individually or in the aggregate, to have a material adverse effect on its financial position, results of operations or cash flows.

Pension Plans—The net periodic benefit cost for all U.S. and non-U.S. defined benefit pension plans for the quarters and six months ended March 30, 2007 and March 31, 2006 was as follows ($ in millions):

		U.S. Plans
		For the Quarters Ended						For the Six Months Ended
		March 30, 2007			March 31, 2006			March 30, 2007			March 31, 2006
Service cost		$	6		$	6		$	12		$	12
Interest cost			35			32			69			63
Expected return on plan assets			(44	)		(41	)		(86	)		(82	)
Amortization of prior service cost			1			1			2			2
Amortization of net actuarial loss			9			12			18			25

	Net periodic benefit cost	$	7		$	10		$	15		$	20

		Non-U.S. Plans
		For the Quarters Ended						For the Six Months Ended
		March 30, 2007			March 31, 2006			March 30, 2007			March 31, 2006
Service cost		$	30		$	29		$	60		$	58
Interest cost			39			34			78			68
Expected return on plan assets			(36	)		(31	)		(72	)		(62	)
Amortization of prior service benefit			(1	)		—			(2	)		(1	)
Amortization of net actuarial loss			13			13			26			26

	Net periodic benefit cost	$	45		$	45		$	90		$	89

As previously discussed in the 2006 Form 10-K/A, the Company anticipates that it will contribute at least the minimum required to its pension plans in 2007 of $10 million for U.S. plans and $141 million for non-U.S. plans. During the six months ended March 30, 2007, the Company has contributed $119 million to its non-U.S. pension plans.

During the six months ended March 30, 2007, the Company completed the merger of certain pension plans in the United Kingdom. Also, in anticipation of the Proposed Separation, the Company legally separated certain pension plans that included participants of Tyco Electronics, Tyco Healthcare and other subsidiaries. As a result, the Company remeasured the assets and projected benefit obligation of the separated pension plans. As a result of these actions, the Company decreased its minimum pension liability with a corresponding increase to accumulated other comprehensive income of $35 million, net of income taxes and an increase to its prepaid pension assets by $58 million.

Postretirement Benefit Plans—Net periodic postretirement benefit cost was as follows ($ in millions):

		For the Quarters Ended						For the Six Months Ended
		March 30, 2007			March 31, 2006			March 30, 2007			March 31, 2006
Service cost		$	1		$	1		$	2		$	2
Interest cost			4			4			8			8
Amortization of prior service benefit			(1	)		(1	)		(2	)		(2	)

	Net periodic postretirement benefit cost	$	4		$	4		$	8		$	8

As previously discussed in the 2006 Form 10-K/A, the Company expects to make contributions to its postretirement benefit plans of $26 million in 2007. During the six months ended March 30, 2007, the Company has contributed $12 million to its postretirement benefit plans.

Rabbi Trust—During the six months ended March 30, 2007, the Company, as permitted under the trust agreement, sold substantially all of the assets from one of the trusts and received $271 million of proceeds. Trust assets were primarily composed of corporate-owned life insurance policies.

Effective October 1, 2005, the Company adopted the provisions of SFAS No. 123R, "Share-Based Payment," using the modified prospective transition method. Total share-based compensation cost recognized during the six months ended March 30, 2007 and March 31, 2006 of $160 million and $149 million, respectively, has been included in the Consolidated Statements of Income within selling, general and administrative expenses.

The Company issued its annual share-based compensation grants during the first quarter of each year. The total number and type of awards granted, primarily in connection with the annual grant, and the related weighted-average grant-date fair values, were as follows (in millions, except per share data):

	For the Six Months Ended
	March 30, 2007			March 31, 2006
	Shares	Weighted-Average Grant-Date Fair Value		Shares	Weighted-Average Grant-Date Fair Value
Share options	10,948,021	$	9.54	10,693,227	$	9.00
Restricted share awards	5,555,907		30.34	5,177,373		28.93
Performance shares	—		—	1,028,500		28.95

Total awards	16,503,928			16,899,100

The options granted in 2007 are exercisable in equal annual installments over a period of four years. The restricted share awards granted in 2007 vest in one-third increments over a period of four years beginning in year two.

The weighted-average assumptions used in the Black-Scholes option pricing model were as follows:

	For the Six Months Ended
	March 30, 2007			March 31, 2006
Expected stock price volatility		32	%		34	%
Risk free interest rate		4.3	%		4.2	%
Expected annual dividend per share	$	0.40		$	0.40
Expected life of options (years)		5.1			4.4

The segment data presented have been reclassified to exclude the results of discontinued operations. Selected information by business segment is presented in the following tables ($ in millions):

Selected supplementary balance sheet information was as follows ($ in millions):

		March 30, 2007			September 29, 2006
Purchased materials and manufactured parts		$	1,360		$	1,153
Work in process			1,224			1,102
Finished goods			2,753			2,538

	Inventories	$	5,337		$	4,793

Land		$	533		$	536
Buildings			3,078			2,975
Subscriber systems			4,918			4,775
Machinery and equipment			11,220			10,323
Property under capital leases⁽¹⁾			268			265
Construction in progress			891			975
Accumulated depreciation⁽²⁾			(11,363	)		(10,609	)

	Property, plant and equipment, net	$	9,545		$	9,240

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

	For the Six Months Ended
	March 30, 2007		March 31, 2006
Conversion of debt to common shares	$	—	$	1,235

The effective income tax rate was 19.7% and 23.2% during the quarters ended March 30, 2007 and March 31, 2006, respectively. The decrease in the effective rate is primarily the result of benefits of approximately $102 million from the release of a deferred tax valuation allowance related to non-U.S. tax rulings received during the quarter. Additionally, taxes for the quarter were impacted by reduced reserve requirements on certain legacy tax matters, offset by tax costs related to the Proposed Separation and decreased profitability in operations in lower tax rate jurisdictions.

Certain of the Company's business segments have guaranteed the performance of third-parties and provided financial guarantees for uncompleted work and financial commitments. The terms of these guarantees vary with end dates ranging from 2007 through the completion of such transactions. The guarantees would be triggered in the event of nonperformance and the potential exposure for nonperformance under the guarantees would not have a material effect on the Company's financial position, results of operations or cash flows.

In disposing of assets or businesses, the Company often provides representations, warranties and/or indemnities to cover various risks including, for example, unknown damage to the assets, environmental risks involved in the sale of real estate, liability to investigate and remediate environmental contamination at waste disposal sites and manufacturing facilities, and unidentified tax liabilities and legal fees related to periods prior to disposition. The Company does not have the ability to estimate the potential liability from such indemnities because they relate to unknown conditions. However, the Company has no reason to believe that these uncertainties would have a material adverse effect on the Company's financial position, results of operations or cash flows.

The Company has recorded liabilities for known indemnifications included as part of environmental liabilities. See Note 11 for a discussion of these liabilities.

At September 29, 2006, the Company had a $54 million obligation under an off-balance sheet leasing arrangement for five cable laying sea vessels which was recorded in the accompanying Consolidated Balance Sheet based on the estimated fair value of the vessels. Upon expiration of this lease in October 2006, a subsidiary of the Company exercised its option to buy these vessels for $280 million and, accordingly, the residual guarantee was settled.

The Company records estimated product warranty costs at the time of sale. Manufactured products are warranted against defects in material and workmanship when properly used for their intended purpose, installed correctly, and appropriately maintained. Generally, product warranties are implicit in the sale; however, the customer may purchase an extended warranty. Manufactured equipment is also warranted in the same manner as product warranties. However, in most instances the warranty is either negotiated in the contract or sold as a separate component. Warranty period terms range from 90 days (e.g., consumable products) up to 20 years (e.g., power system batteries). The warranty liability is determined based on historical information such as past experience, product failure rates or number of units repaired, estimated cost of material and labor, and in certain instances estimated property damage.

Following is a roll forward of the Company's warranty accrual for the quarter and six months ended March 30, 2007 ($ in millions).

	For the Quarter Ended March 30, 2007			For the Six Months Ended March 30, 2007
Balance at beginning of period	$	238		$	245
Warranties issued during the period		15			27
Changes in estimates		3			3
Settlements		(25	)		(45	)
Currency translation		1			2

Balance at March 30, 2007	$	232		$	232

In 2001, Engineered Products and Services initiated a Voluntary Replacement Program ("VRP") associated with the acquisition of Central Sprinkler. The VRP relates to the replacement of certain Model GB fire sprinkler heads which were originally manufactured by Central Sprinkler prior to Tyco's acquisition. Under this program, the sprinkler heads are being replaced over a 5-7 year period free of charge to property owners. Settlements during the quarter and six months ended March 30, 2007 include cash expenditures of $9 million and $17 million, respectively, related to the VRP. On May 1, 2007, the Consumer Products Safety Commission and the Company announced plans to end the VRP on August 31, 2007. Under these plans, the Company will fulfill all valid claims for replacement of faulty sprinklers received up to August 31, 2007.

TIGSA, a wholly owned subsidiary of the Company, has public debt securities outstanding (see Note 9) which are fully and unconditionally guaranteed by Tyco. The following tables, as restated for the adjustments discussed in Note 1, present condensed consolidating financial information for Tyco, TIGSA and all other subsidiaries. Condensed financial information for Tyco and TIGSA on a stand-alone basis is presented using the equity method of accounting for subsidiaries.

CONDENSED CONSOLIDATING STATEMENT OF INCOME
For the Quarter Ended March 30, 2007
(in millions)

CONDENSED CONSOLIDATING STATEMENT OF INCOME (RESTATED)

For the Quarter Ended March 31, 2006

(in millions)

CONDENSED CONSOLIDATING STATEMENT OF INCOME

For the Six Months Ended March 30, 2007

(in millions)

CONDENSED CONSOLIDATING STATEMENT OF INCOME (RESTATED)

For the Six Months Ended March 31, 2006

(in millions)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Six Months Ended March 30, 2007

(in millions)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (RESTATED)

For the Six Months Ended March 31, 2006
(in millions)

On April 27, 2007, the Company announced that, in connection with the Proposed Separation, the Company and certain of its subsidiaries that are issuers of its corporate debt have commenced tender offers to purchase for cash substantially all of its outstanding U.S. Dollar denominated public debt, aggregating approximately $6.6 billion, with maturities from 2007 to 2029. In conjunction with the tender offers, the relevant issuer will also solicit consents for certain clarifying amendments to the indentures pursuant to which the debt was issued.

Additionally, the Company's subsidiary, Tyco International Group S.A., commenced on April 30, 2007 tender offers to purchase for cash all of its outstanding Euro and Pound Sterling denominated public debt, aggregating the equivalent of approximately $1.9 billion, with maturities from 2008 to 2031, issued under its Euro Medium Term Note Programme (the "EMTN Notes") and a consent solicitation for certain clarifying amendments to the fiscal agency agreement pursuant to which the EMTN Notes were issued.

On April 25, 2007, the Company, certain of its subsidiaries and a syndicate of banks entered into three bridge loan facilities with an aggregate commitment amount of $10 billion. Funds under these bridge loan facilities will be used, together with cash on hand, to pay for debt tendered subject to consents obtained pursuant to the tender offers that the Company and certain of its subsidiaries commenced in order to purchase substantially all of their outstanding public debt.

Additionally, on April 25, 2007, the Company, certain of its subsidiaries and a syndicate of banks entered into three revolving credit facilities with an initial aggregate commitment amount of $2.5 billion that will increase to $4.25 billion at the time of the Proposed Separation. Of the aggregate commitment amount of $4.25 billion, a $1.25 billion commitment will be available to the Company, and a $1.5 billion commitment will be available to each of Tyco Healthcare and Tyco Electronics. The revolving credit facilities will replace the Company's existing revolving credit facilities and be used for working capital, capital expenditures and other corporate purposes. The Company initially will guarantee the new revolving credit facilities and Tyco Healthcare and Tyco Electronics will each assume the obligations of the Company with respect to their revolving credit facilities upon the Proposed Separation.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the Company's financial condition and results of operations, including the effects of the restatement described in Note 1 to the Consolidated Financial Statements, should be read together with our Consolidated Financial Statements and the accompanying notes included in this Quarterly Report. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. The Company's actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including but not limited to those under the headings "Risk Factors" and "Forward-Looking Information."

The unaudited Consolidated Financial Statements include the consolidated accounts of Tyco International Ltd., a company organized under the laws of Bermuda, and its subsidiaries (hereinafter collectively referred to as "we," the "Company" or "Tyco") and have been prepared in United States Dollars, in accordance with accounting principles generally accepted in the United States ("GAAP").

References to the segment data are to the Company's continuing operations and prior period amounts have been reclassified to exclude the results of discontinued operations.

The following tables reflect the impact of the income tax restatement on the Company's Consolidated Statements of Income. The amounts previously reported are derived from the Form 10-Q

for the quarter ended March 31, 2006 filed on May 9, 2006 and have been reclassified for the effects of discontinued operations.

As previously reported, on January 13, 2006, the Company announced that its Board of Directors approved a plan to separate the Company into three separate, publicly traded companies—Tyco Healthcare, one of the world's leading diversified healthcare companies; Tyco Electronics, the world's largest passive electronic components manufacturer; and a combination of Tyco Fire and Security and Engineered Products and Services, a global business with leading positions in residential and commercial security, fire protection, and industrial products and services (the "Proposed Separation").

After thorough reviews of strategic options with our Board of Directors, we believe that this strategy is the best way to position our market-leading companies for sustained growth and value creation.

Following the Proposed Separation, Tyco's shareholders will own 100% of the equity in all three companies through tax-free stock dividends. Additionally, we will, if approved by our Board of Directors, execute a reverse share split, and as a result, four Tyco shares will be converted into one share. Shareholder approval for the reverse share split was obtained at the March 8, 2007 Special General Meeting of Shareholders.

Each of the three companies will have its own independent Board of Directors and strong corporate governance standards.

We expect to incur separation costs related to debt refinancing, tax restructuring, professional services and employee-related costs. We currently estimate that the income statement charges will be at the high end of the previously disclosed range of $1.2 billion to $1.6 billion, after-tax. The total charges to complete the Proposed Separation will be influenced by the manner in which and the conditions under which we execute the tax restructuring and debt refinancing transactions. During the quarters ended March 30, 2007 and March 31, 2006, we incurred pre-tax costs related to the Proposed Separation of $106 million and $25 million, respectively. During the six months ended March 30, 2007 and March 31, 2006, we incurred pre-tax costs related to the Proposed Separation of $191 million and $33 million, respectively. Most of the remaining charges are expected to be incurred before completing the Proposed Separation.

Consummation of the Proposed Separation is subject to certain conditions, including final approval by the Tyco Board of Directors, receipt of certain tax rulings, necessary opinions of counsel, the effectiveness of Registration Statements filed with the Securities and Exchange Commission ("SEC") and the completion of any necessary debt refinancings. Approval by the Company's shareholders is not required as a condition to the consummation of the Proposed Separation. Tyco has received an initial private letter ruling from the Internal Revenue Service ("IRS") and an opinion from outside counsel regarding the U.S. federal income tax consequences of the Proposed Separation noting it will qualify for favorable tax treatment. On January 18, 2007, Tyco filed initial Registration Statements with the SEC to register the equity of Tyco Healthcare and Tyco Electronics. In April 2007, amended Registration Statements were filed. The Company expects the Proposed Separation to occur in the second calendar quarter of 2007 subject to the conditions described above. Upon separation, Tyco Healthcare will change its name to Covidien Ltd.

At or shortly before the completion of the Proposed Separation, we will reorganize to a new management and segment reporting structure. As part of these planned organizational changes, we will assess new reporting units and perform valuations to determine assignment of goodwill to the new reporting units based on relative fair values. We will also test the recoverability of goodwill. As such, we estimate that based on preliminary valuations and assumptions we may incur a pre-tax charge of approximately $100 million for the estimated amount of goodwill that we anticipate may be impaired as a result of the planned reorganization to a new management and segment reporting structure. The assessment relied on a number of preliminary assumptions that will be revised to reflect market conditions at the time of the final assessment. At the time of the organizational changes when these assessments actually occur, a charge, if any, could be materially different than the estimate provided herein.

We are focused on growing profitability within each of these companies before and after the Proposed Separation, so that each may be well positioned for long-term growth as independent entities. Following the Proposed Separation, we expect that all three companies will be dividend-paying companies. As we prepare for the Proposed Separation, we remain committed to returning excess cash to shareholders. During the quarter ended December 29, 2006, we repurchased 22 million of our common shares for $659 million completing the $2.0 billion share repurchase program approved by the

Board of Directors in May 2006. During the quarter and six months ended March 31, 2007, we paid dividends of $196 million and $395 million, respectively, to shareholders.

During the quarter ended December 29, 2006, a subsidiary of the Company exercised its option to buy five cable laying sea vessels that were previously included under an off-balance sheet leasing arrangement for $280 million. Additionally, during the quarter ended December 29, 2006, we received $38 million related to restitution owed by Mark H. Swartz, former Chief Financial Officer and during the quarter ended March 30, 2007, we received the remaining $98 million held in escrow related to the restitution owed by L. Dennis Kozlowski, former Chairman and Chief Executive Officer.

During the quarter ended December 29, 2006, we completed the sale of our Printed Circuit Group ("PCG"), a Tyco Electronics business and leading manufacturer of high-technology printed circuit boards for the military, aerospace and commercial markets, for $231 million in net cash proceeds and recorded a pre-tax gain on sale of $45 million. Additionally, we collected the $30 million receivable due from the purchaser of our Plastics, Adhesives and Ludlow Coated Products businesses.

During the quarter ended December 29, 2006, we also consummated the sale of the Aguas Industriales de Jose, C.A. ("AIJ"), a majority owned Engineered Products and Services segment joint venture in Venezuela, for $42 million in net cash proceeds and a pre-tax gain of $19 million was recorded.

The PCG and AIJ businesses met the held for sale and discontinued operations criteria and have been included in discontinued operations in all periods presented. Details related to the Company's divestiture program and the related discontinued operations are discussed in "Discontinued Operations and Divestitures."

We are continuing to assess the strategic fit of our various businesses and are considering additional divestitures where businesses do not align with our long term vision. Tyco, Tyco Electronics and Tyco Healthcare will explore a number of strategic alternatives for under-performing or non-strategic businesses including possible divestiture. At the conclusion of this process, management will present its recommendations to the Board of Directors for their review and approval. This includes our Infrastructure Services business which is part of our Engineered Products and Services segment. The Infrastructure Services business had total net revenue of $1.2 billion and operating income of $55 million in 2006. For Tyco Electronics, this includes the Power Systems business. The Power Systems business had total net revenue of approximately $500 million and operating losses of approximately $30 million in 2006. Should the outcome of the strategic review process result in approval to divest the Power Systems business, there could be a resulting pre-tax impairment charge of up to $450 million.

To further improve operating efficiency, during the first quarter of 2007, we launched a restructuring program across all segments including the corporate organization which will streamline some of the businesses and reduce the operational footprint. We expect to incur charges of approximately $600 million over the next two years, of which $400 million is expected to be incurred in 2007. We expect that the total cash expenditures for this program will be approximately $450 million, of which $250 million is expected in 2007. During the quarter and six months ended March 30, 2007, we incurred charges of $66 million and $148 million, respectively, and utilized cash of $17 million and $19 million, respectively, related to this program. We believe this restructuring program will strengthen our competitive position over the long term.

Net revenue and net income for the quarters and six months ended March 30, 2007 and March 31, 2006, as restated, were as follows ($ in millions):

Net revenue increased $751 million, or 7.4%, for the second quarter and $1,483 million, or 7.5%, for the first six months of 2007 as compared to the same periods last year. The increases reflect revenue growth in all segments. In addition, foreign currency exchange rates favorably affected the second quarter by $302 million and the impact on the first six months of 2007 remained favorable by $581 million. The net impact of acquisitions and divestitures positively impacted the second quarter by $4 million and negatively impacted the first six months of 2007 by $7 million.

Operating income decreased $249 million, or 17.7%, for the second quarter while operating margin decreased 3.3 percentage points to 10.7%. Operating income decreased $296 million, or 11.2%, for the first six months of 2007 while operating margin decreased 2.4 percentage points to 11.0%. Income from revenue growth in all segments was more than offset by unfavorable spreads on both steel and copper products in our Electronics and Engineered Products and Services segments as well as higher material costs and increased investments in sales and marketing and research development. Additionally, operating income was adversely impacted by costs incurred relating to the Proposed Separation and the restructuring program announced in November 2006. Separation costs negatively impacted operating income by $106 million and $191 million for the second quarter and first six months of 2007. In the same periods last year, operating income was negatively impacted by $25 million and $33 million, respectively, of separation costs. In addition, during the quarter and six months ended March 30, 2007 we incurred $18 million and $22 million, respectively, of incremental general and administrative expenses to establish corporate organizations to support three separate, publicly traded companies. The net impact of restructuring and asset impairment charges negatively impacted the second quarter and the first six months of 2007 by $76 million and $166 million, respectively, compared to $7 million and $19 million, respectively, in the same periods last year. Divestiture charges negatively impacted both the quarter and six months ended March 30, 2007 by $9 million as compared to net divestiture gains of $44 million and $41 million, respectively, in the same periods in the prior year.

The segment discussions that follow describe the significant factors contributing to the changes in results for each segment included in continuing operations.

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

	For the Quarters Ended
	March 30, 2007			March 31, 2006
Revenue from product sales	$	3,373		$	3,069
Service revenue		51			54

Net revenue	$	3,424		$	3,123

Operating income	$	455		$	463
Operating margin		13.3	%		14.8	%

Net revenue for Electronics increased 9.6% in the quarter ended March 30, 2007 over the quarter ended March 31, 2006. The increase in net revenue reflects growth in the automotive, industrial machinery, aerospace and defense, power utility, undersea telecommunications, mobile phone and consumer electronics markets, partially offset by revenue declines in the computer and communication service provider markets. Favorable changes in foreign currency exchange rates positively impacted net revenue by $115 million.

Operating income and operating margin decreased compared to the same quarter in the prior year. Income from increased revenue and cost improvements was more than offset by $43 million in higher material costs, primarily copper, and increased investments in engineering and selling. Operating income for the quarter ended March 30, 2007 included $15 million of net restructuring and asset impairment charges compared to $4 million in the quarter ended March 31, 2006. The quarter ended March 31, 2006 also included $4 million of divestiture related charges.

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

	For the Quarters Ended
	March 30, 2007			March 31, 2006
Revenue from product sales	$	1,435		$	1,345
Service revenue		1,613			1,528

Net revenue	$	3,048		$	2,873

Operating income	$	253		$	289
Operating margin		8.3	%		10.1	%

Net revenue for Fire and Security increased 6.1% in the quarter ended March 30, 2007 over the quarter ended March 31, 2006. The increase in net revenue was primarily due to favorable changes in foreign currency exchange rates of $77 million and revenue increases at Worldwide Fire Services and Worldwide Security. Revenue increases at Worldwide Fire Services were the result of continued growth in electrical and mechanical contracting in North America and Europe. Revenue increases at Worldwide Security were due to growth in the recurring revenue base primarily in North America and

Asia. These net revenue increases were partially offset by a decrease in revenue within Safety Products, primarily as a result of decreased sales in breathing products.

Operating income and operating margin decreased in the quarter ended March 31, 2007 as compared to the same period in the prior year. Revenue growth was more than offset by net restructuring and asset impairment charges of $43 million.

Attrition rates for customers in our global electronic security services business continued to decline to an average of 13.1% on a trailing twelve-month basis as of March 30, 2007. As a result of our ongoing review of attrition rates and related patterns in which revenues are earned, management is in the process of reassessing amortization and depreciation methods and lives for its company-owned security systems and dealer intangible assets and may make adjustments in future periods.

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

	For the Quarters Ended
	March 30, 2007			March 31, 2006
Revenue from product sales	$	2,517		$	2,392
Service revenue		20			17

Net revenue	$	2,537		$	2,409

Operating income	$	549		$	579
Operating margin		21.6	%		24.0	%

Net revenue for Healthcare increased 5.3% in the quarter ended March 30, 2007 over the quarter ended March 31, 2006. Increased revenue within Medical Devices and Supplies was largely driven by increased sales in Europe and the United States of surgical products and, to a lesser extent, imaging and medical products. Pharmaceutical contributed to the increase in revenue driven by strong performance within dosage, specialty chemical and active pharmaceutical products. Favorable changes in foreign currency exchange rates positively impacted net revenue by $51 million.

Operating income and operating margin in the quarter ended March 30, 2007 decreased as compared to the quarter ended March 31, 2006 as operating income in the quarter ended March 31, 2006 included $46 million of divestiture gains related to the sale of a business within Medical Devices and Supplies. Additionally, the quarter ended March 30, 2007 includes $5 million of restructuring and asset impairment charges and $1 million of costs incurred related to the Proposed Separation.

Net revenue, operating income and operating margin for Engineered Products and Services were as follows ($ in millions):

	For the Quarters Ended
	March 30, 2007			March 31, 2006
Revenue from product sales	$	1,506		$	1,343
Service revenue		323			339

Net revenue	$	1,829		$	1,682

Operating income	$	154		$	188
Operating margin		8.4	%		11.2	%

Net revenue for Engineered Products and Services increased 8.7% in the quarter ended March 30, 2007 over the quarter ended March 31, 2006. The increase in net revenue was primarily due to higher

demand in industrial and commercial markets in both Flow Control and Fire & Building Products, as well as increased project sales predominantly in Flow Control. These increases were partially offset by a decrease in Infrastructure Services as a result of a strategic decision to be more selective in bidding for new projects and one-time hurricane relief business in the same period in the prior year. Electrical & Metal Products net revenues were essentially level as higher volumes of steel and copper products were offset by lower selling prices on steel products. Favorable changes in foreign currency exchange rates positively impacted net revenue by $59 million.

Operating income decreased 18.1% in the quarter ended March 30, 2007 as compared to the quarter ended March 31, 2006. The decrease was primarily due to the negative impact of lower steel and copper spreads in Electrical & Metal Products driven by lower selling prices on steel products and the flow through of higher cost steel and copper inventory. This decrease was partially offset by the impact of net revenue increases in Flow Control and Fire & Building Products. Additionally, the quarter ended March 30, 2007 included $10 million of restructuring and asset impairment charges, a $2 million net loss on divestitures and $1 million of costs incurred related to the Proposed Separation compared to no charges in the prior year.

Corporate expenses were $252 million and $111 million in the quarters ended March 30, 2007 and March 31, 2006, respectively. The current quarter included $104 million related to the Proposed Separation, a $7 million loss on divestitures and $3 million of restructuring charges. In addition, during the quarter ended March 30, 2007 we incurred $18 million of incremental general and administrative expenses to establish corporate organizations to support three separate, publicly traded companies. The quarter ended March 31, 2006 included $23 million related to the Proposed Separation.

Interest income was $39 million and $33 million during the quarters ended March 30, 2007 and March 31, 2006, respectively. The increase in interest income is related to a higher cash balance. Interest expense was $160 million in the quarter ended March 30, 2007 as compared to $188 million in the quarter ended March 31, 2006. The decrease in interest expense reflects lower debt outstanding.

Other income (expense), net was $8 million and $(2) million during the quarters ended March 30, 2007 and March 31, 2006, respectively and is primarily composed of gains and losses on the sale of investments.

Our effective income tax rate was 19.7% and 23.2% during the quarters ended March 30, 2007 and March 31, 2006, respectively. The decrease in the effective rate is primarily the result of benefits of approximately $102 million from the release of a deferred tax valuation allowance related to non-U.S. tax rulings received during the quarter. Additionally, taxes for the quarter were impacted by reduced reserve requirements on certain legacy tax matters, offset by tax costs related to the Proposed Separation and decreased profitability in operations in lower tax rate jurisdictions.

Six Months Ended March 30, 2007 Compared to Six Months Ended March 31, 2006

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

	For the Six Months Ended
	March 30, 2007			March 31, 2006
Revenue from product sales	$	6,520		$	5,938
Service revenue		99			104

Net revenue	$	6,619		$	6,042

Operating income	$	868		$	848
Operating margin		13.1	%		14.0	%

Net revenue for Electronics increased 9.5% in the six months ended March 30, 2007 over the six months ended March 31, 2006. The increase in net revenue reflects growth in the automotive, industrial machinery, aerospace and defense, power utility, undersea telecommunications, mobile phone and consumer electronics markets, partially offset by revenue declines in the computer and communication service provider markets. Favorable changes in foreign currency exchange rates and net acquisitions and divestitures activity positively impacted net revenue by $221 million and $14 million, respectively.

Operating income increased compared to the same period in the prior year due to increased sales volume and lower price erosion. These increases were partially offset by $116 million in higher material costs, primarily copper, and net restructuring and asset impairment charges of $24 million in the six months ended March 30, 2007 compared to $8 million in the six months ended March 31, 2006. The six months ended March 31, 2006 also included $4 million of divesture related charges.

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

	For the Six Months Ended
	March 30, 2007			March 31, 2006
Revenue from product sales	$	2,830		$	2,612
Service revenue		3,194			3,054

Net revenue	$	6,024		$	5,666

Operating income	$	520		$	517
Operating margin		8.6	%		9.1	%

Net revenue for Fire and Security increased 6.3% in the six months ended March 30, 2007 over the six months ended March 31, 2006. The increase in net revenue was primarily due to favorable changes in foreign currency exchange rates of $155 million and revenue increases at Worldwide Fire Services and Worldwide Security. Revenue increases at Worldwide Fire Services were the result of continued growth in electrical and mechanical contracting in North America, Asia and Europe. Revenue increases at Worldwide Security were due to growth in the recurring revenue base primarily in North American and Asia as well as growth in North America contracting revenue. These increases were partially offset by the net impact of acquisition and divestiture activity of $18 million.

Operating income increased in the six months ended March 31, 2007 as compared to the same period in the prior year driven primarily by lower costs and productivity improvements in North America, increases in income from revenue growth, lower selling, general and administrative expenses, partially offset by net restructuring and asset impairment charges of $80 million.

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

	For the Six Months Ended
	March 30, 2007			March 31, 2006
Revenue from product sales	$	4,949		$	4,664
Service revenue		34			32

Net revenue	$	4,983		$	4,696

Operating income	$	1,064		$	1,118
Operating margin		21.4	%		23.8	%

Net revenue for Healthcare increased 6.1% in the six months ended March 30, 2007 over the six months ended March 31, 2006. Increased revenue within Medical Devices and Supplies was largely driven by increased sales in Europe and the United States of surgical products and, to a lesser extent, imaging, respiratory and medical products. Pharmaceutical contributed to the increase in revenue driven by strong performance within dosage, specialty chemical and active pharmaceutical products. Favorable changes in foreign currency exchange rates positively impacted net revenue by $96 million. These increases were partially offset by a $23 million decline in the Retail business. The decline was primarily in infant care, largely attributable to aggressive price reductions by both branded and private-label competitors.

Operating income and operating margin in the six months ended March 30, 2007 decreased as compared to the six months ended March 31, 2006. Revenue growth was more than offset by $29 million of restructuring and asset impairment charges including charges of $8 million related to in-process research and development. Additionally, the decline in operating income in the six months ended March 30, 2007 was also related to increased legal and employee related costs as well as $4 million of separation costs. Operating income in the six months ended March 31, 2006 included $46 million of divestiture gains related to the sale of a business within Medical Devices and Supplies.

Net revenue, operating income and operating margin for Engineered Products and Services were as follows ($ in millions):

	For the Six Months Ended
	March 30, 2007			March 31, 2006
Revenue from product sales	$	2,916		$	2,619
Service revenue		625			661

Net revenue	$	3,541		$	3,280

Operating income	$	331		$	355
Operating margin		9.3	%		10.8	%

Net revenue for Engineered Products and Services increased 8.0% in the six months ended March 30, 2007 over the six months ended March 31, 2006. The increase in net revenue was primarily due to higher demand in industrial and commercial markets in both Flow Control and Fire & Building

Products, as well as increased project sales predominantly in Flow Control. These increases were partially offset by a decrease at Infrastructure Services as a result of a strategic decision to be more selective in bidding for new projects and one-time hurricane relief business in the same period in the prior year. Electrical & Metal Products net revenues were essentially flat as higher selling prices and volumes of copper products were offset by lower selling prices on steel products. Favorable changes in foreign currency exchange rates positively impacted net revenue by $109 million.

Operating income decreased 6.8% in the six months ended March 30, 2007 as compared to the six months ended March 31, 2006. The decrease was primarily due to the negative impact of lower steel and copper spreads in Electrical & Metal Products driven by lower selling prices on steel products and the flow through of higher cost steel and copper inventory. This decrease was partially offset by the impact of net revenue increases in Flow Control and Fire & Building Products. Additionally, the six months ended March 30, 2007 included $16 million of restructuring and asset impairment charges, a $2 million net loss on divestitures and $2 million of costs incurred related to the Proposed Separation.

Corporate expenses were $447 million and $206 million in the six months ended March 30, 2007 and March 31, 2006, respectively. The current six month period includes $207 million related to the Proposed Separation, $17 million of restructuring charges and a $7 million loss on divestitures. In addition, during the six months ended March 30, 2007 we incurred $22 million of incremental general and administrative expenses to establish corporate organizations to support three separate, publicly traded companies. The same period in the prior year included $31 million related to the Proposed Separation.

Interest income was $80 million and $70 million during the six months ended March 30, 2007 and March 31, 2006, respectively. The increase in interest income is related to a higher cash balance. Interest expense was $327 million in the six months ended March 30, 2007 as compared to $376 million in the six months ended March 31, 2006. The decrease in interest expense reflects lower debt outstanding.

Other income (expense), net was $9 million and $(3) million during the six months ended March 30, 2007 and March 31, 2006, respectively and is primarily composed of gains and losses on the sale of investments.

Our effective income tax rate was 24.5% and 22.9% during the six months ended March 30, 2007 and March 31, 2006, respectively. The increase in the effective rate is primarily the result of tax costs related to the Proposed Separation and decreased profitability in operations in lower tax rate jurisdictions, partially offset by releases of deferred tax valuation allowances, reduced reserve requirements on certain legacy tax matters and the benefit associated with the reinstatement of the research tax credit.

obligations, along with the associated capitalized asset retirement costs, be initially reported at their fair values. Upon adoption, the Company recognized a liability of $32 million for asset retirement obligations and an increase of $10 million in the carrying amount of the related assets. The initial recognition resulted in a cumulative effect of accounting change of $22 million pre-tax loss ($14 million after-tax), reflecting the accumulated depreciation and accretion that would have been recognized in prior periods had the provisions of FIN No. 47 been in effect at the time.

During the first quarter of 2006, Tyco reached a definitive agreement to sell its Plastics, Adhesives and Ludlow Coated Products businesses and was negotiating the sale of its A&E Products business. At that time, the Company assessed the recoverability of the carrying value of these businesses and, based on existing market conditions and the terms and conditions included or expected to be included in the respective sales agreements, recorded pre-tax impairment charges of $275 million and $17 million related to the Plastics, Adhesives and Ludlow Coated Products businesses and the A&E Products business, respectively, to write the businesses down to fair values less costs to sell.

$5 million of divestiture charges related to the write-down to estimated fair value and costs to sell certain other held for sale businesses primarily in Electronics.

The preparation of the Consolidated Financial Statements in conformity with GAAP requires management to use judgment in making estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses.

We believe that our accounting policies for depreciation and amortization of security monitoring systems, revenue recognition, loss contingencies, income taxes, goodwill and intangible assets, long-lived assets and pension and postretirement benefits are based on, among other things, judgments and assumptions made by management that include inherent risks and uncertainties. During the six months ended March 30, 2007, there were no significant changes to these policies or in the underlying accounting assumptions and estimates used in the above critical accounting policies from those disclosed in the Consolidated Financial Statements and accompanying notes contained in the Company's Annual Report on Form 10-K/A for the fiscal year ended September 29, 2006 (the "2006 Form 10-K/A").

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

The net change in working capital increased operating cash flow by $124 million in the quarter ended March 30, 2007. The components of this change are set forth in detail in the Consolidated Statements of Cash Flows. The significant changes in working capital included a $311 million increase in accrued and other current liabilities during the quarter, primarily related to increases in employee bonus, salary and vacation accruals along with accrued interest, as well as a $166 million increase in accounts receivable and a $66 million increase in inventories.

The net change in working capital reduced operating cash flow by $625 million in the six months ended March 30, 2007. The components of this change are set forth in detail in the Consolidated

Statements of Cash Flows. The significant changes in working capital included a $526 million increase in inventories, a $149 million increase in accounts receivable and a $140 million decrease in accounts payable. Additionally, working capital includes the collection of $38 million related to restitution owed by Mark H. Swartz, former Chief Financial Officer and Director, and $98 million related to the restitution owed by L. Dennis Kozlowski, former Chairman and Chief Executive Officer.

Cash flows from operating activities and other cash flow items by segment were as follows ($ in millions):

During the six months ended March 30, 2007, we purchased approximately 178,000 customer contracts for electronic security services through the ADT dealer program for cash of $176 million.

During the six months ended March 30, 2007, we completed the $2.0 billion share repurchase program approved by the Board of Directors in May 2006 with the repurchase of 22 million of our common shares for $659 million.

During the six months ended March 30, 2007, we completed the sale of our PCG business for $231 million in net cash proceeds, we consummated the sale of the AIJ business for $42 million in net cash proceeds and we received the $30 million resin receivable due from the purchaser of our Plastics, Adhesives and Ludlow Coated Products businesses. Additionally, during the six months ended March 30, 2007, we received $271 million due to the liquidation of investments in a rabbi trust, as well as $136 million in restitution payments owed by former executives as described above.

We continue to fund capital expenditures to improve the cost structure of our businesses, to invest in new processes and technology, and to maintain high quality production standards. The amount of capital expenditures is expected to exceed depreciation in 2007 and is expected to exceed the level of spending in 2006. In October 2006, a subsidiary of the Company exercised its right to buy five cable laying sea vessels that were previously included under an off-balance sheet leasing arrangement for $280 million. This purchase is reflected in capital expenditures.

In 2006, we commenced the termination of our interest rate and cross currency swaps, which were designated as fair value hedges. During the first quarter of 2007, we terminated the remaining swaps. Such terminations resulted in a net cash inflow of $63 million.

During the quarter ended December 29, 2006, we launched a $600 million company-wide restructuring program. We expect to incur approximately $500 million of charges in 2007, and we expect that the total cash expenditures for this program will be approximately $450 million, of which $250 million is expected in 2007. During the quarter and six months ended March 30, 2007, we paid out $17 million and $19 million, respectively, in cash related to these restructuring activities.

Income taxes paid, net of refunds, during the six months ended March 30, 2007 were $440 million.

As previously mentioned, in January 2006, the Company announced that its Board of Directors approved a plan to separate the Company into three separate, publicly traded companies. In connection with the Proposed Separation, we paid $87 million and $172 million in separation costs during the quarter and six months ended March 30, 2007, respectively, which followed $96 million of payments for the full year 2006. We expect that, during 2007, we will incur the remaining cash outflows related to the Proposed Separation which will be largely attributable to debt refinancing, tax restructuring, professional services and employee-related costs.

Shareholders' equity was $36.9 billion, or $18.62 per share, at March 30, 2007, compared to $35.4 billion, or $17.76 per share, at September 29, 2006. Shareholders' equity increased $1.5 billion as net income for the six months ended March 30, 2007 of $1.6 billion, favorable changes in foreign currency exchange rates of $476 million and the impact of share options exercised of $237 million were primarily offset by the repurchase of common shares by a subsidiary of $668 million, as previously mentioned, and dividends declared of $395 million.

In connection with the Proposed Separation, we will, if approved by our Board of Directors, execute a reverse share split, and as a result, four Tyco shares will be converted into one share. Shareholder approval was obtained at the March 8, 2007 Special General Meeting of Shareholders.

Total debt was $10.5 billion and total debt as a percentage of total capitalization (total debt and shareholders' equity) was 22% at March 30, 2007 which remained unchanged as compared to September 29, 2006. The increase in our debt level as compared to September 29, 2006 was primarily related to a bank overdraft of $195 million.

consents obtained pursuant to the tender offers that the Company and certain of its subsidiaries commenced in order to purchase substantially all of their outstanding public debt.

Our cash balance increased to $4.1 billion at March 30, 2007, as compared to $2.9 billion at September 29, 2006. The increase in cash was primarily due to cash flows from operations and, to a lesser extent, proceeds from the divestiture of businesses of $307 million, net of cash retained, the liquidation of investments in a rabbi trust of $271 million and proceeds from the exercise of share options of $212 million. This increase was partially offset by capital expenditures, the repurchase of shares under the previously-announced program and to a lesser extent, dividend payments.

TIGSA's bank credit agreements contain financial covenants, including a limit on the ratio of debt to earnings before interest, taxes, depreciation, and amortization and minimum levels of net worth, and limits on the incurrence of liens. The Company's indentures contain customary covenants including limits on negative pledges, subsidiary debt and sale/leaseback transactions. None of these covenants are presently considered restrictive to the Company's operations. The Company is currently in compliance with all of its debt covenants.

Dividend payments were $395 million in the first six months of 2007 and $402 million in the first six months of 2006. Following the Proposed Separation, we expect that all three companies will be dividend-paying companies.

Following the Proposed Separation, it is anticipated that all three companies will be capitalized to provide financial flexibility to take advantage of future growth opportunities. They are expected to have financial policies, balance sheet and credit metrics that are commensurate with solid investment grade ratings. Tyco will continue to follow financial policies that are consistent with its current credit ratings until the planned transactions take place. The company's existing debt is expected to be allocated among the three companies or refinanced. Any existing or potential liabilities that cannot be associated with a particular entity will be allocated appropriately to each of the businesses, and a sharing agreement among the three companies will be established.

At March 30, 2007, the Company had a contingent purchase price of $80 million related to the 2001 acquisition of Com-Net by Electronics. This represents the maximum amount payable to the

former shareholders of Com-Net only after the construction and installation of a communications system for the State of Florida is finished and the State has approved the system based on the guidelines set forth in the contract. A liability for this contingency has not been recorded in Tyco's Consolidated Financial Statements as the outcome of this contingency cannot be reasonably determined.

For a detailed discussion of contingencies related to Tyco's securities class actions, Employee Retirement Income Security Act litigation and investigation, and litigation against our former senior management, see Note 11 to our Consolidated Financial Statements. We are generally obligated to indemnify our directors and officers and our former directors and officers who are named as defendants in some or all of these matters to the extent required by Bermuda law. In addition, our insurance carriers may decline coverage, or our coverage may be insufficient to cover our expenses and liability, in some or all of these matters. While we have from time to time engaged plaintiffs' counsel in settlement discussions, we are unable at this time to estimate what our ultimate liability in these matters may be, and it is possible that we will be required to pay judgments or settlements and incur expenses, in excess of any insurance coverage, in aggregate amounts that would have a material adverse effect on our financial position, results of operations or cash flows. At this time, it is not possible to estimate the amount of loss or probable losses, if any, that might result from an adverse resolution of these matters.

For a detailed discussion of contingencies related to governmental investigations related to Tyco see Note 11 to our Consolidated Financial Statements. We cannot predict when these investigations will be completed, nor can we predict what the results of these investigations may be. It is possible that we will be required to pay material fines, consent to injunctions on future conduct, lose the ability to conduct business with government entities or instrumentalities (which in turn could negatively impact our business with non-governmental customers) or suffer other penalties or adverse impacts, each of which could have a material adverse effect on our business. It is not possible to estimate the amount of loss, or range of possible loss, if any, that might result from an adverse resolution of these matters.

The Company is party to a number of patent infringement and antitrust actions that may require the Company to pay damage awards. Tyco has assessed the status of these matters and has recorded liabilities related to certain of these matters where appropriate. For a detailed discussion of contingencies related to Tyco's intellectual property and antitrust litigation, see Note 11 to our Consolidated Financial Statements.

$186 million, of which $28 million is included in accrued and other current liabilities and $158 million is included in other liabilities on the Company's Consolidated Balance Sheets. In view of the Company's financial position and reserves for environmental matters of $186 million, we believe that any potential payment of such estimated amounts will not have a material adverse effect on our financial position, results of operations or cash flows.

For a detailed discussion of contingencies related to Tyco's asbestos matters, see Note 11 to our Consolidated Financial Statements. We believe that we have valid defenses to these claims and intend to continue to defend them vigorously. Additionally, we believe that we have adequate amounts recorded for potential settlements and adverse judgments in asbestos-related litigation. While it is not possible at this time to determine with certainty the ultimate outcome of these asbestos-related proceedings, the Company believes that the final outcome of all known and anticipated future claims, after taking into account its substantial indemnification rights and insurance coverage, will not have a material adverse effect on the Company's financial position, results of operations or cash flows.

Tyco and its subsidiaries' income tax returns are periodically examined by various regulatory tax authorities. In connection with such examinations, tax authorities, including the Internal Revenue Service ("IRS"), have raised issues and proposed tax adjustments. The Company is reviewing and contesting certain of the proposed tax adjustments. While the timing and ultimate resolution of these matters is uncertain, the Company anticipates that certain of these matters could be resolved during 2007. Amounts related to these tax adjustments and other tax contingencies and related interest that management has assessed as probable and estimable have been recorded.

present its factual findings upon conclusion of the baseline review. The Company has and will continue to have communications with the DOJ and SEC to provide updates on the baseline review being conducted by outside counsel, including, as appropriate, briefings concerning additional instances of potential improper payments identified by the Company in the course of its ongoing compliance activities. To date, the baseline review has revealed that some business practices may not comply with Tyco and FCPA requirements. At this time, Tyco cannot predict the outcome of other allegations reported to regulatory and law enforcement authorities and therefore cannot estimate the range of potential loss or extent of risk, if any, that may result from an adverse resolution of any or all of these matters. However, it is possible that the Company may be required to pay judgments, suffer penalties or incur settlements in amounts that may have a material adverse effect on its financial position, results of operations or cash flows.

The Company is a party to a contract dispute arising from Earth Tech's contract with the City of Phoenix, Arizona for the expansion of the City's 91^st Avenue Waste Water Treatment Plant. Both Earth Tech and the City of Phoenix have filed lawsuits in the local county superior court alleging the other party has breached the contract. At this time, Tyco cannot predict the outcome of this matter and therefore cannot estimate the range of potential loss or extent of risk, if any, that may result from an adverse resolution of this matter. For a detailed discussion of contingencies related to Tyco's other legal matters, see Note 11 to our Consolidated Financial Statements.

At March 30, 2007, Tyco had a backlog of unfilled orders of $14.9 billion, compared to a backlog of $13.7 billion at September 29, 2006. Backlog by segment was as follows ($ in millions):

	March 30, 2007		September 29, 2006
Fire and Security	$	7,142	$	7,000
Engineered Products and Services		4,265		3,742
Electronics		3,236		2,711
Healthcare		291		280

	$	14,934	$	13,733

Within Fire and Security, backlog increased primarily as a result of strong bookings in North America and Europe. Backlog for Fire and Security includes recurring "revenue-in-force," which represents twelve months' fees for monitoring and maintenance services under contract in the security business. The amount of recurring revenue-in-force at March 30, 2007 and September 29, 2006 was $3.76 billion and $3.65 billion, respectively. Backlog within Engineered Products and Services increased primarily as a result of increased orders at Flow Control. The 19.4% increase in backlog at Electronics is primarily within Undersea Telecommunications as a result of signing contracts for several projects. Backlog in Healthcare represents unfilled orders, which, in the nature of the business, are normally shipped shortly after purchase orders are received. We do not view backlog in Healthcare to be a significant indicator of the level of future sales activity.

The aggregate amount outstanding under the Company's remaining international accounts receivable programs was $76 million and $75 million at March 30, 2007 and September 29, 2006.

The Company has recorded liabilities for known indemnifications included as part of environmental liabilities. See Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations—Commitments and Contingencies—Environmental Matters.

The Company records estimated product warranty costs at the time of sale. For further information on estimated product warranty, see Note 16 to the Consolidated Financial Statements.

Certain statements in this report are "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. All forward-looking statements involve risks and uncertainties. All statements contained herein that are not clearly historical in nature are forward-looking, and the words "anticipate," "believe," "expect," "estimate," "project" and similar expressions are generally intended to identify forward-looking statements. Any forward-looking statement contained herein, in press releases, written statements or other documents filed with the SEC, or in Tyco's communications and discussions with investors and analysts in the normal course of business through meetings, webcasts, phone calls and conference calls, regarding expectations with respect to sales,

earnings, cash flows, operating efficiencies, product expansion, backlog, the consummation and benefits of acquisitions and divestitures, the Proposed Separation or other matters, as well as financings and repurchases of debt or equity securities, are subject to known and unknown risks, uncertainties and contingencies. Many of these risks, uncertainties and contingencies are beyond our control, and may cause actual results, performance or achievements to differ materially from anticipated results, performances or achievements. Factors that might affect such forward-looking statements include, among other things:

Additionally, there are several factors and assumptions that could affect the Company's plan to separate into three independent entities, our future results and cause actual results to differ materially from those expressed in our forward looking statements:

The Company's exposure to market risk from changes in interest rates and foreign currency exchange rates has not changed materially from our exposure discussed in the 2006 Form 10-K/A. In order to manage the volatility relating to our more significant market risks, historically we have entered into forward foreign currency exchange contracts, cross-currency swaps, foreign currency options, and interest rate swaps. In assessing the current and future risk related to movements in interest rates, we commenced the termination of the interest rate and cross currency swaps in several tranches beginning in the fourth quarter of 2006. During the first quarter of 2007, we terminated the remaining contracts with a total notional amount of $0.6 billion, resulting in an aggregate terminated notional amount of $3.1 billion. The settlement of these swaps resulted in a net cash inflow of $63 million for the first quarter of 2007. Since the interest rate swaps were designated as hedging instruments of outstanding debt, the related aggregate $32 million loss adjustment to the carrying value of the related debt will be amortized over the remaining life of the related debt instruments.

In December 2006, due to required changes to the legal entity structure to facilitate the Proposed Separation, the Company determined that it will no longer consider certain intercompany foreign currency transactions to be long-term investments. As a result, the related foreign currency transaction gains and losses on such investments were recorded in the income statement subsequent to this determination rather than to the currency translation component of shareholders' equity. Forward contracts that were previously designated as hedges of these net investments, of which the notional value was $4.9 billion at the time of de-designation, will continue to be used to manage this exposure but will no longer be designated as net investment hedges.

We utilize established risk management policies and procedures in executing derivative financial instrument transactions. We do not execute transactions or hold derivative financial instruments for trading or speculative purposes. Derivative financial instruments related to intercompany cross-border transactions and anticipated non-functional currency cash flows, are used with the goal of mitigating a significant portion of these exposures when it is cost effective to do so. Counterparties to derivative financial instruments are limited to financial institutions with at least an A/A2 long-term debt rating.

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission'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 allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures, as defined under Exchange Act Rule 13a-15(e). Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of March 30, 2007, our disclosure controls and procedures were not effective because of the identification of a material weakness in our internal controls over financial reporting relating to accounting for income taxes, which we view as an integral part of our disclosure controls and procedures as discussed in Item 9A. Controls and Procedures in Form 10-K/A to the Annual Report on Form 10-K for the year ended September 29, 2006.

Considerable actions have been taken to improve internal controls over our accounting for income taxes, and we will take further steps to strengthen controls, including the following planned actions:

We proactively identify opportunities for control improvements. We also have ongoing initiatives to standardize and upgrade various financial operating systems and eliminate many of the manual and redundant tasks previously performed under older systems or processes. These changes will be implemented in stages over the next several years.

In preparation for our previously announced separation into three separate publicly traded companies, we are continuing to install the necessary controls to allow the two new entities to properly function as independent public companies. Additionally, we have also begun migrating certain processes, applications and functions previously performed by us to these two entities. We believe that these initiatives should further strengthen our internal control over financial reporting, as well as automate a number of our processes and activities.

Except as discussed below, there have been no material developments in the Company's legal proceedings since the Company filed the 2006 Form 10-K. For a description of the Company's previously reported legal proceedings, refer to Part I, Item 3. Legal Proceedings, in the 2006 Form 10-K.

As previously reported in our periodic filings, we and certain of our former directors and officers have been named as defendants in over 40 securities class actions. We stipulated, pursuant to a court order, that each party to the Separation and Distribution Agreement will be primarily liable for a portion of the obligations arising from such litigation. The stipulation also provides that if any party defaults on its obligations, the other parties will be jointly and severally liable for those obligations. Most of the securities class actions have now been transferred to the United States District Court for the District of New Hampshire by the Judicial Panel on Multidistrict Litigation for coordinated or consolidated pretrial proceedings. On January 28, 2003, a consolidated securities class action complaint was filed in these proceedings. On January 7, 2005, we answered the plaintiffs' consolidated complaint. On January 14, 2005, lead plaintiffs made a motion for class certification, which we opposed on July 22, 2005. On July 5, 2005, we moved for revision of the court's October 14, 2004 order in light of a change in law, insofar as the order denied our motion to dismiss the consolidated complaint for failure to plead loss causation. On December 2, 2005, the court denied our motion. On April 4, 2006, plaintiffs filed a partial motion for summary judgment that was denied without prejudice to its later renewal. On June 12, 2006, the court entered an order certifying a class "consisting of all persons and entities who purchased or otherwise acquired Tyco securities between December 13, 1999 and June 7, 2002, and who were damaged thereby, excluding defendants, all of the officers, directors and partners thereof, members of their immediate families and their legal representatives, heirs, successors or assigns, and any entity in which any of the foregoing have or had a controlling interest." On June 26, 2006, we filed a petition for leave to appeal the class certification order to the United States Court of Appeals for the First Circuit. On September 22, 2006, the United States Court of Appeals for the First Circuit denied our petition. On July 6, 2006, the lead plaintiffs filed in the United States District Court for the District of New Hampshire a motion for a permanent injunction against prosecution of the class action styled Brazen v. Tyco International Ltd. that was certified by the Circuit Court for Cook County, Illinois. On October 26, 2006, the court denied plaintiffs' motion for injunctive relief without prejudice.

As previously reported in our periodic filings, an action entitled Hess v. Tyco International Ltd., et al., was filed on June 3, 2004 in the Superior Court of the State of California for the County of Los Angeles against certain of our former directors and officers, our former auditors and Tyco. The complaint asserts claims of fraud, negligent representation, aiding and abetting breach of fiduciary duty, tortious interference with fiduciary relationship and conspiracy arising out of an underlying settlement of litigation brought by shareholders in Progressive Angioplasty Systems, Inc. where the plaintiffs received our stock as consideration. The claim seeks unspecified monetary damages and other relief. On October 25, 2006, the Court lifted its previous order staying the case during the pendency of a related arbitration to which Tyco was not a party. On December 26, 2006, Tyco filed a demurrer seeking dismissal of the action on the ground that the complaint failed to allege facts sufficient to state causes of action. The demurrer is fully briefed and argument is scheduled for June 7, 2007.

As previously reported in our periodic filings, on November 27, 2002 the State of New Jersey, on behalf of several state pension funds, filed a complaint, New Jersey v. Tyco, in the United States District Court for the District of New Jersey against Tyco, our former auditors and certain of our former officers and directors. The complaint was amended on February 11, 2005, plaintiffs filed a Second Amended Complaint against Tyco, our former auditors, and certain of our former directors and officers. As against all defendants, the amended complaint asserts causes of action under Section 10(b)

of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, for common law fraud, aiding and abetting common law fraud, conspiracy to commit fraud and negligent misrepresentation. Claims are asserted against the individual defendants under Section 20(a) of the Securities Exchange Act of 1934, Section 15 of the Securities Act of 1933, Section 24(d) of the New Jersey Uniform Securities Law, Section 421-B:25(III) of the New Hampshire Uniform Securities Law, and for breaches of fiduciary duties. Claims are also asserted against certain of the individual defendants under Section 20A of the Securities Exchange Act of 1934, and for violation of the New Jersey RICO statute; against Tyco under Section 12(a)(2) of the Securities Act of 1933, Section 24(c) of the New Jersey Uniform Securities Law, Section 421-B:25(II) of the New Hampshire Uniform Securities Law, and for violation of, aiding and abetting violation of, and vicarious liability under the New Jersey RICO statute; against Tyco and certain of the individual defendants under Section 14(a) of the Securities Act of 1933 and Rule 14a-9 promulgated thereunder, and for conspiracy to violate the New Jersey RICO statute; against Tyco, our former auditors, and certain of the individual defendants under Section 11 of the Securities Act of 1933, and for violation of, and conspiracy to violate the New Jersey RICO statute; and against our former auditors and certain of the individual defendants for aiding and abetting violation of the New Jersey RICO statute. Finally, claims are asserted against the individual defendants and our former auditors for aiding and abetting the individual defendants' breaches of fiduciary duties. Plaintiffs assert that the defendants violated the securities laws and otherwise engaged in fraudulent acts by making materially false and misleading statements and omissions concerning, among other things, the following: unauthorized and improper compensation of certain of our former executives; their improper use of our funds for personal benefit and their improper self-dealing in real estate. The plaintiffs seek unspecified monetary damages and other relief. On June 10, 2005, the Company moved to dismiss in part the Amended Complaint, which motion remains pending before the Court.

As previously reported in our periodic filings, the Company appealed to the United States Court of Appeals for the First Circuit the decision of the United States District Court for the District of New Hampshire to remand Brazen v. Tyco International Ltd. to the Circuit Court for Cook County, Illinois and Hromyak v. Tyco International Ltd., Goldfarb v. Tyco International Ltd., Mandel v. Tyco International Ltd., Myers v. Tyco International Ltd., Rappold v. Tyco International Ltd., and Schuldt v. Tyco International Ltd. to the Circuit Court for Palm Beach County, Florida. Plaintiffs moved to dismiss the Company's appeal. On December 29, 2004, the United States Court of Appeals for the First Circuit granted plaintiffs' motion and dismissed the Company's appeal. The Company moved in the Circuit Court for Palm Beach County, Florida to stay and to strike the class allegations in Goldfarb, Mandel, Myers, Rappold, and Schuldt and to dismiss Hromyak. On July 8, 2005, the Court granted in part and denied in part the motion to stay and to strike the class allegations in Goldfarb, Mandel, Myers, Rappold, and Schuldt. The Circuit Court granted Tyco's motion to dismiss Hromyak. The Hromyak plaintiffs filed a notice of appeal on September 20, 2005 and briefing has been completed. The Florida District Court of Appeal affirmed the dismissal.

As previously reported in our periodic filings, after filing an initial complaint on June 26, 2002, plaintiff Lionel I. Brazen filed an amended class action complaint, on March 10, 2005, in the Circuit Court for Cook County, Illinois purporting to represent a class of purchasers who exchanged shares of Mallinckrodt, Inc. common stock for shares of Tyco common stock pursuant to the Joint Proxy Statement and Prospectus, and the Registration Statement in which it was included, in connection with the October 17, 2000 merger of Tyco and Mallinckrodt, Inc. Plaintiff names as defendants Tyco International Ltd., and certain former Tyco executives and asserts causes of action under Section 11, 12(a)(2) and 15 of the Securities Act of 1933. The amended class action complaint alleges that the defendants made statements in the Registration Statement and the Joint Proxy Statement and Prospectus that were materially false and misleading and failed to disclose material adverse facts regarding the business and operations of Tyco. The amended class action complaint seeks unspecified monetary damages and other relief. On April 21, 2005, the Company moved in the Circuit Court for

Cook County, Illinois to dismiss or stay or, in the alternative, to strike the class allegations. On July 22, 2005, the Court denied the Company's motion. On August 19, 2005, Tyco filed an interlocutory appeal of the Circuit Court for Cook County Illinois' July 22, 2005 memorandum and order, which was subsequently denied. On January 6, 2006, the plaintiff, joined by an additional named plaintiff Nancy Hammerslough, filed a renewed motion for class certification which was granted. On February 14, 2006, Tyco filed its answer to the complaint. On July 5, 2006, plaintiffs filed a partial motion for summary judgment which was denied on November 8, 2006. On November 22, 2006, plaintiffs filed a motion to reconsider the denial of their motion for summary judgment. On January 25, 2007, the Court denied plaintiffs' motion to reconsider.

As previously reported in our periodic filings, on April 29, 2005, an action was filed against Tyco in the United States District Court for the Southern District of Florida, Stevenson v. Tyco International Ltd., et. al. Plaintiff names as additional defendants our current Chief Executive Officer, Edward Breen, our former Chief Financial Officer, David FitzPatrick, our former Executive Vice President and General Counsel, William Lytton, current members of Tyco's Board of Directors including Dennis Blair, Bruce Gordon, John Krol, Carl McCall, Brendan O'Neill, Sandra Wijnberg, and Jerome York, as well as former members of Tyco's Board of Directors, including Michael Ashcroft, Joshua Berman, Richard Bodman, John Fort, Steven Foss, Wendy Lane, Mackey McDonald, James Pasman, Peter Slusser and Joseph Welch. The complaint asserts causes of action under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint alleges that defendants made material misrepresentations that resulted in artificially deflated stock prices. The Judicial Panel on Multidistrict Litigation has transferred this action to the United States District Court for the District of New Hampshire. On March 31, 2007, Tyco filed a motion to dismiss the complaint and briefing on that motion is not yet complete.

On January 31, 2003 a civil action was filed by three plaintiffs in the United States District Court for the District of New Jersey, Cirella v. Tyco International et al. Plaintiff names as defendants Tyco International Ltd., Dennis Kozlowski, Mark H. Swartz and Mark A. Belnick. Plaintiff Philip M. Cirella alleges that he was a shareholder in CIT who received common shares of Tyco when it acquired CIT in 2000, and later purchased additional Tyco shares with Marguerite Cirella. Plaintiffs assert a cause of action against all defendants for violation of Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 and a cause of action against the individual defendants for violation of Section 20(a) of the Exchange Act. The complaint alleges that the defendants failed to disclose related-party transactions, including the following: providing interest free loans, forgiving personal loans, purchasing personal properties, using company funds to purchase personal items, sales of Tyco shares while concealing information from investors, and failing to disclose an ongoing criminal investigation of Kozlowski, all of which resulted in an artificially inflated share price. Plaintiffs seek compensatory damages and costs against all defendants and punitive exemplary damages against the individual defendants. The Judicial Panel on Multidistrict Litigation has transferred the action to the United States District Court for the District of New Hampshire.

As previously reported in our periodic filings, a complaint was filed on September 2, 2004 in the Court of Common Pleas for Dauphin County, Pennsylvania, Jasin v. Tyco International Ltd., et. al. This pro se plaintiff named as additional defendants Tyco International (US) Inc., L. Dennis Kozlowski, our former Chairman and Chief Executive Officer, Mark H. Swartz, our former Chief Financial Officer and Director and Juergen W. Gromer, currently President of Tyco Electronics. Plaintiff's complaint asserts causes of action under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, as well as Section 11 of the Securities Act of 1933. Claims against Messrs. Kozlowski, Swartz and Gromer are also asserted under Section 14(a) of the Securities Exchange Act of 1934 and Rule 14a-9 promulgated thereunder and Section 20A of the Securities Exchange Act of 1934, as well as Sections 11, 12(a)(2) and 15 of the Securities Act of 1933. Plaintiff also asserts common law fraud, negligent misrepresentation, unfair trade practice, breach of contract, breach of the duty of good faith and fair dealing and violation of Section 1-402 of the Pennsylvania

Securities Act of 1972. Tyco has removed the complaint to the United States District Court for the Middle District of Pennsylvania. The Judicial Panel on Multidistrict Litigation transferred this action to the United States District Court for the District of New Hampshire.

As previously reported in our periodic filings, the Judicial Panel on Multidistrict Litigation was notified that Hall v. Kozlowski, an action relating to plaintiff's employment, 401(k) and pension plans and ownership of Tyco stock, may be an action that should be transferred to the United States District Court for the District of New Hampshire. Thereafter, the Judicial Panel on Multidistrict Litigation transferred the action to the United States District Court for the District of New Hampshire. On March 16, 2005, Tyco International (US) Inc. answered plaintiff's amended complaint.

As previously reported in our periodic filings, plaintiff moved to remand Davis v. Kozlowski, an action originally filed on December 9, 2003, from the United States District Court for the District of New Hampshire back to the Circuit Court of Cook County, Illinois. On March 17, 2005, the United States District Court for the District of New Hampshire granted plaintiff's motion to remand and denied defendants' motion to dismiss. On March 31, 2005, the Company moved for reconsideration of the court's remand order. On July 17, 2006, the court entered an order granting Tyco's motion to dismiss on the grounds that all of plaintiff's claims were preempted by federal law. The motion to dismiss was granted without prejudice to plaintiff's right to file another action in state court asserting claims that are not preempted by federal law. On January 8, 2007, plaintiff filed an action in the Circuit Court of Cook County, Illinois. The complaint seeks unspecified monetary damages and other relief. On January 12, 2007, Tyco removed the re-filed action to federal court in the United States District Court for the Northern District of Illinois, Eastern Division. On February 1, 2007, the Judicial Panel on Multidistrict Litigation (JPML) issued a conditional transfer order transferring the case to the District of New Hampshire. Plaintiffs filed a motion to remand the case to state court on February 12, 2007 and moved the JPML to vacate the conditional transfer order on March 9, 2007. We filed an opposition to the motion to vacate on March 29, 2007. On March 15, 2007, we filed an opposition to plaintiff's remand motion and filed a cross-motion to dismiss the action. Briefing on the cross-motion was completed on April 26, 2007.

As previously reported in our periodic filings, an action was filed on June 7, 2002 in the Supreme Court of the State of New York, Levin v. Kozlowski, alleging that the individually named defendants breached their fiduciary duties, committed waste and mismanagement and engaged in self-dealing in connection with Tyco's accounting practices, individual board members' use of funds, and the financial disclosures of certain mergers and acquisitions. It is further alleged that certain of the individual defendants converted corporate assets for their own use. Plaintiffs seek money damages. Plaintiffs agreed to stay that action pending the resolution of the federal derivative action, which was dismissed by the United States District Court for the District of New Hampshire on October 14, 2004; and the appeal from that ruling was voluntarily dismissed on May 19, 2005. On June 14, 2005, the plaintiffs resumed the Levin action. On September 22, 2005, the Company filed a motion to dismiss the derivative complaint. On November 14, 2006, the Supreme Court of the State of New York dismissed the complaint with prejudice. On December 11, 2006, plaintiffs filed a notice of appeal of the court's November 14, 2006 order dismissing the complaint.

As previously reported in our periodic filings, Tyco and certain of our current and former employees, officers and directors, have been named as defendants in eight class actions brought under the Employee Retirement Income Security Act ("ERISA"). Two of the actions were filed in the United States District Court for the District of New Hampshire and the six remaining actions were transferred to that court by the Judicial Panel on Multidistrict Litigation. All eight actions have been consolidated

in the District Court in New Hampshire. The consolidated complaint purports to bring claims on behalf of the Tyco International (US) Inc. Retirement Savings and Investment Plans and the participants therein and alleges that the defendants breached their fiduciary duties under ERISA by negligently misrepresenting and negligently failing to disclose material information concerning, among other things, the following: related-party transactions and executive compensation; our mergers and acquisitions and the accounting therefor, as well as allegedly undisclosed acquisitions; and misstatements of our financial results. The complaint also asserts that the defendants breached their fiduciary duties by allowing the Plans to invest in our shares when it was not a prudent investment. The complaints seek recovery of alleged plan losses arising from alleged breaches of fiduciary duties. On January 12, 2005, the United States District Court for the District of New Hampshire denied, without prejudice, the Company's motion to dismiss certain additional individual defendants from the action. On January 20, 2005, plaintiffs filed a motion for class certification. On January 27, 2005, the Company answered the plaintiffs' consolidated complaint. Also, on January 28, 2005, the Company and certain individual defendants filed a motion for reconsideration of the Court's January 12, 2005 order, insofar as it related to the Tyco International (US) Inc. Retirement Committee. On May 25, 2005, the Court denied the motion for reconsideration. On July 11, 2005, the Company and certain individual defendants opposed plaintiffs' motion for class certification. On August 15, 2006, the Court entered an order certifying a class "consisting of all Participants in the Plans for whose individual accounts the Plans purchased and/or held shares of Tyco Stock Fund at any time from August 12, 1998 to July 25, 2002." On August 29, 2006, Tyco filed a petition for leave to appeal the class certification order to the United States Court of Appeals for the First Circuit. On November 13, 2006, the Court denied Tyco's petition. On November 28, 2006, plaintiffs filed a motion seeking an order directing them to serve notice of the ERISA class action on potential class members. Tyco did not object to service of notice on potential class members, and on January 11, 2007, plaintiffs filed a motion, assented to by Tyco that proposed an agreed upon form of notice. On January 18, 2007, the court granted that motion. On December 5, 2006, plaintiffs filed a motion seeking leave to file an amended complaint. Subsequently, on January 10, 2007, plaintiffs filed a motion to withdraw their motion to amend the complaint without prejudice.

Tyco International, Ltd. v. L. Dennis Kozlowski, United States District Court, Southern District of New York, No. 02-CV-7317, filed September 12, 2002, Amended April 1, 2003. As previously reported in our periodic filings, we filed a civil complaint against our former Chairman and Chief Executive Officer for breach of fiduciary duty and other wrongful conduct. The Company amended that complaint on April 1, 2003. The amended complaint alleges that the defendant misappropriated millions of dollars from our Key Employee Loan Program and relocation program; awarded millions of dollars in unauthorized bonuses to himself and certain other Tyco employees; engaged in improper self-dealing real estate transactions involving our assets; and conspired with certain other former Tyco employees in committing these acts. The amended complaint alleges causes of action for breach of fiduciary duty, fraud, unjust enrichment, breach of contract, conversion, constructive trust, and other wrongful conduct. The amended complaint seeks recovery for all of the losses suffered by us as a result of the former Chairman and Chief Executive Officer's conduct, and of all remuneration, including restricted and unrestricted shares and options, obtained by Mr. Kozlowski during the course of this conduct. The Judicial Panel on Multidistrict Litigation transferred this action to the United States District Court for the District of New Hampshire. On October 6, 2003, Mr. Kozlowski filed a motion to dismiss or stay the case and compel arbitration, which was denied on March 16, 2004, with one exception relating to the arbitration of a claim asserting the fraudulent inducement of Mr. Kozlowski's retention agreement. On April 9, 2004, Mr. Kozlowski filed an Answer, Affirmative Defenses and Counterclaims, seeking amounts allegedly due pursuant to his purported retention agreement, life insurance policies, and other arrangements. Tyco filed its Reply to the Counterclaims on April 29, 2004. Discovery in this and the other affirmative cases is proceeding.

Mr. Kozlowski was tried on criminal charges in New York County. The first criminal trial resulted in a mistrial declared on April 2, 2004. The retrial of Mr. Kozlowski began on January 18, 2005 and concluded on June 17, 2005, when the jury returned verdicts. Of the thirty-one counts submitted to it, which were similar to certain of the claims alleged in the Company's affirmative action described above, the jury found Mr. Kozlowski guilty on all charges of grand larceny, conspiracy and securities fraud, and all but one count of falsification of business records. On September 19, 2005, Mr. Kozlowski was sentenced to a term of imprisonment of eight and one-third years to twenty-five years, and ordered to pay an individual fine of $70 million and restitution, jointly and severally with Mr. Swartz, to Tyco of $134,351,397 within one year. On September 19, 2005, Mr. Kozlowski filed a notice of appeal from his conviction and on October 3, 2006 filed a brief in support of his appeal. On January 2, 2007, by order of the Supreme Court of the State of New York, the New York County District Attorney's office released to Tyco, on behalf of Mr. Kozlowski, $97,778,296 in restitution. The payment by Mr. Kozlowski is made pending the outcome of his appeal.

Tyco International, Ltd. v. Mark H. Swartz, United States District Court, Southern District of New York, No. 03-CV-2247 (TPG), filed April 1, 2003. As previously reported in our periodic filings, we filed an arbitration claim against Mark H. Swartz, our former Chief Financial Officer and director, on October 7, 2002. As a consequence of Mr. Swartz's refusal to submit to the jurisdiction of the American Arbitration Association, we filed a civil complaint against him on April 1, 2003, for breach of fiduciary duty and other wrongful conduct. The action alleges that the defendant misappropriated millions of dollars from our Key Employees Loan Program and relocation program; approved and implemented awards of millions of dollars of unauthorized bonuses to himself and certain other Tyco employees; awarded millions of dollars in unauthorized payments to himself; engaged in improper self dealing real estate transactions involving our assets; and conspired with certain other former Tyco employees in committing these acts. The complaint alleges causes of action for breach of fiduciary duty, fraud, unjust enrichment, conversion, and constructive trust, and other wrongful conduct. The action seeks recovery for all of the losses suffered by us as a result of the former Chief Financial Officer and director's conduct, and all remuneration, including restricted and unrestricted shares and options, obtained by Mr. Swartz's during the course of this conduct. The Judicial Panel on Multidistrict Litigation transferred this action to the United States District Court for the District of New Hampshire. Mr. Swartz moved to dismiss Tyco's complaint and to compel arbitration of the parties' respective claims. The court denied Swartz's motion and he has appealed the court's decision to the United States Court of Appeals for the First Circuit. His appeal was heard on December 8, 2004. The First Circuit affirmed the District Court's decision on September 7, 2005. Discovery in this and the other affirmative cases is proceeding.

Mr. Swartz was tried on criminal charges in New York County. The first criminal trial resulted in a mistrial declared on April 2, 2004. The retrial of Mr. Swartz began on January 18, 2005 and concluded on June 17, 2005, when the jury returned verdicts. Of the thirty-one counts submitted to it, which were similar to certain of the claims alleged in the Company's affirmative action described above, the jury found Mr. Swartz guilty on all charges of grand larceny, conspiracy and securities fraud, and all but one count of falsification of business records. On September 19, 2005, Mr. Swartz was sentenced to a term of imprisonment of eight and one-third years to twenty-five years, and ordered to pay an individual fine of $35 million and restitution, jointly and severally with Mr. Kozlowski, to Tyco of $134,351,397 within one year and Mr. Swartz was ordered individually to pay restitution to Tyco of an additional $1,200,000. On September 19, 2005, Mr. Swartz filed a notice of appeal from his conviction and on October 3, 2006 filed a brief in support of his appeal. On October 27, 2006, Mr. Swartz paid restitution to the Company in the amount of $37,773,101. The payment by Mr. Swartz is made pending the outcome of his appeal.

Tyco International, Ltd. v. L. Dennis Kozlowski and Mark H. Swartz, United States District Court Southern District of New York, No. 02-CV-9705, filed December 6, 2002. As previously disclosed in our periodic filings, we filed a civil complaint against our former Chairman and Chief Executive Officer and

former Chief Financial Officer and Director pursuant to Section 16(b) of the Securities and Exchange Act of 1934 for disgorgement of short-swing profits from prohibited transactions in our common shares believed to exceed $40 million. The action seeks disgorgement of profits, interest, attorney's fees and costs. The Judicial Panel on Multidistrict Litigation has transferred this action to the United States District Court for the District of New Hampshire. On October 6, 2003, Messrs. Kozlowski and Swartz moved to dismiss the claims against them based upon the statute of limitations. On March 16, 2004, Judge Barbadoro in the District of New Hampshire granted the defendants' motion to dismiss in part with leave for Tyco to file an amended complaint. Tyco filed an amended complaint on May 14, 2004. The defendants moved to dismiss certain claims in the amended complaint on June 28, 2004. The defendants' motion to dismiss was denied on April 21, 2005. The defendants' motion to extend time to answer the complaint until thirty days after the conclusion of deliberations in the criminal trial was granted on May 17, 2005. Both defendants' filed their answers on July 18, 2005. Discovery in this and the other affirmative cases is proceeding.

Tyco International Ltd. v. Frank E. Walsh, Jr., United States District Court, Southern District of New York, No. 02-CV-4633, filed June 17, 2002. As previously reported in our periodic filings, we filed a civil complaint against Frank E. Walsh, Jr., a former director, for breach of fiduciary duty and related wrongful conduct involving receipt by Walsh of a $20 million payment in connection with our 2001 acquisition of the CIT Group, Inc. The action alleges causes of action for restitution, breach of fiduciary duty and inducing breach of fiduciary duty, conversion, unjust enrichment, and a constructive trust, and seeks recovery for all of the losses suffered by us as a result of the defendant director's conduct. On December 17, 2002, Mr. Walsh paid $20 million in restitution to Tyco, which was deposited by the Company in January 2003, as a result of a plea bargain agreement with the New York County District Attorney. Our claims against Mr. Walsh are still pending. The Judicial Panel on Multidistrict Litigation transferred this action to the United States District Court for the District of New Hampshire. Discovery in this and the other affirmative cases is proceeding.

Tyco International Ltd. v. Mark A. Belnick, No. 02-CV-4644 (SWK), filed June 17, 2002. As previously reported in our periodic filings, we filed a civil complaint against our former Executive Vice President and Chief Corporate Counsel for breach of fiduciary duty and other wrongful conduct. On October 21, 2002, in a related proceeding, Mr. Belnick commenced an arbitration proceeding in New York County, New York. On October 7, 2005, the Company and Mr. Belnick entered into a settlement agreement that resolved all claims each party had previously asserted against the other.

Tyco International Ltd. v. AIG Life of Bermuda Ltd. (formerly known as American General Life of Bermuda Ltd.); L. Dennis Kozlowski; and Butterfield Trust (Bermuda) Limited, Index No. 2006: No. 82, filed on March 6, 2006 (amended April 6, 2006). We filed a civil complaint in the Supreme Court of Bermuda against our former Chief Executive Officer and others with respect to an insurance policy on the life of the former Chief Executive Officer issued by AIG Life of Bermuda Ltd. and held in trust by Butterfield Trust (Bermuda) Limited, seeking declarations that Tyco was entitled to the premiums, proceeds and value of the policy. On September 27, 2006, Tyco, Mr. Kozlowski and the other parties entered into a confidential settlement that resolved the claims in this action, with a portion of the disputed funds placed in escrow pending the resolution of the additional claims including those in the Multidistrict Litigation actions currently pending before the District Court for the District of New Hampshire.

As previously disclosed in our periodic filings, we and others have received various subpoenas and requests from the SEC, the United States Department of Labor, the General Service Administration and others seeking the production of voluminous documents in connection with various investigations into our governance, management, operations, accounting and related controls. We are cooperating with these investigations and are complying with these requests.

Certain current and former employees in Fire and Security received subpoenas from the SEC's Division of Enforcement seeking testimony related to past accounting practices for the ADT dealer connect fees. The investigation, which began in June 2002, related to accounting practices employed by our former management. As previously reported in our periodic filings, these practices have been discontinued.

The United States Department of Labor served document subpoenas on Tyco and Fidelity Management Trust Company for documents concerning the administration of the Tyco International (US) Inc. Retirement Savings and Investment Plans. The current focus of the Department's inquiry concerns the losses allegedly experienced by the plans due to investments in our stock. The Department of Labor has authority to bring suit on behalf of the plans and their participants against those acting as fiduciaries to the plans for recovery of losses and additional penalties, although it has not informed us of any intention to do so. The Company is continuing to cooperate with the Department's investigation.

As previously reported in our periodic filings, in November 2004, we received an order from the SEC to report facts and circumstances involving our participation, if any, in the United Nations Oil for Food Program governing sales of Iraqi oil. On January 10, 2005 and November 8, 2005, we responded to the order and provided information concerning transactions under the United Nations Oil for Food Program. On January 31, 2006, we received a subpoena from the SEC to produce additional documents and information related to the participation of three of our businesses in the United Nations Oil for Food Program. The SEC notified us on June 7, 2006 that it was dismissing us from the SEC's investigation of the United Nations Oil for Food Program.

On January 27, 2006, we received from the New Jersey Division of Criminal Justice Office of the Attorney General a subpoena to produce documents concerning, among other things, former employees, the use of certain chemicals, and the filing of reports under state and federal environmental reporting laws at the same New Jersey facility sold by Tyco in 2000. The subpoena seeks information for the period from January 1987 to December 2000. We have provided information in response to the subpoena and will continue to cooperate fully with the investigators.

As previously disclosed in our periodic filings, we are a party to a number of patent infringement and antitrust actions. Tyco has assessed the status of these matters and has recorded liabilities related to certain of these matters where appropriate.

Masimo Corporation v. Tyco Healthcare Group LP ("Tyco Healthcare") and Mallinckrodt, Inc. is a separate lawsuit filed on May 22, 2002 also pending in the United States District Court for the Central District of California. Tyco Healthcare and Mallinckrodt are subsidiaries of Tyco. In this lawsuit, Masimo alleges violations of antitrust laws against Tyco Healthcare and Mallinckrodt in the markets for pulse oximeter products. Masimo alleges that Tyco Healthcare and Mallinckrodt used their market position to prevent hospitals from purchasing Masimo's pulse oximetry products. Masimo seeks injunctive relief and monetary damages, including treble damages. Trial in this case began on February 22, 2005. The jury returned its verdict on March 21, 2005, and awarded Masimo $140 million in damages. The damages are automatically trebled under the antitrust statute to an award of $420 million. If ultimately successful, Masimo's attorneys are entitled to an award of reasonable fees and costs in addition to the verdict amount. The district court held a hearing on June 28, 2005 regarding post-trial motions.

On March 22, 2006, the district court issued its Memorandum of Decision regarding the post-trial motions. In the Memorandum, the district court (i) vacated the jury's liability findings on two business practices; (ii) affirmed the jury's liability finding on two other business practices; (iii) vacated the jury's damage award in its entirety; and (iv) ordered a new trial on damages. The district court held the new trial on the damages on October 18 and 19, 2006. On January 25, 2007, the district court ordered an additional hearing on the issue of damages, which took place on March 22, 2007. Tyco has assessed the status of this matter and has concluded that it is more likely than not that the jury's decision will be overturned, and, further, Tyco intends to vigorously pursue all available means to achieve such reversal. Accordingly, no provision has been made in the Consolidated Financial Statements with respect to this damage award.

As previously reported in the Company's periodic filings, Applied Medical Resources Corp. ("Applied Medical") v. United States Surgical ("U.S. Surgical") is a patent infringement action that was filed in the United States District Court for the Central District of California in July 2003 in which U.S. Surgical, a subsidiary of Tyco, is the defendant. The complaint alleges that U.S. Surgical's VERSASEAL Plus trocar product infringes Applied Medical's U.S. Patent No. 5,385,553. Applied Medical seeks injunctive relief and unspecified monetary damages, including enhanced damages for alleged willful infringement. Applied Medical filed a motion for a preliminary injunction, which the district court denied on December 23, 2003. On February 7, 2005, the district court granted U.S. Surgical's motion for summary judgment. Applied Medical appealed the summary judgment ruling. On May 15, 2006, the United States Court of Appeals for the Federal Circuit issued a decision on the appeal vacating the district court's grant of summary judgment and remanding the case for further proceedings. On January 9, 2007, the district court entered an order that denied both parties' motions for summary judgment on the ground that material facts remain in dispute. The district court has scheduled trial in this case for July 10, 2007.

As previously reported in our periodic filings, we have been in discussions with the U.S. Environmental Protection Agency and the New Jersey Department of Environmental Protection regarding historic environmental compliance issues at a facility sold by Tyco in 2000. In a letter dated February 10, 2006, the U.S. Environmental Protection Agency proposed a penalty of $1,750,000 for alleged violations at this facility. The Company discussed this matter in detail with the Environmental

Protection Agency and, on April 26, 2007, paid a penalty of $1,137,000 in settlement of all alleged violations.

As previously reported in our periodic filings, Tyco and some of its subsidiaries are named as defendants in personal injury lawsuits based on alleged exposure to asbestos-containing materials. The majority of these cases have been filed against subsidiaries in Healthcare and Engineered Products and Services. Each case typically names between dozens to hundreds of corporate defendants. The complaints generally seek monetary damages for personal injury or bodily injury resulting from alleged exposure to products containing asbestos. The Company will continue to vigorously defend these lawsuits and the Company has not suffered an adverse verdict in a trial court proceeding related to asbestos claims. When appropriate, the Company settles claims. However, the total amount paid in any year to settle and defend all asbestos claims has been immaterial. As of March 30, 2007 there were approximately 15,500 asbestos liability cases pending against the Company and our subsidiaries.

As previously reported in our periodic filings, we have received and responded to various allegations that certain improper payments were made by our subsidiaries in recent years. During 2005, we reported to the U.S. Department of Justice (DOJ) and the SEC the investigative steps and remedial measures that we have taken in response to the allegations. We also informed the DOJ and the SEC that we retained outside counsel to perform a company-wide baseline review of our policies, controls and practices with respect to compliance with the Foreign Corrupt Practices Act, that we would continue to make periodic progress reports to these agencies, and that we would present our factual findings upon conclusion of the baseline review. We have and will continue to have communications with the DOJ and SEC to provide updates on the baseline review being conducted by outside counsel, including, as appropriate, briefings concerning additional instances of potential improper payments identified by us in the course of our ongoing compliance activities. To date, the baseline review has revealed that some business practices may not comply with Tyco and FCPA requirements. At this time, we cannot predict the outcome of these matters reported to regulatory and law enforcement authorities and therefore cannot estimate the range of potential loss or extent of risk, if any, that may result from an adverse resolution of any or all of these matters. However, it is possible that we may be required to pay judgments, suffer penalties or incur settlements in amounts that may have a material adverse effect on our financial position, results of operations or cash flows.

You should carefully consider the risks described below before investing in our publicly traded securities. The risks described below are not the only ones facing us. Our business is also subject to the risks that affect many other companies, such as competition, technological obsolescence, labor relations, general economic conditions, geopolitical events and international operations. Additional risks not currently known to us or that we currently believe are immaterial also may impair our business operations and our liquidity.

Management estimates that the income statement charges to complete the Proposed Separation will be at the high end of the previously disclosed range of $1.2 billion to $1.6 billion, after-tax. However, actual costs could exceed that estimate and could have a material adverse effect on our results of operations or cash flows.

There is no guarantee that the Proposed Separation will be finalized. Completion of the Proposed Separation is subject to a number of factors and conditions, including:

The complexity of the Proposed Separation will require a substantial amount of management and operational resources, as well as the use of several cross-functional project teams. Our financial condition, results of operations or cash flows may be adversely affected during the transition period.

Each of the independent companies may not be able to achieve the full strategic and financial benefits we expect will result from the separation of two of Tyco's segments into independent companies or such benefits may be delayed or may not occur at all. For example, there can be no assurance that analysts and investors will regard the corporate structures of each of the independent companies as more clear and simple than the current Tyco corporate structure or place a greater value on the sum of each of the independent companies as compared to Tyco.

We have received private letter rulings from the Internal Revenue Service regarding the U.S. federal income tax consequences of the distribution of Tyco Healthcare and Tyco Electronics common shares to our shareholders substantially to the effect that the distribution, except for cash received in lieu of fractional shares, will qualify as tax-free under Sections 355 and 368(a)(1)(D) of the Internal Revenue Code of 1986 ("Code"). The private letter rulings also provide that certain internal transactions undertaken in anticipation of the Proposed Separation will qualify for favorable treatment under the Code. In addition to obtaining the private letter rulings, we have obtained an opinion from the law firm of McDermott Will & Emery LLP confirming the tax-free status of the distribution and the internal transactions. The private letter rulings and the opinion rely or will rely on certain facts and assumptions, and certain representations and undertakings, from us, Tyco Healthcare and Tyco Electronics regarding the past and future conduct of our respective businesses and other matters. Notwithstanding the private letter rulings and the opinion, the Internal Revenue Service could determine on audit that the distribution or the internal transactions should be treated as taxable

transactions if it determines that any of these facts, assumptions, representations or undertakings are not correct or have been violated, or that the distributions should be taxable for other reasons, including as a result of significant changes in stock or asset ownership after the distribution. If the distribution ultimately is determined to be taxable, we would recognize gain in an amount equal to the excess of the fair market value of the Tyco Healthcare and Tyco Electronics common shares distributed to our shareholders on the distribution date over our tax basis in such common shares, but such gain, if recognized, generally would not be subject to U.S. federal income tax. However, we, Tyco Healthcare and Tyco Electronics would incur significant U.S. federal income tax liabilities if it ultimately is determined that certain internal transactions undertaken in anticipation of the Proposed Separation should be treated as taxable transactions.

The independent companies' ability to engage in significant equity transactions could be limited or restricted after the distribution of the common shares of Tyco Healthcare and Tyco Electronics upon completion of the Proposed Separation in order to preserve for U.S. federal income tax purposes the tax-free nature of the distribution. Even if the distribution otherwise qualifies for tax-free treatment under Sections 368(a)(1)(D) and 355 of the Code, it may result in corporate level taxable gain to us under Section 355(e) of the Code if 50% or more, by vote or value, of our common shares, Tyco Healthcare's common shares or Tyco Electronics' common shares are acquired or issued as part of a plan or series of related transactions that includes the distribution. For this purpose, any acquisitions or issuances of our common shares within two years before the distribution, and any acquisitions or issuances of our common shares, Tyco Healthcare's common shares or Tyco Electronics' common shares within two years after the distribution, generally are presumed to be part of such a plan, although we, Tyco Healthcare or Tyco Electronics may be able to rebut that presumption. We are not aware of any such acquisitions or issuances of our common shares within the two years before the distribution. If an acquisition or issuance of our common shares, Tyco Healthcare's common shares or Tyco Electronics' common shares triggers the application of Section 355(e) of the Code, we would recognize taxable gain as described above, but such gain generally would not be subject to U.S. federal income tax. However, certain subsidiaries of Tyco Healthcare or Tyco Electronics or subsidiaries of ours would incur significant U.S. federal income tax liabilities as a result of the application of Section 355(e) of the Code.

As a result of actions taken by our former senior corporate management, we, some members of our former senior corporate management, current and former members of our Board of Directors and our current Chief Executive Officer, former Chief Financial Officer and former General Counsels are named defendants in a number of purported class actions alleging violations of certain disclosure provisions of the federal securities laws. Tyco, certain of our current and former employees, some members of our former senior corporate management and some former members of our Board of Directors also are named as defendants in several ERISA class actions.

We generally are obligated to indemnify our directors and officers and our former directors and officers who are also named as defendants in some or all of these matters to the extent required by Bermuda law. In addition, our insurance carriers may decline coverage, or our coverage may be insufficient to cover our expenses and liability, in some or all of these matters. We are unable at this time to estimate what our ultimate liability in these matters may be, and it is possible that we will be required to pay judgments or settlements and incur expenses, in excess of any insurance coverage, in aggregate amounts that would have a material adverse effect on our financial condition, results of

operations or cash flows. At this time, we cannot estimate the amount of loss or probable losses, if any, that might result from an adverse resolution of these matters.

We and others have received subpoenas and requests from the SEC, the U.S. Department of Labor, the General Service Administration and others seeking the production of voluminous documents in connection with various investigations into our governance, management, operations, accounting and related controls. Certain current and former employees in Fire and Security received subpoenas from the SEC's Division of Enforcement seeking testimony related to past accounting practices regarding the ADT dealer connect fees. As previously reported in our periodic filings, these practices have been discontinued. The U.S. Department of Labor is investigating us and the administrators of certain of our benefit plans. At this time, we cannot predict when these investigations will be completed, nor can we predict what the results of these investigations may be. It is possible that we will be required to pay material fines, consent to injunctions on future conduct, lose the ability to conduct business with governmental instrumentalities, which in turn could negatively affect our business with non-governmental customers, or suffer other penalties or adverse impacts, each of which could have a material adverse effect on our business. We cannot provide assurance that the effects and results of these or other investigations will not be material and adverse to our financial condition, results of operations or cash flows.

We and our subsidiaries' income tax returns periodically are examined by various tax authorities. In connection with these examinations, tax authorities, including the Internal Revenue Service, have raised issues and proposed tax adjustments. We are reviewing and contesting certain of the proposed tax adjustments. Amounts related to these tax adjustments and other tax contingencies and related interest that management has assessed as probable and estimable have been recorded through the income tax provision, equity or goodwill, as appropriate. The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations in a multitude of jurisdictions across our global operations. We recognize potential liabilities and record tax liabilities for anticipated tax audit issues in the United States and other tax jurisdictions based on our estimate of whether, and the extent to which, additional income taxes will be due. These tax liabilities are reflected net of related tax loss carryforwards. We adjust these liabilities in light of changing facts and circumstances. Due to the complexity of some of these uncertainties, however, the ultimate resolution may result in a payment that is materially different from our current estimate of the tax liabilities.

The IRS continues to audit the 1997 through 2000 years. In 2004 the Company submitted to the IRS proposed adjustments to these prior period U.S. federal income tax returns, resulting in a reduction in the taxable income previously filed. During 2006, the IRS accepted substantially all of the proposed adjustments. Also during 2006, the Company developed proposed amendments to U.S. federal income tax returns for additional periods through 2002. On the basis of previously accepted amendments, the Company has determined that acceptance of these adjustments is probable and, accordingly, has recorded them in the Consolidated Financial Statements. Such adjustments did not have a material impact on the Company's financial condition, results of operations or cash flows.

The Company has yet to complete proposed amendments to its U.S. federal income tax returns for periods subsequent to 2002, which will primarily reflect the roll forward through 2006 of the amendments for the periods 1997 to 2002. When the Company's tax return positions are updated, additional adjustments may be identified and recorded in the Consolidated Financial Statements. While the final adjustments cannot be determined until the income tax return amendment process is

completed, the Company believes that any resulting adjustments will not have a material impact on its financial condition, results of operations or cash flows.

We estimate that our available cash and our cash flow from operations will be adequate to fund our operations and service our debt for the foreseeable future. In making this estimate, we have not assumed the need to make any material payments in connection with our pending litigation or investigations. Any material adverse legal judgments, fines, penalties or settlements arising from our pending investigations and litigation could require additional funding. If such developments require us to obtain additional funding, we cannot provide assurance that we will be able to obtain the additional funding that we need on commercially reasonable terms or at all, which could have a material adverse effect on our financial condition, results of operations or cash flows.

Such an outcome could have important consequences to you. For example, it could:

As a result of actions taken by our former senior corporate management, Tyco was the subject of continuing negative publicity focusing on these actions. This negative publicity contributed to significant declines in the prices of our publicly traded securities in 2002 and brought increased regulatory scrutiny upon us. Additional negative publicity related to former senior corporate management's actions could have a material adverse effect on our results of operations or cash flows and the market price of our publicly traded securities.

We replaced our senior corporate executives with a new team during 2002 through 2004, and all of the former members of our Board of Directors determined not to stand for reelection in March 2003. A new Board of Directors was elected at our annual general meeting of shareholders in March 2003. We cannot provide assurance that this major restructuring of our Board of Directors and senior management team, and the accompanying distractions related to matters arising from the actions of prior management will not adversely affect our financial condition, results of operations or cash flows.

Our operating results in some of our segments are affected adversely by the general cyclical pattern of the industries in which they operate. For example, demand for the products and services of

Fire and Security and Engineered Products and Services is significantly affected by levels of commercial construction and consumer and business discretionary spending. Also, the electronic components business within Electronics is heavily dependent on the end markets it serves and therefore can be affected by the demand patterns of these markets, which could impact the margins in this business. This cyclical impact can be amplified because some of our businesses purchase products from other of our businesses. For example, Fire and Security purchases certain products sold by Engineered Products and Services. Therefore, a drop in demand for our fire prevention products due to lower new residential or office construction or other factors can cause a drop in demand for certain of our products sold by Engineered Products and Services.

We are subject to numerous foreign, federal, state and local environmental protection and health and safety laws governing, among other things:

There can be no assurances that we have been or will be at all times in compliance with environmental and health and safety laws. If we violate these laws, we could be fined, criminally charged or otherwise sanctioned by regulators.

Certain environmental laws assess liability on current or previous owners or operators of real property for the cost of removal or remediation of hazardous substances at their properties or at properties at which they have disposed of hazardous substances. In addition to cleanup actions brought by governmental authorities, private parties could bring personal injury or other claims due to the presence of, or exposure to, hazardous substances.

We have received notification from the United States Environmental Protection Agency and from state environmental agencies, that conditions at a number of sites where we and others disposed of hazardous substances require cleanup and other possible remedial 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 from past operations. These projects relate to a variety of activities, including:

These projects involve both remediation expenses and capital improvements. In addition, we remain responsible for certain environmental issues at manufacturing locations previously sold by us.

The ultimate cost of cleanup at disposal sites and manufacturing facilities is difficult to predict given uncertainties regarding the extent of the required cleanup, the interpretation of applicable laws and regulations and alternative cleanup methods. Based upon our experience, current information and applicable laws, we believe that it is probable that we would incur remedial costs (including asset retirement obligations of $113 million) of approximately $299 million, of which $28 million is included in accrued expenses and other current liabilities and $271 million is included in other liabilities on the Consolidated Balance Sheets. Environmental laws are complex, change frequently and have tended to become more stringent over time. While we have budgeted for future capital and operating expenditures to maintain compliance with such laws, we cannot provide assurance that our costs of complying with current or future environmental protection and health and safety laws, or our liabilities arising from past or future releases of, or exposures to, hazardous substances will not exceed our

estimates or adversely affect our financial condition or results of operations or that we will not be subject to additional environmental claims for personal injury or cleanup in the future based on our past, present or future business activities.

Pursuant to accounting principles generally accepted in the United States, we are required to periodically assess our goodwill, intangibles and other long-lived assets to determine if they are impaired. Disruptions to our business, end market conditions and protracted economic weakness, unexpected significant declines in operating results of reporting units, divestitures, the Proposed Separation plan and market capitalization declines may result in additional charges for goodwill and other asset impairments. Future impairment charges could substantially affect our reported earnings in the periods of such charges and could adversely affect our financial condition, results of operations or cash flows. In addition, such charges would substantially reduce our consolidated net worth and our shareholders' equity, increasing our debt-to-total-capitalization ratio. Such a substantial reduction in consolidated net worth and increase in debt as a percentage of total capitalization could result in a default under our credit facilities.

We are exposed to a variety of market risks, including the effects of changes in non-U.S. currency exchange rates, commodity prices and interest rates. See Part I Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Our net revenue derived from sales in non-U.S. markets for 2006 was 51.2% of our total net revenue, and we expect revenue from non-U.S. markets to continue to represent a significant portion of our net revenue. Therefore, when the U.S. dollar strengthens in relation to the non-U.S. currencies of the countries where we sell our products, our U.S. dollar reported revenue and income will decrease. Changes in the relative values of currencies occur regularly and, in some instances, may have a significant effect on our results of operations. Our financial statements reflect recalculations of items denominated in non-U.S. currencies to U.S. dollars, our functional currency.

We are a large buyer of steel in the United States. We are also a large buyer of metals and other commodities, including resin, copper, brass, gold, paper, pulp, cotton, oil and gas, the prices of which have fluctuated significantly in recent years. Volatility in the prices of these commodities 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, which could have a material adverse effect on our financial condition, results of operations or cash flows.

We monitor these exposures as an integral part of our overall risk management program. In some cases, we purchase hedges or enter into contracts to insulate our results of operations from these fluctuations. Nevertheless, changes in currency exchange rates, commodity prices and interest rates may have a material adverse effect on our financial condition, results of operations or cash flows.

In the ordinary course of business, we are named as a defendant in a significant amount of litigation, including claims for damages arising out of the use of our products, litigation alleging the infringement of intellectual property rights, litigation alleging anti-competitive behavior, product liability litigation, employment matters and commercial disputes. In certain circumstances, patent infringement and anti-trust laws permit successful plaintiffs to recover treble damages. In addition, our Healthcare business is subject to regulation and potential litigation. The defense of these lawsuits may divert our management's attention, and we may incur significant expenses in defending these lawsuits. In addition,

we may be required to pay damage awards or settlements, or become subject to injunctions or other equitable remedies, that could cause a material adverse effect on our financial condition, results of operations or cash flows. Moreover, any insurance or indemnification rights that we have may be insufficient or unavailable to protect us against potential loss exposures.

Some of the lawsuits outstanding against us relate to actions taken by our former senior corporate management. We do not believe that it is feasible to predict or determine the final outcome or resolution of these unresolved proceedings. An adverse outcome from these unresolved proceedings or liabilities or other proceedings could be material to our financial condition, results of operations or cash flows.

In addition, we could face liability for failure to respond adequately to alarm activations. The nature of the services we provide potentially exposes us to risks of liability for employee acts or omissions or system failures. In an attempt to reduce this risk, our alarm monitoring agreements contain provisions limiting our liability in such circumstances. We cannot assure you, however, that these limitations will be enforced. Losses from such litigation could be material to our financial condition, results of operations or cash flows.

The United States Food and Drug Administration regulates the approval, manufacturing and sale and marketing of many of our healthcare products. Failure to comply with current Good Manufacturing Practices and other applicable regulations and quality assurance guidelines could lead, and have led, to temporary manufacturing shutdowns, product recalls, product shortages or delays in product manufacturing. Efficacy or safety concerns, an increase in trends of adverse events in the marketplace, and/or manufacturing quality issues with respect to our products could lead to product recalls, withdrawals or declining sales.

Attrition rates for customers in our global electronic security services business continued to decline to an average of 13.1% on a trailing 12-month basis as of March 30, 2007. Although the attrition rate has been declining, if attrition rates were to trend upward, ADT's recurring revenue and results of operations would be adversely affected. We amortize the costs of ADT's contracts and related customer relationships purchased through the ADT dealer program based on the estimated life of the customer relationships. Internally generated residential and commercial account pools are similarly amortized. If the attrition rates were to rise, we may be required to accelerate the amortization of the costs, which could have a material adverse effect on our financial condition, results of operations or cash flows.

Our businesses operate in global markets that are characterized by rapidly changing technologies and evolving industry standards. Accordingly, our future growth rate depends upon a number of factors, including our ability to: identify emerging technological trends in our target end-markets; develop and maintain competitive products; enhance our products by adding innovative features that differentiate our products from those of our competitors; and develop, manufacture and bring products to market quickly and cost-effectively. Our ability to develop new products based on technological innovation can affect our competitive position and requires the investment of significant resources. These development efforts divert resources from other potential investments in our businesses, and they may not lead to the development of new technologies or products on a timely basis or that meet the needs of our

customers as fully as competitive offerings. In addition, the markets for our products may not develop or grow as we anticipate. The failure of our technologies or products to gain market acceptance or their obsolescence due to more attractive offerings by our competitors could significantly reduce our revenues and adversely affect our financial condition, results of operations or cash flows.

Tyco's global operations require importing and exporting goods and technology across international borders on a regular basis. Tyco's policy mandates strict compliance with U.S. and foreign laws regarding such activity. Nonetheless, we cannot provide assurance that our policies and procedures will always protect us from acts by our employees that would violate U.S. and/or foreign laws. Such improper actions could subject the Company to civil or criminal penalties, including substantial monetary fines, or other adverse actions including denial of import or export privileges, and could damage our reputation and, therefore, our ability to do business.

From time to time, Tyco obtains or receives information alleging improper activity in connection with imports or exports. Tyco's policy is to investigate that information and respond appropriately, including, if warranted, taking remedial control measures and reporting its findings to relevant government authorities.

Our bank credit agreements contain financial and other covenants, such as a limit on the ratio of debt to earnings before interest, taxes, depreciation and amortization, minimum levels of net worth, and limits on incurrence of liens. Our outstanding indentures contain customary covenants including limits on negative pledges, subsidiary debt and sale/leaseback transactions.

Although we believe none of these covenants are presently restrictive to our operations, our ability to meet the financial covenants can be affected by events beyond our control, and we cannot provide assurance that we will meet those tests. A breach of any of these covenants could result in a default under our credit agreements or indentures. Upon the occurrence of an event of default under any of our credit facilities or indentures, the lenders or trustees could elect to declare all amounts outstanding thereunder to be immediately due and payable and terminate all commitments to extend further credit. If the lenders or trustees accelerate the repayment of borrowings, we cannot provide assurance that we will have sufficient assets to repay our credit facilities and our other indebtedness. Acceleration of any obligation under any of our material debt instruments will permit the holders of our other material debt to accelerate their obligations. See "Liquidity and Capital Resources—Capitalization".

We operate in regulated industries. Our U.S. operations are subject to regulation by a number of federal agencies with respect to safety of operations and equipment and financial responsibility. Intrastate operations in the United States are subject to regulation by state regulatory authorities, and our international operations are regulated by the countries in which they operate. We and our employees are subject to various U.S. federal, state and local laws and regulations, as well as non-U.S. laws and regulations, including many related to consumer protection. Most states in which we operate have licensing laws covering the monitored security services industry. Our business relies heavily upon wireline telephone service to communicate signals, and wireline telephone companies are regulated by both the federal and state governments. Changes in laws or regulations could require us to change the way we operate, which could increase costs or otherwise disrupt operations. In addition, failure to comply with any applicable laws or regulations could result in substantial fines or revocation of our operating permits and licenses. If laws and regulations changed or we failed to comply, our financial condition, results of operations or cash flows could be materially and adversely affected.

We face exposure to product liability claims in the event that any of our products results in personal injury or property damage. In the event that any of our products prove to be defective, we may be required to recall or redesign such products, which could result in significant unexpected costs. Any insurance we maintain may not be available on terms acceptable to us or such coverage may not be adequate for liabilities actually incurred. Any claim or product recall could result in adverse publicity against us, which could adversely affect our financial condition, results of operations or cash flows.

The U.S. Foreign Corrupt Practices Act and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business. Our policies mandate compliance with these anti-bribery laws. We operate in many parts of the world that have experienced governmental corruption to some degree and in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices. We cannot assure you that our internal control policies and procedures always will protect us from reckless or criminal acts committed by our employees or agents. Violations of these laws, or allegations of such violations, could disrupt our business and result in a material adverse effect on our financial condition, results of operations or cash flows.

We have significant operations outside of the United States. Our continuing operations currently operate in approximately 60 countries. We generated 51% of our net revenue outside of the United States in 2006. We expect net revenue generated outside of the United States to continue to represent a significant portion of total net revenue. Business operations outside of the United States are subject to political, economic and other risks inherent in operating in foreign countries, such as:

Changes in the political or economic environments in the countries in which we operate could have a material adverse effect on our financial condition, results of operations or cash flows.

We continue to evaluate the performance of all of our businesses and may sell a business or product line. Any divestiture could result in significant write-offs, including those related to goodwill and other intangible assets, which could have a material adverse effect on our business, financial condition and results of operations. Divestitures could involve additional risks, including difficulties in the separation of operations, services, products and personnel, the diversion of management's attention from other business concerns, the disruption of our business and the potential loss of key employees. We cannot assure you that we will be successful in managing these or any other significant risks that we encounter in divesting a business or product line.

We purchase materials, components and equipment from third parties for use in our manufacturing operations. If we cannot obtain sufficient quantities of these items at competitive prices and quality and on a timely basis, we may not be able to produce sufficient quantities of product to satisfy market demand, product shipments may be delayed or our material or manufacturing costs may increase. In addition, because we cannot always immediately adapt our cost structures to changing market conditions, our manufacturing capacity may at times exceed or fall short of our production requirements. Any of these problems could result in the loss of customers, provide an opportunity for competing products to gain market acceptance and otherwise adversely affect our financial condition, results of operations or cash flows.

In connection with our assessment of internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002, we identified a material weakness in our internal control over financial reporting relating to our accounting for income taxes as of September 29, 2006. For a discussion of our internal control over financial reporting and a description of the identified material weakness, see "Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures" under Item 4, "Controls and Procedures."

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material misstatements of the annual or interim financial statements will not be prevented or detected. Over the past four years, significant internal control, informational systems and process improvements have been implemented in our tax accounting processes. However, we determined that control deficiencies existed related to

The control deficiencies did not result in a material misstatement to our consolidated financial statements in any period presented, however, the design and operation of procedural and monitoring controls may not have prevented or detected at the level of less than remote likelihood, errors from occurring that could have been material, either individually or in the aggregate.

A material weakness in our internal control over financial reporting could adversely impact our ability to provide timely and accurate financial information. While we have taken measures to strengthen our internal controls in response to the identified material weakness related to certain aspects of accounting for income taxes, additional work remains to be done to address the identified material weakness. If we are unsuccessful in implementing or following our remediation plan, we may not be able to timely or accurately report our financial condition, results of operations or cash flows or maintain effective internal controls over financial reporting. If we are unable to report financial information timely and accurately or to maintain effective disclosure controls and procedures, we could be subject to, among other things, regulatory or enforcement actions by the SEC and the New York Stock Exchange, including a delisting from the New York Stock Exchange, securities litigation, debt rating agency downgrades or rating withdrawals, any one of which could adversely affect the valuation of our common stock and could adversely affect our business prospects.

We are now, and believe that in light of the current U.S. governmental contracting environment we will continue to be, the subject of one or more U.S. governmental investigations. If we or one of our business units were charged with wrongdoing as a result of any U.S. governmental investigations, including violation of certain environmental or export laws, we could be suspended from bidding on or receiving awards of new U.S. governmental contracts pending the completion of legal proceedings. If convicted or found liable, we could be subject to fines, penalties, repayments and treble and other damages. Any contracts found to be tainted by fraud could be voided by the U.S. government. The U.S. government also reserves the right to prohibit a contractor from receiving new governmental contracts for fraudulent, criminal or other seriously improper conduct. Independently, failure to comply with U.S. laws and regulations related to the export of goods and technology outside the United States could result in civil or criminal penalties and suspension or termination of our export privileges.

We continue to assess the potential impact of various U.S. federal and state legislative proposals that would deny governmental contracts to U.S. companies that move their corporate location abroad. The legislative proposals could cover the 1997 acquisition of Tyco International Ltd., a Massachusetts corporation, by ADT Limited (a public company that had been located in Bermuda since the 1980's with origins dating back to the United Kingdom since the early 1900's), as a result of which ADT changed its name to Tyco International Ltd. and became the parent to the Tyco group.

We are unable to predict with any level of certainty the likelihood or final form in which any such proposed legislation might become law, the nature of regulations that may be promulgated under any future legislative enactments, or the financial impact such enactments and increased regulatory scrutiny may have on our business.

The United States Congress has in the past considered legislation affecting the tax treatment of U.S. companies that have undertaken certain types of expatriation transactions. In October 2004, the United States Congress enacted such legislation, which did not, however, retroactively apply to the 1997

acquisition of Tyco International Ltd. by ADT Limited. Legislation passed by the U.S. Senate on November 18, 2005 would have modified parts of the American Jobs Creation Act of 2004, but did not become law. We expect various U.S. Treasury Department studies to be released and tax proposals to be introduced in the United States Congress in the future and cannot provide assurance that these proposals would not have adverse effects on Tyco if enacted. Such adverse effects could include substantially reducing the tax benefits of our corporate structure, materially increasing our tax burden or otherwise adversely affecting our financial condition, results of operations or cash flows.

There is continuing negative publicity regarding, and criticism of, U.S. companies' use of, or relocation to, offshore jurisdictions, including Bermuda. As a Bermuda company, this negative publicity could harm our reputation and impair our ability to generate new business if companies or governmental agencies decline to do business with us as a result of any perceived negative public image of Bermuda companies or the possibility of our customers receiving negative media attention from doing business with a Bermuda company.

We are organized under the laws of Bermuda. It may not be possible to enforce court judgments obtained in the United States against us in Bermuda based on the civil liability provisions of the U.S. federal or state securities laws. In addition, there is some doubt as to whether the courts of Bermuda would recognize or enforce judgments of U.S. courts obtained against us or our directors or officers based on the civil liabilities provisions of the U.S. federal or state securities laws or hear actions against us or those persons based on those laws. We have been advised that the United States and Bermuda do not currently have a treaty providing for the reciprocal recognition and enforcement of judgments in civil and commercial matters. Therefore, a final judgment for the payment of money rendered by any U.S. federal or state court based on civil liability, whether or not based solely on U.S. federal or state securities laws, would not automatically be enforceable in Bermuda.

As a Bermuda company, Tyco is governed by the Companies Act 1981 of Bermuda, which differs in some material respects from laws generally applicable to United States corporations and shareholders, including, among others, differences relating to interested director and officer transactions, shareholder lawsuits and indemnification. Likewise, the duties of directors and officers of a Bermuda company are generally owed to the company only. Shareholders of Bermuda companies do not generally have a personal right of action against directors or officers of the company and may only exercise such rights of action on behalf of the company in limited circumstances. Under Bermuda law, a company may also agree to indemnify directors and officers for any personal liability, not involving fraud or dishonesty, incurred in relation to the company.

The transactions described in the table above represent the repurchase of shares by the Company, through an affiliate, from certain employees in order to satisfy employee tax withholding requirements in connection with the vesting of restricted shares.

The 2007 Annual General Meeting of Shareholders (the "Meeting") of the Company was held on March 8, 2007.

At the Meeting, a total of 1,543,490,323 common shares (78.1% of outstanding common shares as of the record date, January 12, 2007) were voted. The two Company proposals submitted at the Meeting were passed as described below.

The following is a brief description of each matter voted upon at the Meeting. Percentages indicated below reflect the percentage of the total number of common shares voted at the Meeting.

The following is a tabulation of the votes submitted in respect of Proposal 1 of the Proxy Statement. Proxies giving discretion to the chairman of the Meeting were voted in favor of each candidate. There were zero broker non-votes.

Proposal 2. A proposal to re-appoint Deloitte & Touche LLP as the independent auditors and to authorize the Audit Committee to set the auditors' remuneration:

A total of 1,534,222,388 shares (99.4%) were voted for and 6,391,915 shares (0.41%) were voted against this proposal. There were 2,876,020 abstentions and zero broker non-votes.

A Special General Meeting of Shareholders (the "Special Meeting") of the Company was also held on March 8, 2007.

At the Special Meeting, a total of 1,596,298,186 common shares (80.7% of outstanding common shares as of the record date, January 12, 2007) were voted. The two Company proposals submitted at the Special Meeting were passed as described below.

The following is a brief description of each matter voted upon at the Special Meeting. Percentages indicated below reflect the percentage of the total number of common shares voted at the Meeting.

Proposal 1. A proposal to approve a reverse stock split of the Company's common shares at a split ratio of 1 for 4:

A total of 1,585,095,604 shares (99.3%) were voted for and 9,019,179 shares (0.57%) were voted against this proposal. There were 2,183,403 abstentions and zero broker non-votes.

Proposal 2. A proposal to approve a consequential amendment to the Company's Amended & Restated Bye-Laws:

A total of 1,585,450,455 shares (99.3%) were voted for and 7,759,813 shares (0.49%) were voted against this proposal. There were 3,087,918 abstentions and zero broker non-votes.

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

		For the Quarters Ended						For the Six Months Ended
		March 30, 2007			March 31, 2006 (Restated)			March 30, 2007			March 31, 2006 (Restated)
Revenue from product sales		$	8,831		$	8,149		$	17,215		$	15,833
Service revenue			2,007			1,938			3,952			3,851

	Net revenue		10,838			10,087			21,167			19,684
Cost of product sales			6,070			5,481			11,764			10,675
Cost of services			1,215			1,200			2,382			2,379
Selling, general and administrative expenses			2,203			2,010			4,319			3,987
Separation costs			106			25			191			33
Restructuring and asset impairment charges, net			76			7			166			19
Losses (gains) on divestitures			9			(44	)		9			(41	)

	Operating income		1,159			1,408			2,336			2,632
Interest income			39			33			80			70
Interest expense			(160	)		(188	)		(327	)		(376	)
Other income (expense), net			8			(2	)		9			(3	)

	Income from continuing operations before income taxes and minority interest		1,046			1,251			2,098			2,323
Income taxes			(206	)		(290	)		(513	)		(533	)
Minority interest			(2	)		(1	)		(5	)		(4	)

	Income from continuing operations		838			960			1,580			1,786
(Loss) income from discontinued operations, net of income taxes			(3	)		(65	)		48			(298	)

	Income before cumulative effect of accounting change		835			895			1,628			1,488
Cumulative effect of accounting change, net of income taxes			—			—			—			(14	)

	Net income	$	835		$	895		$	1,628		$	1,474

Basic earnings per share:
	Income from continuing operations	$	0.42		$	0.48		$	0.80		$	0.89
	(Loss) income from discontinued operations		—			(0.04	)		0.02			(0.15	)

	Income before cumulative effect of accounting change		0.42			0.44			0.82			0.74
	Cumulative effect of accounting change		—			—			—			(0.01	)

	Net income	$	0.42		$	0.44		$	0.82		$	0.73

Diluted earnings per share:
	Income from continuing operations	$	0.42		$	0.46		$	0.78		$	0.86
	(Loss) income from discontinued operations		(0.01	)		(0.03	)		0.03			(0.14	)

	Income before cumulative effect of accounting change		0.41			0.43			0.81			0.72
	Cumulative effect of accounting change		—			—			—			(0.01	)

	Net income	$	0.41		$	0.43		$	0.81		$	0.71

Weighted-average number of shares outstanding:
	Basic		1,972			2,019			1,977			2,011
	Diluted		2,024			2,107			2,029			2,109

			March 30, 2007		September 29, 2006
Assets
Current Assets:
	Cash and cash equivalents		$	4,056	$	2,910
	Accounts receivable, less allowance for doubtful accounts of $332 and $336, respectively			7,341		7,060
	Inventories			5,337		4,793
	Other current assets			3,297		3,776

		Total current assets		20,031		18,539
Property, plant and equipment, net				9,545		9,240
Goodwill				25,096		24,872
Intangible assets, net				5,044		5,128
Other assets				4,755		5,233

		Total Assets	$	64,471	$	63,012

Liabilities and Shareholders' Equity
Current Liabilities:
	Short-term debt and current maturities of long-term debt		$	1,853	$	800
	Accounts payable			3,464		3,526
	Accrued and other current liabilities			5,800		6,031

		Total current liabilities		11,117		10,357
Long-term debt				8,609		9,340
Other liabilities				7,849		7,874

		Total Liabilities		27,575		27,571

Commitments and Contingencies (Note 11)
Minority interest				35		54
Shareholders' Equity:
	Common shares, $0.20 par value, 4,000,000,000 shares authorized; 1,980,263,362 and 1,992,120,380 shares outstanding, net of 125,993,611 and 104,982,780 shares owned by subsidiaries, respectively			396		398
	Capital in excess:
		Share premium		8,997		8,787
		Contributed surplus		14,013		14,493
	Accumulated earnings			11,925		10,692
	Accumulated other comprehensive income			1,530		1,017

		Total Shareholders' Equity		36,861		35,387

		Total Liabilities and Shareholders' Equity	$	64,471	$	63,012

				For the Six Months Ended
				March 30, 2007			March 31, 2006 (Restated)
Cash Flows From Operating Activities:
Net income				$	1,628		$	1,474
	(Income) loss from discontinued operations				(48	)		298
	Cumulative effect of accounting change				—			14

Income from continuing operations					1,580			1,786
Adjustments to reconcile net cash provided by operating activities:
	Depreciation and amortization				1,064			1,024
	Non-cash compensation expense				159			146
	Deferred income taxes				66			28
	Provision for losses on accounts receivable and inventory				129			92
	Non-cash restructuring, asset impairment and divestiture charges (credits), net				28			(35	)
	Other non-cash items				2			22
	Changes in assets and liabilities, net of the effects of acquisitions and divestitures:
		Accounts receivable, net			(149	)		(107	)
		Inventories			(526	)		(512	)
		Accounts payable			(140	)		115
		Accrued and other liabilities			(94	)		(724	)
		Income taxes, net			(24	)		(27	)
		Other			308			(164	)

			Net cash provided by operating activities		2,403			1,644

			Net cash provided by discontinued operating activities		5			8

Cash Flows From Investing Activities:
Capital expenditures					(1,069	)		(723	)
Proceeds from disposal of assets					47			17
Acquisition of businesses, net of cash acquired					(85	)		(134	)
Acquisition of customer accounts (ADT dealer program)					(176	)		(169	)
Purchase accounting and holdback liabilities					(20	)		(11	)
Divestiture of businesses, net of cash retained					307			954
Liquidation of rabbi trust investments					271			—
Decrease in investments					24			62
Decrease in restricted cash					13			31
Other					17			2

			Net cash (used in) provided by investing activities		(671	)		29

			Net cash used in discontinued investing activities		(1	)		(88	)

Cash Flows From Financing Activities:
Net proceeds (repayments) of short-term debt					191			(1,191	)
Repayment of long-term debt					—			(15	)
Proceeds from exercise of share options					212			129
Dividends paid					(395	)		(402	)
Repurchase of common shares by subsidiary					(668	)		(811	)
Transfers from (to) discontinued operations					9			(191	)
Other					25			(16	)

			Net cash used in financing activities		(626	)		(2,497	)

			Net cash (used in) provided by discontinued financing activities		(14	)		92

Effect of currency translation on cash					40			6
Net increase (decrease) in cash and cash equivalents					1,136			(806	)
Less: net decrease (increase) in cash related to discontinued operations					10			(12	)
Cash and cash equivalents at beginning of period					2,910			3,204

Cash and cash equivalents at end of period				$	4,056		$	2,386

		Number of Common Shares		Common Shares $0.20 Par Value			Share Premium		Contributed Surplus			Accumulated Earnings (Restated)			Accumulated Other Comprehensive Income (Loss) (Restated)			Total (Restated)
Balance at September 30, 2005		2,015		$	403		$	8,540	$	15,507		$	7,909		$	260		$	32,619
Comprehensive income:
	Net income												1,474						1,474
	Currency translation															(174	)		(174	)

	Total comprehensive income																		1,300
Dividends declared													(404	)					(404	)
Restricted share grants, net of forfeitures		4			1					(1	)								—
Share options exercised, net of tax expense of $2 million		7			1			127		(2	)								126
Repurchase of common shares by subsidiary		(30	)		(6	)				(805	)								(811	)
Exchange of convertible debt		54			11					1,224									1,235
Compensation expense										152									152
Other										20									20

Balance at March 31, 2006		2,050		$	410		$	8,667	$	16,095		$	8,979		$	86		$	34,237

		Number of Common Shares		Common Shares $0.20 Par Value			Share Premium		Contributed Surplus			Accumulated Earnings			Accumulated Other Comprehensive Income (Loss)		Total
Balance at September 29, 2006		1,992		$	398		$	8,787	$	14,493		$	10,692		$	1,017	$	35,387
Comprehensive income:
	Net income												1,628					1,628
	Currency translation															476		476
	Unrealized gain on marketable securities, net of tax expense of $1 million															2		2
	Minimum pension liability, net of tax expense of $23 million															35		35

	Total comprehensive income																	2,141
Dividends declared													(395	)				(395	)
Share options exercised, including tax benefit of $25 million		10			2			210		25								237
Repurchase of common shares by subsidiary		(22	)		(4	)				(664	)							(668	)
Compensation expense										159								159

Balance at March 30, 2007		1,980		$	396		$	8,997	$	14,013		$	11,925		$	1,530	$	36,861

		Quarter Ended March 31, 2006
		Amounts Previously Reported			Reclass to Discontinued Operations⁽¹⁾			Adjustments to Income Taxes			As Restated
		($ in millions, except per share data)
Consolidated Statements of Income Data:
	Revenue from product sales	$	8,262		$	(113	)	$	—		$	8,149
	Service revenue		1,944			(6	)		—			1,938
	Net revenue		10,206			(119	)		—			10,087
	Cost of product sales		5,583			(102	)		—			5,481
	Cost of services		1,202			(2	)		—			1,200
	Selling, general and administrative expenses		2,021			(11	)		—			2,010
	Restructuring and asset impairment charges, net		8			(1	)					7
	Gains on divestitures		(41	)		(3	)		—			(44	)
	Operating income		1,408			—			—			1,408
	Interest expense		(189	)		1			—			(188	)
	Income from continuing operations before income taxes and minority interest		1,250			1			—			1,251
	Income taxes		(168	)		5			(127	)		(290	)
	Minority interest		(2	)		1			—			(1	)
	Income from continuing operations		1,080			7			(127	)		960
	Loss from discontinued operations, net of income taxes		(58	)		(7	)		—			(65	)
	Income before cumulative effect of accounting change		1,022			—			(127	)		895
	Net income		1,022			—			(127	)		895
Basic earnings per share:
	Income from continuing operations	$	0.54								$	0.48
	Loss from discontinued operations		(0.03	)								(0.04	)
	Income before cumulative effect of accounting change		0.51									0.44
	Cumulative effect of accounting change		—									—
	Net income	$	0.51								$	0.44
Diluted earnings per share:
	Income from continuing operations	$	0.52								$	0.46
	Loss from discontinued operations		(0.03	)								(0.03	)
	Income before cumulative effect of accounting change		0.49									0.43
	Cumulative effect of accounting change		—									—
	Net income	$	0.49								$	0.43

		Six Months Ended March 31, 2006
		Amounts Previously Reported			Reclass to Discontinued Operations⁽¹⁾			Adjustments to Income Taxes			As Restated
		($ in millions, except per share data)
Consolidated Statements of Income Data:
	Revenue from product sales	$	16,049		$	(216	)	$	—		$	15,833
	Service revenue		3,863			(12	)		—			3,851
	Net revenue		19,912			(228	)		—			19,684
	Cost of product sales		10,873			(198	)		—			10,675
	Cost of services		2,383			(4	)		—			2,379
	Selling, general and administrative expenses		4,008			(21	)		—			3,987
	Restructuring and asset impairment charges, net		20			(1	)					19
	Gains on divestitures		(38	)		(3	)		—			(41	)
	Operating income		2,633			(1	)		—			2,632
	Interest expense		(378	)		2			—			(376	)
	Income from continuing operations before income taxes and minority interest		2,322			1			—			2,323
	Income taxes		(430	)		1			(104	)		(533	)
	Minority interest		(5	)		1			—			(4	)
	Income from continuing operations		1,887			3			(104	)		1,786
	Loss from discontinued operations, net of income taxes		(295	)		(3	)		—			(298	)
	Income before cumulative effect of accounting change		1,592			—			(104	)		1,488
	Net income⁽²⁾		1,578			—			(104	)		1,474
Basic earnings per share:
	Income from continuing operations	$	0.94								$	0.89
	Loss from discontinued operations		(0.15	)								(0.15	)
	Income before cumulative effect of accounting change		0.79									0.74
	Cumulative effect of accounting change		(0.01	)								(0.01	)
	Net income	$	0.78								$	0.73
Diluted earnings per share:
	Income from continuing operations	$	0.91								$	0.86
	Loss from discontinued operations		(0.14	)								(0.14	)
	Income before cumulative effect of accounting change		0.77									0.72
	Cumulative effect of accounting change		—									(0.01	)
	Net income	$	0.77								$	0.71

	Six Months Ended March 31, 2006
	Amounts Previously Reported			Reclassifications⁽¹⁾			Adjustments to Income Taxes			As Restated
	($ in millions)
Consolidated Cash Flow Data:
Net income⁽²⁾	$	1,578		$	—		$	(104	)	$	1,474
Loss from discontinued operations		295			3			—			298
Cumulative effect of accounting change⁽²⁾		14			—			—			14
Income from continuing operations		1,887			3			(104	)		1,786
Depreciation and amortization		1,035			(11	)		—			1,024
Non-cash compensation expense		152			(6	)		—			146
Deferred income taxes		51			—			(23	)		28
Other non-cash items		26			(4	)		—			22
Accounts receivable, net		(119	)		12			—			(107	)
Inventories		(517	)		5			—			(512	)
Accounts payable		114			1			—			115
Accrued and other liabilities		(732	)		8			—			(724	)
Income taxes, net		(156	)		2			127			(27	)
Net cash provided by operating activities		1,634			10			—			1,644
Net cash provided by discontinued operating activities		5			3			—			8
Capital expenditures		(729	)		6			—			(723	)
Purchase accounting and holdback liabilities		(86	)		75			—			(11	)
Divestitures of businesses, net of cash retained		960			(6	)		—			954
Net cash used in investing activities		(46	)		75			—			29
Net cash used in discontinued investing activities		(6	)		(82	)		—			(88	)
Net repayment of short-term debt		(1,214	)		23			—			(1,191	)
Repayment of long-term debt		(13	)		(2	)					(15	)
Transfers to discontinued operations		(85	)		(106	)		—			(191	)
Other		(15	)		(1	)		—			(16	)
Net cash used in financing activities		(2,411	)		(86	)		—			(2,497	)
Net cash provided by discontinued financing activities		10			82			—			92
Net decrease in cash and cash equivalents		(808	)		2			—			(806	)
Less: net increase in cash related to discontinued operations		(9	)		(3	)		—			(12	)
Cash and cash equivalents at beginning of year		3,206			(2	)		—			3,204
Cash and cash equivalents at end of year		2,389			(3	)		—			2,386

		Quarter Ended March 30, 2007					Quarter Ended March 31, 2006
		Income		Shares	Per Share		Income (Restated)		Shares	Per Share (Restated)
Basic earnings per share:
	Income from continuing operations	$	838	1,972	$	0.42	$	960	2,019	$	0.48
	Share options, restricted share awards and deferred stock units		—	18				—	14
	Exchange of convertible debt		4	34				10	74

Diluted earnings per share:
	Income from continuing operations, giving effect to dilutive adjustments	$	842	2,024	$	0.42	$	970	2,107	$	0.46

	Electronics		Fire and Security			Healthcare			Engineered Products and Services			Total
Balance at September 29, 2006	$	7,452	$	8,084		$	6,127		$	3,209		$	24,872
Purchase accounting adjustments		1		(1	)		(15	)		—			(15	)
Acquisitions		—		7			43			—			50
Divestitures		—		—			—			(1	)		(1	)
Impairments		—		—			—			(3	)		(3	)
Currency translation		19		90			17			67			193

Balance at March 30, 2007	$	7,472	$	8,180		$	6,172		$	3,272		$	25,096

		March 30, 2007					September 29, 2006
		Gross Carrying Amount		Accumulated Amortization		Weighted Average Amortization Period	Gross Carrying Amount		Accumulated Amortization		Weighted Average Amortization Period
Amortizable:
	Contracts and related customer relationships	$	5,527	$	3,297	12 years	$	5,319	$	3,046	12 years
	Intellectual property		3,269		1,269	20 years		3,213		1,169	20 years
	Other		214		76	28 years		200		70	28 years

	Total	$	9,010	$	4,642	16 years	$	8,732	$	4,285	16 years

Non-Amortizable:
	Intellectual property	$	648				$	653
	Other		28					28

	Total	$	676				$	681

	March 30, 2007		September 29, 2006
6.125% Euro denominated public notes due 2007⁽¹⁾⁽²⁾	$	801	$	762
Revolving bank credit facility due 2007⁽¹⁾		700		700
Bank overdraft⁽¹⁾		195		—
6.5% notes due 2007⁽¹⁾		100		100
6.125% public notes due 2008		399		399
7.2% notes due 2008		86		86
5.5% Euro denominated notes due 2008		911		869
6.125% public notes due 2009		399		399
6.75% public notes due 2011		999		999
6.375% public notes due 2011		1,500		1,500
6.5% British Pound denominated public notes due 2011		392		373
6.0% notes due 2013		997		997
7.0% debentures due 2013		87		86
3.125% convertible senior debentures due 2023		750		750
7.0% public notes due 2028		497		497
6.875% public notes due 2029		791		790
6.5% British Pound denominated public notes due 2031		557		536
Other⁽¹⁾⁽²⁾		301		297

Total debt		10,462		10,140
Less current portion		1,853		800

Long-term debt	$	8,609	$	9,340

			Tyco International Ltd.		Tyco International Group S.A.		Other Subsidiaries			Consolidating Adjustments			Total
Assets
Current Assets:
	Cash and cash equivalents		$	2	$	1,158	$	1,750		$	—		$	2,910
	Accounts receivable, net			—		—		7,060			—			7,060
	Inventories			—		—		4,793			—			4,793
	Intercompany receivables			1,468		671		23,253			(25,392	)		—
	Other current assets			37		72		3,667			—			3,776

		Total current assets		1,507		1,901		40,523			(25,392	)		18,539
Property, plant and equipment, net				—		—		9,240			—			9,240
Goodwill				—		—		24,872			—			24,872
Intangible assets, net				—		—		5,128			—			5,128
Investment in subsidiaries				60,920		35,802		—			(96,722	)		—
Intercompany loans receivable				—		23,039		18,615			(41,654	)		—
Other assets				—		96		5,137			—			5,233

		Total Assets	$	62,427	$	60,838	$	103,515		$	(163,768	)	$	63,012

Liabilities and Shareholders' Equity
Current Liabilities:
	Short-term debt and current maturities of long-term debt		$	—	$	762	$	38		$	—		$	800
	Accounts payable			2		—		3,524			—			3,526
	Accrued and other current liabilities			213		254		5,564			—			6,031
	Intercompany payables			7,101		16,152		2,139			(25,392	)		—

		Total current liabilities		7,316		17,168		11,265			(25,392	)		10,357
Long-term debt				—		8,790		550			—			9,340
Intercompany loans payable				19,722		—		21,932			(41,654	)		—
Other liabilities				2		6		7,866			—			7,874

		Total Liabilities		27,040		25,964		41,613			(67,046	)		27,571
Minority interest				—		—		54			—			54
Shareholders' Equity:
	Preference shares			—		—		13,070			(13,070	)		—
	Common shares			419		1		(21	)		(1	)		398
	Other shareholders' equity			34,968		34,873		48,799			(83,651	)		34,989

		Total Shareholders' Equity		35,387		34,874		61,848			(96,722	)		35,387

		Total Liabilities and Shareholders' Equity	$	62,427	$	60,838	$	103,515		$	(163,768	)	$	63,012

		Tyco International Ltd.			Tyco International Group S.A.			Other Subsidiaries			Consolidating Adjustments			Total
Cash Flows From Operating Activities:
	Net cash (used in) provided by operating activities	$	(652	)	$	1,179		$	1,876		$	—		$	2,403
	Net cash provided by discontinued operating activities		—			—			5			—			5
Cash Flows From Investing Activities:
Capital expenditures			—			—			(1,069	)		—			(1,069	)
Proceeds from disposal of assets			—			—			47			—			47
Acquisition of businesses, net of cash acquired			—			—			(85	)		—			(85	)
Acquisition of customer accounts (ADT dealer program)			—			—			(176	)		—			(176	)
Purchase accounting and holdback liabilities			—			—			(20	)		—			(20	)
Divestiture of businesses, net of cash retained			—			—			307			—			307
Increase in intercompany loans			—			(636	)		—			636			—
Liquidation of rabbi trust investments			—			—			271			—			271
(Increase) decrease in investments			—			(2	)		26			—			24
Decrease in restricted cash			—			—			13			—			13
Other			—			—			17			—			17

	Net cash used in investing activities		—			(638	)		(669	)		636			(671	)
	Net cash used in discontinued investing activities		—			—			(1	)		—			(1	)
Cash Flows From Financing Activities:
Net proceeds (repayments) of debt			—			195			(4	)		—			191
Proceeds from exercise of share options			—			—			212			—			212
Dividends paid			(395	)		—			—			—			(395	)
Repurchase of common shares by subsidiary			—			—			(668	)		—			(668	)
Loan borrowings from (repayments to) affiliate			859			—			(223	)		(636	)		—
Transfers to discontinued operations			—			—			9			—			9
Other			190			—			(165	)		—			25

	Net cash provided by (used in) financing activities		654			195			(839	)		(636	)		(626	)
	Net cash used in discontinued financing activities		—			—			(14	)		—			(14	)
Effect of currency translation on cash			—			—			40			—			40
Net increase in cash and cash equivalents			2			736			398			—			1,136
Less: net decrease in cash related to discontinued operations			—			—			10			—			10
Cash and cash equivalents at beginning of period			2			1,158			1,750			—			2,910

Cash and cash equivalents at end of period		$	4		$	1,894		$	2,158		$	—		$	4,056

		Tyco International Ltd.			Tyco International Group S.A.			Other Subsidiaries			Consolidating Adjustments			Total
Cash Flows From Operating Activities:
	Net cash provided by (used in) operating activities	$	300		$	(445	)	$	1,789		$	—		$	1,644
	Net cash provided by discontinued operating activities		—			—			8			—			8
Cash Flows From Investing Activities:
Capital expenditures			—			—			(723	)		—			(723	)
Proceeds from disposal of assets			—			—			17			—			17
Acquisition of businesses, net of cash acquired			—			—			(134	)		—			(134	)
Acquisition of customer accounts (ADT dealer program)			—			—			(169	)		—			(169	)
Purchase accounting and holdback liabilities			—			—			(11	)		—			(11	)
Divestiture of businesses, net of cash retained			—			—			954			—			954
Decrease in intercompany loans			—			1,346			—			(1,346	)		—
Decrease (increase) in investments			—			99			(37	)		—			62
Decrease in restricted cash			—			—			31			—			31
Other			—			—			2			—			2

	Net cash provided by (used in) investing activities		—			1,445			(70	)		(1,346	)		29
	Net cash used in discontinued investing activities		—			—			(88	)		—			(88	)
Cash Flows From Financing Activities:
Net repayments of debt			(1	)		(1,001	)		(204	)		—			(1,206	)
Proceeds from exercise of share options			101			—			28			—			129
Dividends paid			(402	)		—			—			—			(402	)
Repurchase of common shares by subsidiary			—			—			(811	)		—			(811	)
Loan repayments to parent			—			—			(1,346	)		1,346			—
Transfers to discontinued operations			—			—			(191	)		—			(191	)
Other			—			—			(16	)		—			(16	)

	Net cash used in financing activities		(302	)		(1,001	)		(2,540	)		1,346			(2,497	)
	Net cash provided by discontinued financing activities		—			—			92			—			92
Effect of currency translation on cash			—			—			6			—			6
Net decrease in cash and cash equivalents			(2	)		(1	)		(803	)		—			(806	)
Less: net increase in cash related to discontinued operations			—			—			(12	)		—			(12	)
Cash and cash equivalents at beginning of period			3			1,204			1,997			—			3,204

Cash and cash equivalents at end of period		$	1		$	1,203		$	1,182		$	—		$	2,386

Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares That May Yet Be Purchased Under Publicly Announced Plans or Programs
12/30/06–1/26/07	6,760	$	30.87	—	—
1/27/07–3/2/07	—		—	—	—
3/3/07–3/30/07	236,837	$	31.82	—	—

	NUMBER OF VOTES FOR	% OF QUORUM		NUMBER OF VOTES WITHHELD
Dennis C. Blair	1,532,936,485	99.3	%	10,553,838
Edward D. Breen	1,529,960,203	99.1	%	13,530,120
Brian Duperreault	1,534,148,227	99.4	%	9,342,096
Bruce S. Gordon	1,534,186,984	99.4	%	9,303,339
Rajiv L. Gupta	1,533,481,811	99.4	%	10,008,512
John A. Krol	1,534,076,680	99.4	%	9,413,643
H. Carl McCall	1,533,364,599	99.3	%	10,125,724
Brendan R. O'Neill	1,533,423,138	99.3	%	10,067,185
William S. Stavropoulos	1,531,358,376	99.2	%	12,131,947
Sandra S. Wijnberg	1,534,040,299	99.4	%	9,450,024
Jerome B. York	1,520,062,754	98.5	%	23,427,569

Exhibit Number		Exhibit
10.1		Settlement Agreement, dated April 10, 2007, between Tyco Electronics AMP Gmbh, Tyco Electronics Logistics, Tyco International Ltd. and Juergen Gromer (filed herewith).
10.2		Bridge Loan Agreement, dated as of April 25, 2007, among Tyco International Group S.A., Tyco International Ltd., Tyco International Finance S.A., the Lenders party thereto, and Citibank, N.A. as Administrative Agent (Incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on April 27, 2007).
10.3		Bridge Loan Agreement, dated as of April 25, 2007, among Tyco International Group S.A., Tyco International Ltd., Covidien International Finance S.A., Covidien Ltd., the Lenders party thereto, and Citibank, N.A. as Administrative Agent (Incorporated by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed on April 27, 2007).
10.4		Bridge Loan Agreement, dated as of April 25, 2007, among Tyco International Group S.A., Tyco International Ltd., Tyco Electronics Group S.A., Tyco Electronics Ltd., the Lenders party thereto, and Bank of America, N.A. as Administrative Agent (Incorporated by reference to Exhibit 10.3 to the Registrant's Current Report on Form 8-K filed on April 27, 2007).
10.5		Credit Agreement, dated as of April 25, 2007, among Tyco International Finance S.A., Tyco International Ltd., the Lenders party thereto, and Citibank, N.A. as Administrative Agent (Incorporated by reference to Exhibit 10.4 to the Registrant's Current Report on Form 8-K filed on April 27, 2007).
10.6		Credit Agreement, dated as of April 25, 2007, among Covidien International Finance S.A., Tyco International Ltd., Covidien Ltd., the Lenders party thereto, and Citibank, N.A. as Administrative Agent (Incorporated by reference to Exhibit 10.5 to the Registrant's Current Report on Form 8-K filed on April 27, 2007).
10.7		Credit Agreement, dated as of April 25, 2007, among Tyco Electronics Group S.A., Tyco International Ltd., Tyco Electronics Ltd., the Lenders party thereto, and Bank of America, N.A. as Administrative Agent (Incorporated by reference to Exhibit 10.6 to the Registrant's Current Report on Form 8-K filed on April 27, 2007).
31.1		Certification by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.2		Certification by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.1		Certification by the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

	TYCO INTERNATIONAL LTD.
	By:	/s/ CHRISTOPHER J. COUGHLIN Christopher J. Coughlin Executive Vice President and Chief Financial Officer (Principal Financial Officer)
Date: May 8, 2007