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

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

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

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

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

	For the Quarters Ended						For the Nine Months Ended

	June 29, 2012			June 24, 2011			June 29, 2012			June 24, 2011
Revenue from product sales	$	2,480		$	2,335		$	7,180		$	6,960
Service revenue		1,980			1,957			5,841			5,702

Net revenue		4,460			4,292			13,021			12,662
Cost of product sales		1,692			1,629			4,931			4,870
Cost of services		1,004			1,011			2,984			2,963
Selling, general and administrative expenses		1,293			1,142			3,525			3,364
Separation costs (see Note 2)		61			—			159			—
Restructuring, asset impairments and divestiture charges (gains), net (see Notes 3 and 4)		43			35			99			(153	)

Operating income		367			475			1,323			1,618
Interest income		6			7			19			25
Interest expense		(63	)		(59	)		(182	)		(184	)
Other expense, net		(5	)		(3	)		(19	)		(9	)

Income from continuing operations before income taxes		305			420			1,141			1,450
Income tax expense		(53	)		(58	)		(221	)		(278	)

Income from continuing operations		252			362			920			1,172
(Loss) income from discontinued operations, net of income taxes		(10	)		(4	)		(17	)		161

Net income		242			358			903			1,333
Less: noncontrolling interest in subsidiaries net income		—			(1	)		1			—

Net income attributable to Tyco common shareholders	$	242		$	359		$	902		$	1,333

Amounts attributable to Tyco common shareholders:
Income from continuing operations	$	252		$	363		$	919		$	1,172
(Loss) income from discontinued operations		(10	)		(4	)		(17	)		161

Net income attributable to Tyco common shareholders	$	242		$	359		$	902		$	1,333

Basic earnings per share attributable to Tyco common shareholders:
Income from continuing operations	$	0.54		$	0.78		$	1.98		$	2.46
(Loss) income from discontinued operations		(0.02	)		(0.01	)		(0.03	)		0.34

Net income attributable to Tyco common shareholders	$	0.52		$	0.77		$	1.95		$	2.80

Diluted earnings per share attributable to Tyco common shareholders:
Income from continuing operations	$	0.54		$	0.76		$	1.96		$	2.44
(Loss) income from discontinued operations		(0.03	)		—			(0.04	)		0.33

Net income attributable to Tyco common shareholders	$	0.51		$	0.76		$	1.92		$	2.77

Weighted average number of shares outstanding:
Basic		463			468			463			476
Diluted		470			475			469			481

TYCO INTERNATIONAL LTD.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in millions, except per share data)

	June 29, 2012			September 30, 2011

Assets
Current Assets:
Cash and cash equivalents	$	1,118		$	1,390
Accounts receivable, less allowance for doubtful accounts of $120 and $110, respectively		2,475			2,400
Inventories		1,552			1,343
Prepaid expenses and other current assets		1,099			896
Deferred income taxes		402			402
Assets held for sale		—			2

Total current assets		6,646			6,433
Property, plant and equipment, net		4,173			4,051
Goodwill		10,029			9,999
Intangible assets, net		3,750			3,628
Other assets		2,470			2,666

Total Assets	$	27,068		$	26,777

Liabilities and Equity
Current Liabilities:
Loans payable and current maturities of long-term debt	$	16		$	2
Accounts payable		1,389			1,278
Accrued and other current liabilities		2,244			2,407
Deferred revenue		686			643

Total current liabilities		4,335			4,330
Long-term debt		4,149			4,146
Deferred revenue		1,150			1,143
Other liabilities		2,912			2,878

Total Liabilities		12,546			12,497

Commitments and Contingencies (see Note 11)
Redeemable noncontrolling interest (see Note 14)		106			93

Tyco Shareholders' Equity:
Common shares, CHF 6.70 par value, 825,222,070 shares authorized, 486,414,669 shares issued as of both June 29, 2012 and September 30, 2011		2,792			2,792
Common shares held in treasury, 26,640,722 and 21,790,502 shares, as of June 29, 2012 and September 30, 2011, respectively		(1,205	)		(951	)
Contributed surplus		10,441			10,717
Accumulated earnings		2,960			2,058
Accumulated other comprehensive loss		(588	)		(434	)

Total Tyco Shareholders' Equity		14,400			14,182
Nonredeemable noncontrolling interest		16			5

Total Equity		14,416			14,187

Total Liabilities, Redeemable Noncontrolling Interest and Equity	$	27,068		$	26,777

TYCO INTERNATIONAL LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in millions)

	For the Nine Months Ended

	June 29, 2012			June 24, 2011
Cash Flows From Operating Activities:
Net income attributable to Tyco common shareholders	$	902		$	1,333
Noncontrolling interest in subsidiaries net income		1			—
Loss (income) from discontinued operations, net of income taxes		17			(161	)

Income from continuing operations		920			1,172
Adjustments to reconcile net cash provided by operating activities:
Depreciation and amortization		1,021			976
Non-cash compensation expense		80			86
Deferred income taxes		72			119
Provision for losses on accounts receivable and inventory		90			61
Loss (gain) on divestitures		17			(227	)
Other non-cash items		77			54
Changes in assets and liabilities, net of the effects of acquisitions and divestitures:
Accounts receivable, net		(119	)		(183	)
Contracts in progress		(34	)		(47	)
Inventories		(233	)		(195	)
Prepaid expenses and other current assets		(137	)		(18	)
Accounts payable		83			(53	)
Accrued and other liabilities		(75	)		(172	)
Deferred revenue		50			39
Other		18			8

Net cash provided by operating activities		1,830			1,620

Net cash used in discontinued operating activities		—			(8	)

Cash Flows From Investing Activities:
Capital expenditures		(694	)		(548	)
Proceeds from disposal of assets		9			7
Acquisition of businesses, net of cash acquired		(217	)		(228	)
Acquisition of dealer generated customer accounts and bulk account purchases		(512	)		(451	)
Divestiture of businesses, net of cash divested		(4	)		711
Other		59			(6	)

Net cash used in investing activities		(1,359	)		(515	)

Net cash provided by discontinued investing activities		—			259

Cash Flows From Financing Activities:
Proceeds from issuance of short-term debt		1,224			161
Repayment of short-term debt		(1,225	)		(653	)
Proceeds from issuance of long-term debt		—			497
Repayment of long-term debt		(3	)		(3	)
Proceeds from exercise of share options		140			112
Dividends paid		(346	)		(342	)
Repurchase of common shares by treasury		(500	)		(1,300	)
Transfer from discontinued operations		—			251
Other		(22	)		9

Net cash used in financing activities		(732	)		(1,268	)

Net cash used in discontinued financing activities		—			(251	)

Effect of currency translation on cash		(11	)		27

Net decrease in cash and cash equivalents		(272	)		(136	)
Decrease in cash and cash equivalents from deconsolidation of variable interest entity		—			(10	)
Cash and cash equivalents at beginning of period		1,390			1,775

Cash and cash equivalents at end of period	$	1,118		$	1,629

TYCO INTERNATIONAL LTD.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)

For the Nine Months Ended June 29, 2012 and June 24, 2011

(in millions)

			Common Shares at Par Value			Treasury Shares			Contributed Surplus			Accumulated Earnings			Accumulated Other Comprehensive (Loss) Income			Total Tyco Shareholders' Equity			Nonredeemable Noncontrolling Interest			Total Equity

Balance as of September 24, 2010	488		$	2,948		$	(976	)	$	12,121		$	312		$	(321	)	$	14,084		$	17		$	14,101
Comprehensive income:
Net income													1,333						1,333			—			1,333
Deconsolidation of variable interest entity due to adoption of an accounting standard																			—			(11	)		(11	)
Currency translation, net of income tax expense of $1 million																289			289						289
Unrealized loss on marketable securities																(1	)		(1	)					(1	)
Retirement plans, net of income tax expense of $5 million																43			43						43

Total comprehensive income																			1,664			(11	)		1,653
Cancellation of treasury shares				(160	)		1,075			(915	)								—						—
Dividends declared (See Note 13)				4						(465	)								(461	)					(461	)
Shares issued from treasury for vesting of share based equity awards	6						218			(106	)								112						112
Repurchase of common shares	(30	)					(1,300	)											(1,300	)					(1,300	)
Compensation expense										86									86						86
Other							(5	)					(3	)					(8	)		(1	)		(9	)

Balance as of June 24, 2011	464		$	2,792		$	(988	)	$	10,721		$	1,642		$	10		$	14,177		$	5		$	14,182

			Common Shares at Par Value		Treasury Shares			Contributed Surplus			Accumulated Earnings		Accumulated Other Comprehensive (Loss) Income			Total Tyco Shareholders' Equity			Nonredeemable Noncontrolling Interest			Total Equity

Balance as of September 30, 2011	465		$	2,792	$	(951	)	$	10,717		$	2,058	$	(434	)	$	14,182		$	5		$	14,187
Comprehensive income:
Net income (loss)												902					902			(1	)		901
Currency translation, net of income tax expense of $1 million														(166	)		(166	)					(166	)
Unrealized gain on marketable securities and derivative instruments, net of income tax benefit of $3 million														1			1						1
Retirement plans, net of income tax expense of $6 million														11			11						11

Total comprehensive income																	748			(1	)		747
Dividends declared (See Note 13)									(229	)							(229	)					(229	)
Shares issued from treasury for vesting of share based equity awards	6					268			(128	)							140						140
Repurchase of common shares	(11	)				(500	)										(500	)					(500	)
Compensation expense									81								81						81
Noncontrolling interest related to acquisitions																	—			13			13
Other						(22	)										(22	)		(1	)		(23	)

Balance as of June 29, 2012	460		$	2,792	$	(1,205	)	$	10,441		$	2,960	$	(588	)	$	14,400		$	16		$	14,416

Basis of Presentation—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 unaudited Consolidated Financial Statements include the consolidated results of Tyco International Ltd., a corporation organized under the laws of Switzerland, and its subsidiaries (Tyco and all its subsidiaries, hereinafter collectively referred to as the "Company" or "Tyco"). The Consolidated Financial Statements have been prepared in United States dollars ("USD") and in accordance with the instructions to Form 10-Q under the Securities Exchange Act of 1934, as amended. The results reported in these Consolidated Financial Statements should not be taken as indicative of results that may be expected for the entire year. These financial statements should be read in conjunction with the Consolidated Financial Statements and accompanying notes contained in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2011 (the "2011 Form 10-K").

Effective in the Company's second fiscal quarter of 2012, the Company reorganized its reportable segments to more closely align with its reporting and management structure, which had been realigned in anticipation of the spin-offs of the Company's ADT North American residential security business and its flow control business. See Note 2. Under the new reporting structure, the former Tyco Security Solutions segment was split between the new ADT North American Residential segment and the new Commercial Fire and Security segment. The new ADT North American Residential segment consists of the residential and small business security business in the United States and Canada that was formerly part of the Tyco Security Solutions segment. The new Commercial Fire and Security segment consists of (i) the former Tyco Fire Protection segment, (ii) the North American commercial security business that was formerly part of the Tyco Security Solutions segment, along with all of the security businesses outside of the United States and Canada, and (iii) the security products business that was formerly part of the Tyco Security Solutions segment. The Company's Flow Control segment continues as it has been historically constituted. As a result, prior period segment amounts have been recast to the current period presentation. See Note 16. The recast financial data does not constitute stand-alone historical financial statements for the entities that will be distributed in the spin-offs (and, in the case of Flow Control, the subsequent merger with Pentair, Inc. ("Pentair") (See Note 2)) and does not reflect any adjustments that are likely to be reflected therein. The combined historical financial statements for the entities to be distributed are contained in documents filed with the U.S. Securities and Exchange commission ("SEC") in connection with the spin-offs and associated transactions.

As a result of this realignment, the Company has three reportable segments: Commercial Fire and Security, ADT North American Residential and Flow Control.

References to 2012 and 2011 are to Tyco's fiscal quarters ending June 29, 2012 and June 24, 2011, respectively, unless otherwise indicated.

The Company has a 52 or 53-week fiscal year that ends on the last Friday in September. Fiscal year 2012 will be a 52-week year, whereas fiscal 2011 was a 53-week year.

Reclassifications—During the second quarter of fiscal 2012, the Company reclassified a business which satisfied the criteria to be presented as discontinued operations to (loss) income from discontinued operations, net of income taxes in the Consolidated Statements of Operations and assets held for sale within the Consolidated Balance Sheet. See Note 3. In addition, prior period segment

1. Basis of Presentation and Summary of Significant Accounting Policies (Continued)

amounts have been recast to conform to the current period presentation as a result of the segment realignment discussed above. See Note 16.

Recently Issued Accounting Pronouncements—In June 2011, the FASB issued authoritative guidance for the presentation of comprehensive income. The guidance amended the reporting of Other Comprehensive Income ("OCI") by eliminating the option to present OCI as part of the Consolidated Statement of Shareholders' Equity. The amendment will not impact the accounting for OCI, but only its presentation in the Company's Consolidated Financial Statements. The guidance requires that items of net income and OCI be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements which include total net income and its components, consecutively followed by total OCI and its components to arrive at total comprehensive income. In December 2011, the FASB issued authoritative guidance to defer the effective date for those aspects of the guidance relating to the presentation of reclassification adjustments out of accumulated other comprehensive income by component. The guidance must be applied retrospectively and is effective for Tyco in the first quarter of fiscal 2013.

In September 2011, the FASB issued authoritative guidance which expanded and enhanced the existing disclosure requirements related to multi-employer pension and other postretirement benefit plans. The amendments require additional quantitative and qualitative disclosures to provide more detailed information regarding these plans including: the significant multi-employer plans in which the Company participates, the level of the Company's participation and contributions with respect to such plans, the financial health of such plans and an indication of funded status. These disclosures are intended to provide users of financial statements with a better understanding of the employer's involvement in multi-employer benefit plans. The guidance must be applied retrospectively and is effective for Tyco in fiscal 2012 and will be adopted concurrent with the pension disclosures associated with the Company's annual valuation process during the fourth quarter of fiscal 2012. The Company is currently assessing what impact, if any, the guidance will have on its annual disclosures.

In September 2011, the FASB issued authoritative guidance which amends the process of testing goodwill for impairment. The guidance permits an entity to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not (defined as having a likelihood of more than fifty percent) that the fair value of a reporting unit is less than its carrying amount. If an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, performing the traditional two step goodwill impairment test is unnecessary. If an entity concludes otherwise, it would be required to perform the first step of the two step goodwill impairment test. If the carrying amount of the reporting unit exceeds its fair value, then the entity is required to perform the second step of the goodwill impairment test. However, an entity has the option to bypass the qualitative assessment in any period and proceed directly to step one of the impairment test. The guidance is effective for Tyco for interim and annual impairment testing beginning in the first quarter of fiscal 2013.

On September 19, 2011, the Company announced that its Board of Directors ("the Board") approved a plan to separate the Company into three separate, publicly traded companies consisting of the Company's North American residential security business, its flow control business, and its commercial fire and security business by spinning off the North American residential security business and flow control business in a tax-free pro rata distribution to shareholders. On March 28, 2012, the

Company announced that it entered into a definitive agreement to combine its flow control business with Pentair, Inc. ("Pentair") in a tax-free, all-stock merger ("the Merger"), immediately following the spin off of the flow control business. Upon completion of the Merger, which has been unanimously approved by the Boards of both companies, Tyco shareholders are expected to own approximately 52.5% of the combined company and Pentair shareholders are expected to own approximately 47.5%. Completion of the separation transactions, including the Merger, is subject to the approval of the distributions by Tyco shareholders, the approval of the Merger by Pentair shareholders, regulatory approvals and customary closing conditions. The distributions, the Merger and related transactions are collectively referred to herein as the "2012 Separation".

During the quarter and nine months ended June 29, 2012, the Company incurred aggregate separation related charges of $72 million and $195 million, respectively, which primarily related to professional fees, as well as costs related to the Merger. The Company did not incur any separation related charges during the quarter and nine months ended June 24, 2011. Separation costs were classified in the Company's Consolidated Statement of Operations as follows ($ in millions):

The Company has continued to assess the strategic fit of its various businesses and has pursued divestiture of certain businesses which do not align with its long-term strategy.

During the second quarter of fiscal 2012, the Company sold its Fire Equipment de Mexico, S.A. ("FEMSA") business, which was part of the Company's Commercial Fire and Security segment. The sale was completed for approximately $1 million of cash consideration and a pre-tax loss of $3 million was recorded in (loss) income from discontinued operations, net of income taxes in the Company's Consolidated Statements of Operations.

Additionally, the quarter and nine months ended June 29, 2012 include $10 million and $21 million of income tax expense associated with pre-2007 Separation tax liabilities, which was recorded in (loss) income from discontinued operations, net of income taxes in the Company's Consolidated Statements of Operations. During the quarter ended June 29, 2012, the Company was reimbursed $8 million pursuant to a tax sharing agreement (the "2007 Tax Sharing Agreement") entered into in conjunction with the spin-offs of Covidien and TE Connectivity (the "2007 Separation"), which had been recorded in (loss) income from discontinued operations, net of income taxes in the Company's Consolidated Statements of Operations, during the second quarter of fiscal 2012.

On November 9, 2010, the Company announced that it entered into an investment agreement (the "Agreement") to sell a majority interest in its Electrical and Metal Products business to an affiliate of the private equity firm Clayton, Dubilier & Rice, LLC (the "Investor" or "CD&R"). The Company formed a newly incorporated holding company, Atkore International Group Inc. ("Atkore"), to hold the Company's Electrical and Metal Products business. On December 22, 2010, the transaction closed and the Investor acquired shares of a newly-created class of cumulative convertible preferred stock of Atkore (the "Preferred Stock"). The Preferred Stock initially represented 51% of the outstanding capital stock (on an as-converted basis) of Atkore. In connection with the closing, the Company received cash proceeds of approximately $713 million and recorded a gain of $259 million, which included $33 million of cumulative translation gain, during the first quarter of fiscal 2011. During the quarter and nine months ended June 24, 2011, the Company recorded net working capital adjustments of $2 million and $11 million, respectively, that reduced the gain on disposal. The gain on disposal is recorded within restructuring, asset impairment and divestiture charges (gains), net in the Company's Consolidated Statements of Operations.

In accordance with the terms and conditions of the Agreement, CD&R is entitled to a quarterly dividend which is payable in cash or in shares of Preferred Stock, at the discretion of Atkore. Since the closing of the transaction, Atkore has elected to pay CD&R's quarterly dividend in shares of Preferred Stock, which has diluted the Company's ownership in Atkore. As of June 29, 2012, the Company's ownership percentage was approximately 45%. Tyco's retained ownership interest in Atkore is accounted for under the equity method of accounting and is recorded in other assets in the Company's Consolidated Balance Sheet as of June 29, 2012 and September 30, 2011. The Company's proportionate share of Atkore's net loss is recorded within other expense, net in the Company's Consolidated Statements of Operations. The Company recorded an equity loss of $6 million and $17 million for the quarter and nine months ended June 29, 2012, respectively, and equity income of $9 million and $2 million for the quarter and nine months ended June 24, 2011, respectively.

On September 30, 2010, the Company sold its European water business, which was part of the Company's Flow Control segment. The sale was completed for approximately $264 million in cash proceeds, net of $7 million of cash divested on sale, and a pre-tax gain of $168 million was recorded, which was largely exempt from tax. The gain was recorded in (loss) income from discontinued operations, net of income taxes in the Company's Consolidated Statement of Operations.

Net revenue, pre-tax loss from discontinued operations, pre-tax income on sale of discontinued operations, income tax provision and (loss) income from discontinued operations, net of income taxes are as follows ($ in millions):

There were no material pending divestitures as of June 29, 2012. Balance sheet information for material pending divestitures as of September 30, 2011 was as follows ($ in millions):

During the quarter and nine months ended June 29, 2012, the Company recorded a net loss of $14 million and $17 million, respectively, in restructuring, asset impairments and divestiture charges (gains), net in the Company's Consolidated Statements of Operations primarily in connection with an indemnification of approximately $8 million for both periods resulting from the divestiture of the Company's Electrical and Metal Products business and the divestiture and write-down to fair value less cost to sell of certain businesses that did not meet the criteria for discontinued operations.

During the quarter and nine months ended June 24, 2011, the Company recorded a net loss of $6 million and a net gain of $227 million, respectively, in restructuring, asset impairments and divestiture charges (gain), net in the Company's Consolidated Statements of Operations in connection with the divestiture and write-down to fair value less cost to sell of certain businesses that did not meet the criteria for discontinued operations. The net gain for the nine months ended June 24, 2011 includes a gain of $248 million, net of working capital adjustments, recognized in conjunction with the sale of a majority interest in the Company's Electrical and Metal Products business, as discussed above.

The Company continues to identify and pursue opportunities for cost savings through restructuring activities and workforce reductions to improve operating efficiencies across the Company's businesses and to prepare the Company for the anticipated 2012 Separation. The Company expects to incur restructuring and restructuring related charges of approximately $75 million to $100 million in fiscal

2012. The Company expects to incur an additional $75 million to $100 million in restructuring and restructuring related charges in fiscal 2012 in conjunction with the 2012 Separation. See Note 2.

The Company recorded restructuring and asset impairment charges by program and Consolidated Statement of Operations classification as follows ($ in millions):

Restructuring and asset impairment charges, net, during the quarter and nine months ended June 29, 2012 related to the 2012 actions are as follows ($ in millions):

The rollforward of the reserves from September 30, 2011 to June 29, 2012 is as follows ($ in millions):

During fiscal 2011, the Company continued to identify and pursue opportunities for cost savings through restructuring activities and workforce reductions to improve operating efficiencies across the Company's business (the "2011 Program").

Restructuring and asset impairment charges, net, during the quarters and nine months ended June 29, 2012 and June 24, 2011 related to the 2011 Program are as follows ($ in millions):

Restructuring and asset impairment charges, net, incurred cumulative to date from initiation of the 2011 Program are as follows ($ in millions):

The rollforward of the reserves from September 30, 2011 to June 29, 2012 is as follows ($ in millions):

The Company continues to maintain restructuring reserves related to programs initiated prior to fiscal 2011. The total amount of these reserves were $53 million and $79 million as of June 29, 2012 and September 30, 2011, respectively. The Company incurred $2 million and $4 million of restructuring charges for the quarter and nine months ended June 29, 2012, respectively, and $5 million and $4 million of restructuring charges for the quarter and nine months ended June 24, 2011, respectively, related to 2009 and prior programs. The net decrease in the reserves is primarily due to cash utilization of $28 million. The aggregate remaining reserves primarily relate to facility exit costs for long-term non-cancelable lease obligations primarily within the Company's Commercial Fire and Security segment.

As of June 29, 2012 and September 30, 2011, restructuring reserves related to all programs and actions were included in the Company's Consolidated Balance Sheets as follows ($ in millions):

During the quarter ended June 29, 2012, cash paid for acquisitions included in continuing operations totaled $12 million, net of cash acquired of $1 million related to an acquisition within the Company's Commercial Fire and Security segment. During the nine months ended June 29, 2012, cash paid for acquisitions included in continuing operations totaled $217 million, net of cash acquired of $16 million, the most significant of which related to the acquisition of Visonic Ltd. ("Visonic"). Visonic is a global developer and manufacturer of electronic security systems and components. Cash paid for Visonic totaled approximately $94 million, net of cash acquired of $5 million by the Company's Commercial Fire and Security segment. The balance of the acquisitions for the nine months ended June 29, 2012 were all included in the Company's Commercial Fire and Security segment, none of which were material individually or in the aggregate.

During the quarter and nine months ended June 24, 2011, cash paid for acquisitions included in continuing operations totaled $219 million and $228 million, respectively, which primarily related to the acquisition of Oceania Capital Partners Limited's Signature Security Group ("Signature Security") within our Commercial Fire and Security segment. Signature Security's business is focused on providing electronic security to the small business and residential markets in Australia and New Zealand. Cash paid for Signature Security totaled approximately $184 million, net of cash acquired of $2 million.

Acquisition and integration costs are expensed as incurred. During the quarter and nine months ended June 29, 2012, the Company incurred acquisition and integration costs of $5 million and $21 million, respectively. Such costs are recorded in selling, general and administrative expenses in the Company's Consolidated Statements of Operations for the quarter and nine months ended June 29, 2012.

During the quarter and nine months ended June 24, 2011, the Company incurred acquisition and integration costs of $9 million and $26 million, respectively. These costs were incurred primarily in connection with the acquisitions of Signature Security and KEF Holdings Ltd. ("KEF") during fiscal 2011 within its Commercial Fire and Security and Flow Control segments, respectively, and the acquisition of Brink's Home Security Inc. ("Broadview Security") during fiscal 2010 within its ADT North American Residential segment. Such costs are recorded within selling, general and administrative expenses in the Company's Consolidated Statement of Operations.

During the quarter and nine months ended June 29, 2012, the Company made cash payments of $176 million and $512 million, respectively, to acquire approximately 154,000 and 446,000 customer contracts for electronic security services primarily within its ADT North American Residential segment.

During the quarter and nine months ended June 24, 2011, the Company made cash payments of $172 million and $451 million, respectively, to acquire approximately 159,000 and 419,000 customer contracts for electronic security services primarily within its ADT North American Residential segment.

The Company did not have a significant change to its unrecognized tax benefits during the quarter ended June 29, 2012. The Company's unrecognized tax benefits were reduced by $46 million primarily as a result of audit settlements during the nine months ended June 29, 2012, of which $35 million was recognized in the Company's Consolidated Statement of Operations.

Many of the Company's uncertain tax positions relate to tax years that remain subject to audit by the taxing authorities in U.S. federal, state and local or foreign jurisdictions. Open tax years in significant jurisdictions are as follows:

Based on the current status of its income tax audits, the Company believes that it is reasonably possible that between nil and $20 million in unrecognized tax benefits may be resolved in the next twelve months.

At each balance sheet date, management evaluates whether it is more likely than not that the Company's deferred tax assets will be realized and if sufficient future taxable income will be available by assessing current period and projected operating results and other pertinent data. As of June 29, 2012, the Company had recorded net deferred tax assets of $1.3 billion, which is comprised of $2.7 billion gross deferred tax assets and $1.4 billion of gross valuation allowances.

In connection with the 2007 Separation, Tyco entered into the 2007 Tax Sharing Agreement that generally governs Covidien's, TE Connectivity's and Tyco's respective rights, responsibilities, and obligations after the 2007 Separation with respect to taxes, including ordinary course of business taxes and taxes, if any, incurred as a result of any failure of the distribution of all of the shares of Covidien or TE Connectivity to qualify as a tax-free distribution for U.S. federal income tax purposes within the meaning of Section 355 of the Internal Revenue Code ("the Code") or certain internal transactions undertaken in anticipation of the spin-offs to qualify for tax-favored treatment under the Code.

Under the 2007 Tax Sharing Agreement, Tyco shares responsibility for certain of its, Covidien's and TE Connectivity's income tax liabilities, which result in cash payments, based on a sharing formula for periods prior to and including June 29, 2007. More specifically, Tyco, Covidien and TE Connectivity share 27%, 42% and 31%, respectively, of shared income tax liabilities that arise from adjustments made by tax authorities to Tyco's, Covidien's and TE Connectivity's U.S. and certain non-U.S. income tax returns. The costs and expenses associated with the management of these shared tax liabilities are generally shared equally among the parties. In connection with the execution of the 2007 Tax Sharing Agreement, Tyco established a net receivable from Covidien and TE Connectivity representing the amount Tyco expected to receive for pre-2007 Separation uncertain tax positions, including amounts owed to the Internal Revenue Service ("IRS"). As of June 29, 2012 and September 30, 2011, the aggregate amount of the net receivable was $76 million and $89 million, respectively, of which $67 million and $73 million, respectively, was included in other assets and $9 million and $16 million, respectively, was included in prepaid expenses and other current assets on the Consolidated Balance Sheets. Tyco also established liabilities representing the fair market value of its share of Covidien's and

TE Connectivity's estimated obligations, primarily to the IRS, for their pre-2007 Separation taxes covered by the 2007 Tax Sharing Agreement. As of June 29, 2012 and September 30, 2011, the aggregate amount of the liabilities was $406 million and $436 million, respectively, of which $400 million and $387 million, respectively, were recorded in other liabilities and $6 million and $49 million, respectively, in accrued and other current liabilities. During the nine months ended June 29, 2012, Tyco made a net cash payment of $13 million to Covidien and TE Connectivity related to the resolution of certain IRS audit and pre-Separation tax matters.

Tyco assesses the shared tax liabilities and related guaranteed liabilities at each reporting period. The receivable and liability were initially recognized with an offset to shareholders' equity in 2007. During the quarters ended June 29, 2012 and June 24, 2011, Tyco recorded income of $1 million and expense of $12 million, respectively, in accordance with the 2007 Tax Sharing Agreement. During the nine months ended June 29, 2012 and June 24, 2011, Tyco recorded expense of $3 million and $11 million, respectively, in accordance with the 2007 Tax Sharing Agreement. Tyco will provide payment to Covidien and TE Connectivity under the 2007 Tax Sharing Agreement as the shared income tax liabilities are settled. Settlement is expected to occur as the audit process by applicable taxing authorities is completed for the impacted years and cash payments are made. Due to the nature of the unresolved adjustments described in the next paragraph, the maximum amount of potential future payments under the 2007 Tax Sharing Agreement is not determinable. Such cash payments, when they occur, will reduce the guarantor liability as such payments represent an equivalent reduction of risk. Tyco also assesses the sufficiency of the 2007 Tax Sharing Agreement guarantee liability on a quarterly basis and will increase the liability if and when it becomes probable that cash payments expected to be made under the 2007 Tax Sharing Agreement exceed the recorded balance.

Tyco and its subsidiaries' income tax returns are examined periodically by various tax authorities. In connection with these examinations, tax authorities, including the IRS, have raised issues and proposed tax adjustments, in particular with respect to years preceding the 2007 Separation. The issues and proposed adjustments related to such years are generally subject to the sharing provisions of the 2007 Tax Sharing Agreement. Tyco is reviewing and contesting certain of the proposed tax adjustments. With respect to adjustments raised by the IRS, although the Company has resolved a substantial number of these adjustments, a few significant items are expected to remain open with respect to the audit of the 1997 through 2004 years. As of the date hereof, it is unlikely that Tyco will be able to resolve all the open items, which primarily involve the treatment of certain intercompany debt transactions during the period, through the IRS appeals process. As a result, Tyco expects to litigate these matters once it receives the requisite statutory notices from the IRS, which may occur as soon as within the next three months. The Company has assessed its obligations under the 2007 Tax Sharing Agreement, including with respect to the proposed civil fraud penalties discussed below, to determine that its recorded liability of $406 million is sufficient to cover the indemnifications made by the Company under such agreement. See Note 19. However, the ultimate resolution of these matters is uncertain and could result in a material adverse impact to the Company's financial position, results of operations, cash flows or the effective tax rate in future reporting periods.

In connection with the aforementioned audits, the IRS proposed civil fraud penalties against a prior subsidiary that was distributed to TE Connectivity in connection with the 2007 Separation. The penalties allegedly arise from actions of former executives taken in connection with intercompany transfers of stock of Simplex Technologies in 1998 and 1999. Based on statutory guidelines, the Company estimates the proposed penalties could range between $30 million and $50 million. This is a pre-2007 Separation tax liability that is covered by the provisions of the 2007 Tax Sharing Agreement.

In addition to dealing with pre-2007 Separation tax liabilities of each of the three entities party thereto, the 2007 Tax Sharing Agreement contains sharing provisions to address the contingency that the 2007 Separation itself, or internal transactions related to the 2007 Separation, may be deemed taxable by U.S. or non U.S. taxing authorities. In the event the 2007 Separation is determined to be taxable and such determination was the result of actions taken after the 2007 Separation by Tyco, Covidien or TE Connectivity, the party responsible for such failure would be responsible for all taxes imposed on each company as a result thereof. If such determination is not the result of actions taken by any of the three companies after the 2007 Separation, then Tyco, Covidien and TE Connectivity would be responsible for 27%, 42% and 31%, respectively, of any taxes imposed on any of the companies as a result of such determination. Such tax amounts could be significant. The Company is responsible for all of its own taxes that are not shared pursuant to the 2007 Tax Sharing Agreement's sharing formula. In addition, Covidien and TE Connectivity are responsible for their tax liabilities that are not subject to the 2007 Tax Sharing Agreement's sharing formula.

If any party to the 2007 Tax Sharing Agreement were to default in its obligation to another party to pay its share of the distribution taxes that arise as a result of no party's fault, each non-defaulting party would be required to pay, equally with any other non-defaulting party, the amounts in default. In addition, if another party to the 2007 Tax Sharing Agreement that is responsible for all or a portion of an income tax liability were to default in its payment of such liability to a taxing authority, the Company could be liable under applicable tax law for such liabilities and required to make additional tax payments. Accordingly, under certain circumstances, the Company may be obligated to pay amounts in excess of its agreed-upon share of Tyco's, Covidien's and TE Connectivity's tax liabilities. See Note 19.

Except for earnings that are currently distributed, no additional material provision has been made for U.S. or non-U.S. income taxes on the undistributed earnings of subsidiaries or for unrecognized deferred tax liabilities for temporary differences related to investments in subsidiaries, since the earnings are expected to be permanently reinvested, the investments are essentially permanent in duration, or the Company has concluded that no additional tax liability will arise as a result of the distribution of such earnings. A liability could arise if amounts are distributed by such subsidiaries or if such subsidiaries are ultimately disposed. It is not practicable to estimate the additional income taxes related to permanently reinvested earnings or the basis differences related to investments in subsidiaries.

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

The computation of diluted earnings per share for the quarter and nine months ended June 29, 2012 excludes the effect of the potential exercise of share options to purchase approximately 6 million and 8 million shares, respectively, and excludes restricted stock units of nil for both periods because the effect would be anti-dilutive.

The computation of diluted earnings per share for the quarter and nine months ended June 24, 2011 excludes the effect of the potential exercise of share options to purchase approximately 6 million and 10 million shares, respectively, and excludes restricted stock units of approximately nil and 1 million shares respectively, because the effect would be anti-dilutive.

Annually, in the fiscal fourth quarter, and more frequently if triggering events occur, the Company tests goodwill for impairment by comparing the fair value of each reporting unit with its carrying amount. Fair value for each reporting unit is determined utilizing a discounted cash flow analysis based on the Company's forecast cash flows discounted using an estimated weighted-average cost of capital of market participants. A market approach is utilized to corroborate the discounted cash flow analysis performed at each reporting unit. If the carrying amount of a reporting unit exceeds its fair value, goodwill is considered potentially impaired. In determining fair value, management relies on and considers a number of factors, including operating results, business plans, economic projections, anticipated future cash flow, comparable market transactions (to the extent available), other market data and the Company's overall market capitalization.

As a result of the realignment of business activities, the historical amounts have been recast. The changes in the carrying amount of goodwill by segment are as follows ($ in millions):

	As of September 30, 2011			Acquisitions/ Purchase Accounting Adjustments			Divestitures			Currency Translation			As of June 29, 2012

Commercial Fire and Security
Gross Goodwill	$	5,997		$	100		$	—		$	(23	)	$	6,074
Impairments		(1,761	)		—			—			—			(1,761	)

Carrying Amount of Goodwill		4,236			100			—			(23	)		4,313

ADT North American Residential
Gross Goodwill		3,593			—			—			1			3,594
Impairments		—			—			—			—			—

Carrying Amount of Goodwill		3,593			—			—			1			3,594

Flow Control
Gross Goodwill		2,170			(1	)		(1	)		(46	)		2,122
Impairments		—			—			—			—			—

Carrying Amount of Goodwill		2,170			(1	)		(1	)		(46	)		2,122

Total
Gross Goodwill		11,760			99			(1	)		(68	)		11,790
Impairments		(1,761	)		—			—			—			(1,761	)

Carrying Amount of Goodwill	$	9,999		$	99		$	(1	)	$	(68	)	$	10,029

	As of September 24, 2010			Acquisitions/ Purchase Accounting Adjustments		Divestitures			Currency Translation			As of September 30, 2011

Commercial Fire and Security
Gross Goodwill	$	5,841		$	176	$	(5	)	$	(15	)		5,997
Impairments		(1,761	)		—		—			—			(1,761	)

Carrying Amount of Goodwill		4,080			176		(5	)		(15	)		4,236

ADT North American Residential
Gross Goodwill		3,591			2		—			—			3,593
Impairments		—			—		—			—			—

Carrying Amount of Goodwill		3,591			2		—			—			3,593

Flow Control
Gross Goodwill		1,906			253		(16	)		27			2,170
Impairments		—			—		—			—			—

Carrying Amount of Goodwill		1,906			253		(16	)		27			2,170

Electrical and Metal Products
Gross Goodwill		935			—		(935	)		—			—
Impairments		(935	)		—		935			—			—

Carrying Amount of Goodwill		—			—		—			—			—

Total
Gross Goodwill		12,273			431		(956	)		12			11,760
Impairments		(2,696	)		—		935			—			(1,761	)

Carrying Amount of Goodwill	$	9,577		$	431	$	(21	)	$	12		$	9,999

The following table sets forth the gross carrying amount and accumulated amortization of the Company's intangible assets as of June 29, 2012 and September 30, 2011 ($ in millions):

Intangible asset amortization expense for the quarters ended June 29, 2012 and June 24, 2011 was $167 million and $157 million, respectively. Intangible asset amortization expense for the nine months ended June 29, 2012 and June 24, 2011 was $494 million and $461 million, respectively. As of June 29, 2012, the weighted-average amortization period for contracts and related customer relationships, intellectual property, other and total amortizable intangible assets were 14 years, 19 years, 15 years, and 14 years, respectively.

The estimated aggregate amortization expense on intangible assets is expected to be approximately $150 million for the remainder of 2012, $575 million for 2013, $475 million for 2014, $400 million for 2015, $350 million for 2016 and $1,490 million for 2017 and thereafter.

	As of June 29, 2012		As of September 30, 2011

6.0% public notes due 2013	$	656	$	655
4.125% public notes due 2014		499		499
3.375% public notes due 2015		499		499
3.75% public notes due 2018		249		249
8.5% public notes due 2019		750		750
7.0% public notes due 2019		430		431
6.875% public notes due 2021		714		715
4.625% public notes due 2023		248		248
Other⁽¹⁾⁽²⁾		120		102

Total debt		4,165		4,148
Less current portion		16		2

Long-term debt	$	4,149	$	4,146

The carrying amount of Tyco's debt subject to the fair value disclosure requirements as of June 29, 2012 and September 30, 2011 was $4,045 million and $4,046 million, respectively. The Company has determined the fair value of such debt to be $4,789 million and $4,689 million as of June 29, 2012 and September 30, 2011, respectively. The Company utilizes various valuation methodologies to determine the fair value of its debt, which is primarily dependent on the type of market in which the Company's debt is traded. When available, the Company uses quoted market prices to determine the fair value of its debt that is traded in active markets. As of June 29, 2012 and September 30, 2011, the fair value of

the Company's debt which was actively traded was $4,789 million and $4,689 million, respectively. As of June 29, 2012 and September 30, 2011, the Company's debt that was subject to the fair value disclosure requirements was all actively traded and is classified as Level 1 in the fair value hierarchy. See Note 10 for further details on the fair value hierarchy.

From time to time, Tyco International Finance S.A. ("TIFSA"), the Company's finance subsidiary may issue commercial paper for general corporate purposes. As of June 29, 2012 and September 30, 2011, TIFSA had no commercial paper outstanding.

On April 25, 2012, the Company amended its existing Five-Year Senior Unsecured Credit Agreement, dated April 25, 2007 ("the 2007 Credit Agreement"), to extend the expiration date of the facility from April 25, 2012 to September 30, 2012. Simultaneous with the extension, total commitments under the 2007 Credit Agreement facility were reduced from an aggregate of $750 million to $654 million. On June 22, 2012, the Company further amended the 2007 Credit Agreement to reduce the lenders' commitments under the 2007 Credit Agreement from an aggregate of $654 million to $500 million.

Additionally, on June 22, 2012, TIFSA, as the Borrower, and the Company as the Guarantor, entered into a Five-Year Senior Unsecured Credit Agreement, expiring June 22, 2017, and providing for revolving credit commitments in the aggregate amount of $1.0 billion (the "2012 Credit Agreement"). In connection with entering into the 2012 Credit Agreement, TIFSA and the Company terminated the existing Four-Year Senior Unsecured Credit Agreement, dated March 24, 2011, which provided for revolving credit commitments in the aggregate amount of $750 million.

On June 22, 2012, The ADT Corporation ("ADT"), as the Borrower, and the Company as the Guarantor, entered into a Five-Year Senior Unsecured Credit Agreement, expiring June 22, 2017, and providing for revolving credit commitments for ADT in the aggregate amount of $750 million (the "ADT Credit Agreement"), of which $250 million is available until the completion of the 2012 Separation. Upon the occurrence of the 2012 Separation, the Company will automatically and unconditionally be released from its guarantee of the ADT Credit Agreement. Additionally, on June 22, 2012, ADT entered into a 364-day bridge facility that provided for aggregate lending commitments in the amount of $2.25 billion. This facility was subsequently terminated on July 5, 2012 in connection with ADT's $2.5 billion debt issuance. See Note 21. In connection with the termination of the bridge facility, the Company recorded a $3 million charge for the quarter ended June 29, 2012 to write off costs incurred with establishing the facility which has been recorded in interest expense in the Company's Consolidated Statement of Operations.

As of June 29, 2012, the Company's committed revolving credit facilities, including $250 million of availability under the ADT Credit Agreement, totaled $1.75 billion. These revolving credit facilities may be used for working capital, capital expenditures and general corporate purposes. As of June 29, 2012 and September 30, 2011, there were no amounts drawn under the Company's revolving credit facilities. Interest under the revolving credit facilities is variable and is calculated by reference to LIBOR or an alternate base rate.

On January 12, 2011, TIFSA issued $250 million aggregate principal amount of 3.75% Notes due on January 15, 2018 (the "2018 Notes") and $250 million aggregate principal amount of 4.625% Notes due on January 15, 2023 (the "2023 Notes"), which are fully and unconditionally guaranteed by the Company. TIFSA received total net proceeds of approximately $494 million after deducting debt issuance costs of approximately $1 million for the 2018 Notes and $2 million for the 2023 Notes, as well as debt discount of approximately $1 million for the 2018 Notes and $2 million for the 2023 Notes. The net proceeds of the aforementioned debt issuances, along with other available funds, were used to fund the repayment upon maturity of all of our outstanding 6.75% Notes due February 2011. The 2018 Notes and the 2023 Notes are unsecured and rank equally with TIFSA's other unsecured and unsubordinated debt.

The Company's financial instruments consist primarily of cash and cash equivalents, accounts receivable, investments, accounts payable, debt and derivative financial instruments. The fair value of cash and cash equivalents, accounts receivable and accounts payable approximated book value as of June 29, 2012 and September 30, 2011. The fair value of derivative financial instruments was not material to any of the periods presented. See below for the fair value of investments and Note 9 for the fair value of debt.

In the normal course of business, Tyco is exposed to market risk arising from changes in currency exchange rates, interest rates and commodity prices. The Company uses derivative financial instruments to manage exposures to foreign currency, interest rate and commodity price risks. The Company's objective for utilizing derivative financial instruments is to manage these risks using the most effective methods to eliminate or reduce the impacts of these exposures. The Company does not use derivative financial instruments for trading or speculative purposes.

For derivative instruments that are designated and qualified as hedging instruments for accounting purposes, the Company documented and linked the relationships between the hedging instruments and hedged items. The Company also assessed and documented at the hedge's inception whether the derivatives used in hedging transactions were effective in offsetting changes in fair values associated with the hedged items. These hedges did not result in any hedge ineffectiveness for the quarters and nine months ended June 29, 2012 and June 24, 2011.

All derivative financial instruments are reported on the Consolidated Balance Sheet at fair value with changes in fair value recognized currently in the Company's Statement of Operations, with the exception of net investment hedges for which changes in fair value are reported in the cumulative translation component of accumulated other comprehensive loss to the extent the hedges are effective. The ineffective portion of the hedge, if any, is recognized in the Consolidated Statement of Operations. The derivative financial instruments and impact of such changes in fair value was not material to the Consolidated Balance Sheets as of June 29, 2012 and September 30, 2011 or Consolidated Statements of Operations and Statement of Cash Flows for the quarters and nine months ended June 29, 2012 and June 24, 2011.

The Company manages foreign currency exchange rate risk through the use of derivative financial instruments comprised principally of forward contracts on foreign currency which are not designated as hedging instruments for accounting purposes. The objective is to minimize the income statement impact and potential variability in cash flows associated with intercompany loans and accounts receivable, accounts payable and forecasted transactions that are denominated in certain foreign currencies. As of June 29, 2012 and September 30, 2011, the total gross notional amount of the Company's foreign exchange contracts was $408 million and $836 million, respectively.

Prior to the quarter ended December 30, 2011, the Company hedged net investments in certain foreign operations through the use of foreign exchange forward contracts. The objective was to minimize the exposure to changes in the value of the foreign currency denominated net investment. As of the quarter ended December 30, 2011, the Company terminated its net investment hedge. Accordingly, the aggregate notional amount of these hedges was nil and $224 million as of June 29, 2012 and September 30, 2011, respectively. Changes in the fair value of forward contracts qualifying as net investment hedges are reported in the cumulative translation component of accumulated other comprehensive loss to the extent the hedges are effective. The ineffective portion of the hedge was not material to the Company's Consolidated Statement of Operations for the quarters and nine months ended June 29, 2012 and June 24, 2011. These contracts did not have a material impact to the Company's Consolidated Balance Sheets as of June 29, 2012 and September 30, 2011.

The Company manages interest rate risk through the use of interest rate swap transactions with financial institutions acting as principal counterparties, which are designated as fair value hedges for accounting purposes. Since the third quarter of 2009, Tyco International Finance S.A. (TIFSA), the Company's finance subsidiary, has been entering into interest rate swap transactions with the objective of managing the exposure to interest rate risk by converting interest rates of fixed-rate debt to variable rates. In these contracts, TIFSA agrees with financial institutions acting as principal counterparties to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated on an agreed-upon notional principal amount. As of June 29, 2012 and September 30, 2011, the total gross notional amount of the Company's interest rate swap contracts was $1.2 billion for both periods.

During fiscal 2012 and 2011, the Company entered into commodity swaps for copper which are not designated as hedging instruments for accounting purposes, and which did not have a material impact on the Company's financial position, results of operations or cash flows.

The use of derivative financial instruments exposes the Company to counterparty credit risk. If the counterparty fails to perform, the Company is exposed to losses if the derivative is in an asset position. When the fair value of a derivative instrument is an asset, the counterparty has to pay the Company to settle the contract. This exposes the Company to credit risk. However, when the fair value of a derivative instrument is a liability, the Company has to pay the counterparty to settle the contract and therefore there is no counterparty credit risk. Tyco has established policies and procedures to limit the

potential for counterparty credit risk, including establishing limits for credit exposure and continually assessing the creditworthiness of counterparties. As a matter of practice, the Company deals with major banks worldwide having long-term Standard & Poor's and Moody's credit ratings of A-/A3 or higher. To further reduce the risk of loss, the Company generally enters into International Swaps and Derivatives Association master agreements with substantially all of its counterparties. Master netting agreements provide protection in bankruptcy in certain circumstances and, in some cases, enable receivables and payables with the same counterparty to be offset on the Consolidated Balance Sheets, providing for a more meaningful balance sheet presentation of credit exposure. The Company's derivative contracts do not contain any credit risk related contingent features and do not require collateral or other security to be furnished by the Company or the counterparties.

The Company's exposure to credit risk associated with its derivative instruments is measured on an individual counterparty basis, as well as by groups of counterparties that share similar attributes. As of June 29, 2012, the Company was exposed to industry concentration with financial institutions as well as risk of loss if an individual counterparty or issuer failed to perform its obligations under contractual terms. The maximum amount of loss that the Company would incur as of June 29, 2012 without giving consideration to the effects of legally enforceable master netting agreements was approximately $37 million.

Authoritative guidance for fair value measurements establishes a three-level hierarchy that ranks the quality and reliability of information used in developing fair value estimates. The hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data. In cases where two or more levels of inputs are used to determine fair value, a financial instrument's level is determined based on the lowest level input that is considered significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are summarized as follows:

Investments primarily include cash equivalents, U.S. government obligations, U.S. government agency securities and corporate debt securities.

When available, the Company uses quoted market prices to determine the fair value of investment securities. Such investments are included in Level 1. When quoted market prices are not readily

available, pricing determinations are made based on the results of market approach valuation models using observable market data such as recently reported trades, bid and offer information and benchmark securities. These investments are included in Level 2 and consist primarily of U.S. government agency securities and corporate debt securities.

As described above, under the caption "Derivative Instruments" derivative assets and liabilities consist principally of forward foreign currency exchange contracts and interest rate swaps. The fair values for these derivative financial instruments are derived from market approach pricing models that take into account the contractual terms and features of each instrument, forward foreign currency rates for the Company's foreign exchange contracts and yield curves for the Company's interest rate swaps existing at the end of the period. Valuations are adjusted to reflect creditworthiness of the counterparty for assets and the creditworthiness of the Company for liabilities. Such adjustments are based on observable market evidence and are categorized as Level 2 exposures. Derivative financial instruments are not presented in the following tables as the derivative financial instruments were not material to any of the periods presented.

The following tables present the Company's assets and liabilities measured at fair value on a recurring basis as of June 29, 2012 and September 30, 2011, by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the valuation.

During the quarter and nine months ended June 29, 2012, the Company did not have any significant transfers within the fair value hierarchy.

The Company had $2.7 billion and $2.9 billion of intercompany loans designated as permanent in nature as of June 29, 2012 and September 30, 2011, respectively. For the quarters ended June 29, 2012 and June 24, 2011, the Company recorded $ 90 million of cumulative translation loss and $37 million of cumulative translation gain, respectively, through accumulated other comprehensive loss related to these loans. For the nine months ended June 29, 2012 and June 24, 2011, the Company recorded $38 million of cumulative translation loss and $169 million of cumulative translation gain, respectively, through accumulated other comprehensive loss related to these loans.

In connection with the 2007 Separation, the Company entered into a liability sharing agreement regarding certain legal actions that were pending against Tyco prior to the 2007 Separation. Under the Separation and Distribution Agreement, the Company, Covidien and TE Connectivity are jointly and severally liable for the full amount of any judgments resulting from the actions subject to the agreement, which generally relate to legacy matters that were not specific to the business operations of any of the companies. Substantially all of these legacy matters have been resolved. Additionally, at the time of the 2007 Separation, the Company, Covidien and TE Connectivity agreed to allocate responsibility for certain legacy tax claims pursuant to the same formula under the Tax Sharing Agreement. A number of the legacy tax claims remain outstanding. See Note 6.

Tyco is a party to several lawsuits involving disputes with former management, including Mr. L. Dennis Kozlowski, Mr. Mark Swartz and Mr. Frank Walsh Jr. In connection with Tyco's affirmative actions against, Mr. Kozlowski and Mr. Swartz, Mr. Kozlowski, through counterclaims, and Mr. Swartz, through a separate lawsuit, are seeking an aggregate of approximately $140 million allegedly due in connection with their compensation and retention arrangements and under the Employee Retirement Income Security Act ("ERISA").

With respect to Mr. Kozlowski, on December 1, 2010, the U.S. District Court for the Southern District of New York ruled in favor of several of the Company's affirmative claims against him before trial, while dismissing all of Mr. Kozlowski's counterclaims for pay and benefits after 1995. A trial on the remaining issues between the parties is scheduled to begin on August 13, 2012. With respect to Mr. Swartz, on March 3, 2011, the same Court granted the Company's motion for summary judgment. The Court further ruled that issues related to damages will need to be resolved at trial. A trial is scheduled to begin September 18, 2012. The Company expects Mr. Kozlowski to contest the decision against him. As a result, the Company has and will continue to maintain the reserve recorded in its Consolidated Balance Sheet for the amounts allegedly due under his compensation and retention arrangements and under ERISA until the appeals process is complete. During the second quarter of fiscal 2012, the Company reversed a $50 million liability related to Mr. Swartz's pay and benefits due to the expiration of the statue of limitations, which was recorded in selling, general and administrative expenses in the Consolidated Statement of Operations. On May 15, 2012, Mr. Swartz filed a lawsuit against Tyco in New York state court claiming entitlement to monies under ERISA. Tyco removed the case to the U.S. district court for the southern district of New York and filed a motion to dismiss Mr. Swartz's claims for multiple reasons, including that the statute of limitations had expired, at the

latest, during the second quarter of fiscal 2012. With respect to Mr. Kozlowski's compensation, the Company believes that its existing reserve is sufficient and that the ultimate resolution of the matter will not have a material adverse effect on its financial position, results of operations or cash flows.

Tyco has also brought an action against Mr. Walsh in connection with the damages suffered by Tyco arising from Mr. Walsh's breach of his fiduciary duties to Tyco. In October 2010, the U.S. District Court for the Southern District of New York denied Tyco's affirmative claims for recovery of damages against Mr. Walsh. In January 2012, the United States Court of Appeals for the Second Circuit reversed the District Court's ruling that Tyco's Board of Directors could ratify breaches of fiduciary duties owed by Mr. Walsh to Tyco's shareholders, and remanded the case to the District Court to resolve certain issues relating to consequential damages. On June 20, 2012, the District Court ruled in Tyco's favor and entered a judgment against Mr. Walsh. This affirmative matter, and the affirmative matters against Messrs. Kozlowski and Swartz, are not subject to the liability sharing provisions of the Separation and Distribution Agreement. Separately, Mr. Walsh is pursuing a New York state court claim against the Company asserting his entitlement to indemnification. This action is subject to the liability sharing provisions of the Separation and Distribution Agreement.

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 June 29, 2012, Tyco concluded that it was probable that it would incur remedial costs in the range of approximately $63 million to $100 million. As of June 29, 2012, Tyco concluded that the best estimate within this range is approximately $69 million, of which $34 million is included in accrued and other current liabilities and $35 million is included in other liabilities in the Company's Consolidated Balance Sheet. In view of the Company's financial position and reserves for environmental matters, the Company believes that any potential payments of such estimated amounts will not have a material adverse effect on its financial position, results of operations or cash flows.

The Company and certain of its subsidiaries along with numerous other companies are named as defendants in personal injury lawsuits based on alleged exposure to asbestos-containing materials. These cases typically involve product liability claims based primarily on allegations of manufacture, sale or distribution of industrial products that either contained asbestos or were attached to or used with asbestos-containing components manufactured by third-parties. Each case typically names between dozens to hundreds of corporate defendants. While the Company has observed an increase in the number of these lawsuits over the past several years, including lawsuits by plaintiffs with mesothelioma-related claims, a large percentage of these suits have not presented viable legal claims and, as a result, have been dismissed by the courts. The Company's historical strategy has been to mount a vigorous defense aimed at having unsubstantiated suits dismissed, and, where appropriate, settling suits before trial. Although a large percentage of litigated suits have been dismissed, the Company cannot predict the extent to which it will be successful in resolving lawsuits in the future. In addition, the Company continues to assess its strategy for resolving asbestos claims. Due to the number of claims and limited amount of assets at one of the Company's non-operating subsidiaries, the Company is pursuing

alternatives for this subsidiary, including a negotiated settlement with representatives of all current and future asbestos claimants against such subsidiary. While the Company has not finalized its approach, if the Company is ultimately successful with this alternative, it will likely assign rights to certain insurance assets and make a cash payment in order to fully resolve the claims against the subsidiary.

As of June 29, 2012, there were approximately 5,200 lawsuits pending against the Company, its subsidiaries or entities for which the Company has assumed responsibility. Each lawsuit typically includes several claims, and the Company has determined that there were approximately 6,100 claims outstanding as of June 29, 2012, which reflects the Company's current estimate of the number of viable claims made against it, its affiliates or entities for which it has assumed responsibility in connection with acquisitions or divestitures. This amount includes adjustments for claims that are not actively being prosecuted, identify incorrect defendants or are duplicative of other actions.

Annually, during the Company's third quarter, the Company performs an analysis with the assistance of outside counsel and other experts to update its estimated asbestos-related assets and liabilities. In addition, on a quarterly basis, the Company re-evaluates the assumptions used to perform the annual analysis and records an expense as necessary to reflect changes in its estimated liability and related insurance asset. The Company's estimate of the liability and corresponding insurance recovery for pending and future claims and defense costs is based on the Company's historical claim experience, and estimates of the number and resolution cost of potential future claims that may be filed. The Company's legal strategy for resolving claims also impacts these estimates. The Company considers various trends and developments in evaluating the period of time (the look-back period) over which historical claim and settlement experience is used to estimate and value claims reasonably projected to be made in the future during a defined period of time (the look-forward period). As part of the Company's annual valuation process in the third quarter of fiscal 2012, the Company determined that a look-back period of three years was more appropriate than a five-year period because the Company has experienced a higher and more consistent level of claims activity and settlement costs in the past three years. As a result, the Company believes a three year look-back period is more representative of future claim and settlement activity than the five year period it previously used. The Company also revised its look-forward period from seven years to fifteen years. The Company's decision to revise its look-forward period was primarily based on improvements in the consistency of observable data and the Company's more extensive experience with asbestos claims since the look-forward period was originally established in 2005. The revisions to the Company's look-forward and look-back periods do not apply to claims made against the subsidiary described above for which the Company is pursuing alternatives, including a negotiated settlement with representatives of all current and future asbestos claimants. Excluding these claims, the Company believes it can make a more reliable estimate of pending and future claims beyond seven years. The Company believes valuation of pending claims and future claims to be filed over the next fifteen years produces a reasonable estimate of its asbestos liability, which it records in the consolidated financial statements on an undiscounted basis.

The Company's estimate of asbestos-related insurance recoveries represents estimated amounts due to the Company for previously paid and settled claims and the probable reimbursements relating to its estimated liability for pending and future claims. In determining the amount of insurance recoverable, the Company considers a number of factors, including available insurance, allocation methodologies, and the solvency and creditworthiness of insurers. During the third quarter of fiscal 2012, the Company reached an agreement in principle with one of its primary insurance carriers for asbestos related claims. In connection with the settlement, the Company also expects to terminate a cost-sharing agreement

that it had entered into with an entity that it had acquired a business from several decades ago and as a result, has access to all of the insurance policies and is responsible for all liabilities arising from asbestos claims made against the subsidiary that was acquired. Under the terms of the settlement, the Company agreed with the insurance carrier to accept a lump sum cash payment of $97 million in respect of certain policies, and has reached a coverage-in-place agreement with the insurance carrier with respect to certain claims.

As a result of the activity described above, the Company recorded a net charge of $114 million during the quarter ended June 29, 2012. As of June 29, 2012, the Company's estimated net liability of $154 million was recorded within the Company's Consolidated Balance Sheet as a liability for pending and future claims and related defense costs of $436 million, and separately as an asset for insurance recoveries of $282 million. The Company believes that its asbestos-related liabilities and insurance-related assets as of June 29, 2012 are appropriate. Similarly, as of September 30, 2011, the Company's estimated net liability of $82 million was recorded within the Company's Consolidated Balance Sheet as a liability for pending and future claims and related defense costs of $306 million, and separately as an asset for insurance recoveries of $224 million.

The amounts recorded by the Company for asbestos-related liabilities and insurance-related assets are based on the Company's strategies for resolving its asbestos claims, currently available information, and a number of estimates and assumptions. Key variables and assumptions include the number and type of new claims that are filed each year, the average cost of resolution of claims, the resolution of coverage issues with insurance carriers, amount of insurance and the solvency risk with respect to the Company's insurance carriers. Furthermore, predictions with respect to these variables are subject to greater uncertainty in the later portion of the projection period. Other factors that may affect the Company's liability and cash payments for asbestos-related matters include uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case, reforms of state or federal tort legislation and the applicability of insurance policies among subsidiaries. As a result, actual liabilities or insurance recoveries could be significantly higher or lower than those recorded if assumptions used in the Company's calculations vary significantly from actual results.

As previously reported in the Company's periodic filings, the Company has received and responded to various allegations and other information that certain improper payments were made by the Company's subsidiaries and agents in recent years. The Company reported to the Department of Justice ("DOJ") and the SEC the investigative steps and remedial measures that it has taken in response to these and other allegations and its internal investigations. In 2005, the Company 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"), and that it would continue to investigate and make periodic progress reports to these agencies. The Company has and will continue to communicate with the DOJ and SEC to provide updates on the baseline review and follow-up investigations, including, as appropriate, briefings concerning additional instances of potential improper conduct identified by the Company in the course of its ongoing compliance activities. The baseline review, which has been completed, revealed that some business practices may not comply with Tyco and FCPA requirements, and in February 2010, the Company initiated discussions with the DOJ and SEC aimed at resolving these matters, which remain ongoing. Although the Company has recorded its best estimate of potential loss related to this matter,

it is possible that this estimate may differ from the ultimate loss determined in connection with the resolution of this matter, as the Company may be required to pay material fines, consent to injunctions on future conduct, consent to the imposition of a compliance monitor, or suffer other criminal or civil penalties or adverse impacts, including being subject to lawsuits brought by private litigants, each of which may have a material adverse effect on the Company's financial position, results of operations or cash flows.

Covidien and TE Connectivity agreed, in connection with the 2007 Separation, to cooperate with the Company in its responses regarding these matters. Any judgment required to be paid or settlement or other cost incurred by the Company in connection with the FCPA investigation matters would be subject to the liability sharing provisions of the Separation and Distribution Agreement, which assigned liabilities primarily related to the former Healthcare and Electronics businesses of the Company to Covidien and TE Connectivity, respectively, and provides that the Company will retain liabilities primarily related to its continuing operations. Any liabilities not primarily related to a particular segment will be shared equally among the Company, Covidien and TE Connectivity.

As previously disclosed, in early 2007 certain former subsidiaries in the Company's Flow Control business were charged, prior to their divestiture, by the German Federal Cartel Office ("FCO") with engaging in anti-competitive practices, in particular with regard to its hydrant, valve, street box and fittings business. The Company cooperated with the FCO in its investigation and settled the matter during the first fiscal quarter of 2012.

During the fourth quarter of 2011, the Company reserved $34 million for various compliance matters, including the FCPA matters described above. As of June 29, 2012, the Company continues to maintain its best estimate of probable loss for these compliance matters which the Company has recorded as a liability in accrued and other current liabilities in the Consolidated Balance Sheet. Due to the sharing provisions in the Separation and Distribution Agreement, the Company has also recorded receivables from Covidien and TE Connectivity related to certain of these compliance matters in other current assets in the Company's Consolidated Balance Sheet as of June 29, 2012.

On June 8, 2007, SimplexGrinnell received a notice alleging that it had partially withdrawn from the National Automatic Sprinkler Industry Pension Fund (the "Fund"). Under Title IV of ERISA, if the Fund can prove that an employer completely or partially withdraws from a multi-employer pension plan such as the Fund, the employer is liable for withdrawal liability equal to its proportionate share of the plan's unfunded vested benefits. The alleged withdrawal results from a 1994 labor dispute between Grinnell Fire Protection Systems, SimplexGrinnell's predecessor, and Road Sprinkler Fitters Local Union No. 669. Following an adverse arbitration ruling in the third quarter of fiscal 2012, the Company agreed to settle this matter and recorded a charge in the amount of $28.5 million, including accrued interest on the liability which was recorded in selling, general and administrative expenses in the Consolidated Statement of Operations. ERISA requires that payment of withdrawal liability be made in full or in quarterly installments commencing upon receipt of a liability assessment from the plan, and as a result the Company had made $22.0 million of payments through June 29, 2012. The remaining $6.5 million of cash payments due are expected to be made in the fourth quarter of fiscal 2012.

On May 14, 2010, the Company acquired Broadview Security, which is a business that was formerly owned by The Brink's Company. Under the Coal Industry Retiree Health Benefit Act of 1992, as amended (the "Coal Act"), The Brink's Company and its majority-owned subsidiaries at July 20, 1992 (including certain legal entities acquired in the Broadview Security acquisition) are jointly and severally liable with certain of The Brink's Company's other current and former subsidiaries for health care coverage obligations provided for by the Coal Act. A Voluntary Employees' Beneficiary Associate ("VEBA") trust has been established by The Brink's Company to pay for these liabilities, although the trust may have insufficient funds to satisfy all future obligations. At the time of its spin-off from The Brink's Company, Broadview Security entered into an agreement in which The Brink's Company agreed to indemnify it for any and all liabilities and expenses related to The Brink's Company's former coal operations, including any health care coverage obligations. The Brink's Company has agreed that this indemnification survives the Company's acquisition of Broadview Security. The Company has evaluated its potential liability under the Coal Act as a contingency in light of all known facts, including the funding of the VEBA, and indemnification provided by The Brinks Company. The Company has concluded that no accrual is necessary due to the existence of the indemnification and its belief that The Brink's Company and VEBA will be able to satisfy all future obligations under the Coal Act.

As previously reported, in 2002, a number of former dealers and related parties have filed lawsuits against the Company in the United States and in other countries, including a class action lawsuit filed in the District Court of Arapahoe County, Colorado, alleging breach of contract and other claims related to ADT's decision to terminate certain authorized dealers in 2002 and 2003. In February 2010, the Court granted a directed verdict in ADT's favor dismissing a number of the plaintiffs' key claims. Upon appeal, the Colorado Court of Appeals affirmed the verdict in ADT's favor in October 2011. The parties agreed to settle this matter in April 2012 with no cash consideration being paid by either side, which is subject to final court approval. Although the Company has favorably resolved the class action lawsuit in Colorado, a number of claims related to the 2002 and 2003 decision to terminate certain authorized dealers outside the United States remain outstanding. During the second quarter of fiscal 2012, the Company has recorded its best estimate of probable loss related to these outstanding claims. While it is not possible at this time to predict the final outcome of these lawsuits, the Company does not believe these claims will have a material adverse effect on the Company's financial position, results of operations or cash flows.

ADT has been named as a defendant in two putative class actions that were filed on behalf of purported classes of persons who claim to have received unsolicited "robocalls" in contravention of the U.S. Telephone Consumer Protection Act ("TCPA"). These lawsuits were brought by plaintiffs seeking class action status and monetary damages on behalf of all plaintiffs who allegedly received such unsolicited calls, claiming that millions of calls were made by third party entities on ADT's behalf. ADT asserts that such entities were not retained by, nor authorized to make calls on behalf of, ADT. These matters have been consolidated in the United States District Court for the Northern District of Illinois into one civil action. Each violation under the TCPA provides for $500 in statutory damages ($1,500 if a willful violation is shown). ADT believes that it has meritorious defenses to these claims

and, accordingly, intends to vigorously defend against these actions. The Company has made no provision for this contingency as a reasonable estimate of loss cannot be made at this time.

In addition to the foregoing, the Company is subject to claims and suits, including from time to time, contractual disputes and product and general liability claims, incidental to present and former operations, acquisitions and dispositions. With respect to many of these claims, the Company either self-insures or maintains insurance through third-parties, with varying deductibles. While the ultimate outcome of these matters cannot be predicted with certainty, the Company believes that the resolution of any such proceedings, whether the underlying claims are covered by insurance or not, will not have a material adverse effect on the Company's financial condition, results of operations or cash flows beyond amounts recorded for such matters.

See Note 6 for a detailed discussion of the status of the Company's outstanding income tax audits.

Defined Benefit Pension Plans—The Company sponsors a number of pension plans. The following disclosures exclude the impact of plans which are immaterial individually and in the aggregate. The net periodic benefit cost for the Company's material U.S. and non-U.S. defined benefit pension plans is as follows ($ in millions):

The estimated net actuarial loss for U.S. pension benefit plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the current fiscal year is expected to be $14 million.

The estimated net actuarial loss for non-U.S. pension benefit plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the current fiscal year is expected to be $9 million.

The Company's funding policy is to make contributions in accordance with the laws and customs of the various countries in which it operates and to make discretionary voluntary contributions from time-to-time. The Company anticipates that it will contribute at least the minimum required to its pension plans in fiscal year 2012 of $38 million for U.S. plans and $72 million for non-U.S. plans. During the quarter ended June 29, 2012, the Company made required contributions of $11 million to its U.S. pension plans and $17 million to its non-U.S. pension plans. During the nine months ended June 29, 2012, the Company contributed $17 million to its U.S. pension plans and $53 million to its non-U.S. pension plans.

Postretirement Benefit Plans—Net periodic postretirement benefit cost was insignificant for both periods.

Under Swiss law, the authority to declare dividends is vested in the general meeting of shareholders, and on March 7, 2012, the Company's shareholders approved a cash dividend of $0.50 per share, payable to shareholders in two quarterly installments of $0.25. Shareholders also approved a conditional cash dividend of $0.50 per share, payable to shareholders in two quarterly installments of $0.25 on November 15, 2012 and February 20, 2013. Payment of the conditional cash dividend will be made only in the event that the 2012 Separation does not occur prior to the record date for each conditional dividend payment. As a result, the Company recorded an accrued dividend of $231 million as of March 7, 2012 within accrued and other current liabilities and a corresponding reduction to contributed surplus to reflect only the two unconditional quarterly dividend installments. The first installment of $0.25 was paid on May 23, 2012 to shareholders on record on April 27, 2012. The second installment of $0.25 will be paid on August 22, 2012 to shareholders on record on July 27, 2012.

On March 9, 2011, the Company's shareholders approved an annual dividend on the Company's common shares of $1.00 per share, which was paid from contributed surplus in four installments of $0.25 per share to shareholders on record on April 29, 2011, July 29, 2011, October 28, 2011 and January 27, 2012. As a result, the Company recorded an accrued dividend of $468 million as of March 9, 2011 within accrued and other current liabilities and a corresponding reduction to contributed surplus.

The Board approved a $1.0 billion share repurchase program in April 2011. During the nine months ended June 29, 2012, the Company repurchased approximately 11 million shares for approximately $500 million under this 2011 share repurchase program, which reduced the amount of

common shares outstanding and decreased the dividends declared on the Consolidated Statement of Shareholders' Equity as of June 29, 2012. As of June 29, 2012, approximately $200 million remained outstanding under the 2011 share repurchase program.

The Board approved a $1.0 billion share repurchase program and a $1.0 billion share repurchase program, in September 2010 and July 2008, respectively. During the nine months ended June 24, 2011, the Company repurchased approximately 30 million shares for approximately $1.3 billion under the 2008, 2010 and 2011 share repurchase programs, which reduced the amount of common shares outstanding and decreased the dividends declared on the Consolidated Statement of Shareholders' Equity as of June 24, 2011. Both the 2008 and 2010 share repurchase programs were completed during the nine months ended June 24, 2011.

Noncontrolling interest with redemption features, such as put options, that are not solely within the Company's control are considered redeemable noncontrolling interests. The Company accretes changes in the redemption value through noncontrolling interest in subsidiaries net income (loss) attributable to the noncontrolling interest over the period from the date of issuance to the earliest redemption date. Redeemable noncontrolling interest is considered to be temporary equity and is therefore reported in the mezzanine section between liabilities and equity on the Company's Consolidated Balance Sheet at the greater of the initial carrying amount increased or decreased for the noncontrolling interest's share of net income or loss or its redemption value.

Redeemable noncontrolling interest primarily relates to the Company's acquisition of a 75% ownership interest in KEF in the fourth quarter of fiscal 2011. The remaining 25% interest is held by a noncontrolling interest stakeholder. In connection with the acquisition of KEF, Tyco and the noncontrolling interest stakeholder have a call and put arrangement, respectively, for Tyco to acquire the remaining 25% ownership which becomes exercisable beginning the first full fiscal quarter following the third anniversary of the KEF closing date of June 29, 2011.

The rollforward of redeemable noncontrolling interest from September 30, 2011 to June 29, 2012 is as follows ($ in millions):

During the quarter ended December 30, 2011, the Company issued its annual share-based compensation grants. The total number of awards issued was approximately 5.0 million, of which 3.4 million were share options, 1.1 million were restricted unit awards and 0.5 million were performance share unit awards. The options and restricted stock units vest in equal annual installments over a period of 4 years, and the performance share unit awards vest after a period of 3 years based on

the level of attainment of the applicable performance metrics, which are determined by the Compensation and Human Resources Committee of the Board. The weighted-average grant-date fair value of the share options, restricted unit awards and performance share unit awards was $12.45, $44.32 and $48.86, respectively. The weighted-average assumptions used in the Black-Scholes option pricing model included an expected stock price volatility of 36%, a risk free interest rate of 1.48%, an expected annual dividend per share of $1.00 and an expected option life of 5.8 years.

During the quarter ended December 24, 2010, the Company issued its annual share-based compensation grants. The total number of awards issued was approximately 5.9 million, of which 3.9 million were share options, 1.4 million were restricted unit awards and 0.6 million were performance share unit awards. The options and restricted stock units vest in equal annual installments over a period of 4 years, and the performance share unit awards vest after a period of 3 years based on the level of attainment of the applicable performance metrics, which are determined by the Compensation and Human Resources Committee of the Board. The weighted-average grant-date fair value of the share options, restricted unit awards and performance share unit awards was $9.13, $37.29 and $41.17, respectively. The weighted-average assumptions used in the Black-Scholes option pricing model included an expected stock price volatility of 33%, a risk free interest rate of 1.26%, an expected annual dividend per share of $0.84 and an expected option life of 5.2 years.

Segment information is consistent with how management reviews the businesses, makes investing and resource allocation decisions and assesses operating performance. The Company, from time to time, may realign business and management responsibility within its operating segments based on considerations such as opportunity for market or operating synergies and/or to more fully leverage existing capabilities and enhance development for future products and services.

Effective in the Company's second fiscal quarter of 2012, the Company reorganized its reportable segments to more closely align with its reporting and management structure, which had been realigned in anticipation of the spin-offs of the Company's ADT North American residential security business and its flow control business. See Note 2. Under the new reporting structure, the former Tyco Security Solutions segment was split between the new ADT North American Residential segment and the new Commercial Fire and Security segment. The new ADT North American Residential segment consists of the residential and small business security business in the United States and Canada that was formerly part of the Tyco Security Solutions segment. The new Commercial Fire and Security segment consists of (i) the former Tyco Fire Protection segment, (ii) the North American commercial security business that was formerly part of the Tyco Security Solutions segment, along with all of the security businesses outside of the United States and Canada, and (iii) the security products business that was formerly part of the Tyco Security Solutions segment. The Company's Flow Control segment continues as it has historically been constituted. As a result, prior period segment amounts have been recast to the current period presentation. The recast financial data does not constitute stand-alone historical financial statements for the entities that will distributed in the spin-offs (and, in the case of Flow Control, the subsequent merger with Pentair, Inc.) and does not reflect any adjustments that are likely to be reflected therein. The combined historical financial statement for the entities to be distributed are contained in the documents filed with the SEC in connection with the 2012 Separation.

As a result of this realignment, the Company has three reportable segments: Commercial Fire and Security, ADT North American Residential and Flow Control.

As a result of the realignment of these businesses activities and the reclassification of a business that has been classified as discontinued operations, the revenue and operating income for the quarter and nine months ended June 24, 2011 have been recast. Selected information by segment is presented in the following tables ($ in millions):

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

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

transactions for identical or similar guarantees, the Company determined the fair value of these guarantees and indemnifications utilizing expected present value measurement techniques. Significant assumptions utilized to determine fair value included determining a range of potential outcomes, assigning a probability weighting to each potential outcome and estimating the anticipated timing of resolution. The probability weighted outcomes were discounted using the Company's incremental borrowing rate. The liability necessary to reflect the fair value of guarantees and indemnifications under the 2007 Tax Sharing agreement was $406 million and $436 million on the Company's Consolidated Balance Sheets as of June 29, 2012 and September 30, 2011, respectively. Of these amounts $6 million and $49 million are included in accrued and other current liabilities and the remaining amounts in other liabilities as of June 29, 2012 and September 30, 2011, respectively. The guarantees primarily relate to certain contingent tax liabilities included in the 2007 Tax Sharing Agreement. See Note 6.

In addition, Tyco historically provided support in the form of financial and/or performance guarantees to various Covidien and TE Connectivity operating entities. In connection with the Separation, the Company worked with the guarantee counterparties to cancel or assign these guarantees to Covidien or TE Connectivity. To the extent these guarantees were not assigned prior to the Separation date, Tyco assumed primary liability on any remaining such support. The Company's obligations were $4 million, which were included in other liabilities on the Company's Consolidated Balance Sheets as of June 29, 2012 and September 30, 2011, respectively, with an offset to shareholders' equity on the Separation date.

In disposing of assets or businesses, the Company often provides representations, warranties and/or indemnities to cover various risks including, for example, unknown damage to the assets, environmental risks involved in the sale of real estate, liability to investigate and remediate environmental contamination at waste disposal sites and manufacturing facilities and unidentified tax liabilities and legal fees related to periods prior to disposition. The Company has no reason to believe that the contingencies, if realized, associated with these risks 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.

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

The Company records estimated product warranty costs at the time of sale. The changes in the carrying amount of the Company's warranty accrual from September 30, 2011 to June 29, 2012 were as follows ($ in millions):

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

In anticipation of the 2012 Separation, the Company has commenced certain steps to restructure the ownership of subsidiaries within Tyco. During fiscal 2012, the Company completed the transfer of certain investments from TIFSA to Tyco. Since the transactions were entirely among wholly-owned subsidiaries of Tyco, there was no impact on the Company's financial position, results of operations and cash flows. The transactions did, however, result in a decrease to TIFSA's investment in subsidiaries. Since these transactions were among entities under common control, their effects have been reflected as of the beginning of the earliest period presented, which resulted in a net decrease to TIFSA's investment in subsidiaries of $117 million as of September 30, 2011.

For the quarter and nine months ended June 29, 2012, the operating results of discontinued operations are reflected within the equity in net income of subsidiaries caption in the Condensed Consolidating Statements of Operations. For the quarter and nine months ended June 24, 2011, immaterial amounts for Tyco and TIFSA were reflected in the income from discontinued operations, net of income taxes caption and have been conformed to the current year presentation herein.

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

Net revenue	$	—		$	—		$	4,460		$	—		$	4,460
Cost of product sales and services		—			—			2,696			—			2,696
Selling, general and administrative expenses		4			1			1,288			—			1,293
Separation costs		2			1			58			—			61
Restructuring, asset impairments and divestiture charges, net		—			—			43			—			43

Operating (loss) income		(6	)		(2	)		375			—			367
Interest income		—			—			6			—			6
Interest expense		—			(57	)		(6	)		—			(63	)
Other income (expense), net		1			—			(6	)		—			(5	)
Equity in net income of subsidiaries		165			257			—			(422	)		—
Intercompany interest and fees		83			41			(124	)		—			—

Income from continuing operations before income taxes		243			239			245			(422	)		305
Income tax (expense) benefit		(1	)		7			(59	)		—			(53	)

Income from continuing operations		242			246			186			(422	)		252
Loss from discontinued operations, net of income taxes		—			—			(10	)		—			(10	)

Net income		242			246			176			(422	)		242
Less: noncontrolling interest in subsidiaries net income		—			—			—			—			—

Net income attributable to Tyco common shareholders	$	242		$	246		$	176		$	(422	)	$	242

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

Net revenue	$	—		$	—		$	4,292		$	—		$	4,292
Cost of product sales and services		—			—			2,640			—			2,640
Selling, general and administrative expenses		3			2			1,137			—			1,142
Restructuring, asset impairments and divestiture charges, net		—			—			35			—			35

Operating (loss) income		(3	)		(2	)		480			—			475
Interest income		—			—			7			—			7
Interest expense		—			(57	)		(2	)		—			(59	)
Other (expense) income, net		(12	)		—			9			—			(3	)
Equity in net income of subsidiaries		605			342			—			(947	)		—
Intercompany interest and fees		(231	)		76			155			—			—

Income from continuing operations before income taxes		359			359			649			(947	)		420
Income tax expense		—			(4	)		(54	)		—			(58	)

Income from continuing operations		359			355			595			(947	)		362
Loss from discontinued operations, net of income taxes		—			—			(4	)		—			(4	)

Net income		359			355			591			(947	)		358
Less: noncontrolling interest in subsidiaries net income		—			—			(1	)		—			(1	)

Net income attributable to Tyco common shareholders	$	359		$	355		$	592		$	(947	)	$	359

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

Net revenue	$	—		$	—		$	13,021		$	—		$	13,021
Cost of product sales and services		—			—			7,915			—			7,915
Selling, general and administrative expenses		11			3			3,511			—			3,525
Separation costs		2			1			156			—			159
Restructuring, asset impairments and divestiture charges, net		1			—			98			—			99

Operating (loss) income		(14	)		(4	)		1,341			—			1,323
Interest income		—			—			19			—			19
Interest expense		—			(173	)		(9	)		—			(182	)
Other expense, net		(3	)		—			(16	)		—			(19	)
Equity in net income of subsidiaries		1,075			801			—			(1,876	)		—
Intercompany interest and fees		(164	)		216			(52	)		—			—

Income from continuing operations before income taxes		894			840			1,283			(1,876	)		1,141
Income tax expense		—			(7	)		(214	)		—			(221	)

Income from continuing operations		894			833			1,069			(1,876	)		920
Income (loss) from discontinued operations, net of income taxes		8			—			(25	)		—			(17	)

Net income		902			833			1,044			(1,876	)		903
Less: noncontrolling interest in subsidiaries net income		—			—			1			—			1

Net income attributable to Tyco common shareholders	$	902		$	833		$	1,043		$	(1,876	)	$	902

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the Nine Months Ended June 24, 2011
($ in millions)

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

Net revenue	$	—		$	—		$	12,662		$	—		$	12,662
Cost of product sales and services		—			—			7,833			—			7,833
Selling, general and administrative expenses		4			7			3,353			—			3,364
Restructuring, asset impairments and divestiture charges (gains), net		—			—			(153	)		—			(153	)

Operating (loss) income		(4	)		(7	)		1,629			—			1,618
Interest income		—			—			25			—			25
Interest expense		—			(179	)		(5	)		—			(184	)
Other (expense) income, net		(11	)		—			2			—			(9	)
Equity in net income of subsidiaries		2,231			1,232			—			(3,463	)		—
Intercompany interest and fees		(883	)		256			627			—			—

Income from continuing operations before income taxes		1,333			1,302			2,278			(3,463	)		1,450
Income tax expense		—			(19	)		(259	)		—			(278	)

Income from continuing operations		1,333			1,283			2,019			(3,463	)		1,172
Income from discontinued operations, net of income taxes		—			—			161			—			161

Net income		1,333			1,283			2,180			(3,463	)		1,333

Less: noncontrolling interest in subsidiaries net income		—			—			—			—			—
Net income attributable to Tyco common shareholders	$	1,333		$	1,283		$	2,180		$	(3,463	)	$	1,333

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

Assets
Current Assets:
Cash and cash equivalents	$	—	$	—	$	1,118		$	—		$	1,118
Accounts receivable, net		—		—		2,475			—			2,475
Inventories		—		—		1,552			—			1,552
Intercompany receivables		1,336		1,866		8,046			(11,248	)		—
Prepaid expenses and other current assets		15		—		1,084			—			1,099
Deferred income taxes		—		—		402			—			402

Total current assets		1,351		1,866		14,677			(11,248	)		6,646
Property, plant and equipment, net		—		—		4,173			—			4,173
Goodwill		—		—		10,029			—			10,029
Intangible assets, net		—		—		3,750			—			3,750
Investment in subsidiaries		34,726		20,976		—			(55,702	)		—
Intercompany loans receivable		1,925		7,663		19,995			(29,583	)		—
Other assets		67		283		2,120			—			2,470

Total Assets	$	38,069	$	30,788	$	54,744		$	(96,533	)	$	27,068

Liabilities and Equity
Current Liabilities:
Loans payable and current maturities of long-term debt	$	—	$	—	$	16		$	—		$	16
Accounts payable		—		—		1,389			—			1,389
Accrued and other current liabilities		166		72		2,006			—			2,244
Deferred revenue		—		—		686			—			686
Intercompany payables		3,524		4,539		3,185			(11,248	)		—

Total current liabilities		3,690		4,611		7,282			(11,248	)		4,335
Long-term debt		—		4,080		69			—			4,149
Intercompany loans payable		19,576		3,098		6,909			(29,583	)		—
Deferred revenue		—		—		1,150			—			1,150
Other liabilities		403		—		2,509			—			2,912

Total Liabilities		23,669		11,789		17,919			(40,831	)		12,546

Redeemable noncontrolling interest		—		—		106			—			106

Tyco Shareholders' Equity:
Common shares		2,792		—		—			—			2,792
Common shares held in treasury		—		—		(1,205	)		—			(1,205	)
Other shareholders' equity		11,608		18,999		37,908			(55,702	)		12,813

Total Tyco Shareholders' Equity		14,400		18,999		36,703			(55,702	)		14,400
Nonredeemable noncontrolling interest		—		—		16			—			16

Total Equity		14,400		18,999		36,719			(55,702	)		14,416

Total Liabilities, Redeemable Noncontrolling Interest and Equity	$	38,069	$	30,788	$	54,744		$	(96,533	)	$	27,068

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

Assets
Current Assets:
Cash and cash equivalents	$	—	$	—	$	1,390		$	—		$	1,390
Accounts receivable, net		—		—		2,400			—			2,400
Inventories		—		—		1,343			—			1,343
Intercompany receivables		1,101		1,275		6,821			(9,197	)		—
Prepaid expenses and other current assets		24		—		872			—			896
Deferred income taxes		—		—		402			—			402
Assets held for sale		—		—		2			—			2

Total current assets		1,125		1,275		13,230			(9,197	)		6,433
Property, plant and equipment, net		—		—		4,051			—			4,051
Goodwill		—		—		9,999			—			9,999
Intangible assets, net		—		—		3,628			—			3,628
Investment in subsidiaries		36,483		19,869		—			(56,352	)		—
Intercompany loans receivable		1,921		10,115		20,023			(32,059	)		—
Other assets		73		298		2,295			—			2,666

Total Assets	$	39,602	$	31,557	$	53,226		$	(97,608	)	$	26,777

Liabilities and Equity
Current Liabilities:
Loans payable and current maturities of long-term debt	$	—	$	—	$	2		$	—		$	2
Accounts payable		—		—		1,278			—			1,278
Accrued and other current liabilities		321		50		2,036			—			2,407
Deferred revenue		—		—		643			—			643
Intercompany payables		3,452		3,369		2,376			(9,197	)		—

Total current liabilities		3,773		3,419		6,335			(9,197	)		4,330
Long-term debt		—		4,091		55			—			4,146
Intercompany loans payable		21,249		3,121		7,689			(32,059	)		—
Deferred revenue		—		—		1,143			—			1,143
Other liabilities		398		—		2,480			—			2,878

Total Liabilities		25,420		10,631		17,702			(41,256	)		12,497

Redeemable noncontrolling interest		—		—		93			—			93

Tyco Shareholders' Equity:
Common shares		2,792		—		—			—			2,792
Common shares held in treasury		—		—		(951	)		—			(951	)
Other shareholders' equity		11,390		20,926		36,377			(56,352	)		12,341

Total Tyco Shareholders' Equity		14,182		20,926		35,426			(56,352	)		14,182
Nonredeemable noncontrolling interest		—		—		5			—			5

Total Equity		14,182		20,926		35,431			(56,352	)		14,187

Total Liabilities, Redeemable Noncontrolling Interest and Equity	$	39,602	$	31,557	$	53,226		$	(97,608	)	$	26,777

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Nine Months Ended June 29, 2012

($ in millions)

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

Cash Flows From Operating Activities:
Net cash (used in) provided by operating activities	$	(354	)	$	1,363		$	821		$	—		$	1,830
Cash Flows From Investing Activities:
Capital expenditures		—			—			(694	)		—			(694	)
Proceeds from disposal of assets		—			—			9			—			9
Acquisition of businesses, net of cash acquired		—			—			(217	)		—			(217	)
Acquisition of dealer generated customer accounts and bulk account purchases		—			—			(512	)		—			(512	)
Divestiture of businesses, net of cash divested		—			—			(4	)		—			(4	)
Net increase in intercompany loans		—			(1,353	)		—			1,353			—
(Increase) decrease in investment in subsidiaries		(623	)		(10	)		5			628			—
Other		—			—			59			—			59

Net cash used in investing activity		(623	)		(1,363	)		(1,354	)		1,981			(1,359	)
Cash Flows From Financing Activities:
Net repayments of debt		—			—			(4	)		—			(4	)
Proceeds from exercise of share options		—			—			140			—			140
Dividends paid		(346	)		—			—			—			(346	)
Repurchase of common shares by treasury		—			—			(500	)		—			(500	)
Net intercompany loan borrowings		1,323			—			30			(1,353	)		—
Increase in equity from parent		—			—			628			(628	)		—
Other		—			—			(22	)		—			(22	)

Net cash provided by (used in) financing activities		977			—			272			(1,981	)		(732	)
Effect of currency translation on cash		—			—			(11	)		—			(11	)

Net decrease in cash and cash equivalents		—			—			(272	)		—			(272	)
Cash and cash equivalents at beginning of period		—			—			1,390			—			1,390

Cash and cash equivalents at end of period	$	—		$	—		$	1,118		$	—		$	1,118

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Nine Months Ended June 24, 2011

($ in millions)

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

Cash Flows From Operating Activities:
Net cash (used in) provided by operating activities	$	(646	)	$	1,510		$	756		$	—		$	1,620
Net cash used in discontinued operating activities		—			—			(8	)		—			(8	)
Cash Flows From Investing Activities:
Capital expenditures		—			—			(548	)		—			(548	)
Proceeds from disposal of assets		—			—			7			—			7
Acquisition of businesses, net of cash acquired		—			—			(228	)		—			(228	)
Acquisition of dealer generated customer accounts and bulk account purchases		—			—			(451	)		—			(451	)
Divestiture of businesses, net of cash divested		—			—			711			—			711
Intercompany dividend from subsidiary		9			9			—			(18	)		—
Net increase in intercompany loans		—			(1,518	)		—			1,518			—
Decrease (increase) in investment in subsidiaries		46			(5	)		(72	)		31			—
Other		—			(12	)		6			—			(6	)

Net cash provided by (used in) investing activities		55			(1,526	)		(575	)		1,531			(515	)
Net cash provided by discontinued investing activities		—			—			259			—			259
Cash Flows From Financing Activities:
Net borrowings (repayments) of debt		—			21			(19	)		—			2
Proceeds from exercise of share options		—			—			112			—			112
Dividends paid		(342	)		—			—			—			(342	)
Intercompany dividend to parent		—			—			(18	)		18			—
Repurchase of common shares by treasury		(500	)		—			(800	)		—			(1,300	)
Net intercompany loan borrowings		1,414			—			104			(1,518	)		—
Increase in equity from parent		—			—			31			(31	)		—
Transfer from discontinued operations		—			—			251			—			251
Other		19			(5	)		(5	)		—			9

Net cash provided by (used in) financing activities		591			16			(344	)		(1,531	)		(1,268	)
Net cash used in discontinued financing activities		—			—			(251	)		—			(251	)
Effect of currency translation on cash		—			—			27			—			27

Net decrease in cash and cash equivalents		—			—			(136	)		—			(136	)
Decrease in cash and cash equivalents from deconsolidation of variable interest entity		—			—			(10	)		—			(10	)
Cash and cash equivalents at beginning of period		—			—			1,775			—			1,775

Cash and cash equivalents at end of period	$	—		$	—		$	1,629		$	—		$	1,629

On July 5, 2012, in connection with the planned spinoff of the Company's North American residential security business, ADT issued $750 million aggregate principal amount of 2.250% Notes due 2017, $1.0 billion aggregate principal amount of 3.5% Notes due 2022 and $750 million aggregate principal amount of 4.875% Notes due 2042. ADT received total net proceeds of approximately $2,468 million after deducting debt issuance costs and debt discount. The net proceeds were used to repay intercompany debt and to make other cash payments to Tyco to allow the Company to fund the tender offers and redemptions described below. Tyco is the guarantor of the notes until the occurrence of the 2012 Separation at which time the Company will be automatically and unconditionally released from its guarantee.

On June 27, 2012, Tyco announced that, in connection with the Separation, Tyco and its subsidiary, TIFSA, commenced tender offers to purchase for cash various debt securities maturing from 2013 to 2023 issued by TIFSA and/or Tyco, in an aggregate principal amount up to $2.6 billion. On July 12, 2012, Tyco redeemed approximately $2.1 billion in outstanding aggregate principal. On July 16, 2012, Tyco issued notices to the holders of the remaining outstanding principal amounts of the 6.0% Notes due 2013 and 4.125% Notes due 2014 notifying them that such notes would be redeemed at the "make-whole" amounts plus accrued and unpaid interest on August 15, 2012. The $2.6 billion of outstanding aggregate principal redeemed and to be redeemed is set forth below ($ in millions):


Principal amounts redeemed July 12, 2012:
6.0% Notes due 2013	$	383
4.125% Notes due 2014		300
3.375% Notes due 2015		242
3.750% Notes due 2018		183
8.5% Notes due 2019		386
7.0% Notes due 2019		180
6.875% Notes due 2021		245
4.625% Notes due 2023		208

Total amounts redeemed	$	2,127
Principal amounts to be redeemed August 15, 2012:
6.0% Notes due 2013	$	273
4.125% Notes due 2014		200

Total principal redemption	$	2,600

As a result of the July redemptions, the Company terminated associated interest rate swap contracts related to the 6.0% Notes due 2013 and 4.125% Notes due 2014. Upon termination, the gross notional value of the remaining swaps is approximately $345 million. As a result of the July and anticipated August debt redemptions, the Company expects to record a loss on extinguishment of debt of approximately $450 million. The expected charge is comprised of the premium paid in the tender offers, write-off of the unamortized debt issuance costs and discount related to the extinguished notes, and a net gain recognized upon termination of the associated interest rate swap contracts.

On July 12, 2012, in connection with the 2012 Separation, the Board approved the conversion of all outstanding performance share units of the Company into restricted stock units based on performance achieved through June 29, 2012. Each performance share unit will convert into a number of restricted stock units at a ratio to be determined by the Compensation Committee based on its review and certification of performance results in August 2012. Upon vesting of the resulting restricted stock units, each award will be settled in stock.

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 should be read together with our Consolidated Financial Statements and the related 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 results of Tyco International Ltd., a company organized under the laws of Switzerland, and its subsidiaries (hereinafter collectively referred to as "we", the "Company" or "Tyco"). The financial statements have been prepared in United States dollars ("USD"), in accordance with accounting principles generally accepted in the United States ("GAAP").

As a result of the realignment, the Company now operates in the following business segments:

We also provide general corporate services to our segments and these costs are reported as Corporate and Other.

On September 19, 2011, the Company announced that its Board of Directors ("the Board") approved a plan to separate the Company into three separate, publicly traded companies consisting of the Company's North American residential security business, its flow control business, and its commercial fire and security by spinning off the North American residential security business and flow control business in a tax free pro rata distribution to shareholders. On March 28, 2012, the Company

announced that it entered into a definitive agreement to combine its flow control business with Pentair, Inc. ("Pentair") in a tax-free, all-stock merger ("the Merger"), immediately following the spin off of the flow control business. Upon completion of the Merger, Tyco shareholders are expected to own approximately 52.5% of the combined company and Pentair shareholders are expected to own approximately 47.5%. Completion of the separation transactions, including the Merger, is subject to the approval of the distributions by Tyco Shareholders, the approval of the Merger by Pentair shareholders, regulatory approvals and customary closing conditions. The distributions, the Merger and related transactions are collectively referred to herein as the "2012 Separation".

The Company has a 52 or 53-week fiscal year that ends on the last Friday of September. Fiscal year 2012 will be a 52-week year, whereas fiscal year 2011 was a 53-week year.

References to the segment data are to the Company's continuing operations. Certain prior period amounts have been reclassified to conform to the current period presentation. See Note 1 to the Consolidated Financial Statements.

Net revenue of $4.5 billion increased $168 million, or 3.9%, for the quarter ended June 29, 2012 as compared to the quarter ended June 24, 2011. On a nine month basis, net revenue increased by $359 million, or 2.8% to $13.0 billion, despite the sale of our Electrical and Metal Products business which contributed $347 million of net revenue during the nine months ended June 24, 2011. Net revenue increased across all of our segments for both the quarter and nine months ended June 29, 2012. The increase in our Commercial Fire and Security segment reflected increased volume in product sales as a result of generally improved market demand as well as a continued focus on expanding service revenue. Growth in net revenue in our ADT North American Residential segment was primarily attributable to an increase in average revenue per customer and growth in customer accounts. Net revenue increased in our Flow Control segment primarily due to strength in its Valves and Controls and Water and Environmental Systems businesses for the quarter ended June 29, 2012, and its Valves and Controls and Thermal Controls businesses for the nine months ended June 29, 2012. Net revenue was favorably impacted by the net impact of acquisitions and divestitures, primarily in our Commercial Fire and Security and Flow Control segments, which contributed $105 million, or 2.4%, for the quarter ended June 29, 2012. Net revenue was unfavorably impacted by the net impact of acquisitions and divestitures of $106 million, or 0.8%, for the nine months ended June 29, 2012 primarily due to the sale of our Electrical and Metal Products business during the nine months ended June 24, 2011, partially offset by acquisitions in our Commercial Fire and Security and Flow Control segments. Changes in foreign currency exchange rates unfavorably impacted net revenue by $153 million, or 3.6%, and $200 million, or 1.6%, for the quarter and nine months ended June 29, 2012, respectively.

Service revenue, which is primarily recurring in nature, represented approximately 44% and 45% of our overall revenue for both the quarter and nine months ended June 29, 2012, respectively, and approximately 46% and 45% for the quarter and nine months ended June 24, 2011, respectively. Service revenues are principally derived from our Commercial Fire and Security and ADT North American Residential segments, and represent a consistent source of revenue from monitoring and maintenance services under contractual agreements. For the quarter and nine months ended June 29, 2012, non-service revenue increased $145 million, or 6.2%, and $220 million, or 3.2%, respectively, primarily due to an increase in product sales of $92 million, or 3.9%, and $216 million, or 3.1%, respectively, from our Commercial Fire and Security segment. The increase in product sales was primarily due to the acquisitions of Chemguard Inc. ("Chemguard") during the fourth quarter of fiscal 2011 and Visonic Ltd. ("Visonic") during the first quarter of fiscal 2012 as well as generally improved end market demand. Non-service revenue was favorably impacted for the quarter and nine months ended June 29, 2012 by improvements in the Valves and Controls and Thermal Controls businesses in our Flow Control segment driven by continued strength in the end markets served by these businesses.

These increases were partially offset by the absence of non-service revenue from the Electrical and Metal Products business which was divested in the fourth quarter of fiscal 2011.

Operating income for the quarter and nine months ended June 29, 2012 was $367 million and $1.3 billion, respectively, compared to operating income of $475 million and $1.6 billion for the quarter and nine months ended June 24, 2011, respectively. Operating income for the quarter and nine months ended June 29, 2012 was unfavorably impacted by a net asbestos charge of $114 million compared to $11 million in the prior year, both of which were recorded in connection with the Company's annual valuation of its asbestos-related liabilities and insurance assets. In addition, charges of $69 million and $192 million, respectively, were incurred during the quarter and nine months ended June 29, 2012 in connection with the 2012 Separation including $4 million and $29 million, respectively, of separation related restructuring and asset impairment charges, as compared to nil in the comparable periods in the prior year. These unfavorable charges were partially offset by improved sales volumes across all of our segments. Additionally, the nine months ended June 29, 2012 included a net loss on divestitures of $17 million as compared to a net gain on divestitures of $227 million, which we recognized in the prior year, primarily related to a $248 million net gain related to the sale of a majority interest in the Electrical and Metal Products business. Operating income included restructuring and asset impairment charges and acquisition and integration costs of $29 million and $5 million, respectively, during the quarter ended June 29, 2012 as compared to $30 million and $9 million, respectively, in the comparable period in the prior year. Operating income included restructuring and asset impairment charges and acquisition and integration costs of $82 million and $21 million, respectively, during the nine months ended June 29, 2012 as compared to $74 million and $26 million, respectively, in the comparable period in the prior year. Changes in foreign currency exchange rates unfavorably impacted operating income by $20 million, or 4.2%, and $28 million, or 1.7%, for the quarter and nine months ended June 29, 2012, respectively.

Our cash and cash equivalents balance was $1.1 billion and $1.4 billion as of June 29, 2012 and September 30, 2011 respectively. We generated approximately $1.8 billion of cash from operating activities and utilized $1.4 billion of cash in investing activities and $732 million of cash in financing activities during the nine months ended June 29, 2012. During the nine months ended June 29, 2012, uses of cash primarily included $694 million of capital expenditures, $512 million for dealer generated customer accounts and bulk account purchases primarily in our ADT North American Residential segment, $500 million to repurchase our common shares, $346 million to pay cash dividends and $217 million to acquire businesses, net of cash acquired.

	For the Quarters Ended						For the Nine Months Ended

	June 29, 2012			June 24, 2011			June 29, 2012			June 24, 2011⁽¹⁾
Revenue from product sales	$	2,480		$	2,335		$	7,180		$	6,960
Service revenue		1,980			1,957			5,841			5,702

Net revenue	$	4,460		$	4,292		$	13,021		$	12,662

Operating income	$	367		$	475		$	1,323		$	1,618
Interest income		6			7			19			25
Interest expense		(63	)		(59	)		(182	)		(184	)
Other expense, net		(5	)		(3	)		(19	)		(9	)

Income from continuing operations before income taxes		305			420			1,141			1,450
Income tax expense		(53	)		(58	)		(221	)		(278	)

Income from continuing operations		252			362			920			1,172
Income from discontinued operations, net of income taxes		(10	)		(4	)		(17	)		161

Net income	$	242		$	358		$	903		$	1,333
Less: noncontrolling interest in subsidiaries net (loss)		—			(1	)		1			—

Net income attributable to Tyco common shareholders	$	242		$	359		$	902		$	1,333

Net revenue for Commercial Fire and Security of $2.7 billion increased by $82 million, or 3.2%, during the quarter ended June 29, 2012, as compared to the quarter ended June 24, 2011. Changes in foreign currency exchange rates unfavorably impacted net revenue by $100 million, or 3.9%. Net revenue was favorably impacted by the net impact of acquisitions and divestitures of $90 million, or 3.5%. The net increase in net revenue was primarily driven by higher volumes in product sales as a result of generally improved end market demand.

Net revenue from product sales includes sales and installation of commercial fire and security equipment and other systems. Revenue from systems installation decreased by $15 million, or 1.6%, during the quarter ended June 29, 2012, as compared to the quarter ended June 24, 2011. Changes in foreign currency exchange rates unfavorably impacted net revenue by $32 million, or 3.3%. Net revenue was favorably impacted by the net impact of acquisitions and divestitures of $16 million, or 1.7%. Net revenue was unfavorably impacted by weakness in Europe, Middle East and Africa ("EMEA") and North America due to continued softness in the non-residential construction market, offset by an increase in net revenue primarily driven by an increase in systems installation in Asia.

Net revenue from product sales increased by $107 million, or 23.5%, during the quarter ended June 29, 2012, as compared to the quarter ended June 24, 2011. Changes in foreign currency exchange rates unfavorably impacted net revenue by $18 million, or 3.9%. Net revenue was favorably impacted by the net impact of acquisitions and divestitures of $74 million, or 16.2%, primarily related to the acquisitions of Visonic and Chemguard. The increase in net revenue for product sales was primarily driven by increased sales volume as a result of generally improved end-market demand.

Service revenue consists of monitoring and maintenance agreements for our electronic security, fire detection and suppression systems, as well as inspection and repair of other life safety systems. Service revenue decreased by $10 million, or 0.9%, during the quarter ended June 29, 2012, as compared to the quarter ended June 24, 2011. Changes in foreign currency exchange rates unfavorably impacted net revenue by $50 million, or 4.3%. This decrease was partially offset by continued focus on expanding service revenue within both fire and security businesses across all regions.

Operating income and operating margin for Commercial Fire and Security were as follows ($ in millions):

Operating income of $309 million increased $29 million, or 10.4%, during the quarter ended June 29, 2012 as compared to the quarter ended June 24, 2011. Changes in foreign currency exchange rates unfavorably impacted operating income by $12 million, or 4.3%. The increase in operating income and operating margin was primarily driven by increased product sales volume, implementation of pricing actions to offset commodity inflationary pressures and cost-containment initiatives partially offset by additional environmental remediation costs of $13 million, as compared to nil in the same period in the prior year. Included in operating income for the quarter ended June 29, 2012 was restructuring and asset impairment charges and a loss on divestiture of $14 million and nil, respectively, compared to $24 million and $11 million, respectively, in the same period in the prior year. Also included in operating income were acquisition and integration costs and separation costs of $3 million and $1 million, respectively, for the quarter ended June 29, 2012 as compared to $2 million and nil, respectively, for the quarter ended June 24, 2011. Additionally, for the quarter ended June 29, 2012, there was a settlement of a legacy legal matter of $28.5 million, as compared to nil in the same period in the prior year. See Note 11 to the Consolidated Financial Statements.

Recurring customer revenue is generated by contractual monthly recurring fees for monitoring and other recurring services provided to our customers. Non-recurring revenue consists of revenue associated with sales of equipment, deferred revenue related to upfront installation fees, non-routine repair and maintenance services, customer termination charges and dealer charge-backs.

Net revenue for ADT North American Residential of $815 million increased by $33 million, or 4.2%, during the quarter ended June 29, 2012, as compared to the quarter ended June 24, 2011. Changes in foreign currency exchange rates unfavorably impacted net revenue by $2 million, or 0.3%.The increase in net revenue was driven by growth in recurring customer revenue of $36 million, or 5.2%, primarily due to an increase in customer accounts and higher average revenue per customer.

During the quarter ended June 29, 2012, gross customer additions totaled approximately 291,000, reflecting a 4.7% increase compared to the comparable period in 2011. This increase was primarily driven by customer accounts generated through both our direct and dealer channels. Our annualized customer attrition rate as of June 29, 2012 was 13.5%. We attribute the increase in customer attrition from March 30, 2012 and June 24, 2011 to price escalations as well as increased customer relocations. Average revenue per customer increased $1.35, or 3.6%, as of June 29, 2012 compared with June 24, 2011, due primarily to price escalations and the addition of new customers at higher monthly rates, as well as increased take rates on new service offerings, including ADT Pulse.

Operating income and operating margin for ADT North American Residential were as follows ($ in millions):

Operating income of $203 million increased $10 million, or 5.2%, for the quarter ended June 29, 2012 as compared to the comparable period in the prior year. The increase in operating income and operating margin was primarily due to higher margin recurring customer revenue, efficiencies gained through restructuring actions, integration initiatives and synergies and other cost containment activities. These favorable impacts were partially offset by an increase in selling related expenses as a result of investments to grow the business, including expansion of our internal sales force and other lead generating activities. Operating income for the quarters ended June 29, 2012 and June 24, 2011 included integration costs related to the acquisition of Broadview Security, of $2 million and $5 million, respectively. Additionally, operating income for the quarter ended June 29, 2012 includes approximately $3 million of charges incurred in connection with the 2012 Separation. Changes in foreign currency exchange rates unfavorably impacted operating income by $1 million, or 0.5%.

Net revenue for Flow Control of $981 million increased $53 million, or 5.7%, during the quarter ended June 29, 2012 compared to the quarter ended June 24, 2011. Changes in foreign currency exchange rates unfavorably impacted net revenue by $51 million, or 5.5%. Net revenue was favorably impacted by the net impact of acquisitions and divestitures of $15 million, or 1.6%, primarily related to the acquisition of KEF Holdings Ltd. ("KEF") which was acquired in the beginning of the fourth quarter of fiscal 2011. Additionally, net revenue increased primarily due to strength in end market

demand in our Valves and Controls business and short term project growth in our Water and Environmental Systems business.

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

Operating income of $112 million increased $9 million, or 8.7%, in the quarter ended June 29, 2012 as compared to the same period in the prior year. Changes in foreign currency exchange rates unfavorably impacted operating income by $7 million, or 6.8%, for the quarter ended June 29, 2012. The net increase is primarily a result of the increased sales volume across all three businesses as compared to the prior year period, partially offset by restructuring charges of $12 million and a loss on divestitures of $6 million for the quarter ended June 29, 2012, as compared to $2 million and nil in the same period in the prior year.

Corporate expense was $257 million for the quarter ended June 29, 2012 compared to $101 million during the quarter ended June 24, 2011. The increase in Corporate expense was primarily related to $114 million in net charges recorded in connection with the Company's annual valuation of its asbestos-related liabilities and insurance assets, as well as $61 million of charges incurred in connection with the 2012 Separation, as compared to $11 million and nil, respectively, in the same period in the prior year. The increase in net asbestos charges was primarily due to the Company revising its look-back period for historical claim experience for the past five years to the past three years, as well as its look-forward period related to the projection of future claims from seven years, or 2019, to fifteen years, or 2027. The Company decided to revise its look-back period as it determined that a look-back period of three years was more appropriate as the Company has experienced a higher and more consistent level of claims activity and settlement costs in the past three years. The Company's decision to revise its look-forward period was primarily based on improvements in the consistency of observable data and the Company's more extensive experience with claims activity since the look-forward period was originally established in 2005. See Note 11 to the Consolidated Financial Statements for additional information. Corporate recorded restructuring charges and a loss on divestitures of $3 million and $8 million, respectively, for the quarter ended June 29, 2012 as compared to $3 million and a gain of $5 million, respectively, for the quarter ended June 24, 2011. The quarter ended June 24, 2011 also included acquisition costs of $1 million.

Interest income was $6 million and $7 million for the quarters ended June 29, 2012 and June 24, 2011, respectively. The decrease in interest income was primarily related to lower cash balances.

Interest expense was $63 million in the quarter ended June 29, 2012 compared to $59 million in the quarter ended June 24, 2011. The increase in interest expense was primarily related to $3 million of interest expense incurred in connection with the termination of the bridge facility in our ADT North American Residential segment entered into in connection with the 2012 Separation. See Note 9 to the Consolidated Financial Statements.

Other expense, net was $5 million and $3 million during the quarters ended June 29, 2012 and June 24, 2011. Other expense, net for the quarter ended June 29, 2012 primarily related to $6 million for our share of Atkore International Group Inc.'s ("Atkore") net loss, which is accounted for under the equity method of accounting. See Note 3 to the Consolidated Financial Statements. This was partially offset by changes in amounts due from Covidien and TE Connectivity under the 2007 Tax Sharing Agreement. See Note 6 to the Consolidated Financial Statements. Other expense, net for the quarter ended June 24, 2011 primarily related to amounts due to Covidien and TE Connectivity under the 2007 Tax Sharing Agreement and was partially offset by $9 million, our share of Atkore's net income.

Our effective income tax rate was 17.4% and 13.8% during the quarters ended June 29, 2012 and June 24, 2011, respectively. The increase in the effective tax rate for the quarter ended June 29, 2012 was primarily related to enacted tax law changes and tax costs related to the 2012 Separation, which were partially offset by a non-recurring item generating a tax benefit. Our effective income tax rate for the quarter ended June 24, 2011 was positively impacted by favorable audit resolutions in multiple jurisdictions during the comparable period. The rate can vary from quarter to quarter due to discreet items, such as the settlement of income tax audits and changes in tax laws, as well as recurring factors such as the geographic mix of income before taxes.

Nine Months Ended June 29, 2012 Compared to Nine Months Ended June 24, 2011

Net revenue for Commercial Fire and Security of $7.7 billion increased by $263 million, or 3.5%, during the nine months ended June 29, 2012, as compared to the nine months ended June 24, 2011. Changes in foreign currency exchange rates unfavorably impacted net revenue by $142 million, or 1.9%. Net revenue was favorably impacted by the net impact of acquisitions and divestitures of $184 million, or 2.5%. The net increase in revenue was primarily driven by higher volumes in product sales as a result of generally improved end market demand in ROW, as well as the introduction of new product lines.

Net revenue from product sales includes sales and installation of commercial fire and security equipment and other systems. Revenue from systems installation decreased by $57 million, or 2.0%,

during the nine months ended June 29, 2012, as compared to the nine months ended June 24, 2011. Changes in foreign currency exchange rates unfavorably impacted revenue by $44 million, or 1.6%. Net revenue was favorably impacted by the net impact of acquisitions and divestitures of $12 million, or 0.4%. The net decrease in net revenue was primarily driven by weakness in the EMEA and North American markets due to continued softness in the non-residential construction market, partially offset by an increase in systems installations in Asia.

Net revenue from product sales increased by $273 million, or 21.5%, during the nine months ended June 29, 2012, as compared to the nine months ended June 24, 2011. Changes in foreign currency exchange rates unfavorably impacted net revenue by $24 million, or 1.9%. Net revenue was favorably impacted by the net impact of acquisitions and divestitures of $153 million, or 12.1%, primarily related to the acquisitions of Visonic and Chemguard. The net increase in revenue for product sales was primarily driven by increased volume as a result of generally improved end-market demand in ROW, as well as the introduction of new product lines.

Service revenue consists of monitoring and maintenance agreements for our electronic security, fire detection and suppression systems, as well as inspection and repair of other life safety systems. Service revenue increased by $47 million, or 1.4%, during the nine months ended June 29, 2012, as compared to the nine months ended June 24, 2011. Changes in foreign currency exchange rates unfavorably impacted net revenue by $74 million, or 2.2%. Net revenue was favorably impacted by the net impact of acquisitions and divestitures of $19 million, or 0.6%, primarily related to the acquisition of Signature Security in the third quarter of fiscal 2011. The net increase in net service revenue was primarily driven by continued focus on expanding service revenue across all regions.

Operating income and operating margin for Commercial Fire and Security were as follows ($ in millions):

Operating income of $888 million increased $82 million, or 10.2%, in the nine months ended June 29, 2012 as compared to the nine months ended June 24, 2011. Changes in foreign currency exchange rates unfavorably impacted operating income by $19 million, or 2.4%. The increase in operating income and operating margin was primarily driven by increased product sales volume, implementation of pricing actions to offset commodity inflationary pressures continued growth in service revenue and cost-containment initiatives, partially offset by additional environmental remediation costs of $13 million, as compared to nil in the same period in the prior year. Included in operating income for the nine months ended June 29, 2012 were $61 million of restructuring and asset impairment charges, a $3 million loss on divestitures, $7 million in acquisition and integration costs and $2 million of separation costs. During the nine months ended June 24, 2011, these charges were $54 million, $28 million, $3 million and nil, respectively. Additionally, the nine months ended June 29, 2012 included the settlement of a legacy legal matter of $28.5 million, as compared to nil in the same period in the prior year. See Note 11 to the Consolidated Financial Statements.

Net revenue for ADT North American Residential of $2.4 billion increased by $101 million, or 4.4%, during the nine months ended June 29, 2012, as compared to the nine months ended June 24, 2011. Changes in foreign currency exchange rates unfavorably impacted net revenue by $3 million, or 0.1%.The increase in net revenue was driven by growth in recurring customer revenue of $101 million, or 4.9%, primarily due to an increase in customer accounts and higher average revenue per customer.

During the nine months ended June 29, 2012, gross customer additions totaled approximately 877,000, reflecting a 9.9% increase compared to the comparable period in 2011. This increase was primarily driven by customer accounts generated through both our direct and dealer channels. Our annualized customer attrition rate as of June 29, 2012 was 13.5%. We attribute the increase in customer attrition from March 30, 2012 and June 24, 2011 to price escalations as well as increased customer relocations. Average revenue per customer increased $1.35, or 3.6%, as of June 29, 2012 compared with June 24, 2011, primarily due to price escalations and the addition of new customers at higher monthly rates, as well as increased take rates on new service offerings, including ADT Pulse.

Operating income and operating margin for ADT North American Residential were as follows ($ in millions):

Operating income of $587 million increased $34 million, or 6.1%, for the nine months ended June 29, 2012 as compared to the nine months ended June 24, 2011. The increase in operating income and operating margin was primarily due to higher margin recurring customer revenue, efficiencies gained through restructuring actions, integration initiatives, and other cost containment activities. These favorable impacts were partially offset by an increase in selling related expenses as a result of investments to grow the business, including the expansion of our internal sales force as well as increased advertising and other lead generating activities. Operating income for the nine months ended June 29, 2012 and June 24, 2011 includes integration costs related to the acquisition of Broadview Security of $12 million and $19 million, respectively. Additionally, operating income for the nine months ended June 29, 2012 includes approximately $3 million of charges incurred in connection with the 2012 Separation. Changes in foreign currency exchange rates unfavorably impacted operating income by $1 million, or 0.2%.

Net revenue for Flow Control of $2.9 billion increased $342 million, or 13.4%, during the nine months ended June 29, 2012 compared to the nine months ended June 24, 2011. Net revenue was favorably impacted by the net impact of acquisitions and divestitures of $57 million, or 2.2%, primarily related to the acquisition of KEF. Changes in foreign currency exchange rates unfavorably impacted net revenue by $55 million, or 2.2%. The net increase in revenue was due to strength in end market demand across all three of our businesses led by our Valves and Controls and Thermal Controls businesses.

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

Operating income of $337 million increased $48 million, or 16.6%, in the nine months ended, June 29, 2012 as compared to the same period in the prior year. Changes in foreign currency exchange rates unfavorably impacted operating income by $8 million, or 2.8%. The increase in operating income and operating margin was primarily due to sales volume increases in our Valves & Controls and Thermal Control businesses, partially offset by a decrease in operating income in our Water and Environmental Services business. Restructuring and divestiture charges were $13 million and $6 million during the nine months ended June 29, 2012 as compared to $7 million and nil in the same period in prior year.

Corporate expense was $489 million during the nine months ended June 29, 2012 compared to $37 million during the nine months ended June 24, 2011. Corporate expense for the nine months ended June 29, 2012 included $157 million of charges incurred in connection with the 2012 Separation as well as $114 million in net charges recorded in connection with the Company's annual valuation of its asbestos-related liabilities and insurance assets, partially offset by $30 million of net income related to legacy legal matters, as compared to nil, $11 million and $6 million of income in the same period in the prior year. The increase in net asbestos charges was primarily due to the Company revising its look-back period for historical claim experience for the past five years to the past three years, as well as its look-forward period related to the projection of future claims from seven years, or 2019, to fifteen years, or 2027. The Company decided to revise its look-back period as it determined that a look-back period of three years was more appropriate as the Company has experienced a higher and more consistent level of claims activity and settlement costs in the past three years. The Company's decision to revise its look-forward period was primarily based on improvements in the consistency of observable data and the Company's more extensive experience with claims activity since the look-forward period was originally established in 2005. See Note 11 to the Consolidated Financial Statements for additional information. The nine months ended June 29, 2012 also included restructuring charges, acquisition costs and a loss on divestitures of $6 million, $2 million, and $8 million, respectively, as compared to $11 million, $3 million and a gain of $255 million for the nine months ended June 24, 2011. The gain on divestitures for the nine months ended June 24, 2011 primarily related to the divestiture of our Electrical and Metal Products business.

Interest income was $19 million and $25 million for the nine months ended June 29, 2012 and June 24, 2011, respectively. The decrease in interest income was primarily related to lower cash balances.

Interest expense was $182 million for the nine months ended June 29, 2012 compared to $184 million for the same period in the prior year. The decrease in interest expense was primarily related to savings realized from the replacement of higher coupon notes with lower coupon notes, including the maturity of 6.75% notes due 2011, and issuances of 3.75% notes due 2018 and 4.625% notes due 2023 during the second quarter of 2011. This was partially offset by $3 million of interest

expense incurred in connection with the termination of the bridge facility in our ADT North American Residential segment entered into in connection with the 2012 Separation. See Note 9 to the Consolidated Financial Statements.

Other expense, net was $19 million and $9 million during the nine months ended June 29, 2012 and June 24, 2011, respectively. Other expense, net for the nine months ended June 29, 2012 primarily related to $17 million for our share of Atkore's net loss, which is accounted for under the equity method of accounting. See Note 3 to the Consolidated Financial Statements. In addition, we incurred a charge of $3 million as a result of a decrease in the receivables due from Covidien and TE Connectivity under the 2007 Tax Sharing Agreement. See Note 6 to the Consolidated Financial Statements. Other expense, net for the nine months ended June 24, 2011 primarily related to amounts due to Covidien and TE Connectivity under the 2007 Tax Sharing Agreement.

Our effective income tax rate was 19.4% and 19.2% for the nine months ended June 29, 2012 and June 24, 2011, respectively. Our effective income tax rate for the nine months ended June 29, 2012 was impacted by enacted tax law changes, tax costs related to the 2012 Separation, favorable audit resolutions in multiple jurisdictions and a non-recurring item generating a tax benefit. Our effective income tax rate for the nine months ended June 24, 2011 was impacted by favorable audit resolutions in multiple jurisdictions and a non-recurring tax charge recorded in conjunction with the sale of a majority interest in our Electrical and Metal Products business. The rate can vary from quarter to quarter due to discreet items such as the settlement of income tax audits and changes in tax laws, as well as recurring factors, such as the geographic mix of income before taxes.

The preparation of the Consolidated Financial Statements in conformity with US GAAP requires management to use judgment in making estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses. We believe that our accounting policies for depreciation and amortization methods of security monitoring-related assets, revenue recognition, loss contingencies, income taxes, goodwill and indefinite-lived intangible assets, long-lived assets and pension and postretirement benefits are based on, among other things, judgments and assumptions made by management that include inherent risks and uncertainties. During the third quarter of fiscal 2012, the Company revised its look-back period for historical claim experience from five years to three years, as well as its look-forward period from seven years to fifteen years. See Note 11 to the Consolidated Financial Statements. During fiscal 2012, there have been no other 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 for the fiscal year ended September 30, 2011 (the "2011 Form 10-K"). See Note 1 to the Consolidated Financial Statements for the issuance of new accounting standards during fiscal 2012.

A fundamental objective of the Company is to have sufficient liquidity, balance sheet strength, and financial flexibility to fund the operating and capital requirements of its core businesses around the world. The primary source of funds to finance our operations and capital expenditures is cash generated by operations. In addition, we maintain a commercial paper program, have access to committed revolving credit facilities and have access to equity and debt capital from public and private sources. We continue to balance our operating, investing and financing uses of cash through investments and acquisitions in our core businesses, dividends and share repurchases. In addition, we believe our cash position, amounts available under our credit facilities and cash provided by operating activities will be adequate to cover our operational and business needs in the foreseeable future.

We had $1.1 billion and $1.4 billion of cash and cash equivalents as of June 29, 2012 and September 30, 2011, respectively. Cash generated by operating activities increased to $1.8 billion for the nine months ended June 29, 2012 compared to $1.6 billion for the nine months ended June 24, 2011. Cash used in investing activities was $1.4 billion for the nine months ended June 29, 2012 compared to $515 million for the nine months ended June 24, 2011. Cash used in financing activities was $732 million for the nine months ended June 29, 2012 compared to $1.3 billion for the nine months ended June 24, 2011.

As of June 29, 2012, our shareholder's equity was $14.4 billion and our total debt was $4.2 billion. In addition, we had lines of credit totaling approximately $1.75 billion, including $250 million under a revolving credit facility for ADT entered into on June 22, 2012 in anticipation of the 2012 Separation, none of which were drawn. Upon the occurrence of the 2012 Separation, the Company will automatically and unconditionally be released from its guarantee of the ADT credit facility. See Note 9 to the Consolidated Financial Statements. Our ratio of total debt to total capital (the sum of our short-and long-term debt and shareholders' equity) was 22% as of June 29, 2012 and 23% as of September 30, 2011, respectively. This ratio is a measure of our long-term liquidity and is an indicator of financial flexibility.

On July 5, 2012, in connection with the planned spinoff of the Company's North American residential security business, ADT issued $2.5 billion of aggregate principal amount notes due 2017, 2022 and 2042. The net proceeds will be used to repay intercompany debt and to make other cash payments to Tyco to allow the Company to fund the tender offers and redemptions described below. Tyco is the guarantor of the notes until the occurrence of the 2012 Separation at which time the Company will be automatically and unconditionally released from its guarantee.

On June 27, 2012, Tyco and its subsidiary, TIFSA, commenced tender offers to purchase for cash various debt securities maturing from 2013 to 2023 issued by TIFSA and/or Tyco, in an aggregate principal amount up to $2.6 billion. On July 12, 2012, Tyco redeemed approximately $2.1 billion in outstanding aggregate principal of notes. On July 16, 2012, Tyco issued notices to the holders of the remaining outstanding principal amounts of the 6.0% Notes due 2013 and 4.125% Notes due 2014 notifying them that such notes would be redeemed at the "make-whole" amount plus accrued and unpaid interest on August 15, 2012. See Note 21 to the Consolidated Financial Statements.

The sources of our cash flow from operating activities and the use of a portion of that cash in our operations for the quarters and nine months ended June 29, 2012 and June 24, 2011 are as follows ($ in millions):

	For the Quarters Ended						For the Nine Months Ended

	June 29, 2012			June 24, 2011			June 29, 2012			June 24, 2011
Cash flows from operating activities:
Operating income	$	367		$	475		$	1,323		$	1,618
Depreciation and amortization⁽¹⁾		346			331			1,021			976
Loss (gain) on divestitures		14			6			17			(227	)
Non-cash compensation expense		28			27			80			86
Deferred income taxes		(4	)		(3	)		72			119
Provision for losses on accounts receivable and inventory		29			13			90			61
Other, net		11			15			58			45
Net change in working capital		95			(46	)		(447	)		(621	)
Interest income		6			7			19			25
Interest expense		(63	)		(59	)		(182	)		(184	)
Income tax expense		(53	)		(58	)		(221	)		(278	)

Net cash provided by operating activities	$	776		$	708		$	1,830		$	1,620

Other cash flow items:
Capital expenditures, net⁽²⁾	($	257	)	($	185	)	($	685	)	($	541	)
Increase in the sale of accounts receivable		(1	)		—			—			—
Acquisition of dealer generated customer accounts and bulk account purchases		(176	)		(172	)		(512	)		(451	)
Purchase accounting and holdback liabilities		(1	)		—			(2	)		1
Voluntary pension contributions		—			15			—			15

The net change in working capital increased operating cash flow by $95 million for the quarter ended June 29, 2012. The significant changes in working capital included a $215 million increase in accrued and other liabilities and a $80 million increase in accounts payable, partially offset by a $108 million increase in prepaid expenses and other current assets and a $103 million increase in accounts receivable.

The net change in working capital decreased operating cash flow by $46 million for the quarter ended June 24, 2011. The significant changes in working capital included a $140 million increase in accounts receivable, partially offset by a $110 million increase in accrued and other liabilities.

The net change in working capital decreased operating cash flow by $447 million for the nine months ended June 29, 2012. The significant changes in working capital included a $233 million increase in inventories, a $137 million increase in prepaid expenses and other current assets, a $119 million increase in accounts receivable, a $75 million decrease in accrued and other liabilities, partially offset by an $83 million increase in accounts payable and a $50 million increase in deferred revenue.

The net change in working capital decreased operating cash flow by $621 million for the nine months ended June 24, 2011. The significant changes in working capital included a $195 million increase in inventories, a $183 million increase in accounts receivable and a $172 million decrease in accrued and other liabilities.

During the quarters ended June 29, 2012 and June 24, 2011, we paid approximately $23 million and $31 million, respectively, in cash related to restructuring activities. During the nine months ended June 29, 2012 and June 24, 2011, we paid approximately $74 million and $86 million, respectively, in cash related to restructuring activities. See Note 4 to our Consolidated Financial Statements for further information regarding our restructuring activities.

As previously discussed, in September 2011, 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 $59 million and $114 million in separation costs during the quarter and nine months ended June 29, 2012, compared to nil for both the quarter and nine months ended June 24, 2011.

During the quarter ended June 29, 2012 and June 24, 2011, cash paid for acquisition and integration costs were nil and $2 million, respectively. During the nine months ended June 29, 2012 and June 24, 2011, cash paid for acquisition and integration costs were $2 million and $13 million respectively.

In connection with the 2007 Separation, we entered into the 2007 Tax Sharing Agreement with Covidien and TE Connectivity. In accordance with this agreement, we received $3 million from Covidien and paid $13 million to Covidien and TE Connectivity during the quarter and nine months ended June 29, 2012, respectively, compared to nil for both the quarter and nine months ended June 24, 2011.

During the quarter and nine months ended June 29, 2012, we contributed $11 million and $17 million, respectively, to our U.S. pension plans and $17 million and $53 million, respectively, to our non U.S. Pension plans. We anticipate contributing at least the minimum required to our pension plans in fiscal year 2012 of $38 million for U.S. plans and $72 million for non-U.S. plans.

Income taxes paid, net of refunds, related to continuing operations were $58 million and $62 million during the quarters ended June 29, 2012 and June 24, 2011, respectively, and $149 million and $159 million during the nine months ended June 29, 2012 and June 24, 2011, respectively.

Net interest paid, related to continuing operations were $28 million for both of the quarters ended June 29, 2012 and June 24, 2011 and $128 million and $126 million during the nine months ended June 29, 2012 and June 24, 2011, respectively.

We made capital expenditures of $694 million for the nine months ended June 29, 2012 as compared to $548 million during the comparable prior period. The nine months ended June 29, 2012 includes $12 million of capital expenditures related to the 2012 Separation. The level of capital expenditures in fiscal year 2012 is expected to exceed the spending levels in fiscal year 2011 and is also expected to exceed depreciation expense.

During the nine months ended June 29, 2012 and June 24, 2011, we paid approximately $512 million and $451 million, respectively, to acquire approximately 446,000 and 419,000 customer contracts for electronic security services primarily within our ADT North American Residential segment. See Note 5 to our Consolidated Financial Statements for further information.

During the nine months ended June 29, 2012, we paid cash for acquisitions included in continuing operations totaling $217 million, net of cash acquired of $16 million, the most significant of which related to the acquisition of Visonic. In addition, other acquisitions during the nine months ended June 29, 2012 included in the Company's Commercial Fire and Security were not material individually or in the aggregate. During the nine months ended June 24, 2011, cash paid for acquisitions included in continuing operations totaled $228 million, primarily related to the acquisition of Signature Security Group within our Commercial Fire and Security segment.

During the nine months ended June 29, 2012 and June 24, 2011, we paid cash of $4 million and received cash proceeds, net of cash divested of approximately $1 billion, respectively, for divestitures. The cash proceeds for the nine months ended June 24, 2011, primarily related to the sale of a majority interest in our Electrical and Metal Products business of $713 million, which is presented in continuing operations and $264 million for the sale of our European water business which is presented in discontinued operations. See Note 3 to our Consolidated Financial Statements for further information.

On January 12, 2011, Tyco International Finance, S.A. ("TIFSA"), our finance subsidiary, issued $250 million aggregate principal amount of 3.75% notes due on January 15, 2018 and $250 million aggregate principal amount of 4.625% notes due on January 15, 2023, which are fully and unconditionally guaranteed by the Company. TIFSA received net cash proceeds of approximately $494 million after deducting debt issuance costs and a debt discount. The net proceeds, along with other available funds, were used to fund the repayment of all of our outstanding 6.75% notes due in February 2011.

During the nine months ended June 29, 2012, TIFSA issued commercial paper of $1.2 billion to U.S. institutional accredited investors and qualified institutional buyers. As of June 29, 2012 and June 24, 2011, TIFSA had nil and $40 million, respectively, of commercial paper outstanding. Commercial paper issued during the nine months ended June 29, 2012 and June 24, 2011 bore interest at a weighted average rate of 0.50% and 0.37%, respectively.

Pursuant to our share repurchase program, we may repurchase Tyco shares from time to time in open market purchases at prevailing market prices, in negotiated transactions off the market, or pursuant to an approved 10b5-1 trading plan in accordance with applicable regulations. During the nine months ended June 29, 2012, we repurchased approximately 11 million common shares for approximately $500 million under our 2011 share repurchase program. During the nine months ended June 24, 2011, we repurchased approximately 30 million common shares for approximately $1.3 billion under the 2011, 2010, and 2008 share repurchase programs, which completed both the 2010 and 2008 programs.

On March 7, 2012, our shareholders approved a cash dividend of $0.50 per share, payable to shareholders in two quarterly installments of $0.25 on May 23, 2012 and August 22, 2012. Shareholders also approved a conditional cash dividend of $0.50 per share, payable to shareholders in two quarterly installments of $0.25 on November 15, 2012 and February 20, 2013. Payment of the conditional cash dividend will be made only in the event that the 2012 Separation does not occur prior to the record date for each conditional dividend payment. On March 9, 2011, our shareholders approved an annual dividend on our common shares of $1.00 per share, to be paid from contributed surplus in four installments of $0.25 per share. During the nine months ended June 29, 2012 and June 24, 2011, we paid cash dividends of approximately $346 million and $342 million, respectively.

Management believes that cash generated by or available to us should be sufficient to fund our capital and operational business needs for the foreseeable future, including capital expenditures, quarterly dividend payments, share repurchases, and separation-related expenses.

For a detailed discussion of contingencies related to tax and litigation matters and governmental investigations, see Notes 6 and 11 to our Consolidated Financial Statements.

We had a backlog of unfilled orders of $10,185 million and $9,651 million as of June 29, 2012 and September 30, 2011, respectively. We expect that approximately 87% of our backlog as of June 29, 2012 will be filled during the next 12 months. Backlog by segment was as follows ($ in millions):

Commercial Fire and Security and ADT North American Residential's backlog includes recurring revenue-in-force and long-term deferred revenue for upfront fees. Revenue-in-force represents 12 months' revenue associated with monitoring and maintenance services under contract in the security business. Commercial Fire and Security's backlog of $4,701 million and $4,400 million as of June 29, 2012 and September 30, 2011, respectively, consists primarily of $2,118 million and $2,073 million of recurring revenue in force and $400 million and $420 million of deferred revenue as of June 29, 2012 and September 30, 2011, respectively. ADT North American Residential's backlog of $3,649 million and $3,507 million, as of June 29, 2012 and September 30, 2011, respectively, consists primarily of $2,970 million and $2,852 million of recurring revenue in force and $655 million and $634 million of deferred revenue as of June 29, 2012 and September 30, 2011, respectively.

Backlog increased $534 million, or 5.5%, to $10,185 million as of June 29, 2012. The net increase in backlog was primarily related to an increase in recurring revenue-in-force in both our Commercial Fire and Security and ADT North American Residential segments, as well as acquisitions within our Commercial Fire and Security segment primarily within the Asia Pacific region. In addition, bookings increased in our Commercial Fire and Security segment primarily within the North American region and our Flow Control segment primarily in the Asia Pacific and North American regions. Changes in foreign currency unfavorably impacted backlog by $140 million, or 1.5%.

Certain of our international businesses utilize the sale of accounts receivable as short-term financing mechanisms. The aggregate amount outstanding under our international accounts receivable programs was not material as of June 29, 2012 or September 30, 2011.

Certain of our business segments have guaranteed the performance of third-parties and provided financial guarantees for uncompleted work and financial commitments. The terms of these guarantees

vary with end dates ranging from the current fiscal year through the completion of such transactions. The guarantees would typically be triggered in the event of nonperformance and performance under the guarantees, if required, would not have a material effect on our financial position, results of operations or cash flows.

There are certain guarantees or indemnifications extended among Tyco, Covidien and TE Connectivity in accordance with the terms of the Separation and Distribution Agreement and the 2007 Tax Sharing Agreement. The guarantees primarily relate to certain contingent tax liabilities included in the 2007 Tax Sharing Agreement. At the time of the Separation, we recorded a liability necessary to recognize the fair value of such guarantees and indemnifications. See Note 6 to the Consolidated Financial Statements for further discussion of the 2007 Tax Sharing Agreement. In addition, prior to the Separation we provided support in the form of financial and/or performance guarantees to various Covidien and TE Connectivity operating entities. To the extent these guarantees were not assigned in connection with the Separation, we assumed primary liability on any remaining such support. These obligations were not material to us as of June 29, 2012.

In disposing of assets or businesses, we often provide representations, warranties and/or indemnities to cover various risks including, for example, unknown damage to the assets, environmental risks involved in the sale of real estate, liability to investigate and remediate environmental contamination at waste disposal sites and manufacturing facilities, and unidentified tax liabilities and legal fees related to periods prior to disposition. We have no reason to believe that these uncertainties would have a material adverse effect on our financial position, results of operations or cash flows. We have recorded liabilities for known indemnifications included as part of environmental liabilities. See Note 11 to the Consolidated Financial Statements for a discussion of these liabilities.

In the normal course of business, we are liable for contract completion and product performance. We record estimated product warranty costs at the time of sale. In the opinion of management, such obligations will not significantly affect our financial position, results of operations or cash flows.

For a detailed discussion of guarantees and indemnifications, see Note 19 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 and tax efficiencies, product expansion, backlog, the consummation and benefits of acquisitions and divestitures, as well as financings and repurchases of debt or equity securities, are subject to known and unknown risks, uncertainties and contingencies. Many of these risks, uncertainties and contingencies are beyond our control, and may cause actual results, performance or achievements to differ materially from anticipated results, performances or achievements. Factors that might affect such forward-looking statements include, among other things:

The Company's exposure to market risk from changes in interest rates, foreign currency exchange rates and commodity prices has not changed materially from our exposure discussed in the 2011 Form 10-K. In order to manage the volatility relating to our more significant market risks, from time to time we enter into forward foreign currency exchange contracts, interest rate swaps and commodity swaps.

We utilize established risk management policies and procedures in executing derivative financial instrument transactions. We do not execute transactions or hold derivative financial instruments for trading or speculative purposes. Derivative financial instruments related to non-functional currency cash flows are used with the goal of mitigating a significant portion of these exposures when it is cost effective to do so. Counterparties to derivative financial instruments are mostly limited to financial institutions with at least an A-/A3 long-term credit rating.

The Company, under the supervision and with the participation of its management, including its Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures (as such term is defined under Rule 13a-15 of the Securities and Exchange Act (the Exchange Act)) as of the end of the period covered by this report. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of June 29, 2012, the Company's disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

There has been no change in our internal control over financial reporting during the quarter ended June 29, 2012 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

which $34 million is included in accrued and other current liabilities and $35 million is included in other liabilities in the Company's Consolidated Balance Sheet. In view of the Company's financial position and reserves for environmental matters, the Company believes that any potential payments of such estimated amounts will not have a material adverse effect on its financial position, results of operations or cash flows.

For a detailed discussion of asbestos-related matters, see Note 11 of the Consolidated Financial Statements.

In connection with the 2007 spin-offs of Covidien and TE Connectivity from Tyco, Tyco entered into a Tax Sharing Agreement that governs the rights and obligations of each party with respect to certain pre-2007 Separation income tax liabilities. More specifically, Tyco, Covidien and TE Connectivity share 27%, 42% and 31%, respectively, of shared income tax liabilities that arise from adjustments made by tax authorities to Tyco's, Covidien's and TE Connectivity' U.S. and certain non-U.S. income tax returns. Costs and expenses associated with the management of these shared tax liabilities are generally shared equally among the parties. Consistent with the sharing provisions of the Tax Sharing Agreement, Tyco had a net receivable from Covidien and TE Connectivity of $76 million and $89 million as of June 29, 2012 and September 30, 2011, respectively. In addition, as of June 29, 2012 and September 30, 2011, the Company had recorded $400 million and $387 million, respectively, in other liabilities, and $6 million and $49 million, respectively, in accrued and other current liabilities.

Tyco and its subsidiaries' income tax returns periodically are examined by various tax authorities. In connection with these examinations, tax authorities, including the IRS, have raised issues and proposed tax adjustments. The Company is reviewing and contesting certain of the proposed tax adjustments. Amounts related to these tax adjustments and other tax contingencies and related interest have been assessed as uncertain income tax positions and recorded as appropriate.

For a detailed discussion of contingencies related to Tyco's income taxes, see Note 6 to the Consolidated Financial Statements. Furthermore, in conjunction with the 2012 Separation, we intend to enter into the 2012 Tax Sharing Agreement with ADT North American residential security and the flow control businesses that will govern the respective rights, responsibilities and obligations of the three parties after the spin-off with respect to tax liabilities and benefits, tax attributes, tax contests and other tax matters regarding income taxes, other taxes and related tax returns. For more information, see Part II. Item 1A-Risk Factors.

As previously reported in the Company's periodic filings, the Company has received and responded to various allegations and other information that certain improper payments were made by the Company's subsidiaries and agents in recent years. The Company reported to the Department of Justice ("DOJ") and the SEC the investigative steps and remedial measures that it has taken in response to these and other allegations and its internal investigations. In 2005, the Company 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"), and that it would continue to investigate and make periodic progress reports to these agencies. The Company has and will continue to communicate with the DOJ and SEC to provide updates on the baseline review and follow-up investigations, including, as appropriate, briefings concerning additional instances of potential improper conduct identified by the Company in the course of its ongoing compliance activities. The baseline review, which has been completed, has revealed that some business practices may not comply with Tyco and FCPA requirements, and in February 2010, the Company initiated discussions with the DOJ and SEC aimed at resolving these matters, which remain ongoing. Although the Company has recorded its best estimate of potential loss related to this matter, it is possible that this estimate may differ from the ultimate loss determined in connection with the resolution of this matter, as the Company may be required to pay material fines, consent to injunctions on future conduct, consent to the imposition of a compliance monitor, or suffer other criminal or civil penalties or adverse impacts, including being subject to lawsuits brought by private litigants, each of which may have a material adverse effect on the Company's financial position, results of operations or cash flows.

On June 8, 2007, SimplexGrinnell received a notice alleging that it had partially withdrawn from the National Automatic Sprinkler Industry Pension Fund (the "Fund"). Under Title IV of ERISA, if the Fund can prove that an employer completely or partially withdraws from a multi-employer pension plan such as the Fund, the employer is liable for withdrawal liability equal to its proportionate share of the plan's unfunded vested benefits. The alleged withdrawal results from a 1994 labor dispute between Grinnell Fire Protection Systems, SimplexGrinnell's predecessor, and Road Sprinkler Fitters Local Union No. 669. Following an adverse arbitration ruling in the third quarter of fiscal 2012, the Company agreed to settle this matter and recorded a charge in the amount of $28.5 million, including accrued interest on the liability. ERISA requires that payment of withdrawal liability be made in full or in quarterly installments commencing upon receipt of a liability assessment from the plan, and as a result the Company had made $22.0 million of payments through June 29, 2012. The remaining $6.5 million of cash payments due are expected to be made in the fourth quarter of fiscal 2012.

As previously reported, in 2002, the SEC's Division of Enforcement conducted an investigation related to past accounting practices for dealer connect fees that ADT had charged to its authorized dealers upon purchasing customer accounts. The investigation related to accounting practices employed by the Company's former management, which were discontinued in 2003. Although the Company settled with the SEC in 2006, a number of former dealers and related parties have filed lawsuits against the Company in the United States and in other countries, including a class action lawsuit filed in the District Court of Arapahoe County, Colorado, alleging breach of contract and other claims related to ADT's decision to terminate certain authorized dealers in 2002 and 2003. In February 2010, the Court

granted a directed verdict in ADT's favor dismissing a number of the plaintiffs' key claims. Upon appeal, the Colorado Court of Appeals affirmed the verdict in ADT's favor in October 2011. The parties agreed to settle this matter in April 2012 with no cash consideration being paid by either side, which is subject to final court approval. Although the Company has favorably resolved the class action lawsuit in Colorado, a number of claims related to the 2002 and 2003 decision to terminate certain authorized dealers outside the United States remain outstanding. During the second quarter of fiscal 2012, the Company recorded its best estimate of probable loss related to these claims. While it is not possible at this time to predict the final outcome of these lawsuits, the Company does not believe these claims will have a material adverse effect on the Company's financial position, results of operations or cash flows.

Tyco's significant business risks are described in Part I, Item 1A in our 2011 Form 10-K and Item 1A in our Form 10-Q for the second fiscal quarter of 2012, to which reference is made herein. Management does not believe that there have been any significant changes in the Company's risk factors since the Company filed its form 10-Q for the second fiscal of 2012.

The transactions described in the table above primarily pertain to the repurchase of common shares on the New York Stock Exchange as part of the $1.0 billion share repurchase program approved by the Board of Directors in April 2011 ("2011 Share Repurchase Program"). In addition, the Company also acquires shares from certain employees in order to satisfy employee tax withholding requirements in connection with the vesting of restricted shares. Approximately 51,634 shares were acquired in these vesting-related transactions outside of the share repurchase program during the quarter ended June 29, 2012. The average price paid per share is calculated by dividing the total cash paid for the shares by the total number of shares repurchased. As of June 29, 2012, approximately $200 million remained outstanding under the 2011 Share Repurchase Program.

Exhibit Number		Exhibit

4.2		First Supplemental Indenture by and among The ADT Corporation (as Issuer), Tyco International Ltd. (as Guarantor) and Wells Fargo Bank, National Association (as Trustee), dated as of July 5, 2012 (incorporated by reference to Exhibit 4.2 to Tyco International Ltd.'s Current Report on Form 8-K filed on July 5, 2012).
4.3		Second Supplemental Indenture by and among The ADT Corporation (as Issuer), Tyco International Ltd. (as Guarantor) and Wells Fargo Bank, National Association (as Trustee), dated as of July 5, 2012 (incorporated by reference to Exhibit 4.3 to Tyco International Ltd.'s Current Report on Form 8-K filed on July 5, 2012).
4.4		Third Supplemental Indenture by and among The ADT Corporation (as Issuer), Tyco International Ltd. (as Guarantor) and Wells Fargo Bank, National Association (as Trustee), dated as of July 5, 2012 (incorporated by reference to Exhibit 4.4 to Tyco International Ltd.'s Current Report on Form 8-K filed on July 5, 2012).
4.5		Exchange and Registration Rights Agreement by and among The ADT Corporation, Tyco International Ltd. (as Guarantor) and Goldman, Sachs & Co., Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Barclays Capital Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC and Deutsche Bank Securities Inc. (as representatives of the several Purchasers), dated as of July 5, 2012 (incorporated by reference to Exhibit 4.5 to Tyco International Ltd.'s Current Report on Form 8-K filed on July 5, 2012).
10.1		Employment Offer Letter between Tyco International Ltd. and Mr. Arun Nayar, dated May 3, 2012 (incorporated by reference to Exhibit 10.1 to Tyco International Ltd.'s Current Report on Form 8-K filed on May 8, 2012).
10.2		Five-Year Senior Unsecured Credit Agreement, dated as of June 22, 2012, among Tyco International Finance, S.A., Tyco International Ltd., each of the initial lenders named therein, Citibank, N.A., as administrative agent, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Merrill, Lynch, Pierce, Fenner & Smith, as bookrunners and lead arrangers (incorporated by reference to Exhibit 10.1 to Tyco International Ltd.'s Current Report on Form 8-K filed on June 27, 2012).
10.3		Five-Year Senior Unsecured Revolving Credit Agreement, dated as of June 22, 2012, among The ADT Corporation, Tyco International Ltd., each of the initial lenders named therein, Citibank, N.A., as administrative agent, JP Morgan Chase Bank, N.A., as syndication agent, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC, as bookrunners and lead arrangers (incorporated by reference to Exhibit 10.2 to Tyco International Ltd.'s Current Report on Form 8-K filed on June 27, 2012).
10.4		Amendment No. 4, dated June 22, 2012, to the Five-Year Senior Unsecured Credit Agreement, dated as of April 25, 2007, among Tyco International Finance, S.A., Tyco International Ltd., each of the lenders named therein and Citibank, N.A., as administrative agent (incorporated by reference to Exhibit 10.4 to Tyco International Ltd.'s Current Report on Form 8-K filed on June 27, 2012).
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).

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.


ý		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 29, 2012
or
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


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


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

		Page

Part I.	Financial Information
Item 1.	Financial Statements	1
	Consolidated Statements of Operations (Unaudited) for the quarters and nine months ended June 29, 2012 and June 24, 2011	1
	Consolidated Balance Sheets (Unaudited) as of June 29, 2012 and September 30, 2011	2
	Consolidated Statements of Cash Flows (Unaudited) for the nine months ended June 29, 2012 and June 24, 2011	3
	Consolidated Statements of Shareholders' Equity (Unaudited) for the nine months ended June 29, 2012 and June 24, 2011	4
	Notes to Consolidated Financial Statements (Unaudited)	5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	50
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	71
Item 4.	Controls and Procedures	71
Part II.	Other Information
Item 1.	Legal Proceedings	72
Item 1A.	Risk Factors	76
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	77
Item 3.	Defaults Upon Senior Securities	77
Item 4.	Reserved	77
Item 5.	Other Information	77
Item 6.	Exhibits	77
Signatures		80

Jurisdiction		Years Open To Audit

Australia			2004-2011
Canada			2002-2011
Germany			1998-2011
Italy			2004-2011
South Korea			2007-2011
Switzerland			2002-2011
United Kingdom			2000-2011
United States			1997-2011

	For the Quarter Ended June 29, 2012		For the Quarter Ended June 24, 2011		For the Nine Months Ended June 29, 2012		For the Nine Months Ended June 24, 2011

2012 actions	$	25	$	—	$	69	$	—
2011 program		2		25		9		70
2009 and prior programs		2		5		4		4

Total restructuring and asset impairment charges, net	$	29	$	30	$	82	$	74

Charges reflected in cost of sales		—		1		—		1
Charges reflected in SG&A		—		—		—		(1	)
Charges reflected in restructuring, asset impairments and divestiture charges (gains), net	$	29	$	29	$	82	$	74

	For the Quarter Ended June 29, 2012

	Employee Severance and Benefits⁽¹⁾		Facility Exit and Other Charges⁽²⁾		Total
Commercial Fire and Security	$	10	$	1	$	11
Flow Control		5		5		10
Corporate and Other		2		2		4

Total	$	17	$	8	$	25


Balance as of September 30, 2011	$	—
Charges		43
Reversals		(1	)
Utilization		(13	)
Currency translation		(2	)

Balance as of June 29, 2012	$	27

	For the Quarter Ended June 29, 2012

	Employee Severance and Benefits			Facility Exit and Other Charges		Total
Commercial Fire and Security	$	2		$	—	$	2
Flow Control		—			1		1
Corporate and Other		(1	)		—		(1	)

Total	$	1		$	1	$	2

	For the Quarter Ended June 24, 2011

	Employee Severance and Benefits			Facility Exit and Other Charges		Charges Reflected in Cost of Sales		Total
Commercial Fire and Security	$	20		$	2	$	1	$	23
ADT North American Residential		(3	)		—		—		(3	)
Flow Control		2			—		—		2
Corporate and Other		—			3		—		3

Total	$	19		$	5	$	1	$	25

	For the Quarter Ended June 29, 2012						For the Quarter Ended June 24, 2011

	Income		Shares		Per Share Amount		Income		Shares		Per Share Amount
Basic earnings per share attributable to Tyco common shareholders:
Income from continuing operations	$	252		463	$	0.54	$	363		468	$	0.78
Share options and restricted share awards		—		7				—		7

Diluted earnings per share attributable to Tyco common shareholders:
Income from continuing operations attributable to Tyco common shareholders, giving effect to dilutive adjustments	$	252		470	$	0.54	$	363		475	$	0.76

	As of June 29, 2012				As of September 30, 2011

	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortizable:
Contracts and related customer relationships	$	8,745	$	5,470	$	8,225	$	5,077
Intellectual property		605		499		571		483
Other		89		30		116		22

Total	$	9,439	$	5,999	$	8,912	$	5,582

Non-Amortizable:
Intellectual property	$	224			$	212
Other		86				86

Total	$	310			$	298

	As of June 29, 2012

($ in millions)	Level 1		Level 2		Total
Available-for-Sale Securities:
Corporate debt securities	$	—	$	34	$	34
U.S. Government debt securities		76		90		166

Total	$	76	$	124	$	200

	U.S. Plans

	For the Quarters Ended						For the Nine Months Ended
	June 29, 2012			June 24, 2011			June 29, 2012			June 24, 2011
Service cost	$	2		$	2		$	4		$	7
Interest cost		9			10			29			31
Expected return on plan assets		(12	)		(12	)		(34	)		(37	)
Amortization of net actuarial loss		4			3			10			9

Net periodic benefit cost	$	3		$	3		$	9		$	10


Balance as of September 30, 2011	$	93
Redeemable noncontrolling interest related to acquisitions		12
Net Loss		(3	)
Adjustments to redemption value		5
Other		(1	)

Balance as of June 29, 2012	$	106

	As of June 29, 2012			As of September 30, 2011

Land	$	147		$	143
Buildings		740			760
Subscriber systems		6,741			6,464
Machinery and equipment		2,318			2,256
Property under capital leases⁽¹⁾		62			62
Construction in progress		223			158
Accumulated depreciation⁽²⁾		(6,058	)		(5,792	)

Property, Plant and Equipment, net	$	4,173		$	4,051

	As of June 29, 2012		As of September 30, 2011

Purchased materials and manufactured parts	$	531	$	476
Work in process		221		211
Finished goods		800		656

Inventories	$	1,552	$	1,343


Balance as of September 30, 2011	$	51
Warranties issued		17
Settlements		(19	)
Currency translation		(2	)

Balance as of June 29, 2012	$	47

	For the Quarters Ended

	June 29, 2012		June 24, 2011		% Change
Revenue from product sales
Systems installation and related products	$	945	$	960		(1.6	)%
Products		563		456		23.5	%

Total revenue from product sales		1,508		1,416		6.5	%
Service revenue		1,156		1,166		(0.9	)%

Net revenue	$	2,664	$	2,582		3.2	%

	As of

	June 29, 2012			March 30, 2012			June 24, 2011
Ending number of customers (in thousands)		6,447			6,432			6,360
Gross customer additions for the quarters ended (in thousands)		291			291			278
Customer attrition rate⁽¹⁾		13.5	%		13.2	%		12.9	%
Average revenue per customer (dollars)	$	38.36		$	37.98		$	37.01

	As of

	June 29, 2012			March 30, 2012			June 24, 2011
Ending number of customers (in thousands)		6,447			6,432			6,360
Gross customer additions for the nine months ended (in thousands)		877			876			798
Customer attrition rate⁽¹⁾		13.5	%		13.2	%		12.9	%
Average revenue per customer (dollars)	$	38.36		$	37.98		$	37.01

	As of June 29, 2012		As of September 30, 2011

Commercial Fire and Security	$	4,701	$	4,400
ADT North American Residential		3,649		3,507
Flow Control		1,835		1,744

	$	10,185	$	9,651

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

3/31/12–4/27/12	—		—	—
4/28/12–6/1/12	3,739,823	$	54.12	3,688,189	$	199,987,911
6/2/12–6/29/12	—		—	—

Exhibit Number		Exhibit

2.1		Amendment No. 1 to the Merger Agreement among Tyco International Ltd., Tyco Flow Control International Ltd., Panthro Acquisition Co., Panthro Merger Sub, Inc. and Pentair, Inc. (incorporated by reference to Exhibit 2.1 to Tyco International Ltd.'s Current Report on Form 8-K filed on July 31, 2012).
2.2		Amendment No. 1 to the Separation and Distribution Agreement by and among Tyco International Ltd., Tyco Flow Control International Ltd. and the ADT Corporation (incorporated by reference to Exhibit 2.2 to Tyco International Ltd.'s Current Report on Form 8-K filed on July 31, 2012).
4.1		Indenture by and between The ADT Corporation (as Issuer) and Wells Fargo Bank, National Association (as Trustee), dated as of July 5, 2012 (incorporated by reference to Exhibit 4.1 to Tyco International Ltd.'s Current Report on Form 8-K filed on July 5, 2012).

Exhibit Number		Exhibit

32.1		Certification by the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Filed herewith).
101		Financial statements from the quarterly report on Form 10-Q of Tyco International Ltd. for the quarter ended June 29, 2012 formatted in XBRL: (i) the Consolidated Statements of Operations, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Cash Flows, (iv) the Consolidated Statements of Shareholders' Equity, and (v) the Notes to Consolidated Financial Statements.


		TYCO INTERNATIONAL LTD.
		By:		/s/ FRANK S. SKLARSKY Frank S. Sklarsky Executive Vice President and Chief Financial Officer (Principal Financial Officer)