Third Quarter Review 26 / July / 2013 Forward-Looking Statements - PowerPoint PPT Presentation

Third Quarter Review 26 / July / 2013

Forward-Looking Statements / Safe Harbor This presentation contains a number of forward-looking statements. Words and variations of words such as “outlook”, “expect”, “intend”, “will”, “anticipate”, “believe”, “propose”, “potential”, “continue”, “opportunity”, “estimate”, “project” and similar expressions are intended to identify forward-looking statements. Examples of forward looking statements include, but are not limited to, revenue, operating income and other financial projections, statements regarding the health and growth prospects of the industries and end markets in which Tyco operates, the leadership, resources, potential, priorities, and opportunities for Tyco in the future, statements regarding Tyco’s credit profile and capital allocation priorities, and statements regarding Tyco's acquisition, divestiture, restructuring and capital market related activities. The forward-looking statements in this presentation are based on current expectations and assumptions that are subject to risks and uncertainties, many of which are outside of our control, and could cause results to materially differ from expectations. Such risks and uncertainties include, but are not limited to:  Economic, business competitive, technological or regulatory factors that  The possible effects on us of pending and future legislation in the United adversely impact Tyco or the markets and industries in which it States that may limit or eliminate potential U.S. tax benefits resulting from competes; Tyco’s jurisdiction of incorporation or deny U.S. government contracts to us based upon Tyco’s jurisdiction of incorporation;  Changes in tax requirements (including tax rate changes, new tax laws or treaties and revised tax law interpretations);  The ability of the Company to achieve anticipated cost savings and to execute on its portfolio refinement and acquisition strategies, including  Results and consequences of Tyco’s internal investigations and successfully integrating acquired operations; governmental investigations concerning its governance, management, internal controls and operations including its business operations outside  The ability of the Company to realize the expected benefits of the 2012 the United States; separation transactions, including the integration of its commercial security and fire protection businesses;  The outcome of litigation, arbitrations and governmental proceedings, including the effect of income tax audits, appeals and litigation;  Availability and fluctuations in the prices of key raw materials, and events that could impact the ability of our suppliers to perform ;  Economic, legal and political conditions in international markets, including governmental changes and restrictions on the ability to transfer  Natural events such as severe weather, fires, floods and earthquakes. capital across borders;  Changes in capital market conditions, including availability of funding sources, currency exchange rate fluctuations, and interest rate fluctuations and other changes in borrowing cost; Actual results could differ materially from anticipated results. More detailed information about these and other factors is set forth on Tyco’s Annual Report on Form 10-K for the fiscal year ended September 28, 2012 and in subsequent filings with the Securities and Exchange Commission. Tyco is under no obligation (and expressly disclaims any obligation) to update its forward-looking statements. 2

Key Priorities Accelerating organic growth • Service revenue, including recurring revenue, represents about 45% of revenue and grew 3% organically • Growth in Global Products continues to outpace the market Executing disciplined bolt-on acquisitions • Closed previously announced acquisition of National Fire S olutions • Announced definitive agreement to acquire Exacq Technologies, leader in video management solutions • YTD $260M committed to acquisitions, closed and announced Driving productivity initiatives • Significant contributor to margin expansion • Sourcing • Branch-in-a-box Supported By The Tyco Business System 3

Q3 2013 Results – Financial Overview (EPS amounts are attributable to Tyco common shareholders) ($ in millions, except per-share amounts) Q3FY13 Q3FY12 Change ($ in millions) $2,678 $2,655 1% Revenue Segment Operating Income $375 $369 2% before special items * Segment Operating Margin 14.0% 13.9% 10bps before special items* Corporate Expense $62 $64 (3%) before special items* Tax Rate 18.4% 9.1% before special items* EPS from Cont. Ops. $0.50 $0.47 6% before special items* Excluding 30bps of estimated dis-synergies, segment operating margin improved 40bps year over year Underlying segment operations contributed $0.03 of earnings per share increase year over year Record High Segment Operating Margin of 14.0% * Segment operating income, segment operating margin, corporate expense, tax rate and EPS from continuing operations before special items are non-GAAP measures. 4 For a reconciliation to the most comparable GAAP measures, please see Appendix. **Normalized third quarter 2012 results adjust pre-separation corporate and interest expense to post-separation estimated levels and dis-synergies associated with the separation of the commercial security operations in North America from ADT. See Non-GAAP reconciliation.

Q3 Highlights Revenue of $2.7 billion with organic revenue* growth of 1% • Products +5%, Service +3% and Installation (4%) Record-high segment operating margin before special items* of 14.0% - 170bps improvement sequentially; 40bps improvement, year over year, on normalized basis** • Higher mix of service and product revenue • Improved installation margins • Benefits from sourcing, productivity and restructuring initiatives Orders growth of 3% year over year, excluding impact of foreign currency • Products +11%, Service +4% and Installation (2%) Record-high backlog of $5.3 billion increased 3% on a quarter sequential basis, excluding impact of foreign currency *Organic revenue, segment operating margin and earnings per share before special items are non-GAAP measures. For a reconciliation to the most comparable GAAP measures, please see Appendix. 5 **Normalized third quarter 2012 results adjust for dis-synergies associated with the separation of the commercial security operations in North America from ADT. See Non-GAAP reconciliation.

Third Quarter – NA Installation & Services Organic revenue* declined 3% ($ in millions) Q3FY13 Q3FY12 Change year over year $966 $1,005 (4%) Revenue • Service was up 2% • Installation declined 8% $117 $123 (5%) Operating Income* 12.1% 12.2% (10bps) Operating Margin* Operating margin increased 120bps sequentially and 80bps year over year on a Order activity in line with expectations, overall normalized** basis decline of 8% year over year, excluding currency • Service orders were up 2% • Greater contribution of higher margin service revenue • Install orders down 17%, driven by tough compare with 20% growth rate in prior year • Improved margins in installation Backlog of $2.5 billion increased 1% on a quarter • Sourcing and productivity sequential basis, excluding the impact of foreign savings currency • Nice improvement in security installation backlog margin *Organic revenue, operating income and operating margin before special items are non-GAAP measures. For a reconciliation to the most comparable GAAP measures, please see Appendix. 6 **Normalized third quarter 2012 results adjust for dis-synergies associated with the separation of the commercial security operations in North America from ADT. See Non-GAAP reconciliation.

Third Quarter – ROW Installation & Services Organic revenue* increased 2% ($ in millions) Q3FY13 Q3FY12 Change • Service grew 4% $1,112 $1,087 2% Revenue • Installation declined 1% $139 $133 5% Operating Income* 2% benefit from acquisitions mostly 12.5% 12.2% 30bps Operating Margin* offset by charges in foreign currency exchange rates Orders increased 9% year over year, excluding currency Operating margin improved 150bps • Service orders were up 5% sequentially and 30bps year over year • Installation orders increased 15% • Better mix Record backlog of $2.6 billion increased 3% on • Benefits of productivity and a quarter sequential basis, excluding impact of restructuring initiatives, more foreign currency than offset incremental investments * Organic revenue, operating income and operating margin before special items are non-GAAP 7 measures. For a reconciliation to the most comparable GAAP measures, please see Appendix.