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EXHIBIT 12
TYCO INTERNATIONAL LTD.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES(1)
($ IN MILLIONS)
The ratio of earnings to fixed charges for the nine months ended June 30,
2000, was computed based on Tyco's Quarterly Report on Form 10-Q filed on
August 14, 2000. The ratio of earnings to fixed charges for the years ended
September 30, 1999 and 1998 and the nine months ended September 30, 1997 was
computed based on Tyco's historical consolidated financial statements included
in Tyco's Annual Report on Form 10-K/A filed on June 26, 2000. The ratio of
earnings to fixed charges for the year ended December 31, 1996 was computed
based on the consolidated financial statements included in Tyco's Current Report
on Form 8-K filed on June 3, 1999. The ratio of earnings to fixed charges for
the year ended December 31, 1995 was computed based on the historical financial
statements of Former Tyco, ADT, Keystone, US Surgical and AMP.
<TABLE>
<CAPTION>
NINE
MONTHS NINE MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
--------- ---------------------- -------------- ----------------------
2000 1999 1998 1997(5) 1996 1995
--------- -------- -------- -------------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Income (loss) before
extraordinary items and
cumulative effect of
accounting changes.......... $2,610.0 $1,067.7 $1,168.6 $(348.5) $ 49.4 $ 755.5
Income taxes.................. 878.9 637.5 534.2 348.1 469.4 478.0
-------- -------- -------- ------- ------ --------
3,488.9 1,705.2 1,702.8 (0.4) 518.8 1,233.5
-------- -------- -------- ------- ------ --------
Fixed Charges:
Interest expense(2)........... 618.5 547.1 307.9 170.0 238.5 247.1
Rentals(3).................... 95.3 127.0 110.6 81.0 99.3 88.3
-------- -------- -------- ------- ------ --------
713.8 674.1 418.5 251.0 337.8 335.4
-------- -------- -------- ------- ------ --------
Earnings before income taxes
and fixed charges........... $4,202.7 $2,379.3 $2,121.3 $ 250.6 $856.6 $1,568.9
======== ======== ======== ======= ====== ========
Ratio of earnings to fixed
charges(4).................. 5.89 3.53 5.07 1.00 2.54 4.68
</TABLE>
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(1) On July 2, 1997, Tyco, formerly called ADT Limited, merged with Tyco
International Ltd., a Massachusetts corporation ("Former Tyco"). On
April 2, 1999, October 1, 1998, August 29, 1997 and August 27, 1997, Tyco
merged with AMP Incorporated, United States Surgical Corporation, Keystone
International and Inbrand Corporation, respectively. Each of the five merger
transactions qualifies for the pooling of interests method of accounting. As
such, the ratios of earnings to fixed charges presented above include the
effect of the mergers, except that the calculation presented above for
periods prior to January 1, 1997 does not include Inbrand due to
immateriality.
Prior to their respective mergers, AMP, US Surgical, Keystone and ADT had
December 31 year ends and Former Tyco had a June 30 fiscal year end. The
historical results upon which the ratios are based have been combined using
a December 31 year end for AMP, US Surgical, Former Tyco, Keystone and ADT
for the year ended December 31, 1996. For 1995, the ratio of earnings to
fixed charges reflects the combination of AMP, US Surgical, Keystone and ADT
with a December 31 year end and Former Tyco with a June 30 fiscal year end.
(2) Interest expense consists of interest on indebtedness and amortization of
debt expense.
(3) One-third of net rental expense is deemed representative of the interest
factor.
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(4) Earnings for the nine months ended June 30, 2000, the years ended
September 30, 1999 and 1998, the nine months ended September 30, 1997 and
the years ended December 31, 1996 and 1995 include merger, restructuring and
other non-recurring (credits) charges of $(81.3) million (of which
$1.0 million is included in cost of sales), $1,035.2 million (of which
$106.4 million is included in cost of sales), $256.9 million,
$947.9 million, $344.1 million and $97.1 million, respectively. Earnings
also include charges for the impairment of long-lived assets of
$99.0 million, $507.5 million, $148.4 million, $744.7 million and
$8.2 million in the nine months ended June 30, 2000, the year ended
September 30, 1999, the nine months ended September 30, 1997 and the years
ended December 31, 1996 and 1995, respectively. The 1997 period also
includes a write-off of purchased in-process research and development of
$361.0 million. The 1995 period also includes a net loss on the disposal of
businesses of $34.4 million.
On a pro forma basis, the ratio of earnings to fixed charges excluding
merger, restructuring and other non-recurring (credits) charges, charges for
the impairment of long-lived assets, the write-off of purchased in-process
research and development and the net loss on the disposal of businesses
would have been 5.91x, 5.82x, 5.68x, 6.81x, 5.76x and 5.09x for the nine
months ended June 30, 2000, the years ended September 30, 1999 and 1998, the
nine months ended September 30, 1997 and the years ended December 31, 1996
and 1995, respectively.
(5) In September 1997, Tyco changed its fiscal year end from December 31 to
September 30. Accordingly, the nine-month transition period ended
September 30, 1997 is presented.
