Tyco International Limited (TYC) Message Board

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Non-Tech : Tyco International Limited (TYC)

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To: Terrapin who started this subject	5/4/2004 5:41:10 PM
From: rich evans	Read Replies (1) of 3770

Tyco results much better then reported. Tyco's results much better then reported. Look at cash flow statement which shows real picture. Tyco shows operating income of $1251 mill. But one time charges for restructuring were 143 mill and taken through the P&L. ( Shown on cash flow as accrued liabilities but not paid) The savings of 24 mill are on going and not one time so shouldn't be netted out as tyco did in writeup. Then tyco took another 101 mill charges for inventory and A/R thru the P&L and shown on cash flow statement. All in all tycos true operating results on a proforma basis excluding one charges are closer to $1495 mill or 14.9% margin. Tyco cash tax paid was 258.2 mill shown minus 69 mill deferred leaving 189.2 mill or 18% which is what it used in the past as the proper tax rate. Using this tax rate against proforma operating income of 1495 mill less interest expense of 212 leavves income before taxes of proforma income 1283 mill. After tax income at 18% rate is 1052 mill or 53cent/share basic and 49cents/share diluted. These are the true ongoing operational proforma results IMO and is the reason Tyco cash flow is so high as all these non cash one time charges are added back to cash flow. Hurray for tyco. By the way segment margins overall are 15.5% on same analysis which means tyco is moving margins up considerably from last quarters proforma 14.6% segment margin. This means that in 2005 when onetime charges are over and savings ongoing , margins will easily reach 16% in my opinion and earnings about $2.00/sh Tyco's results therefore much better then reported and a good analyst should pick up on the proforma results. Flex and other companies report proforma results but tyco keeps their great performance partially underwraps IMO and one must study cashflow statement to see the real operating results. Rich

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