Tyco Expects Non-Cash Pre-Tax Charges Of $265 Million To $325 Million

In the Company's Forms 10-K and 8-K filed December 30, 2002, based on Tyco's review and analysis of its accounting and internal procedures during the second half of 2002, the Company committed to implementing a process of intensified internal audits, detailed controls and in-depth operating reviews of each business segment. As a result of these audits and reviews, Tyco has identified a number of issues, primarily in its Fire & Security Services business. These charges result from conforming certain accounting policies across a number of Fire & Security European businesses that were recently reorganized under a single management team, improving compliance with other existing policies, conducting additional account reconciliation procedures, as well as other matters.

The Company's process of intensified internal audits and detailed controls and operating reviews of business segments is still in its implementation phase and is designed both to identify any legacy accounting issues, but also, and more importantly, to create and maintain on an ongoing basis the policies and culture that will meet Tyco's goals of integrity and transparency in all of its business practices. The Company anticipates that intensified audits and reviews will remain a continuing part of Tyco's regular operational procedures.

Updated Guidance

The Company has tightened its cash flow guidance for fiscal 2003 to a range of $2.6 billion to $3.0 billion. Under a new definition of free cash flow that the Company will adopt beginning in the current fiscal quarter, free cash flow for the fiscal year is expected to range from $1.45 billion to $1.85 billion. In determining free cash flow under this new definition, the Company will include the effect of spending on ADT dealer account acquisitions as well as purchase accounting and holdback liabilities related to prior acquisitions.

The Company also said that because of a weakening in the economies in which it operates, particularly over the past 30 days, as well as declining margins at Tyco Fire & Security, the Company has reduced its operational fiscal 2003 EPS guidance, excluding the non-cash charges announced today, to a range of $1.40 to $1.50. Including these non-cash charges, EPS for the year is expected to range from $1.30 to $1.40.

The Company will discuss these issues and the updated guidance at its investor conference on Thursday, March 13. This conference will be web cast at www.tyco.com beginning at 8:15 a.m. EST.

New Leadership at Tyco Fire & Security Services

Tyco also announced today that it has appointed David Robinson, currently the President of Tyco Plastics & Adhesives, as President of the Company's Fire & Security Services segment. The Company terminated Jerry Boggess, who had served as President of Tyco Fire & Security Services. Earlier, in January of this year, Tyco appointed Mark Schmitz, a 20-year veteran of General Motors, as Chief Financial Officer of Tyco Fire & Security.

As a result of Mr. Robinson's appointment to head the Fire & Security Services segment, Tyco has named Terry Sutter, the former President of Specialty Chemicals at Cytec Industries, to succeed Mr. Robinson as President of Tyco Plastics & Adhesives.

Ed Breen, Chairman and Chief Executive Officer of Tyco, commented: "Our Fire & Security unit has solid business fundamentals. The demand for Fire & Security's €˜life safety' services and products remains strong in these uncertain times, and its powerful brand names, with leading positions in global markets, provide steady recurring revenue. However, we have concluded that management changes are necessary in order for us to fully address the opportunities in this business, strengthen its operating margins, improve performance and make it a more efficient and well-run enterprise."

Mr. Breen continued. "We believe Dave Robinson is the right person to take the helm of the large businesses that make up Fire & Security. He represents an unusual combination of leadership, hands-on management skills, industrial and consumer experience, financial expertise and personal integrity. We recruited him to Tyco late last year because he reflects the uncompromising, high standards we are setting for leaders throughout the new Tyco. I have confidence in the future of the Fire & Security business under Dave Robinson and expect that it will improve its performance and make an important contribution to Tyco's long-term success."

Mr. Robinson said: "Tyco Fire & Security is a great business with terrific products, enviable market share and outstanding employees. I intend to move quickly to improve upon every aspect of its operations. I will work with Ed Breen and his team to improve the performance and productivity of this business and set the highest standards of quality in delivering products and services to our customers."

Background on David Robinson

Mr. Robinson was brought to Tyco by Mr. Breen in November 2002. Prior to joining Tyco, Mr. Robinson had over 17 years of experience with Motorola (formerly General Instrument). In addition to his position as Executive Vice President and President of its Broadband Communications Sector, Mr. Robinson also served as Senior Vice President and General Manager, Digital Network Systems; Director, Cableoptics, Wireless and Headend; Product Manager; and Financial Analyst during his career at General Instrument. Mr. Robinson graduated with a B.A. from Bates College and received his M.B.A. in general management from The Amos Tuck School, Dartmouth College.

Background on Terry Sutter

Mr. Sutter joins Tyco from Cytec Industries, one of the world's leading specialty chemicals companies, where he has served as President of the Specialty Chemicals division since 2002. Prior to joining Cytec, Mr. Sutter served as President, Industry Solutions at Honeywell/Allied Signal, Inc., where he had responsibility for a $1.5 billion business unit with over 6,000 employees worldwide. While at Honeywell/Allied Signal, Mr. Sutter also served as Vice President-General Manager, Fluorine Products and Vice President, Marketing & Business Development. Mr. Sutter also spent eight years at Morton International in its Adhesives and Specialty Polymers Group, most recently serving as the business manager of the Thermoplastic Polyurethanes division.

About Tyco Fire & Security Services

Tyco Fire & Security Services designs, manufactures, installs and services electronic security systems, fire protection, detection and suppression systems, sprinklers, and fire extinguishers. Tyco Fire & Security Services consists of more than 60 brands that are represented in over 100 countries. Its products are used to safeguard firefighters, prevent and fight fires, deter thieves, and protect people and property.