Tyco To Incur Approximately $280 Million Charge In Fourth Quarter

PEMBROKE, Bermuda: Sept. 12, 2005 - Tyco International Ltd. (NYSE: TYC; BSX: TYC) today announced that the company will incur a pre-tax charge of approximately $280 million in the fourth quarter of 2005 as a result of the United States Court of Appeals for the Federal Circuit's affirmation of a lower court decision that certain pulse oximetry monitoring devices sold by Tyco's Nellcor unit infringe three patents.

Oximetry sensors, rather than monitoring devices, represent the bulk of Nellcor's oximetry sales.  Relevant sales of Nellcor's pulse oximetry monitoring devices€”products that use pulse oximetry sensors to determine the oxygen level in patients' blood€”totaled approximately $41 million in 2004.   As a result of the court's ruling, Nellcor expects to discontinue its sale of certain pulse oximetry devices in the near term.  Use of monitors previously provided to customers will not be impacted.  This decision in no way affects Nellcor's ability to provide a full range of pulse oximetry sensors to the marketplace€”or its ability to support customers.

Nellcor will launch a new line of pulse oximetry monitors and oximetry circuit boards shortly.  These products will be sold as part of Nellcor's OxiMax pulse oximetry system and will utilize a unique signal processing engine.

The charge for this special item is expected to cover damages of $165 million awarded in an August 2004 court decision for product sales between July 2001 and May 2004, as well as additional interest and estimated damages for product sales through the end of the current fiscal year. 

The company continues to expect earnings per share (EPS) from continuing operations excluding special items of $0.45 to $0.47 for the fourth quarter of 2005 and $1.85 to $1.87 for the full year.  The company continues to expect full-year cash from operating activities of $6.0 to $6.4 billion and free cash flow of $4.2 to $4.6 billion.  With respect to fiscal year 2006, the company expects EPS before special items to increase by approximately 10 percent over full-year 2005 results.  The company further expects that 2006 free cash flow will exceed net income excluding special items.  EPS from continuing operations excluding special items and Free Cash Flow are non-GAAP financial measures and are described below.                                         

A part of Tyco Healthcare's Mallinckrodt business, Nellcor is the world's foremost supplier of pulse oximetry and airway management products.  Tyco International Ltd. is a global, diversified company that provides vital products and services to customers in five business segments: Fire & Security, Electronics, Healthcare, Engineered Products & Services, and Plastics & Adhesives.  With 2004 revenue of $40 billion, Tyco employs approximately 250,000 people worldwide.  More information on Tyco can be found at www.tyco.com.