Geographic, business-line diversity; Many leading positions in large markets; and Good operating cash flow generation capabilities. Historical subpar performance and execution in some businesses; High capital intensity; and Moderate financial leverage, including potential contingent liabilities. The ratings reflect Pembroke, Bermuda-based Tyco International Ltd.'s business profile, which benefits from significant business and geographic diversity as well as leading positions in large but fragmented and highly competitive markets that have moderate growth prospects. Although some of Tyco's business segments (particularly the ADT business) are not yet operating at optimal levels, Standard&Poor's Ratings Services expects the company to generate adequate overall pro forma profitability (about $2.6 billion of pro forma EBITDA and $1.1 billion of free cash flow) in fiscal 2006.
