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EX-99.2 - EX-99.2 - TE Connectivity Ltd.a11-28718_1ex99d2.htm
8-K - 8-K - TE Connectivity Ltd.a11-28718_18k.htm

Exhibit 99.1

 

 

News Release

 

 

 

FOR IMMEDIATE RELEASE

 

Contacts:

Media Relations:

Investor Relations:

 

Amy Shah

Keith Kolstrom

 

610-893-9555 Office

610-893-9551 Office

 

amy.shah@te.com

keith.kolstrom@te.com

 

 

 

 

Wendy Fries

Matt Vergare

 

610-893-9567 Office

610-893-9442 Office

 

wendy.fries@te.com

matthew.vergare@te.com

 

TE CONNECTIVITY REPORTS STRONG FOURTH QUARTER AND FULL YEAR RESULTS

SALES $14.3 BILLION; ADJUSTED EPS $3.12

 

SCHAFFHAUSEN, Switzerland — Nov. 03, 2011 — TE Connectivity Ltd. (NYSE: TEL) today reported fiscal fourth quarter and full year results ended Sept. 30, 2011.  The company reported net sales of $3.9 billion during the fourth quarter, up 25 percent versus the prior year.  Annual sales were $14.3 billion, up 19 percent versus the prior year.  Strong annual and quarterly sales results were driven by the Transportation and Network Solutions segments.  Earnings Per Share from Continuing Operations (GAAP EPS) were $0.75 for the quarter and adjusted EPS were $0.89.  Full year GAAP EPS were $2.82 and adjusted EPS were $3.12.  Fiscal 2011 and fourth quarter results include an additional week.  Excluding the impact of this additional week, fourth quarter adjusted EPS were $0.81 and full year adjusted EPS were $3.03, up 13 percent and 19 percent versus the prior year, respectively.  Free cash flow was $560 million for the quarter and $1.4 billion for the year.

 

“We are very pleased with the strong performance in 2011 as our team executed well in a volatile environment.  We continued to strengthen the company’s position in our Automotive and Telecom Networks businesses as well as in high-growth emerging markets,” said TE Connectivity Chief Executive Officer Tom Lynch.  “Our increased investment in engineering in recent years and the acquisition of ADC have served us well and expanded the range of products and solutions we provide for our customers.”

 

Total company orders were $3.6 billion in the fourth quarter, an increase of 22 percent compared to the prior year.  The book-to-bill ratio was 0.93 overall, and 0.94 excluding the Subsea Communications business.

 

1



 

FISCAL FOURTH QUARTER RESULTS

 

($ in millions)

 

Sept. 30, 2011

 

Sept. 24, 2010

 

YoY

 

Net Sales

 

$

3,911

 

$

3,137

 

25

%

Operating Income

 

$

465

 

$

382

 

22

%

Restructuring and Other Charges

 

$

62

 

$

56

 

 

 

Acquisition Related Charges

 

$

23

 

$

8

 

 

 

Adjusted Operating Income

 

$

550

 

$

446

 

23

%

Operating Margin

 

11.9

%

12.2

%

 

 

Adjusted Operating Margin

 

14.1

%

14.2

%

 

 

 

IMPACT OF ADDITIONAL WEEK

 

($ in millions, except per share amounts)

 

Sept. 30, 2011
14 Weeks

 

14th Week

 

Sept. 30, 2011
13 Weeks

 

Net Sales

 

$

3,911

 

$

(277

)

$

3,634

 

Adjusted Operating Income

 

$

550

 

$

(53

)

$

497

 

Adjusted Operating Margin

 

14.1

%

 

 

13.7

%

Adjusted EPS

 

$

0.89

 

$

(0.08

)

$

0.81

 

 

 

2012 OUTLOOK

 

For the full year, the company expects sales of $14.3 to $14.9 billion and Adjusted EPS of $3.10 to $3.40.  GAAP EPS are expected to be $3.00 to $3.30, including restructuring and other charges.  This compares to fiscal 2011 revenue of $14.0 billion and adjusted EPS of $3.03 excluding the additional week in the year.

 

“We expect full year organic sales growth of 2 to 6 percent,” Lynch said.  “This assumes continued growth in automotive production, increased investment in broadband networks and an improvement in the markets served by our Communications and Industrial Solutions (CIS) segment in the second half.”

 

For the first quarter, the company expects net sales of $3.4 to $3.5 billion and adjusted EPS of $0.68 to $0.72.  GAAP EPS are expected to be $0.66 to $0.70, including restructuring and other charges.  “First quarter sales and earnings are expected to decline sequentially due to normal seasonality and a continuation of soft demand and inventory corrections in our CIS markets,” Lynch said.

 

This outlook assumes current foreign exchange and commodity rates.

 

2



 

ADDITIONAL ITEMS

 

·      The Board of Directors approved a recommendation to increase the quarterly dividend by 17%, from $0.18 to $0.21 per share, for the four fiscal quarters beginning with the third quarter of fiscal 2012.  This recommendation will be presented for shareholder approval at the company’s Annual General Meeting of Shareholders in March 2012.

 

·      The Board of Directors also authorized an increase in the company’s share repurchase program of $1.5 billion on September 27, 2011.

 

·      The company will hold an Investor Meeting on Tuesday, December 6, 2011 at The Waldorf Astoria in New York City.

 

Information about TE Connectivity’s use of non-GAAP financial measures is described at the end of this press release.  For a reconciliation of these non-GAAP financial measures, see the attached tables.

 

ABOUT TE CONNECTIVITY

 

TE Connectivity is a global, $14 billion company that designs and manufactures approximately 500,000 products that connect and protect the flow of power and data inside the products that touch every aspect of our lives. Our nearly 100,000 employees partner with customers in virtually every industry—from consumer electronics, energy and healthcare, to automotive, aerospace and communication networks—enabling smarter, faster, better technologies to connect products to possibilities. More information on TE Connectivity can be found at http://www.te.com.

 

CONFERENCE CALL AND WEBCAST

 

·      The company will hold a conference call for investors today beginning at 8:30 a.m. EDT.

 

·      Internet users will be able to access the company’s earnings webcast, including slide materials, at the “Investors” section of TE Connectivity’s website: http://investors.te.com.

 

·      For both “listen-only” participants and those participants who wish to take part in the question-and-answer portion of the call, the telephone dial-in number in the United States is (800) 230-1059. The telephone dial-in number for participants outside the United States is (612) 234-9959.

 

·      An audio replay of the conference call will be available beginning at 10:30 a.m. EDT on November 3, 2011 and ending at 11:59 p.m. EST on November 10, 2011. The dial-in number for participants in the United States is (800) 475-6701.  For participants outside the United States, the replay dial-in number is (320) 365-3844. The replay access code for all callers is 218704.

 

NON-GAAP MEASURES

 

“Organic Sales Growth,” “Adjusted Operating Income,” “Adjusted Operating Margin,” “Adjusted Other Income, Net,” “Adjusted Income Tax Expense,” “Adjusted Income from Continuing Operations,” “Adjusted Earnings Per Share,” and “Free Cash Flow” (FCF) are non-GAAP measures and should not be considered replacements for GAAP results.

 

3



 

“Organic Sales Growth” is a useful measure used by us to measure the underlying results and trends in the business.  The difference between reported net sales growth (the most comparable GAAP measure) and Organic Sales Growth (the non-GAAP measure) consists of the impact from foreign currency exchange rates, acquisitions, divestitures, and an additional week in the fourth quarter of the fiscal year for fiscal years which are 53 weeks in length.  Organic Sales Growth is a useful measure of our performance because it excludes items that: i) are not completely under management’s control, such as the impact of changes in foreign currency exchange rates; or ii) do not reflect the underlying growth of the company, such as acquisition and divestiture activity and the impact of an additional week in the fourth quarter of the fiscal year for fiscal years which are 53 weeks in length.  The limitation of this measure is that it excludes items that have an impact on our sales.  This limitation is best addressed by using organic sales growth in combination with the GAAP results.  See the accompanying tables to this release for the reconciliation presenting the components of Organic Sales Growth.

 

We have presented operating income before special items including charges or income related to legal settlements and reserves, restructuring and other charges, and acquisition related charges (“Adjusted Operating Income”).  We utilize Adjusted Operating Income to assess segment level core operating performance and to provide insight to management in evaluating segment operating plan execution and underlying market conditions.  It also is a significant component in our incentive compensation plans.  Adjusted Operating Income is a useful measure for investors because it better reflects our underlying operating results, trends, and the comparability of these results between periods.  The difference between Adjusted Operating Income and operating income (the most comparable GAAP measure) consists of the impact of charges or income related to legal settlements and reserves, restructuring and other charges, and acquisition related charges that may mask the underlying operating results and/or business trends.  The limitation of this measure is that it excludes the financial impact of items that would otherwise either increase or decrease our reported operating income.  This limitation is best addressed by using Adjusted Operating Income in combination with operating income (the most comparable GAAP measure) in order to better understand the amounts, character and impact of any increase or decrease on reported results.

 

We have presented operating margin before special items including charges or income related to legal settlements and reserves, restructuring and other charges, and acquisition related charges (“Adjusted Operating Margin”).  We present Adjusted Operating Margin before special items to give investors a perspective on the underlying business results.  It also is a significant component in our incentive compensation plans.  Because we cannot predict the amount and timing of such items and the associated charges or gains that will be recorded in our financial statements, it is difficult to include the impact of those items in the forecast.

 

We have presented other income, net before special items including tax sharing income related to certain proposed adjustments to prior period tax returns and other tax items (“Adjusted Other Income, Net”).   We present Adjusted Other Income, Net as we believe that it is appropriate for investors to consider results excluding these items in addition to results in accordance with GAAP.  The difference between Adjusted Other Income, Net and other income, net (the most comparable GAAP measure) consists of tax sharing income related to certain proposed adjustments to prior period tax returns and other tax items.  The limitation of this measure is that it excludes the financial impact of items that would otherwise either increase or decrease other income, net.  This limitation is best addressed by using Adjusted Other Income, Net in combination with other income, net (the most comparable GAAP measure) in order to better understand the amounts, character and impact of any increase or decrease in reported amounts.

 

We have presented income tax expense after adjusting for the tax effect of special items including charges related to restructuring and other charges, acquisition related charges, and certain significant special tax items (“Adjusted Income Tax Expense”).  We present Adjusted Income Tax Expense to provide investors further information regarding the tax effects of adjustments used in determining the non-GAAP financial measure Adjusted Income from Continuing Operations (as defined below).  The difference between Adjusted Income Tax Expense and income tax expense (the most comparable GAAP measure) is the tax effect of adjusting items and certain significant special tax items.  The limitation of this measure

 

4



 

 is that it excludes the financial impact of items that would otherwise either increase or decrease income tax expense.  This limitation is best addressed by using Adjusted Income Tax Expense in combination with income tax expense (the most comparable GAAP measure) in order to better understand the amounts, character and impact of any increase or decrease in reported amounts.

 

We have presented income from continuing operations attributable to TE Connectivity Ltd. before special items including charges or income related to legal settlements and reserves, restructuring and other charges, acquisition related charges, tax sharing income related to certain proposed adjustments to prior period tax returns and other tax items, certain significant special tax items, and, if applicable, related tax effects (“Adjusted Income from Continuing Operations”).  We present Adjusted Income from Continuing Operations as we believe that it is appropriate for investors to consider results excluding these items in addition to results in accordance with GAAP.  Adjusted Income from Continuing Operations provides additional information regarding our underlying operating results, trends and the comparability of these results between periods.  The difference between Adjusted Income from Continuing Operations and income from continuing operations attributable to TE Connectivity Ltd. (the most comparable GAAP measure) consists of the impact of charges or income related to legal settlements and reserves, restructuring and other charges, acquisition related charges, tax sharing income related to certain proposed adjustments to prior period tax returns and other tax items, certain significant special tax items, and, if applicable, related tax effects.  The limitation of this measure is that it excludes the financial impact of items that would otherwise either increase or decrease our reported results.  This limitation is best addressed by using Adjusted Income from Continuing Operations in combination with income from continuing operations attributable to TE Connectivity Ltd. (the most comparable GAAP measure) in order to better understand the amounts, character and impact of any increase or decrease in reported amounts.

 

We have presented diluted earnings per share from continuing operations attributable to TE Connectivity Ltd. before special items, including charges or income related to legal settlements and reserves, restructuring and other charges, acquisition related charges, tax sharing income related to certain proposed adjustments to prior period tax returns and other tax items, certain significant special tax items, and, if applicable, related tax effects (“Adjusted Earnings Per Share”).  We present Adjusted Earnings Per Share because we believe that it is appropriate for investors to consider results excluding these items in addition to results in accordance with GAAP.  We believe such a measure provides a picture of our results that is more comparable among periods since it excludes the impact of special items, which may recur, but tend to be irregular as to timing, thereby making comparisons between periods more difficult.  It also is a significant component in our incentive compensation plans.  The limitation of this measure is that it excludes the financial impact of items that would otherwise either increase or decrease our reported results.  This limitation is best addressed by using Adjusted Earnings Per Share in combination with diluted earnings per share from continuing operations attributable to TE Connectivity Ltd. (the most comparable GAAP measure) in order to better understand the amounts, character and impact of any increase or decrease on reported results.

 

“Free Cash Flow” (FCF) is a useful measure of our cash generation which is free from any significant existing obligation.  It also is a significant component in our incentive compensation plans.  The difference between cash flows from operating activities (the most comparable GAAP measure) and FCF (the non-GAAP measure) consists mainly of significant cash outflows and inflows that we believe are useful to identify.  FCF permits management and investors to gain insight into the amount that management employs to measure cash that is free from any significant existing obligation.  The difference reflects the impact from:

 

·      net capital expenditures,

·      voluntary pension contributions, and

·      cash impact of special items.

 

Net capital expenditures are subtracted because they represent long-term commitments.  Voluntary pension contributions are subtracted from the GAAP measure because this activity is driven by economic financing decisions rather than operating activity.  We forecast our cash flow results excluding any

 

5



 

voluntary pension contributions because we have not yet made a determination about the amount and timing of any such future contributions.  In addition, our forecast excludes the cash impact of special items because we cannot predict the amount and timing of such items.

 

The limitation associated with using FCF is that it subtracts cash items that are ultimately within management’s and the Board of Directors’ discretion to direct and that therefore may imply that there is less or more cash that is available for the company’s programs than the most comparable GAAP measure.  This limitation is best addressed by using FCF in combination with the GAAP cash flow results.

 

FCF as presented herein may not be comparable to similarly-titled measures reported by other companies.  The measure should be used in conjunction with other GAAP financial measures.  Investors are urged to read our financial statements as filed with the Securities and Exchange Commission, as well as the accompanying tables to this release that show all the elements of the GAAP measures of Cash Flows from Operating Activities, Cash Flows from Investing Activities, Cash Flows from Financing Activities and a reconciliation of our total cash and cash equivalents for the period.  See the accompanying tables to this release for a cash flow statement presented in accordance with GAAP and a reconciliation presenting the components of FCF.

 

Because we do not predict the amount and timing of special items that might occur in the future, and our forecasts are developed at a level of detail different than that used to prepare GAAP-based financial measures, we do not provide reconciliations to GAAP of our forward-looking financial measures.

 

FORWARD-LOOKING STATEMENTS

 

This release contains certain “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995.  These statements are based on management’s current expectations and are subject to risks, uncertainty and changes in circumstances, which may cause actual results, performance, financial condition or achievements to differ materially from anticipated results, performance, financial condition or achievements.  All statements contained herein that are not clearly historical in nature are forward-looking and the words “anticipate,” “believe,” “expect,” “estimate,” “plan,” and similar expressions are generally intended to identify forward-looking statements.  We have no intention and are under no obligation to update or alter (and expressly disclaim any such intention or obligation to do so) our forward-looking statements whether as a result of new information, future events or otherwise, except to the extent required by law.  The forward-looking statements in this release include statements addressing our future financial condition, operating results, dividends and share repurchases.  Examples of factors that could cause actual results to differ materially from those described in the forward-looking statements include, among others, business, economic, competitive and regulatory risks, such as conditions affecting demand for products, particularly the automotive industry and the telecommunications, computer and consumer electronics industries; competition and pricing pressure; fluctuations in foreign currency exchange rates and commodity prices; natural disasters and political, economic and military instability in countries in which we operate; developments in the credit markets; future goodwill impairment; compliance with current and future environmental and other laws and regulations; the possible effects on us of changes in tax laws, tax treaties and other legislation; the risk that revenue opportunities, cost savings and other anticipated synergies from our acquisition of ADC Telecommunications, Inc. (“ADC”) may not be fully realized or may take longer to realize than expected and the risk that ADC’s operations will not be successfully integrated into ours.  More detailed information about these and other factors is set forth in our Annual Report on Form 10-K for the fiscal year ended Sept. 24, 2010 and Quarterly Reports on Form 10-Q for the quarterly periods ended Dec. 24, 2010, Mar. 25, 2011 and Jun. 24, 2011 as well as in our Current Reports on Form 8-K and other reports filed by us with the Securities and Exchange Commission.

 

# # #

 

6



 

TE CONNECTIVITY LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 

 

 

For the Quarters Ended

 

For the Years Ended

 

 

 

September 30,

 

September 24,

 

September 30,

 

September 24,

 

 

 

2011

 

2010

 

2011

 

2010

 

 

 

(in millions, except per share data)

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

3,911

 

$

3,137

 

$

14,312

 

$

12,070

 

Cost of sales

 

2,679

 

2,144

 

9,890

 

8,293

 

Gross margin

 

1,232

 

993

 

4,422

 

3,777

 

Selling, general, and administrative expenses

 

481

 

389

 

1,780

 

1,538

 

Research, development, and engineering expenses

 

202

 

158

 

733

 

585

 

Acquisition and integration costs

 

 

8

 

19

 

8

 

Restructuring and other charges, net

 

84

 

56

 

149

 

137

 

Pre-separation litigation income

 

 

 

 

(7

)

Operating income

 

465

 

382

 

1,741

 

1,516

 

Interest income

 

6

 

6

 

22

 

20

 

Interest expense

 

(43

)

(40

)

(161

)

(155

)

Other income, net

 

14

 

52

 

27

 

177

 

Income from continuing operations before income taxes

 

442

 

400

 

1,629

 

1,558

 

Income tax expense

 

(115

)

(145

)

(376

)

(493

)

Income from continuing operations

 

327

 

255

 

1,253

 

1,065

 

Income (loss) from discontinued operations, net of income taxes

 

 

44

 

(3

)

44

 

Net income

 

327

 

299

 

1,250

 

1,109

 

Less: net income attributable to noncontrolling interests

 

(1

)

(2

)

(5

)

(6

)

Net income attributable to TE Connectivity Ltd.

 

$

326

 

$

297

 

$

1,245

 

$

1,103

 

 

 

 

 

 

 

 

 

 

 

Amounts attributable to TE Connectivity Ltd.:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

326

 

$

253

 

$

1,248

 

$

1,059

 

Income (loss) from discontinued operations

 

 

44

 

(3

)

44

 

Net income

 

$

326

 

$

297

 

$

1,245

 

$

1,103

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share attributable to TE Connectivity Ltd.:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.76

 

$

0.57

 

$

2.85

 

$

2.34

 

Income (loss) from discontinued operations

 

 

0.10

 

(0.01

)

0.09

 

Net income

 

$

0.76

 

$

0.67

 

$

2.84

 

$

2.43

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share attributable to TE Connectivity Ltd.:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.75

 

$

0.56

 

$

2.82

 

$

2.32

 

Income (loss) from discontinued operations

 

 

0.10

 

(0.01

)

0.09

 

Net income

 

$

0.75

 

$

0.66

 

$

2.81

 

$

2.41

 

 

 

 

 

 

 

 

 

 

 

Dividends and cash distributions paid per common share of TE Connectivity Ltd.

 

$

0.18

 

$

0.16

 

$

0.68

 

$

0.64

 

 

 

 

 

 

 

 

 

 

 

Weighted-average number of shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

429

 

446

 

438

 

453

 

Diluted

 

433

 

450

 

443

 

457

 

 



 

TE CONNECTIVITY LTD.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

 

 

September 30,

 

September 24,

 

 

 

2011

 

2010

 

 

 

(in millions, except share data)

 

Assets

 

 

 

 

 

Current Assets:

 

 

 

 

 

Cash and cash equivalents

 

$

1,219

 

$

1,990

 

Accounts receivable, net of allowance for doubtful accounts of $39 and $44, respectively

 

2,425

 

2,259

 

Inventories

 

1,939

 

1,583

 

Prepaid expenses and other current assets

 

646

 

651

 

Deferred income taxes

 

403

 

248

 

Total current assets

 

6,632

 

6,731

 

Property, plant, and equipment, net

 

3,163

 

2,867

 

Goodwill

 

3,586

 

3,211

 

Intangible assets, net

 

655

 

392

 

Deferred income taxes

 

2,365

 

2,447

 

Receivable from Tyco International Ltd. and Covidien plc

 

1,066

 

1,127

 

Other assets

 

256

 

217

 

Total Assets

 

$

17,723

 

$

16,992

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

Current maturities of long-term debt

 

$

1

 

$

106

 

Accounts payable

 

1,483

 

1,386

 

Accrued and other current liabilities

 

1,772

 

1,804

 

Deferred revenue

 

145

 

164

 

Total current liabilities

 

3,401

 

3,460

 

Long-term debt

 

2,668

 

2,307

 

Long-term pension and postretirement liabilities

 

1,204

 

1,280

 

Deferred income taxes

 

333

 

285

 

Income taxes

 

2,122

 

2,152

 

Other liabilities

 

511

 

452

 

Total Liabilities

 

10,239

 

9,936

 

Commitments and contingencies

 

 

 

 

 

Equity:

 

 

 

 

 

TE Connectivity Ltd. Shareholders’ Equity:

 

 

 

 

 

Common shares, 463,080,684 shares authorized and issued, CHF 1.37 par value, at September 30, 2011; 468,215,574 shares authorized and issued, CHF 1.73 par value, at September 24, 2010

 

593

 

599

 

Contributed surplus

 

7,604

 

8,085

 

Accumulated earnings (deficit)

 

84

 

(1,161

)

Treasury shares, at cost, 39,303,550 and 24,845,929 shares, respectively

 

(1,235

)

(721

)

Accumulated other comprehensive income

 

428

 

246

 

Total TE Connectivity Ltd. shareholders’ equity

 

7,474

 

7,048

 

Noncontrolling interests

 

10

 

8

 

Total Equity

 

7,484

 

7,056

 

Total Liabilities and Equity

 

$

17,723

 

$

16,992

 

 



 

TE CONNECTIVITY LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

 

 

For the Quarters Ended

 

For the Years Ended

 

 

 

September 30,

 

September 24,

 

September 30,

 

September 24,

 

 

 

2011

 

2010

 

2011

 

2010

 

 

 

(in millions)

 

Cash Flows From Operating Activities:

 

 

 

 

 

 

 

 

 

Net income

 

$

327

 

$

299

 

$

1,250

 

$

1,109

 

(Income) loss from discontinued operations, net of income taxes

 

 

(44

)

3

 

(44

)

Income from continuing operations

 

327

 

255

 

1,253

 

1,065

 

Adjustments to reconcile net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Non-cash restructuring and other charges, net

 

3

 

1

 

9

 

17

 

Loss on divestitures

 

 

42

 

 

43

 

Depreciation and amortization

 

147

 

125

 

574

 

520

 

Deferred income taxes

 

(4

)

(240

)

109

 

35

 

Provision for losses on accounts receivable and inventories

 

(2

)

(3

)

19

 

(4

)

Tax sharing income

 

(14

)

(37

)

(27

)

(163

)

Share-based compensation expense

 

14

 

16

 

73

 

63

 

Other

 

(1

)

(19

)

(11

)

12

 

Changes in assets and liabilities, net of the effects of acquisitions and divestitures:

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

142

 

51

 

34

 

(323

)

Inventories

 

3

 

48

 

(241

)

(213

)

Inventoried costs on long-term contracts

 

16

 

31

 

32

 

36

 

Prepaid expenses and other current assets

 

93

 

17

 

185

 

(25

)

Accounts payable

 

(127

)

(50

)

(48

)

317

 

Accrued and other current liabilities

 

26

 

(9

)

(224

)

77

 

Income taxes

 

(52

)

302

 

(31

)

302

 

Deferred revenue

 

40

 

(3

)

(28

)

(38

)

Long-term pension and postretirement liabilities

 

22

 

(66

)

75

 

(25

)

Other

 

(3

)

13

 

26

 

(17

)

Net cash provided by operating activities

 

630

 

474

 

1,779

 

1,679

 

Cash Flows From Investing Activities:

 

 

 

 

 

 

 

 

 

Capital expenditures

 

(206

)

(136

)

(581

)

(385

)

Proceeds from sale of property, plant, and equipment

 

7

 

11

 

65

 

16

 

Proceeds from sale of intangible assets

 

 

 

68

 

 

Proceeds from sale of short-term investments

 

 

 

155

 

1

 

Acquisition of businesses, net of cash acquired

 

 

(23

)

(731

)

(93

)

Payment of acquisition-related earn-out liabilities

 

(15

)

 

(15

)

 

Proceeds from divestiture of business, net of cash retained by business sold

 

 

3

 

 

15

 

Other

 

10

 

25

 

 

4

 

Net cash used in continuing investing activities

 

(204

)

(120

)

(1,039

)

(442

)

Net cash used in discontinued investing activities

 

(4

)

 

(4

)

 

Net cash used in investing activities

 

(208

)

(120

)

(1,043

)

(442

)

Cash Flows From Financing Activities:

 

 

 

 

 

 

 

 

 

Net increase (decrease) in commercial paper

 

 

100

 

(100

)

100

 

Proceeds from long-term debt

 

 

 

249

 

 

Repayment of long-term debt

 

 

(100

)

(565

)

(100

)

Proceeds from exercise of share options

 

6

 

 

80

 

12

 

Repurchase of common shares

 

(325

)

(115

)

(865

)

(488

)

Payment of common share dividends and cash distributions to shareholders

 

(76

)

(71

)

(296

)

(289

)

Other

 

(6

)

(6

)

(19

)

(14

)

Net cash used in continuing financing activities

 

(401

)

(192

)

(1,516

)

(779

)

Net cash provided by discontinued financing activities

 

4

 

 

4

 

 

Net cash used in financing activities

 

(397

)

(192

)

(1,512

)

(779

)

Effect of currency translation on cash

 

(18

)

13

 

5

 

11

 

Net increase (decrease) in cash and cash equivalents

 

7

 

175

 

(771

)

469

 

Cash and cash equivalents at beginning of period

 

1,212

 

1,815

 

1,990

 

1,521

 

Cash and cash equivalents at end of period

 

$

1,219

 

$

1,990

 

$

1,219

 

$

1,990

 

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Information:

 

 

 

 

 

 

 

 

 

Income taxes paid, net of refunds

 

$

172

 

$

83

 

$

299

 

$

156

 

 

 

 

 

 

 

 

 

 

 

Reconciliation to Free Cash Flow:

 

 

 

 

 

 

 

 

 

Net cash provided by continuing operating activities

 

$

630

 

$

474

 

$

1,779

 

$

1,679

 

Capital expenditures, net

 

(199

)

(125

)

(516

)

(369

)

Payments related to pre-separation tax matters, net

 

129

 

 

129

 

 

Pre-separation litigation payments

 

 

25

 

 

25

 

Voluntary pension contributions

 

 

69

 

 

69

 

Free cash flow (1)

 

$

560

 

$

443

 

$

1,392

 

$

1,404

 

 


(1) Free cash flow is a non-GAAP measure.  See description of non-GAAP measures contained in this release.

 

 



 

TE CONNECTIVITY LTD.

CONSOLIDATED SEGMENT DATA (UNAUDITED)

 

 

 

For the Quarters Ended

 

 

 

For the Years Ended

 

 

 

 

 

September 30,

 

 

 

September 24,

 

 

 

September 30,

 

 

 

September 24,

 

 

 

 

 

2011

 

 

 

2010

 

 

 

2011

 

 

 

2010

 

 

 

 

 

($ in millions)

 

Net Sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

1,535

 

 

 

$

1,208

 

 

 

$

5,629

 

 

 

$

4,799

 

 

 

Communications and Industrial Solutions

 

1,343

 

 

 

1,315

 

 

 

5,071

 

 

 

4,820

 

 

 

Network Solutions

 

1,033

 

 

 

614

 

 

 

3,612

 

 

 

2,451

 

 

 

Total

 

$

3,911

 

 

 

$

3,137

 

 

 

$

14,312

 

 

 

$

12,070

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

237

 

15.4

%

$

108

 

8.9

%

$

848

 

15.1

%

$

515

 

10.7

%

Communications and Industrial Solutions

 

103

 

7.7

%

200

 

15.2

%

564

 

11.1

%

682

 

14.1

%

Network Solutions

 

125

 

12.1

%

74

 

12.1

%

329

 

9.1

%

312

 

12.7

%

Pre-separation litigation income

 

 

 

 

 

 

 

 

 

 

7

 

 

 

Total

 

$

465

 

11.9

%

$

382

 

12.2

%

$

1,741

 

12.2

%

$

1,516

 

12.6

%

 


 


 

TE CONNECTIVITY LTD.

NET SALES GROWTH RECONCILIATION (UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percentage of

 

 

 

Change in Net Sales for the Quarter Ended September 30, 2011

 

Segment’s Total

 

 

 

versus Net Sales for the Quarter Ended September 24, 2010

 

Net Sales for the

 

 

 

Organic (1)

 

Translation (2)

 

Impact of
14th Week (3)

 

Acquisition
(Divestiture)

 

Total

 

Quarter Ended
September 30, 2011

 

 

 

($ in millions)

 

 

 

Transportation Solutions (4):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Automotive

 

$

131

 

12.7

%

$

83

 

$

102

 

$

(18

)

$

298

 

28.6

%

87

%

Aerospace, Defense, and Marine

 

13

 

7.9

 

6

 

10

 

 

29

 

17.4

 

13

 

Total

 

144

 

12.0

 

89

 

112

 

(18

)

327

 

27.1

 

100

%

Communications and Industrial Solutions (4):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial

 

(20

)

(4.8

)

20

 

30

 

 

30

 

7.7

 

31

 

Data Communications

 

(38

)

(13.8

)

9

 

16

 

 

(13

)

(4.7

)

20

 

Appliance

 

(12

)

(6.0

)

8

 

14

 

 

10

 

5.1

 

15

 

Consumer Devices

 

(28

)

(13.1

)

9

 

14

 

(6

)

(11

)

(5.1

)

15

 

Computer

 

(4

)

(3.1

)

1

 

9

 

 

6

 

4.8

 

10

 

Touch Solutions

 

(6

)

(5.6

)

4

 

8

 

 

6

 

5.4

 

9

 

Total

 

(108

)

(8.1

)

51

 

91

 

(6

)

28

 

2.1

 

100

%

Network Solutions (4):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Telecom Networks

 

7

 

5.5

 

12

 

34

 

249

 

302

 

205.4

 

43

 

Energy

 

17

 

8.6

 

16

 

14

 

 

47

 

23.6

 

24

 

Enterprise Networks

 

5

 

4.2

 

6

 

16

 

48

 

75

 

61.5

 

19

 

Subsea Communications

 

(15

)

(10.3

)

 

10

 

 

(5

)

(3.4

)

14

 

Total

 

14

 

2.4

 

34

 

74

 

297

 

419

 

68.2

 

100

%

Total

 

$

50

 

1.6

%

$

174

 

$

277

 

$

273

 

$

774

 

24.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percentage of

 

 

 

Change in Net Sales for the Year Ended September 30, 2011

 

Segment’s Total

 

 

 

versus Net Sales for the Year Ended September 24, 2010

 

Net Sales for the

 

 

 

Organic (1)

 

Translation (2)

 

Impact of
53rd Week (3)

 

Acquisition
(Divestitures)

 

Total

 

Year Ended
September 30, 2011

 

 

 

($ in millions)

 

 

 

Transportation Solutions (4):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Automotive

 

$

562

 

13.5

%

$

169

 

$

102

 

$

(82

)

$

751

 

18.0

%

88

%

Aerospace, Defense, and Marine

 

59

 

9.5

 

10

 

10

 

 

79

 

12.7

 

12

 

Total

 

621

 

13.0

 

179

 

112

 

(82

)

830

 

17.3

 

100

%

Communications and Industrial Solutions (4):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial

 

96

 

6.9

 

43

 

30

 

(2

)

167

 

11.9

 

31

 

Data Communications

 

25

 

2.6

 

28

 

16

 

 

69

 

7.2

 

20

 

Appliance

 

27

 

3.6

 

20

 

14

 

 

61

 

8.1

 

16

 

Consumer Devices

 

(99

)

(12.0

)

26

 

14

 

(20

)

(79

)

(9.5

)

15

 

Computer

 

(6

)

(1.2

)

7

 

9

 

 

10

 

2.1

 

10

 

Touch Solutions

 

7

 

1.8

 

8

 

8

 

 

23

 

5.9

 

8

 

Total

 

50

 

1.1

 

132

 

91

 

(22

)

251

 

5.2

 

100

%

Network Solutions (4):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Telecom Networks

 

111

 

22.6

 

31

 

34

 

786

 

962

 

187.5

 

41

 

Energy

 

81

 

11.4

 

34

 

14

 

(12

)

117

 

15.5

 

24

 

Enterprise Networks

 

41

 

9.7

 

18

 

16

 

152

 

227

 

49.3

 

19

 

Subsea Communications

 

(155

)

(21.4

)

 

10

 

 

(145

)

(20.0

)

16

 

Total

 

78

 

3.3

 

83

 

74

 

926

 

1,161

 

47.4

 

100

%

Total

 

$

749

 

6.2

%

$

394

 

$

277

 

$

822

 

$

2,242

 

18.6

%

 

 

 


(1) Represents the change in net sales resulting from volume and price changes, before consideration of acquisitions, divestitures, and the impact of changes in foreign currency exchange rates, and in fiscal 2011, the impact of an additional week in the fourth quarter.  Organic net sales growth is a non-GAAP measure.  See description of non-GAAP measures contained in this release.

(2) Represents the change in net sales resulting from changes in foreign currency exchange rates.

(3) Represents the impact of an additional week in the fourth quarter of fiscal 2011.  Includes $26 million related to ADC.

(4) Industry end market information about net sales is presented consistently with our internal management reporting and may be periodically revised as management deems necessary.

 



 

TE CONNECTIVITY LTD.

NET SALES GROWTH RECONCILIATION (UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percentage of

 

 

 

Change in Net Sales for the Quarter Ended September 30, 2011

 

Segment’s Total

 

 

 

versus Net Sales for the Quarter Ended June 24, 2011

 

Net Sales for the

 

 

 

Organic (1)

 

Translation (2)

 

Impact of
14th Week (3)

 

Acquisition

 

Total

 

Quarter Ended
September 30, 2011

 

 

 

($ in millions)

 

 

 

Transportation Solutions (4):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Automotive

 

$

2

 

0.2

%

$

(4

)

$

102

 

$

 

$

100

 

8.1

%

87

%

Aerospace, Defense, and Marine

 

 

(0.1

)

(1

)

10

 

 

9

 

4.8

 

13

 

Total

 

2

 

0.1

 

(5

)

112

 

 

109

 

7.6

 

100

%

Communications and Industrial Solutions (4):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial

 

(14

)

(3.6

)

1

 

30

 

 

17

 

4.2

 

31

 

Data Communications

 

(19

)

(7.6

)

(1

)

16

 

 

(4

)

(1.5

)

20

 

Appliance

 

(18

)

(8.3

)

 

14

 

 

(4

)

(1.9

)

15

 

Consumer Devices

 

18

 

10.3

 

2

 

14

 

 

34

 

20.0

 

15

 

Computer

 

(10

)

(7.6

)

(1

)

9

 

 

(2

)

(1.5

)

10

 

Touch Solutions

 

(3

)

(2.8

)

 

8

 

 

5

 

4.4

 

9

 

Total

 

(46

)

(3.7

)

1

 

91

 

 

46

 

3.5

 

100

%

Network Solutions (4):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Telecom Networks

 

(20

)

(11.9

)

(4

)

34

 

(11

)

(1

)

(0.2

)

43

 

Energy

 

10

 

4.3

 

(3

)

14

 

 

21

 

9.3

 

24

 

Enterprise Networks

 

2

 

1.1

 

(2

)

16

 

(3

)

13

 

7.1

 

19

 

Subsea Communications

 

(16

)

(10.6

)

 

10

 

 

(6

)

(4.1

)

14

 

Total

 

(24

)

(4.0

)

(9

)

74

 

(14

)

27

 

2.7

 

100

%

Total

 

$

(68

)

(2.2

)%

$

(13

)

$

277

 

$

(14

)

$

182

 

4.9

%

 

 

 


(1) Represents the change in net sales resulting from volume and price changes, before consideration of acquisitions, divestitures, and the impact of changes in foreign currency exchange rates, and in fiscal 2011, the impact of an additional week in the fourth quarter.  Organic net sales growth is a non-GAAP measure.  See description of non-GAAP measures contained in this release.

(2) Represents the change in net sales resulting from changes in foreign currency exchange rates.

(3) Represents the impact of an additional week in the fourth quarter of fiscal 2011.  Includes $26 million related to ADC.

(4) Industry end market information about net sales is presented consistently with our internal management reporting and may be periodically revised as management deems necessary.

 



 

TE CONNECTIVITY LTD.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES

For the Quarter Ended September 30, 2011

(UNAUDITED)

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Acquisition

 

Restructuring

 

 

 

 

 

 

 

Related

 

and Other

 

Adjusted

 

 

 

U.S. GAAP

 

Charges (1)

 

Charges, Net

 

(Non-GAAP) (2)

 

 

 

($ in millions, except per share data)

 

Operating Income:

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

237

 

$

 

$

4

 

$

241

 

Communications and Industrial Solutions

 

103

 

 

57

 

160

 

Network Solutions

 

125

 

23

 

1

 

149

 

Total

 

$

465

 

$

23

 

$

62

 

$

550

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

11.9

%

 

 

 

 

14.1

%

 

 

 

 

 

 

 

 

 

 

Other Income, Net

 

$

14

 

$

 

$

 

$

14

 

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

$

(115

)

$

(7

)

$

(17

)

$

(139

)

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

326

 

$

16

 

$

45

 

$

387

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings per Share from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

0.75

 

$

0.04

 

$

0.10

 

$

0.89

 

 


(1) Includes $22 million of restructuring charges and $1 million of non-cash amortization associated with acquisition accounting-related adjustments recorded in cost of sales.

(2) See description of non-GAAP measures contained in this release.

 



 

TE CONNECTIVITY LTD.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES

For the Quarter Ended September 24, 2010

(UNAUDITED)

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Acquisition

 

Restructuring

 

 

 

 

 

 

 

 

 

and Integration

 

and Other

 

Tax

 

Adjusted

 

 

 

U.S. GAAP

 

Costs

 

Charges, Net

 

Items (1)

 

(Non-GAAP) (2)

 

 

 

($ in millions, except per share data)

 

Operating Income:

 

 

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

108

 

$

 

$

51

 

$

 

$

159

 

Communications and Industrial Solutions

 

200

 

 

2

 

 

202

 

Network Solutions

 

74

 

8

 

3

 

 

85

 

Total

 

$

382

 

$

8

 

$

56

 

$

 

$

446

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

12.2

%

 

 

 

 

 

 

14.2

%

 

 

 

 

 

 

 

 

 

 

 

 

Other Income, Net

 

$

52

 

$

 

$

 

$

(40

)

$

12

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

$

(145

)

$

 

$

(13

)

$

62

 

$

(96

)

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

253

 

$

8

 

$

43

 

$

22

 

$

326

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings per Share from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

0.56

 

$

0.02

 

$

0.10

 

$

0.05

 

$

0.72

 

 


(1) Includes income tax expense related to certain proposed adjustments to prior year tax returns and income tax benefits associated with the settlement of an audit of prior year tax returns as well as the related impact to other income pursuant to the Tax Sharing Agreement with Tyco International and Covidien.

(2) See description of non-GAAP measures contained in this release.

 



 

TE CONNECTIVITY LTD.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES

For the Year Ended September 30, 2011

(UNAUDITED)

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Acquisition

 

Restructuring

 

 

 

 

 

 

 

 

 

Related

 

and Other

 

Tax

 

Adjusted

 

 

 

U.S. GAAP

 

Charges (1)

 

Charges, Net

 

Items (2)

 

(Non-GAAP) (3)

 

 

 

($ in millions, except per share data)

 

Operating Income:

 

 

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

848

 

$

 

$

(14

)

$

 

$

834

 

Communications and Industrial Solutions

 

564

 

 

76

 

 

640

 

Network Solutions

 

329

 

142

 

5

 

 

476

 

Total

 

$

1,741

 

$

142

 

$

67

 

$

 

$

1,950

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

12.2

%

 

 

 

 

 

 

13.6

%

 

 

 

 

 

 

 

 

 

 

 

 

Other Income, Net

 

$

27

 

$

 

$

 

$

14

 

$

41

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

$

(376

)

$

(36

)

$

(20

)

$

(35

)

$

(467

)

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

1,248

 

$

106

 

$

47

 

$

(21

)

$

1,380

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings per Share from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

2.82

 

$

0.24

 

$

0.11

 

$

(0.05

)

$

3.12

 

 


(1) Includes $82 million of restructuring charges, $41 million of non-cash amortization associated with fair value adjustments primarily related to acquired inventories and customer order backlog recorded in cost of sales, and $19 million of ADC acquisition and integration costs.

(2) Includes income tax benefits associated with the settlement of certain tax matters related to an audit of prior year tax returns.  Also includes the related impact to other income pursuant to the Tax Sharing Agreement with Tyco International and Covidien.

(3) See description of non-GAAP measures contained in this release.

 



 

TE CONNECTIVITY LTD.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES

For the Year Ended September 24, 2010

(UNAUDITED)

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Restructuring

 

 

 

 

 

 

 

 

 

 

 

and Other

 

Tax

 

Other Items,

 

Adjusted

 

 

 

U.S. GAAP

 

Charges, Net (1)

 

Items (2)

 

Net (3)

 

(Non-GAAP) (4)

 

 

 

($ in millions, except per share data)

 

Operating Income:

 

 

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

515

 

$

94

 

$

 

$

 

$

609

 

Communications and Industrial Solutions

 

 

682

 

 

20

 

 

 

 

 

 

702

 

Network Solutions

 

 

312

 

 

20

 

 

 

 

8

 

 

340

 

Pre-separation litigation income

 

 

7

 

 

 

 

 

 

(7

)

 

 

Total

 

$

1,516

 

$

134

 

$

 

$

1

 

$

1,651

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

 

12.6

%

 

 

 

 

 

 

 

 

 

 

13.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Income, Net

 

$

177

 

$

 

$

(137

)

$

 

$

40

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

$

(493

)

$

(30

)

$

134

 

$

 

$

(389

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

1,059

 

$

104

 

$

(3

)

$

1

 

$

1,161

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings per Share from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

2.32

 

$

0.23

 

$

(0.01

)

$

 

$

2.54

 

 


(1) Includes $137 million recorded in net restructuring and other charges and a $3 million credit recorded in cost of sales.

(2) Includes income tax expense related to certain proposed adjustments to prior year tax returns and income tax benefits associated with the settlement of an audit of prior year tax returns as well as the related impact to other income pursuant to the Tax Sharing Agreement with Tyco International and Covidien.  Also includes an income tax benefit recognized in connection with a reduction in the valuation allowance associated with certain tax loss carryforwards.

(3) Consists of $8 million of acquisition and integration costs and $7 million of income related to pre-separation securities litigation.

(4) See description of non-GAAP measures contained in this release.

 



 

TE CONNECTIVITY LTD.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES

For the Quarter Ended December 24, 2010

(UNAUDITED)

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Acquisition
Related

 

Restructuring
and Other

 

Adjusted

 

 

 

U.S. GAAP

 

Charges (1)

 

Charges, Net

 

(Non-GAAP) (2)

 

 

 

($ in millions, except per share data)

 

Operating Income:

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

189

 

$

 

$

1

 

$

190

 

Communications and Industrial Solutions

 

181

 

 

3

 

184

 

Network Solutions

 

30

 

59

 

 

89

 

Total

 

$

400

 

$

59

 

$

4

 

$

463

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

12.5

%

 

 

 

 

14.5

%

 

 

 

 

 

 

 

 

 

 

Other Income, Net

 

$

12

 

$

 

$

 

$

12

 

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

$

(113

)

$

 

$

(1

)

$

(114

)

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

268

 

$

59

 

$

3

 

$

330

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings per Share from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

0.60

 

$

0.13

 

$

0.01

 

$

0.73

 

 


(1) Includes $35 million of restructuring charges, $17 million of ADC acquisition and integration costs, and $7 million of non-cash amortization associated with fair value adjustments to acquired inventories and customer order backlog recorded in cost of sales.

(2) See description of non-GAAP measures contained in this release.

 



 

TE CONNECTIVITY LTD.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES

For the Quarter Ended June 24, 2011

(UNAUDITED)

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Acquisition

 

Restructuring

 

 

 

 

 

 

 

 

 

Related

 

and Other

 

Tax

 

Adjusted

 

 

 

U.S. GAAP

 

Charges (1)

 

Charges, Net

 

Items (2)

 

(Non-GAAP) (3)

 

 

 

($ in millions, except per share data)

 

Operating Income:

 

 

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

211

 

$

 

$

(13

)

$

 

$

198

 

Communications and Industrial Solutions

 

134

 

 

15

 

 

149

 

Network Solutions

 

126

 

12

 

3

 

 

141

 

Total

 

$

471

 

$

12

 

$

5

 

$

 

$

488

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

12.6

%

 

 

 

 

 

 

13.1

%

 

 

 

 

 

 

 

 

 

 

 

 

Other Income (Expense), Net

 

$

(5

)

$

 

$

 

$

14

 

$

9

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

$

(74

)

$

(3

)

$

(2

)

$

(35

)

$

(114

)

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

355

 

$

9

 

$

3

 

$

(21

)

$

346

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings per Share from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

0.80

 

$

0.02

 

$

0.01

 

$

(0.05

)

$

0.78

 

 


(1) Includes $8 million of restructuring charges, $3 million of non-cash amortization associated with acquisition accounting-related adjustments recorded in cost of sales, and $1 million of ADC acquisition and integration costs.

(2) Includes income tax benefits associated with the settlement of certain tax matters related to an audit of prior year tax returns.  Also includes the related impact to other income pursuant to the Tax Sharing Agreement with Tyco International and Covidien.

(3) See description of non-GAAP measures contained in this release.

 


 

 


 

TE CONNECTIVITY LTD.

IMPACT OF ADDITIONAL WEEK (UNAUDITED)

 

For the Quarter Ended September 30, 2011

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

Acquisition

 

Restructuring

 

 

 

14 Weeks

 

Adjustment

 

13 Weeks

 

 

 

14 Weeks

 

Related

 

and Other

 

 

 

Adjusted

 

Impact of

 

Adjusted

 

 

 

U.S. GAAP

 

Charges (1)

 

Charges, Net

 

Tax Items

 

(Non-GAAP) (2)

 

14th Week

 

(Non-GAAP) (3)

 

 

 

($ in millions, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

$

465

 

$

23

 

$

62

 

$

 

$

550

 

$

(53

)

$

497

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

11.9

%

 

 

 

 

 

 

14.1

%

 

 

13.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings per Share from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

0.75

 

$

0.04

 

$

0.10

 

$

 

$

0.89

 

$

(0.08

)

$

0.81

 

 


(1) Includes $22 million of restructuring charges and $1 million of non-cash amortization associated with acquisition accounting-related adjustments recorded in cost of sales.

(2) See description of non-GAAP measures contained in this release.

(3) Excludes the impact of an additional week in the fourth quarter of fiscal 2011.

 

For the Year Ended September 30, 2011

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

Acquisition

 

Restructuring

 

 

 

53 Weeks

 

Adjustment

 

52 Weeks

 

 

 

53 Weeks

 

Related

 

and Other

 

 

 

Adjusted

 

Impact of

 

Adjusted

 

 

 

U.S. GAAP

 

Charges (1)

 

Charges, Net

 

Tax Items (2)

 

(Non-GAAP) (3)

 

53rd Week

 

(Non-GAAP) (4)

 

 

 

($ in millions, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

$

1,741

 

$

142

 

$

67

 

$

 

$

1,950

 

$

(53

)

$

1,897

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

12.2

%

 

 

 

 

 

 

13.6

%

 

 

13.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings per Share from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

2.82

 

$

0.24

 

$

0.11

 

$

(0.05

)

$

3.12

 

$

(0.08

)

$

3.03

 

 


(1) Includes $82 million of restructuring charges, $41 million of non-cash amortization associated with fair value adjustments primarily related to acquired inventories and customer order backlog recorded in cost of sales, and $19 million of ADC acquisition and integration costs.

(2) Includes income tax benefits associated with the settlement of certain tax matters related to an audit of prior year tax returns.  Also includes the related impact to other income pursuant to the Tax Sharing Agreement with Tyco International and Covidien.

(3) See description of non-GAAP measures contained in this release.

(4) Excludes the impact of an additional week in the fourth quarter of fiscal 2011.