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EX-99.2 - EX-99.2 - TE Connectivity Ltd.a12-16568_1ex99d2.htm

Exhibit 99.1

 

News Release

 

 

GRAPHIC

 

TE CONNECTIVITY REPORTS THIRD QUARTER RESULTS

 

SCHAFFHAUSEN, Switzerland — July 25, 2012 — TE Connectivity Ltd. (NYSE: TEL) today reported results for the fiscal third quarter ended June 29, 2012.

 

Third Quarter Highlights

 

·                  Net sales were $3.50 billion

·                  Diluted Earnings Per Share from Continuing Operations (GAAP EPS) were $0.60

·                  Adjusted EPS were $0.79

·                  Continued strong performance in Automotive, Aerospace, and Energy

·                  Profitability improved in all segments

·                  Deutsch acquisition completed and integration is on track

 

“We executed well in Q3 delivering EPS at our guidance level, increasing adjusted operating margins to 14% and generating free cash flow of $414 million,” said TE Connectivity Chief Executive Officer Tom Lynch. “Sales were up 8% sequentially although slightly below our expectations due to a weaker Euro and softness in our Network Solutions segment. Based on current order trends, we expect fourth quarter sales of approximately $3.4 billion with adjusted operating margins holding around 14%. We expect to generate in excess of $1.3 billion of free cash flow in fiscal 2012 and plan to restart our share repurchase program in the fourth quarter.”

 

FISCAL THIRD QUARTER RESULTS

 

The Company reported net sales of $3.50 billion compared to prior year sales of $3.58 billion. GAAP EPS were $0.60 for the quarter. Adjusted EPS were $0.79, compared to $0.76 in the prior year. Free cash flow was $414 million for the quarter.

 

GAAP EPS included $0.16 per share of acquisition-related charges, $0.04 per share of restructuring and other charges and $0.02 of income related to tax items.

 

1



 

Total company orders were $3.46 billion in the third quarter. The book-to-bill ratio was 0.99 both overall and excluding the Subsea Communications business.

 

Also in the third quarter, the Company completed the divestiture of its Touch Solutions and TE Professional Services businesses. Total proceeds were $409 million, of which $394 million were received in the third quarter.

 

2012 OUTLOOK

 

For the fourth quarter, the Company expects net sales of $3.325 to $3.425 billion and adjusted EPS of $0.72 to $0.76. GAAP EPS are expected to be $0.64 to $0.68, including restructuring and acquisition-related charges of $0.08.

 

For the full year, the Company expects net sales of $13.25 to $13.35 billion and adjusted EPS of $2.82 to $2.86. GAAP EPS are expected to be $2.41 to $2.45, including restructuring and acquisition-related charges of $0.41. This outlook compares to fiscal 2011 revenue of $13.5 billion and adjusted EPS of $2.95 excluding the additional week in 2011.

 

This outlook assumes current foreign exchange and commodity rates.

 

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 (NYSE: TEL) 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.

 

2



 

·                  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 10:00 a.m. on July 25, 2012 and ending at 11:59 p.m. on August 2, 2012. 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 251847.

 

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.

 

“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 and divestitures, if any, 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.

 

We present operating income before special items including charges or income related to legal settlements and reserves, restructuring and other charges, acquisition related charges, impairment charges, and other income or charges, if any (“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 provides insight into 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, acquisition related charges, impairment charges, and other income or charges, if any, 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 present operating margin before special items including charges or income related to legal settlements and reserves, restructuring and other charges, acquisition related charges, impairment charges, and other income or charges, if any (“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. This measure should be considered in conjunction with operating margin calculated using our GAAP results in order to understand the amounts, character and impact of adjustments to operating margin.

 

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We present other income, net before special items including tax sharing income related to certain proposed adjustments to prior period tax returns and other tax items, if any (“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, if any. 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 present income tax expense after adjusting for the tax effect of special items including charges related to restructuring and other charges, acquisition related charges, impairment charges, other income or charges, and certain significant special tax items, if any (“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, if any. The limitation of this measure 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 present 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, impairment charges, tax sharing income related to certain proposed adjustments to prior period tax returns and other tax items, certain significant special tax items, other income or charges, if any, 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, impairment charges, tax sharing income related to certain proposed adjustments to prior period tax returns and other tax items, certain significant special tax items, other income or charges, if any, 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 present 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, impairment charges, tax sharing income related to certain proposed adjustments to prior period tax returns and other tax items, certain significant special tax items, other income or charges, if any, 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

 

4



 

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 performance and ability to generate cash. It also is a significant component in our incentive compensation plans. The difference between net cash provided by continuing 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. We believe free cash flow provides useful information to investors as it provides insight into the primary cash flow metric used by management to monitor and evaluate cash flows generated from our operations. The difference reflects the impact from net capital expenditures, voluntary pension contributions, and special items, if any.

 

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. Certain special items, including net payments related to pre-separation tax matters, also are considered by management in evaluating free cash flow. We believe investors should consider these items in evaluating our free cash flow. We forecast our cash flow results excluding any 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.

 

FCF as presented herein may not be comparable to similarly-titled measures reported by other companies. The primary limitation of this measure is that it excludes items that have an impact on our GAAP cash flow. Also, it subtracts certain cash items that are ultimately within management’s and the Board of Directors’ discretion to direct and may imply that there is less or more cash available for our programs than the most comparable GAAP measure indicates. This limitation is best addressed by using FCF in combination with the GAAP cash flow results. It should not be inferred that the entire free cash flow amount is available for future discretionary expenditures, as our definition of free cash flow does not consider certain non-discretionary expenditures, such as debt payments. In addition, we may have other discretionary expenditures, such as discretionary dividends, share repurchases, and business acquisitions, that are not considered in the calculation of free cash flow.

 

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 U.S. 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 and operating results. 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 in the automotive industry and the telecommunications, computer and consumer

 

5



 

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 Deutsch’s operations will not be successfully integrated into ours; and the risk that revenue opportunities, cost savings and other anticipated synergies from the Deutsch acquisition may not be fully realized or may take longer to realize than expected. More detailed information about these and other factors is set forth in TE Connectivity Ltd.’s Annual Report on Form 10-K for the fiscal year ended Sept. 30, 2011 as well as in our Quarterly Reports on Form 10-Q for the fiscal quarters ended Dec. 30, 2011 and March 30, 2012, Current Reports on Form 8-K and other reports filed by us with the U.S. Securities and Exchange Commission.

 

# # #

 

Contacts:

 

Media Relations:

 

Investor Relations:

 

 

Amy Shah

610-893-9555  Office

amy.shah@te.com

 

Brian Schaffer

212-279-3115  Office

bschaffer@prosek.com

 

Keith Kolstrom

610-893-9551  Office

keith.kolstrom@te.com

 

Will Ruthrauff

610-893-9565  Office

will.ruthrauff@te.com

 

6


 


 

TE CONNECTIVITY LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 

 

 

For the Quarters Ended

 

For the Nine Months Ended

 

 

 

June 29,

 

June 24,

 

June 29,

 

June 24,

 

 

 

2012

 

2011

 

2012

 

2011

 

 

 

(in millions, except per share data)

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

3,499

 

$

3,579

 

$

9,918

 

$

10,025

 

Cost of sales

 

2,481

 

2,491

 

6,936

 

6,938

 

Gross margin

 

1,018

 

1,088

 

2,982

 

3,087

 

Selling, general, and administrative expenses

 

423

 

441

 

1,233

 

1,261

 

Research, development, and engineering expenses

 

173

 

178

 

523

 

507

 

Acquisition and integration costs

 

15

 

1

 

23

 

19

 

Restructuring and other charges, net

 

36

 

8

 

86

 

58

 

Operating income

 

371

 

460

 

1,117

 

1,242

 

Interest income

 

6

 

5

 

18

 

16

 

Interest expense

 

(48

)

(39

)

(131

)

(117

)

Other income (expense), net

 

19

 

(5

)

31

 

13

 

Income from continuing operations before income taxes

 

348

 

421

 

1,035

 

1,154

 

Income tax expense

 

(88

)

(70

)

(267

)

(247

)

Income from continuing operations

 

260

 

351

 

768

 

907

 

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

 

(61

)

6

 

(49

)

16

 

Net income

 

199

 

357

 

719

 

923

 

Less: net income attributable to noncontrolling interests

 

 

(2

)

(3

)

(4

)

Net income attributable to TE Connectivity Ltd.

 

$

199

 

$

355

 

$

716

 

$

919

 

 

 

 

 

 

 

 

 

 

 

Amounts attributable to TE Connectivity Ltd.:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

260

 

$

349

 

$

765

 

$

903

 

Income (loss) from discontinued operations

 

(61

)

6

 

(49

)

16

 

Net income

 

$

199

 

$

355

 

$

716

 

$

919

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to TE Connectivity Ltd.:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.61

 

$

0.80

 

$

1.79

 

$

2.05

 

Income (loss) from discontinued operations

 

(0.15

)

0.01

 

(0.11

)

0.03

 

Net income

 

$

0.46

 

$

0.81

 

$

1.68

 

$

2.08

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to TE Connectivity Ltd.:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.60

 

$

0.79

 

$

1.78

 

$

2.02

 

Income (loss) from discontinued operations

 

(0.14

)

0.01

 

(0.11

)

0.04

 

Net income

 

$

0.46

 

$

0.80

 

$

1.67

 

$

2.06

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.21

 

$

0.18

 

$

0.57

 

$

0.50

 

 

 

 

 

 

 

 

 

 

 

Weighted-average number of shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

428

 

437

 

427

 

441

 

Diluted

 

431

 

442

 

430

 

447

 

 



 

TE CONNECTIVITY LTD.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

 

 

June 29,

 

September 30,

 

 

 

2012

 

2011

 

 

 

(in millions, except share data)

 

Assets

 

 

 

 

 

Current Assets:

 

 

 

 

 

Cash and cash equivalents

 

$

1,302

 

$

1,218

 

Accounts receivable, net of allowance for doubtful accounts of $41 and $38, respectively

 

2,393

 

2,341

 

Inventories

 

1,868

 

1,878

 

Prepaid expenses and other current assets

 

462

 

634

 

Deferred income taxes

 

407

 

402

 

Assets held for sale

 

 

508

 

Total current assets

 

6,432

 

6,981

 

Property, plant, and equipment, net

 

3,136

 

3,140

 

Goodwill

 

4,290

 

3,288

 

Intangible assets, net

 

1,392

 

631

 

Deferred income taxes

 

2,232

 

2,364

 

Receivable from Tyco International Ltd. and Covidien plc

 

1,170

 

1,066

 

Other assets

 

290

 

253

 

Total Assets

 

$

18,942

 

$

17,723

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

Current maturities of long-term debt

 

$

1,066

 

$

 

Accounts payable

 

1,383

 

1,454

 

Accrued and other current liabilities

 

1,522

 

1,733

 

Deferred revenue

 

99

 

143

 

Liabilities held for sale

 

 

80

 

Total current liabilities

 

4,070

 

3,410

 

Long-term debt

 

2,693

 

2,667

 

Long-term pension and postretirement liabilities

 

1,169

 

1,202

 

Deferred income taxes

 

509

 

333

 

Income taxes

 

2,257

 

2,122

 

Other liabilities

 

504

 

505

 

Total Liabilities

 

11,202

 

10,239

 

Commitments and contingencies

 

 

 

 

 

Equity:

 

 

 

 

 

TE Connectivity Ltd. Shareholders’ Equity:

 

 

 

 

 

Common shares, 439,092,124 shares authorized and issued, CHF 1.17 par value, and 463,080,684 shares authorized and issued, CHF 1.37 par value, respectively

 

193

 

593

 

Contributed surplus

 

6,820

 

7,604

 

Accumulated earnings

 

800

 

84

 

Treasury shares, at cost, 11,318,310 and 39,303,550 shares, respectively

 

(305

)

(1,235

)

Accumulated other comprehensive income

 

226

 

428

 

Total TE Connectivity Ltd. shareholders’ equity

 

7,734

 

7,474

 

Noncontrolling interests

 

6

 

10

 

Total Equity

 

7,740

 

7,484

 

Total Liabilities and Equity

 

$

18,942

 

$

17,723

 

 



 

TE CONNECTIVITY LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

 

 

For the Quarters Ended

 

For the Nine Months Ended

 

 

 

June 29,

 

June 24,

 

June 29,

 

June 24,

 

 

 

2012

 

2011

 

2012

 

2011

 

 

 

(in millions)

 

Cash Flows From Operating Activities:

 

 

 

 

 

 

 

 

 

Net income

 

$

199

 

$

357

 

$

719

 

$

923

 

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

 

61

 

(6

)

49

 

(16

)

Income from continuing operations

 

260

 

351

 

768

 

907

 

Adjustments to reconcile net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

174

 

143

 

453

 

419

 

Deferred income taxes

 

22

 

6

 

100

 

103

 

Provision for losses on accounts receivable and inventories

 

9

 

8

 

44

 

20

 

Share-based compensation expense

 

17

 

19

 

52

 

58

 

Other

 

32

 

(15

)

17

 

(19

)

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

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

(10

)

(84

)

(26

)

(122

)

Inventories

 

33

 

(63

)

24

 

(235

)

Inventoried costs on long-term contracts

 

14

 

(13

)

9

 

16

 

Prepaid expenses and other current assets

 

(15

)

44

 

86

 

94

 

Accounts payable

 

(45

)

50

 

(91

)

84

 

Accrued and other current liabilities

 

(7

)

5

 

(195

)

(251

)

Income taxes

 

(7

)

8

 

(74

)

22

 

Deferred revenue

 

(8

)

(29

)

(52

)

(66

)

Long-term pension and postretirement liabilities

 

13

 

9

 

33

 

53

 

Other

 

16

 

6

 

26

 

31

 

Net cash provided by continuing operating activities

 

498

 

445

 

1,174

 

1,114

 

Net cash provided by (used in) discontinued operating activities

 

7

 

(7

)

60

 

35

 

Net cash provided by operating activities

 

505

 

438

 

1,234

 

1,149

 

Cash Flows From Investing Activities:

 

 

 

 

 

 

 

 

 

Capital expenditures

 

(115

)

(143

)

(385

)

(370

)

Proceeds from sale of property, plant, and equipment

 

6

 

46

 

13

 

58

 

Proceeds from sale of intangible assets

 

 

68

 

 

68

 

Proceeds from sale of short-term investments

 

 

 

 

155

 

Acquisition of business, net of cash acquired

 

(1,384

)

(14

)

(1,384

)

(731

)

Proceeds from divestiture of discontinued operations, net of cash retained by operations sold

 

394

 

 

394

 

 

Other

 

 

(1

)

(7

)

(10

)

Net cash used in continuing investing activities

 

(1,099

)

(44

)

(1,369

)

(830

)

Net cash used in discontinued investing activities

 

 

(1

)

(1

)

(5

)

Net cash used in investing activities

 

(1,099

)

(45

)

(1,370

)

(835

)

Cash Flows From Financing Activities:

 

 

 

 

 

 

 

 

 

Net increase (decrease) in commercial paper

 

(219

)

 

350

 

(100

)

Proceeds from long-term debt

 

 

 

748

 

249

 

Repayment of long-term debt

 

(642

)

(95

)

(642

)

(565

)

Proceeds from exercise of share options

 

4

 

9

 

52

 

74

 

Repurchase of common shares

 

 

(259

)

(17

)

(540

)

Payment of common share dividends and cash distributions to shareholders

 

(90

)

(79

)

(243

)

(220

)

Other

 

5

 

(15

)

45

 

17

 

Net cash provided by (used in) continuing financing activities

 

(942

)

(439

)

293

 

(1,085

)

Net cash provided by (used in) discontinued financing activities

 

(7

)

8

 

(59

)

(30

)

Net cash provided by (used in) financing activities

 

(949

)

(431

)

234

 

(1,115

)

Effect of currency translation on cash

 

(21

)

11

 

(14

)

23

 

Net increase (decrease) in cash and cash equivalents

 

(1,564

)

(27

)

84

 

(778

)

Cash and cash equivalents at beginning of period

 

2,866

 

1,239

 

1,218

 

1,990

 

Cash and cash equivalents at end of period

 

$

1,302

 

$

1,212

 

$

1,302

 

$

1,212

 

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Information:

 

 

 

 

 

 

 

 

 

Income taxes paid, net of refunds

 

$

72

 

$

58

 

$

240

 

$

127

 

 

 

 

 

 

 

.

 

 

 

Reconciliation to Free Cash Flow:

 

 

 

 

 

 

 

 

 

Net cash provided by continuing operating activities

 

$

498

 

$

445

 

$

1,174

 

$

1,114

 

Capital expenditures, net

 

(109

)

(97

)

(372

)

(312

)

Payments related to pre-separation U.S. tax matters, net

 

8

 

 

26

 

 

Payments related to accrued interest on debt acquired in the Deutsch acquisition

 

17

 

 

17

 

 

Payments to settle acquisition-related foreign currency derivative contracts

 

 

 

20

 

 

Free cash flow (1)

 

$

414

 

$

348

 

$

865

 

$

802

 

 


(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 Nine Months Ended

 

 

 

 

 

June 29,

 

 

 

June 24,

 

 

 

June 29,

 

 

 

June 24,

 

 

 

 

 

2012

 

 

 

2011

 

 

 

2012

 

 

 

2011

 

 

 

 

 

($ in millions)

 

 

 

Net Sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

1,607

 

 

 

$

1,426

 

 

 

$

4,469

 

 

 

$

4,094

 

 

 

Communications and Industrial Solutions

 

1,045

 

 

 

1,184

 

 

 

2,994

 

 

 

3,433

 

 

 

Network Solutions

 

847

 

 

 

969

 

 

 

2,455

 

 

 

2,498

 

 

 

Total

 

$

3,499

 

 

 

$

3,579

 

 

 

$

9,918

 

 

 

$

10,025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

183

 

11.4

%

$

211

 

14.8

%

$

633

 

14.2

%

$

611

 

14.9

%

Communications and Industrial Solutions

 

96

 

9.2

%

120

 

10.1

%

232

 

7.7

%

426

 

12.4

%

Network Solutions

 

92

 

10.9

%

129

 

13.3

%

252

 

10.3

%

205

 

8.2

%

Total

 

$

371

 

10.6

%

$

460

 

12.9

%

$

1,117

 

11.3

%

$

1,242

 

12.4

%

 



 

TE CONNECTIVITY LTD.

NET SALES GROWTH RECONCILIATION (UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percentage of

 

 

 

 

 

Segment’s Total

 

 

 

Change in Net Sales for the Quarter Ended June 29, 2012

 

Net Sales for the

 

 

 

versus Net Sales for the Quarter Ended June 24, 2011

 

Quarter Ended

 

 

 

Organic (1)

 

Translation (2)

 

Acquisition

 

Total

 

June 29, 2012

 

 

 

($ in millions)

 

 

 

Transportation Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Automotive

 

$

85

 

6.9

%

$

(73

)

$

96

 

$

108

 

8.7

%

84

%

Aerospace, Defense, and Marine

 

1

 

0.2

 

(6

)

78

 

73

 

39.0

 

16

 

Total

 

86

 

6.1

 

(79

)

174

 

181

 

12.7

 

100

%

Communications and Industrial Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial

 

(53

)

(13.6

)

(11

)

 

(64

)

(16.0

)

32

 

Consumer Devices

 

(11

)

(3.6

)

(2

)

 

(13

)

(4.4

)

27

 

Data Communications

 

(41

)

(14.9

)

(4

)

 

(45

)

(16.4

)

22

 

Appliance

 

(6

)

(2.9

)

(11

)

 

(17

)

(8.0

)

19

 

Total

 

(111

)

(9.4

)

(28

)

 

(139

)

(11.7

)

100

%

Network Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Telecom Networks

 

(60

)

(14.5

)

(11

)

 

(71

)

(17.2

)

40

 

Energy

 

8

 

3.4

 

(16

)

 

(8

)

(3.6

)

26

 

Enterprise Networks

 

(4

)

(2.4

)

(8

)

 

(12

)

(6.5

)

20

 

Subsea Communications

 

(30

)

(20.5

)

(1

)

 

(31

)

(21.1

)

14

 

Total

 

(86

)

(8.9

)

(36

)

 

(122

)

(12.6

)

100

%

Total

 

$

(111

)

(3.1

)%

$

(143

)

$

174

 

$

(80

)

(2.2

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percentage of

 

 

 

 

 

Segment’s Total

 

 

 

Change in Net Sales for the Nine Months Ended June 29, 2012

 

Net Sales for the

 

 

 

versus Net Sales for the Nine Months Ended June 24, 2011

 

Nine Months Ended

 

 

 

Organic (1)

 

Translation (2)

 

Acquisitions

 

Total

 

June 29, 2012

 

 

 

($ in millions)

 

 

 

Transportation Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Automotive

 

$

264

 

7.3

%

$

(91

)

$

96

 

$

269

 

7.5

%

86

%

Aerospace, Defense, and Marine

 

37

 

7.0

 

(9

)

78

 

106

 

20.9

 

14

 

Total

 

301

 

7.3

 

(100

)

174

 

375

 

9.2

 

100

%

Communications and Industrial Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial

 

(162

)

(14.2

)

(10

)

 

(172

)

(15.0

)

32

 

Consumer Devices

 

(70

)

(7.8

)

3

 

 

(67

)

(7.5

)

28

 

Data Communications

 

(141

)

(17.7

)

(3

)

 

(144

)

(18.1

)

22

 

Appliance

 

(45

)

(7.6

)

(11

)

 

(56

)

(9.4

)

18

 

Total

 

(418

)

(12.2

)

(21

)

 

(439

)

(12.8

)

100

%

Network Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Telecom Networks

 

(83

)

(9.0

)

(25

)

117

 

9

 

1.0

 

39

 

Energy

 

18

 

2.7

 

(20

)

 

(2

)

(0.3

)

25

 

Enterprise Networks

 

1

 

0.1

 

(18

)

37

 

20

 

4.1

 

21

 

Subsea Communications

 

(70

)

(15.9

)

 

 

(70

)

(15.9

)

15

 

Total

 

(134

)

(5.4

)

(63

)

154

 

(43

)

(1.7

)

100

%

Total

 

$

(251

)

(2.5

)%

$

(184

)

$

328

 

$

(107

)

(1.1

)%

 

 

 


(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.  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) 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

 

 

 

 

 

Segment’s Total

 

 

 

Change in Net Sales for the Quarter Ended June 29, 2012

 

Net Sales for the

 

 

 

versus Net Sales for the Quarter Ended March 30, 2012

 

Quarter Ended

 

 

 

Organic (1)

 

Translation (2)

 

Acquisition

 

Total

 

June 29, 2012

 

 

 

($ in millions)

 

 

 

Transportation Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Automotive

 

$

(10

)

(0.9

)%

$

(15

)

$

96

 

$

71

 

5.6

%

84

%

Aerospace, Defense, and Marine

 

1

 

0.3

 

 

78

 

79

 

43.6

 

16

 

Total

 

(9

)

(0.6

)

(15

)

174

 

150

 

10.3

 

100

%

Communications and Industrial Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial

 

20

 

5.3

 

(5

)

 

15

 

4.7

 

32

 

Consumer Devices

 

24

 

9.1

 

(1

)

 

23

 

8.8

 

27

 

Data Communications

 

21

 

10.1

 

(1

)

 

20

 

9.6

 

22

 

Appliance

 

14

 

7.5

 

(2

)

 

12

 

6.6

 

19

 

Total

 

79

 

8.1

 

(9

)

 

70

 

7.2

 

100

%

Network Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Telecom Networks

 

29

 

8.9

 

(3

)

 

26

 

8.2

 

40

 

Energy

 

13

 

5.9

 

(4

)

 

9

 

4.3

 

26

 

Enterprise Networks

 

4

 

2.0

 

(4

)

 

 

 

20

 

Subsea Communications

 

(5

)

(4.1

)

 

 

(5

)

(4.1

)

14

 

Total

 

41

 

5.0

 

(11

)

 

30

 

3.7

 

100

%

Total

 

$

111

 

3.4

%

$

(35

)

$

174

 

$

250

 

7.7

%

 

 

 


(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.  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) 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 June 29, 2012

(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

 

$

183

 

$

94

 

$

3

 

$

 

$

280

 

Communications and Industrial Solutions

 

96

 

 

16

 

 

112

 

Network Solutions

 

92

 

 

6

 

 

98

 

Total

 

$

371

 

$

94

 

$

25

 

$

 

$

490

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

10.6

%

 

 

 

 

 

 

14.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Other Income, Net

 

$

19

 

$

 

$

 

$

(10

)

$

9

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

$

(88

)

$

(23

)

$

(6

)

$

 

$

(117

)

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

260

 

$

71

 

$

19

 

$

(10

)

$

340

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.60

 

$

0.16

 

$

0.04

 

$

(0.02

)

$

0.79

 

 


(1) Includes $68 million of non-cash amortization associated with fair value adjustments primarily related to acquired inventories and customer order backlog recorded in cost of sales, $15 million of acquisition and integration costs, and $11 million of restructuring costs.

(2) Relates to reimbursements by Tyco International and Covidien in connection with pre-separation tax matters.

(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 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

 

120

 

 

11

 

 

131

 

Network Solutions

 

129

 

10

 

3

 

 

142

 

Total

 

$

460

 

$

10

 

$

1

 

$

 

$

471

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

12.9

%

 

 

 

 

 

 

13.2

%

 

 

 

 

 

 

 

 

 

 

 

 

Other Income (Expense), Net

 

$

(5

)

$

 

$

 

$

14

 

$

9

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

$

(70

)

$

(3

)

$

 

$

(35

)

$

(108

)

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

349

 

$

7

 

$

1

 

$

(21

)

$

336

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.79

 

$

0.02

 

$

 

$

(0.05

)

$

0.76

 

 


(1) Includes $7 million of restructuring charges, $2 million of non-cash amortization associated with acquisition accounting-related adjustments recorded in cost of sales, and $1 million of 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 Nine Months Ended June 29, 2012

(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

 

$

633

 

$

102

 

$

1

 

$

 

$

736

 

Communications and Industrial Solutions

 

232

 

 

51

 

 

283

 

Network Solutions

 

252

 

 

23

 

 

275

 

Total

 

$

1,117

 

$

102

 

$

75

 

$

 

$

1,294

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

11.3

%

 

 

 

 

 

 

13.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Other Income, Net

 

$

31

 

$

 

$

 

$

(10

)

$

21

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

$

(267

)

$

(23

)

$

(23

)

$

17

 

$

(296

)

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

765

 

$

79

 

$

52

 

$

7

 

$

903

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

1.78

 

$

0.18

 

$

0.12

 

$

0.02

 

$

2.10

 

 


(1) Includes $68 million of non-cash amortization associated with fair value adjustments primarily related to acquired inventories and customer order backlog recorded in cost of sales, $23 million of acquisition and integration costs, and $11 million of restructuring costs.

(2) Other income adjustment relates to reimbursements by Tyco International and Covidien in connection with pre-separation tax matters. Income tax expense adjustment primarily relates to income tax expense associated with certain non-U.S tax rate changes.

(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 Nine Months 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

 

$

611

 

$

 

$

(18

)

$

 

$

593

 

Communications and Industrial Solutions

 

426

 

 

14

 

 

440

 

Network Solutions

 

205

 

115

 

4

 

 

324

 

Total

 

$

1,242

 

$

115

 

$

 

$

 

$

1,357

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

12.4

%

 

 

 

 

 

 

13.5

%

 

 

 

 

 

 

 

 

 

 

 

 

Other Income, Net

 

$

13

 

$

 

$

 

$

14

 

$

27

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

$

(247

)

$

(28

)

$

(1

)

$

(35

)

$

(311

)

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

903

 

$

87

 

$

(1

)

$

(21

)

$

968

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

2.02

 

$

0.19

 

$

 

$

(0.05

)

$

2.17

 

 


(1) Includes $58 million of restructuring charges, $38 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 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 Quarter Ended March 30, 2012

(UNAUDITED)

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Acquisition

 

Restructuring

 

 

 

 

 

 

 

Related

 

and Other

 

Adjusted

 

 

 

U.S. GAAP

 

Charges

 

Charges, Net

 

(Non-GAAP) (1)

 

 

 

($ in millions, except per share data)

 

Operating Income:

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

227

 

$

4

 

$

2

 

$

233

 

Communications and Industrial Solutions

 

75

 

 

18

 

93

 

Network Solutions

 

83

 

 

12

 

95

 

Total

 

$

385

 

$

4

 

$

32

 

$

421

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

11.8

%

 

 

 

 

13.0

%

 

 

 

 

 

 

 

 

 

 

Other Income, Net

 

$

11

 

$

 

$

 

$

11

 

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

$

(91

)

$

 

$

(9

)

$

(100

)

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

267

 

$

4

 

$

23

 

$

294

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.62

 

$

0.01

 

$

0.05

 

$

0.68

 

 


(1) 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 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

 

89

 

 

51

 

140

 

Network Solutions

 

119

 

23

 

1

 

143

 

Total

 

$

445

 

$

23

 

$

56

 

$

524

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

11.9

%

 

 

 

 

14.0

%

 

 

 

 

 

 

 

 

 

 

Other Income, Net

 

$

14

 

$

 

$

 

$

14

 

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

$

(100

)

$

(7

)

$

(17

)

$

(124

)

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

320

 

$

16

 

$

39

 

$

375

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.74

 

$

0.04

 

$

0.09

 

$

0.87

 

 


(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 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

 

515

 

 

65

 

 

580

 

Network Solutions

 

324

 

138

 

5

 

 

467

 

Total

 

$

1,687

 

$

138

 

$

56

 

$

 

$

1,881

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

12.2

%

 

 

 

 

 

 

13.7

%

 

 

 

 

 

 

 

 

 

 

 

 

Other Income, Net

 

$

27

 

$

 

$

 

$

14

 

$

41

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

$

(347

)

$

(35

)

$

(18

)

$

(35

)

$

(435

)

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

1,223

 

$

103

 

$

38

 

$

(21

)

$

1,343

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

2.76

 

$

0.23

 

$

0.09

 

$

(0.05

)

$

3.03

 

 


(1) Includes $80 million of restructuring charges, $39 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 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

 

 

 

Adjustment

 

 

 

 

 

 

 

Acquisition

 

Restructuring

 

 

 

14 Weeks

 

 

 

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 (3)

 

(Non-GAAP) (4)

 

 

 

($ in millions, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

$

445

 

$

23

 

$

56

 

$

 

$

524

 

$

(52

)

$

472

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

11.9

%

 

 

 

 

 

 

14.0

%

 

 

13.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.74

 

$

0.04

 

$

0.09

 

$

 

$

0.87

 

$

(0.08

)

$

0.79

 

 


(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) Estimated impact of the 14th week using an average weekly sales figure for the last month of the fiscal year.

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

 

For the Year Ended September 30, 2011

 

 

 

 

 

Adjustments

 

 

 

Adjustment

 

 

 

 

 

 

 

Acquisition

 

Restructuring

 

 

 

53 Weeks

 

 

 

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 (4)

 

(Non-GAAP) (5)

 

 

 

($ in millions, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

$

1,687

 

$

138

 

$

56

 

$

 

$

1,881

 

$

(52

)

$

1,829

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

12.2

%

 

 

 

 

 

 

13.7

%

 

 

13.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

2.76

 

$

0.23

 

$

0.09

 

$

(0.05

)

$

3.03

 

$

(0.08

)

$

2.95

 

 


(1) Includes $80 million of restructuring charges, $39 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 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) Estimated impact of the 53rd week using an average weekly sales figure for the last month of the fiscal year.

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