EX-99.1 2 a13-16865_1ex99d1.htm EX-99.1

Exhibit 99.1

 

GRAPHIC

News Release

 

GRAPHIC

 

TE CONNECTIVITY REPORTS STRONG THIRD QUARTER RESULTS

RAISES FULL YEAR GUIDANCE

 

SCHAFFHAUSEN, Switzerland — July 24, 2013 — TE Connectivity Ltd. (NYSE: TEL) today reported results for the fiscal third quarter ended June 28, 2013.

 

Third Quarter Highlights

 

·                  Adjusted Earnings Per Share (EPS) were $0.88, a third quarter record; up 11% over the prior year

·                  Diluted Earnings Per Share from Continuing Operations (GAAP EPS) were $0.79

·                  Net sales were $3.45 billion, above the high end of the guidance range

·                  Adjusted operating margin of 14.8%, up 80 basis points versus the prior year; GAAP operating margin of 12.7%

·                  Free cash flow was $431 million for the quarter and $1.1 billion for the fiscal year to date

·                  Returned $314 million to shareholders through share repurchases and dividends

·                  Orders increased over the prior year and book-to-bill was 1.02, excluding Subsea Communications

 

“We had a strong third quarter with sales and EPS above the high end of our guidance,” said TE Connectivity Chairman and Chief Executive Officer Tom Lynch. “Sales were up six percent sequentially driven by continued strength in our Transportation segment and improving demand in our Industrial and Network segments. Adjusted operating margins increased in all segments due to significant productivity gains and the increase in sales. We had another quarter of outstanding free cash flow, reaching $1.1 billion year to date.

 

“Orders increased over the prior year in most of our businesses and we expect another strong quarter in the fourth quarter, in line with our prior guidance. We are raising our full year adjusted EPS guidance to $3.18 to $3.22, up about 12% over the prior year.”

 

FISCAL THIRD QUARTER RESULTS

 

The company reported net sales of $3.45 billion compared to prior year sales of $3.50 billion. Adjusted EPS were $0.88, compared to $0.79 in the prior year. GAAP EPS were $0.79 for the quarter. Free cash flow was $431 million for the quarter.

 

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GAAP EPS included $0.11 per share of restructuring and other charges and $0.02 of income related to tax items.

 

Company orders, excluding the Subsea Communications business, were $3.41 billion in the third quarter and the book-to-bill ratio was 1.02.

 

OUTLOOK

 

For the fourth quarter, the company expects net sales of $3.35 to $3.45 billion and adjusted EPS of $0.88 to $0.92. GAAP EPS are expected to be $0.82 to $0.86, including restructuring and acquisition-related charges of $0.06.

 

For the full year, the company is raising its annual EPS guidance. The company now expects adjusted EPS of $3.18 to $3.22 and sales of $13.2 to $13.3 billion. GAAP EPS are expected to be $2.92 to $2.96, including restructuring and acquisition-related charges of $0.48 and income from tax-related items of $0.22.

 

This outlook assumes foreign exchange rates and commodity prices that are consistent with current levels.

 

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 $13 billion world leader in connectivity. The company designs and manufactures products at the heart of electronic connections for the world’s leading industries including automotive, energy and industrial, broadband communications, consumer devices, healthcare, and aerospace and defense. TE Connectivity’s long-standing commitment to innovation and engineering excellence helps its customers solve the need for more energy efficiency, always-on communications and ever-increasing productivity. With nearly 90,000 employees in over 50 countries, TE Connectivity makes connections the world relies on to work flawlessly every day. To connect with the company, visit: 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) 288-8968. The telephone dial-in number for participants outside the United States is (612) 288-0329.

 

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·                  An audio replay of the conference call will be available beginning at 10:30 a.m. on July 24, 2013 and ending at 11:59 p.m. on July 31, 2013. 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 295904.

 

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 and acquisitions and divestitures, if any. 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. 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.

 

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

 

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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 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

 

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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 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

 

5



 

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. 28, 2012 as well as in our Quarterly Reports on Form 10-Q for the fiscal quarters ended Dec. 28, 2012 and March 29, 2013, 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

Keith Kolstrom

 

610-893-9555 Office

610-893-9551 Office

 

amy.shah@te.com

keith.kolstrom@te.com

 

 

 

 

Brian Schaffer

Will Ruthrauff

 

212-279-3115 Office

610-893-9565 Office

 

bschaffer@prosek.com

will.ruthrauff@te.com

 

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TE CONNECTIVITY LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 

 

 

For the Quarters Ended

 

For the Nine Months Ended

 

 

 

June 28,

 

June 29,

 

June 28,

 

June 29,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

(in millions, except per share data)

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

3,449

 

$

3,499

 

$

9,848

 

$

9,918

 

Cost of sales

 

2,317

 

2,481

 

6,675

 

6,936

 

Gross margin

 

1,132

 

1,018

 

3,173

 

2,982

 

Selling, general, and administrative expenses

 

456

 

423

 

1,322

 

1,233

 

Research, development, and engineering expenses

 

167

 

173

 

509

 

523

 

Acquisition and integration costs

 

3

 

15

 

11

 

23

 

Restructuring and other charges, net

 

67

 

36

 

240

 

86

 

Operating income

 

439

 

371

 

1,091

 

1,117

 

Interest income

 

4

 

6

 

13

 

18

 

Interest expense

 

(36

)

(48

)

(108

)

(131

)

Other income (expense), net

 

18

 

19

 

(199

)

31

 

Income from continuing operations before income taxes

 

425

 

348

 

797

 

1,035

 

Income tax (expense) benefit

 

(93

)

(88

)

92

 

(267

)

Income from continuing operations

 

332

 

260

 

889

 

768

 

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

 

3

 

(61

)

 

(49

)

Net income

 

335

 

199

 

889

 

719

 

Less: net income attributable to noncontrolling interests

 

 

 

 

(3

)

Net income attributable to TE Connectivity Ltd.

 

$

335

 

$

199

 

$

889

 

$

716

 

 

 

 

 

 

 

 

 

 

 

Amounts attributable to TE Connectivity Ltd.:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

332

 

$

260

 

$

889

 

$

765

 

Income (loss) from discontinued operations

 

3

 

(61

)

 

(49

)

Net income

 

$

335

 

$

199

 

$

889

 

$

716

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to TE Connectivity Ltd.:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.80

 

$

0.61

 

$

2.12

 

$

1.79

 

Income (loss) from discontinued operations

 

0.01

 

(0.15

)

 

(0.11

)

Net income

 

0.81

 

0.46

 

2.12

 

1.68

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to TE Connectivity Ltd.:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.79

 

$

0.60

 

$

2.10

 

$

1.78

 

Income (loss) from discontinued operations

 

0.01

 

(0.14

)

 

(0.11

)

Net income

 

0.80

 

0.46

 

2.10

 

1.67

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.25

 

$

0.21

 

$

0.67

 

$

0.57

 

 

 

 

 

 

 

 

 

 

 

Weighted-average number of shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

415

 

428

 

419

 

427

 

Diluted

 

421

 

431

 

423

 

430

 

 



 

TE CONNECTIVITY LTD.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

 

 

June 28,

 

September 28,

 

 

 

2013

 

2012

 

 

 

(in millions, except share data)

 

Assets

 

 

 

 

 

Current Assets:

 

 

 

 

 

Cash and cash equivalents

 

$

1,262

 

$

1,589

 

Accounts receivable, net of allowance for doubtful accounts of $49 and $41, respectively

 

2,257

 

2,343

 

Inventories

 

1,762

 

1,808

 

Prepaid expenses and other current assets

 

453

 

474

 

Deferred income taxes

 

284

 

289

 

Total current assets

 

6,018

 

6,503

 

Property, plant, and equipment, net

 

3,071

 

3,213

 

Goodwill

 

4,285

 

4,308

 

Intangible assets, net

 

1,263

 

1,352

 

Deferred income taxes

 

2,198

 

2,460

 

Receivable from Tyco International Ltd. and Covidien plc

 

984

 

1,180

 

Other assets

 

271

 

290

 

Total Assets

 

$

18,090

 

$

19,306

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

Current maturities of long-term debt

 

$

711

 

$

1,015

 

Accounts payable

 

1,357

 

1,292

 

Accrued and other current liabilities

 

1,842

 

1,576

 

Deferred revenue

 

93

 

121

 

Total current liabilities

 

4,003

 

4,004

 

Long-term debt

 

2,307

 

2,696

 

Long-term pension and postretirement liabilities

 

1,293

 

1,353

 

Deferred income taxes

 

304

 

448

 

Income taxes

 

1,936

 

2,311

 

Other liabilities

 

359

 

517

 

Total Liabilities

 

10,202

 

11,329

 

Commitments and contingencies

 

 

 

 

 

Equity:

 

 

 

 

 

TE Connectivity Ltd. Shareholders’ Equity:

 

 

 

 

 

Common shares, 428,527,307 shares authorized and issued, CHF 0.57 par value, and 439,092,124 shares authorized and issued, CHF 0.97 par value, respectively

 

189

 

193

 

Contributed surplus

 

6,092

 

6,837

 

Accumulated earnings

 

2,085

 

1,196

 

Treasury shares, at cost, 14,557,154 and 16,408,049 shares, respectively

 

(556

)

(484

)

Accumulated other comprehensive income

 

72

 

229

 

Total TE Connectivity Ltd. shareholders’ equity

 

7,882

 

7,971

 

Noncontrolling interests

 

6

 

6

 

Total Equity

 

7,888

 

7,977

 

Total Liabilities and Equity

 

$

18,090

 

$

19,306

 

 



 

TE CONNECTIVITY LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

 

 

For the Quarters Ended

 

For the Nine Months Ended

 

 

 

June 28,

 

June 29,

 

June 28,

 

June 29,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

(in millions)

 

Cash Flows From Operating Activities:

 

 

 

 

 

 

 

 

 

Net income

 

$

335

 

$

199

 

$

889

 

$

719

 

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

 

(3

)

61

 

 

49

 

Income from continuing operations

 

332

 

260

 

889

 

768

 

Adjustments to reconcile income from continuing operations to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Tax sharing (income) expense

 

(18

)

(19

)

198

 

(32

)

Depreciation and amortization

 

147

 

174

 

457

 

453

 

Non-cash restructuring charges (credits)

 

42

 

 

66

 

(3

)

Deferred income taxes

 

(1

)

22

 

92

 

100

 

Provision for losses on accounts receivable and inventories

 

10

 

9

 

49

 

44

 

Share-based compensation expense

 

19

 

17

 

59

 

52

 

Other

 

20

 

51

 

30

 

52

 

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

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

(79

)

(10

)

(30

)

(26

)

Inventories

 

(17

)

33

 

(91

)

24

 

Inventoried costs on long-term contracts

 

25

 

14

 

31

 

9

 

Prepaid expenses and other current assets

 

43

 

(15

)

7

 

86

 

Accounts payable

 

25

 

(45

)

132

 

(91

)

Accrued and other current liabilities

 

24

 

(7

)

(28

)

(195

)

Income taxes

 

39

 

(7

)

(412

)

(74

)

Other

 

3

 

21

 

4

 

7

 

Net cash provided by continuing operating activities

 

614

 

498

 

1,453

 

1,174

 

Net cash provided by discontinued operating activities

 

2

 

7

 

 

60

 

Net cash provided by operating activities

 

616

 

505

 

1,453

 

1,234

 

Cash Flows From Investing Activities:

 

 

 

 

 

 

 

 

 

Capital expenditures

 

(159

)

(115

)

(412

)

(385

)

Proceeds from sale of property, plant, and equipment

 

15

 

6

 

19

 

13

 

Acquisition of business, net of cash acquired

 

 

(1,384

)

 

(1,384

)

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

 

9

 

394

 

14

 

394

 

Other

 

10

 

 

22

 

(7

)

Net cash used in continuing investing activities

 

(125

)

(1,099

)

(357

)

(1,369

)

Net cash used in discontinued investing activities

 

 

 

 

(1

)

Net cash used in investing activities

 

(125

)

(1,099

)

(357

)

(1,370

)

Cash Flows From Financing Activities:

 

 

 

 

 

 

 

 

 

Net increase (decrease) in commercial paper

 

 

(219

)

50

 

350

 

Proceeds from long-term debt

 

 

 

 

748

 

Repayment of long-term debt

 

(1

)

(642

)

(715

)

(642

)

Proceeds from exercise of share options

 

67

 

4

 

153

 

52

 

Repurchase of common shares

 

(253

)

 

(618

)

(17

)

Payment of common share dividends and cash distributions to shareholders

 

(104

)

(90

)

(281

)

(243

)

Other

 

2

 

5

 

 

45

 

Net cash provided by (used in) continuing financing activities

 

(289

)

(942

)

(1,411

)

293

 

Net cash used in discontinued financing activities

 

(2

)

(7

)

 

(59

)

Net cash provided by (used in) financing activities

 

(291

)

(949

)

(1,411

)

234

 

Effect of currency translation on cash

 

(11

)

(21

)

(12

)

(14

)

Net increase (decrease) in cash and cash equivalents

 

189

 

(1,564

)

(327

)

84

 

Cash and cash equivalents at beginning of period

 

1,073

 

2,866

 

1,589

 

1,218

 

Cash and cash equivalents at end of period

 

$

1,262

 

$

1,302

 

$

1,262

 

$

1,302

 

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Information:

 

 

 

 

 

 

 

 

 

Income taxes paid, net of refunds

 

$

56

 

$

72

 

$

229

 

$

240

 

 

 

 

 

 

 

 

 

 

 

Reconciliation to Free Cash Flow:

 

 

 

 

 

 

 

 

 

Net cash provided by continuing operating activities

 

$

614

 

$

498

 

$

1,453

 

$

1,174

 

Capital expenditures, net

 

(144

)

(109

)

(393

)

(372

)

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

 

(39

)

8

 

28

 

26

 

Payments related to accrued interest on debt assumed in the acquisition of Deutsch

 

 

17

 

 

17

 

Payments to settle acquisition-related foreign currency derivative contracts

 

 

 

 

20

 

Free cash flow (1)

 

$

431

 

$

414

 

$

1,088

 

$

865

 

 


(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 28,

 

 

 

June 29,

 

 

 

June 28,

 

 

 

June 29,

 

 

 

 

 

2013

 

 

 

2012

 

 

 

2013

 

 

 

2012

 

 

 

 

 

 

 

 

 

 

 

($ in millions)

 

 

 

 

 

 

 

 

 

Net Sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

1,438

 

 

 

$

1,344

 

 

 

$

4,087

 

 

 

$

3,849

 

 

 

Network Solutions

 

803

 

 

 

855

 

 

 

2,262

 

 

 

2,472

 

 

 

Industrial Solutions

 

779

 

 

 

814

 

 

 

2,215

 

 

 

2,210

 

 

 

Consumer Solutions

 

429

 

 

 

486

 

 

 

1,284

 

 

 

1,387

 

 

 

Total

 

$

3,449

 

 

 

$

3,499

 

 

 

$

9,848

 

 

 

$

9,918

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

282

 

19.6

%

$

178

 

13.2

%

$

715

 

17.5

%

$

558

 

14.5

%

Network Solutions

 

48

 

6.0

%

64

 

7.5

%

103

 

4.6

%

176

 

7.1

%

Industrial Solutions

 

84

 

10.8

%

87

 

10.7

%

232

 

10.5

%

281

 

12.7

%

Consumer Solutions

 

25

 

5.8

%

42

 

8.6

%

41

 

3.2

%

102

 

7.4

%

Total

 

$

439

 

12.7

%

$

371

 

10.6

%

$

1,091

 

11.1

%

$

1,117

 

11.3

%

 



 

TE CONNECTIVITY LTD.

NET SALES GROWTH RECONCILIATION (UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percentage of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment’s Total

 

 

 

Change in Net Sales for the Quarter Ended June 28, 2013

 

Net Sales for the

 

 

 

versus Net Sales for the Quarter Ended June 29, 2012

 

Quarter Ended

 

 

 

Organic (1)

 

Translation (2)

 

Divestiture

 

Total

 

June 28, 2013

 

 

 

($ in millions)

 

 

 

Transportation Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Automotive

 

$

109

 

8.1

%

$

(15

)

$

 

$

94

 

7.0

%

100

%

Total

 

109

 

8.1

 

(15

)

 

94

 

7.0

 

100

%

Network Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Telecom Networks

 

2

 

0.6

 

1

 

 

3

 

0.9

 

43

 

Data Communications

 

(19

)

(8.0

)

(1

)

(19

)

(39

)

(17.0

)

24

 

Enterprise Networks

 

(1

)

(0.8

)

(2

)

 

(3

)

(1.8

)

20

 

Subsea Communications

 

(13

)

(10.9

)

 

 

(13

)

(11.1

)

13

 

Total

 

(31

)

(3.6

)

(2

)

(19

)

(52

)

(6.1

)

100

%

Industrial Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial

 

(30

)

(8.2

)

(2

)

 

(32

)

(9.5

)

39

 

Aerospace, Defense, and Marine

 

8

 

2.9

 

(2

)

 

6

 

2.3

 

34

 

Energy

 

(9

)

(4.3

)

 

 

(9

)

(4.1

)

27

 

Total

 

(31

)

(3.8

)

(4

)

 

(35

)

(4.3

)

100

%

Consumer Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Devices

 

(35

)

(12.1

)

(6

)

 

(41

)

(14.4

)

57

 

Appliance

 

(15

)

(7.2

)

(1

)

 

(16

)

(7.9

)

43

 

Total

 

(50

)

(10.2

)

(7

)

 

(57

)

(11.7

)

100

%

Total

 

$

(3

)

(0.1

)%

$

(28

)

$

(19

)

$

(50

)

(1.4

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percentage of

 

 

 

Change in Net Sales for the Nine Months Ended June 28, 2013

 

Segment’s Total

 

 

 

versus Net Sales for the Nine Months Ended June 29, 2012

 

Net Sales for the

 

 

 

 

 

 

 

Acquisition/

 

 

 

Nine Months Ended

 

 

 

Organic (1)

 

Translation (2)

 

Divestiture

 

Total

 

June 28, 2013

 

 

 

($ in millions)

 

 

 

Transportation Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Automotive

 

$

131

 

3.4

%

$

(53

)

$

160

 

$

238

 

6.2

%

100

%

Total

 

131

 

3.4

 

(53

)

160

 

238

 

6.2

 

100

%

Network Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Telecom Networks

 

(32

)

(3.3

)

(4

)

 

(36

)

(3.7

)

41

 

Data Communications

 

(48

)

(7.1

)

1

 

(18

)

(65

)

(10.0

)

26

 

Enterprise Networks

 

(28

)

(5.7

)

(6

)

 

(34

)

(7.0

)

20

 

Subsea Communications

 

(75

)

(20.3

)

 

 

(75

)

(20.3

)

13

 

Total

 

(183

)

(7.4

)

(9

)

(18

)

(210

)

(8.5

)

100

%

Industrial Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial

 

(111

)

(11.4

)

(12

)

 

(123

)

(12.6

)

38

 

Aerospace, Defense, and Marine

 

4

 

0.7

 

(3

)

160

 

161

 

26.4

 

35

 

Energy

 

(30

)

(4.8

)

(3

)

 

(33

)

(5.3

)

27

 

Total

 

(137

)

(6.2

)

(18

)

160

 

5

 

0.2

 

100

%

Consumer Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Devices

 

(48

)

(5.9

)

(16

)

 

(64

)

(7.8

)

59

 

Appliance

 

(35

)

(6.2

)

(4

)

 

(39

)

(6.9

)

41

 

Total

 

(83

)

(6.0

)

(20

)

 

(103

)

(7.4

)

100

%

Total

 

$

(272

)

(2.7

)%

$

(100

)

$

302

 

$

(70

)

(0.7

)%

 

 

 


(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.

NET SALES GROWTH RECONCILIATION (UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percentage of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment’s Total

 

 

 

Change in Net Sales for the Quarter Ended June 28, 2013

 

Net Sales for the

 

 

 

versus Net Sales for the Quarter Ended March 29, 2013

 

Quarter Ended

 

 

 

Organic (1)

 

Translation (2)

 

Divestiture

 

Total

 

June 28, 2013

 

 

 

($ in millions)

 

 

 

Transportation Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Automotive

 

$

75

 

5.4

%

$

(22

)

$

 

$

53

 

3.8

%

100

%

Total

 

75

 

5.4

 

(22

)

 

53

 

3.8

 

100

%

Network Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Telecom Networks

 

51

 

16.6

 

(4

)

 

47

 

15.6

 

43

 

Data Communications

 

20

 

10.2

 

(3

)

(21

)

(4

)

(2.1

)

24

 

Enterprise Networks

 

15

 

10.3

 

(2

)

 

13

 

8.8

 

20

 

Subsea Communications

 

21

 

25.9

 

1

 

 

22

 

26.8

 

13

 

Total

 

107

 

14.8

 

(8

)

(21

)

78

 

10.8

 

100

%

Industrial Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial

 

31

 

11.1

 

(4

)

 

27

 

9.7

 

39

 

Aerospace, Defense, and Marine

 

3

 

1.0

 

(2

)

 

1

 

0.4

 

34

 

Energy

 

17

 

9.0

 

(2

)

 

15

 

7.8

 

27

 

Total

 

51

 

6.9

 

(8

)

 

43

 

5.8

 

100

%

Consumer Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Devices

 

1

 

0.6

 

(2

)

 

(1

)

(0.4

)

57

 

Appliance

 

13

 

7.2

 

(2

)

 

11

 

6.3

 

43

 

Total

 

14

 

3.3

 

(4

)

 

10

 

2.4

 

100

%

Total

 

$

247

 

7.5

%

$

(42

)

$

(21

)

$

184

 

5.6

%

 

 

 


(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.  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 28, 2013

(UNAUDITED)

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Acquisition

 

Restructuring

 

 

 

 

 

 

 

 

 

Related

 

and Other

 

Tax

 

Adjusted

 

 

 

U.S. GAAP

 

Charges

 

Charges, Net

 

Items (1)

 

(Non-GAAP) (2)

 

 

 

($ in millions, except per share data)

 

Operating Income:

 

 

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

282

 

$

1

 

$

1

 

$

 

$

284

 

Network Solutions

 

48

 

 

26

 

 

74

 

Industrial Solutions

 

84

 

2

 

22

 

 

108

 

Consumer Solutions

 

25

 

 

18

 

 

43

 

Total

 

$

439

 

$

3

 

$

67

 

$

 

$

509

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

12.7

%

 

 

 

 

 

 

14.8

%

 

 

 

 

 

 

 

 

 

 

 

 

Other Income, Net

 

$

18

 

$

 

$

 

$

(8

)

$

10

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

$

(93

)

$

(1

)

$

(21

)

$

 

$

(115

)

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

332

 

$

2

 

$

46

 

$

(8

)

$

372

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.79

 

$

 

$

0.11

 

$

(0.02

)

$

0.88

 

 


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

(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 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

 

$

178

 

$

57

 

$

3

 

$

 

$

238

 

Network Solutions

 

64

 

 

18

 

 

82

 

Industrial Solutions

 

87

 

37

 

 

 

124

 

Consumer Solutions

 

42

 

 

4

 

 

46

 

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 charges.

(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 Nine Months Ended June 28, 2013

(UNAUDITED)

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Acquisition

 

Restructuring

 

 

 

 

 

 

 

 

 

Related

 

and Other

 

Tax

 

Adjusted

 

 

 

U.S. GAAP

 

Charges

 

Charges, Net

 

Items (1)

 

(Non-GAAP) (2)

 

 

 

($ in millions, except per share data)

 

Operating Income:

 

 

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

715

 

$

5

 

$

29

 

$

 

$

749

 

Network Solutions

 

103

 

 

76

 

 

179

 

Industrial Solutions

 

232

 

6

 

55

 

 

293

 

Consumer Solutions

 

41

 

 

80

 

 

121

 

Total

 

$

1,091

 

$

11

 

$

240

 

$

 

$

1,342

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

11.1

%

 

 

 

 

 

 

13.6

%

 

 

 

 

 

 

 

 

 

 

 

 

Other Income (Expense), Net

 

$

(199

)

$

 

$

 

$

222

 

$

23

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Tax (Expense) Benefit

 

$

92

 

$

(3

)

$

(72

)

$

(314

)

$

(297

)

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

889

 

$

8

 

$

168

 

$

(92

)

$

973

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

2.10

 

$

0.02

 

$

0.40

 

$

(0.22

)

$

2.30

 

 


(1) Includes income tax benefits associated with the settlement of an audit of prior year income tax returns as well as the related impact to other expense pursuant to the tax sharing agreement with Tyco International and Covidien.  Also includes income tax expense related to adjustments to prior year income tax returns and income tax benefits recognized in connection with the lapse of statutes of limitations for examinations of prior year income tax returns.  In addition, the other income adjustment includes amounts related to reimbursements by Tyco International and Covidien in connection with pre-separation tax matters.  

(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 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

 

$

558

 

$

62

 

$

4

 

$

 

$

624

 

Network Solutions

 

176

 

 

48

 

 

224

 

Industrial Solutions

 

281

 

40

 

9

 

 

330

 

Consumer Solutions

 

102

 

 

14

 

 

116

 

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 Quarter Ended September 28, 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

 

$

196

 

$

5

 

$

5

 

$

 

$

206

 

Network Solutions

 

71

 

 

11

 

 

82

 

Industrial Solutions

 

97

 

9

 

14

 

 

120

 

Consumer Solutions

 

37

 

 

9

 

 

46

 

Total

 

$

401

 

$

14

 

$

39

 

$

 

$

454

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

11.9

%

 

 

 

 

 

 

13.5

%

 

 

 

 

 

 

 

 

 

 

 

 

Other Income, Net

 

$

19

 

$

 

$

 

$

(7

)

$

12

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Tax (Expense) Benefit

 

$

18

 

$

(1

)

$

(10

)

$

(107

)

$

(100

)

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

398

 

$

13

 

$

29

 

$

(114

)

$

326

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.93

 

$

0.03

 

$

0.07

 

$

(0.27

)

$

0.76

 

 


(1) Includes $7 million of non-cash amortization associated with acquisition-related adjustments recorded in cost of sales, $4 million of acquisition and integration costs, and $3 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 includes income tax benefits recognized in connection with a reduction in the valuation allowance associated with certain tax loss carryforwards.

(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 28, 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

 

$

754

 

$

67

 

$

9

 

$

 

$

830

 

Network Solutions

 

247

 

 

59

 

 

306

 

Industrial Solutions

 

378

 

49

 

23

 

 

450

 

Consumer Solutions

 

139

 

 

23

 

 

162

 

Total

 

$

1,518

 

$

116

 

$

114

 

$

 

$

1,748

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

11.4

%

 

 

 

 

 

 

13.2

%

 

 

 

 

 

 

 

 

 

 

 

 

Other Income, Net

 

$

50

 

$

 

$

 

$

(17

)

$

33

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

$

(249

)

$

(24

)

$

(33

)

$

(90

)

$

(396

)

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

1,163

 

$

92

 

$

81

 

$

(107

)

$

1,229

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

2.70

 

$

0.21

 

$

0.19

 

$

(0.25

)

$

2.86

 

 


(1) Includes $75 million of non-cash amortization associated with fair value adjustments primarily related to acquired inventories and customer order backlog recorded in cost of sales, $27 million of acquisition and integration costs, and $14 million of restructuring charges.

(2) Other income adjustment relates to reimbursements by Tyco International and Covidien in connection with pre-separation tax matters. Income tax expense adjustments include income tax benefits recognized in connection with a reduction in the valuation allowance associated with certain tax loss carryforwards and income tax expense associated with certain non-U.S. tax rate changes.

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