Exhibit 99.1
TE CONNECTIVITY POSTS FISCAL 2016 THIRD QUARTER RESULTS
GAAP EPS and Adjusted EPS above high end of guidance range
SCHAFFHAUSEN, Switzerland — July 20, 2016 — TE Connectivity Ltd. (NYSE: TEL) today reported results for the fiscal third quarter ended June 24, 2016.
Third Quarter Highlights
· Net sales of $3.12 billion were at the midpoint of the guidance range.
· Diluted Earnings Per Share from Continuing Operations (GAAP EPS) were $2.19.
· Adjusted Earnings Per Share (EPS) were $1.08, up 20% versus the prior year.
· Both GAAP EPS and Adjusted EPS were records for the company and above the high end of guidance.
· Cash Flow from Continuing Operating Activities was $715 million; Free Cash Flow was $589 million.
· Returned $231 million to shareholders through share buybacks and dividends.
· Continued to expand harsh environment portfolio:
· Completed the acquisition of Jaquet Technology Group AG (Jaquet), a sensor company addressing the automotive and industrial markets;
· Signed a definitive agreement to acquire Intercontec Group, a provider of connectivity solutions for the industrial market.
“I am pleased with our third quarter performance, with adjusted EPS up 20 percent and exceeding the high end of our guidance range,” said TE Connectivity Chairman and CEO Tom Lynch. “Sales grew in the majority of our harsh environment businesses including Automotive, Commercial Transportation, Medical, Aerospace and Appliances, and in our SubCom business. This growth was offset by weakness in our Oil and Gas, Data and Devices and Industrial Equipment businesses. We continued to drive strong operating margins due to the expansion of our harsh environment portfolio and ongoing productivity improvements, despite an uncertain macro environment.
“Our targeted M&A strategy has enabled us to further strengthen our harsh environment portfolio. In the quarter, we bolstered TE’s position in the minimally-invasive interventional segment of the medical device market with the closing of the Creganna acquisition. We closed Jaquet, broadening our product offering in the automotive and
1
industrial markets. Additionally, today we announced an agreement to acquire Intercontec Group, adding an important range of connector technology for industrial customers.
“In the third quarter, orders grew approximately seven percent sequentially and our book to bill, excluding SubCom, was 1.01. For the fourth quarter, we expect adjusted EPS of $1.17 to $1.23 on sales of $3.25 billion to $3.45 billion. For the full year, we are reiterating our adjusted EPS guidance of $4.00 at the midpoint on sales of $12.15 billion to $12.35 billion, an increase of 11 percent over the prior year.”
FISCAL THIRD QUARTER RESULTS
The company reported net sales of $3.1 billion, flat compared to the prior year. GAAP EPS were $2.19, compared to $0.85 in the prior year. Adjusted EPS were $1.08, compared to $0.90 in the prior year. Cash flow from continuing operating activities was $715 million. Free cash flow was $589 million.
GAAP EPS included income from tax items of $436 million partially offset by $36 million of acquisition, restructuring and other charges.
Total company orders were $2.9 billion, up seven percent sequentially, excluding SubCom. The book-to-bill ratio was 1.01, excluding SubCom.
OUTLOOK
For the fiscal fourth quarter 2016, the company expects net sales of $3.25 billion to $3.45 billion, GAAP EPS of $1.10 to $1.16 and adjusted EPS of $1.17 to $1.23. GAAP EPS includes acquisition related charges of $0.01, and restructuring and other charges of $0.06.
For the full year, the company expects net sales of $12.15 billion to $12.35 billion. GAAP EPS are expected to be $5.13 to $5.19, including acquisition related charges of $0.07, net restructuring and other charges of $0.01, and tax-related income of $1.24. Adjusted EPS are expected to be $3.97 to $4.03.
The outlook includes the Jaquet and Creganna acquisitions and the impact of a 53rd week. The outlook assumes foreign exchange and commodity rates that are consistent with current levels. Information about TE Connectivity’s use of non-GAAP financial measures is provided below. For a reconciliation of these non-GAAP financial
2
measures, see the attached tables.
OTHER ITEMS
The company entered into an agreement with the IRS to resolve all disputes related to the previously disclosed intercompany debt issues. The impact of this agreement is reflected in the company’s GAAP EPS results. All disputes with the IRS related to pre-separation from Tyco International are now closed.
The company signed a definitive agreement to acquire Intercontec Group. Intercontec, based in Germany, is a leading manufacturer of high-quality industrial metric circular connectors. The acquisition strengthens TE’s position in harsh connectivity applications for factory automation customers. Adding Intercontec’s capabilities offers customers a more comprehensive range of products, technologies and services in the industry.
The transaction is expected to close in September 2016, following the completion of customary regulatory approvals and the finalization of various administrative matters. Upon closing, Intercontec will be reported as part of TE’s Industrial Solutions segment.
CONFERENCE CALL AND WEBCAST
· Internet users will be able to access the company’s earnings webcast, including slide materials, on the Investors section of TE Connectivity’s website: http://investors.te.com.
· The company will hold a conference call for investors today at 8:30 a.m. ET. For both listen-only participants and those participants who wish to take part in the question-and-answer portion of the call, the dial-in number in the United States is (800) 230-1085, and for international callers, the dial-in number is (612) 288-0329.
· An audio replay of the conference call will be available beginning at 10:30 a.m. ET on July 20, 2016, and ending at 11:59 p.m. ET on July 27, 2016. The dial-in number for participants in the United States is (800) 475-6701. For participants outside the United States, the dial-in number is (320) 365-3844. The replay access code for all callers is 396124.
3
NON-GAAP MEASURES
“Organic Net 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” are non-GAAP measures and should not be considered replacements for results in accordance with accounting principles generally accepted in the U.S. (“GAAP”). These non-GAAP measures may not be comparable to similarly-titled measures reported by other companies. The primary limitation of these measures is that they exclude the financial impact of items that would otherwise either increase or decrease our reported results. This limitation is best addressed by using these non-GAAP measures in combination with the most directly comparable GAAP measures in order to better understand the amounts, character and impact of any increase or decrease in reported amounts. The following provides additional information regarding these non-GAAP measures:
· Organic Net Sales Growth — is a useful measure of our underlying results and trends in the business. It is also a significant component in our incentive compensation plans. The difference between reported net sales growth (the most comparable GAAP measure) and Organic Net Sales Growth consists of the impact from foreign currency exchange rates and acquisitions and divestitures, if any. Organic Net 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.
· Adjusted Operating Income — represents operating income (the most comparable GAAP measure) before special items including charges or income related to restructuring and other charges, acquisition related charges, impairment charges, and other income or charges, if any. 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.
· Adjusted Operating Margin — represents operating margin (the most comparable GAAP measure) before special items including charges or income related to restructuring and other charges, acquisition related charges, impairment charges, and other income or charges, if any. We present Adjusted Operating Margin before special items to give investors a perspective on the underlying business results. 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.
· Adjusted Other Income, Net — represents other income, net (the most comparable GAAP measure) before special items including tax sharing income related to certain proposed adjustments to prior period tax returns and other tax items, if any. 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.
· Adjusted Income Tax Expense — represents income tax expense (the most comparable GAAP measure) 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. 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).
· Adjusted Income from Continuing Operations — represents income from continuing operations (the most comparable GAAP measure) before special items including charges or income related to restructuring and
4
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, the related tax effects. 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.
· Adjusted Earnings Per Share — represents diluted earnings per share from continuing operations (the most comparable GAAP measure) before special items, including charges or income related to 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, the related tax effects. 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 insight into our underlying operating results, trends and the comparability of these results between periods since it excludes the impact of special items, which may recur, but tend to be irregular as to timing. It also is a significant component in our incentive compensation plans.
· Free Cash Flow (FCF) — is a useful measure of our ability to generate cash. The difference between net cash provided by continuing operating activities (the most comparable GAAP measure) and Free Cash Flow 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.
Free Cash Flow is defined as net cash provided by continuing operating activities excluding voluntary pension contributions and the cash impact of special items, if any, minus net capital expenditures. Voluntary pension contributions are excluded 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, are also excluded by management in evaluating Free Cash Flow. Net capital expenditures consist of capital expenditures less proceeds from the sale of property, plant, and equipment. These items are subtracted because they represent long-term commitments.
In the calculation of Free Cash Flow, we subtract 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. 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.
FORWARD-LOOKING STATEMENTS
This release contains certain “forward-looking statements” within the meaning of the U.S. Private Securities
5
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 and data and devices 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 Creganna’s operations will not be successfully integrated into ours; and the risk that revenue opportunities, cost savings and other anticipated synergies from the Creganna 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. 25, 2015 as well as in our Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports filed by us with the U.S. Securities and Exchange Commission.
ABOUT TE CONNECTIVITY
TE Connectivity (NYSE: TEL) is a $12 billion global technology leader. Our connectivity and sensor solutions are essential in today’s increasingly connected world. We collaborate with engineers to transform their concepts into creations — redefining what’s possible using intelligent, efficient and high-performing TE products and solutions proven in harsh environments. Our 72,000 people, including over 7,000 engineers, partner with customers in close to 150 countries across a wide range of industries. We believe EVERY CONNECTION COUNTS — www.TE.com.
# # #
|
Contacts: |
Media Relations:
Amy Shah
TE Connectivity
610-893-9555
media@te.com |
Investor Relations:
Sujal Shah
TE Connectivity
610-893-9790
Sujal.shah@te.com |
6
TE CONNECTIVITY LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
|
|
|
For the Quarters Ended |
|
For the Nine Months Ended |
|
|
|
|
June 24, |
|
June 26, |
|
June 24, |
|
June 26, |
|
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
(in millions, except per share data) |
|
|
Net sales |
|
$ |
3,121 |
|
$ |
3,118 |
|
$ |
8,906 |
|
$ |
9,249 |
|
|
Cost of sales |
|
2,099 |
|
2,070 |
|
5,977 |
|
6,130 |
|
|
Gross margin |
|
1,022 |
|
1,048 |
|
2,929 |
|
3,119 |
|
|
Selling, general, and administrative expenses |
|
367 |
|
393 |
|
1,074 |
|
1,170 |
|
|
Research, development, and engineering expenses |
|
161 |
|
159 |
|
479 |
|
479 |
|
|
Acquisition and integration costs |
|
11 |
|
8 |
|
19 |
|
46 |
|
|
Restructuring and other charges (credits), net |
|
31 |
|
19 |
|
(28 |
) |
82 |
|
|
Operating income |
|
452 |
|
469 |
|
1,385 |
|
1,342 |
|
|
Interest income |
|
2 |
|
4 |
|
12 |
|
13 |
|
|
Interest expense |
|
(31 |
) |
(33 |
) |
(93 |
) |
(104 |
) |
|
Other income (expense), net |
|
(651 |
) |
11 |
|
(631 |
) |
(64 |
) |
|
Income (loss) from continuing operations before income taxes |
|
(228 |
) |
451 |
|
673 |
|
1,187 |
|
|
Income tax (expense) benefit |
|
1,019 |
|
(100 |
) |
831 |
|
(85 |
) |
|
Income from continuing operations |
|
791 |
|
351 |
|
1,504 |
|
1,102 |
|
|
Income (loss) from discontinued operations, net of income taxes |
|
48 |
|
(42 |
) |
68 |
|
278 |
|
|
Net income |
|
$ |
839 |
|
$ |
309 |
|
$ |
1,572 |
|
$ |
1,380 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share: |
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
$ |
2.22 |
|
$ |
0.86 |
|
$ |
4.08 |
|
$ |
2.71 |
|
|
Income (loss) from discontinued operations |
|
0.13 |
|
(0.10 |
) |
0.18 |
|
0.68 |
|
|
Net income |
|
2.35 |
|
0.76 |
|
4.26 |
|
3.39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share: |
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
$ |
2.19 |
|
$ |
0.85 |
|
$ |
4.03 |
|
$ |
2.67 |
|
|
Income (loss) from discontinued operations |
|
0.13 |
|
(0.10 |
) |
0.18 |
|
0.67 |
|
|
Net income |
|
2.32 |
|
0.75 |
|
4.21 |
|
3.34 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid per common share |
|
$ |
0.37 |
|
$ |
0.33 |
|
$ |
1.03 |
|
$ |
0.91 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of shares outstanding: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
357 |
|
406 |
|
369 |
|
407 |
|
|
Diluted |
|
361 |
|
412 |
|
373 |
|
413 |
|
TE CONNECTIVITY LTD.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
|
|
|
June 24, |
|
September 25, |
|
|
|
|
2016 |
|
2015 |
|
|
|
|
(in millions, except share data) |
|
|
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
694 |
|
$ |
3,329 |
|
|
Accounts receivable, net of allowance for doubtful accounts of $16 and $18, respectively |
|
2,158 |
|
2,120 |
|
|
Inventories |
|
1,610 |
|
1,615 |
|
|
Prepaid expenses and other current assets |
|
467 |
|
476 |
|
|
Deferred income taxes |
|
— |
|
345 |
|
|
Total current assets |
|
4,929 |
|
7,885 |
|
|
Property, plant, and equipment, net |
|
2,976 |
|
2,920 |
|
|
Goodwill |
|
5,251 |
|
4,824 |
|
|
Intangible assets, net |
|
1,792 |
|
1,555 |
|
|
Deferred income taxes |
|
2,208 |
|
2,144 |
|
|
Receivable from Tyco International plc and Covidien plc |
|
11 |
|
964 |
|
|
Other assets |
|
333 |
|
297 |
|
|
Total Assets |
|
$ |
17,500 |
|
$ |
20,589 |
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Current maturities of long-term debt |
|
$ |
302 |
|
$ |
498 |
|
|
Accounts payable |
|
1,157 |
|
1,143 |
|
|
Accrued and other current liabilities |
|
1,692 |
|
1,749 |
|
|
Deferred revenue |
|
160 |
|
185 |
|
|
Total current liabilities |
|
3,311 |
|
3,575 |
|
|
Long-term debt |
|
3,734 |
|
3,386 |
|
|
Long-term pension and postretirement liabilities |
|
1,334 |
|
1,327 |
|
|
Deferred income taxes |
|
326 |
|
329 |
|
|
Income taxes |
|
199 |
|
1,954 |
|
|
Other liabilities |
|
331 |
|
433 |
|
|
Total Liabilities |
|
9,235 |
|
11,004 |
|
|
Commitments and contingencies |
|
|
|
|
|
|
Shareholders’ Equity: |
|
|
|
|
|
|
Common shares, 382,835,381 shares authorized and issued, CHF 0.57 par value, and 414,064,381 shares authorized and issued, CHF 0.57 par value, respectively |
|
168 |
|
182 |
|
|
Contributed surplus |
|
1,786 |
|
4,359 |
|
|
Accumulated earnings |
|
8,245 |
|
6,673 |
|
|
Treasury shares, at cost, 26,432,510 and 20,071,089 shares, respectively |
|
(1,559 |
) |
(1,256 |
) |
|
Accumulated other comprehensive loss |
|
(375 |
) |
(373 |
) |
|
Total Shareholders’ Equity |
|
8,265 |
|
9,585 |
|
|
Total Liabilities and Equity |
|
$ |
17,500 |
|
$ |
20,589 |
|
TE CONNECTIVITY LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
|
|
|
For the Quarters Ended |
|
For the Nine Months Ended |
|
|
|
|
June 24, |
|
June 26, |
|
June 24, |
|
June 26, |
|
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
(in millions) |
|
|
Cash Flows From Operating Activities: |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
839 |
|
$ |
309 |
|
$ |
1,572 |
|
$ |
1,380 |
|
|
(Income) loss from discontinued operations, net of income taxes |
|
(48 |
) |
42 |
|
(68 |
) |
(278 |
) |
|
Income from continuing operations |
|
791 |
|
351 |
|
1,504 |
|
1,102 |
|
|
Adjustments to reconcile income from continuing operations to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
148 |
|
148 |
|
438 |
|
455 |
|
|
Non-cash restructuring charges |
|
5 |
|
— |
|
13 |
|
15 |
|
|
Deferred income taxes |
|
214 |
|
(52 |
) |
162 |
|
(106 |
) |
|
Provision for losses on accounts receivable and inventories |
|
4 |
|
7 |
|
27 |
|
35 |
|
|
Tax sharing (income) expense |
|
651 |
|
(12 |
) |
632 |
|
62 |
|
|
Share-based compensation expense |
|
23 |
|
21 |
|
66 |
|
65 |
|
|
(Gain) loss on divestiture |
|
3 |
|
— |
|
(143 |
) |
— |
|
|
Other |
|
17 |
|
13 |
|
71 |
|
59 |
|
|
Changes in assets and liabilities, net of the effects of acquisitions and divestitures: |
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net |
|
6 |
|
(106 |
) |
15 |
|
(125 |
) |
|
Inventories |
|
59 |
|
(38 |
) |
(2 |
) |
(218 |
) |
|
Prepaid expenses and other current assets |
|
— |
|
24 |
|
302 |
|
35 |
|
|
Accounts payable |
|
12 |
|
(18 |
) |
(29 |
) |
(29 |
) |
|
Accrued and other current liabilities |
|
70 |
|
35 |
|
(68 |
) |
(206 |
) |
|
Deferred revenue |
|
48 |
|
84 |
|
(22 |
) |
4 |
|
|
Income taxes |
|
(1,339 |
) |
42 |
|
(1,735 |
) |
(90 |
) |
|
Other |
|
3 |
|
25 |
|
6 |
|
21 |
|
|
Net cash provided by continuing operating activities |
|
715 |
|
524 |
|
1,237 |
|
1,079 |
|
|
Net cash provided by discontinued operating activities |
|
3 |
|
72 |
|
1 |
|
210 |
|
|
Net cash provided by operating activities |
|
718 |
|
596 |
|
1,238 |
|
1,289 |
|
|
Cash Flows From Investing Activities: |
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
(150 |
) |
(134 |
) |
(420 |
) |
(425 |
) |
|
Proceeds from sale of property, plant, and equipment |
|
2 |
|
4 |
|
3 |
|
10 |
|
|
Acquisition of businesses, net of cash acquired |
|
(988 |
) |
3 |
|
(994 |
) |
(1,726 |
) |
|
Proceeds from divestiture of business, net of cash retained by sold business |
|
65 |
|
— |
|
326 |
|
— |
|
|
Other |
|
(1 |
) |
— |
|
28 |
|
(2 |
) |
|
Net cash used in continuing investing activities |
|
(1,072 |
) |
(127 |
) |
(1,057 |
) |
(2,143 |
) |
|
Net cash used in discontinued investing activities |
|
— |
|
(8 |
) |
— |
|
(22 |
) |
|
Net cash used in investing activities |
|
(1,072 |
) |
(135 |
) |
(1,057 |
) |
(2,165 |
) |
|
Cash Flows From Financing Activities: |
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in commercial paper |
|
150 |
|
(105 |
) |
300 |
|
(197 |
) |
|
Proceeds from issuance of long-term debt |
|
— |
|
— |
|
350 |
|
617 |
|
|
Repayment of long-term debt |
|
— |
|
— |
|
(500 |
) |
(473 |
) |
|
Proceeds from exercise of share options |
|
16 |
|
9 |
|
77 |
|
97 |
|
|
Repurchase of common shares |
|
(134 |
) |
(226 |
) |
(2,657 |
) |
(511 |
) |
|
Payment of common share dividends to shareholders |
|
(132 |
) |
(134 |
) |
(377 |
) |
(370 |
) |
|
Transfers from discontinued operations |
|
3 |
|
64 |
|
1 |
|
188 |
|
|
Other |
|
— |
|
— |
|
(5 |
) |
(2 |
) |
|
Net cash used in continuing financing activities |
|
(97 |
) |
(392 |
) |
(2,811 |
) |
(651 |
) |
|
Net cash used in discontinued financing activities |
|
(3 |
) |
(64 |
) |
(1 |
) |
(188 |
) |
|
Net cash used in financing activities |
|
(100 |
) |
(456 |
) |
(2,812 |
) |
(839 |
) |
|
Effect of currency translation on cash |
|
(2 |
) |
(1 |
) |
(4 |
) |
(41 |
) |
|
Net increase (decrease) in cash and cash equivalents |
|
(456 |
) |
4 |
|
(2,635 |
) |
(1,756 |
) |
|
Cash and cash equivalents at beginning of period |
|
1,150 |
|
697 |
|
3,329 |
|
2,457 |
|
|
Cash and cash equivalents at end of period |
|
$ |
694 |
|
$ |
701 |
|
$ |
694 |
|
$ |
701 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Cash Flow Information: |
|
|
|
|
|
|
|
|
|
|
Interest paid |
|
$ |
40 |
|
$ |
46 |
|
$ |
102 |
|
$ |
110 |
|
|
Income taxes paid, net of refunds |
|
107 |
|
111 |
|
742 |
|
281 |
|
TE CONNECTIVITY LTD.
RECONCILIATION OF FREE CASH FLOW (UNAUDITED)
|
|
|
For the Quarters Ended |
|
For the Nine Months Ended |
|
|
|
|
June 24, |
|
June 26, |
|
June 24, |
|
June 26, |
|
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
(in millions) |
|
|
Net cash provided by continuing operating activities |
|
$ |
715 |
|
$ |
524 |
|
$ |
1,237 |
|
$ |
1,079 |
|
|
Excluding: |
|
|
|
|
|
|
|
|
|
|
Payments (receipts) related to pre-separation U.S. tax matters, net |
|
5 |
|
(3 |
) |
145 |
|
23 |
|
|
Payments related to income taxes on the sale of the Broadband Network Solutions business |
|
17 |
|
— |
|
26 |
|
— |
|
|
Capital expenditures, net |
|
(148 |
) |
(130 |
) |
(417 |
) |
(415 |
) |
|
Free cash flow (1) |
|
$ |
589 |
|
$ |
391 |
|
$ |
991 |
|
$ |
687 |
|
(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 24, |
|
June 26, |
|
June 24, |
|
June 26, |
|
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
($ in millions) |
|
|
|
|
Net Sales |
|
|
|
Net Sales |
|
|
|
Net Sales |
|
|
|
Net Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation Solutions |
|
$ |
1,652 |
|
|
|
$ |
1,621 |
|
|
|
$ |
4,767 |
|
|
|
$ |
4,843 |
|
|
|
|
Industrial Solutions |
|
849 |
|
|
|
806 |
|
|
|
2,296 |
|
|
|
2,387 |
|
|
|
|
Communications Solutions |
|
620 |
|
|
|
691 |
|
|
|
1,843 |
|
|
|
2,019 |
|
|
|
|
Total |
|
$ |
3,121 |
|
|
|
$ |
3,118 |
|
|
|
$ |
8,906 |
|
|
|
$ |
9,249 |
|
|
|
|
|
|
Operating |
|
Operating |
|
Operating |
|
Operating |
|
Operating |
|
Operating |
|
Operating |
|
Operating |
|
|
|
|
Income |
|
Margin |
|
Income |
|
Margin |
|
Income |
|
Margin |
|
Income |
|
Margin |
|
|
Transportation Solutions |
|
$ |
297 |
|
18.0 |
% |
$ |
303 |
|
18.7 |
% |
$ |
847 |
|
17.8 |
% |
$ |
921 |
|
19.0 |
% |
|
Industrial Solutions |
|
95 |
|
11.2 |
|
98 |
|
12.2 |
|
224 |
|
9.8 |
|
268 |
|
11.2 |
|
|
Communications Solutions |
|
60 |
|
9.7 |
|
68 |
|
9.8 |
|
314 |
|
17.0 |
|
153 |
|
7.6 |
|
|
Total |
|
$ |
452 |
|
14.5 |
% |
$ |
469 |
|
15.0 |
% |
$ |
1,385 |
|
15.6 |
% |
$ |
1,342 |
|
14.5 |
% |
|
|
|
Adjusted |
|
Adjusted |
|
Adjusted |
|
Adjusted |
|
Adjusted |
|
Adjusted |
|
Adjusted |
|
Adjusted |
|
|
|
|
Operating |
|
Operating |
|
Operating |
|
Operating |
|
Operating |
|
Operating |
|
Operating |
|
Operating |
|
|
|
|
Income (1) |
|
Margin (1) |
|
Income (1) |
|
Margin (1) |
|
Income (1) |
|
Margin (1) |
|
Income (1) |
|
Margin (1) |
|
|
Transportation Solutions |
|
$ |
320 |
|
19.4 |
% |
$ |
317 |
|
19.6 |
% |
$ |
905 |
|
19.0 |
% |
$ |
987 |
|
20.4 |
% |
|
Industrial Solutions |
|
112 |
|
13.2 |
|
109 |
|
13.5 |
|
274 |
|
11.9 |
|
319 |
|
13.4 |
|
|
Communications Solutions |
|
69 |
|
11.1 |
|
71 |
|
10.3 |
|
206 |
|
11.2 |
|
198 |
|
9.8 |
|
|
Total |
|
$ |
501 |
|
16.1 |
% |
$ |
497 |
|
15.9 |
% |
$ |
1,385 |
|
15.6 |
% |
$ |
1,504 |
|
16.3 |
% |
(1) Adjusted operating income and adjusted operating margin are non-GAAP measures. See description of non-GAAP measures contained in this release.
TE CONNECTIVITY LTD.
RECONCILIATION OF NET SALES GROWTH (UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of |
|
|
|
|
Change in Net Sales for the Quarter Ended June 24, 2016 |
|
Segment’s Total |
|
|
|
|
versus Net Sales for the Quarter Ended June 26, 2015 |
|
Net Sales for the |
|
|
|
|
|
|
|
|
Acquisitions |
|
|
|
|
|
Quarter Ended |
|
|
|
|
Organic (1) |
|
Translation (2) |
|
(Divestiture) |
|
Total |
|
June 24, 2016 |
|
|
|
|
($ in millions) |
|
|
|
|
Transportation Solutions (3): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automotive |
|
$ |
33 |
|
2.7 |
% |
$ |
(5 |
) |
$ |
— |
|
$ |
28 |
|
2.3 |
% |
75 |
% |
|
Commercial Transportation |
|
7 |
|
3.3 |
|
— |
|
— |
|
7 |
|
3.3 |
|
13 |
|
|
Sensors |
|
(4 |
) |
(2.1 |
) |
(2 |
) |
2 |
|
(4 |
) |
(2.1 |
) |
12 |
|
|
Total |
|
36 |
|
2.2 |
|
(7 |
) |
2 |
|
31 |
|
1.9 |
|
100 |
% |
|
Industrial Solutions (3): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial Equipment |
|
(24 |
) |
(6.8 |
) |
4 |
|
70 |
|
50 |
|
14.5 |
|
47 |
|
|
Aerospace, Defense, Oil, and Gas |
|
(5 |
) |
(1.9 |
) |
1 |
|
1 |
|
(3 |
) |
(1.1 |
) |
32 |
|
|
Energy |
|
— |
|
(0.2 |
) |
(4 |
) |
— |
|
(4 |
) |
(2.2 |
) |
21 |
|
|
Total |
|
(29 |
) |
(3.6 |
) |
1 |
|
71 |
|
43 |
|
5.3 |
|
100 |
% |
|
Communications Solutions (3): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Data and Devices |
|
(50 |
) |
(16.7 |
) |
2 |
|
(45 |
) |
(93 |
) |
(28.4 |
) |
38 |
|
|
Subsea Communications |
|
21 |
|
10.4 |
|
— |
|
— |
|
21 |
|
10.4 |
|
36 |
|
|
Appliances |
|
3 |
|
1.6 |
|
(2 |
) |
— |
|
1 |
|
0.6 |
|
26 |
|
|
Total |
|
(26 |
) |
(3.7 |
) |
— |
|
(45 |
) |
(71 |
) |
(10.3 |
) |
100 |
% |
|
Total |
|
$ |
(19 |
) |
(0.6 |
)% |
$ |
(6 |
) |
$ |
28 |
|
$ |
3 |
|
0.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of |
|
|
|
|
Change in Net Sales for the Nine Months Ended June 24, 2016 |
|
Segment’s Total |
|
|
|
|
versus Net Sales for the Nine Months Ended June 26, 2015 |
|
Net Sales for the |
|
|
|
|
|
|
|
|
Acquisitions |
|
|
|
|
|
Nine Months Ended |
|
|
|
|
Organic (1) |
|
Translation (2) |
|
(Divestiture) |
|
Total |
|
June 24, 2016 |
|
|
|
|
($ in millions) |
|
|
|
|
Transportation Solutions (3): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automotive |
|
$ |
90 |
|
2.5 |
% |
$ |
(141 |
) |
$ |
— |
|
$ |
(51 |
) |
(1.4 |
)% |
75 |
% |
|
Commercial Transportation |
|
(3 |
) |
(0.3 |
) |
(17 |
) |
— |
|
(20 |
) |
(3.2 |
) |
13 |
|
|
Sensors |
|
14 |
|
2.7 |
|
(21 |
) |
2 |
|
(5 |
) |
(0.9 |
) |
12 |
|
|
Total |
|
101 |
|
2.1 |
|
(179 |
) |
2 |
|
(76 |
) |
(1.6 |
) |
100 |
% |
|
Industrial Solutions (3): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial Equipment |
|
(72 |
) |
(7.3 |
) |
(16 |
) |
100 |
|
12 |
|
1.2 |
|
43 |
|
|
Aerospace, Defense, Oil, and Gas |
|
(66 |
) |
(7.6 |
) |
(15 |
) |
8 |
|
(73 |
) |
(8.4 |
) |
35 |
|
|
Energy |
|
2 |
|
0.3 |
|
(32 |
) |
— |
|
(30 |
) |
(5.6 |
) |
22 |
|
|
Total |
|
(136 |
) |
(5.7 |
) |
(63 |
) |
108 |
|
(91 |
) |
(3.8 |
) |
100 |
% |
|
Communications Solutions (3): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Data and Devices |
|
(189 |
) |
(21.5 |
) |
(12 |
) |
(76 |
) |
(277 |
) |
(26.8 |
) |
41 |
|
|
Subsea Communications |
|
140 |
|
27.7 |
|
— |
|
— |
|
140 |
|
27.7 |
|
35 |
|
|
Appliances |
|
(28 |
) |
(5.9 |
) |
(11 |
) |
— |
|
(39 |
) |
(8.2 |
) |
24 |
|
|
Total |
|
(77 |
) |
(4.2 |
) |
(23 |
) |
(76 |
) |
(176 |
) |
(8.7 |
) |
100 |
% |
|
Total |
|
$ |
(112 |
) |
(1.3 |
)% |
$ |
(265 |
) |
$ |
34 |
|
$ |
(343 |
) |
(3.7 |
)% |
|
|
(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 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 24, 2016
(UNAUDITED)
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
|
Acquisition |
|
Restructuring |
|
|
|
|
|
|
|
|
|
|
Related |
|
and Other |
|
Tax |
|
Adjusted |
|
|
|
|
U.S. GAAP |
|
Charges (1)(2) |
|
Charges, Net (2) |
|
Items (3) |
|
(Non-GAAP) (4) |
|
|
|
|
($ in millions, except per share data) |
|
|
Operating Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Transportation Solutions |
|
$ |
297 |
|
$ |
2 |
|
$ |
21 |
|
$ |
— |
|
$ |
320 |
|
|
Industrial Solutions |
|
95 |
|
16 |
|
1 |
|
— |
|
112 |
|
|
Communications Solutions |
|
60 |
|
— |
|
9 |
|
— |
|
69 |
|
|
Total |
|
$ |
452 |
|
$ |
18 |
|
$ |
31 |
|
$ |
— |
|
$ |
501 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Margin |
|
14.5 |
% |
|
|
|
|
|
|
16.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Expense, Net |
|
$ |
(651 |
) |
$ |
— |
|
$ |
— |
|
$ |
650 |
|
$ |
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax (Expense) Benefit |
|
$ |
1,019 |
|
$ |
(3 |
) |
$ |
(10 |
) |
$ |
(1,086 |
) |
$ |
(80 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations |
|
$ |
791 |
|
$ |
15 |
|
$ |
21 |
|
$ |
(436 |
) |
$ |
391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings per Share from Continuing Operations |
|
$ |
2.19 |
|
$ |
0.04 |
|
$ |
0.06 |
|
$ |
(1.21 |
) |
$ |
1.08 |
|
(1) Includes $11 million of acquisition and integration costs and $7 million of non-cash amortization associated with fair value adjustments related to acquired inventories and customer order backlog recorded in cost of sales.
(2) The tax effect of each non-GAAP adjustment is calculated based on the jurisdictions in which the expense (income) is incurred and the tax laws in effect for each such jurisdiction.
(3) Includes $1,135 million of income tax benefits associated with the settlement of tax matters for the years 1997 through 2000 which resolved all aspects of the disputed debt matter with the IRS through the year 2007, as well as the related impact of $604 million to other expense pursuant to the tax sharing agreement with Tyco International and Covidien. Also includes income tax charges related to a $91 million increase in the valuation allowance for certain U.S. deferred tax assets; and an $83 million net income tax benefit related to tax settlements in certain other tax jurisdictions, as well as the related impact of $46 million to other expense pursuant to the tax sharing agreement with Tyco International and Covidien.
(4) See description of non-GAAP measures contained in this release.
TE CONNECTIVITY LTD.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES
For the Quarter Ended June 26, 2015
(UNAUDITED)
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
|
Acquisition |
|
Restructuring |
|
|
|
|
|
|
|
|
|
|
Related |
|
and Other |
|
Tax |
|
Adjusted |
|
|
|
|
U.S. GAAP |
|
Charges (1)(2) |
|
Charges, Net (2) |
|
Items |
|
(Non-GAAP) (3) |
|
|
|
|
($ in millions, except per share data) |
|
|
Operating Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Transportation Solutions |
|
$ |
303 |
|
$ |
5 |
|
$ |
9 |
|
$ |
— |
|
$ |
317 |
|
|
Industrial Solutions |
|
98 |
|
5 |
|
6 |
|
— |
|
109 |
|
|
Communications Solutions |
|
68 |
|
— |
|
3 |
|
— |
|
71 |
|
|
Total |
|
$ |
469 |
|
$ |
10 |
|
$ |
18 |
|
$ |
— |
|
$ |
497 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Margin |
|
15.0 |
% |
|
|
|
|
|
|
15.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income, Net |
|
$ |
11 |
|
$ |
— |
|
$ |
— |
|
$ |
(5 |
) |
$ |
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Expense |
|
$ |
(100 |
) |
$ |
(5 |
) |
$ |
(1 |
) |
$ |
2 |
|
$ |
(104 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations |
|
$ |
351 |
|
$ |
5 |
|
$ |
17 |
|
$ |
(3 |
) |
$ |
370 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings per Share from Continuing Operations |
|
$ |
0.85 |
|
$ |
0.01 |
|
$ |
0.04 |
|
$ |
(0.01 |
) |
$ |
0.90 |
|
(1) Includes $8 million of acquisition and integration costs, $1 million of non-cash amortization associated with fair value adjustments related to acquired inventories and customer order backlog recorded in cost of sales, and $1 million of restructuring costs.
(2) The tax effect of each non-GAAP adjustment is calculated based on the jurisdictions in which the expense (income) is incurred and the tax laws in effect for each such jurisdiction.
(3) See description of non-GAAP measures contained in this release.
TE CONNECTIVITY LTD.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES
For the Nine Months Ended June 24, 2016
(UNAUDITED)
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
|
|
|
Restructuring |
|
|
|
|
|
|
|
|
|
|
Acquisition |
|
and Other |
|
|
|
|
|
|
|
|
|
|
Related |
|
Charges |
|
Tax |
|
Adjusted |
|
|
|
|
U.S. GAAP |
|
Charges (1)(2) |
|
(Credits), Net (2) |
|
Items (3) |
|
(Non-GAAP) (4) |
|
|
|
|
($ in millions, except per share data) |
|
|
Operating Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Transportation Solutions |
|
$ |
847 |
|
$ |
6 |
|
$ |
52 |
|
$ |
— |
|
$ |
905 |
|
|
Industrial Solutions |
|
224 |
|
22 |
|
28 |
|
— |
|
274 |
|
|
Communications Solutions |
|
314 |
|
— |
|
(108 |
) |
— |
|
206 |
|
|
Total |
|
$ |
1,385 |
|
$ |
28 |
|
$ |
(28 |
) |
$ |
— |
|
$ |
1,385 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Margin |
|
15.6 |
% |
|
|
|
|
|
|
15.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense), Net |
|
$ |
(631 |
) |
$ |
— |
|
$ |
— |
|
$ |
650 |
|
$ |
19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax (Expense) Benefit |
|
$ |
831 |
|
$ |
(6 |
) |
$ |
13 |
|
$ |
(1,111 |
) |
$ |
(273 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations |
|
$ |
1,504 |
|
$ |
22 |
|
$ |
(15 |
) |
$ |
(461 |
) |
$ |
1,050 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings per Share from Continuing Operations |
|
$ |
4.03 |
|
$ |
0.06 |
|
$ |
(0.04 |
) |
$ |
(1.24 |
) |
$ |
2.82 |
|
(1) Includes $19 million of acquisition and integration costs and $9 million of non-cash amortization associated with fair value adjustments related to acquired inventories and customer order backlog recorded in cost of sales.
(2) The tax effect of each non-GAAP adjustment is calculated based on the jurisdictions in which the expense (income) is incurred and the tax laws in effect for each such jurisdiction.
(3) Includes $1,135 million of income tax benefits associated with the settlement of tax matters for the years 1997 through 2000 which resolved all aspects of the disputed debt matter with the IRS through the year 2007, as well as the related impact of $604 million to other expense pursuant to the tax sharing agreement with Tyco International and Covidien. Also includes income tax charges related to a $91 million increase in the valuation allowance for certain U.S. deferred tax assets; and an $83 million net income tax benefit related to tax settlements in certain other tax jurisdictions, as well as the related impact of $46 million to other expense pursuant to the tax sharing agreement with Tyco International and Covidien.
(4) See description of non-GAAP measures contained in this release.
TE CONNECTIVITY LTD.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES
For the Nine Months Ended June 26, 2015
(UNAUDITED)
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
|
Acquisition |
|
Restructuring |
|
|
|
|
|
|
|
|
|
|
Related |
|
and Other |
|
Tax |
|
Adjusted |
|
|
|
|
U.S. GAAP |
|
Charges (1)(2) |
|
Charges, Net (2) |
|
Items (3) |
|
(Non-GAAP) (4) |
|
|
|
|
($ in millions, except per share data) |
|
|
Operating Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Transportation Solutions |
|
$ |
921 |
|
$ |
56 |
|
$ |
10 |
|
$ |
— |
|
$ |
987 |
|
|
Industrial Solutions |
|
268 |
|
27 |
|
24 |
|
— |
|
319 |
|
|
Communications Solutions |
|
153 |
|
— |
|
45 |
|
— |
|
198 |
|
|
Total |
|
$ |
1,342 |
|
$ |
83 |
|
$ |
79 |
|
$ |
— |
|
$ |
1,504 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Margin |
|
14.5 |
% |
|
|
|
|
|
|
16.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense), Net |
|
$ |
(64 |
) |
$ |
— |
|
$ |
— |
|
$ |
89 |
|
$ |
25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Expense |
|
$ |
(85 |
) |
$ |
(23 |
) |
$ |
(12 |
) |
$ |
(204 |
) |
$ |
(324 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations |
|
$ |
1,102 |
|
$ |
60 |
|
$ |
67 |
|
$ |
(115 |
) |
$ |
1,114 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings per Share from Continuing Operations |
|
$ |
2.67 |
|
$ |
0.15 |
|
$ |
0.16 |
|
$ |
(0.28 |
) |
$ |
2.70 |
|
(1) Includes $46 million of acquisition and integration costs, $34 million of non-cash amortization associated with fair value adjustments related to acquired inventories and customer order backlog recorded in cost of sales, and $3 million of restructuring costs.
(2) The tax effect of each non-GAAP adjustment is calculated based on the jurisdictions in which the expense (income) is incurred and the tax laws in effect for each such jurisdiction.
(3) Includes $202 million of income tax benefits associated with the settlement of audits of prior year income tax returns as well as the related impact of $89 million to other expense pursuant to the tax sharing agreement with Tyco International and Covidien. Also includes income tax benefits related to the impacts of certain non-U.S. tax law changes and the associated reduction in the valuation allowance for tax loss carryforwards and an income tax charge for the estimated tax impacts of certain intercompany dividends related to the restructuring and anticipated sale of the Broadband Network Solutions business.
(4) See description of non-GAAP measures contained in this release.
TE CONNECTIVITY LTD.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES
For the Quarter Ended September 25, 2015
(UNAUDITED)
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
|
Acquisition |
|
Restructuring |
|
|
|
|
|
|
|
|
|
|
Related |
|
and Other |
|
Tax |
|
Adjusted |
|
|
|
|
U.S. GAAP |
|
Charges (1)(2) |
|
Charges, Net (2) |
|
Items (3) |
|
(Non-GAAP) (4) |
|
|
|
|
($ in millions, except per share data) |
|
|
Operating Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Transportation Solutions |
|
$ |
272 |
|
$ |
5 |
|
$ |
29 |
|
$ |
— |
|
$ |
306 |
|
|
Industrial Solutions |
|
84 |
|
6 |
|
20 |
|
— |
|
110 |
|
|
Communications Solutions |
|
51 |
|
— |
|
21 |
|
— |
|
72 |
|
|
Total |
|
$ |
407 |
|
$ |
11 |
|
$ |
70 |
|
$ |
— |
|
$ |
488 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Margin |
|
13.6 |
% |
|
|
|
|
|
|
16.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income, Net |
|
$ |
9 |
|
$ |
— |
|
$ |
— |
|
$ |
(5 |
) |
$ |
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Expense |
|
$ |
(252 |
) |
$ |
1 |
|
$ |
(17 |
) |
$ |
168 |
|
$ |
(100 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations |
|
$ |
136 |
|
$ |
12 |
|
$ |
53 |
|
$ |
163 |
|
$ |
364 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings per Share from Continuing Operations |
|
$ |
0.34 |
|
$ |
0.03 |
|
$ |
0.13 |
|
$ |
0.40 |
|
$ |
0.90 |
|
(1) Includes $9 million of acquisition and integration costs and $2 million of non-cash amortization associated with fair value adjustments related to acquired inventories and customer order backlog recorded in cost of sales.
(2) The tax effect of each non-GAAP adjustment is calculated based on the jurisdictions in which the expense (income) is incurred and the tax laws in effect for each such jurisdiction.
(3) Includes $216 million of income tax charges associated with the tax impacts of certain intercompany legal entity restructurings made in connection with our integration of Measurement Specialties, Inc. Also includes $63 million of income tax benefits associated with the settlement of audits of prior year income tax returns.
(4) See description of non-GAAP measures contained in this release.
TE CONNECTIVITY LTD.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES
For the Year Ended September 25, 2015
(UNAUDITED)
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
|
Acquisition |
|
Restructuring |
|
|
|
|
|
|
|
|
|
|
Related |
|
and Other |
|
Tax |
|
Adjusted |
|
|
|
|
U.S. GAAP |
|
Charges (1)(2) |
|
Charges, Net (2) |
|
Items (3) |
|
(Non-GAAP) (4) |
|
|
|
|
($ in millions, except per share data) |
|
|
Operating Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Transportation Solutions |
|
$ |
1,193 |
|
$ |
61 |
|
$ |
39 |
|
$ |
— |
|
$ |
1,293 |
|
|
Industrial Solutions |
|
352 |
|
33 |
|
44 |
|
— |
|
429 |
|
|
Communications Solutions |
|
204 |
|
— |
|
66 |
|
— |
|
270 |
|
|
Total |
|
$ |
1,749 |
|
$ |
94 |
|
$ |
149 |
|
$ |
— |
|
$ |
1,992 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Margin |
|
14.3 |
% |
|
|
|
|
|
|
16.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense), Net |
|
$ |
(55 |
) |
$ |
— |
|
$ |
— |
|
$ |
84 |
|
$ |
29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Expense |
|
$ |
(337 |
) |
$ |
(22 |
) |
$ |
(29 |
) |
$ |
(36 |
) |
$ |
(424 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations |
|
$ |
1,238 |
|
$ |
72 |
|
$ |
120 |
|
$ |
48 |
|
$ |
1,478 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings per Share from Continuing Operations |
|
$ |
3.01 |
|
$ |
0.18 |
|
$ |
0.29 |
|
$ |
0.12 |
|
$ |
3.60 |
|
(1) Includes $55 million of acquisition and integration costs, $36 million of non-cash amortization associated with fair value adjustments related to acquired inventories and customer order backlog recorded in cost of sales, and $3 million of restructuring costs.
(2) The tax effect of each non-GAAP adjustment is calculated based on the jurisdictions in which the expense (income) is incurred and the tax laws in effect for each such jurisdiction.
(3) Includes $264 million of income tax benefits associated with the settlement of audits of prior year income tax returns as well as the related impact of $84 million to other expense pursuant to the tax sharing agreement with Tyco International and Covidien. Also includes $216 million of income tax charges associated with the tax impacts of certain intercompany legal entity restructurings made in connection with our integration of Measurement Specialties, Inc. and $29 million of income tax charges for the tax impacts of certain intercompany dividends related to the restructuring and sale of the Broadband Network Solutions business.
(4) See description of non-GAAP measures contained in this release.
TE CONNECTIVITY LTD.
RECONCILIATION OF FORWARD-LOOKING NON-GAAP FINANCIAL MEASURES
TO FORWARD-LOOKING GAAP FINANCIAL MEASURES
As of July 20, 2016
(UNAUDITED)
|
|
|
Outlook for |
|
|
|
|
|
|
Quarter Ending |
|
|
|
|
|
|
September 30, |
|
Outlook for |
|
|
|
|
2016 |
|
Fiscal 2016 |
|
|
Diluted earnings per share from continuing operations (GAAP) |
|
$1.10 - $1.16 |
|
$5.13 - $5.19 |
|
|
Restructuring and other charges, net |
|
0.06 |
|
0.01 |
|
|
Acquisition related charges |
|
0.01 |
|
0.07 |
|
|
Tax items |
|
— |
|
(1.24 |
) |
|
Adjusted diluted earnings per share from continuing operations (non-GAAP) (1) |
|
$1.17 - $1.23 |
|
$3.97 - $4.03 |
|
|
|
|
|
|
|
|
|
Net sales growth (GAAP) |
|
9 - 15 |
% |
(1) - 1 |
% |
|
Translation |
|
— |
|
2 |
|
|
(Acquisitions) divestitures |
|
(2 |
) |
— |
|
|
Organic net sales growth (non-GAAP) (1) |
|
7 - 13 |
% |
1 - 3 |
% |
(1) See description of non-GAAP measures contained in this release.
