EX-99.1 2 a17-24531_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

TE Connectivity Announces Fourth Quarter and Full Year Results for Fiscal Year 2017

 

Sales and earnings per share exceed guidance, driven by growth across all segments and regions;

company reports record cash flow

 

SCHAFFHAUSEN, Switzerland — November 1, 2017 — TE Connectivity Ltd. (NYSE: TEL) today reported results for the fiscal fourth quarter and year ended September 29, 2017.

 

Fourth Quarter Highlights

 

·                  Net sales were $3.5 billion, exceeding guidance range, with growth in all segments and regions

 

·                  Diluted earnings per share (EPS) from continuing operations were $1.21 and adjusted EPS were $1.25, also above guidance range

 

·                  Cash flow from continuing operating activities was $873 million and free cash flow was $691 million, both records for the company

 

Full Year Highlights

 

·                  Net sales were $13.1 billion, up 7 percent year-over-year

 

·                  Net sales were up 9 percent, and 8 percent organically, on a 52-week comparison basis

 

·                  Diluted EPS from continuing operations were $4.67, down 11 percent, due to a tax benefit in 2016

 

·                  Adjusted EPS were $4.83, up 22 percent versus the prior year, on a 52-week comparison basis

 

·                  Cash flow from continuing operating activities was $2.3 billion and free cash flow was $1.7 billion, both records for the company

 

·                  $1.2 billion returned to shareholders through dividends and share repurchases

 

Fourth Quarter Results

 

For the fourth quarter, the company reported net sales of $3.5 billion, with diluted EPS from continuing operations of $1.21. Adjusted EPS were $1.25, cash flow from continuing operating activities was $873 million, and free cash flow was a record for the company at $691 million. Excluding SubCom, total orders were $3.3 billion and the book-to-bill ratio was 1.02.

 

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Full Year Results

 

For the full year, the company reported net sales of $13.1 billion and diluted EPS from continuing operations of $4.67. Adjusted EPS were $4.83, cash flow from continuing operating activities was $2.3 billion and free cash flow was $1.7 billion for the year.

 

“Our strong fourth quarter results capped off an exceptional fiscal year for TE, with sales up 9 percent and adjusted EPS up 22 percent from 2016, each on a comparable basis. For the year, we delivered above-market growth due to content gains and 100 points of adjusted operating margin expansion, with contributions from each of our segments. We continued to leverage our global presence and market-leading products to deliver strong results,” said TE Connectivity CEO Terrence Curtin. “We also made two acquisitions in medical and automotive connectivity that will enable us to further capitalize on opportunities in those high-growth areas.”

 

2018 Outlook

 

For the fiscal first quarter of 2018, the company expects net sales of $3.35 billion to $3.45 billion, reflecting an increase of 10 percent on an actual basis and 5 percent on an organic basis year over year at the mid-point. Diluted EPS from continuing operations are expected to be $1.12 to $1.16, including net restructuring, acquisition-related and other charges of $0.11. The company expects adjusted EPS of $1.23 to $1.27 which represents a 9 percent improvement at the mid-point versus the first quarter of 2017.

 

For the full year, the company expects net sales of $13.7 to $14.1 billion, reflecting 6 percent actual and 4 percent organic growth at the mid-point versus the prior year. Diluted EPS from continuing operations are expected to be $4.78 to $4.98, including net restructuring, acquisition-related and other charges of $0.35. The company expects adjusted EPS of $5.13 to 5.33, reflecting 8 percent growth at the mid-point compared to fiscal year 2017.

 

“We expect to continue to deliver above-market sales and strong EPS performance into 2018, fueled by positive momentum from 2017, confidence in our business model and a solid pipeline of growth opportunities. Our portfolio aligns with important trends in an increasingly connected world and we look forward to creating a safer, sustainable, productive and connected future for our customers, shareholders and employees,” said Curtin.

 

Information about TE Connectivity’s use of non-GAAP financial measures is provided below. For reconciliations of these non-GAAP financial measures, see the attached tables.

 

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Conference Call and Webcast

 

The company will hold a conference call today beginning at 8:30 a.m. ET. The dial-in information is provided here:

 

·                  At TE Connectivity’s website: http://investors.te.com.

 

·                  By telephone: 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) 230-1059, and for international callers, the dial-in number is (612) 234-9959.

 

·                  An audio replay of the conference call will be available beginning at 10:30 a.m. ET on November 1, 2017, and ending at 11:59 p.m. ET on November 8, 2017. 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 431097.

 

About TE Connectivity

 

TE Connectivity Ltd. (NYSE: TEL) is a $13 billion global technology and manufacturing leader creating a safer, sustainable, productive, and connected future. For more than 75 years, our connectivity and sensor solutions, proven in the harshest environments, have enabled advancements in transportation, industrial applications, medical technology, energy, data communications, and the home. With 78,000 employees, including more than 7,000 engineers, working alongside customers in nearly 150 countries, TE ensures that EVERY CONNECTION COUNTS. Learn more at www.te.com and on LinkedIn, Facebook, WeChat and Twitter.

 

Non-GAAP Financial Measures

 

We present non-GAAP performance and liquidity measures as we believe it is appropriate for investors to consider adjusted financial measures in addition to results in accordance with accounting principles generally accepted in the U.S. (“GAAP”). These non-GAAP financial measures provide supplemental information and should not be considered replacements for results in accordance with GAAP. Management uses non-GAAP financial measures internally for planning and forecasting purposes and in its decision-making processes related to the operations of our company. We believe these measures provide meaningful information to us and investors because they enhance the understanding of our operating performance, ability to generate cash, and the trends of our business. Additionally, we believe that investors benefit from having access to the same financial measures that management uses in evaluating our operations. 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 financial measures in combination with the most directly comparable GAAP financial measures in order to better understand the amounts, character, and impact of any increase or decrease in reported amounts. These non-GAAP financial measures may not be comparable to similarly-titled measures reported by other companies.

 

The following provides additional information regarding our non-GAAP financial measures:

 

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·                  Organic Net Sales Growth — represents net sales growth (the most comparable GAAP financial measure) excluding the impact of foreign currency exchange rates, and acquisitions and divestitures that occurred in the preceding twelve months, if any. Organic Net Sales Growth is a useful measure of our performance because it excludes items that are not completely under management’s control, such as the impact of changes in foreign currency exchange rates, and items that do not reflect the underlying growth of the company, such as acquisition and divestiture activity. This measure is a significant component in our incentive compensation plans.

 

·                  Adjusted Operating Income and Adjusted Operating Margin — represent operating income and operating margin, respectively, (the most comparable GAAP financial measures) before special items including restructuring and other charges, acquisition related charges, and other income or charges, if any. We utilize these measures to assess segment level operating performance and to provide insight to management in evaluating segment operating plan execution and market conditions. Adjusted Operating Income is a significant component in our incentive compensation plans.

 

·                  Adjusted Other Income, Net — represents net other income (the most comparable GAAP financial measure) before special items including tax sharing income related to adjustments to prior period tax returns and other items, if any.

 

·                  Adjusted Income Tax Expense and Adjusted Effective Tax Rate — represent income tax expense and effective tax rate, respectively (the most comparable GAAP financial measures) after adjusting for the tax effect of special items including restructuring and other charges, acquisition related charges, other income or charges, and certain significant tax items, if any.

 

·                  Adjusted Income from Continuing Operations — represents income from continuing operations (the most comparable GAAP financial measure) before special items including restructuring and other charges, acquisition related charges, tax sharing income related to adjustments to prior period tax returns and other tax items, other income or charges, and certain significant tax items, if any, and, if applicable, the related tax effects.

 

·                  Adjusted Earnings Per Share — represents diluted earnings per share from continuing operations (the most comparable GAAP financial measure) before special items including restructuring and other charges, acquisition related charges, tax sharing income related to adjustments to prior period tax returns and other tax items, other income or charges, and certain significant tax items, if any, and, if applicable, the related tax effects. This measure is a significant component in our incentive compensation plans.

 

·                  Net Sales Excluding the Impact of the Additional Week, Net Sales Growth Excluding the Impact of the Additional Week, Organic Net Sales Growth Excluding the Impact of the Additional Week, Adjusted Operating Income Excluding the Impact of the Additional Week, Adjusted Operating Margin Excluding the Impact of the Additional Week, and Adjusted Earnings Per Share Excluding the Impact of the Additional Week — represent certain GAAP and non-GAAP financial measures excluding the impact of the additional week in the fourth quarter of the fiscal year for fiscal years which are 53 weeks in length. The impact of the additional week is estimated using an average weekly sales figure for the last month of the fiscal year.

 

·                  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 financial 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

 

4



 

pension contributions and the cash impact of special items, if any, minus net capital expenditures. Voluntary pension contributions are excluded from the GAAP financial 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 and cash paid (collected) pursuant to collateral requirements related to cross currency swaps, 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 financial 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 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; and the possible effects on us of changes in tax laws, tax treaties and other legislation.  More detailed information about these and other factors is set forth in TE Connectivity Ltd.’s Annual Report on Form 10-K for the fiscal year ended Sept. 30, 2016 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.

 

# # #

 

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Contacts:

Media Relations:

Investor Relations:

 

B.J. Talley

Sujal Shah

 

TE Connectivity

TE Connectivity

 

610-893-9553

610-893-9790

 

bj.talley@te.com

sujal.shah@te.com

 

6



 

TE CONNECTIVITY LTD.

 CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 

 

 

For the Quarters Ended

 

For the Years Ended

 

 

 

September 29,

 

September 30,

 

September 29,

 

September 30,

 

 

 

2017

 

2016

 

2017

 

2016

 

 

 

(in millions, except per share data)

 

Net sales

 

$

3,456

 

$

3,332

 

$

13,113

 

$

12,238

 

Cost of sales

 

2,317

 

2,228

 

8,663

 

8,205

 

Gross margin

 

1,139

 

1,104

 

4,450

 

4,033

 

Selling, general, and administrative expenses

 

395

 

389

 

1,591

 

1,463

 

Research, development, and engineering expenses

 

168

 

165

 

658

 

644

 

Acquisition and integration costs

 

1

 

3

 

6

 

22

 

Restructuring and other charges, net

 

23

 

30

 

148

 

2

 

Operating income

 

552

 

517

 

2,047

 

1,902

 

Interest income

 

6

 

7

 

20

 

19

 

Interest expense

 

(35

)

(34

)

(130

)

(127

)

Other expense, net

 

(3

)

(1

)

(9

)

(632

)

Income from continuing operations before income taxes

 

520

 

489

 

1,928

 

1,162

 

Income tax (expense) benefit

 

(91

)

(52

)

(255

)

779

 

Income from continuing operations

 

429

 

437

 

1,673

 

1,941

 

Income from discontinued operations, net of income taxes

 

5

 

 

10

 

68

 

Net income

 

$

434

 

$

437

 

$

1,683

 

$

2,009

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

1.22

 

$

1.23

 

$

4.71

 

$

5.30

 

Income from discontinued operations

 

0.01

 

 

0.03

 

0.19

 

Net income

 

1.23

 

1.23

 

4.74

 

5.49

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

1.21

 

$

1.22

 

$

4.67

 

$

5.26

 

Income from discontinued operations

 

0.01

 

 

0.03

 

0.18

 

Net income

 

1.22

 

1.22

 

4.70

 

5.44

 

 

 

 

 

 

 

 

 

 

 

Dividends paid per common share

 

$

0.40

 

$

0.37

 

$

1.54

 

$

1.40

 

 

 

 

 

 

 

 

 

 

 

Weighted-average number of shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

353

 

355

 

355

 

366

 

Diluted

 

356

 

359

 

358

 

369

 

 



 

TE CONNECTIVITY LTD.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

 

 

September 29,

 

September 30,

 

 

 

2017

 

2016

 

 

 

(in millions, except share data)

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

1,218

 

$

647

 

Accounts receivable, net of allowance for doubtful accounts of $21 and $17, respectively

 

2,290

 

2,046

 

Inventories

 

1,813

 

1,596

 

Prepaid expenses and other current assets

 

605

 

486

 

Total current assets

 

5,926

 

4,775

 

Property, plant, and equipment, net

 

3,400

 

3,052

 

Goodwill

 

5,651

 

5,492

 

Intangible assets, net

 

1,841

 

1,879

 

Deferred income taxes

 

2,141

 

2,111

 

Other assets

 

444

 

299

 

Total Assets

 

$

19,403

 

$

17,608

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Short-term debt

 

$

710

 

$

331

 

Accounts payable

 

1,436

 

1,090

 

Accrued and other current liabilities

 

1,626

 

1,437

 

Deferred revenue

 

75

 

208

 

Total current liabilities

 

3,847

 

3,066

 

Long-term debt

 

3,634

 

3,739

 

Long-term pension and postretirement liabilities

 

1,160

 

1,502

 

Deferred income taxes

 

236

 

207

 

Income taxes

 

293

 

247

 

Other liabilities

 

482

 

362

 

Total Liabilities

 

9,652

 

9,123

 

Commitments and contingencies

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

Common shares, CHF 0.57 par value, 357,069,981 shares authorized and issued, and 382,835,381 shares authorized and issued, respectively

 

157

 

168

 

Contributed surplus

 

 

1,801

 

Accumulated earnings

 

10,175

 

8,682

 

Treasury shares, at cost, 5,356,369 and 27,554,005 shares, respectively

 

(421

)

(1,624

)

Accumulated other comprehensive loss

 

(160

)

(542

)

Total Shareholders’ Equity

 

9,751

 

8,485

 

Total Liabilities and Shareholders’ Equity

 

$

19,403

 

$

17,608

 

 



 

TE CONNECTIVITY LTD.

 CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

 

 

For the Quarters Ended

 

For the Years Ended

 

 

 

September 29,

 

September 30,

 

September 29,

 

September 30,

 

 

 

2017

 

2016

 

2017

 

2016

 

 

 

(in millions)

 

Cash Flows From Operating Activities:

 

 

 

 

 

 

 

 

 

Net income

 

$

434

 

$

437

 

$

1,683

 

$

2,009

 

Income from discontinued operations, net of income taxes

 

(5

)

 

(10

)

(68

)

Income from continuing operations

 

429

 

437

 

1,673

 

1,941

 

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

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

166

 

147

 

635

 

585

 

Deferred income taxes

 

71

 

16

 

(75

)

178

 

Provision for losses on accounts receivable and inventories

 

4

 

(10

)

19

 

17

 

Tax sharing expense

 

2

 

 

8

 

632

 

Share-based compensation expense

 

26

 

25

 

99

 

91

 

Gain on divestiture

 

 

(1

)

 

(144

)

Other

 

(7

)

18

 

10

 

102

 

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

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

7

 

101

 

(253

)

116

 

Inventories

 

(16

)

18

 

(211

)

16

 

Prepaid expenses and other current assets

 

(66

)

(20

)

(72

)

282

 

Accounts payable

 

91

 

(71

)

308

 

(75

)

Accrued and other current liabilities

 

169

 

64

 

225

 

(4

)

Deferred revenue

 

13

 

48

 

(137

)

26

 

Income taxes

 

(47

)

(29

)

7

 

(1,764

)

Other

 

31

 

39

 

86

 

45

 

Net cash provided by continuing operating activities

 

873

 

782

 

2,322

 

2,044

 

Net cash used in discontinued operating activities

 

 

(98

)

(1

)

(97

)

Net cash provided by operating activities

 

873

 

684

 

2,321

 

1,947

 

Cash Flows From Investing Activities:

 

 

 

 

 

 

 

 

 

Capital expenditures

 

(250

)

(208

)

(702

)

(628

)

Proceeds from sale of property, plant, and equipment

 

7

 

5

 

19

 

8

 

Acquisition of businesses, net of cash acquired

 

(173

)

(342

)

(250

)

(1,336

)

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

 

 

7

 

4

 

333

 

Other

 

22

 

14

 

(3

)

42

 

Net cash used in investing activities

 

(394

)

(524

)

(932

)

(1,581

)

Cash Flows From Financing Activities:

 

 

 

 

 

 

 

 

 

Net increase (decrease) in commercial paper

 

(168

)

30

 

(330

)

330

 

Proceeds from issuance of debt

 

500

 

2

 

589

 

352

 

Repayment of debt

 

 

(1

)

 

(501

)

Proceeds from exercise of share options

 

31

 

13

 

117

 

90

 

Repurchase of common shares

 

(238

)

(130

)

(614

)

(2,787

)

Payment of common share dividends to shareholders

 

(141

)

(132

)

(546

)

(509

)

Transfers to discontinued operations

 

(1

)

(98

)

(1

)

(97

)

Other

 

(6

)

 

(30

)

(30

)

Net cash used in continuing financing activities

 

(23

)

(316

)

(815

)

(3,152

)

Net cash provided by discontinued financing activities

 

 

98

 

1

 

97

 

Net cash used in financing activities

 

(23

)

(218

)

(814

)

(3,055

)

Effect of currency translation on cash

 

7

 

11

 

(4

)

7

 

Net increase (decrease) in cash and cash equivalents

 

463

 

(47

)

571

 

(2,682

)

Cash and cash equivalents at beginning of period

 

755

 

694

 

647

 

3,329

 

Cash and cash equivalents at end of period

 

$

1,218

 

$

647

 

$

1,218

 

$

647

 

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Information:

 

 

 

 

 

 

 

 

 

Interest paid

 

$

22

 

$

15

 

$

128

 

$

117

 

Income taxes paid, net of refunds

 

67

 

64

 

323

 

806

 

 



 

TE CONNECTIVITY LTD.

RECONCILIATION OF FREE CASH FLOW (UNAUDITED)

 

 

 

For the Quarters Ended

 

For the Years Ended

 

 

 

September 29,

 

September 30,

 

September 29,

 

September 30,

 

 

 

2017

 

2016

 

2017

 

2016

 

 

 

(in millions)

 

Net cash provided by continuing operating activities

 

$

873

 

$

782

 

$

2,322

 

$

2,044

 

Excluding:

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

5

 

(23

)

150

 

Payments related to income taxes on the sale of the Broadband Network Solutions business

 

 

10

 

 

36

 

Cash paid pursuant to collateral requirements related to cross currency swaps

 

61

 

10

 

80

 

29

 

Capital expenditures, net

 

(243

)

(203

)

(683

)

(620

)

Free cash flow (1)

 

$

691

 

$

604

 

$

1,696

 

$

1,639

 

 


(1) Free cash flow is a non-GAAP financial measure. See description of non-GAAP financial measures.

 



 

TE CONNECTIVITY LTD.

CONSOLIDATED SEGMENT DATA (UNAUDITED)

 

 

 

For the Quarters Ended

 

For the Years Ended

 

 

 

September 29,

 

September 30,

 

September 29,

 

September 30,

 

 

 

2017

 

2016

 

2017

 

2016

 

 

 

($ in millions)

 

 

 

Net Sales

 

 

 

Net Sales

 

 

 

Net Sales

 

 

 

Net Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

1,844

 

 

 

$

1,736

 

 

 

$

7,039

 

 

 

$

6,503

 

 

 

Industrial Solutions

 

954

 

 

 

919

 

 

 

3,507

 

 

 

3,215

 

 

 

Communications Solutions

 

658

 

 

 

677

 

 

 

2,567

 

 

 

2,520

 

 

 

Total

 

$

3,456

 

 

 

$

3,332

 

 

 

$

13,113

 

 

 

$

12,238

 

 

 

 

 

 

Operating

 

Operating

 

Operating

 

Operating

 

Operating

 

Operating

 

Operating

 

Operating

 

 

 

Income

 

Margin

 

Income

 

Margin

 

Income

 

Margin

 

Income

 

Margin

 

Transportation Solutions

 

$

328

 

17.8

%

$

344

 

19.8

%

$

1,299

 

18.5

%

$

1,191

 

18.3

%

Industrial Solutions

 

113

 

11.8

 

119

 

12.9

 

364

 

10.4

 

343

 

10.7

 

Communications Solutions

 

111

 

16.9

 

54

 

8.0

 

384

 

15.0

 

368

 

14.6

 

Total

 

$

552

 

16.0

%

$

517

 

15.5

%

$

2,047

 

15.6

%

$

1,902

 

15.5

%

 

 

 

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

 

$

336

 

18.2

%

$

341

 

19.6

%

$

1,369

 

19.4

%

$

1,246

 

19.2

%

Industrial Solutions

 

132

 

13.8

 

123

 

13.4

 

445

 

12.7

 

397

 

12.3

 

Communications Solutions

 

108

 

16.4

 

87

 

12.9

 

392

 

15.3

 

293

 

11.6

 

Total

 

$

576

 

16.7

%

$

551

 

16.5

%

$

2,206

 

16.8

%

$

1,936

 

15.8

%

 


(1) Adjusted operating income and adjusted operating margin are non-GAAP financial measures. See description of non-GAAP financial measures.

 



 

TE CONNECTIVITY LTD.

RECONCILIATION OF NET SALES GROWTH (UNAUDITED)

 

 

 

 

Change in Net Sales for the Quarter Ended September 29, 2017

 

 

 

versus Net Sales for the Quarter Ended September 30, 2016

 

 

 

Net

 

Organic Net

 

 

 

 

 

 

 

Sales Growth

 

Sales Growth (1)

 

Translation (2)

 

Acquisitions

 

 

 

($ in millions)

 

Transportation Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

Automotive

 

$

39

 

3.0

%

$

19

 

1.5

%

$

20

 

$

 

Commercial transportation

 

59

 

27.4

 

58

 

26.9

 

1

 

 

Sensors

 

10

 

4.8

 

5

 

2.2

 

5

 

 

Total

 

108

 

6.2

 

82

 

4.7

 

26

 

 

Industrial Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial equipment

 

63

 

14.8

 

21

 

5.0

 

7

 

35

 

Aerospace, defense, oil, and gas

 

(15

)

(5.0

)

(18

)

(6.0

)

3

 

 

Energy

 

(13

)

(6.7

)

(17

)

(8.5

)

4

 

 

Total

 

35

 

3.8

 

(14

)

(1.5

)

14

 

35

 

Communications Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

Data and devices

 

(8

)

(3.1

)

(7

)

(2.4

)

(1

)

 

Subsea communications

 

(17

)

(7.1

)

(17

)

(7.1

)

 

 

Appliances

 

6

 

3.4

 

4

 

2.9

 

2

 

 

Total

 

(19

)

(2.8

)

(20

)

(2.9

)

1

 

 

Total

 

$

124

 

3.7

%

$

48

 

1.4

%

$

41

 

$

35

 

 

 

 

Change in Net Sales for the Year Ended September 29, 2017

 

 

 

versus Net Sales for the Year Ended September 30, 2016

 

 

 

Net

 

Organic Net

 

 

 

Acquisitions

 

 

 

Sales Growth

 

Sales Growth (1)

 

Translation (2)

 

(Divestiture)

 

 

 

($ in millions)

 

Transportation Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

Automotive

 

$

316

 

6.4

%

$

349

 

7.1

%

$

(33

)

$

 

Commercial transportation

 

172

 

20.8

 

181

 

21.9

 

(9

)

 

Sensors

 

48

 

6.3

 

23

 

3.0

 

(5

)

30

 

Total

 

536

 

8.2

 

553

 

8.5

 

(47

)

30

 

Industrial Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial equipment

 

328

 

23.1

 

77

 

5.5

 

(10

)

261

 

Aerospace, defense, oil, and gas

 

(25

)

(2.3

)

(19

)

(1.7

)

(7

)

1

 

Energy

 

(11

)

(1.6

)

(8

)

(1.0

)

(3

)

 

Total

 

292

 

9.1

 

50

 

1.6

 

(20

)

262

 

Communications Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

Data and devices

 

(57

)

(5.6

)

23

 

2.3

 

(10

)

(70

)

Subsea communications

 

43

 

4.9

 

43

 

4.9

 

 

 

Appliances

 

61

 

9.9

 

67

 

10.8

 

(6

)

 

Total

 

47

 

1.9

 

133

 

5.4

 

(16

)

(70

)

Total

 

$

875

 

7.1

%

$

736

 

6.0

%

$

(83

)

$

222

 

 


(1) Organic net sales growth is a non-GAAP financial measure. See description of non-GAAP financial measures.

(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 September 29, 2017

(UNAUDITED)

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

 

 

Restructuring

 

 

 

 

 

 

 

Acquisition

 

and Other

 

 

 

 

 

 

 

Related

 

Charges

 

Adjusted

 

 

 

U.S. GAAP

 

Charges (1)

 

(Credits), Net (1)

 

(Non-GAAP) (2)

 

 

 

($ in millions, except per share data)

 

Operating Income:

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

328

 

$

1

 

$

7

 

$

336

 

Industrial Solutions

 

113

 

 

19

 

132

 

Communications Solutions

 

111

 

 

(3

)

108

 

Total

 

$

552

 

$

1

 

$

23

 

$

576

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

16.0

%

 

 

 

 

16.7

%

 

 

 

 

 

 

 

 

 

 

Other Expense, Net

 

$

(3

)

$

 

$

 

$

(3

)

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

$

(91

)

$

(1

)

$

(7

)

$

(99

)

 

 

 

 

 

 

 

 

 

 

Effective Tax Rate

 

17.5

%

 

 

 

 

18.2

%

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations

 

$

429

 

$

 

$

16

 

$

445

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings per Share from Continuing Operations

 

$

1.21

 

$

 

$

0.04

 

$

1.25

 

 


(1) 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.

(2) See description of non-GAAP financial measures.

 



 

TE CONNECTIVITY LTD.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES

For the Quarter Ended September 30, 2016

(UNAUDITED)

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

 

 

Restructuring

 

 

 

 

 

 

 

Acquisition

 

and Other

 

 

 

 

 

 

 

Related

 

Charges

 

Adjusted

 

 

 

U.S. GAAP

 

Charges (1)

 

(Credits), Net (1)

 

(Non-GAAP) (2)

 

 

 

($ in millions, except per share data)

 

Operating Income:

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

344

 

$

3

 

$

(6

)

$

341

 

Industrial Solutions

 

119

 

1

 

3

 

123

 

Communications Solutions

 

54

 

 

33

 

87

 

Total

 

$

517

 

$

4

 

$

30

 

$

551

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

15.5

%

 

 

 

 

16.5

%

 

 

 

 

 

 

 

 

 

 

Other Expense, Net

 

$

(1

)

$

 

$

 

$

(1

)

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

$

(52

)

$

(1

)

$

(15

)

$

(68

)

 

 

 

 

 

 

 

 

 

 

Effective Tax Rate

 

10.6

%

 

 

 

 

13.0

%

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations

 

$

437

 

$

3

 

$

15

 

$

455

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings per Share from Continuing Operations

 

$

1.22

 

$

0.01

 

$

0.04

 

$

1.27

 

 


(1) 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.

(2) See description of non-GAAP financial measures.

 



 

TE CONNECTIVITY LTD.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES

For the Year Ended September 29, 2017

(UNAUDITED)

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Acquisition

 

Restructuring

 

 

 

 

 

 

 

 

 

Related

 

and Other

 

Tax

 

Adjusted

 

 

 

U.S. GAAP

 

Charges (1)

 

Charges, Net (1)

 

Items (2)

 

(Non-GAAP) (3)

 

 

 

($ in millions, except per share data)

Operating Income:

 

 

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

1,299

 

$

3

 

$

67

 

$

 

$

1,369

 

Industrial Solutions

 

364

 

8

 

73

 

 

445

 

Communications Solutions

 

384

 

 

8

 

 

392

 

Total

 

$

2,047

 

$

11

 

$

148

 

$

 

$

2,206

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

15.6

%

 

 

 

 

 

 

16.8

%

 

 

 

 

 

 

 

 

 

 

 

 

Other Expense, Net

 

$

(9

)

$

 

$

 

$

7

 

$

(2

)

 

 

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

$

(255

)

$

(3

)

$

(40

)

$

(66

)

$

(364

)

 

 

 

 

 

 

 

 

 

 

 

 

Effective Tax Rate

 

13.2

%

 

 

 

 

 

 

17.4

%

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations

 

$

1,673

 

$

8

 

$

108

 

$

(59

)

$

1,730

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings per Share from
Continuing Operations

 

$

4.67

 

$

0.02

 

$

0.30

 

$

(0.16

)

$

4.83

 

 


(1) 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.

(2) Includes income tax benefits associated with the tax impacts of certain intercompany transactions and the corresponding reduction in the valuation allowance for U.S. tax loss carryforwards. Also includes income tax benefits associated with pre-separation tax matters and the related impact to other expense pursuant to the tax sharing agreement with Tyco International and Covidien.

(3) See description of non-GAAP financial measures.

 



 

TE CONNECTIVITY LTD.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES

For the Year Ended September 30, 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

 

$

1,191

 

$

9

 

$

46

 

$

 

$

1,246

 

Industrial Solutions

 

343

 

23

 

31

 

 

397

 

Communications Solutions

 

368

 

 

(75

)

 

293

 

Total

 

$

1,902

 

$

32

 

$

2

 

$

 

$

1,936

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

15.5

%

 

 

 

 

 

 

15.8

%

 

 

 

 

 

 

 

 

 

 

 

 

Other Income (Expense), Net

 

$

(632

)

$

 

$

 

$

650

 

$

18

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Tax (Expense) Benefit

 

$

779

 

$

(7

)

$

(2

)

$

(1,111

)

$

(341

)

 

 

 

 

 

 

 

 

 

 

 

 

Effective Tax Rate

 

(67.0

)%

 

 

 

 

 

 

18.5

%

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations

 

$

1,941

 

$

25

 

$

 

$

(461

)

$

1,505

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings per Share from Continuing Operations

 

$

5.26

 

$

0.07

 

$

 

$

(1.25

)

$

4.08

 

 


(1) Includes $22 million of acquisition and integration costs and $10 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 financial measures.

 



 

TE CONNECTIVITY LTD.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES

For the Quarter Ended December 30, 2016

(UNAUDITED)

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Acquisition

 

Restructuring

 

 

 

 

 

 

 

 

 

Related

 

and Other

 

Tax

 

Adjusted

 

 

 

U.S. GAAP

 

Charges (1)

 

Charges, Net (1)

 

Items (2)

 

(Non-GAAP) (3)

 

 

 

($ in millions, except per share data)

 

Operating Income:

 

 

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

343

 

$

1

 

$

24

 

$

 

$

368

 

Industrial Solutions

 

67

 

2

 

21

 

 

90

 

Communications Solutions

 

76

 

 

2

 

 

78

 

Total

 

$

486

 

$

3

 

$

47

 

$

 

$

536

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

15.9

%

 

 

 

 

 

 

17.5

%

 

 

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

$

(54

)

$

(1

)

$

(13

)

$

(30

)

$

(98

)

 

 

 

 

 

 

 

 

 

 

 

 

Effective Tax Rate

 

11.7

%

 

 

 

 

 

 

19.2

%

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations

 

$

406

 

$

2

 

$

34

 

$

(30

)

$

412

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings per Share from Continuing Operations

 

$

1.13

 

$

0.01

 

$

0.09

 

$

(0.08

)

$

1.15

 

 


(1) 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.

 

(2) Income tax benefits associated with the tax impacts of certain intercompany restructurings and the corresponding reduction in the valuation allowance for U.S. tax loss carryforwards.

 

(3) See description of non-GAAP financial measures.

 



 

TE CONNECTIVITY LTD.

IMPACT OF ADDITIONAL WEEK (UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

Change in Net Sales for the Quarter Ended
September 29, 2017 versus Net Sales for the

 

Change in Organic Net Sales for the Quarter Ended
September 29, 2017 versus Organic Net Sales for the

 

 

 

For the

 

For the Quarter Ended September 30, 2016

 

Quarter Ended September 30, 2016

 

Quarter Ended September 30, 2016 (2)

 

 

 

Quarter Ended

 

 

 

Adjustment

 

 

 

 

 

Adjustment

 

 

 

 

 

Adjustment

 

 

 

 

 

September 29,

 

14 Weeks

 

Impact of

 

13 Weeks

 

14 Weeks

 

Impact of

 

13 Weeks

 

14 Weeks

 

Impact of

 

13 Weeks

 

 

 

2017

 

U.S. GAAP

 

14th Week

 

(Non-GAAP) (1)(2)

 

U.S. GAAP

 

14th Week

 

(Non-GAAP) (1)(2)

 

(Non-GAAP) (2)

 

14th Week

 

(Non-GAAP) (1)(2)

 

 

 

($ in millions)

 

Net Sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Automotive

 

$

1,350

 

$

1,311

 

$

(102

)

$

1,209

 

3.0

%

8.7

%

11.7

%

1.5

%

8.6

%

10.1

%

Commercial transportation

 

274

 

215

 

(15

)

200

 

27.4

 

9.6

 

37.0

 

26.9

 

9.6

 

36.5

 

Sensors

 

220

 

210

 

(13

)

197

 

4.8

 

6.9

 

11.7

 

2.2

 

6.4

 

8.6

 

Total

 

1,844

 

1,736

 

(130

)

1,606

 

6.2

 

8.6

 

14.8

 

4.7

 

8.5

 

13.2

 

Industrial Solutions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial equipment

 

490

 

427

 

(32

)

395

 

14.8

 

9.3

 

24.1

 

5.0

 

8.4

 

13.4

 

Aerospace, defense, oil, and gas

 

284

 

299

 

(20

)

279

 

(5.0

)

6.8

 

1.8

 

(6.0

)

6.7

 

0.7

 

Energy

 

180

 

193

 

(13

)

180

 

(6.7

)

6.7

 

 

(8.5

)

6.8

 

(1.7

)

Total

 

954

 

919

 

(65

)

854

 

3.8

 

7.9

 

11.7

 

(1.5

)

7.5

 

6.0

 

Communications Solutions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data and devices

 

254

 

262

 

(21

)

241

 

(3.1

)

8.5

 

5.4

 

(2.4

)

8.4

 

6.0

 

Subsea communications

 

222

 

239

 

(11

)

228

 

(7.1

)

4.5

 

(2.6

)

(7.1

)

4.5

 

(2.6

)

Appliances

 

182

 

176

 

(11

)

165

 

3.4

 

6.9

 

10.3

 

2.9

 

7.4

 

10.3

 

Total

 

658

 

677

 

(43

)

634

 

(2.8

)

6.6

 

3.8

 

(2.9

)

6.7

 

3.8

 

Total

 

$

3,456

 

$

3,332

 

$

(238

)

$

3,094

 

3.7

%

8.0

%

11.7

%

1.4

%

7.9

%

9.3

%

 

 

 

For the Quarter Ended September 30, 2016

 

 

 

 

 

 

 

 

 

Adjustments

 

 

 

Adjustment

 

 

 

 

 

 

 

Acquisition

 

Restructuring

 

14 Weeks

 

 

 

13 Weeks

 

 

 

 

 

Related

 

and Other

 

Adjusted

 

Impact of

 

Adjusted

 

 

 

U.S. GAAP

 

Charges

 

Charges, Net

 

(Non-GAAP) (2)

 

14th Week

 

(Non-GAAP) (1)(2)

 

 

 

($ in millions, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

$

517

 

$

4

 

$

30

 

$

551

 

$

(55

)

$

496

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

15.5

%

 

 

 

 

16.5

%

 

 

16.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings per Share from Continuing Operations

 

$

1.22

 

$

0.01

 

$

0.04

 

$

1.27

 

$

(0.13

)

$

1.14

 

 


(1) Excludes the impact of an additional week in the fourth quarter of fiscal 2016. The impact of the additional week was estimated using an average weekly sales figure for the last month of the fiscal year.

 

(2) See description of non-GAAP financial measures.

 



 

TE CONNECTIVITY LTD.

IMPACT OF ADDITIONAL WEEK (UNAUDITED)

 

 

 

 

 

Fiscal 2016

 

Change in Net Sales for Fiscal 2017
versus Net Sales for Fiscal 2016

 

Change in Organic Net Sales for Fiscal 2017
versus Organic Net Sales for Fiscal 2016 (2)

 

 

 

 

 

 

 

Adjustment

 

 

 

 

 

Adjustment

 

 

 

 

 

Adjustment

 

 

 

 

 

 

 

53 Weeks

 

Impact of

 

52 Weeks

 

53 Weeks

 

Impact of

 

52 Weeks

 

53 Weeks

 

Impact of

 

52 Weeks

 

 

 

Fiscal 2017

 

U.S. GAAP

 

53rd Week

 

(Non-GAAP) (1)(2)

 

U.S. GAAP

 

53rd Week

 

(Non-GAAP) (1)(2)

 

(Non-GAAP) (2)

 

53rd Week

 

(Non-GAAP) (1)(2)

 

 

 

($ in millions)

 

Net Sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Automotive

 

$

5,228

 

$

4,912

 

$

(102

)

$

4,810

 

6.4

%

2.3

%

8.7

%

7.1

%

2.3

%

9.4

%

Commercial transportation

 

997

 

825

 

(15

)

810

 

20.8

 

2.3

 

23.1

 

21.9

 

2.2

 

24.1

 

Sensors

 

814

 

766

 

(13

)

753

 

6.3

 

1.8

 

8.1

 

3.0

 

1.7

 

4.7

 

Total

 

7,039

 

6,503

 

(130

)

6,373

 

8.2

 

2.3

 

10.5

 

8.5

 

2.1

 

10.6

 

Industrial Solutions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial equipment

 

1,747

 

1,419

 

(32

)

1,387

 

23.1

 

2.9

 

26.0

 

5.5

 

2.4

 

7.9

 

Aerospace, defense, oil, and gas

 

1,075

 

1,100

 

(20

)

1,080

 

(2.3

)

1.8

 

(0.5

)

(1.7

)

1.8

 

0.1

 

Energy

 

685

 

696

 

(13

)

683

 

(1.6

)

1.9

 

0.3

 

(1.0

)

1.9

 

0.9

 

Total

 

3,507

 

3,215

 

(65

)

3,150

 

9.1

 

2.2

 

11.3

 

1.6

 

2.1

 

3.7

 

Communications Solutions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data and devices

 

963

 

1,020

 

(21

)

999

 

(5.6

)

2.0

 

(3.6

)

2.3

 

2.3

 

4.6

 

Subsea communications

 

928

 

885

 

(11

)

874

 

4.9

 

1.3

 

6.2

 

4.9

 

1.3

 

6.2

 

Appliances

 

676

 

615

 

(11

)

604

 

9.9

 

2.0

 

11.9

 

10.8

 

2.2

 

13.0

 

Total

 

2,567

 

2,520

 

(43

)

2,477

 

1.9

 

1.7

 

3.6

 

5.4

 

1.8

 

7.2

 

Total

 

$

13,113

 

$

12,238

 

$

(238

)

$

12,000

 

7.1

%

2.2

%

9.3

%

6.0

%

2.1

%

8.1

%

 

For the Year Ended September 30, 2016

 

 

 

 

 

Adjustments

 

 

 

Adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition

 

Restructuring

 

 

 

53 Weeks

 

 

 

52 Weeks

 

 

 

 

 

 

 

 

 

 

 

Related

 

and Other

 

 

 

Adjusted

 

Impact of

 

Adjusted

 

 

 

 

 

 

 

 

 

U.S. GAAP

 

Charges (3)

 

Charges, Net

 

Tax Items (4)

 

(Non-GAAP) (2)

 

53rd Week

 

(Non-GAAP) (1)(2)

 

 

 

 

 

 

 

 

 

($ in millions, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

$

1,902

 

$

32

 

$

2

 

$

 

$

1,936

 

$

(55

)

$

1,881

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

15.5

%

 

 

 

 

 

 

15.8

%

 

 

15.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings per Share from Continuing Operations

 

$

5.26

 

$

0.07

 

$

 

$

(1.25

)

$

4.08

 

$

(0.13

)

$

3.95

 

 

 

 

 

 

 

 


(1) Excludes the impact of an additional week in the fourth quarter of fiscal 2016. The impact of the additional week was estimated using an average weekly sales figure for the last month of the fiscal year.

(2) See description of non-GAAP financial measures.

(3) Includes $22 million of acquisition and integration costs and $10 million of non-cash amortization associated with fair value adjustments related to acquired inventories and customer order backlog recorded in cost of sales.

(4) 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.

 



 

TE CONNECTIVITY LTD.

RECONCILIATION OF FORWARD-LOOKING NON-GAAP FINANCIAL MEASURES

TO FORWARD-LOOKING GAAP FINANCIAL MEASURES

As of November 1, 2017

(UNAUDITED)

 

 

 

Outlook for

 

 

 

 

 

Quarter Ending

 

 

 

 

 

December 29,

 

Outlook for

 

 

 

2017

 

Fiscal 2018

 

Diluted earnings per share from continuing operations (GAAP)

 

$1.12 - $1.16

 

$4.78 - $4.98

 

Restructuring and other charges, net

 

0.10

 

0.31

 

Acquisition related charges

 

0.01

 

0.04

 

Adjusted diluted earnings per share from continuing operations (non-GAAP) (1)

 

$1.23 - $1.27

 

$5.13 - $5.33

 

 

 

 

 

 

 

Net sales growth (GAAP)

 

9% - 12%

 

4% - 8%

 

Translation

 

(3)

 

(1)

 

(Acquisitions) divestitures, net

 

(2)

 

(1)

 

Organic net sales growth (non-GAAP) (1)

 

4% - 7%

 

2% - 6%

 

 


(1) See description of non-GAAP financial measures.