Slide 1: Q3 2014 Earnings Call
Q3 2014 Earnings Call July 23, 2014
Slide 2: Forward-Looking Statements and Non-GAAP Measures
Forward-Looking Statements and Non-GAAP Measures Forward-Looking Statements -- This presentation 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 subj
Slide 3: Summary
Summary • Sales of $3.58 billion; up 4% versus prior year • Adjusted EPS of $1.00, up 14% versus prior year • Adjusted Operating Margin of 15.4%, up 60 basis points versus prior year • Free Cash Flow of $530 million; returned $169 million to shareholders • Book-to-Bill of 0.99 with orders up 2%, exc
Slide 4: Transportation Solutions Q3 Summary
Transportation Solutions Q3 Summary ($ in Millions) Growth Rates Actual Organic Sales by Business Growth Rates Sales $1,585 10% 8% Actual Organic Orders $1,562 9% 7% Automotive $1,585 10% 8% Book to Bill 0.99 Transportation Solutions $1,585 10% 8% Adj. Operating Income $335 18% Adj. Operating Margin
Slide 5: Industrial Solutions Q3 Summary
Industrial Solutions Q3 Summary ($ in Millions) Growth Rates Sales by Business Growth Rates Actual Organic Actual Organic Sales $849 6% 4% Industrial Equipment $349 4% 3% Orders $853 3% 2% Aerospace, Defense, Oil, and Gas 291 12% 8% Book to Bill 1.00 Energy 209 -% 1% Industrial Solutions $849 6% 4%
Slide 6: Network Solutions Q3 Summary
Network Solutions Q3 Summary Growth Rates ($ in Millions) Actual Organic Sales by Business Growth Rates Actual Organic Sales $738 (8)% (8)% Telecom Networks $347 -% (1)% Orders $1,228 65% 65% Data Communications 182 (4)% (5)% Orders ex SubCom $676 (7)% (7)% Enterprise Networks 157 (2)% (1)% Book to
Slide 7: Consumer Solutions Q3 Summary
Consumer Solutions Q3 Summary ($ in Millions) Growth Rates Actual Organic Sales by Business Growth Rates Actual Organic Sales $408 1% -% Consumer Devices $230 (5)% (5)% Orders $389 (9)% (9)% Appliances 178 10% 9% Book to Bill 0.95 Consumer Solutions $408 1% -% Adj. Operating Income $48 12% Adj. Oper
Slide 8: Q3 Financial Summary
Q3 Financial Summary ($ in Millions, except per share amounts) Q3 FY14 Q3 FY13 Net Sales $ 3,580 $ 3,449 Operating Income $ 535 $ 439 Acquisition Related Charges 1 3 Restructuring & Other Charges, net 14 67 Adjusted Operating Income $ 550 $ 509 Operating Margin 14.9% 12.7% Adjusted Operating Margin
Slide 9: Q3 Operating Results & Other Items
Q3 Operating Results & Other Items Gross Margin Percentage Other Items 35.0% 34.2% 33.7% 33.6% 33.6% 34.0% ($ in Millions) Q3 FY14 Q3 FY13 32.8% 33.0% 32.2% 31.6% Interest Expense, Net $ (26) $ (32) 32.0% 31.0% Adjusted Other Income, Net $ 9 $ 10 30.0% Income Tax Expense $ (113) $ (93) Q1 Q2 Q3 Q4 Q
Slide 10: Q3 Balance Sheet and Cash Flow Summary
Q3 Balance Sheet and Cash Flow Summary Free Cash Flow and Working Capital Liquidity, Cash & Debt Liquidity Summary ($ in Millions) Q3 FY14 Q3 FY13 ($ in Millions) Q3 FY14 Q3 FY13 Beginning Cash Balance $ 1,429 $ 1,073 Cash from Continuing Operations $ 501 $ 614 Free Cash Flow 530 431 Capital expendi
Slide 11: Q4 Outlook
Q4 Outlook^ ($ in Millions, except per share amounts) Sales $3,560 to $3,660 Y/Y Growth Actual 4% 7% Organic* 2% 5% Adjusted EPS* $0.98 to $1.02 Y/Y Growth 5% 10% Transportation Solutions Network Solutions Revenue up ~7-9% vs. prior year Revenue flat excluding Subsea Communications Global auto
Slide 12: FY14 Outlook
FY14 Outlook^ ($ in Millions, except per share amounts) Sales $13,900 to $14,000 Y/Y Growth Actual 5% 5% Organic* 4% 5% Adjusted EPS* $3.76 to $3.80 Y/Y Growth 16% 18% Transportation Solutions Network Solutions Revenue up ~11% vs. prior year Revenue down slightly vs. prior year excluding Subsea
Slide 13: Appendix
Appendix
Slide 14: Non-GAAP Measures
Non-GAAP Measures “Organic Sales Growth,” “Adjusted Operating Income,” “Adjusted Operating Margin,” “Adjusted Other Income, Net,” “Adjusted Income Tax Expense,” “Adjusted Effective Tax Rate,” ”Adjusted Income from Continuing Operations,” “Adjusted Earnings Per Share,” and “Free Cash Flow” (FCF) are
Slide 15: Non-GAAP Measures (cont.)
Non-GAAP Measures (cont.) We present income from continuing operations attributable to TE Connectivity Ltd. before special items including charges or income related to legal settlements and reserves, restructuring and other charges, acquisition related charges, impairment charges, tax sharing income
Slide 16: Q3 Revenue Summary
Q3 Revenue Summary ($ in Millions) Actual Organic Q3 FY14 Q3 FY13 Growth (1) Segment Growth Transportation Solutions $1,585 $1,438 10% 8% Industrial Solutions 849 803 6% 4% Network Solutions 738 803 (8)% (8)% Consumer Solutions 408 405 1% -% Total $3,580 $3,449 4% 3% page 16 / July 2014 (1)See descr
Slide 17: Reconciliation of Net Sales Growth – Q3 14 vs. Q3 13
Reconciliation of Net Sales Growth– Q3 14 vs. Q3 13 Percentage of Change in Net Sales for the Quarter Ended June 27, 2014 Segm ent's Total versus Net Sales for the Quarter Ended June 28, 2013 Net Sales for the Acquisitions Quarter Ended Organic (1) Translation (2) (Divestiture) Total June 27, 2014 (
Slide 18: Reconciliation of Net Sales Growth by Segment and Geography
Reconciliation of Net Sales Growth by Segment and Geography – Q3 14 vs. Q3 13 Change in Net Sales for the Quarter Ended June 27, 2014 versus Net Sales for the Quarter Ended June 28, 2013 Acquisitions Organic (1) Translation (2) (Divestiture) Total ($ in m illions) Transportation Solutions: EMEA $ 36
Slide 19: Reconciliation of Non-GAAP to GAAP, Quarter Ended June 27, 2014
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended June 27, 2014 Adjustm ents Acquisition Restructuring Related and Other Adjusted U.S. GAAP Charges Charges, Net (Non-GAAP) (1) ($ in m illions, except per share data) Operating Income: Transportation Soluti
Slide 20: Reconciliation of Non-GAAP to GAAP, Quarter Ended June 28, 2013
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended June 28, 2013 Adjustm ents Acquisition Restructuring Related and Other Tax Adjusted (1) U.S. GAAP Charges Charges, Net Item s (Non-GAAP) (2) ($ in m illions, except per share data) Operating Income: Transp
Slide 21: Reconciliation of Non-GAAP to GAAP, Quarter Ended September 27, 2013
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended September 27, 2013 Adjustm ents Acquisition Restructuring Related and Other Tax Adjusted (1) U.S. GAAP Charges Charges, Net Item s (Non-GAAP) (2) ($ in m illions, except per share data) Operating Income: T
Slide 22: Reconciliation of Non-GAAP to GAAP, Year Ended September 27, 2013
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 27, 2013 Adjustm ents Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges Charges, Net Item s (1) (Non-GAAP) (2) ($ in m illions, except per share data) Operating Income: Tran
Slide 23: Reconciliation of Forward-Looking Non-GAAP Financial Measures
Reconciliation of Forward-Looking Non-GAAP Financial Measures to Forward-Looking GAAP Financial Measures Outlook for Quarter Ending Septem ber 26, Outlook for 2014 Fiscal 2014 Diluted earnings per share from continuing operations attributable to TE Connectivity Ltd. (GAAP) $0.93 - 0.97 $3.62 - 3.66