Slide 1: Q2 2013 Earnings Call
Q2 2013 Earnings Call April 24, 2013
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: Q2 Summary
Q2 Summary Second Quarter • Sales of $3.27 billion • Adjusted EPS of $0.76 up 12% versus prior year and above guidance; Adjusted Operating Margin up 60 basis points versus prior year • Free Cash Flow of $353 million; returned $319 million to shareholders • Book-to-Bill of 1.06 excluding Subsea Commu
Slide 4: Q2 Revenue Summary
Q2 Revenue Summary Actual Organic Region Q2 FY13 Q2 FY12 Growth Growth U.S. auto strength and addition of Deutsch Americas $ 1,051 $ 1,041 1% (6)% offset industrial and networks weakness Addition of Deutsch offset industrial and EMEA 1,148 1,131 2% (6)% networks market weakness Improvement in China
Slide 5: Transportation Solutions Q2 Summary
Transportation Solutions Q2 Summary ($ in Millions) Growth Rates Sales by Business Growth Rates Actual Organic Actual Organic Sales $1,385 9% 3% Automotive $1,385 9% 3% Adj. Operating Income $260 31% Transportation Solutions $1,385 9% 3% Adj. Operating Margin 19% Deutsch sales of $90 million • Conti
Slide 6: Network Solutions Q2 Summary
Network Solutions Q2 Summary ($ in Millions) Growth Rates Sales By Business Growth Rates Actual Organic Actual Organic Sales $725 (11)% (11)% Telecom Networks $301 (6)% (6)% Data Communications 194 (8)% (8)% Adj. Operating Income $45 (42)% Enterprise Networks 148 (10)% (9)% Adj. Operating Margin 6%
Slide 7: Industrial Solutions Q2 Summary
Industrial Solutions Q2 Summary ($ in Millions) Sales by Business Growth Rates Growth Rates Actual Organic Actual Organic Industrial $278 (14)% (13)% Sales $736 4% (7)% Aerospace, Defense, & Marine 265 47% 1% Adj. Operating Income $101 (5)% Energy 193 (8)% (7)% Adj. Operating Margin 14% Industrial S
Slide 8: Consumer Solutions Q2 Summary
Consumer Solutions Q2 Summary ($ in Millions) Growth Rates Sales by Business Growth Rates Actual Organic Actual Organic Sales $419 (7)% (5)% Consumer Devices $244 (6)% (4)% Appliance 175 (8)% (7)% Adj. Operating Income $37 (5)% Adj. Operating Margin 9% Consumer Solutions $419 (7)% (5)% • Strong grow
Slide 9: Q2 Financial Summary
Q2 Financial Summary ($ in Millions, except per share amounts) Q2 FY13 Q2 FY12 Net Sales $ 3,265 $ 3,249 Operating Income $ 359 $ 385 Restructuring & Other Charges 78 32 Acquisition Related Charges 6 4 Adjusted Operating Income $ 443 $ 421 Operating Margin 11.0% 11.8% Adjusted Operating Margin 13.6%
Slide 10: Q2 Operating Results & Other Items
Q2 Operating Results & Other Items Adjusted Gross Margin Percentage Other Items 33% ($ in Millions) Q2 FY13 Q2 FY12 31% Interest Expense, Net $ (30) $ (37) 29% Q1 FY12 Q2 FY12 Q3 FY12 Q4 FY12 Q1 FY13 Q2 FY13 Adjusted Other Income, Net $ 8 $ 11 GM% 29.7% 31.4% 31.0% 31.8% 31.6% 32.2% Income Tax Expen
Slide 11: Q2 Balance Sheet and Cash Flow Summary
Q2 Balance Sheet and Cash Flow Summary Free Cash Flow and Working Capital Liquidity, Cash & Debt ($ in Millions) Q2 FY13 Q2 FY12 Liquidity Summary ($ in Millions) Q2 FY13 Q2 FY12 Cash from Continuing Operations $ 446 $ 481 Beginning Cash Balance $ 972 $ 1,389 Capital expenditures, net (125) (138) Pr
Slide 12: Q2 Book to Bill
Q2 Book to Bill Segment Q2 FY13 Q2 FY12 Transportation Solutions 1.06 1.02 Network Solutions Excl. Subsea Communications 1.05 1.07 Industrial Solutions 1.07 1.05 Consumer Solutions 1.03 0.97 Total Excl. Subsea Communications 1.06 1.03 Order momentum supports expected improvement in second half page
Slide 13: Q3 Outlook
Q3 Outlook^ ($ in Millions, except per share amounts) Sales $3,325 to $3,425 Y/Y Growth Actual (5)% (2)% Negative impact to revenues from Organic* (3)% 0% Fx of ~$55 million versus prior year Adjusted EPS* $0.80 to $0.84 Y/Y Growth 1% 6% Transportation Solutions Industrial Solutions Up slightly se
Slide 14: FY13 Outlook
FY13 Outlook^ ($ in Millions, except per share amounts) Sales $13,075 to $13,375 Y/Y Growth Actual (2)% 1% Negative impact to revenues from Organic* (2)% 0% Fx of ~$165 million versus prior year Adjusted EPS* $3.10 to $3.22 Y/Y Growth 8% 13% Transportation Solutions – up mid single digits Industrial
Slide 15: Q & A
O&A —TE . —* page 15 / April 2013 connectivity
Slide 16: Appendix
Appendix —TE . —* page 16 / April 2013 ctivity
Slide 17: Non-GAAP Measures
Non-GAAP Measures “Organic Sales Growth,” “Adjusted Gross Margin,” “Adjusted Gross Margin Percentage,” “Adjusted Operating Income,” “Adjusted Operating Margin,” “Adjusted Other Income, Net,” “Adjusted Income Tax Expense,” “Adjusted Effective Tax Rate,” ”Adjusted Income from Continuing Operations,” “
Slide 18: Non-GAAP Measures (cont.)
Non-GAAP Measures (cont.) We present income tax expense after adjusting for the tax effect of special items including charges related to restructuring and other charges, acquisition related charges, impairment charges, other income or charges, and certain significant special tax items, if any (“Adju
Slide 19: Non-GAAP Measures (cont.)
Non-GAAP Measures (cont.) Net capital expenditures are subtracted because they represent long-term commitments. Voluntary pension contributions are subtracted from the GAAP measure because this activity is driven by economic financing decisions rather than operating activity. Certain special items,
Slide 20: Net Sales Growth Reconciliation – Q2 13 vs. Q2 12
Net Sales Growth Reconciliation – Q2 13 vs. Q2 12 Percentage of Change in Net Sales for the Quarter Ended March 29, 2013 Segm ent's Total versus Net Sales for the Quarter Ended March 30, 2012 Net Sales for the Acquisition/ Quarter Ended Organic (1) Translation (2) Divestiture Total March 29, 2013 ($
Slide 21: Net Sales Growth Reconciliation – Q2 13 vs. Q1 13
Net Sales Growth Reconciliation – Q2 13 vs. Q1 13 Percentage of Change in Net Sales for the Quarter Ended March 29, 2013 Segm ent's Total versus Net Sales for the Quarter Ended Decem ber 28, 2012 Net Sales for the Quarter Ended Organic (1) Translation (2) Divestiture Total March 29, 2013 ($ in m ill
Slide 22: Net Sales Growth Reconciliation by Geography – Q2 13 vs. Q2 12
Net Sales Growth Reconciliation by Geography – Q2 13 vs. Q2 12 Change in Net Sales for the Quarter Ended March 29, 2013 versus Net Sales for the Quarter Ended March 30, 2012 Acquisition / Organic (1) Translation (2) Divestiture Total ($ in millions) Americas $ (62) (6.0)% $ (10) $ 82 $ 10 1.0% EMEA
Slide 23: Non-GAAP Reconciliation for Quarter Ended March 29, 2013
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 29, 2013 Adjustm ents Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges (1) Charges, Net Item s (2) (Non-GAAP) (3) ($ in m illions, except per share data) Operating Income: T
Slide 24: Non-GAAP Reconciliation for Quarter Ended March 30, 2012
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 30, 2012 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 Solut
Slide 25: Non-GAAP Reconciliation for Quarter Ended December 28, 2012
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended December 28, 2012 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 (Lo
Slide 26: Non-GAAP Reconciliation for Quarter Ended June 29, 2012
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended June 29, 2012 Adjustm ents Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges (1) Charges, Net Item s (2) (Non-GAAP) (3) ($ in m illions, except per share data) Operating Income: Tr
Slide 27: Non-GAAP Reconciliation for Year Ended September 28, 2012
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 28, 2012 Adjustm ents Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges (1) Charges, Net Item s (2) (Non-GAAP) (3) ($ in m illions, except per share data) Operating Income:
Slide 28: Gross Margin & Gross Margin Percentage Reconciliation
Gross Margin & Gross Margin Percentage Reconciliation For the Quarters Ended Decem ber 30, March 30, June 29, Septem ber 28, Decem ber 28, March 29, 2011 2012 2012 2012 2012 2013 (in millions) Net sales $ 3,170 $ 3,249 $ 3,499 $ 3,364 $ 3,134 $ 3,265 Cost of sales 2,227 2,228 2,481 2,300 2,145 2,213
Slide 29: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow For the Six Months Ended March 29, March 30, 2013 2012 (in millions) Reconciliation of Free Cash Flow: Net cash provided by continuing operating activities $ 839 $ 676 Capital expenditures, net (249) (263) Pre-separation tax payments, net 67 18 Payments to settle acq