Slide 1: Q3 2011 Earnings Call
Q3 2011 Earnings Call July 20, 2011
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 United States Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and
Slide 3: Strong Q3 Exceeded Guidance
Strong Q3 Exceeded Guidance Sales of $3.7 billion – up 21% versus prior year; up 5% organically Strength in transportation and telecom networks more than offset impact of Japan earthquake Network Solutions sales at $1 billion Adjusted EPS of $0.78 – up 11% versus prior year ADC progressing well; int
Slide 4: Q3 Revenue Summary
Q3 Revenue Summary Y/Y Change ($ in Millions) Q/Q Segment Q3 FY11 Q2 FY11 Q3 FY10 Change Transportation Solutions $ 1,426 $ 1,357 $ 1,214 17% 5% Communications & Industrial Solutions 1,297 1,208 1,258 3% 7% Network Solutions 1,006 907 612 64% 11% Total $ 3,729 $ 3,472 $ 3,084 21% 7% Consumer vs. Ind
Slide 5: Transportation Solutions
Transportation Solutions ($ in Millions) Q3 Q3 Actual Organic FY11 FY10 Growth Growth Automotive $1,239 $1,053 18% 11% Aerospace, Defense & Marine 187 161 16% 12% Transportation Solutions $1,426 $1,214 17% 11% Automotive Organic sales growth including Japan earthquake impact Europe up 17% Asia flat
Slide 6: Communications & Industrial Solutions
Q3 Q3 Actual Organic ($ in Millions) FY11 FY10 Growth Growth Industrial $403 $372 8% 3% Data Communications 267 253 6% 1% Appliance 212 201 5% - Consumer Devices 170 202 (16)% (18)% Computer 132 129 2% - Touch Solutions 113 101 12% 7% Communications & Industrial Solutions $1,297 $1,258 3% (1)% Consu
Slide 7: Network Solutions
Q3 Q3 Actual Organic ($ in Millions) FY11 FY10 Growth Growth Telecom Networks $450 $141 219% 24% Energy 225 182 24% 13% Enterprise Networks 184 119 55% 6% Subsea Communications 147 170 (14)% (14)% Network Solutions $1,006 $612 64% 7% Network Solutions Organic sales growth is a non-GAAP measure; see
Slide 8: Q3 Financial Summary
Q3 Financial Summary ($ in Millions, except per share amounts) Q3 FY11 Q2 FY11 Q3 FY10 Net Sales $ 3,729 $ 3,472 $ 3,084 Operating Income $ 471 $ 405 $ 467 Restructuring & Other Charges (Credits) 5 (4) 3 Acquisition Related Charges 12 48 - Other Items - - (7) Adj. Operating Income $ 488 $ 449 $ 463
Slide 9: Q3 Operating Results
Q3 Operating Results Adjusted Gross Margin Performance Q3 gross margin negatively impacted by Japan earthquake and metals Expect Q4 adjusted gross margin of ~31% Operating Expense ($ in Millions) Q3 FY11 Q3 FY10 RD&E $ 188 $ 147 SG&A 452 375 Total $ 640 $ 522 % of Sales RD&E 5.0% 4.8% SG&A 12.1% 12.
Slide 10: Q3 Other Items
Q3 Other Items ($ in Millions) Q3 FY11 Q3 FY10 Interest Expense, Net $ (35) $ (34) Other Income (Expense), Net $ (5) $ 42 Adj. Other Income (Expense), Net $ 9 $ 9 Income Tax Expense $ (74) $ (144) Effective Tax Rate 17% 30% Adj. Income Tax Expense $ (114) $ (118) Adj. Effective Tax Rate 25% 27% Net
Slide 11: Q3 Free Cash Flow and Working Capital
Q3 Free Cash Flow and Working Capital ($ in Millions) Q3 FY11 Q3 FY10 Cash from Continuing Operations $ 438 $ 375 Capital Expenditures (144) (92) Proceeds from Sale of PP&E 46 - Free Cash Flow $ 340 $ 283 Acquisition Related Cash Spend $ 12 - Cash Taxes $ 58 $ 25 A/R - $ $ 2,614 $ 2,216 Days Sales O
Slide 12: Q3 Liquidity and Debt
Q3 Liquidity and Debt ($ in Millions) Q3 FY11 Q3 FY10 Beginning Cash Balance $ 1,239 $ 1,839 Free Cash Flow 340 283 Debt Repayment (95) - Dividends (79) (72) Share Repurchases (259) (208) Sale of ADC Patents 68 - Other (2) (27) Ending Cash Balance $ 1,212 $ 1,815 Total Debt $ 2,655 $ 2,415 Liquidity
Slide 13: Q3 Orders Summary
Q3 Orders Summary ($ in Millions) Y/Y Q/Q Segment Q3 FY11 Q2 FY11 Q3 FY10 Change Change Transportation Solutions $ 1,433 $ 1,415 $ 1,230 17% 1% Book to Bill 1.00 1.04 1.01 Communications & Industrial Solutions 1,292 1,292 1,452 (11)% 0% Book to Bill 1.00 1.07 1.15 Network Solutions Excl. Subsea Comm
Slide 14: Q4 & FY11 Outlook
Q4 & FY11 Outlook^ Q4 FY11 Outlook^ ($ in Millions, except per share amounts) ($ in Millions, except per share amounts) Sales Sales $14,400 $3,900 to to $14,300 $4,000 Growth vs Prior Year: Growth vs Prior Year: Actual 19% 24% 18% 28% Organic* 3% 6% Adjusted EPS* $0.84 toto $3.10 $0.88 Growth vs Pri
Slide 15: Q & A
Q & A page 15/ July 20, 2011
Slide 16: Appendix
Appendix page 16/ July 20, 2011
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 Income Tax Rate,” ”Adjusted Income from Continuing Operati
Slide 18: Non-GAAP Measures (cont.)
Non-GAAP Measures (cont.) We have presented effective income tax rate after adjusting for the tax effect of special items including charges related to restructuring and other charges, acquisition related charges, and certain significant special tax items (“Adjusted Effective Tax Rate”). We present A
Slide 19: Non-GAAP Measures (cont.)
Non-GAAP Measures (cont.) The limitation associated with using FCF is that it subtracts cash items that are ultimately within management’s and the Board of Directors’ discretion to direct and that therefore may imply that there is less or more cash that is available for the company's programs than t
Slide 20: Net Sales Growth Reconciliation – Q3 vs. Q3
Net Sales Growth Reconciliation – Q3 11 vs. Q3 10 Translation (2) Acquisition (Divestiture) Transportation Solutions (3): Automotive 111 $ 10.6 % 95 $ (20) $ 186 $ 17.7 % 87 % Aerospace, Defense, and Marine 19 11.5 7 - 26 16.1 13 Total 130 10.7 102 (20) 212 17.5 100 % Communications and Industrial S
Slide 21: Net Sales Growth Reconciliation – Q3 vs. Q2
Net Sales Growth Reconciliation – Q3 11 vs. Q2 11 Translation (2) Acquisition Transportation Solutions (3): Automotive 4 $ 0.4 % 40 $ 1 $ 45 $ 3.8 % 87 % Aerospace, Defense, and Marine 20 13.0 4 - 24 14.7 13 Total 24 2.0 44 1 69 5.1 100 % Communications and Industrial Solutions (3): Industrial 17 4.
Slide 22: Non-GAAP Reconciliation – Quarter Ended June 24, 2011
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended June 24, 2011 Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges (1) Charges, Net Items (2) (Non-GAAP) (3) Operating Income: Transportation Solutions 211 $ - $ (13) $ - $ 198 $ Comm
Slide 23: Non-GAAP Reconciliation – Quarter Ended June 25, 2010
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended June 25, 2010 Restructuring and Other Tax Other Items, Adjusted U.S. GAAP Charges, Net Items (1) Net (2) (Non-GAAP) (3) Operating Income: Transportation Solutions 159 $ 6 $ - $ - $ 165 $ Communications and
Slide 24: Non-GAAP Reconciliation – Quarter Ended March 25, 2011
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 25, 2011 Acquisition Restructuring Related and Other Adjusted U.S. GAAP Charges (1) Charges, Net (Non-GAAP) (2) Operating Income: Transportation Solutions 211 $ - $ (6) $ 205 $ Communications and Ind
Slide 25: Non-GAAP Reconciliation – Quarter Ended September 24, 2010
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended September 24, 2010 Acquisition Restructuring and Integration and Other Tax Adjusted U.S. GAAP Costs Charges, Net Items (1) (Non-GAAP) (2) Operating Income: Transportation Solutions 108 $ - $ 51 $ - $ 159 $
Slide 26: Non-GAAP Reconciliation – Year Ended September 24, 2010
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 24, 2010 Restructuring and Other Tax Other Items, Adjusted U.S. GAAP Charges, Net (1) Items (2) Net (3) (Non-GAAP) (4) Operating Income: Transportation Solutions 515 $ 94 $ - $ - $ 609 $ Communicati
Slide 27: Gross Margin & Gross Margin Percentage Reconciliation
Gross Margin & Gross Margin Percentage Reconciliation September 26, September 25, September 24, December 24, March 25, June 24, 2008 2009 2010 2010 2011 2011 ($ in millions) Net sales 14,373 $ 10,256 $ 12,070 $ 3,200 $ 3,472 $ 3,729 $ Cost of sales 10,200 7,720 8,293 2,179 2,428 2,604 Gross margin 4