Slide 1: Q4 2012 Earnings Call
Q4 2012 Earnings Call November 5, 2012
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: Q4 and Full Year Results
Q4 and Full Year Results Fourth Quarter • Sales of $3.36 billion – down 3% organically versus prior year • Adjusted EPS of $0.76 • Free Cash Flow of $569 million • Repurchased ~5.5 million shares Full Year • Sales of $13.3 billion – down 3% organically versus prior year • Adjusted EPS of $2.86 • Fre
Slide 4: Q4 Revenue Summary
Q4 Revenue Summary ($ in M illions) Q4 FY11 Y/Y Q/Q Segment Q4 FY12 Q3 FY12 (13 weeks) Change Change Transportation Solutions $ 1,538 $ 1,607 $ 1,423 8% (4)% Communications & Industrial Solutions 996 1,045 1,142 (13)% (5)% Network Solutions 830 847 921 (10)% (2)% Total $ 3,364 $ 3,499 $ 3,486 (3)% (
Slide 5: Transportation Solutions
Transportation Solutions Q4 Q4 FY11 Q3 Y/Y Q/Q Revenue Summary: FY12 (13 Weeks) FY12 Organic Organic ($ in M illions) Automotive $ 1,281 $ 1,237 $ 1,347 4% (3)% Aerospace, Defense & Marine 257 186 260 2% 1% Transportation Solutions $ 1,538 $ 1,423 $ 1,607 4% (2)% Automotive Aerospace, Defense & Mari
Slide 6: Communications & Industrial Solutions (CIS)
Communications & Industrial Solutions (CIS) Q4 Q4 FY11 Q3 Y/Y Q/Q Revenue Summary: FY12 (13 Weeks) FY12 Organic Organic ($ in M illions) Industrial $ 307 $ 384 $ 336 (17)% (8)% Consumer Devices 297 309 285 (3)% 4% Data Communications 223 255 229 (10)% (2)% Appliance 169 194 195 (9)% (13)% Communicat
Slide 7: Network Solutions
Network Solutions Q4 Q4 FY11 Q3 Y/Y Q/Q Revenue Summary: FY12 (13 weeks) FY12 Organic Organic ($ in M illions) Telecom Networks $ 337 $ 377 $ 342 (6)% ─% Energy 213 232 217 (2)% (1)% Enterprise Networks 169 181 172 ─% (1)% Subsea Communications 111 131 116 (15)% (5)% Network Solutions $ 830 $ 921 $
Slide 8: Q4 Financial Summary
Q4 Financial Summary ($ in Millions, except per share amounts) Q4 FY12 Q3 FY12 Q4 FY11 Q4 FY11 (14 weeks) (13 weeks) Net Sales $ 3,364 $ 3,499 $ 3,753 $ 3,486 Deutsch Charges Operating Income $ 401 $ 371 $ 445 $ 393 Q4 Q3 Restructuring & Other Charges 39 25 56 56 Cash $7 $26 Acquisition Related Char
Slide 9: Q4 Operating Results
Q4 Operating Results Adjusted Gross Margin Percentage 35% 33% Adjusted Gross Margin Performance 31% 29% • Gross margin percentage in line with 27% guidance 25% 23% • Expect Q1 adjusted gross margin of FY 2008 FY 2009 FY 2010 FY 2011 Q1 FY12 Q2 FY12 Q3 FY12 Q4 FY12 31%+ GM% 29.0% 24.5% 31.2% 31.3% 29
Slide 10: Q4 Other Items
Q4 Other Items ($ in Millions) Q4 FY12 Q4 FY11 • Net Interest Expense Interest Expense, Net $ (40) $ (38) Expect ~$32 million in Q1 Adjusted Other Income, Net $ 12 $ 14 • Other Income, Net Income Tax Benefit (Expense) $ 18 $ (100) Relates to Tax Sharing Agreement Effective Tax Rate (5)% 24% Expect ~
Slide 11: Q4 Free Cash Flow and Working Capital
Q4 Free Cash Flow and Working Capital ($ in Millions) Q4 FY12 Q4 FY11 Capital spending expected Cash from Continuing Operations $ 714 $ 608 to remain at 4-5% level Capital Expenditures (148) (204) Proceeds from Sale of PP&E 10 7 Pre-separation tax payments, net (7) 129 Free Cash Flow $ 569 $ 540 A/R
Slide 12: Q4 Liquidity, Cash and Debt
Q4 Liquidity, Cash and Debt ($ in Millions) Q4 FY12 Q4 FY11 Beginning Cash Balance $ 1,302 $ 1,212 • Dividends $0.21 per share paid in Free Cash Flow 569 540 September Dividends (89) (76) Net decrease in commercial paper (50) - • Share repurchases restarted in Q4 Pre-Separation tax payments, net 7 (
Slide 13: Segment Change Effective FY13
Segment Change Effective FY13 ($ in Billions) FY12 Sales – Current Segments FY12 Sales – New Segments Transportation Solutions $ 6.0 Transportation Solutions $ 5.1 Automotive/ Commercial Vehicle 5.1 Automotive/ Commercial Vehicle 5.1 Aerospace, Defense, & Marine 0.9 Industrial Solutions $ 3.0 Commun
Slide 14: Q4 Orders Summary
Q4 Orders Summary ($ in Millions) Q4 FY11 Y/Y Q/Q Segment Q4 FY12 Q3 FY12 (13 weeks) Change Change Transportation Solutions $ 1,482 $ 1,615 $ 1,445 3% (8)% Book to Bill 0.96 1.01 1.02 Communications & Industrial Solutions 911 1,011 984 (7)% (10)% Book to Bill 0.91 0.97 0.86 Network Solutions Excl. S
Slide 15: Q1 FY13 Outlook
Q1 FY 13 Outlook^ Q1 FY13 Outlook Versus prior year Full Year 2011 Outlook* ($ in Millions, except per share amounts) Sales $3,150 to $3,250 Transportation Solutions – about flat Growth vs Prior Year: Global auto production expected to be down slightly Actual (1)% 3% Asia up ~3% Organic* (4)% (1)% N
Slide 16: FY13 Outlook
FY 13 Outlook^ FY13 Outlook Versus prior year ($ in Millions, except per share amounts) Sales $13,400 to $14,000 Transportation Solutions Growth vs Prior Year: Global auto production expected to be about flat year over year Actual 1% 5% Organic* (2)% 3% Asia up ~2% North America up ~2% Adjusted EPS*
Slide 17: Summary
Summary Fiscal 2012 Recap • Improved operating leverage • Strong cash flow of $1.4 billion • Over $7 billion in free cash flow generated since 2007 with over 60% returned to shareholders • Strengthened the portfolio with the addition of Deutsch Fiscal 2013 • Entering the year with a very strong prod
Slide 18: Q & A
& A - = 7 E page 18 / November 2012 connectivity
Slide 19: Appendix
Appendix page 19 / November 2012
Slide 20: Non-GAAP Measures
Non-GAAP Measures “Organic Sales Growth,” “Adjusted Gross Margin,” “Adjusted Gross Margin Percentage,” “Adjusted Operating Income,” “Adjusted Operating Margin,” “Adjusted Other Income, Net,” “Adjusted Income Tax Expense,” “Adjusted Effective Tax Rate,” ”Adjusted Income from Continuing Operations,” “
Slide 21: Non-GAAP Measures (cont.)
Non-GAAP Measures (cont.) We present income tax expense after adjusting for the tax effect of special items including charges related to restructuring and other charges, acquisition related charges, impairment charges, other income or charges, and certain significant special tax items, if any (“Adju
Slide 22: Non-GAAP Measures (cont.)
Non-GAAP Measures (cont.) Net capital expenditures are subtracted because they represent long-term commitments. Voluntary pension contributions are subtracted from the GAAP measure because this activity is driven by economic financing decisions rather than operating activity. Certain special items,
Slide 23: Net Sales Reconciliation – Q4 12 vs. Q3 12
Net Sales Reconciliation – Q4 12 vs. Q3 12 Percentage of Segm ent's Total Change in Net Sales for the Quarter Ended Septem ber 28, 2012 Net Sales for the versus Net Sales for the Quarter Ended June 29, 2012 Quarter Ended Translation Septem ber 28, Organic (1) (2) Total 2012 ($ in m illions) (3) Tran
Slide 24: Net Sales Reconciliation – Q4 12 vs. Q4 11
Net Sales Reconciliation – Q4 12 vs. Q4 11 Percentage of Segm ent's Total Change in Net Sales for the Quarter Ended Septem ber 28, 2012 Net Sales for the versus Net Sales for the Quarter Ended Septem ber 30, 2011 Quarter Ended Translation Im pact of Septem ber 28, Organic (1) (2) 14th Week (3) Acqui
Slide 25: Net Sales Reconciliation – FY 12 vs. FY 11
Net Sales Reconciliation – FY 12 vs. FY 11 Percentage of Segm ent's Total Change in Net Sales for the Year Ended Septem ber 28, 2012 Net Sales for the versus Net Sales for the Year Ended Septem ber 30, 2011 Year Ended Translation Im pact of Septem ber 28, Organic (1) (2) 53rd Week (3) Acquisitions T
Slide 26: Reconciliation for the Quarter Ended September 28, 2012
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended September 28, 2012 Adjustm ents Acquisition Restructuring Related and Other Tax Adjusted (1) (2) U.S. GAAP Charges Charges, Net Item s (Non-GAAP) (3) ($ in m illions, except per share data) Operating Incom
Slide 27: Reconciliation for the Quarter Ended September 30, 2011
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended September 30, 2011 Adjustm ents Acquisition Restructuring Related and Other Adjusted U.S. GAAP Charges (1) Charges, Net (Non-GAAP) (2) ($ in m illions, except per share data) Operating Income: Transportati
Slide 28: Reconciliation for the 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 Items (2) (Non-GAAP) (3) ($ in millions, except per share data) Operating Income: Tr
Slide 29: Reconciliation for the Year Ended September 30, 2011
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 30, 2011 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 30: Reconciliation for the Quarter Ended December 30, 2011
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended December 30, 2011 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: Tr
Slide 31: Reconciliation for the 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 (1) (2) U.S. GAAP Charges Charges, Net Items (Non-GAAP) (3) ($ in millions, except per share data) Operating Income: Tran
Slide 32: Gross Margin and Gross Margin Percentage Reconciliation
Gross Margin and Gross Margin Percentage Reconciliation For the Years Ended For the Quarters Ended September 24, September 30, September 28, December 30, March 30, June 29, September 28, 2010 2011 2012 2011 2012 2012 2012 Net sales $ 11,681 $ 13,778 $ 13,282 $ 3,170 $ 3,249 $ 3,499 $3,364 Cost of sa
Slide 33: Reconciliation for the 13 Week Quarter Ended September 30, 2011
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the 13 Week Quarter Ended September 30, 2011 Adjustments Adjustm ent Acquisition Restructuring 14 Weeks 13 Weeks 14 Weeks Related and Other Adjusted Impact of Adjusted U.S. GAAP Charges (1) Charges, Net Tax Item s (Non-GAAP
Slide 34: Reconciliation for the 52 Week Year Ended September 30, 2011
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the 52 Week Year Ended September 30, 2011 Adjustments Adjustm ent Acquisition Restructuring 53 Weeks 52 Weeks 53 Weeks Related and Other Adjusted Impact of Adjusted U.S. GAAP Charges (1) Charges, Net Tax Item s (2) (Non-GAA