Slide 1: Forward-Looking Statements and Non-GAAP Measures
Forward-Looking Statements and Non-GAAP Measures Forward-Looking Statements -- This presentation may contain 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
Slide 2: Summary
Summary Good start to FY 2011 Sales of $3.2 billion – up 11% versus prior year and at high end of guidance Adjusted operating margin of 14.5% - up 300 bps versus prior year Adjusted EPS of $0.73 – up 55% from $0.47 in prior year ADC acquisition closed in December – minimal impact on overall adjusted
Slide 3: ADC Update
ADC Update ~40% ~80% Cost Synergies ~$100 million total Cash Acquisition-Related Spending* $110-130 million cash costs Strategic Rationale Creates the leading connectivity product range for the broadband network Strong fiber portfolio Wireless connectivity via Distributed Antenna System (DAS) techno
Slide 4: Strong Year-On-Year Growth Across All Segments
Strong Year-On-Year Growth Across All Segments Q1 Revenue Summary ($ in Millions) Segment Q1 FY11 Q1 FY10 Q4 FY10 Y/Y Change Q/Q Change Transportation Connectivity $ 1,311 $ 1,179 $ 1,208 11% 9% Communications & Industrial Solutions 1,223 1,090 1,315 12% (7%) Network Solutions 666 623 614 7% 8% Tota
Slide 5: Transportation Connectivity
Transportation Connectivity Automotive Auto Production up 5% Strong organic sales growth in all regions Europe up 22% Asia up 12% Americas up 12% Higher content Share gains ($ in Millions) Organic sales growth is a non-GAAP measure; see Appendix for description and reconciliation. Aerospace, Defense
Slide 6: Communications & Industrial Solutions
Appliance Increased demand in emerging markets and “energy star” incentives in North America Computer Lower volumes in PC market Touch Systems Decrease in retail project revenues Communications & Industrial Solutions ($ in Millions) Organic sales growth is a non-GAAP measure; see Appendix for descri
Slide 7: Network Solutions
Network Solutions ($ in Millions) Organic sales growth is a non-GAAP measure; see Appendix for description and reconciliation. Energy Early stages of recovery in energy infrastructure Subsea Communications FY 2011 revenue in line with expectations Expect revenues of $600 to $700 million Strong RFP a
Slide 8: Q1 Financial Summary
Q1 Financial Summary $59 Total 11 Noncash $48 Cash ADC Charges ($ in Millions, except per share amounts) Adjusted Operating Income, Adjusted Operating Margin and Adjusted EPS are non-GAAP measures; see Appendix for description and reconciliation. ADC impact was $51 million in Sales, No impact on Adj
Slide 9: Q1 Operating Results
Q1 Operating Results Gross Margin Performance Strong flow-through on incremental sales Expect gross margin of ~31% for Q2 Includes ~30 basis point impact of metal headwinds vs. Q1 Operating Expense Performance Operating expenses at expected levels Expect RD&E of ~5% and SG&A of ~13% in Q2 ADC adds ~
Slide 10: Q1 Other Items
Q1 Other Items Net Interest Expense Expect ~$36 million in Q2 including interest on $250 million debt issued in Q1 Other Income Relates to Tax Sharing Agreement Expect ~$12 million in Q2 Income Taxes on Adjusted Income Expect adjusted tax rate at Q1 levels Adjusted Income Tax Expense and Adjusted Ef
Slide 11: Q1 Free Cash Flow and Working Capital
Q1 Free Cash Flow and Working Capital ADC impact to Free Cash Flow was ~$50 million outflow $35 million of acquisition-related spend Expect ~$105 million of acquisition-related cash spend in FY 2011 Working capital days up slightly due to inventory Expect inventory days to move back to lower 60-day
Slide 12: Q1 Liquidity and Debt
Q1 Liquidity and Debt ($ in Millions) ADC acquisition Cash Outflow $(1.28) billion purchase price $ 0.55 billion of ADC cash acquired $ 0.72 billion Q1 cash outflow Existing debt of ~$650 million Offers to purchase initiated in Q1, expect completion in Q2 Debt Issued $250 million principal amount of
Slide 13: Q1 Orders Summary
Q1 Orders Summary ($ in Millions) Orders Strengthened Throughout the Quarter Segment Q1 FY11 Q4 FY10 Q1 FY10 Y/Y Change Q/Q Change Transportation Connectivity $1,398 $1,221 $1,262 11% 14% Book to Bill 1.07 1.01 1.07 Communications & Industrial Solutions 1,216 1,244 1,232 (1%) (2%) Book to Bill 0.99
Slide 14: Q2 & Full Year 2011 Outlook
Q2 & Full Year 2011 Outlook* * Assumes current commodity and currency exchange rates Organic growth driven by: Broad-based growth of 11 to 15% vs. 2010 SubCom ~$150 million, down ~28% vs. 2010 ADC contribution: ~$280 million of revenue ~900 basis points of incremental growth ~ $0.02 of adjusted EPS
Slide 15: Summary
Summary Global economy continues to recover Strong Auto, Industrial and Network Infrastructure markets DataComm and Consumer soft, expect 2nd half recovery ADC creates world leader in broadband connectivity Expect $0.12 full-year adjusted EPS benefit with $0.02 in 1st half, $0.10 in 2nd half Metals
Slide 16: Q & A
Q & A
Slide 17: Appendix
Appendix
Slide 18: Non-GAAP Measures
Non-GAAP Measures Non-GAAP Measures “Organic Sales Growth,” “Adjusted Operating Income,” “Adjusted Operating Margin,” “Adjusted Other Income, Net,” “Adjusted Income Tax Expense,” “Adjusted Income from Continuing Operations,” “Adjusted Earnings Per Share,” and “Free Cash Flow” (FCF) are non-GAAP meas
Slide 19: Non-GAAP Measures (cont.)
Non-GAAP Measures (cont.) The company has 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, other income or charges, and certain significant special tax items (“Adjusted E
Slide 20: 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 21: Net Sales Growth Reconciliation – Q1 vs. Q1
Net Sales Growth Reconciliation – Q1 11 vs. Q1 10 (3) Industry end market information about net sales is presented consistently with our internal management reporting and may be periodically revised as management deems necessary. (2) Represents the change in net sales resulting from changes in forei
Slide 22: Net Sales Growth Reconciliation – Q1 vs. Q4
Net Sales Growth Reconciliation – Q1 11 vs. Q4 10 (3) Industry end market information about net sales is presented consistently with our internal management reporting and may be periodically revised as management deems necessary. (2) Represents the change in net sales resulting from changes in forei
Slide 23: Reconciliation for the Quarter Ended December 24, 2010
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended December 24, 2010 Adjustments Acquisition Restructuring Related and Other Adjusted U.S. GAAP Charges (1) Charges, Net (Non-GAAP) (2) ($ in millions, except per share data) Operating Income: Transportation
Slide 24: Reconciliation for the Quarter Ended December 25, 2009
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended December 25, 2009 Adjustments Restructuring and Other Adjusted U.S. GAAP Charges, Net (1) (Non-GAAP) (2) ($ in millions, except per share data) Operating Income: Transportation Connectivity $99 $37 $136 Co
Slide 25: Reconciliation for the Quarter Ended March 26, 2010
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 26, 2010 (2) See description of non-GAAP measures contained in this appendix. Adjustments Restructuring and Other Tax Adjusted U.S. GAAP Charges, Net Items (1) (Non-GAAP) (2) ($ in millions, except p
Slide 26: Reconciliation for the Quarter Ended September 24, 2010
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended September 24, 2010 (2) See description of non-GAAP measures contained in this appendix. Adjustments Acquisition Restructuring and Integration and Other Tax Adjusted U.S. GAAP Costs Charges, Net Items (1) (
Slide 27: Reconciliation for the Year Ended September 24, 2010
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 24, 2010 (3) Consists of $8 million of acquisition and integration costs and $7 million of credits related to pre-separation securities litigation. Adjustments Restructuring and Other Tax Other Item