Slide 1: Q2 2015 Earnings
Q2 2015 Earnings April 22, 2015
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 subject
Slide 3: Q2 2015 Summary
Q2 2015 Summary Strong Q2 Results • Sales up 4% and 6% organic Y/Y to $3.08B, vs. implied Guidance of $3.16B • Adjusted EPS up 6% to $0.91 Y/Y, above implied Guidance of $0.89 • FX headwinds: $246M Revenue and $0.09 EPS Y/Y • Free Cash Flow $217M; Returned $261M to shareholders • Broadband Networks
Slide 4: FY 2015 Summary
FY 2015 Summary Continuing to Hold Full Year Outlook Despite Additional FX headwinds • Adjusted EPS range of $3.60 - $3.74, up 11% vs prior year at Mid-Point • FY15 organic revenue guidance up 6% vs prior year • Strong performance in harsh businesses and SubCom • FY15 FX headwinds total $1.01B in re
Slide 5: Transportation Solutions
Transportation Solutions $ in Millions Revenue Business Performance Actual Y/Y Growth Rates Actual Organic Up 2% Automotive $1,215 (6)% 4% $1,571 $1,610 Organic Commercial 208 (9)% (1)% Transportation Up 3% Q2 2014 Q2 2015 Sensors 187 282% 2%* Actual Organic Transportation $1,610 2% 3% Solutions Ord
Slide 6: Industrial Solutions
Industrial Solutions $ in Millions Revenue Business Performance Actual Y/Y Growth Rates Actual Organic Up 1% Industrial $324 (2)% 6% $789 $797 Equipment Organic Aerospace, Defense, Oil & 303 11% 6% Up 5% Q2 2014 Q2 2015 Gas Actual Organic Energy 170 (9)% 4% Orders $828 -% 3% Industrial $797 1% 5% So
Slide 7: Communications Solutions
Communications Solutions $ in Millions Revenue Business Performance Actual Y/Y Growth Rates Actual Organic Up 12% $604 $675 Data & Devices $346 (10)% (6)% Organic Appliances 159 (1)% 6% Up 16% Q2 2014 Q2 2015 SubCom 170 181% 181% Communications $675 12% 16% Actual Organic Solutions Orders $522 (14)%
Slide 8: Q2 Financial Summary
Q2 Financial Summary ($ in Millions, except per share amounts) Q2 FY14 Q2 FY15 Net Sales $ 2,964 $ 3,082 Operating Income $ 471 $ 448 Acquisition Related Charges 1 22 Restructuring & Other Charges, net (1) 36 Adjusted Operating Income $ 471 $ 506 Operating Margin 15.9% 14.5% Adjusted Operating Margi
Slide 9: TE Operating Advantage (TEOA)
TE Operating Advantage (TEOA) $ in Millions Adjusted Gross Margin Percentage Adjusted Operating Margin 33.6% 34.3% 16.0% 15.9% 16.4% Q2 2014 Q2 2015 Q2 2014 Q2 2015 Free Cash Flow • Adjusted Gross Margin increases 70 bps with productivity gains and leverage on additional volume • Adjusted Operating
Slide 10: Q3 Outlook
Q3 Outlook* Revenue Guidance Highlights Transportation Up Low Single Digits • Continued strong performance in Transportation with Solutions Up Mid Single Digits Organic growth well in excess of 1% auto production growth • Expect continued strength in Commercial Aerospace Industrial Down Low Single D
Slide 11: FY15 Outlook
FY15 Outlook* Revenue Guidance Highlights • Strong performance in our harsh environment business Transportation Up Mid Single Digits Solutions • Transportation growth expected up mid single digits on Up Mid Single Digits Organic global auto production growth of ~2% Y/Y • Growing momentum in Sensors
Slide 12: Additional Information
Additional Information 12
Slide 13: 8-K Recast Summary
8-K Recast Summary For the Q uarte rs Ende d For the Ye ars Ende d (in millions) De ce mbe r 28, March 29, June 28, Se pte mbe r 27, De cembe r 27, March 28, June 27, Se pte mbe r 26, De ce mbe r 26, Se ptembe r 27, Se pte mbe r 26, Se gment and Industry End Marke t 2012 2013 2013 2013 2013 2014 201
Slide 14: Guidance Bridge Q2 2015
Guidance Bridge Q2 2015 (performance versus implied guidance) Adjusted Sales EPS Q2 2015 January Guidance $3,600 $1.00 Discontinued Operations (440) (0.11) (Implied in January Guidance) Q2 2015 Continuing Operations $3,160 $.89 Implied January Guidance FX (40) - Operational Performance (38) .02 Q2 2
Slide 15: Y/Y Q2 2015 Continuing Ops Performance
Y/Y Q2 2015 Continuing Ops Performance Adjusted Sales EPS Q2 2014 Results $3,431 $.95 (Previously Reported) Discontinued Operations (467) (0.09) Q2 2014 Results $2,964 $.86 (Recast in March 23, 2015 Form 8-K) FX Impact (246) (0.09) Operational Performance 364 .14 Q2 2015 Continuing Operations $3,082
Slide 16: Guidance Bridge FY15
Guidance Bridge FY15 • January Guidance of $4.20 assumed: Adjusted • Continuing Operations $3.67 Sales EPS • Divestiture $0.53 FY15 October Guidance $15,000 $4.20 • Form 8-K Filed March 23, 2015 FX (500) (0.20) Regarding Discontinued Operations • FY14 Adjusted EPS Contribution Operational Performanc
Slide 17: Y/Y FY15 Expected Performance
Y/Y FY15 Expected Performance Adjusted Sales EPS FY14 Results $13,912 $3.79 (Previously Reported) Discontinued Operations (1,939) (0.48) FY14 Results $11,973 $3.31 (Recast in March 23, 2015 Form 8-K) FX Impact (1,015) (0.38) Operational Performance 1,542 .74 FY15 Continuing Operations $12,500 $3.67
Slide 18: Q2 Balance Sheet & Cash Flow Summary
Q2 Balance Sheet & Cash Flow Summary Free Cash Flow and Working Capital Liquidity, Cash & Debt ($ in Millions) Q2 2015 Q2 2014 Liquidity Summary ($ in Millions) Q2 2015 Q2 2014 Cash from Continuing Operations $350 $411 Capital expenditures, net (155) (146) Beginning Cash Balance $868 $1,397 Pre-sepa
Slide 19: Appendix
Appendix 19
Slide 20: Non-GAAP Measures
Non-GAAP Measures “Organic Sales Growth,” “Adjusted Gross Margin,” “Adjusted Gross Margin Percentage,” “Adjusted Operating Income,” “Adjusted Operating Margin,” “Adjusted Other Income, Net,” “Adjusted Income Tax Expense,” “Adjusted Effective Tax Rate,” ”Adjusted Income from Continuing Operations,” “
Slide 21: Non-GAAP Measures (cont.)
Non-GAAP Measures (cont.) We present effective income tax rate after adjusting for the tax effect of special items including charges related to restructuring and other charges, acquisition related charges, impairment charges, other income or charges, and certain significant special tax items, if any
Slide 22: Segment Summary
Segment Summary Q2 FY2015 ($ in millions) For the Quarters Ended Ne t Sale s Adjuste d Actual O rganic O pe rating Segment Q 2 FY15 Q 2 FY14 Growth Growth (1) Margin (1) Transportation Solutions $ 1,610 $ 1,571 2.5 % 3.0 % 20.7 % Industrial Solutions 797 789 1.0 5.2 14.1 Communications Solutions 675
Slide 23: Reconciliation of Net Sales Growth– Q2 15 vs. Q2 14
Reconciliation of Net Sales Growth– Q2 15 vs. Q2 14 Pe rce ntage of Se gme nt's Total Change in Ne t Sale s for the Q uarte r Ende d March 27, 2015 Ne t Sale s for the versus Ne t Sale s for the Q uarte r Ende d March 28, 2014 Q uarte r Ende d (1) (2) O rganic Translation Acquisitions Total March 27
Slide 24: Reconciliation of Net Sales Growth– YTD Q2 15 vs. YTD Q2 14
Reconciliation of Net Sales Growth– YTD Q2 15 vs. YTD Q2 14 Pe rce ntage of Segme nt's Total Change in Ne t Sale s for the Six Months Ende d March 27, 2015 Ne t Sale s for the ve rsus Ne t Sale s for the Six Months Ended March 28, 2014 Six Months Ende d O rganic (1) Translation (2) Acquisitions Tota
Slide 25: Net Sales Growth by Segment and Geography – Q2 15 vs. Q2 14
Reconciliation of Net Sales Growth by Segment and Geography – Q2 15 vs. Q2 14 Change in Net Sale s for the Q uarter Ende d March 27, 2015 versus Net Sales for the Q uarter Ended March 28, 2014 O rganic (1) Translation (2) Acquisitions Total ($ in millions) Transportation Solutions: EMEA $ 20 2.9 % $
Slide 26: Reconciliation for the Six Months Ended March 27, 2015
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Six Months Ended March 27, 2015 Adjustme nts Acquisition Re structuring Re late d and O ther Tax Adjuste d U.S. GAAP C harge s (1) Charge s, Ne t (2) Items (3) (Non-GAAP) (4) ($ in millions, e xce pt pe r share data) Op
Slide 27: Reconciliation for the Quarter Ended March 27, 2015
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 27, 2015 Adjustments Acquisition Re structuring Relate d and O the r Tax Adjusted U.S. GAAP Charge s (1) Charge s, Ne t (2) Items (3) (Non-GAAP) (4) ($ in millions, e xcept per share data) Operating
Slide 28: Reconciliation for the Quarter Ended December 26, 2014
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended December 26, 2014 Adjustme nts Acquisition Re structuring Re late d and O the r Tax Adjusted U.S. GAAP Charge s (1) Charge s, Ne t Ite ms (2) (Non-GAAP) (3) ($ in millions, e xce pt per share data) Operati
Slide 29: Reconciliation for the Year Ended September 26, 2014
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 26, 2014 Adjustments Acquisition Re structuring Related and O ther Tax Adjusted U.S. GAAP C harges (1) C harges, Ne t Items (2) (Non-GAAP) (3) ($ in millions, e xce pt per share data) Operating Inco
Slide 30: Reconciliation for the Quarter Ended September 26, 2014
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended September 26, 2014 Adjustme nts Acquisition Re structuring Re late d and O the r Tax Adjuste d U.S. GAAP Charge s (1) Charge s, Ne t Ite ms (2) (Non-GAAP) (3) ($ in millions, e xce pt pe r share data) Oper
Slide 31: Reconciliation for the Quarter Ended June 27, 2014
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended June 27, 2014 Adjustme nts Acquisition Re structuring Re late d and O the r Adjuste d U.S. GAAP Charge s Charge s, Ne t (Non-GAAP) (1) ($ in millions, e xcept per share data) Operating Income: Transportati
Slide 32: Reconciliation for the Six Months Ended March 28, 2014
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Six Months Ended March 28, 2014 Adjustme nts Acquisition Re structuring Relate d and O ther Tax Adjuste d U.S. GAAP C harges Charges, Ne t Items (1) (Non-GAAP) (2) ($ in millions, e xce pt per share data) Operating Inco
Slide 33: Reconciliation for the Quarter Ended March 28, 2014
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 28, 2014 Adjustme nts Re structuring Acquisition and O the r Re late d Charge s Tax Adjuste d U.S. GAAP Charge s (Cre dits), Ne t Ite ms (1) (Non-GAAP) (2) ($ in millions, e xce pt pe r share data) O
Slide 34: Reconciliation for the Quarter Ended December 27, 2013
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended December 27, 2013 Adjustments Restructuring and O the r Tax Adjuste d (1) U.S. GAAP Charge s, Net Items (Non-GAAP) (2) ($ in millions, e xce pt per share data) Operating Income: Transportation Solutions $
Slide 35: Reconciliation for the Year Ended September 27, 2013
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 27, 2013 Adjustme nts Acquisition Re structuring Re late d and O the r Tax Adjusted (1) U.S. GAAP Charge s Charge s, Ne t Ite ms (Non-GAAP) (2) ($ in millions, e xce pt pe r share data) Operating In
Slide 36: Reconciliation for the Quarter Ended September 27, 2013
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended September 27, 2013 Adjustme nts Acquisition Restructuring Re lated and O the r Tax Adjuste d U.S. GAAP Charge s Charges, Net Ite ms (1) (Non-GAAP) (2) ($ in millions, e xce pt pe r share data) Operating In
Slide 37: Reconciliation for the Quarter Ended June 28, 2013
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended June 28, 2013 Adjustme nts Acquisition Re structuring Re lated and O ther Tax Adjusted U.S. GAAP Charge s Charge s, Net Items (1) (Non-GAAP) (2) ($ in millions, e xcept pe r share data) Operating Income: T
Slide 38: Reconciliation for the Quarter Ended March 29, 2013
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 29, 2013 Adjustments Acquisition Re structuring Re lated and O ther Tax Adjuste d U.S. GAAP Charge s C harge s, Ne t Items (1) (Non-GAAP) (2) ($ in millions, e xcept pe r share data) Operating Income
Slide 39: Reconciliation for the Quarter Ended December 28, 2012
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended December 28, 2012 Adjustme nts Acquisition Re structuring Re late d and O the r Tax Adjuste d U.S. GAAP Charge s Charge s, Ne t Ite ms (1) (Non-GAAP) (2) ($ in millions, e xce pt pe r share data) Operating
Slide 40: Reconciliation of Gross Margin & Gross Margin Percentage
Reconciliation of Gross Margin & Gross Margin Percentage For the Q uarte rs Ende d For the Six Months Ende d March 27, March 28, March 27, March 28, 2015 2014 2015 2014 ($ in millions) Net Sales $ 3,082 $ 2,964 $ 6,131 $ 5,826 Cost of Sales 2,031 1,969 4,060 3,886 Gross Margin 1,051 995 2,071 1,940
Slide 41: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow For the Q uarters Ended For the Six Months Ended March 27, March 28, March 27, March 28, 2015 2014 2015 2014 (in millions) Net cash provided by continuing operating activities $ 350 $ 411 $ 555 $ 740 Capital expenditures, net (155) (146) (285) (260) Payments (receipt
Slide 42: Forward-Looking Non-GAAP Reconciliation for Q2 2015
Reconciliation of Forward-Looking Non-GAAP Financial Measures to Forward-Looking GAAP Financial Measures for Q2 2015 Re cast (1) O utlook for the O utlook for the Q uarte r Ende d Q uarte r Ende d March 27, 2015 March 27, 2015 As of January 28, As of January 28, 2015 2015 Diluted earnings per share
Slide 43: Forward-Looking Non-GAAP Reconciliation for Q3 2015 and Fiscal 2015
Reconciliation of Forward-Looking Non-GAAP Financial Measures to Forward-Looking GAAP Financial Measures for Q3 2015 and Fiscal 2015 As of April 22, 2015 O utlook for the Q uarte r Ending June 26, O utlook for 2015 Fiscal 2015 Diluted earnings per share from continuing operations attributable to TE
Slide 44: Forward-Looking Non-GAAP Reconciliation for Fiscal 2015
Reconciliation of Forward-Looking Non-GAAP Financial Measures to Forward-Looking GAAP Financial Measures for Fiscal 2015 Recast (1) O utlook for O utlook for O utlook for O utlook for Fiscal 2015 Fiscal 2015 Fiscal 2015 Fiscal 2015 As of O ctober 29, As of January 28, As of January 28, As of April 2