Slide 1: Q4 2010 Earnings Call
Q4 2010 Earnings Call October 28, 2010
Slide 2: Summary: Strong Q4 Results
Summary Strong Q4 Results Top end of Q4 FY10 guidance for sales and adjusted EPS Adjusted EPS of $0.72, up from $0.30 in prior year Adjusted operating margin of 14.2%, up 600 bps year-on-year Free cash flow of $443 million FY 2010 results show broad growth and improvement in operating leverage Sales
Slide 3: Q4 Revenue Summary
Q4 Revenue Summary Year-on-year and sequential increases across all segments, excluding expected decline in SubCom ($ in Millions) Segment Q4 FY10 Q4 FY09 Q3 FY10 Y/Y Change Q/Q Change Electronic Components 2,101 $ 1,632 $ 2,074 $ 29% 1% Network Solutions 469 436 442 8% 6% Specialty Products 422 362
Slide 4: Q4 Revenue by Segment
Q4 Revenue by Segment Electronic Components - Revenue $2,101 Million Network Solutions - Revenue $469 Million Automotive up 26% vs. prior year. Down 3% vs. Q3 due to seasonally lower production in EMEA and China. DataComm up 51% vs. prior year, and 9% vs. Q3 due to continued growth in enterprise/ br
Slide 5: Q4 Revenue by Segment (cont.)
Specialty Products - Revenue $422 Million Subsea Communications - Revenue $145 Million Revenue down 46% vs. prior year, and 14% sequentially. Backlog at quarter-end of $475M. Solid pipeline. Expect 2011 revenue of $600 to $700 million. Q4 Revenue by Segment (cont.) Aerospace, Defense & Marine up 16%
Slide 6: Q4 Financial Summary
Q4 Financial Summary ($ 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. Q4 FY10 Q4 FY09 Q3 FY10 Net Sales 3,137 $ 2,698 $ 3,084 $ Operating Income 382 $ 176 $ 467 $ Re
Slide 7: Q4 Other Items
Q4 Other Items Net Interest Expense Benefit of lower average debt levels Adjusted Other Income Relates to Tax Sharing Agreement Expect ~$14 million in Q1 Income Taxes on Adjusted Income Expect adjusted tax rate of ~26% for Q1 Adjusted Other Income, Adjusted Income Tax Expense and Adjusted Effective
Slide 8: Q4 Free Cash Flow and Working Capital
Q4 Free Cash Flow and Working Capital Q4 Free Cash Flow driven by: Strong earnings levels and continued solid working capital management Working capital days metrics flat vs. Q3 Capital spending of 4% of sales Expect capital spending of ~4.5% of sales in 2011 Restructuring Q4 cash spending of $38 mi
Slide 9: Q4 Liquidity and Debt
Q4 Liquidity and Debt ($ in Millions) Liquidity and use of cash: Dividends $0.16 per share paid in September Board recommending shareholders approve dividend increase of 12.5% to $0.18 per share starting Q3 FY11 Share Repurchase Repurchased ~4M shares in Q4 FY10 Board approved $750M increase in repu
Slide 10: Segment Change – Effective Q1 FY2011
Segment Change – Effective Q1 FY2011 Current Segments - 4 New Segments - 3 Aligning Similar Businesses & Streamlining Management Structure Dollar amounts are FY10 full year. See Appendix for further end market detail. * Sales related to pending ADC acquisition are not included in dollar amounts show
Slide 11: Q4 Orders Summary
Q4 Orders Summary Order rates have stabilized at ~$3.1 billion level ($ in Millions) Segment Q4 FY09 Q1 FY10 Q2 FY10 Q3 FY10 Q4 FY10 FY10 Electronic Components 1,794 $ 2,111 $ 2,203 $ 2,255 $ 2,076 $ 8,645 $ Book to Bill 1.10 1.11 1.11 1.09 0.99 1.07 Network Solutions 423 426 413 457 485 1,782 Book
Slide 12: Q & A
Q & A
Slide 13: Appendix
Appendix
Slide 14: Non-GAAP Measures and Other Disclosure Matters
Non-GAAP Measures and Other Disclosure Matters Non-GAAP Measures “Organic Sales Growth,” “Adjusted Operating Income,” “Adjusted Operating Margin,” “Adjusted Other Income, Net,” “Adjusted Income Tax (Expense) Benefit,” “Adjusted Effective Tax Rate,” “Adjusted Income from Continuing Operations,” “Adju
Slide 15: Non-GAAP Measures and Other Disclosure Matters (cont.)
Non-GAAP Measures and Other Disclosure Matters (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, impairment charges, acquisition and integration costs, other income or charges,
Slide 16: Non-GAAP Measures and Other Disclosure Matters (cont.)
Non-GAAP Measures and Other Disclosure Matters (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
Slide 17: Q1 Outlook Detail
Q1 Outlook Detail * Assumes current commodity rates and currency exchange rates ($ in Millions, except per share amounts) Q1 Outlook* Q1 FY10 Q4 FY10 Sales $3,050 to $3,150 $2,892 $3,137 Operating Income $404 to $429 $269 $382 Restructuring and Other Charges ($9) ($63) ($56) Acquisition and Integrat
Slide 18: Segment Change – Effective Q1 FY2011
Segment Change – Effective Q1 FY2011 Current Segments - 2010 Reported New Segments - 2010 Revenue Electronic Components (EC): Transportation Connectivity Automotive $4,097 Automotive $4,176 DataComm 986 Aerospace, Defense, and Marine 623 Industrial 889 Total $4,799 Appliance 582 Computer 491 Consume
Slide 19: Net Sales Growth Reconciliation – Q4 vs. Q4
Net Sales Growth Reconciliation – Q4 10 vs. Q4 09 Translation (2) Divestiture Electronic Components (3): Automotive 215 $ 25.7 % (33) $ - $ 182 $ 21.7 % 49 % DataComm 96 51.0 1 - 97 51.6 14 Industrial 91 55.6 (8) - 83 50.9 11 Appliance 33 29.0 1 - 34 29.6 7 Computer 17 15.3 2 - 19 17.4 6 Consumer De
Slide 20: Net Sales Growth Reconciliation – Q4 vs. Q3
Net Sales Growth Reconciliation – Q4 10 vs. Q3 10 Translation (2) Electronic Components (3): Automotive (28) $ (2.7) % 10 $ (18) $ (1.7) % 49 % DataComm 23 9.1 5 28 10.9 14 Industrial 11 4.8 1 12 5.1 11 Appliance (8) (5.1) 2 (6) (3.9) 7 Computer (4) (3.2) 2 (2) (1.5) 6 Consumer Devices - - 1 1 1.1 4
Slide 21: 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: Electronic Components 244 $ - $ 52 $ - $ 296 $ Ne
Slide 22: Non-GAAP Reconciliation – Quarter Ended September 25, 2009
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended September 25, 2009 Restructuring and Other Tax Retirement Adjusted U.S. GAAP Charges, Net (1) Items (2) of Debt (Non-GAAP) (3) Operating Income: Electronic Components 38 $ 24 $ - $ - $ 62 $ Network Solutio
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: Electronic Components 298 $ 4 $ - $ - $ 302 $ Network Solutions 60
Slide 24: Non-GAAP Reconciliation – 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) Operating Income: Electronic Components 163 $ 44 $ 207 $ Network Solutions 20 17 37 Specialty Produc
Slide 25: 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: Electronic Components 967 $ 108 $ - $ - $ 1,075 $ Network Sol
Slide 26: Non-GAAP Reconciliation – Year Ended September 25, 2009
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 25, 2009 Restructuring and Other Impairment of Tax Other Items, Adjusted U.S. GAAP Charges, Net (1) Goodwill Items (2) Net (3) (Non-GAAP) (4) Operating Income (Loss): Electronic Components (3,716) $
Slide 27: Correction of Immaterial Errors
Correction of Immaterial Errors Amounts Previously Reported As Corrected Amounts Previously Reported As Corrected Income tax (expense) benefit (1) $ (3) $ 576 $ 567 $ Income (loss) from continuing operations 84 82 (3,094) (3,103) Net income (loss) 94 92 (3,250) (3,259) Net income (loss) attributable