Slide 1: Forward-Looking Statements and Non-GAAP Measures
Forward-Looking Statements and Non-GAAP Measures 2 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 subje
Slide 2: Earnings Highlights
Record Q3 Adjusted EPS of $1.08, up 20% Y/Y and above the high end of guidance Sequential increases in revenue of 6% and orders of 7% driven by our harsh environment businesses Expected Q4 revenue of $3.35B at the mid-point with Adjusted EPS of $1.20 including an extra week Reiterating full year Adj
Slide 3: Transportation Solutions
Y/Y Growth Rates Actual Organic Automotive $1,245 2% 3% Commercial Transportation $217 3% 3% Sensors $190 (2)% (2)% Transportation Solutions $1,652 2% 2% $ in Millions Sales Automotive organic sales growth driven by China and EMEA Commercial Transportation organic growth driven by China and EMEA hea
Slide 4: Industrial Solutions
Y/Y Growth Rates Actual Organic Industrial Equipment $395 14% (7)% Aerospace & Defense 246 5% 4% Oil and Gas 30 (31)% (31)% Energy 178 (2)% -% Industrial Solutions $849 5% (4)% $ in Millions Sales Industrial Equipment actual growth driven by Creganna Industrial Equipment organic growth of 4% sequent
Slide 5: Communications Solutions
Y/Y Growth Rates Actual Organic SubCom $223 10% 10% Appliances $162 1% 2% Data & Devices $235 (28)% (17)% Communications Solutions $620 (10)% (4)% $ in Millions Sales SubCom growth driven by execution of multiple programs in force Appliances grew in Asia and North America; Delivered another quarter
Slide 6: Q3 Financial Summary
Adjusted Operating Income, Adjusted Operating Margin and Adjusted EPS are non-GAAP measures; see Appendix for description and reconciliation. *Represents Diluted Earnings Per Share from Continuing Operations ($ in Millions, except per share amounts) Q3 FY15 Q3 FY16 Net Sales $ 3,118 $ 3,121 Operatin
Slide 7: Operating Metrics
$ in Millions Adjusted Gross Margin Percentage Adjusted Operating Margin Free Cash Flow Adjusted Gross Margin Percentage, Free Cash Flow, Adjusted Operating Margin and Adjusted EBITDA Margin are non-GAAP measures; See Appendix for description and reconciliation. Operating Metrics 9 Adjusted EBITDA M
Slide 8: Q4 Outlook (Includes an Extra Week)
Guidance* Strong Adjusted EPS expansion Y/Y Transportation Solutions Industrial Solutions Communications Solutions TE Connectivity Highlights Sales $3.25B to $3.45B Adjusted EPS $1.17 to $1.23 Revenue up 12% and up 11% organic Y/Y at midpoint Revenue up 3% organically excluding the extra week of $20
Slide 9: FY16 Outlook (Includes an Extra Week)
Sales Up 2% Organically, with 11% Adjusted EPS Growth Y/Y Sales of $12.15B - $12.35B Adjusted EPS of $3.97 - $4.03 Sales flat Y/Y and up 2% organically at midpoint FX headwind impacting sales by ~$250M Y/Y Adjusted EPS up 11% at midpoint, with ~$0.07 FX headwind Includes a 53rd week of $200M revenue
Slide 10: FY16 Outlook (Includes an Extra Week)
FY16 Outlook (Includes an Extra Week) Guidance* Highlights Transportation Up Low Single Digits Up Mid Single Digits Organic Industrial Solutions Up Low Single Digits Down Low Single Digits Organic. mmunications’ Solutions Down High Single Digits Down Low Single Digits Organic Sales of $12.15B - $12.
Slide 11: Q3 2016 Sales and Adjusted EPS Bridge
Sales (in millions) Adjusted EPS Q3 2015 Results $3,118 $0.90 FX Impact (6) - Operational Performance 9 0.18 Q3 2016 Results $3,121 $1.08 Y/Y Q3 2016 13 Adjusted EPS is a non-GAAP measure; See Appendix for description and reconciliation.
Slide 12: Q4 2016 Sales and Adjusted EPS Bridge
Y/Y Q4 2016 14 Sales (in millions) Adjusted EPS Q4 2015 Results $2,984 $0.90 FX Impact 11 0.01 Operational Performance 355 0.29 Q4 2016 Guidance* $3,350 $1.20 Adjusted EPS is a non-GAAP measure; See Appendix for description and reconciliation. * A 14 week quarter Guidance Range Sales $3.25B - $3.45B
Slide 13: 2016 Sales and Adjusted EPS Bridge
Y/Y 2016 15 Sales (in millions) Adjusted EPS 2015 Results $12,233 $3.60 FX Impact (254) (0.07) Operational Performance 271 0.47 2016 Guidance* $12,250 $4.00 Adjusted EPS is a non-GAAP measure; See Appendix for description and reconciliation. * 53 Week Year Guidance Range Sales $12.15B - $12.35B Adju
Slide 14: Q3 Balance Sheet & Cash Flow Summary
Liquidity Summary ($ in Millions) Q3 2015 Q3 2016 Beginning Cash Balance $697 $1,150 Free Cash Flow 391 589 Dividends (134) (132) Share repurchases (226) (134) Acquisitions, net of cash acquired 3 (988) Divestiture, net of cash retained Net increase (decrease) in Commercial Paper - (105) 65 150 Proc
Slide 15: Q3 Balance Sheet & Cash Flow Summary
Q3 Balance Sheet & Cash Flow Summary (Sin Mons) 03.2015 Cash from Continuing Operations $524 Capital expenditures, net (130) Pre-separation and BNS related tax @) payments (receipts), net Free Cash Flow $391 AR -$ $2,185 Days Sales Outstanding? 64 Inventory (Excl. CIP) - $ $1,651 Days on Hand* n Acc
Slide 16: Non-GAAP Measures
Non-GAAP Measures “Organic Net Sales Growth,” “Net Sales Excluding the Impact of the Additional Week,” “Net Sales in Constant Currency,” “Adjusted Gross Margin,” “Adjusted Gross Margin Percentage,” “Adjusted Operating Income,” “Adjusted Operating Income in Constant Currency,” “Adjusted Operating Mar
Slide 17: Non-GAAP Measures (cont.)
Non-GAAP Measures (cont.) 19 Adjusted Income Tax Expense – represents income tax expense (the most comparable GAAP measure) after adjusting for the tax effect of special items including charges related to restructuring and other charges, acquisition related charges, impairment charges, other income
Slide 18: Segment Summary for the Quarter Ended June 24, 2016
20 Segment Summary for the Quarter Ended June 24, 2016 Operating Adjusted Operating Y/Y Actual Y/Y Organic Margin for the Margin for the June 26, June 24, Sales Sales Quarter Ended Quarter Ended Segment 2015 2016 Growth Growth (1) June 24, 2016 June 24, 2016 (1) Transportation Solutions 1,621 $ 1,65
Slide 19: Segment Summary for the Quarter Ended March 25, 2016
21 Segment Summary for the Quarter Ended March 25, 2016 Operating Adjusted Operating Y/Y Actual Margin for the Margin for the March 27, March 25, Sales Quarter Ended Quarter Ended Segment 2015 2016 Growth March 25, 2016 March 25, 2016 (1) Transportation Solutions 1,610 $ 1,608 $ (0.1) % 18.0 % 19.0
Slide 20: Reconciliation of Net Sales Growth – Q3 vs. Q3
Reconciliation of Net Sales Growth– Q3 16 vs. Q3 15 22 Acquisitions Translation (2) (Divestiture) Transportation Solutions (3) : Automotive 33 $ 2.7 % (5) $ - $ 28 $ 2.3 % 75 % Commercial Transportation 7 3.3 - - 7 3.3 13 Sensors (4) (2.1) (2) 2 (4) (2.1) 12 Total 36 2.2 (7) 2 31 1.9 100 % Industria
Slide 21: Reconciliation of Non-GAAP Measures, Quarter Ended June 24, 2016
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended June 24, 2016 23 Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges (1)(2) Charges, Net (2) Items (3) (Non-GAAP) (4) Operating Income: Transportation Solutions 297 $ 2 $ 21 $ - $ 32
Slide 22: Reconciliation of Non-GAAP Measures, Quarter Ended March 25, 2016
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 25, 2016 24 Restructuring Acquisition and Other Related Charges Tax Adjusted U.S. GAAP Charges (1) (Credits), Net (1)(2) Items (Non-GAAP) (3) Operating Income: Transportation Solutions 289 $ 1 $ 15 $
Slide 23: Reconciliation of Non-GAAP Measures, Quarter Ended June 26, 2015
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended June 26, 2015 25 Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges (1)(2) Charges, Net (2) Items (Non-GAAP) (3) Operating Income: Transportation Solutions 303 $ 5 $ 9 $ - $ 317 $ I
Slide 24: Reconciliation of Non-GAAP Measures, Quarter Ended September 25, 2015
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended September 25, 2015 26 Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges (1)(2) Charges, Net (2) Items (3) (Non-GAAP) (4) Operating Income: Transportation Solutions 272 $ 5 $ 29 $ -
Slide 25: Reconciliation of Non-GAAP Measures, Year Ended September 25, 2015
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 25, 2015 27 Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges (1)(2) Charges, Net (2) Items (3) (Non-GAAP) (4) Operating Income: Transportation Solutions 1,193 $ 61 $ 39 $ -
Slide 26: Reconciliation of Gross Margin & Gross Margin Percentage
Reconciliation of Gross Margin & Gross Margin Percentage 28 June 26, June 24, 2015 2016 Net Sales 3,118 $ 3,121 $ Cost of Sales 2,070 2,099 Gross Margin 1,048 1,022 Gross Margin Percentage 33.6% 32.7% Acquisition Related Charges 1 7 Adjusted Gross Margin (1) 1,049 $ 1,029 $ Adjusted Gross Margin Per
Slide 27: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow 29 June 26, June 24, June 26, June 24, 2015 2016 2015 2016 Net cash provided by operating activities: Net cash provided by continuing operating activities 524 $ 715 $ 1,079 $ 1,237 $ Net cash provided by discontinued operating activities 72 3 210 1 596 718 1,289 1,23
Slide 28: Reconciliation of Adjusted EBITDA Margin
Reconciliation of Adjusted EBITDA Margin 30 June 26, June 24, 2015 2016 Net Income 309 $ 839 $ (Income) loss from discontinued operations 42 (48) Income tax expense (benefit) 100 (1,019) Other (income) expense, net (11) 651 Interest expense 33 31 Interest income (4) (2) Operating Income 469 $ 452 $
Slide 29: Reconciliation of Forward-Looking Non-GAAP Measures for Q4 2016 and Fiscal 2016
Reconciliation of Forward-Looking Non-GAAP Financial Measures to Forward-Looking GAAP Financial Measures for Q4 2016 and Fiscal 2016 31 Outlook for Quarter Ending September 30, Outlook for 2016 Fiscal 2016 Diluted earnings per share from continuing operations (GAAP) $1.10 - $1.16 $5.13 - $5.19 Restr
Slide 30: Impact of Changes in Foreign Currency Exchange Rates
Impact of Changes in Foreign Currency Exchange Rates for Q3 2016, Q4 2016 and Fiscal 2016 32 Adjusted Operating Net Sales Income (1) Adjusted EPS (1) Quarter ended June 26, 2015 3,118 $ 497 $ 0.90 $ Impact of changes in foreign currency exchange rates (6) (1) - Operational performance 9 5 0.18 Quart
Slide 31: Impact of Additional Week for Q4 2016 and Fiscal 2016
Impact of Additional Week for Q4 2016 and Fiscal 2016 33 Outlook for Quarter Ending September 30, Outlook for 2016 (1) Fiscal 2016 (1) Adjusted diluted earnings per share from continuing operations (non-GAAP) (2) $1.17 - $1.23 $3.97 - $4.03 Impact of additional week in fiscal 2016 (0.10) (0.10) Adju
Slide 32: Impact of Additional Week for Q4 2016 and Fiscal 2016
Impact of Additional Week for Q4 2016 and Fiscal 2016 Adjusted diluted earnings per share from continuing operations (non-GAAP) Impact of additional week in fiscal 2016 Adjusted diluted earnings per share from continuing operations excluding ‘the impact of the additional week (non-GAAP) Net sales (G