Slide 1: Q4 2014 Earnings Call
Q4 2014 Earnings Call October 29, 2014
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: Summary – Q4 FY2014
Summary – Q4 FY2014 • Sales of $3.58 billion; up 4% versus prior year • Adjusted EPS of $1.02, up 10% versus prior year • Adjusted Operating Margin of 16.0%, up 30 basis points versus prior year • Free Cash Flow of $661 million • Returned $283 million to shareholders through repurchases and dividend
Slide 4: Summary – Fiscal 2014
Summary – Fiscal 2014 • Sales of $13.9 billion; up 5% versus the prior year • Adjusted EPS of $3.79; up 17% versus the prior year • Free Cash Flow of $1.73 billion; up 15% versus prior year • Returned $1.05 billion to shareholders • Expanded position in oil & gas and sensors markets through acquisit
Slide 5: Transportation Solutions Q4 Summary
Transportation Solutions Q4 Summary ($ in Millions) Growth Rates Actual Organic Sales by Business Growth Rates Sales $1,494 7% 6% Actual Organic Orders $1,523 8% 7% Automotive $1,494 7% 6% Book to Bill 1.02 Transportation Solutions $1,494 7% 6% Adj. Operating Income $313 17% Adj. Operating Margin 21
Slide 6: Industrial Solutions Q4 Summary
Industrial Solutions Q4 Summary ($ in Millions) Growth Rates Sales by Business Growth Rates Actual Organic Actual Organic Sales $901 10% 6% Industrial Equipment $363 4% 5% Orders $832 6% 2% Aerospace, Defense, Oil, and Gas 327 25% 10% Book to Bill 0.92 Energy 211 1% 3% Industrial Solutions $901 10%
Slide 7: Network Solutions Q4 Summary
Network Solutions Q4 Summary Growth Rates ($ in Millions) Actual Organic Sales by Business Growth Rates Actual Organic Sales $779 (3)% (3)% Telecom Networks $333 (4)% (4)% Orders $844 24% 24% Data Communications 191 (2)% (2)% Orders ex SubCom $665 3% 3% Enterprise Networks 170 6% 7% Book to Bill 1.0
Slide 8: Consumer Solutions Q4 Summary
Consumer Solutions Q4 Summary ($ in Millions) Growth Rates Sales by Business Growth Rates Actual Organic Actual Organic Sales $401 (3)% (2)% Consumer Devices $233 (7)% (6)% Orders $390 (3)% (3)% Appliances 168 4% 4% Book to Bill 0.97 Consumer Solutions $401 (3)% (2)% Adj. Operating Income $45 (17)%
Slide 9: Q4 Financial Summary
Q4 Financial Summary ($ in Millions, except per share amounts) Q4 FY14 Q4 FY13 Net Sales $ 3,575 $ 3,432 Operating Income $ 521 $ 465 Acquisition Related Charges 33 3 Restructuring & Other Charges, net 17 71 Adjusted Operating Income $ 571 $ 539 Operating Margin 14.6% 13.5% Adjusted Operating Margin
Slide 10: Q4 Operating Results & Other Items
Q4 Operating Results & Other Items Adjusted Gross Margin Percentage Other Items 35% 34.2% 34% 33.7% 33.6% 33.6% 33.6% ($ in Millions) Q4 FY14 Q4 FY13 32.8% 33% 32.2% Interest Expense, Net $ (31) $ (30) 32% 31.6% 31% Adjusted Other Income, Net $ 6 $ 7 30% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 GAAP Income Tax (Expe
Slide 11: Q4 Balance Sheet and Cash Flow Summary
Q4 Balance Sheet and Cash Flow Summary Free Cash Flow and Working Capital Liquidity, Cash & Debt ($ in Millions) Q4 FY14 Q4 FY13 Liquidity Summary ($ in Millions) Q4 FY14 Q4 FY13 Cash from Continuing Operations $ 754 $ 595 Beginning Cash Balance $ 1,613 $ 1,262 Capital expenditures, net* (93) (183)
Slide 12: Q1 Outlook
Q1 Outlook^ Sales ($ in Millions, except per share amounts) $3,460 To $3,560 Y/Y Growth Actual 4% 7% Organic 2% 5% Adjusted EPS $0.88 $0.92 To Y/Y Growth 7% 12% Note: The Q1FY15 Y/Y FX impact to actual revenue and EPS guidance is approximately $100M and $.03/share, respectively Transportation Soluti
Slide 13: Fiscal 2015 Outlook
Fiscal 2015 Outlook^ Sales ($ in Millions, except per share amounts) $14,700 To $15,300 Y/Y Growth Actual 6% 10% Organic 3% 8% Adjusted EPS $4.05 $4.35 To Y/Y Growth 7% 15% Note: The FY15 Y/Y FX impact to actual revenue and EPS guidance is approximately $400M and $.15/share, respectively Transportat
Slide 14: Appendix
Appendix
Slide 15: Non-GAAP Measures
Non-GAAP Measures “Organic Sales Growth,” “Adjusted Gross Margin,” “Adjusted Gross Margin Percentage,” “Adjusted Operating Income,” “Adjusted Operating Margin,” “Adjusted Other Income, Net,” “Adjusted Income Tax Expense,” “Adjusted Effective Tax Rate,” ”Adjusted Income from Continuing Operations,” “
Slide 16: Non-GAAP Measures (cont.)
Non-GAAP Measures (cont.) We present effective income tax rate after adjusting for the tax effect of special items including charges related to restructuring and other charges, acquisition related charges, impairment charges, other income or charges, and certain significant special tax items, if any
Slide 17: Segment Summary
Segment Summary Q4 FY2014 Adjusted ($ in Millions) Organic Operating Actual (1) (1) Segment Q4 FY14 Q4 FY13 Growth Growth Margin Transportation Solutions $1,494 $1,398 7% 6% 21.0% Industrial Solutions 901 818 10% 6% 16.1% Network Solutions 779 804 (3)% (3)% 8.7% Consumer Solutions 401 412 (3)% (2)%
Slide 18: Reconciliation of Net Sales Growth – Q4 14 vs. Q4 13
Reconciliation of Net Sales Growth– Q4 14 vs. Q4 13 Percentage of Change in Net Sales for the Q uarter Ended September 26, 2014 Segment's Total versus Net Sales for the Q uarter Ended September 27, 2013 Net Sales for the Acquisitions Q uarter Ended O rganic (1) Translation (2) (Divestiture) Total Se
Slide 19: Reconciliation of Net Sales Growth – FY2014 vs. FY2013
Reconciliation of Net Sales Growth– FY2014 vs. FY2013 Percentage of Change in Net Sales for the Year Ended September 26, 2014 Segment's Total versus Net Sales for the Year Ended September 27, 2013 Net Sales for the Acquisitions Year Ended O rganic (1) Translation (2) (Divestitures) Total September 2
Slide 20: Net Sales Growth by Segment and Geography – Q4 vs. Q4
Reconciliation of Net Sales Growth by Segment and Geography – Q4 14 vs. Q4 13 Change in Net Sales for the Q uarter Ended September 26, 2014 versus Net Sales for the Q uarter Ended September 27, 2013 Acquisitions O rganic (1) Translation (2) (Divestiture) Total ($ in millions) Transportation Solution
Slide 21: Non-GAAP to GAAP Reconciliation – Quarter Ended September 26, 2014
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended September 26, 2014 Adjustments Acquisition Restructuring Related and O ther Tax Adjusted U.S. GAAP Charges (1) Charges, Net Items (2) (Non-GAAP) (3) ($ in millions, except per share data) Operating Income:
Slide 22: Non-GAAP to GAAP Reconciliation – Quarter Ended September 27, 2013
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended September 27, 2013 Adjustments Acquisition Restructuring Related and O ther Tax Adjusted U.S. GAAP Charges Charges, Net Items (1) (Non-GAAP) (2) ($ in millions, except per share data) Operating Income: Tra
Slide 23: Non-GAAP to GAAP Reconciliation – Year Ended September 26, 2014
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 26, 2014 Adjustments Acquisition Restructuring Related and O ther Tax Adjusted U.S. GAAP Charges (1) Charges, Net Items (2) (Non-GAAP) (3) ($ in millions, except per share data) Operating Income: Tr
Slide 24: Non-GAAP to GAAP Reconciliation – Year Ended September 27, 2013
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 27, 2013 Adjustments Acquisition Restructuring Related and O ther Tax Adjusted U.S. GAAP Charges Charges, Net Items (1) (Non-GAAP) (2) ($ in millions, except per share data) Operating Income: Transp
Slide 25: Non-GAAP to GAAP Reconciliation – 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 ther Tax Adjusted U.S. GAAP Charges, Net Items (1) (Non-GAAP) (2) ($ in millions, except per share data) Operating Income: Transportation Solutions $ 296 $
Slide 26: Gross Margin & Gross Margin Percentage
Reconciliation of Gross Margin & Gross Margin Percentage For the Q uarters Ended December 28, March 29, June 28, September 27, December 27, March 28, June 27, September 26, 2012 2013 2013 2013 2013 2014 2014 2014 ($ in millions) Net Sales $ 3,134 $ 3,265 $ 3,449 $ 3,432 $ 3,326 $ 3,431 $ 3,580 $ 3,5
Slide 27: Free Cash Flow Reconciliation
Reconciliation of Free Cash Flow For the Q uarters Ended For the Years Ended September 26, September 27, September 26, September 27, 2014 2013 2014 2013 (in millions) Reconciliation to Free Cash Flow: Net cash provided by continuing operating activities $ 754 $ 595 $ 2,095 $ 2,048 Capital expenditur
Slide 28: Forward-Looking Non-GAAP to GAAP Reconciliation
Reconciliation of Forward-Looking Non-GAAP Financial Measures to Forward-Looking GAAP Financial Measures O utlook for Q uarter Ending December 26, O utlook for 2014 Fiscal 2015 Diluted earnings per share from continuing operations attributable to TE Connectivity Ltd. (GAAP) $0.95 - 0.99 $3.99 - 4.29