Slide 1: Q3 2016 Earnings
Q3 2016 Earnings July 20, 2016
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: Earnings Highlights
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 $1.20 including an extra week
Slide 4: Segment Orders Summary
Segment Orders Summary ($ in millions) FY15 FY16 FY16 Q3 Q2 Q3 • Transportation orders remain solid Transportation 1,643 1,550 1,659 • Industrial orders continue to grow sequentially with growth Industrial 820 764 879 in OEM and distribution orders as well as the addition of Creganna Communications
Slide 5: Transportation Solutions
Transportation Solutions $ in Millions Sales Business Performance Actual Y/Y Growth Rates Actual Organic Up 2% Automotive $1,245 2% 3% $1,621 $1,652 Organic Commercial $217 3% 3% Transportation Up 2% Q3 2015 Q3 2016 Sensors $190 (2)% (2)% Actual Organic Transportation $1,652 2% 2% Solutions Orders $
Slide 6: Industrial Solutions
Industrial Solutions $ in Millions Sales Business Performance Actual Y/Y Growth Rates Actual Organic Up 5% Industrial Equipment $395 14% (7)% $849 Aerospace & Defense 246 5% 4% $806 Organic Oil and Gas 30 (31)% (31)% Down 4% Energy 178 (2)% -% Q3 2015 Q3 2016 Actual Organic Industrial Solutions $849
Slide 7: Communications Solutions
Communications Solutions $ in Millions Sales Business Performance Actual Y/Y Growth Rates Actual Organic Down 10% SubCom $223 10% 10% $691 $620 Appliances $162 1% 2% Organic Data & Devices $235 (28)% (17)% Down 4% Q3 2015 Q3 2016 Communications $620 (10)% (4)% Actual Organic Solutions Orders ex SubC
Slide 8: Q3 Financial Summary
Q3 Financial Summary ($ in Millions, except per share amounts) Q3 FY15 Q3 FY16 Net Sales $ 3,118 $ 3,121 Operating Income $ 469 $ 452 Acquisition Related Charges 10 18 Restructuring & Other Charges, net 18 31 Adjusted Operating Income $ 497 $ 501 Operating Margin 15.0% 14.5% Adjusted Operating Margi
Slide 9: Operating Metrics
Operating Metrics $ in Millions Adjusted Gross Margin Percentage Free Cash Flow 33.6% 33.0% $589 $391 Q3 2015 Q3 2016 Q3 2015 Q3 2016 Adjusted Operating Margin Adjusted EBITDA Margin 15.9% 16.1% 20.7% 20.7% Q3 2015 Q3 2016 Q3 2015 Q3 2016 9 Adjusted Gross Margin Percentage, Free Cash Flow, Adjusted
Slide 10: Q4 Outlook (Includes an Extra Week)
Q4 Outlook (Includes an Extra Week) Guidance* Highlights Transportation Up Mid Teens • Continued strong performance in Automotive with Solutions Up Mid Teens Organic organic growth in excess of auto production • Industrial Solutions growth driven by Creganna Industrial Up High Teens acquisition and
Slide 11: FY16 Outlook (Includes an Extra Week)
FY16 Outlook (Includes an Extra Week) Guidance* Highlights • Transportation remains strong with mid single digit Transportation Up Low Single Digits Automotive organic growth expected on 2 to 2.5% Solutions global auto production growth Up Mid Single Digits Organic • Industrial growth driven by Creg
Slide 12: Additional Information
Additional Information 12
Slide 13: Y/Y Q3 2016 Sales and Adjusted EPS
Y/Y Q3 2016 Sales Adjusted (in millions) EPS Q3 2015 Results $3,118 $0.90 FX Impact (6) - Operational Performance 9 0.18 Q3 2016 Results $3,121 $1.08 Adjusted EPS is a non-GAAP measure; See Appendix for description and reconciliation. 13
Slide 14: Y/Y Q4 2016 Sales and Adjusted EPS
Y/Y Q4 2016 Sales Adjusted (in millions) 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 Ad
Slide 15: Y/Y 2016 Sales and Adjusted EPS
Y/Y 2016 Sales Adjusted (in millions) 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 - $12.35B Adjuste
Slide 16: Q3 Balance Sheet & Cash Flow Summary
Q3 Balance Sheet & Cash Flow Summary Free Cash Flow and Working Capital Liquidity, Cash & Debt Liquidity Summary ($ in Millions) Q3 2015 Q3 2016 ($ in Millions) Q3 2015 Q3 2016 Cash from Continuing Operations $524 $715 Beginning Cash Balance $697 $1,150 Free Cash Flow 391 589 Capital expenditures, n
Slide 17: Appendix
Appendix 17
Slide 18: Non-GAAP Measures
Non-GAAP Measures “Organic Net Sales Growth,” “Net Sales Excluding the Impact of the Additional Week,” “Net Sales in Constant Currency,” “Adjusted Gross Margin,” “Adjusted Gross Margin Percentage,” “Adjusted Operating Income,” “Adjusted Operating Income in Constant Currency,” “Adjusted Operating Mar
Slide 19: Non-GAAP Measures (cont.)
Non-GAAP Measures (cont.) Adjusted Income Tax Expense – represents income tax expense (the most comparable GAAP measure) after adjusting for the tax effect of special items including charges related to restructuring and other charges, acquisition related charges, impairment charges, other income or
Slide 20: Segment Summary for the Quarter Ended June 24, 2016
Segment Summary for the Quarter Ended June 24, 2016 Net Sales O perating Adjusted O perating For the Q uarters Ended Y/Y Actual Y/Y O rganic Margin for the Margin for the June 26, June 24, Sales Sales Q uarter Ended Q uarter Ended Segment 2015 2016 Growth Growth (1) June 24, 2016 June 24, 2016 (1) (
Slide 21: Segment Summary for the Quarter Ended March 25, 2016
Segment Summary for the Quarter Ended March 25, 2016 Net Sales O perating Adjusted O perating For the Q uarters Ended Y/Y Actual Margin for the Margin for the March 27, March 25, Sales Q uarter Ended Q uarter Ended Segment 2015 2016 Growth March 25, 2016 March 25, 2016 (1) ($ in millions) Transporta
Slide 22: Reconciliation of Net Sales Growth – Q3 16 vs. Q3 15
Reconciliation of Net Sales Growth– Q3 16 vs. Q3 15 Percentage of Change in Net Sales for the Q uarter Ended June 24, 2016 Segment's Total versus Net Sales for the Q uarter Ended June 26, 2015 Net Sales for the Acquisitions Q uarter Ended O rganic (1) Translation (2) (Divestiture) Total June 24, 201
Slide 23: 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 Adjustments Acquisition Restructuring Related and O ther Tax Adjusted U.S. GAAP Charges (1)(2) Charges, Net (2) Items (3) (Non-GAAP) (4) ($ in millions, except per share data) Operating Incom
Slide 24: 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 Adjustments Restructuring Acquisition and O ther Related Charges Tax Adjusted (1) (1)(2) U.S. GAAP Charges (Credits), Net Items (Non-GAAP) (3) ($ in millions, except per share data) Operatin
Slide 25: 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 Adjustments Acquisition Restructuring Related and O ther Tax Adjusted U.S. GAAP Charges (1)(2) Charges, Net (2) Items (Non-GAAP) (3) ($ in millions, except per share data) Operating Income: T
Slide 26: 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 Adjustme nts Acquisition Re structuring Re late d and O the r Tax Adjuste d U.S. GAAP Charge s (1)(2) Charge s, Ne t (2) Ite ms (3) (Non-GAAP) (4) ($ in millions, e xce pt pe r share dat
Slide 27: 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 Adjustments Acquisition Restructuring Related and O ther Tax Adjusted U.S. GAAP Charges (1)(2) Charges, Net (2) Items (3) (Non-GAAP) (4) ($ in millions, except per share data) Operating Inc
Slide 28: Reconciliation of Gross Margin & Gross Margin Percentage
Reconciliation of Gross Margin & Gross Margin Percentage For the Q uarters Ended June 26, June 24, 2015 2016 ($ in millions) 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,
Slide 29: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow For the Q uarters Ended For the Nine Months Ended June 26, June 24, June 26, June 24, 2015 2016 2015 2016 (in millions) Net cash provided by operating activities: Net cash provided by continuing operating activities $ 524 $ 715 $ 1,079 $ 1,237 Net cash provided by di
Slide 30: Reconciliation of Adjusted EBITDA Margin
Reconciliation of Adjusted EBITDA Margin For the Q uarters Ended June 26, June 24, 2015 2016 ($ in millions) 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
Slide 31: 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 O utlook for Q uarter Ending September 30, O utlook for 2016 Fiscal 2016 Diluted earnings per share from continuing operations (GAAP) $1.10 - $1.16 $5.13 - $5.19 Restr
Slide 32: Impact of Changes in Foreign Currency Exchange Rates
Impact of Changes in Foreign Currency Exchange Rates for Q3 2016, Q4 2016 and Fiscal 2016 Adjusted O perating Net Sales Income (1) Adjusted EPS (1) (in millions, except per share data) Quarter ended June 26, 2015 $ 3,118 $ 497 $ 0.90 Impact of changes in foreign currency exchange rates (6) (1) - Ope
Slide 33: Impact of Additional Week for Q4 2016 and Fiscal 2016
Impact of Additional Week for Q4 2016 and Fiscal 2016 O utlook for Q uarter Ending September 30, O utlook for (1) 2016 Fiscal 2016 (1) (in millions, except per share data) (2) Adjusted diluted earnings per share from continuing operations (non-GAAP) $1.17 - $1.23 $3.97 - $4.03 Impact of additional w