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
Adjusted EPS above the midpoint of guidance in a challenging macro environment Continued slow recovery in Industrial markets; China excluding Auto remains sluggish Reiterating full year guidance of $12.3B in sales and adjusted EPS of $4.00 Returned $1.2B to shareholders; generated $165M in free cash
Slide 3: Segment Orders Summary
FY15 FY16 FY16 Q2 Q1 Q2 Transportation 1,653 1,583 1,550 Industrial 828 728 764 Communications Ex SubCom 513 408 425 Total TE Ex SubCom 2,994 2,719 2,739 Total TE Ex SubCom @ Constant Currency 2,952 2,758 2,786 Book to Bill Ex SubCom 1.03 1.04 1.00 Segment Orders Summary ($ in millions) 4 Transporta
Slide 4: Transportation Solutions
Y/Y Growth Rates Actual Organic Automotive $1,215 0% 4% Commercial Transportation $208 (1)% 1% Sensors $185 (2)% 2% Transportation Solutions $1,608 (0)% 3% $ in Millions Sales Automotive organic sales growth driven by strength in China and EMEA Commercial Transportation organic growth driven by Chin
Slide 5: Industrial Solutions
Y/Y Growth Rates Actual Organic Industrial Equipment $308 (5)% (8)% Aerospace & Defense 242 (2)% (2)% Oil and Gas 31 (44)% (42)% Energy 157 (8)% (2)% Industrial Solutions $738 (7)% (7)% $ in Millions Sales EMEA stable, with weakness driven by NA supply chain corrections and China slowdown Aerospace
Slide 6: Communications Solutions
Y/Y Growth Rates Actual Organic SubCom $200 18% 18% Appliances $147 (8)% (6)% Data & Devices $259 (25)% (24)% Communications Solutions $606 (10)% (8)% $ in Millions Sales SubCom growth driven by execution of multiple programs in force Appliances impacted by inventory corrections in the NA Distributi
Slide 7: Q2 Financial Summary
Adjusted Operating Income, Adjusted Operating Margin and Adjusted EPS are non-GAAP measures; see Appendix for description and reconciliation. ($ in Millions, except per share amounts) Q2 FY15 Q2 FY16 Net Sales $ 3,082 $ 2,952 Operating Income $ 448 $ 535 Acquisition Related Charges 22 4 Restructurin
Slide 8: Operating Metrics in Line with Expectations
$ 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 in Line with Expect
Slide 9: Q3 Outlook
Guidance* Adjusted EPS Growth of 14% Y/Y in Q3; 16% in Constant Currency Transportation Solutions Industrial Solutions Communications Solutions TE Connectivity Highlights Sales $3.0B to $3.2B Adjusted EPS $1.00 to $1.06 Sales up 1% actual and flat organic Y/Y at midpoint Sales impacted by $23M FX he
Slide 10: FY16 Outlook
Sales Up 3% Organically, with 14% Adjusted EPS Growth Y/Y in Constant Currency Sales of $12.1B - $12.5B Adjusted EPS of $3.90 - $4.10 Sales up 1% and 3% organic at midpoint FX impacting sales by ~$284M Y/Y Adjusted EPS up 11% at midpoint, with ~$0.10 FX headwind Includes a 53rd week, which will occu
Slide 11: FY16 Outlook
FY16 Outlook Guidance* Highlights + Transportation remains strong with mid single ec Up Low Single Digits digit Automotive organic growth expected on 2% Up Mid Single Digits Organic to 2.5% global auto production growth + Industrial growth expected in the second half vs ft hor the first half across
Slide 12: Y/Y Q2 2016 Sales and Adjusted EPS Bridge
Sales (in millions) Adjusted EPS Q2 2015 Results $3,082 $0.91 FX Impact (74) (0.02) Operational Performance (56) 0.01 Q2 2016 Results $2,952 $0.90 Y/Y Q2 2016 13 Adjusted EPS is a non-GAAP measure; See Appendix for description and reconciliation.
Slide 13: Y/Y Q3 2016 Sales and Adjusted EPS Bridge
Y/Y Q3 2016 14 Sales (in millions) Adjusted EPS Q3 2015 Results $3,118 $0.90 FX Impact (23) (0.01) Operational Performance 5 0.14 Q3 2016 Guidance $3,100 $1.03 Adjusted EPS is a non-GAAP measure; See Appendix for description and reconciliation. Guidance Range Sales $3.0B - $3.2B Adjusted EPS $1.00 -
Slide 14: Y/Y 2016 Sales and Adjusted EPS Bridge
Y/Y 2016 15 Sales (in millions) Adjusted EPS 2015 Results $12,233 $3.60 FX Impact (284) (0.10) Operational Performance 351 0.50 2016 Guidance* $12,300 $4.00 Adjusted EPS is a non-GAAP measure; See Appendix for description and reconciliation. * 53 Week Year Guidance Range Sales $12.1B - $12.5B Adjust
Slide 15: Q2 Balance Sheet & Cash Flow Summary
Liquidity Summary ($ in Millions) Q2 2015 Q2 2016 Beginning Cash Balance $868 $2,223 Free Cash Flow 217 165 Dividends (118) (118) Share repurchases (130) (1,274) Acquisitions, net of cash acquired (218) (6) Divestiture, net of cash retained Repayment of long-term debt - (250) 261 (500) Proceeds from
Slide 16: Q2 Balance Sheet & Cash Flow Summary
Q2 Balance Sheet & Cash Flow Summary (Sin Mons) Cash from Continuing Operations Capital expenditures, net Pre-separation and BNS related tax payments, net Free Cash Flow AIR -$ Days Sales Outstanding Inventory (Excl. CIP) - $ Days on Hand* Accounts Payable - $ Days Outstanding* 222015, $350 (155) 22
Slide 17: Non-GAAP Measures
Non-GAAP Measures “Organic Sales Growth,” “Sales in Constant Currency,” “Adjusted Gross Margin,” “Adjusted Gross Margin Percentage,” “Adjusted Operating Income,” “Adjusted Operating Income in Constant Currency,” “Adjusted Operating Margin,” “Adjusted Other Income, Net,” “Adjusted Income Tax Expense,
Slide 18: Non-GAAP Measure Definitions
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 charges, and certain signi
Slide 19: Segment Summary for the Quarter Ended March 25, 2016
20 Segment Summary for the Quarter Ended March 25, 2016 Operating Adjusted Operating Y/Y Actual Y/Y Organic Margin for the Margin for the March 27, March 25, Sales Sales Quarter Ended Quarter Ended Segment 2015 2016 Growth Growth (1) March 25, 2016 March 25, 2016 (1) Transportation Solutions 1,610 $
Slide 20: Reconciliation of Net Sales Growth – Q2 vs. Q2
Reconciliation of Net Sales Growth– Q2 16 vs. Q2 15 21 Acquisitions Translation (2) (Divestiture) Transportation Solutions (3) : Automotive 47 $ 3.9 % (43) $ - $ 4 $ 0.3 % 76 % Commercial Transportation 1 0.7 (4) - (3) (1.4) 13 Sensors 4 1.9 (7) - (3) (1.6) 11 Total 52 3.2 (54) - (2) (0.1) 100 % Ind
Slide 21: 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 22 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 22: Reconciliation of Non-GAAP Measures, Quarter Ended March 27, 2015
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 27, 2015 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 323 $ 10 $ - $ - $ 3
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 24 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, Year Ended September 25, 2015
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 25, 2015 25 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 25: Reconciliation of Gross Margin & Gross Margin Percentage
Reconciliation of Gross Margin & Gross Margin Percentage 26 March 27, March 25, 2015 2016 Net Sales 3,082 $ 2,952 $ Cost of Sales 2,031 1,990 Gross Margin 1,051 962 Gross Margin Percentage 34.1% 32.6% Acquisition Related Charges 6 1 Adjusted Gross Margin (1) 1,057 $ 963 $ Adjusted Gross Margin Perce
Slide 26: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow 27 March 27, March 25, March 27, March 25, 2015 2016 2015 2016 Net cash provided by continuing operating activities 350 $ 155 $ 555 $ 522 $ Capital expenditures, net (155) (131) (285) (269) Payments related to pre-separation U.S. tax matters, net 22 139 26 140 Paymen
Slide 27: Reconciliation of Adjusted EBITDA Margin
Reconciliation of Adjusted EBITDA Margin 28 March 27, March 25, 2015 2016 Net Income 599 $ 380 $ (Income) loss from discontinued operations (283) 9 Income tax expense (benefit) 94 130 Other (income) expense, net 5 (12) Interest expense 37 32 Interest income (4) (4) Operating Income 448 $ 535 $ Acqui
Slide 28: Reconciliation of Forward-Looking Non-GAAP Measures for Q3 and Fiscal 2016
Reconciliation of Forward-Looking Non-GAAP Financial Measures to Forward-Looking GAAP Financial Measures for Q3 2016 and Fiscal 2016 29 Outlook for Quarter Ending June 24, Outlook for 2016 Fiscal 2016 Diluted earnings per share from continuing operations (GAAP) $0.90 - $0.96 $3.92 - $4.12 Restructur
Slide 29: Impact of Changes in Foreign Currency Exchange Rates
Impact of Changes in Foreign Currency Exchange Rates for Q2 2016, Q3 2016 and Fiscal 2016 30 Adjusted Operating Net Sales Income (1) Adjusted EPS (1) Quarter ended March 27, 2015 3,082 $ 506 $ 0.91 $ Impact of changes in foreign currency exchange rates (74) (2) (11) (0.02) Operational performance (5
Slide 30: Impact of Changes in Foreign Currency Exchange Rates
Impact of Changes in Foreign Currency Exchange Rates for Q2 2016, Q3 2016 and Fiscal 2016 Adjusted Operating Adjusted BPS aay ‘Quarter ended March 27,2015 sos Impact of changes in foreign currency exchange rates 00) Operational perfomance oo ‘Quarter ended March 25,2016 090 ‘Quarter ended June 26,20