Slide 1: Q3 2014 Earnings Call
Q3 2014 Earnings Call July 23, 2014
Slide 2: Forward-Looking Statements and Non-GAAP Measures
Forward-Looking Statements and Non-GAAP Measures page 2 / July 2014 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 expect
Slide 3: Summary
Summary Adjusted EPS, Adjusted Operating Margin, and Free Cash Flow are non-GAAP measures; see Appendix for description and reconciliation. Sales of $3.58 billion; up 4% versus prior year Adjusted EPS of $1.00, up 14% versus prior year Adjusted Operating Margin of 15.4%, up 60 basis points versus pr
Slide 4: Transportation Solutions Q3 Summary
Revenue up 8% organically; global vehicle production up ~2%; Sales and orders growth in all regions with China sales up >20% Continued strength in industrial transportation driven by global truck market, particularly in the U.S. and China Adjusted operating margin increase due to volume growth, prod
Slide 5: Industrial Solutions Q3 Summary
Industrial Solutions Q3 Summary Organic Sales Growth, Adjusted Operating Income, and Adjusted Operating Margin are non-GAAP measures; see Appendix for description and reconciliation. page 5 ($ in Millions) Industrial Equipment growth driven by strength in Asia-Pacific, particularly China Continued s
Slide 6: Network Solutions Q3 Summary
Network Solutions Q3 Summary ($ in Millions) Organic Sales Growth, Adjusted Operating Income, and Adjusted Operating Margin are non-GAAP measures; see Appendix for description and reconciliation. page 6 Subsea Communications significantly impacted segment revenue and operating margins Telecom Networ
Slide 7: Consumer Solutions Q3 Summary
Consumer Solutions Q3 Summary Organic Sales Growth, Adjusted Operating Income, and Adjusted Operating Margin are non-GAAP measures; see Appendix for description and reconciliation. page 7 ($ in Millions) Strength in Appliances driven by continued strong demand and share gains in Americas and Asia Co
Slide 8: Q3 Financial Summary
Q3 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. Q3 FY14 Q3 FY13 Net Sales 3,580 $ 3,449 $ Operating Income 535 $ 439 $ Acquisition Related Charges 1 3 Restructuri
Slide 9: Q3 Operating Results & Other Items
31.6% 32.2% 32.8% 33.7% 33.6% 34.2% 33.6% 30.0% 31.0% 32.0% 33.0% 34.0% 35.0% Q1 FY13 Q2 FY13 Q3 FY13 Q4 FY13 Q1 FY14 Q2 FY14 Q3 FY14 Q3 Operating Results & Other Items Q3 FY14 Q3 FY13 RD&E 171 $ 167 $ SG&A 483 456 Total 654 $ 623 $ % of Sales RD&E 4.8% 4.8% SG&A 13.5% 13.2% ($ in Millions) Adjusted
Slide 10: Q3 Balance Sheet and Cash Flow Summary
Q3 Balance Sheet and Cash Flow Summary ($ in Millions) Q3 FY14 Q3 FY13 Cash from Continuing Operations 501 $ 614 $ Capital expenditures, net (171) (144) Pre-separation tax payments (receipts), net 200 (39) Free Cash Flow 530 $ 431 $ A/R - $ 2,503 $ 2,257 $ Days Sales Outstanding 63 59 Inventory (Exc
Slide 11: Q4 Outlook
Q4 Outlook^ ^ Assumes foreign exchange rates and commodity prices that are consistent with current levels and does not include the impact of the planned Measurement Specialties acquisition. * Organic Sales Growth and Adjusted EPS are non-GAAP measures; see Appendix for description and reconciliation
Slide 12: FY14 Outlook
Network Solutions Revenue down slightly vs. prior year excluding Subsea Communications Telecom Networks up mid single digits Enterprise Networks flat Data Communications down ~11% Subsea Communications revenue ~$285 million Consumer Solutions Revenue down slightly vs. prior year Appliances up mid si
Slide 13: Appendix
Appendix
Slide 14: Non-GAAP Measures
Non-GAAP Measures “Organic Sales Growth,” “Adjusted Operating Income,” “Adjusted Operating Margin,” “Adjusted Other Income, Net,” “Adjusted Income Tax Expense,” “Adjusted Effective Tax Rate,” ”Adjusted Income from Continuing Operations,” “Adjusted Earnings Per Share,” and “Free Cash Flow” (FCF) are
Slide 15: Non-GAAP Measures (cont.)
Non-GAAP Measures (cont.) We present income from continuing operations attributable to TE Connectivity Ltd. before special items including charges or income related to legal settlements and reserves, restructuring and other charges, acquisition related charges, impairment charges, tax sharing income
Slide 16: Q3 Revenue Summary
Q3 Revenue Summary Actual Organic Segment Q3 FY14 Q3 FY13 Growth Growth(1) Transportation Solutions $1,585 $1,438 10% 8% Industrial Solutions 849 803 6% 4% Network Solutions 738 803 (8)% (8)% Consumer Solutions 408 405 1% -% Total $3,580 $3,449 4% 3% (1)See description and reconciliation of non-GAAP
Slide 17: Reconciliation of Net Sales Growth – Q3 vs. Q3
Reconciliation of Net Sales Growth– Q3 14 vs. Q3 13 page 17 / July 2014 Translation (2) Acquisitions (Divestiture) Transportation Solutions (3) : Automotive 119 $ 8.3 % 28 $ - $ 147 $ 10.2 % 100 % Total 119 8.3 28 - 147 10.2 100 % Industrial Solutions (3) : Industrial Equipment 10 3.0 4 - 14 4.2 41
Slide 18: Reconciliation of Net Sales Growth by Segment and Geography
Reconciliation of Net Sales Growth by Segment and Geography – Q3 14 vs. Q3 13 page 18 / July 2014 Translation (2) Acquisitions (Divestiture) Transportation Solutions : EMEA 36 $ 6.0 % 30 $ - $ 66 $ 10.9 % Asia–Pacific 51 10.4 4 - 55 11.2 Americas 32 9.3 (6) - 26 7.6 Total 119 8.3 28 - 147 10.2 Indus
Slide 19: Reconciliation of Non-GAAP to GAAP Measures, Quarter Ended June 27, 2014
page 19 Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended June 27, 2014 / July 2014 Acquisition Restructuring Related and Other Adjusted U.S. GAAP Charges Charges, Net (Non-GAAP) (1) Operating Income: Transportation Solutions 335 $ - $ - $ 335 $ Industria
Slide 20: Reconciliation of Non-GAAP to GAAP Measures, Quarter Ended September 27, 2013
page 21 Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended September 27, 2013 / July 2014 Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges Charges, Net Items (1) (Non-GAAP) (2) Operating Income: Transportation Solutions 257 $ 2 $
Slide 21: Reconciliation of Non-GAAP to GAAP Measures, Year Ended September 27, 2013
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 27, 2013 page 22 / July 2014 Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges Charges, Net Items (1) (Non-GAAP) (2) Operating Income: Transportation Solutions 972 $ 7 $ 38
Slide 22: Reconciliation of Forward-Looking Non-GAAP Financial Measures
Reconciliation of Forward-Looking Non-GAAP Financial Measures to Forward-Looking GAAP Financial Measures page 23 / July 2014 Outlook for Quarter Ending September 26, Outlook for 2014 Fiscal 2014 Diluted earnings per share from continuing operations attributable to TE Connectivity Ltd. (GAAP) $0.93 -