Slide 1: Q3 2013 Earnings Call
Q3 2013 Earnings Call July 24, 2013
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
Summary • Sales of $3.45 billion exceeded guidance; down 1% versus prior year • Adjusted Operating Margin of 14.8%, up 80 basis points versus prior year • Adjusted EPS of $0.88 up 11% versus prior year and above guidance • Free Cash Flow of $431 million; returned $314 million to shareholders • Book-
Slide 4: Q3 Revenue Summary
Q3 Revenue Summary ($ in Millions) Actual Organic Segment Q3 FY13 Q3 FY12 Growth Growth Transportation Solutions $ 1,438 $ 1,344 7% 8% Network Solutions 803 855 (6)% (4)% Industrial Solutions 779 814 (4)% (4)% Consumer Solutions 429 486 (12)% (10)% Total $ 3,449 $ 3,499 (1)% (0)% Sales ~$25 million
Slide 5: Transportation Solutions Q3 Summary
Transportation Solutions Q3 Summary ($ in Millions) Growth Rates Actual Organic Sales by Business Growth Rates Sales $1,438 7% 8% Actual Organic Orders $1,435 6% 7% Automotive $1,438 7% 8% Book to Bill 1.00 Transportation Solutions $1,438 7% 8% Adj. Operating Income $284 19% Adj. Operating Margin 19
Slide 6: Network Solutions Q3 Summary
Network Solutions Q3 Summary Growth Rates ($ in Millions) Actual Organic Sales By Business Growth Rates Actual Organic Sales $803 (6)% (4)% Telecom Networks $348 1% 1% Orders $745 (12)% (10)% Data Communications 190 (17)% (8)% Orders ex SubCom $723 (2)% 1% Enterprise Networks 161 (2)% (1)% Book to B
Slide 7: Industrial Solutions Q3 Summary
Industrial Solutions Q3 Summary ($ in Millions) Growth Rates Sales by Business Growth Rates Actual Organic Actual Organic Sales $779 (4)% (4)% Industrial $306 (9)% (8)% Orders $799 3% 4% Aerospace, Defense, & Marine 265 2% 3% Book to Bill 1.03 Energy 208 (4)% (4)% Adj. Operating Income $108 (13)% In
Slide 8: Consumer Solutions Q3 Summary
Consumer Solutions Q3 Summary ($ in Millions) Growth Rates Sales by Business Growth Rates Actual Organic Actual Organic Sales $429 (12)% (10)% Consumer Devices $243 (14)% (12)% Orders $454 (5)% (3)% Appliance 186 (8)% (7)% Book to Bill 1.06 Consumer Solutions $429 (12)% (10)% Adj. Operating Income $
Slide 9: Q3 Financial Summary
Q3 Financial Summary ($ in Millions, except per share amounts) Q3 FY13 Q3 FY12 Net Sales $ 3,449 $ 3,499 Operating Income $ 439 $ 371 Restructuring & Other Charges, net 67 25 Acquisition Related Charges 3 94 Adjusted Operating Income $ 509 $ 490 Operating Margin 12.7% 10.6% Adjusted Operating Margin
Slide 10: Q3 Operating Results & Other Items
Q3 Operating Results & Other Items Adjusted Gross Margin Percentage Other Items 33% ($ in Millions) Q3 FY13 Q3 FY12 31% Interest Expense, Net $ (32) $ (42) 29% Q2 FY12 Q3 FY12 Q4 FY12 Q1 FY13 Q2 FY13 Q3 FY13 Series1 31.4% 31.0% 31.8% 31.6% 32.2% 32.8% Adjusted Other Income, Net $ 10 $ 9 Income Tax E
Slide 11: Q3 Balance Sheet and Cash Flow Summary
Q3 Balance Sheet and Cash Flow Summary Free Cash Flow and Working Capital Liquidity, Cash & Debt Liquidity Summary ($ in Millions) Q3 FY13 Q3 FY12 ($ in Millions) Q3 FY13 Q3 FY12 Cash from Continuing Operations $ 614 $ 498 Beginning Cash Balance $ 1,073 $ 2,866 Capital expenditures, net (144) (109)
Slide 12: Q4 Outlook
Q4 Outlook^ ($ in Millions, except per share amounts) Sales $3,350 to $3,450 Y/Y Growth Actual - % 3% Organic* 1% 4% Adjusted EPS* $0.88 to $0.92 Y/Y Growth 16% 21% Transportation Solutions Industrial Solutions Up high single digits vs. prior year Flat to up-slightly vs. prior year Global auto
Slide 13: FY13 Outlook
FY13 Outlook^ ($ in Millions, except per share amounts) Sales $13,200 to $13,300 Y/Y Growth Actual (1)% - % Organic* (2)% (1)% Adjusted EPS* $3.18 to $3.22 Y/Y Growth 11% 13% Transportation Solutions – up mid single digits Industrial Solutions – flat to up slightly Global auto production expected
Slide 14: Q&A
page 14 / July 2013 Q&A TE
Slide 15: Appendix
Appendix = page 15 / July 2013 = TE
Slide 16: Non-GAAP Measures
Non-GAAP Measures “Organic Sales Growth,” “Adjusted Gross Margin,” “Adjusted Gross Margin Percentage,” “Adjusted Operating Income,” “Adjusted Operating Margin,” “Adjusted Other Income, Net,” “Adjusted Income Tax Expense,” “Adjusted Effective Tax Rate,” ”Adjusted Income from Continuing Operations,” “
Slide 17: Non-GAAP Measures (cont.)
Non-GAAP Measures (cont.) We present income tax expense after adjusting for the tax effect of special items including charges related to restructuring and other charges, acquisition related charges, impairment charges, other income or charges, and certain significant special tax items, if any (“Adju
Slide 18: Non-GAAP Measures (cont.)
Non-GAAP Measures (cont.) Net capital expenditures are subtracted because they represent long-term commitments. Voluntary pension contributions are subtracted from the GAAP measure because this activity is driven by economic financing decisions rather than operating activity. Certain special items,
Slide 19: Net Sales Growth Reconciliation – Q3 13 vs. Q3 12
Net Sales Growth Reconciliation – Q3 13 vs. Q3 12 Percentage of Segm ent's Total Change in Net Sales for the Quarter Ended June 28, 2013 Net Sales for the versus Net Sales for the Quarter Ended June 29, 2012 Quarter Ended Organic (1) Translation (2) Divestiture Total June 28, 2013 ($ in m illions) T
Slide 20: Net Sales Growth Reconciliation – Q3 13 vs. Q2 13
Net Sales Growth Reconciliation – Q3 13 vs. Q2 13 Percentage of Segm ent's Total Change in Net Sales for the Quarter Ended June 28, 2013 Net Sales for the versus Net Sales for the Quarter Ended March 29, 2013 Quarter Ended Organic (1) Translation (2) Divestiture Total June 28, 2013 ($ in m illions)
Slide 21: Net Sales Growth Reconciliation by Segment and Geography – Q3 13 vs. Q3 12
Net Sales Growth Reconciliation by Segment and Geography – Q3 13 vs. Q3 12 Change in Net Sales for the Quarter Ended June 28, 2013 versus Net Sales for the Quarter Ended June 29, 2012 Organic (1) Translation (2) Divestiture Total ($ in m illions) Transportation Solutions: Americas $ 29 9.5 % $ (2) $
Slide 22: Reconciliation of Non-GAAP Financial Measures – Quarter Ended June 28, 2013
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended June 28, 2013 Adjustm ents Acquisition Restructuring Related and Other Tax Adjusted (1) U.S. GAAP Charges Charges, Net Item s (Non-GAAP) (2) ($ in m illions, except per share data) Operating Income: Transp
Slide 23: Reconciliation of Non-GAAP Financial Measures – Quarter Ended June 29, 2012
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended June 29, 2012 Adjustm ents Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges (1) Charges, Net Item s (2) (Non-GAAP) (3) ($ in m illions, except per share data) Operating Income: Tr
Slide 24: Reconciliation of Non-GAAP Financial Measures – Quarter Ended March 29, 2013
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 29, 2013 Adjustm ents Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges Charges, Net Item s (1) (Non-GAAP) (2) ($ in m illions, except per share data) Operating Income: Trans
Slide 25: Reconciliation of Non-GAAP Financial Measures – Quarter Ended September 28, 2012
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended September 28, 2012 Adjustm ents Acquisition Restructuring Related and Other Tax Adjusted (1) (2) U.S. GAAP Charges Charges, Net Item s (Non-GAAP) (3) ($ in m illions, except per share data) Operating Incom
Slide 26: Reconciliation of Non-GAAP Financial Measures – Year Ended September 28, 2012
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 28, 2012 Adjustm ents Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges (1) Charges, Net Item s (2) (Non-GAAP) (3) ($ in m illions, except per share data) Operating Income:
Slide 27: Gross Margin & Gross Margin Percentage Reconciliation
Gross Margin & Gross Margin Percentage Reconciliation For the Quarters Ended March 30, June 29, Septem ber 28, Decem ber 28, March 29, June 28, 2012 2012 2012 2012 2013 2013 ($ in millions) Net sales $ 3,249 $ 3,499 $ 3,364 $ 3,134 $ 3,265 $ 3,449 Cost of sales 2,228 2,481 2,300 2,145 2,213 2,317 Gr
Slide 28: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow For the Nine Months Ended June 28, June 29, 2013 2012 (in millions) Reconciliation of Free Cash Flow: Net cash provided by continuing operating activities $ 1,453 $ 1,174 Capital expenditures, net (393) (372) Pre-separation tax payments, net 28 26 Payments related to
Slide 29: Every Connection Counts
EVERY CONNECTION COUNTS