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8-K - 8-K - TE Connectivity Ltd.a11-8700_18k.htm
EX-99.2 - EX-99.2 - TE Connectivity Ltd.a11-8700_1ex99d2.htm

Exhibit 99.1

 

 

News Release

 

GRAPHIC

 

FOR IMMEDIATE RELEASE

 

Contacts:

 

Media Relations:

Joan Wainwright

610-893-9500 Office
joan.wainwright@te.com

 

Investor Relations:

Keith Kolstrom

610-893-9551 Office

keith.kolstrom@te.com

 

 

 

 

 

Matt Vergare

610-893-9442 Office

matthew.vergare@te.com

 

TE CONNECTIVITY REPORTS FISCAL SECOND QUARTER RESULTS

AND UPDATES FULL YEAR OUTLOOK FOR IMPACT OF JAPAN EARTHQUAKE

 

Second Quarter Results

 

·                  Net Sales of $3.5 Billion, Up 17 Percent Year-Over-Year

·                  GAAP EPS of $0.67; Adjusted EPS of $0.71, Up From $0.64 in Prior Year

·                  Free Cash Flow of $447 Million, Up From $422 Million in Prior Year

 

Outlook

 

·                  Third Quarter:

 

·                  Sales of $3.50 to $3.65 Billion; Up 13 to 18 Percent From Prior Year

·                  Adjusted EPS of $0.68 to $0.74; Compared to $0.70 in the Prior Year

·                  Negative Impact From Japan Earthquake Approximately $135 Million of Sales and $0.09 of EPS

 

·                  Full Year:

 

·                  Sales of $14.0 to $14.3 Billion; Up 16 to 18 Percent From Prior Year

·                  Adjusted EPS of $2.95 to $3.07; Up 16 to 21 Percent From Prior Year

·                  Negative Impact From Japan Earthquake Approximately $220 Million of Sales and $0.14 of EPS

·                  Full Year Free Cash Flow Now Expected to be in Excess of $1.3 Billion, Excluding ADC Acquisition-Related Spending

 

SCHAFFHAUSEN, Switzerland — Apr. 21, 2011 — TE Connectivity Ltd. (NYSE: TEL) today reported results for the fiscal second quarter ended Mar. 25, 2011.  The company reported a net sales increase of 17 percent year-over-year, and 9 percent sequentially, to $3.5 billion.  Earnings Per Share from Continuing Operations (GAAP EPS) were $0.67 for the quarter, compared to $0.66 in the prior-year period.  Included in the GAAP EPS were $0.05 per share of ADC acquisition-related charges and $0.01 per share of restructuring and other credits.  This compares to $0.02 per share of restructuring and other

 

1



 

charges and $0.04 per share of income related to tax items in the prior-year quarter.  Adjusted EPS were $0.71 in the quarter, up 11 percent compared to $0.64 in the prior-year quarter.  In the fiscal second quarter, the acquisition of ADC contributed $279 million of revenues and approximately $0.02 to adjusted EPS.

 

“Our second quarter overall was solid with double-digit sales and adjusted earnings growth versus the prior year and continued orders growth in most of our markets, especially automotive, industrial and telecom networks,” said TE Connectivity Chief Executive Officer Tom Lynch.  “In addition, the benefits of the ADC acquisition began to materialize during the quarter as sales and earnings were on track and we were awarded a $400 million contract to supply network connectivity products for the Australian government’s National Broadband Network.”

 

“Our company, like many others, is being impacted by the earthquake in Japan.  We feel fortunate that all 2,000 of our people there came through the earthquake safely and I want to thank them for their commitment to keeping our operations running and supporting our customers during these trying times,” Lynch continued.  “The situation is creating disruptions to some of our customers’ operations and we expect the majority of this impact to be in our third quarter.”

 

UPDATED 2011 OUTLOOK

 

“Despite the negative impact from the earthquake in Japan, the strength in our automotive, network infrastructure and industrial markets, coupled with the contribution of the ADC acquisition, is driving strong year-over-year adjusted earnings growth of 16 to 21 percent,” Lynch said.

 

For the third quarter, the company expects net sales of $3.50 to $3.65 billion, an increase of 13 to 18 percent over the prior-year period.  GAAP EPS are expected to be $0.65 to $0.71, including acquisition-related and restructuring charges of $0.03.  Adjusted EPS are expected to be $0.68 to $0.74, compared to adjusted EPS of $0.70 in the prior-year period.  Included in this guidance are approximately $320 million of sales and $0.05 of adjusted EPS related to the ADC acquisition, as well as a negative impact of $135 million of sales and $0.09 of EPS due to the Japan earthquake.

 

For the full fiscal year, which includes 53 weeks, the company expects sales of $14.0 to $14.3 billion, an increase of 16 to 18 percent over the prior year.  GAAP EPS are expected to be $2.73 to $2.85, including acquisition-related and restructuring charges of approximately $0.22 per share.  Adjusted EPS are expected to be $2.95 to $3.07, up 16 to 21 percent compared to adjusted EPS of $2.54 in the prior year.  This guidance includes approximately $1.0 billion of sales and $0.12 of adjusted EPS due to the ADC acquisition, $240 million of sales and $0.05 of EPS due to the impact of the additional week in the fiscal

 

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year 2011, as well as the negative impact of approximately $220 million of sales and $0.14 of EPS due to the Japan earthquake.

 

This outlook assumes current foreign exchange and commodity rates.

 

Information about TE Connectivity’s use of non-GAAP financial measures is described at the end of this press release.  For a reconciliation of these non-GAAP financial measures, see the attached tables.

 

FISCAL SECOND QUARTER 2011 RESULTS

All dollar amounts are pre-tax and stated in millions.

 

 

 

 

 

 

 

 

 

% Change

 

% Change

 

($ in millions)

 

Mar. 25, 2011

 

Dec. 24, 2010

 

Mar. 26, 2010

 

Sequential

 

YoY

 

Net Sales

 

$

3,472

 

$

3,200

 

$

2,957

 

9

%

17

%

Operating Income

 

$

405

 

$

400

 

$

398

 

1

%

2

%

Restructuring and Other Credits (Charges)

 

$

4

 

$

(4

)

$

(12

)

 

 

 

 

Acquisition Related Charges

 

$

(48

)

$

(59

)

$

0

 

 

 

 

 

Adjusted Operating Income

 

$

449

 

$

463

 

$

410

 

(3

)%

10

%

Operating Margin

 

11.7

%

12.5

%

13.5

%

 

 

 

 

Adjusted Operating Margin

 

12.9

%

14.5

%

13.9

%

 

 

 

 

 

Sales grew 17 percent compared to the prior-year quarter and 9 percent sequentially.  Organically, sales increased 7 percent compared to the prior-year and 1 percent sequentially.  By segment, and on an organic basis, sales in the Transportation Solutions segment were up 14 percent compared to the prior year, primarily driven by continued growth in global automotive production and increased content.  Sales in the Communications and Industrial Solutions segment were up 3 percent compared to the prior year driven by the industrial market.  Sales were up 3 percent compared to the prior year in the Network Solutions segment driven by double-digit improvement in all end markets except our Subsea Communications business, which declined as expected.

 

The adjusted operating margin was 12.9 percent in the quarter, down 100 basis points versus the prior year and 160 basis points sequentially primarily as a result of the acquisition of ADC.

 

CASH FLOW

 

Cash from continuing operations was $557 million during the quarter.  Free cash flow was $447 million.  The company now expects free cash flow in excess of $1.3 billion in fiscal 2011, excluding the estimated

 

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$105 million of cash expenditures related to the ADC acquisition.

 

ORDERS

 

Total company orders were $3.5 billion, an increase of 16 percent compared to the prior year and up 11 percent sequentially.  Orders were up 6 percent organically compared to the prior year and up 4 percent sequentially.  The book-to-bill ratio was 1.02 overall and 1.05, excluding the Subsea Communications business.

 

ADDITIONAL ITEMS

 

·                  In April, the company’s Subsea Communications business finalized an agreement with the SJC consortium to participate in the construction of a major undersea communications network in Southeast Asia.  The value of the contract is estimated to be approximately $180 million.

·                  In April, the company completed a $75 million sale of non-core patents acquired as part of ADC.

·                  In March, the company’s shareholders approved a 12.5 percent increase in the dividend to $0.18 for the four fiscal quarters beginning with the June quarter of 2011.  Shareholders also approved the company’s name change to TE Connectivity Ltd.

 

ABOUT TE CONNECTIVITY

 

TE Connectivity is a global, $12.1 billion company that designs and manufactures over 500,000 products that connect and protect the flow of power and data inside the products that touch every aspect of our lives. Our nearly 100,000 employees partner with customers in virtually every industry—from consumer electronics, energy and healthcare, to automotive, aerospace and communication networks—enabling smarter, faster, better technologies to connect products to possibilities. More information on TE Connectivity can be found at http://www.te.com.

 

CONFERENCE CALL AND WEBCAST

 

·                  The company will hold a conference call for investors today beginning at 8:30 a.m. EDT.

·                  Internet users will be able to access the company’s earnings webcast, including slide materials, at the “Investors” section of TE Connectivity’s website: http://investors.te.com.

·                  For both “listen-only” participants and those participants who wish to take part in the question-and-answer portion of the call, the telephone dial-in number in the United States is (800) 553-5275. The telephone dial-in number for participants outside the United States is (612) 332-0725.

·                  An audio replay of the conference call will be available beginning at 10:30 a.m. EDT on Apr. 21, 2011 and ending at 11:59 p.m. EDT on Apr. 28, 2011. The dial-in number for participants in the United States is (800) 475-6701.  For participants outside the United States, the replay dial-in number is (320) 365-3844. The replay access code for all callers is 193182.

 

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NON-GAAP MEASURES

 

“Organic Sales Growth,” “Adjusted Operating Income,” “Adjusted Operating Margin,” “Adjusted Other Income, Net,” “Adjusted Income Tax Expense,” “Adjusted Income from Continuing Operations,” “Adjusted Earnings Per Share,” and “Free Cash Flow” (FCF) are non-GAAP measures and should not be considered replacements for GAAP results.

 

“Organic Sales Growth” is a useful measure used by the company to measure the underlying results and trends in the business.  The difference between reported net sales growth (the most comparable GAAP measure) and Organic Sales Growth (the non-GAAP measure) consists of the impact from foreign currency, acquisitions and divestitures.  Organic Sales Growth is a useful measure of the company’s performance because it excludes items that:  i) are not completely under management’s control, such as the impact of foreign currency exchange; or ii) do not reflect the underlying growth of the company, such as acquisition and divestiture activity.  The limitation of this measure is that it excludes items that have an impact on the company’s sales.  This limitation is best addressed by using organic sales growth in combination with the GAAP results.  See the accompanying tables to this release for the reconciliation presenting the components of Organic Sales Growth.

 

The company has presented its operating income before special items including charges or income related to legal settlements and reserves, restructuring and other charges, and acquisition related charges (“Adjusted Operating Income”).  The company utilizes Adjusted Operating Income to assess segment level core operating performance and to provide insight to management in evaluating segment operating plan execution and underlying market conditions.  It is also a significant component in the company’s incentive compensation plans.  Adjusted Operating Income is a useful measure for investors because it better reflects the company’s underlying operating results, trends, and the comparability of these results between periods.  The difference between Adjusted Operating Income and operating income (the most comparable GAAP measure) consists of the impact of charges or income related to legal settlements and reserves, restructuring and other charges, and acquisition related charges that may mask the underlying operating results and/or business trends.  The limitation of this measure is that it excludes the financial impact of items that would otherwise either increase or decrease the company’s reported operating income.  This limitation is best addressed by using Adjusted Operating Income in combination with operating income (the most comparable GAAP measure) in order to better understand the amounts, character and impact of any increase or decrease on reported results.

 

The company has presented its operating margin before special items including charges or income related to legal settlements and reserves, restructuring and other charges, and acquisition related charges (“Adjusted Operating Margin”).  The company presents Adjusted Operating Margin before special items to give investors a perspective on the underlying business results.  Because the company cannot predict the amount and timing of such items and the associated charges or gains that will be recorded in the company’s financial statements, it is difficult to include the impact of those items in the forecast.

 

The company has presented other income, net before special items including tax sharing income related to certain proposed adjustments to prior period tax returns and other tax items (“Adjusted Other Income, Net”).  The company presents Adjusted Other Income, Net as it believes that it is appropriate for investors to consider results excluding these items in addition to its results in accordance with GAAP.  The difference between Adjusted Other Income, Net and other income, net (the most comparable GAAP measure) consists of tax sharing income related to certain proposed adjustments to prior period tax returns and other tax items.  The limitation of this measure is that it excludes the financial impact of items that would otherwise either increase or decrease other income, net.  This limitation is best addressed by using Adjusted Other Income, Net in combination with other income, net (the most comparable GAAP measure) in order to better understand the amounts, character and impact of any increase or decrease in reported amounts.

 

5



 

The company has presented income tax expense after adjusting for the tax effect of special items including charges related to restructuring and other charges, acquisition related charges, and certain significant special tax items (“Adjusted Income Tax Expense”).  The company presents Adjusted Income Tax Expense to provide investors further information regarding the tax effects of adjustments used in determining the non-GAAP financial measure Adjusted Income from Continuing Operations (as defined below).  The difference between Adjusted Income Tax Expense and income tax expense (the most comparable GAAP measure) is the tax effect of adjusting items and certain significant special tax items.  The limitation of this measure is that it excludes the financial impact of items that would otherwise either increase or decrease income tax expense.  This limitation is best addressed by using Adjusted Income Tax Expense in combination with income tax expense (the most comparable GAAP measure) in order to better understand the amounts, character and impact of any increase or decrease in reported amounts.

 

The company has presented 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, tax sharing income related to certain proposed adjustments to prior period tax returns and other tax items, certain significant special tax items, and, if applicable, related tax effects (“Adjusted Income from Continuing Operations”).  The company presents Adjusted Income from Continuing Operations as it believes that it is appropriate for investors to consider results excluding these items in addition to its results in accordance with GAAP.  Adjusted Income from Continuing Operations provides additional information regarding the company’s underlying operating results, trends and the comparability of these results between periods.  The difference between Adjusted Income from Continuing Operations and income from continuing operations attributable to TE Connectivity Ltd. (the most comparable GAAP measure) consists of the impact of charges or income related to legal settlements and reserves, restructuring and other charges, acquisition related charges, tax sharing income related to certain proposed adjustments to prior period tax returns and other tax items, certain significant special tax items, and, if applicable, related tax effects.  The limitation of this measure is that it excludes the financial impact of items that would otherwise either increase or decrease the company’s reported results.  This limitation is best addressed by using Adjusted Income from Continuing Operations in combination with income from continuing operations attributable to TE Connectivity Ltd. (the most comparable GAAP measure) in order to better understand the amounts, character and impact of any increase or decrease in reported amounts.

 

The company has presented diluted earnings per share 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, tax sharing income related to certain proposed adjustments to prior period tax returns and other tax items, certain significant special tax items, and, if applicable, related tax effects (“Adjusted Earnings Per Share”).  The company presents Adjusted Earnings Per Share because it believes that it is appropriate for investors to consider results excluding these items in addition to its results in accordance with GAAP.  The company believes such a measure provides a picture of its results that is more comparable among periods since it excludes the impact of special items, which may recur, but tend to be irregular as to timing, thereby making comparisons between periods more difficult.  This limitation is best addressed by using Adjusted Earnings Per Share in combination with diluted earnings per share from continuing operations attributable to TE Connectivity Ltd. (the most comparable GAAP measure) in order to better understand the amounts, character and impact of any increase or decrease on reported results.

 

“Free Cash Flow” (FCF) is a useful measure of the company’s cash generation which is free from any significant existing obligation.  The difference between cash flows from operating activities (the most comparable GAAP measure) and FCF (the non-GAAP measure) consists mainly of significant cash outflows that the company believes are useful to identify.  FCF permits management and investors to gain insight into the amount that management employs to measure cash that is free from any significant existing obligation.  The difference reflects the impact from:

 

6



 

·                  net capital expenditures,

·                  voluntary pension contributions, and

·                  cash impact of special items.

 

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.  The company forecasts its cash flow results excluding any voluntary pension contributions because it has not yet made a determination about the amount and timing of any such future contributions.  In addition, the company’s forecast excludes the cash impact of special items because the company cannot predict the amount and timing of such items.

 

The limitation associated with using FCF is that it subtracts cash items that are ultimately within management’s and the Board of Directors’ discretion to direct and that therefore may imply that there is less or more cash that is available for the company’s programs than the most comparable GAAP measure.  This limitation is best addressed by using FCF in combination with the GAAP cash flow results.

 

FCF as presented herein may not be comparable to similarly-titled measures reported by other companies.  The measure should be used in conjunction with other GAAP financial measures.  Investors are urged to read the company’s financial statements as filed with the Securities and Exchange Commission, as well as the accompanying tables to this release that show all the elements of the GAAP measures of Cash Flows from Operating Activities, Cash Flows from Investing Activities, Cash Flows from Financing Activities and a reconciliation of the company’s total cash and cash equivalents for the period.  See the accompanying tables to this release for a cash flow statement presented in accordance with GAAP and a reconciliation presenting the components of FCF.

 

Because the company does not predict the amount and timing of special items that might occur in the future, and its forecasts are developed at a level of detail different than that used to prepare GAAP-based financial measures, the company does not provide reconciliations to GAAP of its forward-looking financial measures.

 

FORWARD-LOOKING STATEMENTS

 

This release may contain certain “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995.  These statements are based on management’s current expectations and are subject to risks, uncertainty and changes in circumstances, which may cause actual results, performance, financial condition or achievements to differ materially from anticipated results, performance, financial condition or achievements.  All statements contained herein that are not clearly historical in nature are forward-looking and the words “anticipate,” “believe,” “expect,” “estimate,” “plan,” and similar expressions are generally intended to identify forward-looking statements. TE Connectivity has no intention and is under no obligation to update or alter (and expressly disclaims any such intention or obligation to do so) its forward-looking statements whether as a result of new information, future events or otherwise, except to the extent required by law.  The forward-looking statements in this release include statements addressing our future financial condition and operating results.  Examples of factors that could cause actual results to differ materially from those described in the forward-looking statements include, among others, business, economic, competitive and regulatory risks, such as developments in the credit markets; conditions affecting demand for products, particularly the automotive industry and the telecommunications, computer and consumer electronics industries; future goodwill impairment; competition and pricing pressure; fluctuations in foreign currency exchange rates and commodity prices, natural disasters; political, economic and military instability in countries in which the company operates; compliance with current and future environmental and other laws and regulations; the possible effects on us of changes in tax laws, tax treaties and other legislation; the risk that ADC will not be integrated successfully into TE Connectivity; and the risk that revenue opportunities, cost savings and other anticipated synergies from the transaction may not be fully realized or may take longer to realize than expected.  More detailed information about these and other factors is set forth in TE Connectivity’s Annual

 

7



 

Report on Form 10-K for the fiscal year ended Sept. 24, 2010 and Quarterly Report on Form 10-Q for the quarterly period ended Dec. 24, 2010, as well as in TE Connectivity’s Current Reports on Form 8-K and other reports filed by TE Connectivity with the Securities and Exchange Commission.

 

# # #

 

8



 

TE CONNECTIVITY LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 

 

 

For the Quarters Ended

 

For the Six Months Ended

 

 

 

March 25,

 

March 26,

 

March 25,

 

March 26,

 

 

 

2011

 

2010

 

2011

 

2010

 

 

 

(in millions, except per share data)

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

3,472

 

$

2,957

 

$

6,672

 

$

5,849

 

Cost of sales

 

2,428

 

1,999

 

4,607

 

4,050

 

Gross margin

 

1,044

 

958

 

2,065

 

1,799

 

Selling, general, and administrative expenses

 

445

 

406

 

847

 

774

 

Research, development, and engineering expenses

 

180

 

142

 

343

 

280

 

Acquisition and integration costs

 

1

 

 

18

 

 

Restructuring and other charges, net

 

13

 

12

 

52

 

78

 

Operating income

 

405

 

398

 

805

 

667

 

Interest income

 

6

 

6

 

11

 

10

 

Interest expense

 

(43

)

(38

)

(78

)

(77

)

Other income, net

 

6

 

75

 

18

 

83

 

Income from continuing operations before income taxes

 

374

 

441

 

756

 

683

 

Income tax expense

 

(74

)

(135

)

(187

)

(204

)

Income from continuing operations

 

300

 

306

 

569

 

479

 

Loss from discontinued operations, net of income taxes

 

 

 

(3

)

 

Net income

 

300

 

306

 

566

 

479

 

Less: net income attributable to noncontrolling interests

 

(1

)

(2

)

(2

)

(3

)

Net income attributable to TE Connectivity Ltd.

 

$

299

 

$

304

 

$

564

 

$

476

 

 

 

 

 

 

 

 

 

 

 

Amounts attributable to TE Connectivity Ltd.:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

299

 

$

304

 

$

567

 

$

476

 

Loss from discontinued operations

 

 

 

(3

)

 

Net income

 

$

299

 

$

304

 

$

564

 

$

476

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share attributable to TE Connectivity Ltd.:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.67

 

$

0.67

 

$

1.28

 

$

1.04

 

Loss from discontinued operations

 

 

 

(0.01

)

 

Net income

 

$

0.67

 

$

0.67

 

$

1.27

 

$

1.04

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share attributable to TE Connectivity Ltd.:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.67

 

$

0.66

 

$

1.26

 

$

1.03

 

Loss from discontinued operations

 

 

 

 

 

Net income

 

$

0.67

 

$

0.66

 

$

1.26

 

$

1.03

 

 

 

 

 

 

 

 

 

 

 

Cash distributions paid per common share of TE Connectivity Ltd.

 

$

0.16

 

$

0.16

 

$

0.32

 

$

0.32

 

 

 

 

 

 

 

 

 

 

 

Weighted-average number of shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

443

 

457

 

444

 

458

 

Diluted

 

449

 

461

 

449

 

461

 

 



 

TE CONNECTIVITY LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

 

 

March 25,

 

September 24,

 

 

 

2011

 

2010

 

 

 

(in millions, except share data)

 

 

 

 

 

 

 

Assets

 

 

 

 

 

Current Assets:

 

 

 

 

 

Cash and cash equivalents

 

$

1,239

 

$

1,990

 

Accounts receivable, net of allowance for doubtful accounts of $32 and $44, respectively

 

2,495

 

2,259

 

Inventories

 

1,912

 

1,583

 

Prepaid expenses and other current assets

 

834

 

651

 

Deferred income taxes

 

263

 

248

 

Total current assets

 

6,743

 

6,731

 

Property, plant, and equipment, net

 

3,129

 

2,867

 

Goodwill

 

3,602

 

3,211

 

Intangible assets, net

 

670

 

392

 

Deferred income taxes

 

2,547

 

2,447

 

Receivable from Tyco International Ltd. and Covidien plc

 

1,150

 

1,127

 

Other assets

 

239

 

217

 

Total Assets

 

$

18,080

 

$

16,992

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

Current maturities of long-term debt

 

$

185

 

$

106

 

Accounts payable

 

1,558

 

1,386

 

Accrued and other current liabilities

 

1,875

 

1,804

 

Deferred revenue

 

132

 

164

 

Total current liabilities

 

3,750

 

3,460

 

Long-term debt

 

2,559

 

2,307

 

Long-term pension and postretirement liabilities

 

1,387

 

1,280

 

Deferred income taxes

 

285

 

285

 

Income taxes

 

2,223

 

2,152

 

Other liabilities

 

540

 

452

 

Total Liabilities

 

10,744

 

9,936

 

Commitments and contingencies

 

 

 

 

 

Shareholders’ Equity:

 

 

 

 

 

Common shares, 468,215,574 shares authorized and issued, CHF 1.37 par value and CHF 1.73 par value, respectively

 

599

 

599

 

Contributed surplus

 

7,726

 

8,085

 

Accumulated deficit

 

(596

)

(1,161

)

Treasury shares, at cost, 28,542,459 and 24,845,929 shares, respectively

 

(851

)

(721

)

Accumulated other comprehensive income

 

447

 

246

 

Total TE Connectivity Ltd. shareholders’ equity

 

7,325

 

7,048

 

Noncontrolling interests

 

11

 

8

 

Total Shareholders’ Equity

 

7,336

 

7,056

 

Total Liabilities and Shareholders’ Equity

 

$

18,080

 

$

16,992

 

 



 

TE CONNECTIVITY LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

 

 

For the Quarters Ended

 

For the Six Months Ended

 

 

 

March 25,

 

March 26,

 

March 25,

 

March 26,

 

 

 

2011

 

2010

 

2011

 

2010

 

 

 

(in millions)

 

Cash Flows From Operating Activities:

 

 

 

 

 

 

 

 

 

Net income

 

$

300

 

$

306

 

$

566

 

$

479

 

Loss from discontinued operations, net of income taxes

 

 

 

3

 

 

Income from continuing operations

 

300

 

306

 

569

 

479

 

Adjustments to reconcile net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Non-cash restructuring and other charges, net

 

5

 

(3

)

5

 

16

 

Depreciation and amortization

 

148

 

128

 

281

 

266

 

Deferred income taxes

 

(1

)

102

 

104

 

155

 

Provision for losses on accounts receivable and inventories

 

7

 

5

 

13

 

 

Tax sharing income

 

(4

)

(75

)

(17

)

(83

)

Other

 

26

 

18

 

49

 

38

 

Changes in assets and liabilities, net of the effects of acquisitions and divestitures:

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

(19

)

(70

)

(12

)

(146

)

Inventories

 

(71

)

(109

)

(177

)

(129

)

Inventoried costs on long-term contracts

 

32

 

(5

)

31

 

(25

)

Prepaid expenses and other current assets

 

6

 

(1

)

49

 

26

 

Accounts payable

 

25

 

98

 

29

 

260

 

Accrued and other current liabilities

 

87

 

101

 

(258

)

4

 

Income taxes

 

13

 

 

13

 

 

Deferred revenue

 

(26

)

(12

)

(38

)

(40

)

Long-term pension and postretirement liabilities

 

22

 

21

 

44

 

15

 

Other

 

7

 

(4

)

26

 

(6

)

Net cash provided by operating activities

 

557

 

500

 

711

 

830

 

Cash Flows From Investing Activities:

 

 

 

 

 

 

 

 

 

Capital expenditures

 

(114

)

(81

)

(231

)

(157

)

Proceeds from sale of property, plant, and equipment

 

4

 

3

 

12

 

5

 

Proceeds from sale of short-term investments

 

118

 

 

155

 

1

 

Acquisition of business, net of cash acquired

 

 

(55

)

(717

)

(55

)

Proceeds from divestiture of business, net of cash retained by business sold

 

 

 

 

12

 

Other

 

(5

)

(2

)

(9

)

(5

)

Net cash provided by (used in) investing activities

 

3

 

(135

)

(790

)

(199

)

Cash Flows From Financing Activities:

 

 

 

 

 

 

 

 

 

Decrease in commercial paper

 

 

 

(100

)

 

Proceeds from long-term debt

 

 

 

249

 

 

Repayment of long-term debt

 

(470

)

 

(470

)

 

Proceeds from exercise of share options

 

41

 

2

 

65

 

3

 

Repurchase of common shares

 

(236

)

(147

)

(281

)

(165

)

Payment of cash distributions to shareholders

 

(70

)

(72

)

(141

)

(146

)

Other

 

(2

)

(3

)

(6

)

(5

)

Net cash used in financing activities

 

(737

)

(220

)

(684

)

(313

)

Effect of currency translation on cash

 

9

 

(1

)

12

 

 

Net increase (decrease) in cash and cash equivalents

 

(168

)

144

 

(751

)

318

 

Cash and cash equivalents at beginning of period

 

1,407

 

1,695

 

1,990

 

1,521

 

Cash and cash equivalents at end of period

 

$

1,239

 

$

1,839

 

$

1,239

 

$

1,839

 

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Information:

 

 

 

 

 

 

 

 

 

Income taxes paid, net of refunds

 

$

61

 

$

32

 

$

69

 

$

48

 

 

 

 

 

 

 

 

 

 

 

Reconciliation to Free Cash Flow:

 

 

 

 

 

 

 

 

 

Net cash provided by continuing operating activities

 

$

557

 

$

500

 

$

711

 

$

830

 

Capital expenditures, net

 

(110

)

(78

)

(219

)

(152

)

Free cash flow (1)

 

$

447

 

$

422

 

$

492

 

$

678

 

 


(1) Free cash flow is a non-GAAP measure.  See description of non-GAAP measures contained in this release.

 



 

TE CONNECTIVITY LTD.

CONSOLIDATED SEGMENT DATA (UNAUDITED)

 

 

 

For the Quarters Ended

 

 

 

For the Six Months Ended

 

 

 

 

 

March 25,

 

 

 

March 26,

 

 

 

March 25,

 

 

 

March 26,

 

 

 

 

 

2011

 

 

 

2010

 

 

 

2011

 

 

 

2010

 

 

 

 

 

($ in millions)

 

Net Sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

1,357

 

 

 

$

1,198

 

 

 

$

2,668

 

 

 

$

2,377

 

 

 

Communications and Industrial Solutions

 

1,208

 

 

 

1,157

 

 

 

2,431

 

 

 

2,247

 

 

 

Network Solutions

 

907

 

 

 

602

 

 

 

1,573

 

 

 

1,225

 

 

 

Total

 

$

3,472

 

 

 

$

2,957

 

 

 

$

6,672

 

 

 

$

5,849

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

211

 

15.5

%

$

149

 

12.4

%

$

400

 

15.0

%

$

248

 

10.4

%

Communications and Industrial Solutions

 

146

 

12.1

%

162

 

14.0

%

327

 

13.5

%

277

 

12.3

%

Network Solutions

 

48

 

5.3

%

87

 

14.5

%

78

 

5.0

%

142

 

11.6

%

Total

 

$

405

 

11.7

%

$

398

 

13.5

%

$

805

 

12.1

%

$

667

 

11.4

%

 



 

TE CONNECTIVITY LTD.

NET SALES GROWTH RECONCILIATION (UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percentage of

 

 

 

Change in Net Sales for the Quarter Ended March 25, 2011

 

Segment’s Total

 

 

 

versus Net Sales for the Quarter Ended March 26, 2010

 

Net Sales for the

 

 

 

Organic (1)

 

Translation (2)

 

Acquisition
(Divestiture)

 

Total

 

Quarter Ended
March 25, 2011

 

 

 

($ in millions)

 

 

 

Transportation Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Automotive

 

$

157

 

15.1

%

$

12

 

$

(21

)

$

148

 

14.1

%

88

%

Aerospace, Defense, and Marine

 

10

 

7.3

 

1

 

 

11

 

7.2

 

12

 

Total

 

167

 

14.0

 

13

 

(21

)

159

 

13.3

 

100

%

Communications and Industrial Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial

 

34

 

10.3

 

5

 

 

39

 

11.5

 

31

 

Data Communications

 

20

 

9.5

 

6

 

 

26

 

11.7

 

21

 

Appliance

 

9

 

4.9

 

2

 

 

11

 

5.9

 

16

 

Consumer Devices

 

(30

)

(15.0

)

5

 

(5

)

(30

)

(14.9

)

14

 

Computer

 

(3

)

(2.6

)

1

 

 

(2

)

(1.7

)

10

 

Touch Solutions

 

7

 

7.5

 

 

 

7

 

7.8

 

8

 

Total

 

37

 

3.3

 

19

 

(5

)

51

 

4.4

 

100

%

Network Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Telecom Networks

 

35

 

32.9

 

4

 

232

 

271

 

242.0

 

43

 

Energy

 

19

 

11.6

 

4

 

 

23

 

13.4

 

21

 

Enterprise Networks

 

20

 

19.7

 

3

 

47

 

70

 

63.6

 

20

 

Subsea Communications

 

(59

)

(28.4

)

 

 

(59

)

(28.4

)

16

 

Total

 

15

 

2.6

 

11

 

279

 

305

 

50.7

 

100

%

Total

 

$

219

 

7.4

%

$

43

 

$

253

 

$

515

 

17.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percentage of

 

 

 

Change in Net Sales for the Six Months Ended March 25, 2011

 

Segment’s Total

 

 

 

versus Net Sales for the Six Months Ended March 26, 2010

 

Net Sales for the

 

 

 

Organic (1)

 

Translation (2)

 

Acquisition 
(Divestitures)

 

Total

 

Six Months Ended
March 25, 2011

 

 

 

($ in millions)

 

 

 

Transportation Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Automotive

 

$

322

 

15.6

%

$

(12

)

$

(44

)

$

266

 

12.8

%

88

%

Aerospace, Defense, and Marine

 

26

 

9.4

 

(1

)

 

25

 

8.5

 

12

 

Total

 

348

 

14.7

 

(13

)

(44

)

291

 

12.2

 

100

%

Communications and Industrial Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial

 

106

 

16.7

 

(1

)

(1

)

104

 

16.2

 

31

 

Data Communications

 

62

 

14.3

 

7

 

 

69

 

15.9

 

21

 

Appliance

 

40

 

11.3

 

 

 

40

 

11.4

 

16

 

Consumer Devices

 

(35

)

(8.5

)

8

 

(9

)

(36

)

(8.8

)

15

 

Computer

 

(2

)

(0.7

)

4

 

 

2

 

0.9

 

10

 

Touch Solutions

 

6

 

3.6

 

(1

)

 

5

 

2.8

 

7

 

Total

 

177

 

7.9

 

17

 

(10

)

184

 

8.2

 

100

%

Network Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Telecom Networks

 

71

 

33.3

 

2

 

277

 

350

 

155.6

 

37

 

Energy

 

41

 

12.2

 

(1

)

(12

)

28

 

7.5

 

25

 

Enterprise Networks

 

29

 

14.7

 

4

 

53

 

86

 

39.1

 

19

 

Subsea Communications

 

(116

)

(28.5

)

 

 

(116

)

(28.4

)

19

 

Total

 

25

 

2.1

 

5

 

318

 

348

 

28.4

 

100

%

Total

 

$

550

 

9.4

%

$

9

 

$

264

 

$

823

 

14.1

%

 

 

 


(1) Represents the change in net sales resulting from volume and price changes, before consideration of acquisitions, divestitures, and the impact of changes in foreign currency exchange rates.  Organic net sales growth is a non-GAAP measure.  See description of non-GAAP measures contained in this release.

(2) Represents the change in net sales resulting from changes in foreign currency exchange rates.

(3) Industry end market information about net sales is presented consistently with our internal management reporting and may be periodically revised as management deems necessary.



 

TE CONNECTIVITY LTD.

NET SALES GROWTH RECONCILIATION (UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percentage of

 

 

 

 

 

Segment’s Total

 

 

 

Change in Net Sales for the Quarter Ended March 25, 2011

 

Net Sales for the

 

 

 

versus Net Sales for the Quarter Ended December 24, 2010

 

Quarter Ended

 

 

 

Organic (1)

 

Translation (2)

 

Acquisition

 

Total

 

March 25, 2011

 

 

 

($ in millions)

 

 

 

Transportation Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Automotive

 

$

37

 

3.2

%

$

3

 

$

 

$

40

 

3.5

%

88

%

Aerospace, Defense, and Marine

 

6

 

3.7

 

 

 

6

 

3.8

 

12

 

Total

 

43

 

3.3

 

3

 

 

46

 

3.5

 

100

%

Communications and Industrial Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial

 

9

 

2.2

 

(1

)

 

8

 

2.2

 

31

 

Data Communications

 

(8

)

(3.1

)

1

 

 

(7

)

(2.7

)

21

 

Appliance

 

4

 

2.0

 

 

 

4

 

2.1

 

16

 

Consumer Devices

 

(34

)

(16.6

)

1

 

 

(33

)

(16.2

)

14

 

Computer

 

1

 

1.0

 

 

 

1

 

0.9

 

10

 

Touch Solutions

 

11

 

13.5

 

1

 

 

12

 

14.1

 

8

 

Total

 

(17

)

(1.4

)

2

 

 

(15

)

(1.2

)

100

%

Network Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Telecom Networks

 

4

 

2.3

 

 

187

 

191

 

99.5

 

43

 

Energy

 

(11

)

(5.5

)

1

 

 

(10

)

(4.9

)

21

 

Enterprise Networks

 

14

 

11.2

 

(1

)

41

 

54

 

42.9

 

20

 

Subsea Communications

 

6

 

4.1

 

 

 

6

 

4.2

 

16

 

Total

 

13

 

2.0

 

 

228

 

241

 

36.2

 

100

%

Total

 

$

39

 

1.2

%

$

5

 

$

228

 

$

272

 

8.5

%

 

 

 


(1) Represents the change in net sales resulting from volume and price changes, before consideration of acquisitions, divestitures, and the impact of changes in foreign currency exchange rates.  Organic net sales growth is a non-GAAP measure.  See description of non-GAAP measures contained in this release.

(2) Represents the change in net sales resulting from changes in foreign currency exchange rates.

(3) Industry end market information about net sales is presented consistently with our internal management reporting and may be periodically revised as management deems necessary.

 



 

TE CONNECTIVITY LTD.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES

For the Quarter Ended March 25, 2011

(UNAUDITED)

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Acquisition

 

Restructuring

 

 

 

 

 

 

 

Related

 

and Other

 

Adjusted

 

 

 

U.S. GAAP

 

Charges (1)

 

Charges, Net

 

(Non-GAAP) (2)

 

 

 

($ in millions, except per share data)

 

Operating Income:

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

211

 

$

 

$

(6

)

$

205

 

Communications and Industrial Solutions

 

146

 

 

1

 

147

 

Network Solutions

 

48

 

48

 

1

 

97

 

Total

 

$

405

 

$

48

 

$

(4

)

$

449

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

11.7

%

 

 

 

 

12.9

%

 

 

 

 

 

 

 

 

 

 

Other Income, Net

 

$

6

 

$

 

$

 

$

6

 

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

$

(74

)

$

(26

)

$

 

$

(100

)

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

299

 

$

22

 

$

(4

)

$

317

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings per Share from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

0.67

 

$

0.05

 

$

(0.01

)

$

0.71

 

 


(1) Includes $30 million of non-cash amortization associated with fair value adjustments primarily related to acquired inventories and customer order backlog recorded in cost of sales, $17 million of restructuring charges, and $1 million of ADC acquisition and integration costs.

(2) See description of non-GAAP measures contained in this release.

 



 

TE CONNECTIVITY LTD.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES

For the Quarter Ended March 26, 2010

(UNAUDITED)

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Restructuring

 

 

 

 

 

 

 

 

 

and Other

 

Tax

 

Adjusted

 

 

 

U.S. GAAP

 

Charges, Net

 

Items (1)

 

(Non-GAAP) (2)

 

 

 

($ in millions, except per share data)

 

Operating Income:

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

149

 

$

 

$

 

$

149

 

Communications and Industrial Solutions

 

162

 

12

 

 

174

 

Network Solutions

 

87

 

 

 

87

 

Total

 

$

398

 

$

12

 

$

 

$

410

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

13.5

%

 

 

 

 

13.9

%

 

 

 

 

 

 

 

 

 

 

Other Income, Net

 

$

75

 

$

 

$

(64

)

$

11

 

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

$

(135

)

$

(1

)

$

46

 

$

(90

)

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

304

 

$

11

 

$

(18

)

$

297

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings per Share from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

0.66

 

$

0.02

 

$

(0.04

)

$

0.64

 

 


(1) Includes income tax expense related to certain proposed adjustments to prior year tax returns and the related impact to other income pursuant to the Tax Sharing Agreement with Tyco International and Covidien.  Also includes an income tax benefit recognized in connection with a reduction in the valuation allowance associated with certain tax loss carryforwards.

(2) See description of non-GAAP measures contained in this release.

 



 

TE CONNECTIVITY LTD.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES

For the Six Months Ended March 25, 2011

(UNAUDITED)

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Acquisition

 

Restructuring

 

 

 

 

 

 

 

Related

 

and Other

 

Adjusted

 

 

 

U.S. GAAP

 

Charges (1)

 

Charges, Net

 

(Non-GAAP) (2)

 

 

 

($ in millions, except per share data)

 

Operating Income:

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

400

 

$

 

$

(5

)

$

395

 

Communications and Industrial Solutions

 

327

 

 

4

 

331

 

Network Solutions

 

78

 

107

 

1

 

186

 

Total

 

$

805

 

$

107

 

$

 

$

912

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

12.1

%

 

 

 

 

13.7

%

 

 

 

 

 

 

 

 

 

 

Other Income, Net

 

$

18

 

$

 

$

 

$

18

 

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

$

(187

)

$

(26

)

$

(1

)

$

(214

)

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

567

 

$

81

 

$

(1

)

$

647

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings per Share from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

1.26

 

$

0.18

 

$

 

$

1.44

 

 


(1) Includes $52 million of restructuring charges, $37 million of non-cash amortization associated with fair value adjustments primarily related to acquired inventories and customer order backlog recorded in cost of sales, and $18 million of ADC acquisition and integration costs.

(2) See description of non-GAAP measures contained in this release.

 



 

TE CONNECTIVITY LTD.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES

For the Six Months Ended March 26, 2010

(UNAUDITED)

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Restructuring

 

 

 

 

 

 

 

 

 

and Other

 

Tax

 

Adjusted

 

 

 

U.S. GAAP

 

Charges, Net (1)

 

Items (2)

 

(Non-GAAP) (3)

 

 

 

($ in millions, except per share data)

 

Operating Income:

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

248

 

$

37

 

$

 

$

285

 

Communications and Industrial Solutions

 

277

 

19

 

 

296

 

Network Solutions

 

142

 

19

 

 

161

 

Total

 

$

667

 

$

75

 

$

 

$

742

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

11.4

%

 

 

 

 

12.7

%

 

 

 

 

 

 

 

 

 

 

Other Income, Net

 

$

83

 

$

 

$

(64

)

$

19

 

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

$

(204

)

$

(17

)

$

46

 

$

(175

)

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

476

 

$

58

 

$

(18

)

$

516

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings per Share from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

1.03

 

$

0.13

 

$

(0.04

)

$

1.12

 

 


(1) Includes $78 million recorded in net restructuring and other charges and a $3 million credit recorded in cost of sales.

(2) Includes income tax expense related to certain proposed adjustments to prior year tax returns and the related impact to other income pursuant to the Tax Sharing Agreement with Tyco International and Covidien.  Also includes an income tax benefit recognized in connection with a reduction in the valuation allowance associated with certain tax loss carryforwards.

(3) See description of non-GAAP measures contained in this release.

 



 

TE CONNECTIVITY LTD.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES

For the Quarter Ended December 24, 2010

(UNAUDITED)

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Acquisition

 

Restructuring

 

 

 

 

 

 

 

Related

 

and Other

 

Adjusted

 

 

 

U.S. GAAP

 

Charges (1)

 

Charges, Net

 

(Non-GAAP) (2)

 

 

 

($ in millions, except per share data)

 

Operating Income:

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

189

 

$

 

$

1

 

$

190

 

Communications and Industrial Solutions

 

181

 

 

3

 

184

 

Network Solutions

 

30

 

59

 

 

89

 

Total

 

$

400

 

$

59

 

$

4

 

$

463

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

12.5

%

 

 

 

 

14.5

%

 

 

 

 

 

 

 

 

 

 

Other Income, Net

 

$

12

 

$

 

$

 

$

12

 

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

$

(113

)

$

 

$

(1

)

$

(114

)

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

268

 

$

59

 

$

3

 

$

330

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings per Share from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

0.60

 

$

0.13

 

$

0.01

 

$

0.73

 

 


(1) Includes $35 million of restructuring charges, $17 million of ADC acquisition and integration costs, and $7 million of non-cash amortization associated with fair value adjustments to acquired inventories and customer order backlog recorded in cost of sales.

(2) See description of non-GAAP measures contained in this release.

 



 

TE CONNECTIVITY LTD.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES

For the Quarter Ended June 25, 2010

(UNAUDITED)

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Restructuring

 

 

 

 

 

 

 

 

 

 

 

and Other

 

Tax

 

Other Items,

 

Adjusted

 

 

 

U.S. GAAP

 

Charges, Net

 

Items (1)

 

Net (2)

 

(Non-GAAP) (3)

 

 

 

($ in millions, except per share data)

 

Operating Income:

 

 

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

159

 

$

6

 

$

 

$

 

$

165

 

Communications and Industrial Solutions

 

205

 

(1

)

 

 

204

 

Network Solutions

 

96

 

(2

)

 

 

94

 

Pre-separation litigation income

 

7

 

 

 

(7

)

 

Total

 

$

467

 

$

3

 

$

 

$

(7

)

$

463

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

15.1

%

 

 

 

 

 

 

15.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Other Income, Net

 

$

42

 

$

 

$

(33

)

$

 

$

9

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

$

(144

)

$

 

$

26

 

$

 

$

(118

)

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

330

 

$

3

 

$

(7

)

$

(7

)

$

319

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings per Share from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

0.72

 

$

0.01

 

$

(0.02

)

$

(0.02

)

$

0.70

 

 


(1) Includes income tax expense related to certain proposed adjustments to prior year tax returns and income tax benefits associated with the completion of an audit of prior year tax returns.  Also includes the related impact to other income pursuant to the Tax Sharing Agreement with Tyco International and Covidien.

(2) Consists of $7 million of income related to pre-separation securities litigation.

(3) See description of non-GAAP measures contained in this release.

 



 

TE CONNECTIVITY LTD.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES

For the Year Ended September 24, 2010

(UNAUDITED)

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Restructuring

 

 

 

 

 

 

 

 

 

 

 

and Other

 

Tax

 

Other Items,

 

Adjusted

 

 

 

U.S. GAAP

 

Charges, Net (1)

 

Items (2)

 

Net (3)

 

(Non-GAAP) (4)

 

 

 

($ in millions, except per share data)

 

Operating Income:

 

 

 

 

 

 

 

 

 

 

 

Transportation Solutions

 

$

515

 

$

94

 

$

 

$

 

$

609

 

Communications and Industrial Solutions

 

682

 

20

 

 

 

702

 

Network Solutions

 

312

 

20

 

 

8

 

340

 

Pre-separation litigation income

 

7

 

 

 

(7

)

 

Total

 

$

1,516

 

$

134

 

$

 

$

1

 

$

1,651

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

12.6

%

 

 

 

 

 

 

13.7

%

 

 

 

 

 

 

 

 

 

 

 

 

Other Income, Net

 

$

177

 

$

 

$

(137

)

$

 

$

40

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

$

(493

)

$

(30

)

$

134

 

$

 

$

(389

)

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

1,059

 

$

104

 

$

(3

)

$

1

 

$

1,161

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings per Share from Continuing Operations Attributable to TE Connectivity Ltd.

 

$

2.32

 

$

0.23

 

$

(0.01

)

$

 

$

2.54

 

 


(1) Includes $137 million recorded in net restructuring and other charges and a $3 million credit recorded in cost of sales.

(2) Includes income tax expense related to certain proposed adjustments to prior year tax returns and income tax benefits associated with the settlement of an audit of prior year tax returns as well as the related impact to other income pursuant to the Tax Sharing Agreement with Tyco International and Covidien.  Also includes an income tax benefit recognized in connection with a reduction in the valuation allowance associated with certain tax loss carryforwards.

(3) Consists of $8 million of acquisition and integration costs and $7 million of credits related to pre-separation securities litigation.

(4) See description of non-GAAP measures contained in this release.