SCHAFFHAUSEN, Switzerland, Jan. 29, 2020 /PRNewswire/ — TE Connectivity Ltd. (NYSE: TEL) today reported results for the fiscal first quarter ended December 27, 2019.
First Quarter Highlights
“I’m pleased with our performance in the first quarter where we delivered sales and adjusted earnings per share above our expectations and generated strong cash flow in what continues to be a challenging market environment,” said Terrence Curtin, chief executive officer of TE Connectivity. “Our Industrial segment grew ahead of guidance driven by strength in our defense, medical, aerospace and energy businesses, while our Transportation segment continued to outperform auto production declines due to our strong content position in the long-term growth trends of electric and connected vehicles. We were pleased to see sequential orders growth this quarter, signaling stabilization in key end markets. Based on our first quarter results, we are updating our GAAP EPS guidance and raising our sales and adjusted EPS guidance for the full year.”
2020 Outlook
The company has updated full year guidance to net sales expectations of $12.85 to $13.25 billion, reflecting 3% actual and 2% organic decline at the mid-point versus the prior year. Diluted EPS from continuing operations are expected to be $3.23 to $3.53, including net restructuring, acquisition-related and other charges of $0.66 and a tax-related charge of $1.06. The company expects adjusted EPS of $4.95 to $5.25.
For the fiscal second quarter of 2020, the company expects net sales of $3.1 billion to $3.3 billion, reflecting a decrease of 6% on an actual basis and 5% on an organic basis year over year at the mid-point. Diluted EPS from continuing operations are expected to be $1.05 to $1.11, including net restructuring, acquisition-related and other charges of $0.17. The company expects adjusted EPS of $1.22 to $1.28.
Information about TE Connectivity’s use of non-GAAP financial measures is provided below. For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, see the attached tables.
Conference Call and Webcast
The company will hold a conference call today beginning at 8:30 a.m. ET. The dial-in information is provided here:
About TE Connectivity
TE Connectivity Ltd. (NYSE: TEL) is a $13 billion global industrial technology leader creating a safer, sustainable, productive, and connected future. Our broad range of connectivity and sensor solutions, proven in the harshest environments, enable advancements in transportation, industrial applications, medical technology, energy, data communications, and the home. With nearly 80,000 employees, including more than 8,000 engineers, working alongside customers in approximately 150 countries, TE ensures that EVERY CONNECTION COUNTS. Learn more at www.te.com and on LinkedIn, Facebook, WeChat and Twitter.
Non-GAAP Financial Measures
We present non-GAAP performance and liquidity measures as we believe it is appropriate for investors to consider adjusted financial measures in addition to results in accordance with accounting principles generally accepted in the U.S. (“GAAP”). These non-GAAP financial measures provide supplemental information and should not be considered replacements for results in accordance with GAAP. Management uses non-GAAP financial measures internally for planning and forecasting purposes and in its decision-making processes related to the operations of our company. We believe these measures provide meaningful information to us and investors because they enhance the understanding of our operating performance, ability to generate cash, and the trends of our business. Additionally, we believe that investors benefit from having access to the same financial measures that management uses in evaluating our operations. The primary limitation of these measures is that they exclude the financial impact of items that would otherwise either increase or decrease our reported results. This limitation is best addressed by using these non-GAAP financial measures in combination with the most directly comparable GAAP financial measures in order to better understand the amounts, character, and impact of any increase or decrease in reported amounts. These non-GAAP financial measures may not be comparable to similarly-titled measures reported by other companies.
The following provides additional information regarding our non-GAAP financial measures:
Free Cash Flow is defined as net cash provided by continuing operating activities excluding voluntary pension contributions and the cash impact of special items, if any, minus net capital expenditures. Voluntary pension contributions are excluded from the GAAP financial measure because this activity is driven by economic financing decisions rather than operating activity. Certain special items, including net payments related to pre-separation tax matters and cash paid (collected) pursuant to collateral requirements related to cross-currency swap contracts, are also excluded by management in evaluating Free Cash Flow. Net capital expenditures consist of capital expenditures less proceeds from the sale of property, plant, and equipment. These items are subtracted because they represent long-term commitments.
In the calculation of Free Cash Flow, we subtract certain cash items that are ultimately within management’s and the Board of Directors’ discretion to direct and may imply that there is less or more cash available for our programs than the most comparable GAAP financial measure indicates. It should not be inferred that the entire Free Cash Flow amount is available for future discretionary expenditures, as our definition of Free Cash Flow does not consider certain non-discretionary expenditures, such as debt payments. In addition, we may have other discretionary expenditures, such as discretionary dividends, share repurchases, and business acquisitions, that are not considered in the calculation of Free Cash Flow.
Forward-Looking Statements
This release 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 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. We have no intention and are under no obligation to update or alter (and expressly disclaim any such intention or obligation to do so) our 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 conditions affecting demand for products, particularly in the automotive and data and devices industries; competition and pricing pressure; fluctuations in foreign currency exchange rates and commodity prices; natural disasters and political, economic and military instability in countries in which we operate; developments in the credit markets; future goodwill impairment; compliance with current and future environmental and other laws and regulations; and the possible effects on us of changes in tax laws, tax treaties and other legislation, including the effects of Swiss tax reform. More detailed information about these and other factors is set forth in TE Connectivity Ltd.’s Annual Report on Form 10-K for the fiscal year ended Sept. 27, 2019 as well as in our Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports filed by us with the U.S. Securities and Exchange Commission.
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TE CONNECTIVITY LTD. |
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CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) |
|||
|
For the Quarters Ended |
|||
|
December 27, |
December 28, |
||
|
2019 |
2018 |
||
|
(in millions, except per share data) |
|||
|
Net sales |
$ 3,168 |
$ 3,347 |
|
|
Cost of sales |
2,138 |
2,233 |
|
|
Gross margin |
1,030 |
1,114 |
|
|
Selling, general, and administrative expenses |
367 |
389 |
|
|
Research, development, and engineering expenses |
161 |
161 |
|
|
Acquisition and integration costs |
7 |
5 |
|
|
Restructuring and other charges, net |
24 |
75 |
|
|
Operating income |
471 |
484 |
|
|
Interest income |
6 |
5 |
|
|
Interest expense |
(12) |
(27) |
|
|
Other income (expense), net |
5 |
(1) |
|
|
Income from continuing operations before income taxes |
470 |
461 |
|
|
Income tax expense |
(447) |
(78) |
|
|
Income from continuing operations |
23 |
383 |
|
|
Income (loss) from discontinued operations, net of income taxes |
3 |
(107) |
|
|
Net income |
$ 26 |
$ 276 |
|
|
Basic earnings per share: |
|||
|
Income from continuing operations |
$ 0.07 |
$ 1.12 |
|
|
Income (loss) from discontinued operations |
0.01 |
(0.31) |
|
|
Net income |
0.08 |
0.81 |
|
|
Diluted earnings per share: |
|||
|
Income from continuing operations |
$ 0.07 |
$ 1.11 |
|
|
Income (loss) from discontinued operations |
0.01 |
(0.31) |
|
|
Net income |
0.08 |
0.80 |
|
|
Weighted-average number of shares outstanding: |
|||
|
Basic |
335 |
342 |
|
|
Diluted |
337 |
344 |
|
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TE CONNECTIVITY LTD. |
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|
CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
|||
|
December 27, |
September 27, |
||
|
2019 |
2019 |
||
|
(in millions, except share data) |
|||
|
Assets |
|||
|
Current assets: |
|||
|
Cash and cash equivalents |
$ 742 |
$ 927 |
|
|
Accounts receivable, net of allowance for doubtful accounts of $29 and $25, respectively |
2,338 |
2,320 |
|
|
Inventories |
2,003 |
1,836 |
|
|
Prepaid expenses and other current assets |
483 |
471 |
|
|
Total current assets |
5,566 |
5,554 |
|
|
Property, plant, and equipment, net |
3,659 |
3,574 |
|
|
Goodwill |
5,846 |
5,740 |
|
|
Intangible assets, net |
1,602 |
1,596 |
|
|
Deferred income taxes |
2,360 |
2,776 |
|
|
Other assets |
943 |
454 |
|
|
Total assets |
$ 19,976 |
$ 19,694 |
|
|
Liabilities and shareholders’ equity |
|||
|
Current liabilities: |
|||
|
Short-term debt |
$ 561 |
$ 570 |
|
|
Accounts payable |
1,433 |
1,357 |
|
|
Accrued and other current liabilities |
1,410 |
1,613 |
|
|
Total current liabilities |
3,404 |
3,540 |
|
|
Long-term debt |
3,412 |
3,395 |
|
|
Long-term pension and postretirement liabilities |
1,365 |
1,367 |
|
|
Deferred income taxes |
142 |
156 |
|
|
Income taxes |
247 |
239 |
|
|
Other liabilities |
849 |
427 |
|
|
Total liabilities |
9,419 |
9,124 |
|
|
Commitments and contingencies |
|||
|
Shareholders’ equity: |
|||
|
Common shares, CHF 0.57 par value, 350,951,381 shares authorized and issued |
154 |
154 |
|
|
Accumulated earnings |
12,206 |
12,256 |
|
|
Treasury shares, at cost, 16,520,951 and 15,862,337 shares, respectively |
(1,389) |
(1,337) |
|
|
Accumulated other comprehensive loss |
(414) |
(503) |
|
|
Total shareholders’ equity |
10,557 |
10,570 |
|
|
Total liabilities and shareholders’ equity |
$ 19,976 |
$ 19,694 |
|
|
TE CONNECTIVITY LTD. |
|||
|
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
|||
|
For the Quarters Ended |
|||
|
December 27, |
December 28, |
||
|
2019 |
2018 |
||
|
(in millions) |
|||
|
Cash flows from operating activities: |
|||
|
Net income |
$ 26 |
$ 276 |
|
|
(Income) loss from discontinued operations, net of income taxes |
(3) |
107 |
|
|
Income from continuing operations |
23 |
383 |
|
|
Adjustments to reconcile income from continuing operations to net cash |
|||
|
provided by operating activities: |
|||
|
Depreciation and amortization |
174 |
168 |
|
|
Deferred income taxes |
394 |
(11) |
|
|
Non-cash lease cost |
27 |
– |
|
|
Provision for losses on accounts receivable and inventories |
20 |
23 |
|
|
Share-based compensation expense |
22 |
23 |
|
|
Other |
10 |
18 |
|
|
Changes in assets and liabilities, net of the effects of acquisitions |
|||
|
and divestitures: |
|||
|
Accounts receivable, net |
(24) |
(26) |
|
|
Inventories |
(176) |
(119) |
|
|
Prepaid expenses and other current assets |
(23) |
67 |
|
|
Accounts payable |
94 |
(9) |
|
|
Accrued and other current liabilities |
(185) |
(190) |
|
|
Income taxes |
10 |
15 |
|
|
Other |
45 |
(14) |
|
|
Net cash provided by continuing operating activities |
411 |
328 |
|
|
Net cash used in discontinued operating activities |
– |
(31) |
|
|
Net cash provided by operating activities |
411 |
297 |
|
|
Cash flows from investing activities: |
|||
|
Capital expenditures |
(176) |
(210) |
|
|
Proceeds from sale of property, plant, and equipment |
2 |
1 |
|
|
Acquisition of businesses, net of cash acquired |
(115) |
– |
|
|
Proceeds from divestiture of discontinued operation, net of cash retained by sold operation |
– |
288 |
|
|
Other |
– |
3 |
|
|
Net cash provided by (used in) continuing investing activities |
(289) |
82 |
|
|
Net cash used in discontinued investing activities |
– |
(2) |
|
|
Net cash provided by (used in) investing activities |
(289) |
80 |
|
|
Cash flows from financing activities: |
|||
|
Net increase (decrease) in commercial paper |
(9) |
63 |
|
|
Proceeds from issuance of debt |
– |
350 |
|
|
Repayment of debt |
– |
(441) |
|
|
Proceeds from exercise of share options |
14 |
7 |
|
|
Repurchase of common shares |
(139) |
(519) |
|
|
Payment of common share dividends to shareholders |
(154) |
(150) |
|
|
Transfers to discontinued operations |
– |
(33) |
|
|
Other |
(26) |
(29) |
|
|
Net cash used in continuing financing activities |
(314) |
(752) |
|
|
Net cash provided by discontinued financing activities |
– |
33 |
|
|
Net cash used in financing activities |
(314) |
(719) |
|
|
Effect of currency translation on cash |
7 |
(1) |
|
|
Net decrease in cash, cash equivalents, and restricted cash |
(185) |
(343) |
|
|
Cash, cash equivalents, and restricted cash at beginning of period |
927 |
848 |
|
|
Cash, cash equivalents, and restricted cash at end of period |
$ 742 |
$ 505 |
|
|
Supplemental cash flow information: |
|||
|
Interest paid on debt, net |
$ 4 |
$ 19 |
|
|
Income taxes paid, net of refunds |
43 |
75 |
|
|
TE CONNECTIVITY LTD. |
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|
RECONCILIATION OF FREE CASH FLOW (UNAUDITED) |
|||
|
For the Quarters Ended |
|||
|
December 27, |
December 28, |
||
|
2019 |
2018 |
||
|
(in millions) |
|||
|
Net cash provided by continuing operating activities |
$ 411 |
$ 328 |
|
|
Excluding: |
|||
|
Cash (collected) paid pursuant to collateral requirements related |
|||
|
to cross-currency swap contracts |
6 |
(50) |
|
|
Capital expenditures, net |
(174) |
(209) |
|
|
Free cash flow (1) |
$ 243 |
$ 69 |
|
|
(1) Free cash flow is a non-GAAP financial measure. See description of non-GAAP financial measures. |
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|
TE CONNECTIVITY LTD. |
|||||
|
CONSOLIDATED SEGMENT DATA (UNAUDITED) |
|||||
|
For the Quarters Ended |
|||||
|
December 27, |
December 28, |
||||
|
2019 |
2018 |
||||
|
($ in millions) |
|||||
|
Net Sales |
Net Sales |
||||
|
Transportation Solutions |
$ 1,868 |
$ 1,986 |
|||
|
Industrial Solutions |
927 |
928 |
|||
|
Communications Solutions |
373 |
433 |
|||
|
Total |
$ 3,168 |
$ 3,347 |
|||
|
Operating |
Operating |
Operating |
Operating |
||
|
Income |
Margin |
Income |
Margin |
||
|
Transportation Solutions |
$ 316 |
16.9% |
$ 332 |
16.7% |
|
|
Industrial Solutions |
115 |
12.4 |
100 |
10.8 |
|
|
Communications Solutions |
40 |
10.7 |
52 |
12.0 |
|
|
Total |
$ 471 |
14.9% |
$ 484 |
14.5% |
|
|
Adjusted |
Adjusted |
Adjusted |
Adjusted |
||
|
Operating |
Operating |
Operating |
Operating |
||
|
Income (1) |
Margin (1) |
Income (1) |
Margin (1) |
||
|
Transportation Solutions |
$ 325 |
17.4% |
$ 356 |
17.9% |
|
|
Industrial Solutions |
132 |
14.2 |
138 |
14.9 |
|
|
Communications Solutions |
45 |
12.1 |
71 |
16.4 |
|
|
Total |
$ 502 |
15.8% |
$ 565 |
16.9% |
|
|
(1) Adjusted operating income and adjusted operating margin are non-GAAP financial measures. See description of non-GAAP financial measures. |
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TE CONNECTIVITY LTD. |
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|
RECONCILIATION OF NET SALES GROWTH (DECLINE) (UNAUDITED) |
|||||||||
|
Change in Net Sales for the Quarter Ended December 27, 2019 |
|||||||||
|
versus Net Sales for the Quarter Ended December 28, 2018 |
|||||||||
|
Net Sales |
Organic Net Sales |
||||||||
|
Growth (Decline) |
Growth (Decline) (1) |
Translation (2) |
Acquisitions |
||||||
|
($ in millions) |
|||||||||
|
Transportation Solutions (3): |
|||||||||
|
Automotive |
$ (64) |
(4.4)% |
$ (43) |
(2.9)% |
$ (21) |
$ – |
|||
|
Commercial transportation |
(39) |
(13.1) |
(45) |
(15.6) |
(7) |
13 |
|||
|
Sensors |
(15) |
(6.8) |
(25) |
(11.3) |
(2) |
12 |
|||
|
Total |
(118) |
(5.9) |
(113) |
(5.6) |
(30) |
25 |
|||
|
Industrial Solutions (3): |
|||||||||
|
Aerospace, defense, oil, and gas |
24 |
8.4 |
27 |
9.4 |
(3) |
– |
|||
|
Industrial equipment |
(52) |
(16.5) |
(47) |
(15.0) |
(5) |
– |
|||
|
Medical |
11 |
6.5 |
12 |
6.9 |
(1) |
– |
|||
|
Energy |
16 |
10.0 |
19 |
12.1 |
(3) |
– |
|||
|
Total |
(1) |
(0.1) |
11 |
1.2 |
(12) |
– |
|||
|
Communications Solutions (3): |
|||||||||
|
Data and devices |
(38) |
(14.8) |
(38) |
(14.8) |
– |
– |
|||
|
Appliances |
(22) |
(12.5) |
(21) |
(11.4) |
(1) |
– |
|||
|
Total |
(60) |
(13.9) |
(59) |
(13.7) |
(1) |
– |
|||
|
Total |
$ (179) |
(5.3)% |
$ (161) |
(4.8)% |
$ (43) |
$ 25 |
|||
|
(1) Organic net sales growth (decline) is a non-GAAP financial measure. See description of non-GAAP financial measures. |
|||||||||
|
(2) Represents the change in net sales resulting from changes in foreign currency exchange rates. |
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|
(3) Industry end market information is presented consistently with our internal management reporting and may be periodically revised as management deems necessary. |
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|
TE CONNECTIVITY LTD. |
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|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES |
|||||||||
|
For the Quarter Ended December 27, 2019 |
|||||||||
|
(UNAUDITED) |
|||||||||
|
Adjustments |
|||||||||
|
Acquisition- |
Restructuring |
||||||||
|
Related |
and Other |
Adjusted |
|||||||
|
U.S. GAAP |
Charges (1) |
Charges, Net (1) |
Tax Items (2) |
(Non-GAAP) (3) |
|||||
|
($ in millions, except per share data) |
|||||||||
|
Operating income: |
|||||||||
|
Transportation Solutions |
$ 316 |
$ 5 |
$ 4 |
$ – |
$ 325 |
||||
|
Industrial Solutions |
115 |
2 |
15 |
– |
132 |
||||
|
Communications Solutions |
40 |
– |
5 |
– |
45 |
||||
|
Total |
$ 471 |
$ 7 |
$ 24 |
$ – |
$ 502 |
||||
|
Operating margin |
14.9% |
15.8% |
|||||||
|
Other income, net |
$ 5 |
$ – |
$ – |
$ – |
$ 5 |
||||
|
Income tax expense |
$ (447) |
$ (1) |
$ – |
$ 355 |
$ (93) |
||||
|
Effective tax rate |
95.1% |
18.6% |
|||||||
|
Income from continuing operations |
$ 23 |
$ 6 |
$ 24 |
$ 355 |
$ 408 |
||||
|
Diluted earnings per share from |
|||||||||
|
continuing operations |
$ 0.07 |
$ 0.02 |
$ 0.07 |
$ 1.05 |
$ 1.21 |
||||
|
(1) The tax effect of each non-GAAP adjustment is calculated based on the jurisdictions in which the expense (income) is incurred and the tax laws in |
|||||||||
|
(2) Income tax expense related to the tax impacts of certain measures of Swiss tax reform. |
|||||||||
|
(3) See description of non-GAAP financial measures. |
|||||||||
|
TE CONNECTIVITY LTD. |
|||||||
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES |
|||||||
|
For the Quarter Ended December 28, 2018 |
|||||||
|
(UNAUDITED) |
|||||||
|
Adjustments |
|||||||
|
Acquisition- |
Restructuring |
||||||
|
Related |
and Other |
Adjusted |
|||||
|
U.S. GAAP |
Charges (1) |
Charges, Net (1) |
(Non-GAAP) (2) |
||||
|
($ in millions, except per share data) |
|||||||
|
Operating income: |
|||||||
|
Transportation Solutions |
$ 332 |
$ 3 |
$ 21 |
$ 356 |
|||
|
Industrial Solutions |
100 |
3 |
35 |
138 |
|||
|
Communications Solutions |
52 |
– |
19 |
71 |
|||
|
Total |
$ 484 |
$ 6 |
$ 75 |
$ 565 |
|||
|
Operating margin |
14.5% |
16.9% |
|||||
|
Other expense, net |
$ (1) |
$ – |
$ – |
$ (1) |
|||
|
Income tax expense |
$ (78) |
$ (1) |
$ (19) |
$ (98) |
|||
|
Effective tax rate |
16.9% |
18.1% |
|||||
|
Income from continuing operations |
$ 383 |
$ 5 |
$ 56 |
$ 444 |
|||
|
Diluted earnings per share from |
|||||||
|
continuing operations |
$ 1.11 |
$ 0.01 |
$ 0.16 |
$ 1.29 |
|||
|
(1) The tax effect of each non-GAAP adjustment is calculated based on the jurisdictions in which the expense (income) is incurred and |
|||||||
|
(2) See description of non-GAAP financial measures. |
|||||||
|
TE CONNECTIVITY LTD. |
|||||||||
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES |
|||||||||
|
For the Quarter Ended March 29, 2019 |
|||||||||
|
(UNAUDITED) |
|||||||||
|
Adjustments |
|||||||||
|
Acquisition- |
Restructuring |
||||||||
|
Related |
and Other |
Tax |
Adjusted |
||||||
|
U.S. GAAP |
Charges (1) |
Charges, Net (1) |
Items (2) |
(Non-GAAP) (3) |
|||||
|
($ in millions, except per share data) |
|||||||||
|
Operating income: |
|||||||||
|
Transportation Solutions |
$ 316 |
$ 4 |
$ 24 |
$ – |
$ 344 |
||||
|
Industrial Solutions |
137 |
5 |
17 |
– |
159 |
||||
|
Communications Solutions |
77 |
– |
1 |
– |
78 |
||||
|
Total |
$ 530 |
$ 9 |
$ 42 |
$ – |
$ 581 |
||||
|
Operating margin |
15.5% |
17.0% |
|||||||
|
Other income, net |
$ 1 |
$ – |
$ – |
$ – |
$ 1 |
||||
|
Income tax expense |
$ (91) |
$ (2) |
$ (10) |
$ 15 |
$ (88) |
||||
|
Effective tax rate |
17.5% |
15.4% |
|||||||
|
Income from continuing operations |
$ 429 |
$ 7 |
$ 32 |
$ 15 |
$ 483 |
||||
|
Diluted earnings per share from |
|||||||||
|
continuing operations |
$ 1.26 |
$ 0.02 |
$ 0.09 |
$ 0.04 |
$ 1.42 |
||||
|
(1) The tax effect of each non-GAAP adjustment is calculated based on the jurisdictions in which the expense (income) is incurred and the tax laws in effect for |
|||||||||
|
(2) Includes income tax expense associated with the tax impacts of certain legal entity restructurings and intercompany transactions. |
|||||||||
|
(3) See description of non-GAAP financial measures. |
|||||||||
|
TE CONNECTIVITY LTD. |
|||||||||
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES |
|||||||||
|
For the Year Ended September 27, 2019 |
|||||||||
|
(UNAUDITED) |
|||||||||
|
Adjustments |
|||||||||
|
Acquisition- |
|||||||||
|
Related Charges |
Restructuring |
||||||||
|
and Other |
and Other |
Tax |
Adjusted |
||||||
|
U.S. GAAP |
Items (1)(2) |
Charges, Net (1) |
Items (3) |
(Non-GAAP) (4) |
|||||
|
($ in millions, except per share data) |
|||||||||
|
Operating income: |
|||||||||
|
Transportation Solutions |
$ 1,226 |
$ 31 |
$ 144 |
$ – |
$ 1,401 |
||||
|
Industrial Solutions |
543 |
15 |
63 |
– |
621 |
||||
|
Communications Solutions |
209 |
1 |
48 |
– |
258 |
||||
|
Total |
$ 1,978 |
$ 47 |
$ 255 |
$ – |
$ 2,280 |
||||
|
Operating margin |
14.7% |
17.0% |
|||||||
|
Other income, net |
$ 2 |
$ – |
$ – |
$ – |
$ 2 |
||||
|
Income tax (expense) benefit |
$ 15 |
$ (9) |
$ (61) |
$ (291) |
$ (346) |
||||
|
Effective tax rate |
(0.8)% |
15.5% |
|||||||
|
Income from continuing operations |
$ 1,946 |
$ 38 |
$ 194 |
$ (291) |
$ 1,887 |
||||
|
Diluted earnings per share from |
|||||||||
|
continuing operations |
$ 5.72 |
$ 0.11 |
$ 0.57 |
$ (0.86) |
$ 5.55 |
||||
|
(1) The tax effect of each non-GAAP adjustment is calculated based on the jurisdictions in which the expense (income) is incurred and the tax laws in effect for |
|||||||||
|
(2) Includes acquisition-related charges of $30 million and a write-off of spare parts of $17 million. |
|||||||||
|
(3) Includes a $216 million income tax benefit related to the tax impacts of certain measures of Swiss tax reform, a $90 million income tax benefit related to the |
|||||||||
|
(4) See description of non-GAAP financial measures. |
|||||||||
|
TE CONNECTIVITY LTD. |
|||
|
RECONCILIATION OF FORWARD-LOOKING NON-GAAP FINANCIAL MEASURES |
|||
|
TO FORWARD-LOOKING GAAP FINANCIAL MEASURES |
|||
|
As of January 29, 2020 |
|||
|
(UNAUDITED) |
|||
|
Outlook for |
|||
|
Quarter Ending |
|||
|
March 27, |
Outlook for |
||
|
2020 |
Fiscal 2020 |
||
|
Diluted earnings per share from continuing operations |
$1.05 – $1.11 |
$3.23 – $3.53 |
|
|
Restructuring and other charges, net |
0.14 |
0.58 |
|
|
Acquisition-related charges |
0.03 |
0.08 |
|
|
Tax items |
– |
1.06 |
|
|
Adjusted diluted earnings per share from continuing operations (1) |
$1.22 – $1.28 |
$4.95 – $5.25 |
|
|
Net sales growth (decline) |
(9)% – (3)% |
(4)% – (2)% |
|
|
Translation |
2 |
2 |
|
|
(Acquisitions) divestitures, net |
(1) |
(1) |
|
|
Organic net sales growth (decline) (1) |
(8)% – (2)% |
(3)% – (1)% |
|
|
(1) See description of non-GAAP financial measures. |
|||
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SOURCE TE Connectivity Ltd.
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