Delivered EPS above guidance driven by strong margin expansion; Record year-to-date cash flow
SCHAFFHAUSEN, Switzerland, July 24, 2024 /PRNewswire/ — TE Connectivity Ltd. (NYSE: TEL) today reported results for the fiscal third quarter ended June 28, 2024.
Third Quarter Highlights
“I’m pleased that our team continued to navigate a dynamic market environment to deliver another strong quarter of performance, highlighted by operating margin expansion of 200 basis points, delivering EPS above guidance and record cash flow generation,” said TE Connectivity CEO Terrence Curtin. “In our Transportation Segment, our automotive business grew 4% organically despite a decline in auto production, and three out of four businesses in our Industrial segment continued their growth trajectories. In our Communications segment, we achieved sales growth of more than 20% along with record orders, driven by momentum in artificial intelligence programs where we are well positioned with multiple customers. We expect to deliver year-over-year earnings growth and margin expansion in the fourth quarter as well as double-digit earnings growth for the full year. As we look to the future, we continue to invest in key long-term growth trends to innovate alongside our valued customers around the world.”
Fourth Quarter FY24 Outlook
For the fourth quarter of fiscal 2024, the company expects net sales of approximately $4.0 billion. GAAP EPS from continuing operations is expected to be approximately $1.80, up 3% year over year, with adjusted EPS of approximately $1.94, up 9% year over year. Fourth quarter guidance includes a $0.10 year-over-year headwind from tax and currency exchange rates.
Information about TE Connectivity’s use of non-GAAP financial measures is provided below. For reconciliations of these non-GAAP financial measures, see the attached tables.
Conference Call and Webcast
The company will hold a conference call for investors today beginning at 8:30 a.m. ET. The conference call may be accessed in the following ways:
About TE Connectivity
TE Connectivity Ltd. (NYSE: TEL) is a global industrial technology leader creating a safer, sustainable, productive, and connected future. Our broad range of connectivity and sensor solutions enable the distribution of power, signal and data to advance next-generation transportation, renewable energy, automated factories, data centers, medical technology and more. With more than 85,000 employees, including 8,000 engineers, working alongside customers in approximately 140 countries, TE ensures that EVERY CONNECTION COUNTS. Learn more at www.te.com and on LinkedIn, Facebook, WeChat, Instagram and X (formerly 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:
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. In addition, our proposed change of incorporation from Switzerland to Ireland is subject to risks, such as the risk that the change of place of incorporation might not be completed or, if completed, that the anticipated advantages might not materialize, as well as the risks that the price of our stock could decline and our position on stock exchanges and indices could change, and Irish corporate governance and regulatory schemes could prove different or more challenging than currently expected. Examples of factors that could cause actual results to differ materially from those described in the forward-looking statements include, among others, the extent, severity and duration of business interruptions, such as the coronavirus disease 2019 (“COVID-19”) negatively affecting our business operations; business, economic, competitive and regulatory risks, such as conditions affecting demand for products in the automotive and other industries we serve; 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, including continuing military conflict in certain parts of the world; 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. In addition, the extent to which COVID-19 will impact our business and our financial results will depend on future developments, which are highly uncertain and cannot be predicted. 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 29, 2023, 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.
TE CONNECTIVITY LTD. |
|||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) |
|||||||||||
For the Quarters Ended |
For the Nine Months Ended |
||||||||||
June 28, |
June 30, |
June 28, |
June 30, |
||||||||
2024 |
2023 |
2024 |
2023 |
||||||||
(in millions, except per share data) |
|||||||||||
Net sales |
$ |
3,979 |
$ |
3,998 |
$ |
11,777 |
$ |
11,999 |
|||
Cost of sales |
2,593 |
2,699 |
7,704 |
8,229 |
|||||||
Gross margin |
1,386 |
1,299 |
4,073 |
3,770 |
|||||||
Selling, general, and administrative expenses |
431 |
431 |
1,299 |
1,258 |
|||||||
Research, development, and engineering expenses |
189 |
176 |
546 |
534 |
|||||||
Acquisition and integration costs |
5 |
9 |
16 |
26 |
|||||||
Restructuring and other charges, net |
6 |
53 |
67 |
283 |
|||||||
Operating income |
755 |
630 |
2,145 |
1,669 |
|||||||
Interest income |
20 |
18 |
61 |
39 |
|||||||
Interest expense |
(18) |
(20) |
(55) |
(61) |
|||||||
Other expense, net |
(3) |
(4) |
(11) |
(13) |
|||||||
Income from continuing operations before income taxes |
754 |
624 |
2,140 |
1,634 |
|||||||
Income tax (expense) benefit |
(181) |
(96) |
778 |
(283) |
|||||||
Income from continuing operations |
573 |
528 |
2,918 |
1,351 |
|||||||
Income (loss) from discontinued operations, net of income taxes |
— |
— |
(1) |
7 |
|||||||
Net income |
$ |
573 |
$ |
528 |
$ |
2,917 |
$ |
1,358 |
|||
Basic earnings per share: |
|||||||||||
Income from continuing operations |
$ |
1.87 |
$ |
1.68 |
$ |
9.47 |
$ |
4.28 |
|||
Income (loss) from discontinued operations |
— |
— |
— |
0.02 |
|||||||
Net income |
1.87 |
1.68 |
9.47 |
4.30 |
|||||||
Diluted earnings per share: |
|||||||||||
Income from continuing operations |
$ |
1.86 |
$ |
1.67 |
$ |
9.41 |
$ |
4.25 |
|||
Income (loss) from discontinued operations |
— |
— |
— |
0.02 |
|||||||
Net income |
1.86 |
1.67 |
9.41 |
4.27 |
|||||||
Weighted-average number of shares outstanding: |
|||||||||||
Basic |
306 |
315 |
308 |
316 |
|||||||
Diluted |
308 |
317 |
310 |
318 |
TE CONNECTIVITY LTD. |
|||||
CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
|||||
June 28, |
September 29, |
||||
2024 |
2023 |
||||
(in millions, except share data) |
|||||
Assets |
|||||
Current assets: |
|||||
Cash and cash equivalents |
$ |
1,469 |
$ |
1,661 |
|
Accounts receivable, net of allowance for doubtful accounts of $37 and $30, respectively |
2,889 |
2,967 |
|||
Inventories |
2,669 |
2,552 |
|||
Prepaid expenses and other current assets |
686 |
712 |
|||
Total current assets |
7,713 |
7,892 |
|||
Property, plant, and equipment, net |
3,758 |
3,754 |
|||
Goodwill |
5,664 |
5,463 |
|||
Intangible assets, net |
1,177 |
1,175 |
|||
Deferred income taxes |
3,768 |
2,600 |
|||
Other assets |
818 |
828 |
|||
Total assets |
$ |
22,898 |
$ |
21,712 |
|
Liabilities, redeemable noncontrolling interests, and shareholders’ equity |
|||||
Current liabilities: |
|||||
Short-term debt |
$ |
1,249 |
$ |
682 |
|
Accounts payable |
1,662 |
1,563 |
|||
Accrued and other current liabilities |
2,206 |
2,218 |
|||
Total current liabilities |
5,117 |
4,463 |
|||
Long-term debt |
2,953 |
3,529 |
|||
Long-term pension and postretirement liabilities |
720 |
728 |
|||
Deferred income taxes |
186 |
185 |
|||
Income taxes |
386 |
365 |
|||
Other liabilities |
781 |
787 |
|||
Total liabilities |
10,143 |
10,057 |
|||
Commitments and contingencies |
|||||
Redeemable noncontrolling interests |
123 |
104 |
|||
Shareholders’ equity: |
|||||
Common shares, CHF 0.57 par value, 316,574,781 shares authorized and issued, and 322,470,281 shares authorized and issued, respectively |
139 |
142 |
|||
Accumulated earnings |
14,253 |
12,947 |
|||
Treasury shares, at cost, 12,129,385 and 10,487,742 shares, respectively |
(1,647) |
(1,380) |
|||
Accumulated other comprehensive loss |
(113) |
(158) |
|||
Total shareholders’ equity |
12,632 |
11,551 |
|||
Total liabilities, redeemable noncontrolling interests, and shareholders’ equity |
$ |
22,898 |
$ |
21,712 |
TE CONNECTIVITY LTD. |
|||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
|||||||||||
For the Quarters Ended |
For the Nine Months Ended |
||||||||||
June 28, |
June 30, |
June 28, |
June 30, |
||||||||
2024 |
2023 |
2024 |
2023 |
||||||||
(in millions) |
|||||||||||
Cash flows from operating activities: |
|||||||||||
Net income |
$ |
573 |
$ |
528 |
$ |
2,917 |
$ |
1,358 |
|||
(Income) loss from discontinued operations, net of income taxes |
— |
— |
1 |
(7) |
|||||||
Income from continuing operations |
573 |
528 |
2,918 |
1,351 |
|||||||
Adjustments to reconcile income from continuing operations to net cash provided by operating activities: |
|||||||||||
Depreciation and amortization |
208 |
200 |
594 |
594 |
|||||||
Deferred income taxes |
22 |
(51) |
(1,190) |
(121) |
|||||||
Non-cash lease cost |
33 |
36 |
100 |
106 |
|||||||
Provision for losses on accounts receivable and inventories |
15 |
13 |
70 |
82 |
|||||||
Share-based compensation expense |
31 |
32 |
100 |
95 |
|||||||
Impairment of held for sale business |
— |
— |
— |
67 |
|||||||
Other |
(11) |
17 |
53 |
85 |
|||||||
Changes in assets and liabilities, net of the effects of acquisitions and divestitures: |
|||||||||||
Accounts receivable, net |
10 |
22 |
82 |
(202) |
|||||||
Inventories |
114 |
(50) |
(127) |
(323) |
|||||||
Prepaid expenses and other current assets |
13 |
(5) |
12 |
(30) |
|||||||
Accounts payable |
44 |
(36) |
99 |
68 |
|||||||
Accrued and other current liabilities |
(37) |
69 |
(324) |
(14) |
|||||||
Income taxes |
13 |
16 |
28 |
51 |
|||||||
Other |
(22) |
(12) |
20 |
185 |
|||||||
Net cash provided by operating activities |
1,006 |
779 |
2,435 |
1,994 |
|||||||
Cash flows from investing activities: |
|||||||||||
Capital expenditures |
(149) |
(166) |
(467) |
(538) |
|||||||
Proceeds from sale of property, plant, and equipment |
10 |
1 |
12 |
3 |
|||||||
Acquisition of businesses, net of cash acquired |
— |
— |
(339) |
(108) |
|||||||
Proceeds from divestiture of businesses, net of cash retained by businesses sold |
21 |
(3) |
59 |
48 |
|||||||
Other |
1 |
(1) |
(9) |
22 |
|||||||
Net cash used in investing activities |
(117) |
(169) |
(744) |
(573) |
|||||||
Cash flows from financing activities: |
|||||||||||
Net increase (decrease) in commercial paper |
18 |
3 |
(21) |
(82) |
|||||||
Proceeds from issuance of debt |
— |
— |
— |
499 |
|||||||
Repayment of debt |
(1) |
— |
(2) |
(591) |
|||||||
Proceeds from exercise of share options |
19 |
13 |
52 |
33 |
|||||||
Repurchase of common shares |
(416) |
(208) |
(1,301) |
(674) |
|||||||
Payment of common share dividends to shareholders |
(199) |
(186) |
(564) |
(541) |
|||||||
Other |
(12) |
(2) |
(39) |
(30) |
|||||||
Net cash used in financing activities |
(591) |
(380) |
(1,875) |
(1,386) |
|||||||
Effect of currency translation on cash |
(5) |
(4) |
(8) |
8 |
|||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash |
293 |
226 |
(192) |
43 |
|||||||
Cash, cash equivalents, and restricted cash at beginning of period |
1,176 |
905 |
1,661 |
1,088 |
|||||||
Cash, cash equivalents, and restricted cash at end of period |
$ |
1,469 |
$ |
1,131 |
$ |
1,469 |
$ |
1,131 |
|||
Supplemental cash flow information: |
|||||||||||
Interest paid on debt, net |
$ |
6 |
$ |
9 |
$ |
38 |
$ |
48 |
|||
Income taxes paid, net of refunds |
146 |
131 |
384 |
354 |
TE CONNECTIVITY LTD. |
|||||||||||
RECONCILIATION OF FREE CASH FLOW (UNAUDITED) |
|||||||||||
For the Quarters Ended |
For the Nine Months Ended |
||||||||||
June 28, |
June 30, |
June 28, |
June 30, |
||||||||
2024 |
2023 |
2024 |
2023 |
||||||||
(in millions) |
|||||||||||
Net cash provided by operating activities |
$ |
1,006 |
$ |
779 |
$ |
2,435 |
$ |
1,994 |
|||
Capital expenditures, net |
(139) |
(165) |
(455) |
(535) |
|||||||
Free cash flow (1) |
$ |
867 |
$ |
614 |
$ |
1,980 |
$ |
1,459 |
|||
(1) Free cash flow is a non-GAAP financial measure. See description of non-GAAP financial measures. |
TE CONNECTIVITY LTD. |
|||||||||||||||||||||||
CONSOLIDATED SEGMENT DATA (UNAUDITED) |
|||||||||||||||||||||||
For the Quarters Ended |
For the Nine Months Ended |
||||||||||||||||||||||
June 28, |
June 30, |
June 28, |
June 30, |
||||||||||||||||||||
2024 |
2023 |
2024 |
2023 |
||||||||||||||||||||
($ in millions) |
|||||||||||||||||||||||
Net Sales |
Net Sales |
Net Sales |
Net Sales |
||||||||||||||||||||
Transportation Solutions |
$ |
2,330 |
$ |
2,433 |
$ |
7,087 |
$ |
7,175 |
|||||||||||||||
Industrial Solutions |
1,133 |
1,141 |
3,301 |
3,392 |
|||||||||||||||||||
Communications Solutions |
516 |
424 |
1,389 |
1,432 |
|||||||||||||||||||
Total |
$ |
3,979 |
$ |
3,998 |
$ |
11,777 |
$ |
11,999 |
|||||||||||||||
Operating |
Operating |
Operating |
Operating |
Operating |
Operating |
Operating |
Operating |
||||||||||||||||
Income |
Margin |
Income |
Margin |
Income |
Margin |
Income |
Margin |
||||||||||||||||
Transportation Solutions |
$ |
498 |
21.4 |
% |
$ |
425 |
17.5 |
% |
$ |
1,443 |
20.4 |
% |
$ |
1,040 |
14.5 |
% |
|||||||
Industrial Solutions |
153 |
13.5 |
150 |
13.1 |
451 |
13.7 |
440 |
13.0 |
|||||||||||||||
Communications Solutions |
104 |
20.2 |
55 |
13.0 |
251 |
18.1 |
189 |
13.2 |
|||||||||||||||
Total |
$ |
755 |
19.0 |
% |
$ |
630 |
15.8 |
% |
$ |
2,145 |
18.2 |
% |
$ |
1,669 |
13.9 |
% |
|||||||
Adjusted |
Adjusted |
Adjusted |
Adjusted |
Adjusted |
Adjusted |
Adjusted |
Adjusted |
||||||||||||||||
Operating |
Operating |
Operating |
Operating |
Operating |
Operating |
Operating |
Operating |
||||||||||||||||
Income (1) |
Margin (1) |
Income (1) |
Margin (1) |
Income (1) |
Margin (1) |
Income (1) |
Margin (1) |
||||||||||||||||
Transportation Solutions |
$ |
490 |
21.0 |
% |
$ |
452 |
18.6 |
% |
$ |
1,471 |
20.8 |
% |
$ |
1,221 |
17.0 |
% |
|||||||
Industrial Solutions |
171 |
15.1 |
180 |
15.8 |
499 |
15.1 |
529 |
15.6 |
|||||||||||||||
Communications Solutions |
105 |
20.3 |
60 |
14.2 |
262 |
18.9 |
228 |
15.9 |
|||||||||||||||
Total |
$ |
766 |
19.3 |
% |
$ |
692 |
17.3 |
% |
$ |
2,232 |
19.0 |
% |
$ |
1,978 |
16.5 |
% |
|||||||
(1) Adjusted operating income and adjusted operating margin are non-GAAP financial measures. See description of non-GAAP financial measures. |
TE CONNECTIVITY LTD. |
|||||||||||||||||
RECONCILIATION OF NET SALES GROWTH (DECLINE) (UNAUDITED) |
|||||||||||||||||
Change in Net Sales for the Quarter Ended June 28, 2024 |
|||||||||||||||||
versus Net Sales for the Quarter Ended June 30, 2023 |
|||||||||||||||||
Net Sales |
Organic Net Sales |
Acquisition/ |
|||||||||||||||
Growth (Decline) |
Growth (Decline) (1) |
Translation (2) |
(Divestiture) |
||||||||||||||
($ in millions) |
|||||||||||||||||
Transportation Solutions (3): |
|||||||||||||||||
Automotive |
$ |
(20) |
(1.1) |
% |
$ |
63 |
3.6 |
% |
$ |
(39) |
$ |
(44) |
|||||
Commercial transportation |
(40) |
(9.9) |
(34) |
(8.4) |
(6) |
— |
|||||||||||
Sensors |
(43) |
(15.2) |
(37) |
(13.1) |
(6) |
— |
|||||||||||
Total |
(103) |
(4.2) |
(8) |
(0.3) |
(51) |
(44) |
|||||||||||
Industrial Solutions (3): |
|||||||||||||||||
Industrial equipment |
(70) |
(16.5) |
(98) |
(23.6) |
(8) |
36 |
|||||||||||
Aerospace, defense, and marine |
52 |
17.7 |
53 |
18.7 |
(1) |
— |
|||||||||||
Energy |
(4) |
(1.7) |
8 |
3.4 |
(12) |
— |
|||||||||||
Medical |
14 |
7.2 |
14 |
7.2 |
— |
— |
|||||||||||
Total |
(8) |
(0.7) |
(23) |
(2.1) |
(21) |
36 |
|||||||||||
Communications Solutions (3): |
|||||||||||||||||
Data and devices |
77 |
30.6 |
80 |
31.8 |
(3) |
— |
|||||||||||
Appliances |
15 |
8.7 |
20 |
11.7 |
(5) |
— |
|||||||||||
Total |
92 |
21.7 |
100 |
23.7 |
(8) |
— |
|||||||||||
Total |
$ |
(19) |
(0.5) |
% |
$ |
69 |
1.7 |
% |
$ |
(80) |
$ |
(8) |
|||||
Change in Net Sales for the Nine Months Ended June 28, 2024 |
|||||||||||||||||
versus Net Sales for the Nine Months Ended June 30, 2023 |
|||||||||||||||||
Net Sales |
Organic Net Sales |
Acquisitions/ |
|||||||||||||||
Growth (Decline) |
Growth (Decline) (1) |
Translation (2) |
(Divestitures) |
||||||||||||||
($ in millions) |
|||||||||||||||||
Transportation Solutions (3): |
|||||||||||||||||
Automotive |
$ |
61 |
1.2 |
% |
$ |
220 |
4.2 |
% |
$ |
(46) |
$ |
(113) |
|||||
Commercial transportation |
(53) |
(4.6) |
(49) |
(4.2) |
(4) |
— |
|||||||||||
Sensors |
(96) |
(11.6) |
(90) |
(10.9) |
(6) |
— |
|||||||||||
Total |
(88) |
(1.2) |
81 |
1.1 |
(56) |
(113) |
|||||||||||
Industrial Solutions (3): |
|||||||||||||||||
Industrial equipment |
(279) |
(21.2) |
(344) |
(26.2) |
— |
65 |
|||||||||||
Aerospace, defense, and marine |
122 |
14.3 |
137 |
16.2 |
3 |
(18) |
|||||||||||
Energy |
13 |
2.0 |
12 |
1.8 |
(19) |
20 |
|||||||||||
Medical |
53 |
9.3 |
53 |
9.3 |
— |
— |
|||||||||||
Total |
(91) |
(2.7) |
(142) |
(4.2) |
(16) |
67 |
|||||||||||
Communications Solutions (3): |
|||||||||||||||||
Data and devices |
12 |
1.4 |
17 |
2.0 |
(5) |
— |
|||||||||||
Appliances |
(55) |
(9.8) |
(46) |
(8.2) |
(9) |
— |
|||||||||||
Total |
(43) |
(3.0) |
(29) |
(2.0) |
(14) |
— |
|||||||||||
Total |
$ |
(222) |
(1.9) |
% |
$ |
(90) |
(0.7) |
% |
$ |
(86) |
$ |
(46) |
|||||
(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. |
|||||||||||||||||
(3) Industry end market information 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 June 28, 2024 |
|||||||||||||
(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 |
$ |
498 |
$ |
— |
$ |
(8) |
$ |
490 |
|||||
Industrial Solutions |
153 |
5 |
13 |
171 |
|||||||||
Communications Solutions |
104 |
— |
1 |
105 |
|||||||||
Total |
$ |
755 |
$ |
5 |
$ |
6 |
$ |
766 |
|||||
Operating margin |
19.0 |
% |
19.3 |
% |
|||||||||
Income tax expense |
$ |
(181) |
$ |
— |
$ |
4 |
$ |
(177) |
|||||
Effective tax rate |
24.0 |
% |
23.1 |
% |
|||||||||
Income from continuing operations |
$ |
573 |
$ |
5 |
$ |
10 |
$ |
588 |
|||||
Diluted earnings per share from continuing operations |
$ |
1.86 |
$ |
0.02 |
$ |
0.03 |
$ |
1.91 |
|||||
(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 each such jurisdiction. |
|||||||||||||
(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 June 30, 2023 |
|||||||||||||
(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 |
$ |
425 |
$ |
— |
$ |
27 |
$ |
452 |
|||||
Industrial Solutions |
150 |
8 |
22 |
180 |
|||||||||
Communications Solutions |
55 |
1 |
4 |
60 |
|||||||||
Total |
$ |
630 |
$ |
9 |
$ |
53 |
$ |
692 |
|||||
Operating margin |
15.8 |
% |
17.3 |
% |
|||||||||
Income tax expense |
$ |
(96) |
$ |
(2) |
$ |
(27) |
$ |
(125) |
|||||
Effective tax rate |
15.4 |
% |
18.2 |
% |
|||||||||
Income from continuing operations |
$ |
528 |
$ |
7 |
$ |
26 |
$ |
561 |
|||||
Diluted earnings per share from continuing operations |
$ |
1.67 |
$ |
0.02 |
$ |
0.08 |
$ |
1.77 |
|||||
(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 each such jurisdiction. |
|||||||||||||
(2) See description of non-GAAP financial measures. |
TE CONNECTIVITY LTD. |
||||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES |
||||||||||||||||
For the Nine Months Ended June 28, 2024 |
||||||||||||||||
(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 |
$ |
1,443 |
$ |
— |
$ |
25 |
$ |
3 |
$ |
1,471 |
||||||
Industrial Solutions |
451 |
15 |
32 |
1 |
499 |
|||||||||||
Communications Solutions |
251 |
1 |
10 |
— |
262 |
|||||||||||
Total |
$ |
2,145 |
$ |
16 |
$ |
67 |
$ |
4 |
$ |
2,232 |
||||||
Operating margin |
18.2 |
% |
19.0 |
% |
||||||||||||
Income tax (expense) benefit |
$ |
778 |
$ |
(2) |
$ |
(7) |
$ |
(1,254) |
$ |
(485) |
||||||
Effective tax rate |
(36.4) |
% |
21.8 |
% |
||||||||||||
Income from continuing operations |
$ |
2,918 |
$ |
14 |
$ |
60 |
$ |
(1,250) |
$ |
1,742 |
||||||
Diluted earnings per share from continuing operations |
$ |
9.41 |
$ |
0.05 |
$ |
0.19 |
$ |
(4.03) |
$ |
5.62 |
||||||
(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 each such jurisdiction. |
||||||||||||||||
(2) Includes an $874 million net income tax benefit associated with a ten-year tax credit obtained by a Swiss subsidiary and a $262 million income tax benefit related to the revaluation of deferred tax assets as a result of a corporate tax rate increase in Switzerland. Also includes a $118 million income tax benefit associated with the tax impacts of a legal entity restructuring with related costs of $4 million recorded in selling, general, and administrative expenses for other non-income taxes. |
||||||||||||||||
(3) See description of non-GAAP financial measures. |
TE CONNECTIVITY LTD. |
|||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES |
|||||||||||||
For the Nine Months Ended June 30, 2023 |
|||||||||||||
(UNAUDITED) |
|||||||||||||
Adjustments |
|||||||||||||
Acquisition- |
Restructuring |
||||||||||||
Related |
and Other |
Adjusted |
|||||||||||
U.S. GAAP |
Charges (1) |
Charges, Net (1) |
(Non-GAAP) (2) |
||||||||||
($ in millions, except per share data) |
|||||||||||||
Operating income: |
|||||||||||||
Transportation Solutions |
$ |
1,040 |
$ |
2 |
$ |
179 |
$ |
1,221 |
|||||
Industrial Solutions |
440 |
21 |
68 |
529 |
|||||||||
Communications Solutions |
189 |
3 |
36 |
228 |
|||||||||
Total |
$ |
1,669 |
$ |
26 |
$ |
283 |
$ |
1,978 |
|||||
Operating margin |
13.9 |
% |
16.5 |
% |
|||||||||
Income tax expense |
$ |
(283) |
$ |
(5) |
$ |
(82) |
$ |
(370) |
|||||
Effective tax rate |
17.3 |
% |
19.0 |
% |
|||||||||
Income from continuing operations |
$ |
1,351 |
$ |
21 |
$ |
201 |
$ |
1,573 |
|||||
Diluted earnings per share from continuing operations |
$ |
4.25 |
$ |
0.07 |
$ |
0.63 |
$ |
4.95 |
|||||
(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 each such jurisdiction. |
|||||||||||||
(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 September 29, 2023 |
||||||||||||||||
(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 |
$ |
411 |
$ |
1 |
$ |
32 |
$ |
— |
$ |
444 |
||||||
Industrial Solutions |
162 |
6 |
16 |
— |
184 |
|||||||||||
Communications Solutions |
62 |
— |
9 |
— |
71 |
|||||||||||
Total |
$ |
635 |
$ |
7 |
$ |
57 |
$ |
— |
$ |
699 |
||||||
Operating margin |
15.7 |
% |
17.3 |
% |
||||||||||||
Income tax expense |
$ |
(81) |
$ |
(1) |
$ |
(3) |
$ |
(49) |
$ |
(134) |
||||||
Effective tax rate |
12.8 |
% |
19.2 |
% |
||||||||||||
Income from continuing operations |
$ |
553 |
$ |
6 |
$ |
54 |
$ |
(49) |
$ |
564 |
||||||
Diluted earnings per share from continuing operations |
$ |
1.75 |
$ |
0.02 |
$ |
0.17 |
$ |
(0.16) |
$ |
1.78 |
||||||
(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 each such jurisdiction. |
||||||||||||||||
(2) Represents income tax benefits associated with a decrease in the valuation allowance for certain tax loss and credit carryforwards. |
||||||||||||||||
(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 29, 2023 |
||||||||||||||||
(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 |
$ |
1,451 |
$ |
3 |
$ |
211 |
$ |
— |
$ |
1,665 |
||||||
Industrial Solutions |
602 |
27 |
84 |
— |
713 |
|||||||||||
Communications Solutions |
251 |
3 |
45 |
— |
299 |
|||||||||||
Total |
$ |
2,304 |
$ |
33 |
$ |
340 |
$ |
— |
$ |
2,677 |
||||||
Operating margin |
14.4 |
% |
16.7 |
% |
||||||||||||
Income tax expense |
$ |
(364) |
$ |
(6) |
$ |
(85) |
$ |
(49) |
$ |
(504) |
||||||
Effective tax rate |
16.0 |
% |
19.1 |
% |
||||||||||||
Income from continuing operations |
$ |
1,904 |
$ |
27 |
$ |
255 |
$ |
(49) |
$ |
2,137 |
||||||
Diluted earnings per share from continuing operations |
$ |
6.01 |
$ |
0.09 |
$ |
0.80 |
$ |
(0.15) |
$ |
6.74 |
||||||
(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 each such jurisdiction. |
||||||||||||||||
(2) Represents income tax benefits associated with a decrease in the valuation allowance for certain tax loss and credit carryforwards. |
||||||||||||||||
(3) 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 July 24, 2024 |
|||
(UNAUDITED) |
|||
Outlook for |
|||
Quarter Ending |
|||
September 27, |
|||
2024 |
|||
Diluted earnings per share from continuing operations |
$ |
1.80 |
|
Restructuring and other charges, net |
0.12 |
||
Acquisition-related charges |
0.02 |
||
Adjusted diluted earnings per share from continuing operations (1) |
$ |
1.94 |
|
Net sales growth (decline) |
(0.9) |
% |
|
Translation |
1.4 |
||
(Acquisitions) divestitures, net |
0.2 |
||
Organic net sales growth (1) |
0.7 |
% |
|
(1) See description of non-GAAP financial measures. |
SOURCE TE Connectivity, LTD
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