Last10K.com

Te Connectivity Ltd. (TEL) SEC Filing 10-Q Quarterly report for the period ending Friday, March 27, 2020

SEC Filings

Te Connectivity Ltd.

CIK: 1385157 Ticker: TEL

Exhibit 99.1

 

 

 

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TE Connectivity announces second quarter results for fiscal year 2020

 

Year to date free cash flow up 34% year-over-year; Company has excess of $2 billion in available liquidity

 

SCHAFFHAUSEN, Switzerland – April 28, 2020 – TE Connectivity Ltd. (NYSE: TEL) today reported results for the fiscal second quarter ended March 27, 2020.

 

Second Quarter Highlights

·

Net sales were $3.2 billion, in line with the company’s guidance, down 6% on a reported and down 5% on an organic basis over the second quarter of 2019.

·

Diluted earnings per share (EPS) from continuing operations were a loss of $1.35. Adjusting for one-time impairment charge, adjusted EPS were $1.29, exceeding the high end of the company’s guidance.

·

Cash flow from continuing operating activities was $481 million and free cash flow was $311 million.  Year to date free cash flow up 34% versus prior year. During the quarter the company returned $433 million returned to shareholders.

·

Strong liquidity position with more than $2 billion available liquidity.

 

“The market environment we guided to last quarter changed dramatically, and I’m pleased that we still delivered sales in line with our guidance and adjusted earnings per share above our expectations,” said TE Connectivity Chief Executive Officer Terrence Curtin. “Despite the impact of COVID-19, we were able to maintain adjusted operating margins above 16% due to the diversity of our portfolio, our global manufacturing strategy and our early execution of cost reduction actions. We continue to successfully prioritize the safety of our employees while keeping our commitments to our customers, and I want to thank our employees for their strong execution in what has been an unprecedented time for our global community. We expect to see COVID-related demand impacts in the second half of the year particularly in the transportation and commercial aerospace markets, but our strong free cash flow and liquidity allows us to continue to invest in long-term global growth trends and position us for further content growth when demand returns.” 

2020 Outlook

For the fiscal third quarter of 2020, the company expects net sales to be down approximately 25% sequentially, reflecting the impact of COVID-19 on the end demand environment, especially in the transportation and

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commercial aerospace markets. The company is withdrawing its full year guidance due to limited visibility of COVID-19 impact on future demand. 

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:

At TE Connectivity's website: investors.te.com  

By telephone: For both "listen-only" participants and those participants who wish to take part in the question-and-answer portion of the call, the dial-in number in the United States is (866) 211-4092, and for international callers, the dial-in number is (647) 689-6620.              

·

A replay of the conference call will be available on TE Connectivity’s investor website at investors.te.com at 11:30 a.m. ET on April 28, 2020.

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

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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:

Organic Net Sales Growth (Decline) – represents net sales growth (decline) (the most comparable GAAP financial measure) excluding the impact of foreign currency exchange rates, and acquisitions and divestitures that occurred in the preceding twelve months, if any. Organic Net Sales Growth (Decline) is a useful measure of our performance because it excludes items that are not completely under management’s control, such as the impact of changes in foreign currency exchange rates, and items that do not reflect the underlying growth of the company, such as acquisition and divestiture activity. This measure is a significant component in our incentive compensation plans.

Adjusted Operating Income (Loss) and Adjusted Operating Margin – represent operating income (loss) and operating margin, respectively, (the most comparable GAAP financial measures) before special items including restructuring and other charges, acquisition-related charges, impairment of goodwill, and other income or charges, if any. We utilize these adjusted measures in combination with operating income (loss) and operating margin to assess segment level operating performance and to provide insight to management in evaluating segment operating plan execution and market conditions. Adjusted Operating Income (Loss) is a significant component in our incentive compensation plans.

Adjusted Other Income (Expense), Net – represents net other income (expense) (the most comparable GAAP financial measure) before special items including tax sharing income related to adjustments to prior period tax returns and other items, if any.

Adjusted Income Tax (Expense) Benefit and Adjusted Effective Tax Rate – represent income tax (expense) benefit and effective tax rate, respectively, (the most comparable GAAP financial measures) after adjusting for the tax effect of special items including restructuring and other charges, acquisition-related charges, impairment of goodwill, other income or charges, and certain significant tax items, if any.

Adjusted Income (Loss) from Continuing Operations – represents income (loss) from continuing operations (the most comparable GAAP financial measure) before special items including restructuring and other charges, acquisition-related charges, impairment of goodwill, tax sharing income related to adjustments to prior period tax returns and other tax items, other income or charges, and certain significant tax items, if any, and, if applicable, the related tax effects.

Adjusted Earnings (Loss) Per Share – represents diluted earnings (loss) per share from continuing operations (the most comparable GAAP financial measure) before special items including restructuring and other charges, acquisition-related charges, impairment of goodwill, tax sharing income related to adjustments to prior period tax returns and other tax items, other income or charges, and certain significant tax items, if any, and, if applicable, the related tax effects. This measure is a significant component in our incentive compensation plans.

Free Cash Flow (FCF) – is a useful measure of our ability to generate cash. The difference between net cash provided by continuing operating activities (the most comparable GAAP financial measure) and Free Cash Flow consists mainly of significant cash outflows and inflows that we believe are useful to identify. We believe Free

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Cash Flow provides useful information to investors as it provides insight into the primary cash flow metric used by management to monitor and evaluate cash flows generated from our operations.

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, and the impact on our operations resulting from the coronavirus disease 2019 (“COVID-19”). 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 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; 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. 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. Such developments may include the geographic spread of the virus, the severity of the virus, the duration of the outbreak, the impact on our suppliers’ and customers’ supply chains, the actions that may be taken by various governmental authorities in response to the outbreak in jurisdictions in which we operate, and the possible impact on the global economy and local economies in which we operate.  More detailed information about

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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.

 

# # #

 

 

 

 

 

 

 

 

 

 

 

Contacts:

Media Relations:

Fernando Vivanco

TE Connectivity

610-893-9756

Fernando.Vivanco@te.com

Investor Relations:

Sujal Shah

TE Connectivity

610-893-9790

Sujal.Shah@te.com

 

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TE CONNECTIVITY LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Quarters Ended

 

For the Six Months Ended

 

March 27,

 

March 29,

 

March 27,

 

March 29,

 

2020

  

2019

  

2020

 

2019

 

(in millions, except per share data)

Net sales

$

3,195

 

$

3,412

 

$

6,363

 

$

6,759

Cost of sales

 

2,166

 

 

2,294

 

 

4,304

 

 

4,527

Gross margin

 

1,029

 

 

1,118

 

 

2,059

 

 

2,232

Selling, general, and administrative expenses

 

352

 

 

373

 

 

719

 

 

762

Research, development, and engineering expenses

 

158

 

 

166

 

 

319

 

 

327

Acquisition and integration costs

 

12

 

 

 7

 

 

19

 

 

12

Restructuring and other charges, net

 

22

 

 

42

 

 

46

 

 

117

Impairment of goodwill

 

900

 

 

 -

 

 

900

 

 

 -

Operating income (loss)

 

(415)

 

 

530

 

 

56

 

 

1,014

Interest income

 

 5

 

 

 4

 

 

11

 

 

 9

Interest expense

 

(11)

 

 

(15)

 

 

(23)

 

 

(42)

Other income, net

 

11

 

 

 1

 

 

16

 

 

 -

Income (loss) from continuing operations before income taxes

 

(410)

 

 

520

 

 

60

 

 

981

Income tax expense

 

(42)

 

 

(91)

 

 

(489)

 

 

(169)

Income (loss) from continuing operations

 

(452)

 

 

429

 

 

(429)

 

 

812

Income (loss) from discontinued operations, net of income taxes

 

(4)

 

 

10

 

 

(1)

 

 

(97)

Net income (loss)

$

(456)

 

$

439

 

$

(430)

 

$

715

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

$

(1.35)

 

$

1.27

 

$

(1.28)

 

$

2.39

Income (loss) from discontinued operations

 

(0.01)

 

 

0.03

 

 

 -

 

 

(0.29)

Net income (loss)

 

(1.37)

 

 

1.30

 

 

(1.29)

 

 

2.10

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

$

(1.35)

 

$

1.26

 

$

(1.28)

 

$

2.37

Income (loss) from discontinued operations

 

(0.01)

 

 

0.03

 

 

 -

 

 

(0.28)

Net income (loss)

 

(1.37)

 

 

1.29

 

 

(1.29)

 

 

2.09

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average number of shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

334

 

 

338

 

 

334

 

 

340

Diluted

 

334

 

 

340

 

 

334

 

 

342

 

6

TE CONNECTIVITY LTD.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

 

 

 

 

 

 

March 27,

   

September 27,

 

2020

   

2019

 

(in millions, except share data)

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

796

 

$

927

Accounts receivable, net of allowance for doubtful accounts of $32 and $25, respectively

 

2,461

 

 

2,320

Inventories

 

2,001

 

 

1,836

Prepaid expenses and other current assets

 

457

 

 

471

Total current assets

 

5,715

 

 

5,554

Property, plant, and equipment, net

 

3,558

 

 

3,574

Goodwill

 

5,235

 

 

5,740

Intangible assets, net

 

1,547

 

 

1,596

Deferred income taxes

 

2,382

 

 

2,776

Other assets

 

930

 

 

454

Total assets

$

19,367

 

$

19,694

 

 

 

 

 

 

Liabilities and equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Short-term debt

$

603

 

$

570

Accounts payable

 

1,390

 

 

1,357

Accrued and other current liabilities

 

1,966

 

 

1,613

Total current liabilities

 

3,959

 

 

3,540

Long-term debt

 

3,752

 

 

3,395

Long-term pension and postretirement liabilities

 

1,359

 

 

1,367

Deferred income taxes

 

126

 

 

156

Income taxes

 

228

 

 

239

Other liabilities

 

772

 

 

427

Total liabilities

 

10,196

 

 

9,124

Commitments and contingencies

 

 

 

 

 

Equity:

 

 

 

 

 

TE Connectivity Ltd. shareholders' equity:

 

 

 

 

 

Common shares, CHF 0.57 par value, 350,951,381 shares authorized and issued

 

154

 

 

154

Accumulated earnings

 

11,122

 

 

12,256

Treasury shares, at cost, 19,877,795 and 15,862,337 shares, respectively

 

(1,639)

 

 

(1,337)

Accumulated other comprehensive loss

 

(571)

 

 

(503)

Total TE Connectivity Ltd. shareholders' equity

 

9,066

 

 

10,570

Noncontrolling interests

 

105

 

 

 -

Total equity

 

9,171

 

 

10,570

Total liabilities and equity

$

19,367

 

$

19,694

 

 

 

7

TE CONNECTIVITY LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Quarters Ended

 

For the Six Months Ended

 

March 27,

 

March 29,

 

March 27,

 

March 29,

 

2020

   

2019

   

2020

   

2019

 

(in millions)

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

(456)

 

$

439

 

$

(430)

 

$

715

(Income) loss from discontinued operations, net of income taxes

 

 4

 

 

(10)

 

 

 1

 

 

97

Income (loss) from continuing operations

 

(452)

 

 

429

 

 

(429)

 

 

812

Adjustments to reconcile income (loss) from continuing operations to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

Impairment of goodwill

 

900

 

 

 -

 

 

900

 

 

 -

Depreciation and amortization

 

180

 

 

173

 

 

354

 

 

341

Deferred income taxes

 

(49)

 

 

(17)

 

 

345

 

 

(28)

Non-cash lease cost

 

25

 

 

 -

 

 

52

 

 

 -

Provision for losses on accounts receivable and inventories

 

(2)

 

 

 5

 

 

18

 

 

28

Share-based compensation expense

 

15

 

 

15

 

 

37

 

 

38

Other

 

 1

 

 

14

 

 

11

 

 

32

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

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

(116)

 

 

(81)

 

 

(140)

 

 

(107)

Inventories

 

25

 

 

49

 

 

(151)

 

 

(70)

Prepaid expenses and other current assets

 

48

 

 

24

 

 

25

 

 

91

Accounts payable

 

(45)

 

 

(35)

 

 

49

 

 

(44)

Accrued and other current liabilities

 

 5

 

 

(16)

 

 

(180)

 

 

(206)

Income taxes

 

(9)

 

 

 6

 

 

 1

 

 

21

Other

 

(45)

 

 

(11)

 

 

 -

 

 

(25)

Net cash provided by continuing operating activities

 

481

 

 

555

 

 

892

 

 

883

Net cash provided by (used in) discontinued operating activities

 

 -

 

 

 1

 

 

 -

 

 

(30)

Net cash provided by operating activities

 

481

 

 

556

 

 

892

 

 

853

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

(133)

 

 

(191)

 

 

(309)

 

 

(401)

Proceeds from sale of property, plant, and equipment

 

 1

 

 

12

 

 

 3

 

 

13

Acquisition of businesses, net of cash acquired

 

(244)

 

 

 8

 

 

(359)

 

 

 8

Proceeds from divestiture of discontinued operation, net of cash retained by sold operation

 

 -

 

 

 9

 

 

 -

 

 

297

Other

 

(2)

 

 

(3)

 

 

(2)

 

 

 -

Net cash used in continuing investing activities

 

(378)

 

 

(165)

 

 

(667)

 

 

(83)

Net cash used in discontinued investing activities

 

 -

 

 

 -

 

 

 -

 

 

(2)

Net cash used in investing activities

 

(378)

 

 

(165)

 

 

(667)

 

 

(85)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in commercial paper

 

(210)

 

 

27

 

 

(219)

 

 

90

Proceeds from issuance of debt

 

593

 

 

 -

 

 

593

 

 

350

Repayment of debt

 

 -

 

 

 -

 

 

 -

 

 

(441)

Proceeds from exercise of share options

 

13

 

 

10

 

 

27

 

 

17

Repurchase of common shares

 

(269)

 

 

(220)

 

 

(408)

 

 

(739)

Payment of common share dividends to shareholders

 

(153)

 

 

(149)

 

 

(307)

 

 

(299)

Transfers (to) from discontinued operations

 

 -

 

 

 1

 

 

 -

 

 

(32)

Other

 

(5)

 

 

(1)

 

 

(31)

 

 

(30)

Net cash used in continuing financing activities

 

(31)

 

 

(332)

 

 

(345)

 

 

(1,084)

Net cash provided by (used in) discontinued financing activities

 

 -

 

 

(1)

 

 

 -

 

 

32

Net cash used in financing activities

 

(31)

 

 

(333)

 

 

(345)

 

 

(1,052)

Effect of currency translation on cash

 

(18)

 

 

 2

 

 

(11)

 

 

 1

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

54

 

 

60

 

 

(131)

 

 

(283)

Cash, cash equivalents, and restricted cash at beginning of period

 

742

 

 

505

 

 

927

 

 

848

Cash, cash equivalents, and restricted cash at end of period

$

796

 

$

565

 

$

796

 

$

565

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

 

 

 

 

 

Interest paid on debt, net

$

20

 

$

33

 

$

24

 

$

52

Income taxes paid, net of refunds

 

101

 

 

102

 

 

144

 

 

177

 

8

 

TE CONNECTIVITY LTD.

RECONCILIATION OF FREE CASH FLOW (UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Quarters Ended

 

For the Six Months Ended

 

March 27,

 

March 29,

 

March 27,

 

March 29,

 

2020

   

2019

   

2020

   

2019

 

(in millions)

Net cash provided by continuing operating activities

$

481

 

$

555

 

$

892

 

$

883

Excluding:

 

 

 

 

 

 

 

 

 

 

 

Cash collected pursuant to collateral requirements related to cross-currency swap contracts

 

(38)

 

 

(32)

 

 

(32)

 

 

(82)

Capital expenditures, net

 

(132)

 

 

(179)

 

 

(306)

 

 

(388)

Free cash flow (1)

$

311

 

$

344

 

$

554

 

$

413

 

 

 

 

 

 

 

 

 

 

 

 

(1) Free cash flow is a non-GAAP financial measure. See description of non-GAAP financial measures.

 

 

9

TE CONNECTIVITY LTD.

CONSOLIDATED SEGMENT DATA (UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Quarters Ended

 

 

For the Six Months Ended

 

 

March 27,

 

 

March 29,

 

 

March 27,

 

 

March 29,

 

 

2020

 

   

2019

 

   

2020

 

   

2019

 

 

($ in millions)

 

 

Net Sales

  

 

 

 

Net Sales

  

 

 

 

Net Sales

  

 

 

 

Net Sales

  

 

 

Transportation Solutions

$

1,857

 

 

 

 

$

1,971

 

 

 

 

$

3,725

 

 

 

 

$

3,957

 

 

 

Industrial Solutions

 

962

 

 

 

 

 

1,007

 

 

 

 

 

1,889

 

 

 

 

 

1,935

 

 

 

Communications Solutions

 

376

 

 

 

 

 

434

 

 

 

 

 

749

 

 

 

 

 

867

 

 

 

Total

$

3,195

 

 

 

 

$

3,412

 

 

 

 

$

6,363

 

 

 

 

$

6,759

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating

 

Operating

 

Operating

 

Operating

 

Operating

 

Operating

 

Operating

 

Operating

 

Income (Loss)

 

Margin

 

Income

 

Margin

 

Income (Loss)

 

Margin

 

Income

 

Margin

Transportation Solutions

$

(606)

 

(32.6)

%

 

$

316

 

16.0

%

 

$

(290)

 

(7.8)

%

 

$

648

 

16.4

%

Industrial Solutions

 

142

 

14.8

 

 

 

137

 

13.6

 

 

 

257

 

13.6

 

 

 

237

 

12.2

 

Communications Solutions

 

49

 

13.0

 

 

 

77

 

17.7

 

 

 

89

 

11.9

 

 

 

129

 

14.9

 

Total

$

(415)

 

(13.0)

%

 

$

530

 

15.5

%

 

$

56

 

0.9

%

 

$

1,014

 

15.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

$

322

 

17.3

%

 

$

344

 

17.5

%

 

$

647

 

17.4

%

 

$

700

 

17.7

%

Industrial Solutions

 

145

 

15.1

 

 

 

159

 

15.8

 

 

 

277

 

14.7

 

 

 

297

 

15.3

 

Communications Solutions

 

52

 

13.8

 

 

 

78

 

18.0

 

 

 

97

 

13.0

 

 

 

149

 

17.2

 

Total

$

519

 

16.2

%

 

$

581

 

17.0

%

 

$

1,021

 

16.0

%

 

$

1,146

 

17.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Adjusted operating income and adjusted operating margin are non-GAAP financial measures. See description of non-GAAP financial measures.

 

 

 

10

TE CONNECTIVITY LTD.

RECONCILIATION OF NET SALES GROWTH (DECLINE) (UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in Net Sales for the Quarter Ended March 27, 2020

 

versus Net Sales for the Quarter Ended March 29, 2019

 

Net Sales

 

 

Organic Net Sales

 

 

 

 

 

 

Growth (Decline)

 

   

Growth (Decline) (1)

 

   

Translation (2)

   

Acquisitions

 

($ in millions)

Transportation Solutions (3):

 

 

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

Automotive

$

(60)

 

(4.2)

%

 

$

(29)

 

(2.1)

%

 

$

(31)

 

$

 -

Commercial transportation

 

(30)

 

(9.3)

 

 

 

(36)

 

(11.1)

 

 

 

(8)

 

 

14

Sensors

 

(24)

 

(10.8)

 

 

 

(33)

 

(14.9)

 

 

 

(3)

 

 

12

Total

 

(114)

 

(5.8)

 

 

 

(98)

 

(5.0)

 

 

 

(42)

 

 

26

Industrial Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aerospace, defense, oil, and gas

 

(13)

 

(3.9)

 

 

 

(10)

 

(2.9)

 

 

 

(3)

 

 

 -

Industrial equipment

 

(46)

 

(14.1)

 

 

 

(40)

 

(12.5)

 

 

 

(6)

 

 

 -

Medical

 

10

 

5.7

 

 

 

10

 

5.7

 

 

 

 -

 

 

 -

Energy

 

 4

 

2.3

 

 

 

10

 

5.6

 

 

 

(6)

 

 

 -

Total

 

(45)

 

(4.5)

 

 

 

(30)

 

(3.0)

 

 

 

(15)

 

 

 -

Communications Solutions (3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data and devices

 

(33)

 

(13.1)

 

 

 

(33)

 

(13.1)

 

 

 

 -

 

 

 -

Appliances

 

(25)

 

(13.7)

 

 

 

(22)

 

(11.9)

 

 

 

(3)

 

 

 -

Total

 

(58)

 

(13.4)

 

 

 

(55)

 

(12.6)

 

 

 

(3)

 

 

 -

Total

$

(217)

 

(6.4)

%

 

$

(183)

 

(5.4)

%

 

$

(60)

 

$

26

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in Net Sales for the Six Months Ended March 27, 2020

 

versus Net Sales for the Six Months Ended March 29, 2019

 

Net Sales

 

 

Organic Net Sales

 

 

 

 

 

 

Growth (Decline)

 

 

Growth (Decline) (1)

 

 

Translation (2)

 

Acquisitions

 

($ in millions)

Transportation Solutions (3):