EPS above guidance driven by significant
margin expansion; first quarter record cash flow
SCHAFFHAUSEN, Switzerland, Jan. 24,
2024 /PRNewswire/ -- TE Connectivity Ltd. (NYSE: TEL)
today reported results for the fiscal first quarter ended
Dec. 29, 2023.
First Quarter Highlights
- Net sales were $3.83 billion, in
line with guidance, essentially flat on a reported basis year over
year and down 1% organically.
- GAAP diluted earnings per share (EPS) from continuing
operations were $5.76, including a
one-time tax-related benefit, and adjusted EPS were $1.84, up 20% year over year.
- Orders were $3.8 billion, up 4%
year over year, with year-over-year growth in all segments.
- Operating margins were 18.2% and adjusted operating margins
were 19.1%, up 290 basis points year over year.
- Cash flow from operating activities was $719 million and free cash flow was $570 million, both first quarter records.
- Deployed approximately $1 billion
of capital in the quarter, including approximately $600 million returned to shareholders and
approximately $350 million used for
the acquisition of Schaffner.
- Company named to the Dow Jones Sustainability Index for the
12th consecutive year.
"I'm pleased with our strong performance in our first quarter,
as our teams delivered earnings above guidance driven by
significant margin expansion, along with record free cash flow, in
what remains a dynamic market environment," said TE Connectivity
CEO Terrence Curtin. "Our
industry-leading innovations and global position in automotive
connectivity, including a strong presence in Asia, once again allowed us to outperform the
market and deliver year-over-year growth in our Transportation
segment. In our Industrial segment, we continued to benefit from
growth in renewable energy, commercial air and medical
applications. Our Communications segment delivered margins in the
high teens, and we anticipate revenue growth in artificial
intelligence applications as we move through the year. We expect to
deliver strong margin performance at the company level throughout
fiscal year 2024 as we continue to execute on operational levers,
while benefiting from the diversity and positioning of our
portfolio around key long-term growth trends."
Second Quarter FY24 Outlook
For the second quarter of
fiscal 2024, the company expects net sales of approximately
$3.95 billion. GAAP EPS from
continuing operations are expected to be approximately
$1.75, up 31% year over year, with
adjusted EPS of approximately $1.82,
up 10% year over year.
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:
- 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 (888) 330-3417 and for
international callers, the dial-in number is (646)
960-0804
- 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 Jan. 24,
2024.
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:
- 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 and Adjusted Operating Margin –
represent operating income 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 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 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.
- 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 from Continuing Operations – represents income
from continuing operations (the most comparable GAAP financial
measure) before special items including restructuring and other
charges, acquisition-related charges, impairment of goodwill, other
income or charges, and certain significant tax items, if any, and,
if applicable, the related tax effects.
- Adjusted Earnings Per Share – represents diluted earnings 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,
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
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
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 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
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, 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, 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.
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
|
|
December 29,
|
|
December 30,
|
|
2023
|
|
2022
|
|
(in millions, except
per share data)
|
Net
sales
|
$
|
3,831
|
|
$
|
3,841
|
Cost of
sales
|
|
2,507
|
|
|
2,654
|
Gross
margin
|
|
1,324
|
|
|
1,187
|
Selling, general, and
administrative expenses
|
|
424
|
|
|
392
|
Research, development,
and engineering expenses
|
|
173
|
|
|
173
|
Acquisition and
integration costs
|
|
8
|
|
|
9
|
Restructuring and other
charges, net
|
|
21
|
|
|
111
|
Operating
income
|
|
698
|
|
|
502
|
Interest
income
|
|
22
|
|
|
9
|
Interest
expense
|
|
(18)
|
|
|
(21)
|
Other expense,
net
|
|
(3)
|
|
|
(5)
|
Income from
continuing operations before income taxes
|
|
699
|
|
|
485
|
Income tax (expense)
benefit
|
|
1,105
|
|
|
(87)
|
Income from
continuing operations
|
|
1,804
|
|
|
398
|
Loss from discontinued
operations, net of income taxes
|
|
(1)
|
|
|
(1)
|
Net
income
|
$
|
1,803
|
|
$
|
397
|
|
|
|
|
|
|
Basic earnings per
share:
|
|
|
|
|
|
Income from continuing
operations
|
$
|
5.80
|
|
$
|
1.26
|
Loss from discontinued
operations
|
|
—
|
|
|
—
|
Net income
|
|
5.80
|
|
|
1.25
|
|
|
|
|
|
|
Diluted earnings per
share:
|
|
|
|
|
|
Income from continuing
operations
|
$
|
5.76
|
|
$
|
1.25
|
Loss from discontinued
operations
|
|
—
|
|
|
—
|
Net income
|
|
5.76
|
|
|
1.24
|
|
|
|
|
|
|
Weighted-average
number of shares outstanding:
|
|
|
|
|
|
Basic
|
|
311
|
|
|
317
|
Diluted
|
|
313
|
|
|
319
|
TE CONNECTIVITY
LTD.
|
CONSOLIDATED BALANCE
SHEETS (UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 29,
|
|
September 29,
|
|
2023
|
|
2023
|
|
(in millions, except
share data)
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
1,170
|
|
$
|
1,661
|
Accounts receivable,
net of allowance for doubtful accounts of $37 and $30,
respectively
|
|
2,828
|
|
|
2,967
|
Inventories
|
|
2,783
|
|
|
2,552
|
Prepaid expenses and
other current assets
|
|
660
|
|
|
712
|
Total current
assets
|
|
7,441
|
|
|
7,892
|
Property, plant, and
equipment, net
|
|
3,854
|
|
|
3,754
|
Goodwill
|
|
5,836
|
|
|
5,463
|
Intangible assets,
net
|
|
1,278
|
|
|
1,175
|
Deferred income
taxes
|
|
3,852
|
|
|
2,600
|
Other assets
|
|
810
|
|
|
828
|
Total
assets
|
$
|
23,071
|
|
$
|
21,712
|
Liabilities,
redeemable noncontrolling interests, and equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Short-term
debt
|
$
|
613
|
|
$
|
682
|
Accounts
payable
|
|
1,690
|
|
|
1,563
|
Accrued and other
current liabilities
|
|
1,708
|
|
|
2,218
|
Total current
liabilities
|
|
4,011
|
|
|
4,463
|
Long-term
debt
|
|
3,585
|
|
|
3,529
|
Long-term pension and
postretirement liabilities
|
|
744
|
|
|
728
|
Deferred income
taxes
|
|
188
|
|
|
185
|
Income taxes
|
|
380
|
|
|
365
|
Other
liabilities
|
|
914
|
|
|
787
|
Total
liabilities
|
|
9,822
|
|
|
10,057
|
Commitments and
contingencies
|
|
|
|
|
|
Redeemable
noncontrolling interests
|
|
108
|
|
|
104
|
Equity:
|
|
|
|
|
|
TE Connectivity Ltd.
shareholders' equity:
|
|
|
|
|
|
Common shares, CHF 0.57
par value, 322,470,281 shares authorized and issued
|
|
142
|
|
|
142
|
Accumulated
earnings
|
|
14,678
|
|
|
12,947
|
Treasury shares, at
cost, 13,050,787 and 10,487,742 shares, respectively
|
|
(1,695)
|
|
|
(1,380)
|
Accumulated other
comprehensive income (loss)
|
|
11
|
|
|
(158)
|
Total TE Connectivity
Ltd. shareholders' equity
|
|
13,136
|
|
|
11,551
|
Noncontrolling
interests
|
|
5
|
|
|
—
|
Total
equity
|
|
13,141
|
|
|
11,551
|
Total liabilities,
redeemable noncontrolling interests, and equity
|
$
|
23,071
|
|
$
|
21,712
|
TE CONNECTIVITY
LTD.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarters
Ended
|
|
December 29,
|
|
December 30,
|
|
2023
|
|
2022
|
|
(in
millions)
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net income
|
$
|
1,803
|
|
$
|
397
|
Loss from discontinued
operations, net of income taxes
|
|
1
|
|
|
1
|
Income from continuing
operations
|
|
1,804
|
|
|
398
|
Adjustments to
reconcile income from continuing operations to net cash provided by
operating activities:
|
|
|
|
|
|
Depreciation and
amortization
|
|
194
|
|
|
187
|
Deferred income
taxes
|
|
(1,217)
|
|
|
(35)
|
Non-cash lease
cost
|
|
34
|
|
|
34
|
Provision for losses on
accounts receivable and inventories
|
|
42
|
|
|
51
|
Share-based
compensation expense
|
|
34
|
|
|
32
|
Other
|
|
40
|
|
|
49
|
Changes in assets and
liabilities, net of the effects of acquisitions and
divestitures:
|
|
|
|
|
|
Accounts receivable,
net
|
|
127
|
|
|
(54)
|
Inventories
|
|
(282)
|
|
|
(324)
|
Prepaid expenses and
other current assets
|
|
(48)
|
|
|
(86)
|
Accounts
payable
|
|
128
|
|
|
149
|
Accrued and other
current liabilities
|
|
(239)
|
|
|
(39)
|
Income taxes
|
|
12
|
|
|
25
|
Other
|
|
90
|
|
|
194
|
Net cash provided by
operating activities
|
|
719
|
|
|
581
|
Cash flows from
investing activities:
|
|
|
|
|
|
Capital
expenditures
|
|
(151)
|
|
|
(183)
|
Proceeds from sale of
property, plant, and equipment
|
|
2
|
|
|
1
|
Acquisition of
businesses, net of cash acquired
|
|
(349)
|
|
|
(109)
|
Proceeds from
divestiture of business, net of cash retained by business
sold
|
|
38
|
|
|
—
|
Other
|
|
(8)
|
|
|
26
|
Net cash used in
investing activities
|
|
(468)
|
|
|
(265)
|
Cash flows from
financing activities:
|
|
|
|
|
|
Net decrease in
commercial paper
|
|
(69)
|
|
|
(139)
|
Repayment of
debt
|
|
(1)
|
|
|
(4)
|
Proceeds from exercise
of share options
|
|
11
|
|
|
11
|
Repurchase of common
shares
|
|
(476)
|
|
|
(287)
|
Payment of common share
dividends to shareholders
|
|
(183)
|
|
|
(178)
|
Other
|
|
(27)
|
|
|
(24)
|
Net cash used in
financing activities
|
|
(745)
|
|
|
(621)
|
Effect of currency
translation on cash
|
|
3
|
|
|
10
|
Net decrease in
cash, cash equivalents, and restricted cash
|
|
(491)
|
|
|
(295)
|
Cash, cash
equivalents, and restricted cash at beginning of
period
|
|
1,661
|
|
|
1,088
|
Cash, cash
equivalents, and restricted cash at end of period
|
$
|
1,170
|
|
$
|
793
|
|
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
Interest paid on debt,
net
|
$
|
5
|
|
$
|
12
|
Income taxes paid, net
of refunds
|
|
100
|
|
|
98
|
TE CONNECTIVITY
LTD.
|
RECONCILIATION OF
FREE CASH FLOW (UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarters
Ended
|
|
December 29,
|
|
December 30,
|
|
2023
|
|
2022
|
|
(in
millions)
|
Net cash provided by
operating activities
|
$
|
719
|
|
$
|
581
|
Capital expenditures,
net
|
|
(149)
|
|
|
(182)
|
Free cash
flow (1)
|
$
|
570
|
|
$
|
399
|
|
|
|
|
|
|
(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
|
|
|
December 29,
|
|
|
December 30,
|
|
|
2023
|
|
|
2022
|
|
|
($ in
millions)
|
|
Net
Sales
|
|
|
|
|
Net
Sales
|
|
|
|
Transportation
Solutions
|
$
|
2,373
|
|
|
|
|
$
|
2,259
|
|
|
|
Industrial
Solutions
|
|
1,025
|
|
|
|
|
|
1,060
|
|
|
|
Communications
Solutions
|
|
433
|
|
|
|
|
|
522
|
|
|
|
Total
|
$
|
3,831
|
|
|
|
|
$
|
3,841
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
|
|
Operating
|
|
|
Operating
|
|
Operating
|
|
|
Income
|
|
Margin
|
|
|
Income
|
|
Margin
|
|
Transportation
Solutions
|
$
|
478
|
|
20.1
|
%
|
|
$
|
282
|
|
12.5
|
%
|
Industrial
Solutions
|
|
141
|
|
13.8
|
|
|
|
156
|
|
14.7
|
|
Communications
Solutions
|
|
79
|
|
18.2
|
|
|
|
64
|
|
12.3
|
|
Total
|
$
|
698
|
|
18.2
|
%
|
|
$
|
502
|
|
13.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
|
|
Adjusted
|
|
|
Adjusted
|
|
Adjusted
|
|
|
Operating
|
|
Operating
|
|
|
Operating
|
|
Operating
|
|
|
Income
(1)
|
|
Margin
(1)
|
|
|
Income
(1)
|
|
Margin
(1)
|
|
Transportation
Solutions
|
$
|
495
|
|
20.9
|
%
|
|
$
|
358
|
|
15.8
|
%
|
Industrial
Solutions
|
|
155
|
|
15.1
|
|
|
|
175
|
|
16.5
|
|
Communications
Solutions
|
|
81
|
|
18.7
|
|
|
|
89
|
|
17.0
|
|
Total
|
$
|
731
|
|
19.1
|
%
|
|
$
|
622
|
|
16.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 December 29, 2023
|
|
versus Net Sales for
the Quarter Ended December 30, 2022
|
|
Net
Sales
|
|
|
Organic Net
Sales
|
|
|
|
|
Acquisition/
|
|
Growth
(Decline)
|
|
|
Growth (Decline)
(1)
|
|
|
Translation
(2)
|
|
(Divestitures)
|
|
($ in
millions)
|
Transportation
Solutions (3):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automotive
|
$
|
127
|
|
7.7
|
%
|
|
$
|
135
|
|
8.1
|
%
|
|
$
|
17
|
|
$
|
(25)
|
Commercial
transportation
|
|
8
|
|
2.3
|
|
|
|
2
|
|
0.7
|
|
|
|
6
|
|
|
—
|
Sensors
|
|
(21)
|
|
(8.0)
|
|
|
|
(24)
|
|
(9.2)
|
|
|
|
3
|
|
|
—
|
Total
|
|
114
|
|
5.0
|
|
|
|
113
|
|
5.0
|
|
|
|
26
|
|
|
(25)
|
Industrial
Solutions (3):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial
equipment
|
|
(104)
|
|
(24.0)
|
|
|
|
(115)
|
|
(26.3)
|
|
|
|
11
|
|
|
—
|
Aerospace, defense, and
marine
|
|
26
|
|
9.8
|
|
|
|
33
|
|
12.5
|
|
|
|
4
|
|
|
(11)
|
Energy
|
|
16
|
|
8.5
|
|
|
|
3
|
|
1.4
|
|
|
|
3
|
|
|
10
|
Medical
|
|
27
|
|
15.6
|
|
|
|
27
|
|
15.6
|
|
|
|
—
|
|
|
—
|
Total
|
|
(35)
|
|
(3.3)
|
|
|
|
(52)
|
|
(4.9)
|
|
|
|
18
|
|
|
(1)
|
Communications
Solutions (3):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Data and
devices
|
|
(50)
|
|
(15.2)
|
|
|
|
(50)
|
|
(15.2)
|
|
|
|
—
|
|
|
—
|
Appliances
|
|
(39)
|
|
(20.2)
|
|
|
|
(39)
|
|
(20.2)
|
|
|
|
—
|
|
|
—
|
Total
|
|
(89)
|
|
(17.0)
|
|
|
|
(89)
|
|
(17.0)
|
|
|
|
—
|
|
|
—
|
Total
|
$
|
(10)
|
|
(0.3)
|
%
|
|
$
|
(28)
|
|
(0.7)
|
%
|
|
$
|
44
|
|
$
|
(26)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 December 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
|
$
|
478
|
|
|
$
|
—
|
|
$
|
14
|
|
$
|
3
|
|
$
|
495
|
|
Industrial
Solutions
|
|
141
|
|
|
|
7
|
|
|
6
|
|
|
1
|
|
|
155
|
|
Communications
Solutions
|
|
79
|
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
81
|
|
Total
|
$
|
698
|
|
|
$
|
8
|
|
$
|
21
|
|
$
|
4
|
|
$
|
731
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
|
18.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
19.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense,
net
|
$
|
(3)
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (expense)
benefit
|
$
|
1,105
|
|
|
$
|
(1)
|
|
$
|
(5)
|
|
$
|
(1,254)
|
|
$
|
(155)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
|
(158.1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
21.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
1,804
|
|
|
$
|
7
|
|
$
|
16
|
|
$
|
(1,250)
|
|
$
|
577
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share from
continuing operations
|
$
|
5.76
|
|
|
$
|
0.02
|
|
$
|
0.05
|
|
$
|
(3.99)
|
|
$
|
1.84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 $4 million recorded in selling,
general, and
administrative expenses for other non-income taxes.
|
|
(3) See
description of non-GAAP financial measures.
|
|
TE CONNECTIVITY
LTD.
|
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL
MEASURES
|
|
For the Quarter
Ended December 30, 2022
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
Acquisition-
|
|
Restructuring
|
|
|
|
|
|
|
|
Related
|
|
and
Other
|
|
Adjusted
|
|
|
U.S.
GAAP
|
|
|
Charges
(1)
|
|
Charges, Net
(1)
|
|
(Non-GAAP)
(2)
|
|
|
($ in millions,
except per share data)
|
|
Operating
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation
Solutions
|
$
|
282
|
|
|
$
|
2
|
|
$
|
74
|
|
$
|
358
|
|
Industrial
Solutions
|
|
156
|
|
|
|
6
|
|
|
13
|
|
|
175
|
|
Communications
Solutions
|
|
64
|
|
|
|
1
|
|
|
24
|
|
|
89
|
|
Total
|
$
|
502
|
|
|
$
|
9
|
|
$
|
111
|
|
$
|
622
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
|
13.1
|
%
|
|
|
|
|
|
|
|
|
16.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense,
net
|
$
|
(5)
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
$
|
(87)
|
|
|
$
|
(2)
|
|
$
|
(29)
|
|
$
|
(118)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
|
17.9
|
%
|
|
|
|
|
|
|
|
|
19.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
398
|
|
|
$
|
7
|
|
$
|
82
|
|
$
|
487
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share from continuing operations
|
$
|
1.25
|
|
|
$
|
0.02
|
|
$
|
0.26
|
|
$
|
1.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 March 31, 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
|
$
|
333
|
|
|
$
|
—
|
|
$
|
78
|
|
$
|
411
|
|
Industrial
Solutions
|
|
134
|
|
|
|
7
|
|
|
33
|
|
|
174
|
|
Communications
Solutions
|
|
70
|
|
|
|
1
|
|
|
8
|
|
|
79
|
|
Total
|
$
|
537
|
|
|
$
|
8
|
|
$
|
119
|
|
$
|
664
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
|
12.9
|
%
|
|
|
|
|
|
|
|
|
16.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense,
net
|
$
|
(4)
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
$
|
(100)
|
|
|
$
|
(1)
|
|
$
|
(26)
|
|
$
|
(127)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
|
19.0
|
%
|
|
|
|
|
|
|
|
|
19.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
425
|
|
|
$
|
7
|
|
$
|
93
|
|
$
|
525
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share from continuing operations
|
$
|
1.34
|
|
|
$
|
0.02
|
|
$
|
0.29
|
|
$
|
1.65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 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
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense,
net
|
$
|
(16)
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(16)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 January 24,
2024
|
(UNAUDITED)
|
|
|
|
|
Outlook
for
|
|
|
Quarter
Ending
|
|
|
March
29,
|
|
|
2024
|
|
Diluted earnings per
share from continuing operations
|
$
|
1.75
|
|
Restructuring and other
charges, net
|
|
0.05
|
|
Acquisition-related
charges
|
|
0.02
|
|
Adjusted diluted
earnings per share from continuing operations
(1)
|
$
|
1.82
|
|
|
|
|
|
|
|
|
|
Net sales growth
(decline)
|
|
(5.0)
|
%
|
Translation
|
|
0.3
|
|
(Acquisitions)
divestitures, net
|
|
0.5
|
|
Organic net sales
growth (decline) (1)
|
|
(4.2)
|
%
|
|
|
|
|
(1) See
description of non-GAAP financial measures.
|
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SOURCE TE Connectivity, LTD