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TE Connectivity announces fourth quarter and full year results for fiscal year 2020

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SCHAFFHAUSEN, Switzerland, Oct. 28, 2020 /PRNewswire/ -- TE Connectivity Ltd. (NYSE:TEL) today reported results for the fiscal fourth quarter and year ended Sept. 25, 2020.

Fourth Quarter Highlights

  • Net sales were $3.26 billion, up 28% sequentially on a reported basis compared to the 10% increase the company expected. Sales were down 1% on a reported basis and down 4% on an organic basis year over year.
  • Growth in all segments sequentially, with Transportation segment up 49%, driven by Auto business.
  • GAAP earnings per share (EPS) from continuing operations were $0.69, and adjusted EPS were $1.16.
  • Cash flow from continuing operating activities was $719 million and free cash flow was $648 million.

Full Year Highlights

  • Net sales were $12.2 billion, down 10% from fiscal year 2019 as a result of COVID-19 impact.
  • GAAP EPS from continuing operations were a loss of $0.78, and adjusted EPS were $4.26.
  • Cash flow from continuing operating activities was $2 billion and free cash flow was $1.5 billion, with $1.1 billion returned to shareholders.

"I am proud of our employees for delivering fourth quarter results well above our expectations, exiting the year with sequential sales growth in all segments. In particular, our Transportation segment was up nearly 50% from last quarter, driven by a recovery in auto production and our continued outperformance versus the market due to our strong position in hybrid and electric vehicle platform technology," said TE Connectivity CEO Terrence Curtin.  "Our global manufacturing strategy and acceleration of our cost reduction activities enabled us to meet our commitments to our customers as they continue to navigate the impacts of COVID-19. Our full year results demonstrate strong cash flow generation and our portfolio is well positioned. While the markets remain uncertain, we do expect our first quarter of 2021 to be back to pre-COVID revenue levels and we expect an increase in profitability with year-over-year adjusted margin and EPS growth."

First Quarter FY21 Outlook

For the first quarter of fiscal 2021, the company expects net sales of approximately $3.2 billion, reflecting an increase of 1% on a reported basis and down 2% on an organic basis year over year. GAAP EPS from continuing operations are expected to be approximately $0.83, with adjusted EPS of approximately $1.25.

The company is not providing 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, 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 Oct. 28, 2020.

About TE Connectivity

TE Connectivity Ltd. (NYSE:TEL) is a $12 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 approximately 80,000 employees, including more than 7,500 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 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:

  • 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 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 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.

TE CONNECTIVITY LTD.

 CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


























For the Quarters Ended


For the Year Ended


September 25,


September 27,


September 25,


September 27,


2020


2019


2020


2019


(in millions, except per share data)

Net sales

$

3,261


$

3,300


$

12,172


$

13,448

Cost of sales 


2,292



2,248



8,437



9,054

Gross margin


969



1,052



3,735



4,394

Selling, general, and administrative expenses


352



372



1,392



1,490

Research, development, and engineering expenses


148



159



613



644

Acquisition and integration costs


9



6



36



27

Restructuring and other charges, net


113



71



257



255

Impairment of goodwill


-



-



900



-

Operating income


347



444



537



1,978

Interest income


2



6



15



19

Interest expense


(12)



(13)



(48)



(68)

Other income, net


-



-



20



2

Income from continuing operations before income taxes


337



437



524



1,931

Income tax (expense) benefit


(109)



(61)



(783)



15

Income (loss) from continuing operations


228



376



(259)



1,946

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


2



(4)



18



(102)

Net income (loss)

$

230


$

372


$

(241)


$

1,844













Basic earnings (loss) per share:












Income (loss) from continuing operations

$

0.69


$

1.12


$

(0.78)


$

5.76

Income (loss) from discontinued operations


0.01



(0.01)



0.05



(0.30)

Net income (loss)


0.70



1.11



(0.73)



5.46













Diluted earnings (loss) per share:












Income (loss) from continuing operations

$

0.69


$

1.11


$

(0.78)


$

5.72

Income (loss) from discontinued operations


0.01



(0.01)



0.05



(0.30)

Net income (loss)


0.69



1.10



(0.73)



5.42













Weighted-average number of shares outstanding: 












Basic


330



336



332



338

Diluted


332



338



332



340

 

TE CONNECTIVITY LTD.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)














September 25,


September 27,


2020


2019


(in millions, except share data)

Assets






Current assets:






Cash and cash equivalents

$

945


$

927

Accounts receivable, net of allowance for doubtful accounts of $29 and $25, respectively


2,377



2,320

Inventories


1,950



1,836

Prepaid expenses and other current assets


512



471

Total current assets


5,784



5,554

Property, plant, and equipment, net


3,650



3,574

Goodwill


5,224



5,740

Intangible assets, net


1,593



1,596

Deferred income taxes


2,178



2,776

Other assets


813



454

Total assets

$

19,242


$

19,694







Liabilities, redeemable noncontrolling interests,  and shareholders' equity






Current liabilities:






Short-term debt

$

694


$

570

Accounts payable


1,276



1,357

Accrued and other current liabilities


1,720



1,613

Total current liabilities


3,690



3,540

Long-term debt


3,452



3,395

Long-term pension and postretirement liabilities


1,336



1,367

Deferred income taxes


143



156

Income taxes


252



239

Other liabilities


874



427

Total liabilities


9,747



9,124

Commitments and contingencies






Redeemable noncontrolling interests


112



-

Shareholders' equity:






Common shares, CHF 0.57 par value, 338,953,381 shares authorized and issued, and
350,951,381 shares authorized and issued, respectively


149



154

Accumulated earnings 


10,348



12,256

Treasury shares, at cost, 8,295,878 and 15,862,337 shares, respectively


(669)



(1,337)

Accumulated other comprehensive loss


(445)



(503)

Total shareholders' equity


9,383



10,570

Total liabilities, redeemable noncontrolling interests, and shareholders' equity

$

19,242


$

19,694

 

TE CONNECTIVITY LTD.

 CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


























For the Quarters Ended


For the Year Ended


September 25,


September 27,


September 25,


September 27,


2020


2019


2020


2019


(in millions)

Cash flows from operating activities:












Net income (loss)

$

230


$

372


$

(241)


$

1,844

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


(2)



4



(18)



102

Income (loss) from continuing operations


228



376



(259)



1,946

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












Impairment of goodwill


-



-



900



-

Depreciation and amortization


181



175



711



690

Deferred income taxes


76



72



535



(218)

Non-cash lease cost


29



-



108



-

Provision for losses on accounts receivable and inventories


(14)



7



14



43

Share-based compensation expense


20



19



74



75

Other 


14



25



54



51

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












Accounts receivable, net


(245)



136



(63)



31

Inventories


253



123



(89)



64

Prepaid expenses and other current assets


24



35



51



144

Accounts payable


1



(92)



(80)



(178)

Accrued and other current liabilities


105



132



(99)



(15)

Income taxes


(29)



(72)



(9)



(135)

Other


76



(57)



143



(44)

Net cash provided by continuing operating activities


719



879



1,991



2,454

Net cash provided by (used in) discontinued operating activities


1



(1)



1



(32)

Net cash provided by operating activities


720



878



1,992



2,422

Cash flows from investing activities:












Capital expenditures


(121)



(179)



(560)



(749)

Proceeds from sale of property, plant, and equipment


11



27



17



43

Acquisition of businesses, net of cash acquired


(11)



-



(339)



(283)

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


-



-



-



297

Other


4



(1)



17



2

Net cash used in continuing investing activities


(117)



(153)



(865)



(690)

Net cash used in discontinued investing activities


-



-



-



(2)

Net cash used in investing activities


(117)



(153)



(865)



(692)

Cash flows from financing activities:












Net increase (decrease) in commercial paper


-



219



(219)



(51)

Proceeds from issuance of debt


-



-



593



746

Repayment of debt


-



(250)



(352)



(691)

Proceeds from exercise of share options


26



30



55



85

Repurchase of common shares


-



(178)



(523)



(1,091)

Payment of common share dividends to shareholders


(159)



(154)



(625)



(608)

Transfers (to) from discontinued operations 


1



(1)



1



(34)

Other


(2)



(1)



(34)



(33)

Net cash used in continuing financing activities


(134)



(335)



(1,104)



(1,677)

Net cash provided by (used in) discontinued financing activities


(1)



1



(1)



34

Net cash used in financing activities


(135)



(334)



(1,105)



(1,643)

Effect of currency translation on cash


3



(10)



(4)



(8)

Net increase in cash, cash equivalents, and restricted cash


471



381



18



79

Cash, cash equivalents, and restricted cash at beginning of fiscal year


474



546



927



848

Cash, cash equivalents, and restricted cash at end of fiscal year

$

945


$

927


$

945


$

927













Supplemental cash flow information:












Interest paid on debt, net

$

19


$

19


$

50


$

75

Income taxes paid, net of refunds


62



61



257



338

 

TE CONNECTIVITY LTD.

RECONCILIATION OF FREE CASH FLOW (UNAUDITED)


























For the Quarters Ended


For the Year Ended


September 25,


September 27,


September 25,


September 27,


2020


2019


2020


2019


(in millions)

Net cash provided by continuing operating activities

$

719


$

879


$

1,991


$

2,454

Excluding:












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


39



(39)



34



(132)

Capital expenditures, net


(110)



(152)



(543)



(706)

Free cash flow (1)

$

648


$

688


$

1,482


$

1,616













(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 Year Ended



September 25,



September 27,



September 25,



September 27,



2020



2019



2020



2019



($ in millions)



Net Sales





Net Sales





Net Sales





Net Sales




Transportation Solutions

$

1,865





$

1,896





$

6,845





$

7,821




Industrial Solutions


959






1,014






3,713






3,954




Communications Solutions


437






390






1,614






1,673




Total

$

3,261





$

3,300





$

12,172





$

13,448





















































Operating


Operating


Operating


Operating


Operating


Operating


Operating


Operating


Income


Margin


Income


Margin


Income (Loss)


Margin


Income


Margin

Transportation Solutions

$

198


10.6

%


$

270


14.2

%


$

(93)


(1.4)

%


$

1,226


15.7

%

Industrial Solutions


85


8.9




150


14.8




412


11.1




543


13.7


Communications Solutions


64


14.6




24


6.2




218


13.5




209


12.5


Total

$

347


10.6

%


$

444


13.5

%


$

537


4.4

%


$

1,978


14.7

%


















































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

$

245


13.1

%


$

334


17.6

%


$

952


13.9

%


$

1,401


17.9

%

Industrial Solutions


133


13.9




157


15.5




522


14.1




621


15.7


Communications Solutions


95


21.7




47


12.1




260


16.1




258


15.4


Total

$

473


14.5

%


$

538


16.3

%


$

1,734


14.2

%


$

2,280


17.0

%

























(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 September 25, 2020


versus Net Sales for the Quarter Ended September 27, 2019


Net Sales



Organic Net Sales







Growth (Decline)



Growth (Decline) (1)



Translation (2)


Acquisitions


($ in millions)

Transportation Solutions (3):


















Automotive

$

(38)


(2.8)

%


$

(61)


(4.2)

%


$

23


$

-

Commercial transportation


(17)


(6.0)




(17)


(6.0)




-



-

Sensors


24


10.0




(39)


(16.5)




3



60

Total


(31)


(1.6)




(117)


(6.0)




26



60

Industrial Solutions (3):


















Aerospace, defense, oil, and gas


(39)


(11.2)




(43)


(12.5)




4



-

Industrial equipment


(2)


(0.7)




(6)


(2.2)




4



-

Medical


(16)


(8.6)




(16)


(8.6)




-



-

Energy


2


1.1




-


-




2



-

Total


(55)


(5.4)




(65)


(6.4)




10



-

Communications Solutions (3):


















Data and devices


20


8.3




17


7.1




3



-

Appliances


27


18.0




27


18.0




-



-

Total


47


12.1




44


11.3




3



-

Total 

$

(39)


(1.2)

%


$

(138)


(4.1)

%


$

39


$

60
























































Change in Net Sales for the Year Ended September 25, 2020


versus Net Sales for the Year Ended September 27, 2019


Net Sales



Organic Net Sales







Growth (Decline)



Growth (Decline) (1)



Translation (2)


Acquisitions


($ in millions)

Transportation Solutions (3):


















Automotive

$

(783)


(13.8)

%


$

(742)


(12.9)

%


$

(41)


$

-

Commercial transportation


(170)


(13.9)




(176)


(14.4)




(21)



27

Sensors


(23)


(2.5)




(148)


(16.3)




(3)



128

Total


(976)


(12.5)




(1,066)


(13.5)




(65)



155

Industrial Solutions (3):


















Aerospace, defense, oil, and gas


(105)


(8.0)




(100)


(7.8)




(5)



-

Industrial equipment


(144)


(11.6)




(133)


(10.7)




(11)



-

Medical


(10)


(1.4)




(9)


(1.3)




(1)



-

Energy


18


2.6




30


4.3




(12)



-

Total


(241)


(6.1)




(212)


(5.4)




(29)



-

Communications Solutions (3):


















Data and devices


(20)


(2.0)




(23)


(2.5)




3



-

Appliances


(39)


(5.7)




(31)


(4.4)




(8)



-

Total


(59)


(3.5)




(54)


(3.2)




(5)



-

Total 

$

(1,276)


(9.5)

%


$

(1,332)


(9.9)

%


$

(99)


$

155



















(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 September 25, 2020


(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

$

198



$

11


$

36


$

-


$

245


Industrial Solutions


85




2



46



-



133


Communications Solutions


64




-



31



-



95


Total 

$

347



$

13


$

113


$

-


$

473



















Operating margin


10.6

%












14.5

%


















Income tax expense

$

(109)



$

(4)


$

(21)


$

56


$

(78)



















Effective tax rate


32.3

%












16.8

%


















Income from continuing operations

$

228



$

9


$

92


$

56


$

385



















Diluted earnings per share from continuing operations

$

0.69



$

0.03


$

0.28


$

0.17


$

1.16



















(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) Income tax expense related to increases to the valuation allowance for certain deferred tax assets.


(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 September 27, 2019


(UNAUDITED)









































Adjustments











Acquisition-
















Related Charges


Restructuring











and Other


and Other




Adjusted



U.S. GAAP




Items (1)(2)


Charges, Net (1)


Tax Items


(Non-GAAP) (3)



($ in millions, except per share data)


Operating income:

















Transportation Solutions

$

270



$

18


$

46


$

-


$

334


Industrial Solutions


150




4



3



-



157


Communications Solutions


24




1



22



-



47


Total 

$

444



$

23


$

71


$

-


$

538



















Operating margin


13.5

%












16.3

%


















Income tax expense

$

(61)



$

(5)


$

(15)


$

1


$

(80)



















Effective tax rate


14.0

%












15.1

%


















Income from continuing operations

$

376



$

18


$

56


$

1


$

451



















Diluted earnings per share from continuing operations

$

1.11



$

0.05


$

0.17


$

-


$

1.33



















(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 acquisition-related charges of $6 million and a write-off of spare parts of $17 million.


(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 25, 2020


(UNAUDITED)















































Adjustments









Acquisition-


Restructuring












Related


and Other


Impairment




Adjusted



U.S. GAAP



Charges (1)


Charges, Net (1)


of Goodwill (1)


Tax Items (2)


(Non-GAAP) (4)



($ in millions, except per share data)


Operating income (loss):




















Transportation Solutions

$

(93)



$

32


$

113


$

900


$

-


$

952


Industrial Solutions


412




8



102



-



-



522


Communications Solutions


218




-



42



-



-



260


Total 

$

537



$

40


$

257


$

900


$

-


$

1,734






















Operating margin


4.4

%















14.2

%





















Other income, net

$

20



$

-


$

-


$

-


$

(8)


$

12






















Income tax expense

$

(783)



$

(8)


$

(46)


$

(4)


$

550


$

(291)






















Effective tax rate


149.4

%















17.0

%





















Income (loss) from continuing
operations

$

(259)



$

32


$

211


$

896


$

542


$

1,422






















Diluted earnings (loss) per share from
continuing operations (3)

$

(0.78)



$

0.10


$

0.63


$

2.68


$

1.62


$

4.26






















(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 $355 million of income tax expense related to the tax impacts of certain measures of Swiss tax reform and $226 million of income tax expense related to
increases to the valuation allowance for certain deferred tax assets, partially offset by a $31 million income tax benefit related to pre-separation tax matters and the
termination of the tax sharing agreement with Tyco International and Covidien.


(3) U.S. GAAP diluted shares excludes two million of nonvested share awards and options outstanding as the inclusion of these securities would have been
antidilutive because of our loss during the period. Such amounts are included in adjusted (non-GAAP) diluted shares.


(4) 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




Adjusted



U.S. GAAP



Items (1)(2)


Charges, Net (1)


Tax 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
each such jurisdiction.


(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
effective settlement of a tax audit in a non-U.S. jurisdiction, and $15 million of income tax expense associated with the tax impacts of certain legal entity
restructurings and intercompany transactions.


(4) 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 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 effect for each such jurisdiction.


(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 FORWARD-LOOKING NON-GAAP FINANCIAL MEASURES


TO FORWARD-LOOKING GAAP FINANCIAL MEASURES


As of October 28, 2020


(UNAUDITED)






Outlook for



Quarter Ending



December 25,



2020


Diluted earnings per share from continuing operations

$

0.83


Restructuring and other charges, net


0.40


Acquisition-related charges


0.02


Adjusted diluted earnings per share from continuing operations (1)

$

1.25










Net sales growth (decline)


1.0

%

Translation


(1.7)


(Acquisitions) divestitures, net


(1.3)


Organic net sales growth (decline) (1)


(2.0)

%





(1) See description of non-GAAP financial measures.

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/te-connectivity-announces-fourth-quarter-and-full-year-results-for-fiscal-year-2020-301161060.html

SOURCE TE Connectivity Ltd.

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