ADC TELECOMMUNICATIONS 
By SCHAFFHAUSEN, Switzerland, Oct. 28 /PRNewswire-FirstCall/ -- Tyco Electronics Ltd. (NYSE: TEL) today reported results for the fiscal fourth quarter ended Sept. 24, 2010. The company reported a net sales increase of 16 percent year-over-year, and 2 percent sequentially, to $3.1 billion. GAAP EPS were $0.56 for the quarter, compared to $0.18 in the prior-year period. Included in the GAAP EPS were $0.10 per share related to restructuring charges and a loss on the sale of a mechatronics business, $0.02 per share of acquisition-related costs and $0.05 per share of items primarily due to shared tax matters. This compares to $0.12 per share of net charges in the prior-year quarter. Adjusted EPS were $0.72 in the quarter, compared to $0.30 in the prior-year quarter.
Full-year net sales were $12.1 billion, an increase of 18 percent over the prior year. Organic sales growth was 17 percent. GAAP EPS were $2.32 for the year, compared to a loss of $6.77 in the prior year. Included in GAAP EPS were $0.22 per share of net charges, compared to $7.58 per share of charges in the prior year. Adjusted EPS were $2.54 for the year, compared to $0.81 in the prior year.
"Our fourth quarter was a strong finish to a very good year," said Tyco Electronics Chief Executive Officer Tom Lynch. "Our 2010 sales of $12.1 billion were up 18 percent over the prior year. This growth was broad-based across our markets and geographies, driven by a recovering global economy and our ability to respond quickly during the rebound. We also strengthened our market position during the year.
"Full-year adjusted EPS of $2.54 were up from $0.81 in the prior year. This improvement was primarily due to the sales growth and strong execution of our productivity improvement programs. We also generated $1.4 billion of free cash flow."
FIRST QUARTER AND FULL YEAR FISCAL 2011 OUTLOOK (EXCLUDES ADC ACQUISITION)
"For fiscal 2011, we are expecting organic sales growth of 4 to 7 percent and 12 to 20 percent adjusted EPS growth. This excludes the ADC acquisition that we expect to close this quarter," Lynch said. "The sales growth assumes 2 to 3 percent global GDP growth, driven primarily by continued strength in developing markets, where we have a leading position. We expect another year of strong cash flow and plan to increase our dividend by 12.5 percent in our third quarter of fiscal 2011. Earlier this month, we announced that our Board of Directors approved a $750 million expansion of our share repurchase program."
For the first quarter, the company expects net sales of $3.05 to $3.15 billion, an increase of 5 to 9 percent over the prior-year period. GAAP EPS are expected to be $0.63 to $0.67, including restructuring charges and acquisition-related costs of approximately $0.03 per share. Adjusted EPS are expected to be $0.66 to $0.70, up 40 percent to 49 percent compared to adjusted EPS of $0.47 in the prior-year period.
For the full fiscal year, which includes 53 weeks in 2011, the company expects sales of $12.8 to $13.2 billion, an increase of 6 to 9 percent over the prior year. GAAP EPS are expected to be $2.80 to $3.00, including restructuring charges and acquisition-related costs of approximately $0.05 per share. Adjusted EPS are expected to be $2.85 to $3.05, compared to adjusted EPS of $2.54 in the prior-year period. Approximately $240 million of the expected growth and $0.05 per share of EPS is due to the impact of the additional week in 2011. Excluding the 53rd week, sales are expected to be up 4 to 7 percent organically and adjusted EPS will be up 10 to 18 percent.
This outlook assumes current foreign exchange and commodity rates, and does not include results related to the pending acquisition of ADC.
ADC ACQUISITION UPDATE
As announced in July 2010, the company reached an agreement to acquire ADC (Nasdaq: ADCT) for $12.75 per share in cash, or an enterprise value of approximately $1.25 billion. This acquisition is expected to position the company as a leading global provider of broadband connectivity products to carrier and enterprise networks.
Integration plans are progressing as expected. We continue to anticipate that the transaction will close in the current quarter and be accretive by $0.14 per share in the first 12 months after closing -- excluding acquisition-related costs.
FISCAL FOURTH QUARTER 2010 RESULTS
The following discussion includes non-GAAP financial measures which are described at the end of this press release. For a reconciliation of these non-GAAP financial measures, see the attached tables. All dollar amounts are pre-tax and stated in millions.
Sept. 24, June 25, Sept. 25,
($ in millions) 2010 2010 2009
---------- --------- ----------
Net Sales $3,137 $3,084 $2,698
Operating Income $382 $467 $176
Restructuring and Other
Charges $(56) $(3) $(45)
Acquisition and Integration
Costs $(8) $0 $0
Other Items $0 $7 $0
--- --- ---
Adjusted Operating Income $446 $463 $221
Operating Margin 12.2% 15.1% 6.5%
Adjusted Operating Margin 14.2% 15.0% 8.2%
% Change % Change
($ in millions) Sequential YoY
---------- ---
Net Sales 2% 16%
Operating Income (18)% 117%
Restructuring and Other
Charges
Acquisition and Integration
Costs
Other Items
Adjusted Operating Income (4)% 102%
Operating Margin
Adjusted Operating Margin
Sales grew 16 percent compared to the prior-year quarter and 2 percent sequentially. Organically, sales increased 19 percent compared to the prior year and 1 percent sequentially. By segment, and on an organic basis, sales in the Electronic Components segment were flat sequentially, with continued growth in industrial markets mostly offset by typical seasonal production declines in automotive. Sales increased 6 percent sequentially in the Network Solutions segment due to increased capital spending in infrastructure markets. Sales in the Specialty Products segment grew 5 percent sequentially, with broad-based growth in all markets. In the Subsea Communications segment, sales decreased 14 percent sequentially.
The adjusted operating margin was up 600 basis points versus the prior year to 14.2 percent, and down sequentially as expected.
CASH FLOW
Cash from continuing operations was $474 million during the quarter, and free cash flow was $443 million. For the full year, cash from operations was $1.7 billion and free cash flow was $1.4 billion, up 15 percent versus the prior year.
ORDERS
Total company orders increased 3 percent compared to the prior year and decreased 9 percent sequentially. The book-to-bill ratio was 0.95 in the quarter. Excluding the Subsea Communications segment, which is a project-oriented business with uneven order patterns, orders increased 16 percent year-over-year and decreased 6 percent sequentially and the book-to-bill ratio was 0.99.
ADDITIONAL ITEMS
-- Dividend - The company's Board of Directors approved a recommendation to
increase the quarterly dividend by 12.5 percent to $0.18 per share for
the four fiscal quarters beginning with the third quarter of 2011. This
recommendation will be presented for shareholder approval at the
company's Annual General Meeting of Shareholders in March 2011.
-- Share Repurchases - On Oct. 1, 2010 the company announced that its Board
of Directors authorized a $750 million increase in the share repurchase
program to a total of $2.75 billion. Approximately $1.9 billion has
been utilized under the program to-date.
ABOUT TYCO ELECTRONICS
Tyco Electronics Ltd. is a leading global provider of engineered electronic components, network solutions, specialty products and subsea communication systems, with fiscal 2010 sales of $12.1 billion to customers in more than 150 countries. We design, manufacture and market products for customers in a broad array of industries including automotive; data communication systems and consumer electronics; telecommunications; aerospace, defense and marine; medical; energy; and lighting. With approximately 7,000 engineers and worldwide manufacturing, sales and customer service capabilities, Tyco Electronics' commitment is our customers' advantage. More information on Tyco Electronics can be found at http://www.tycoelectronics.com/.
CONFERENCE CALL AND WEBCAST
-- The company will hold a conference call for investors today beginning at
8:30 a.m. EDT.
-- Internet users will be able to access the company's earnings webcast,
including slide materials, at the "Investors" section of Tyco
Electronics' website: http://investors.tycoelectronics.com.
-- For both "listen-only" participants and those participants who wish to
take part in the question-and-answer portion of the call, the telephone
dial-in number in the United States is (800) 288-8976. The telephone
dial-in number for participants outside the United States is (612)
332-0636.
-- An audio replay of the conference call will be available beginning at
10:30 a.m. on Oct. 28, 2010 and ending at 11:59 p.m. on Nov. 4, 2010.
The dial-in number for participants in the United States is (800)
475-6701. For participants outside the United States, the replay
dial-in number is (320) 365-3844. The replay access code for all callers
is 170757.
NON-GAAP MEASURES
"Organic Sales Growth," "Adjusted Operating Income," "Adjusted Operating Margin," "Adjusted Other Income, Net," "Adjusted Income Tax (Expense) Benefit," "Adjusted Income from Continuing Operations," "Adjusted Earnings Per Share," and "Free Cash Flow" (FCF) are non-GAAP measures and should not be considered replacements for GAAP results.
"Organic Sales Growth" is a useful measure used by the company to measure the underlying results and trends in the business. The difference between reported net sales growth (the most comparable GAAP measure) and Organic Sales Growth (the non-GAAP measure) consists of the impact from foreign currency, acquisitions and divestitures. Organic Sales Growth is a useful measure of the company's performance because it excludes items that: i) are not completely under management's control, such as the impact of foreign currency exchange; or ii) do not reflect the underlying growth of the company, such as acquisition and divestiture activity. The limitation of this measure is that it excludes items that have an impact on the company's sales. This limitation is best addressed by using organic sales growth in combination with the GAAP results. See the accompanying tables to this press release for the reconciliation presenting the components of Organic Sales Growth.
The company has presented its operating income before special items including charges or income related to legal settlements and reserves, restructuring and other charges, impairment charges, acquisition and integration costs, and other income or charges ("Adjusted Operating Income"). The company utilizes Adjusted Operating Income to assess segment level core operating performance and to provide insight to management in evaluating segment operating plan execution and underlying market conditions. It is also a significant component in the company's incentive compensation plans. Adjusted Operating Income is a useful measure for investors because it better reflects the company's underlying operating results, trends and the comparability of these results between periods. The difference between Adjusted Operating Income and operating income (the most comparable GAAP measure) consists of the impact of charges or income related to legal settlements and reserves, restructuring and other charges, impairment charges, acquisition and integration costs, and other income or charges that may mask the underlying operating results and/or business trends. The limitation of this measure is that it excludes the financial impact of items that would otherwise either increase or decrease the company's reported operating income. This limitation is best addressed by using Adjusted Operating Income in combination with operating income (the most comparable GAAP measure) in order to better understand the amounts, character and impact of any increase or decrease on reported results.
The company has presented its operating margin before special items including charges or income related to legal settlements and reserves, restructuring and other charges, impairment charges, acquisition and integration costs, and other income or charges ("Adjusted Operating Margin"). The company presents Adjusted Operating Margin before special items to give investors a perspective on the underlying business results. Because the company cannot predict the amount and timing of such items and the associated charges or gains that will be recorded in the company's financial statements, it is difficult to include the impact of those items in the forecast.
The company has presented other income, net before special items including tax sharing income related to certain proposed adjustments to prior period tax returns and other tax items and the gain on retirement of debt ("Adjusted Other Income, Net"). The company presents Adjusted Other Income, Net as it believes that it is appropriate for investors to consider results excluding these items in addition to its results in accordance with GAAP. The difference between Adjusted Other Income, Net and other income, net (the most comparable GAAP measure) consists of tax sharing income related to certain proposed adjustments to prior period tax returns and other tax items and the gain on retirement of debt. The limitation of this measure is that it excludes the financial impact of items that would otherwise either increase or decrease other income, net. This limitation is best addressed by using Adjusted Other Income, Net in combination with other income, net (the most comparable GAAP measure) in order to better understand the amounts, character and impact of any increase or decrease in reported amounts.
The company has presented income tax (expense) benefit after adjusting for the tax effect of special items including charges related to restructuring and other charges, impairment charges, acquisition and integration costs, other income or charges, and certain significant special tax items ("Adjusted Income Tax (Expense) Benefit"). The company presents Adjusted Income Tax (Expense) Benefit to provide investors further information regarding the tax effects of adjustments used in determining the non-GAAP financial measure Adjusted Income from Continuing Operations (as defined below). The difference between Adjusted Income Tax (Expense) Benefit and income tax (expense) benefit (the most comparable GAAP measure) is the tax effect of adjusting items and certain significant special tax items. The limitation of this measure is that it excludes the financial impact of items that would otherwise either increase or decrease income tax (expense) benefit. This limitation is best addressed by using Adjusted Income Tax (Expense) Benefit in combination with income tax (expense) benefit (the most comparable GAAP measure) in order to better understand the amounts, character and impact of any increase or decrease in reported amounts.
The company has presented income from continuing operations attributable to Tyco Electronics Ltd. before special items including charges or income related to legal settlements and reserves, restructuring and other charges, impairment charges, acquisition and integration costs, tax sharing income related to certain proposed adjustments to prior period tax returns and other tax items, certain significant special tax items, other income or charges, and, if applicable, related tax effects ("Adjusted Income from Continuing Operations"). The company presents Adjusted Income from Continuing Operations as it believes that it is appropriate for investors to consider results excluding these items in addition to its results in accordance with GAAP. Adjusted Income from Continuing Operations provides additional information regarding the company's underlying operating results, trends and the comparability of these results between periods. The difference between Adjusted Income from Continuing Operations and income from continuing operations attributable to Tyco Electronics Ltd. (the most comparable GAAP measure) consists of the impact of charges or income related to legal settlements and reserves, restructuring and other charges, impairment charges, acquisition and integration costs, tax sharing income related to certain proposed adjustments to prior period tax returns and other tax items, certain significant special tax items, other income or charges, and, if applicable, related tax effects. The limitation of this measure is that it excludes the financial impact of items that would otherwise either increase or decrease the company's reported results. This limitation is best addressed by using Adjusted Income from Continuing Operations in combination with income from continuing operations attributable to Tyco Electronics Ltd. (the most comparable GAAP measure) in order to better understand the amounts, character and impact of any increase or decrease in reported amounts.
The company has presented diluted earnings per share from continuing operations attributable to Tyco Electronics Ltd. before special items, including charges or income related to legal settlements and reserves, restructuring and other charges, impairment charges, acquisition and integration costs, tax sharing income related to certain proposed adjustments to prior period tax returns and other tax items, certain significant special tax items, other income or charges, and, if applicable, related tax effects ("Adjusted Earnings Per Share"). The company presents Adjusted Earnings Per Share because it believes that it is appropriate for investors to consider results excluding these items in addition to its results in accordance with GAAP. The company believes such a measure provides a picture of its results that is more comparable among periods since it excludes the impact of special items, which may recur, but tend to be irregular as to timing, thereby making comparisons between periods more difficult. This limitation is best addressed by using Adjusted Earnings Per Share in combination with diluted earnings per share from continuing operations attributable to Tyco Electronics Ltd. (the most comparable GAAP measure) in order to better understand the amounts, character and impact of any increase or decrease on reported results.
"Free Cash Flow" (FCF) is a useful measure of the company's cash generation which is free from any significant existing obligation. The difference between cash flows from operating activities (the most comparable GAAP measure) and FCF (the non-GAAP measure) consists mainly of significant cash outflows that the company believes are useful to identify. FCF permits management and investors to gain insight into the amount that management employs to measure cash that is free from any significant existing obligation. The difference reflects the impact from:
-- net capital expenditures,
-- voluntary pension contributions, and
-- cash impact of special items.
Net capital expenditures are subtracted because they represent long-term commitments. Voluntary pension contributions are subtracted from the GAAP measure because this activity is driven by economic financing decisions rather than operating activity. The company forecasts its cash flow results excluding any voluntary pension contributions because it has not yet made a determination about the amount and timing of any such future contributions. In addition, the company's forecast excludes the cash impact of special items because the company cannot predict the amount and timing of such items.
The limitation associated with using FCF is that it subtracts cash items that are ultimately within management's and the Board of Directors' discretion to direct and that therefore may imply that there is less or more cash that is available for the company's programs than the most comparable GAAP measure. This limitation is best addressed by using FCF in combination with the GAAP cash flow results.
FCF as presented herein may not be comparable to similarly-titled measures reported by other companies. The measure should be used in conjunction with other GAAP financial measures. Investors are urged to read the company's financial statements as filed with the Securities and Exchange Commission, as well as the accompanying tables to this press release that show all the elements of the GAAP measures of Cash Flows from Operating Activities, Cash Flows from Investing Activities, Cash Flows from Financing Activities and a reconciliation of the company's total cash and cash equivalents for the period. See the accompanying tables to this press release for a cash flow statement presented in accordance with GAAP and a reconciliation presenting the components of FCF.
Because the company does not predict the amount and timing of special items that might occur in the future, and its forecasts are developed at a level of detail different than that used to prepare GAAP-based financial measures, the company does not provide reconciliations to GAAP of its forward-looking financial measures.
CORRECTION OF IMMATERIAL ERRORS
During the third quarter of fiscal 2010, the company identified certain errors in its accounting for income taxes. These errors related to the adoption of the uncertain tax position provisions of ASC 740, Income Taxes, in fiscal 2008 and data utilized in the determination of the company's income tax provision in fiscal 2005 through fiscal 2009.
The company evaluated the effects of these errors individually and in the aggregate and determined that its prior period financial statements are not materially misstated. However, the company determined that the cumulative effect of correcting these errors in fiscal 2010 would be material to the fiscal 2010 financial statements. Therefore, the company corrected these errors in the affected prior periods. More information related to these corrections is provided in the schedules attached accompanying this press release.
FORWARD-LOOKING STATEMENTS
This release may contain certain "forward-looking statements" within the meaning of the United States 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. Tyco Electronics has no intention and is under no obligation to update or alter (and expressly disclaims any such intention or obligation to do so) its 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 acquisition of ADC Telecommunications, Inc. (ADC). Examples of factors that could cause actual results to differ materially from those described in the forward-looking statements include, among others, business, economic, competitive and regulatory risks, such as developments in the credit markets; conditions affecting demand for products, particularly the automotive industry and the telecommunications, computer and consumer electronics industries; future goodwill impairment; competition and pricing pressure; fluctuations in foreign currency exchange rates and commodity prices; political, economic and military instability in countries in which we operate; compliance with current and future environmental and other laws and regulations; the possible effects on us of changes in tax laws, tax treaties and other legislation; the risk that the ADC transaction may not be consummated; the risk that a regulatory approval that may be required for the transaction is not obtained or is obtained subject to conditions that are not anticipated; the risk that ADC will not be integrated successfully into Tyco Electronics; and the risk that revenue opportunities, cost savings and other anticipated synergies from the transaction may not be fully realized or may take longer to realize than expected. More detailed information about these and other factors is set forth in Tyco Electronics' Annual Report on Form 10-K for the fiscal year ended Sept. 25, 2009 and Quarterly Reports on Form 10-Q for the quarterly periods ended Dec. 25, 2009, March 26, 2010 and June 25, 2010, as well as in Tyco Electronics' Current Reports on Form 8-K and other reports filed by Tyco Electronics with the Securities and Exchange Commission.
TYCO ELECTRONICS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the Quarter Ended
---------------------
September September
24, 25,
2010 2009
---- ----
(in millions, except per share data)
Net sales $3,137 $2,698
Cost of sales 2,144 2,007
----- -----
Gross margin 993 691
Selling, general,
and administrative
expenses 389 338
Research,
development, and
engineering
expenses 158 131
Acquisition and
integration costs 8 -
Restructuring and
other charges, net 56 46
Pre-separation
litigation charges
(income) - -
Impairment of
goodwill - -
---
Operating income
(loss) 382 176
Interest income 6 4
Interest expense (40) (40)
Other income
(expense), net 52 (55)
--- ---
Income (loss) from
continuing
operations before
income taxes 400 85
Income tax
(expense) benefit (145) (3)
---- ---
Income (loss) from
continuing
operations 255 82
Income (loss) from
discontinued
operations, net of
income taxes 44 10
--- ---
Net income (loss) 299 92
Less: net income
attributable to
noncontrolling
interests (2) (1)
--- ---
Net income (loss)
attributable to
Tyco Electronics
Ltd. $297 $91
==== ===
Amounts
attributable to
Tyco Electronics
Ltd.:
Income (loss) from
continuing
operations $253 $81
Income (loss) from
discontinued
operations 44 10
--- ---
Net income (loss) $297 $91
==== ===
Basic earnings
(loss) per share
attributable to
Tyco Electronics
Ltd.:
Income (loss) from
continuing
operations $0.57 $0.18
Income (loss) from
discontinued
operations 0.10 0.02
---- ----
Net income (loss) $0.67 $0.20
===== =====
Diluted earnings
(loss) per share
attributable to
Tyco Electronics
Ltd.:
Income (loss) from
continuing
operations $0.56 $0.18
Income (loss) from
discontinued
operations 0.10 0.02
---- ----
Net income (loss) $0.66 $0.20
===== =====
Weighted-average
number of shares
outstanding:
Basic 446 459
Diluted 450 461
For the Year Ended
------------------
September September
24, 25,
2010 2009
---- ----
(in millions, except per share data)
Net sales $12,070 $10,256
Cost of sales 8,293 7,720
----- -----
Gross margin 3,777 2,536
Selling, general,
and administrative
expenses 1,538 1,408
Research,
development, and
engineering
expenses 585 536
Acquisition and
integration costs 8 -
Restructuring and
other charges, net 137 375
Pre-separation
litigation charges
(income) (7) 144
Impairment of
goodwill - 3,547
-----
Operating income
(loss) 1,516 (3,474)
Interest income 20 17
Interest expense (155) (165)
Other income
(expense), net 177 (48)
--- ---
Income (loss) from
continuing
operations before
income taxes 1,558 (3,670)
Income tax
(expense) benefit (493) 567
---- ---
Income (loss) from
continuing
operations 1,065 (3,103)
Income (loss) from
discontinued
operations, net of
income taxes 44 (156)
--- ----
Net income (loss) 1,109 (3,259)
Less: net income
attributable to
noncontrolling
interests (6) (6)
--- ---
Net income (loss)
attributable to
Tyco Electronics
Ltd. $1,103 $(3,265)
====== =======
Amounts
attributable to
Tyco Electronics
Ltd.:
Income (loss) from
continuing
operations $1,059 $(3,109)
Income (loss) from
discontinued
operations 44 (156)
--- ----
Net income (loss) $1,103 $(3,265)
====== =======
Basic earnings
(loss) per share
attributable to
Tyco Electronics
Ltd.:
Income (loss) from
continuing
operations $2.34 $(6.77)
Income (loss) from
discontinued
operations 0.09 (0.34)
---- -----
Net income (loss) $2.43 $(7.11)
===== ======
Diluted earnings
(loss) per share
attributable to
Tyco Electronics
Ltd.:
Income (loss) from
continuing
operations $2.32 $(6.77)
Income (loss) from
discontinued
operations 0.09 (0.34)
---- -----
Net income (loss) $2.41 $(7.11)
===== ======
Weighted-average
number of shares
outstanding:
Basic 453 459
Diluted 457 459
TYCO ELECTRONICS LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
September September
24, 25,
2010 2009
---- ----
(in millions, except
share data)
Assets
Current Assets:
Cash and cash equivalents $1,990 $1,521
Accounts receivable, net of
allowance for doubtful accounts of
$44 and $48, respectively 2,259 1,975
Inventories 1,583 1,435
Prepaid expenses and other current
assets 651 487
Deferred income taxes 248 161
--- ---
Total current assets 6,731 5,579
Property, plant, and equipment, net 2,867 3,111
Goodwill 3,211 3,160
Intangible assets, net 392 407
Deferred income taxes 2,447 2,397
Receivable from Tyco International
Ltd. and Covidien plc 1,127 1,130
Other assets 217 234
--- ---
Total Assets $16,992 $16,018
======= =======
Liabilities and Shareholders' Equity
Current Liabilities:
Current maturities of long-term
debt $106 $101
Accounts payable 1,386 1,068
Accrued and other current
liabilities 1,804 1,243
Deferred revenue 164 203
--- ---
Total current liabilities 3,460 2,615
Long-term debt 2,307 2,316
Long-term pension and
postretirement liabilities 1,280 1,129
Deferred income taxes 285 188
Income taxes 2,152 2,130
Other liabilities 452 634
--- ---
Total Liabilities 9,936 9,012
----- -----
Commitments and contingencies
Shareholders' Equity:
Common shares, 468,215,574 shares
authorized and issued, CHF 1.73 par
value, at
September 24, 2010; 468,215,574
shares authorized and issued, CHF
2.43 par value, at
September 25, 2009 599 1,049
Contributed surplus 8,085 8,105
Accumulated deficit (1,161) (2,264)
Treasury shares, at cost, 24,845,929
and 9,425,172 shares, respectively (721) (349)
Accumulated other comprehensive
income 246 455
--- ---
Total Tyco Electronics Ltd.
shareholders' equity 7,048 6,996
Noncontrolling interests 8 10
--- ---
Total Shareholders' Equity 7,056 7,006
----- -----
Total Liabilities and Shareholders'
Equity $16,992 $16,018
======= =======
TYCO ELECTRONICS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Quarter Ended
---------------------
September September
24, 25,
2010 2009
---- ----
(in millions)
Cash Flows From Operating
Activities:
Net income (loss) $299 $92
(Income) loss from discontinued
operations, net of income taxes (44) (10)
--- ---
Income (loss) from continuing
operations 255 82
Adjustments to reconcile net cash
provided by operating activities:
Impairment of goodwill - -
Loss on divestitures 42 -
Non-cash restructuring and other
charges, net 1 18
Depreciation and amortization 125 133
Deferred income taxes (240) 111
Provision for losses on accounts
receivable and inventories (3) 17
Tax sharing (income) expense (37) 77
Share-based compensation 16 12
Other (19) (14)
Changes in assets and liabilities,
net of the effects of acquisitions
and divestitures:
Accounts receivable, net 51 (128)
Inventories 48 167
Inventoried costs on long-term
contracts 31 103
Prepaid expenses and other current
assets 17 (40)
Accounts payable (50) 50
Accrued and other current
liabilities (9) 124
Income taxes 302 (142)
Deferred revenue (3) 34
Other (53) (55)
--- ---
Net cash provided by continuing
operating activities 474 549
Net cash used in discontinued
operating activities - (7)
--- ---
Net cash provided by operating
activities 474 542
--- ---
Cash Flows From Investing
Activities:
Capital expenditures (136) (58)
Proceeds from sale of property,
plant, and equipment 11 4
Acquisition of businesses, net of
cash acquired (23) -
Proceeds from divestiture of
discontinued operations, net of
cash retained by operations sold - (1)
Proceeds from divestiture of
businesses, net of cash retained by
businesses sold 3 1
Other 25 1
--- ---
Net cash provided by (used in)
continuing investing activities (120) (53)
Net cash used in discontinued
investing activities - -
--- ---
Net cash provided by (used in)
investing activities (120) (53)
---- ---
Cash Flows From Financing
Activities:
Net increase (decrease) in
commercial paper 100 -
Proceeds from long-term debt - -
Repayment of long-term debt (100) (141)
Repurchase of common shares (115) -
Payment of common share dividends
and cash distributions to
shareholders (71) (73)
Transfer to discontinued operations - (7)
Other (6) (2)
--- ---
Net cash used in continuing
financing activities (192) (223)
Net cash provided by discontinued
financing activities - 7
Net cash used in financing
activities (192) (216)
---- ----
Effect of currency translation on
cash 13 (10)
Net increase in cash and cash
equivalents 175 263
Less: net increase in cash and cash
equivalents related to discontinued
operations - -
Cash and cash equivalents at
beginning of period 1,815 1,258
----- -----
Cash and cash equivalents at end of
period $1,990 $1,521
====== ======
Supplemental Cash Flow Information:
Income taxes paid, net of refunds $83 $34
Reconciliation to Free Cash Flow:
Net cash provided by continuing
operating activities $474 $549
Capital expenditures, net (125) (54)
Pre-separation litigation payments 25 52
Voluntary pension contributions 69 61
--- ---
Free cash flow (1) $443 $608
==== ====
For the Year Ended
------------------
September September
24, 25,
2010 2009
---- ----
(in millions)
Cash Flows From Operating Activities:
Net income (loss) $1,109 $(3,259)
(Income) loss from discontinued
operations, net of income taxes (44) 156
--- ---
Income (loss) from continuing
operations 1,065 (3,103)
Adjustments to reconcile net cash
provided by operating activities:
Impairment of goodwill - 3,547
Loss on divestitures 43 7
Non-cash restructuring and other
charges, net 17 49
Depreciation and amortization 520 515
Deferred income taxes 35 (574)
Provision for losses on accounts
receivable and inventories (4) 74
Tax sharing (income) expense (163) 68
Share-based compensation 63 50
Other 12 (10)
Changes in assets and liabilities, net
of the effects of acquisitions and
divestitures:
Accounts receivable, net (323) 651
Inventories (213) 638
Inventoried costs on long-term
contracts 36 (4)
Prepaid expenses and other current
assets (25) 184
Accounts payable 317 (420)
Accrued and other current liabilities 77 (124)
Income taxes 302 (115)
Deferred revenue (38) (7)
Other (42) (48)
--- ---
Net cash provided by continuing
operating activities 1,679 1,378
Net cash used in discontinued operating
activities - (49)
--- ---
Net cash provided by operating
activities 1,679 1,329
----- -----
Cash Flows From Investing Activities:
Capital expenditures (385) (328)
Proceeds from sale of property, plant,
and equipment 16 13
Acquisition of businesses, net of cash
acquired (93) -
Proceeds from divestiture of
discontinued operations, net of cash
retained by operations sold - 693
Proceeds from divestiture of
businesses, net of cash retained by
businesses sold 15 17
Other 5 (1)
--- ---
Net cash provided by (used in)
continuing investing activities (442) 394
Net cash used in discontinued investing
activities - (3)
--- ---
Net cash provided by (used in)
investing activities (442) 391
---- ---
Cash Flows From Financing Activities:
Net increase (decrease) in commercial
paper 100 (649)
Proceeds from long-term debt - 448
Repayment of long-term debt (100) (602)
Repurchase of common shares (488) (152)
Payment of common share dividends and
cash distributions to shareholders (289) (294)
Transfer to discontinued operations - (56)
Other (2) (5)
--- ---
Net cash used in continuing financing
activities (779) (1,310)
Net cash provided by discontinued
financing activities - 56
Net cash used in financing activities (779) (1,254)
---- ------
Effect of currency translation on cash 11 (31)
Net increase in cash and cash
equivalents 469 435
Less: net increase in cash and cash
equivalents related to discontinued
operations - (4)
Cash and cash equivalents at beginning
of period 1,521 1,090
----- -----
Cash and cash equivalents at end of
period $1,990 $1,521
====== ======
Supplemental Cash Flow Information:
Income taxes paid, net of refunds $156 $121
Reconciliation to Free Cash Flow:
Net cash provided by continuing
operating activities $1,679 $1,378
Capital expenditures, net (369) (315)
Pre-separation litigation payments 25 102
Voluntary pension contributions 69 61
--- ---
Free cash flow (1) $1,404 $1,226
====== ======
(1) Free cash flow is a non-GAAP measure. See description of non-
GAAP measures contained in this release.
TYCO ELECTRONICS LTD.
CONSOLIDATED SEGMENT DATA (UNAUDITED)
For the Quarter Ended
---------------------
September September
24, 25,
2010 2009
---- ----
($ in millions)
Net Sales:
Electronic Components $2,101 $1,632
Network Solutions 469 436
Specialty Products 422 362
Subsea Communications 145 268
Total $3,137 $2,698
====== ======
Operating Income (Loss):
Electronic Components $244 11.6% $38 2.3%
Network Solutions 55 11.7% 37 8.5%
Specialty Products 64 15.2% 47 13.0%
Subsea Communications 19 13.1% 54 20.1%
Pre-separation litigation
(charges) income - -
Total $382 12.2% $176 6.5%
==== ====
For the Year Ended
------------------
September September
24, 25,
2010 2009
---- ----
($ in millions)
Net Sales:
Electronic Components $8,070 $5,961
Network Solutions 1,727 1,719
Specialty Products 1,549 1,415
Subsea Communications 724 1,161
Total $12,070 $10,256
======= =======
Operating Income (Loss):
NM
Electronic Components $967 12.0% $(3,716) (1)
Network Solutions 177 10.2% 133 7.7%
Specialty Products 230 14.8% 34 2.4%
Subsea Communications 135 18.6% 219 18.9%
Pre-separation litigation
(charges) income 7 (144)
NM
Total $1,516 12.6% $(3,474) (1)
====== =======
(1) Not meaningful.
TYCO ELECTRONICS LTD.
NET SALES GROWTH RECONCILIATION (UNAUDITED)
Change in Net Sales for the
Quarter Ended September 24, 2010
versus Net Sales for the
Quarter Ended September 25, 2009
--------------------------------
Organic (1)
-----------
($ in millions)
Electronic
Components
(3):
Automotive $215 25.7%
DataComm 96 51.0
Industrial 91 55.6
Appliance 33 29.0
Computer 17 15.3
Consumer
Devices (9) (8.5)
Other 69 60.2
Total 512 31.4
--- ----
Network
Solutions
(3):
Energy 22 10.6
Service
Providers 32 28.0
Enterprise
Networks 13 12.1
Other - (8.5)
Total 67 15.3
--- ----
Specialty
Products
(3):
Aerospace,
Defense,
and Marine 24 15.5
Touch
Systems 26 30.0
Circuit
Protection 9 13.3
Medical 7 12.0
Total 66 18.1
--- ----
Subsea
Communications (122) (45.6)
---- -----
Total $523 19.4%
==== ====
Change in Net Sales for the
Quarter Ended September 24, 2010
versus Net Sales for the
Quarter Ended September 25, 2009
--------------------------------
Translation
(2) Divestiture
------------ -----------
($ in millions)
Electronic
Components
(3):
Automotive $(33) $-
DataComm 1 -
Industrial (8) -
Appliance 1 -
Computer 2 -
Consumer
Devices - -
Other (6) -
Total (43) -
--- ---
Network
Solutions
(3):
Energy (10) (15)
Service
Providers (7) -
Enterprise
Networks (1) -
Other (1) -
Total (19) (15)
--- ---
Specialty
Products
(3):
Aerospace,
Defense,
and Marine (5) -
Touch
Systems (2) -
Circuit
Protection 1 -
Medical - -
Total (6) -
--- ---
Subsea
Communications (1) -
--- ---
Total $(69) $(15)
==== ====
Change in Net Sales for the
Quarter Ended September 24, 2010
versus Net Sales for the
Quarter Ended September 25, 2009
--------------------------------
Total
-----
($ in millions)
Electronic
Components
(3):
Automotive $182 21.7%
DataComm 97 51.6
Industrial 83 50.9
Appliance 34 29.6
Computer 19 17.4
Consumer
Devices (9) (8.7)
Other 63 54.3
Total 469 28.7
--- ----
Network
Solutions
(3):
Energy (3) (1.4)
Service
Providers 25 22.1
Enterprise
Networks 12 11.1
Other (1) (14.3)
Total 33 7.6
--- ---
Specialty
Products
(3):
Aerospace,
Defense,
and Marine 19 12.8
Touch
Systems 24 27.3
Circuit
Protection 10 14.9
Medical 7 11.9
Total 60 16.6
--- ----
Subsea
Communications (123) (45.9)
---- -----
Total $439 16.3%
==== ====
Percentage of
Segment's Total
Net Sales for the
Quarter Ended
September 24,
2010
--------------
Electronic
Components
(3):
Automotive 49%
DataComm 14
Industrial 11
Appliance 7
Computer 6
Consumer
Devices 4
Other 9
Total 100%
---
Network
Solutions
(3):
Energy 44
Service
Providers 29
Enterprise
Networks 26
Other 1
Total 100%
---
Specialty
Products
(3):
Aerospace,
Defense,
and Marine 40
Touch
Systems 26
Circuit
Protection 18
Medical 16
Total 100%
---
Subsea
Communications
Total
Change in Net Sales for the
Year Ended September 24, 2010
versus Net Sales for the
Year Ended September 25, 2009
------------------------------
Organic (1)
-----------
($ in millions)
Electronic
Components
(3):
Automotive $1,232 42.5%
DataComm 147 17.4
Industrial 215 32.5
Appliance 152 36.7
Computer 63 14.9
Consumer
Devices 28 7.4
Other 196 44.6
Total 2,033 33.8
----- ----
Network
Solutions
(3):
Energy (12) (1.5)
Service
Providers (13) (2.6)
Enterprise
Networks 30 7.3
Other - 1.8
Total 5 0.3
--- ---
Specialty
Products (3):
Aerospace,
Defense, and
Marine (5) (0.8)
Touch Systems 54 16.9
Circuit
Protection 62 29.7
Medical - (0.1)
Total 111 7.9
--- ---
Subsea
Communications (437) (37.6)
---- -----
Total $1,712 16.7%
====== ====
Change in Net Sales for the
Year Ended September 24, 2010
versus Net Sales for the
Year Ended September 25, 2009
------------------------------
Translation
(2) Divestiture
------------ -----------
($ in millions)
Electronic
Components
(3):
Automotive $68 $-
DataComm 14 (18)
Industrial 15 (2)
Appliance 15 -
Computer 6 (3)
Consumer
Devices 1 (21)
Other 4 (3)
Total 123 (47)
--- ---
Network
Solutions
(3):
Energy 19 (39)
Service
Providers 11 -
Enterprise
Networks 11 -
Other 1 -
Total 42 (39)
--- ---
Specialty
Products (3):
Aerospace,
Defense, and
Marine 6 -
Touch Systems 5 -
Circuit
Protection 10 -
Medical 2 -
Total 23 -
--- ---
Subsea
Communications - -
--- ---
Total $188 $(86)
==== ====
Change in Net Sales for the
Year Ended September 24, 2010
versus Net Sales for the
Year Ended September 25, 2009
------------------------------
Total
-----
($ in millions)
Electronic
Components
(3):
Automotive $1,300 46.5%
DataComm 143 17.0
Industrial 228 34.5
Appliance 167 40.2
Computer 66 15.5
Consumer
Devices 8 2.1
Other 197 44.8
Total 2,109 35.4
----- ----
Network
Solutions
(3):
Energy (32) (4.0)
Service
Providers (2) (0.4)
Enterprise
Networks 41 10.1
Other 1 4.0
Total 8 0.5
--- ---
Specialty
Products (3):
Aerospace,
Defense, and
Marine 1 0.2
Touch Systems 59 17.9
Circuit
Protection 72 33.2
Medical 2 0.8
Total 134 9.5
--- ---
Subsea
Communications (437) (37.6)
-----
Total $1,814 17.7%
====== ====
Percentage of
Segment's Total
Net Sales for the
Year Ended
September 24, 2010
------------------
Electronic
Components
(3):
Automotive 51%
DataComm 12
Industrial 11
Appliance 7
Computer 6
Consumer
Devices 5
Other 8
Total 100%
---
Network
Solutions
(3):
Energy 45
Service
Providers 28
Enterprise
Networks 26
Other 1
Total 100%
---
Specialty
Products (3):
Aerospace,
Defense, and
Marine 40
Touch Systems 25
Circuit
Protection 19
Medical 16
Total 100%
---
Subsea
Communications
Total
(1) Represents the change in net sales resulting from volume and
price changes, before consideration of acquisitions, divestitures,
and the impact of changes in foreign currency exchange rates.
Organic net sales growth is a non-GAAP measure. See description
of non-GAAP measures contained in this release.
(2) Represents the change in net sales resulting from changes in
foreign currency exchange rates.
(3) Industry end market information about net sales is presented
consistently with our internal management reporting and may be
periodically revised as management deems necessary.
TYCO ELECTRONICS LTD.
NET SALES GROWTH RECONCILIATION (UNAUDITED)
Change in Net Sales for the
Quarter Ended September 24, 2010
versus Net Sales for the
Quarter Ended June 25, 2010
---------------------------
Translation
Organic (1) (2)
----------- ------------
($ in millions)
Electronic Components
(3):
Automotive $(28) (2.7) % $10
DataComm 23 9.1 5
Industrial 11 4.8 1
Appliance (8) (5.1) 2
Computer (4) (3.2) 2
Consumer Devices - - 1
Other 13 7.3 (1)
---
Total 7 0.3 20
--- --- ---
Network Solutions (3):
Energy 17 8.7 -
Service Providers 5 3.8 1
Enterprise Networks 4 3.1 -
Other (1) (10.1) 1
---
Total 25 5.5 2
--- --- ---
Specialty Products (3):
Aerospace, Defense, 6 3.2 -
and Marine
Touch Systems 10 9.9 1
Circuit Protection 1 1.0 2
Medical 3 4.7 1
---
Total 20 4.8 4
--- --- ---
Subsea Communications (24) (14.1) (1)
--- ----- ---
Total $28 0.9% $25
=== === ===
Change in Net Sales for the
Quarter Ended September 24, 2010
versus Net Sales for the
Quarter Ended June 25, 2010
---------------------------
Total
-----
($ in millions)
Electronic Components
(3):
Automotive $(18) (1.7) %
DataComm 28 10.9
Industrial 12 5.1
Appliance (6) (3.9)
Computer (2) (1.5)
Consumer Devices 1 1.1
Other 12 7.2
--- ---
Total 27 1.3
--- ---
Network Solutions (3):
Energy 17 9.0
Service Providers 6 4.5
Enterprise Networks 4 3.4
Other - -
--- ---
Total 27 6.1
--- ---
Specialty Products (3):
Aerospace, Defense, 6 3.7
and Marine
Touch Systems 11 10.9
Circuit Protection 3 4.1
Medical 4 6.5
--- ---
Total 24 6.0
--- ---
Subsea Communications (25) (14.7)
--- -----
Total $53 1.7%
=== ===
Percentage of
Segment's Total
Net Sales for
the
Quarter Ended
September 24,
2010
--------------
Electronic Components
(3):
Automotive 49%
DataComm 14
Industrial 11
Appliance 7
Computer 6
Consumer Devices 4
Other 9
---
Total 100%
---
Network Solutions (3):
Energy 44
Service Providers 29
Enterprise Networks 26
Other 1
---
Total 100%
---
Specialty Products (3):
Aerospace, Defense, 40
and Marine
Touch Systems 26
Circuit Protection 18
Medical 16
---
Total 100%
---
Subsea Communications
Total
(1) Represents the change in net sales resulting from volume and
price changes, before consideration of acquisitions, divestitures,
and the impact of changes in foreign currency exchange rates.
Organic net sales growth is a non-GAAP measure. See description
of non-GAAP measures contained in this release.
(2) Represents the change in net sales resulting from changes in
foreign currency exchange rates.
(3) Industry end market information about net sales is presented
consistently with our internal management reporting and may be
periodically revised as management deems necessary.
TYCO ELECTRONICS LTD.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES
For the Quarter Ended September 24, 2010
(UNAUDITED)
Adjustments
-----------
Acquisition
and
Integration
U.S. GAAP Costs
--------- -----
($ in millions, except per share data)
Operating Income:
Electronic Components $244 $-
Network Solutions 55 8
Specialty Products 64 -
Subsea Communications 19 -
Total $382 $8
==== ===
Operating Margin 12.2%
====
Other Income, Net $52 $-
=== ===
Income Tax Expense $(145) $-
===== ===
Income from Continuing
Operations Attributable
to Tyco Electronics Ltd.
$253 $8
==== ===
Diluted Earnings per
Share from Continuing
Operations Attributable
to Tyco Electronics Ltd.
$0.56 $0.02
===== =====
Adjustments
-----------
Restructuring
and Other Tax Adjusted
Items (Non-GAAP)
Charges, Net (1) (2)
------------ ------ -----------
($ in millions, except per share data)
Operating Income:
Electronic Components $52 $- $296
Network Solutions 3 - 66
Specialty Products - - 64
Subsea Communications 1 - 20
Total $56 $- $446
=== === ====
Operating Margin 14.2%
====
Other Income, Net $- $(40) $12
=== ==== ===
Income Tax Expense $(13) $62 $(96)
==== === ====
Income from Continuing
Operations Attributable
to Tyco Electronics Ltd.
$43 $22 $326
=== === ====
Diluted Earnings per
Share from Continuing
Operations Attributable
to Tyco Electronics Ltd.
$0.10 $0.05 $0.72
===== ===== =====
(1) Includes income tax expense related to certain proposed
adjustments to prior year tax returns and income tax benefits
associated with the settlement of an audit of prior year tax returns
as well as the related impact to other income pursuant to the Tax
Sharing Agreement with Tyco International and Covidien.
(2) See description of non-GAAP measures contained in this release.
TYCO ELECTRONICS LTD.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES
For the Quarter Ended September 25, 2009
(UNAUDITED)
Adjustments
-----------
Restructuring
and Other
U.S. Charges, Net
GAAP (1)
----- -------------
($ in millions, except per share data)
Operating Income:
Electronic Components $38 $24
Network Solutions 37 14
Specialty Products 47 4
Subsea Communications 54 3
---
Total $176 $45
==== ===
Operating Margin 6.5%
===
Other Income (Expense), Net $(55) $-
==== ===
Income Tax Expense $(3) $(9)
=== ===
Income from Continuing
Operations Attributable to
Tyco Electronics Ltd.
$81 $36
=== ===
Diluted Earnings per Share
from Continuing Operations
Attributable to Tyco
Electronics Ltd.
$0.18 $0.08
===== =====
Adjustments
-----------
Tax Retirement Adjusted
Items (Non-GAAP)
(2) of Debt (3)
------ ------- -----------
($ in millions, except per share data)
Operating Income:
Electronic Components $- $- $62
Network Solutions - - 51
Specialty Products - - 51
Subsea Communications - - 57
Total $- $- $221
=== === ====
Operating Margin 8.2%
===
Other Income (Expense), Net $86 $(22) $9
=== ==== ===
Income Tax Expense $(46) $- $(58)
==== === ====
Income from Continuing
Operations Attributable to
Tyco Electronics Ltd.
$40 $(19) $138
=== ==== ====
Diluted Earnings per Share
from Continuing Operations
Attributable to Tyco
Electronics Ltd.
$0.09 $(0.04) $0.30
===== ====== =====
(1) Includes $46 million recorded in net restructuring and other
charges and a $1 million credit recorded in cost of sales.
(2) Includes an income tax benefit primarily related to proposed
adjustments to prior year tax returns, and charges to other expense
pursuant to the Tax Sharing Agreement with Tyco International and
Covidien.
(3) See description of non-GAAP measures contained in this release.
TYCO ELECTRONICS LTD.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES
For the Year Ended September 24, 2010
(UNAUDITED)
Adjustments
-----------
Restructuring
and Other
U.S. Charges, Net
GAAP (1)
----- -------------
($ in millions, except per share data)
Operating Income:
Electronic Components $967 $108
Network Solutions 177 19
Specialty Products 230 5
Subsea Communications 135 2
Pre-separation litigation
income 7 -
Total $1,516 $134
====== ====
Operating Margin 12.6%
====
Other Income, Net $177 $-
==== ===
Income Tax Expense $(493) $(30)
===== ====
Income from Continuing
Operations Attributable to
Tyco Electronics Ltd.
$1,059 $104
====== ====
Diluted Earnings per Share
from Continuing Operations
Attributable to Tyco
Electronics Ltd.
$2.32 $0.23
===== =====
Adjustments
-----------
Other
Tax Items, Adjusted
Items (Non-GAAP)
(2) Net (3) (4)
------ ------- -----------
($ in millions, except per share data)
Operating Income:
Electronic Components $- $- $1,075
Network Solutions - 8 204
Specialty Products - - 235
Subsea Communications - - 137
Pre-separation litigation
income - (7) -
---
Total $- $1 $1,651
=== === ======
Operating Margin 13.7%
====
Other Income, Net $(137) $- $40
===== === ===
Income Tax Expense $134 $- $(389)
==== === =====
Income from Continuing
Operations Attributable to
Tyco Electronics Ltd.
$(3) $1 $1,161
=== === ======
Diluted Earnings per Share
from Continuing Operations
Attributable to Tyco
Electronics Ltd.
$(0.01) $0.00 $2.54
====== ===== =====
(1) Includes $137 million recorded in net restructuring and other
charges and a $3 million credit recorded in cost of sales.
(2) Includes income tax expense related to certain proposed
adjustments to prior year tax returns and income tax benefits
associated with the settlement of an audit of prior year tax returns
as well as the related impact to other income pursuant to the Tax
Sharing Agreement with Tyco International and Covidien. Also
includes an income tax benefit recognized in connection with a
reduction in the valuation allowance associated with certain tax
loss carryforwards.
(3) Consists of $8 million of acquisition and integration costs and
$7 million of income related to pre-separation securities
litigation.
(4) See description of non-GAAP measures contained in this release.
TYCO ELECTRONICS LTD.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES
For the Year Ended September 25, 2009
(UNAUDITED)
Adjustments
-----------
Restructuring
Impairment
and Other of
U.S. Charges, Net
GAAP (1) Goodwill
----- ------------- --------
($ in millions, except per share data)
Operating Income (Loss):
Electronic Components $(3,716) $278 $3,435
Network Solutions 133 56 -
Specialty Products 34 31 112
Subsea Communications 219 8 -
Pre-separation litigation
charges (144) - -
--- ---
Total $(3,474) $373 $3,547
======= ==== ======
Operating Margin NM (6)
======
Other Income (Expense), Net $(48) $- $-
==== === ===
Income Tax (Expense)
Benefit $567 $(87) $(523)
==== ==== =====
Income (Loss) from
Continuing Operations
Attributable to Tyco
Electronics Ltd.
$(3,109) $286 $3,024
======= ==== ======
Diluted Earnings (Loss) per
Share from Continuing
Operations Attributable to
Tyco Electronics Ltd. (5)
$(6.77) $0.62 $6.57
====== ===== =====
Adjustments
-----------
Other
Tax Items, Adjusted
Items (Non-GAAP)
(2) Net (3) (4)
------ ------- -----------
($ in millions, except per share data)
Operating Income (Loss):
Electronic Components $- $- $(3)
Network Solutions - - 189
Specialty Products - 8 185
Subsea Communications - - 227
Pre-separation litigation
charges - 144 -
--- ---
Total $- $152 $598
=== ==== ====
Operating Margin 5.8%
===
Other Income (Expense), Net $86 $(22) $16
=== ==== ===
Income Tax (Expense)
Benefit $(46) $(3) $(92)
==== === ====
Income (Loss) from
Continuing Operations
Attributable to Tyco
Electronics Ltd.
$40 $130 $371
=== ==== ====
Diluted Earnings (Loss) per
Share from Continuing
Operations Attributable to
Tyco Electronics Ltd. (5)
$0.09 $0.28 $0.81
===== ===== =====
(1) Includes $375 million recorded in net restructuring and other
charges and a $2 million credit recorded in cost of sales.
(2) Includes an income tax benefit primarily related to proposed
adjustments to prior year tax returns, and charges to other expense
pursuant to the Tax Sharing Agreement with Tyco International and
Covidien.
(3) Consists of $144 million of charges related to the settlement of
pre-separation securities litigation and $8 million of costs
related to a product liability matter from several years ago
recorded in selling, general, and administrative expenses. Also
includes net gain related to retirement of debt of $19 million.
(4) See description of non-GAAP measures contained in this release.
(5) GAAP diluted shares excludes 1 million of non-vested restricted
share awards and non-vested options as the inclusion of these
securities would have been anti-dilutive. Such amounts are
included in non-GAAP diluted shares.
(6) Not meaningful.
TYCO ELECTRONICS LTD.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL
MEASURES
For the Quarter Ended December 25, 2009
(UNAUDITED)
Adjustments
-----------
Restructuring
and Other Adjusted
U.S. Charges, Net (Non-GAAP)
GAAP (1) (2)
----- ------------- -----------
($ in millions, except per share data)
Operating Income:
Electronic
Components $163 $44 $207
Network Solutions 20 17 37
Specialty Products 51 - 51
Subsea
Communications 35 2 37
Total $269 $63 $332
==== === ====
Operating Margin 9.3% 11.5%
=== ====
Other Income, Net $8 $- $8
=== === ===
Income Tax Expense $(69) $(16) $(85)
==== ==== ====
Income from
Continuing
Operations
Attributable to
Tyco Electronics
Ltd.
$172 $47 $219
==== === ====
Diluted Earnings
per Share from
Continuing
Operations
Attributable to
Tyco Electronics
Ltd.
$0.37 $0.10 $0.47
===== ===== =====
(1) Includes $66 million recorded in net restructuring and other
charges and a $3 million credit recorded in cost of sales.
(2) See description of non-GAAP measures contained in this release.
TYCO ELECTRONICS LTD.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES
For the Quarter Ended June 25, 2010
(UNAUDITED)
Adjustments
-----------
Restructuring
and Other Tax
U.S. Items
GAAP Charges, Net (1)
----- ------------ ------
($ in millions, except per share data)
Operating Income:
Electronic Components $298 $4 $-
Network Solutions 60 (1) -
Specialty Products 66 1 -
Subsea Communications 36 (1) -
Pre-separation litigation
income 7 - -
Total $467 $3 $-
==== === ===
Operating Margin 15.1%
====
Other Income, Net $42 $- $(33)
=== === ====
Income Tax Expense $(144) $- $26
===== === ===
Income from Continuing
Operations Attributable to
Tyco Electronics Ltd.
$330 $3 $(7)
==== === ===
Diluted Earnings per Share
from Continuing Operations
Attributable to Tyco
Electronics Ltd.
$0.72 $0.01 $(0.02)
===== ===== ======
Adjustments
-----------
Other
Items, Adjusted
(Non-GAAP)
Net (2) (3)
------- -----------
($ in millions, except per share data)
Operating Income:
Electronic
Components $- $302
Network Solutions - 59
Specialty
Products - 67
Subsea
Communications - 35
Pre-separation
litigation
income (7) -
---
Total $(7) $463
=== ====
Operating Margin 15.0%
====
Other Income, Net $- $9
=== ===
Income Tax
Expense $- $(118)
=== =====
Income from
Continuing
Operations
Attributable to
Tyco Electronics
Ltd.
$(7) $319
=== ====
Diluted Earnings
per Share from
Continuing
Operations
Attributable to
Tyco Electronics
Ltd.
$(0.02) $0.70
====== =====
(1) Includes income tax expense related to certain proposed
adjustments to prior year tax returns and income tax benefits
associated with the completion of an audit of prior year tax
returns. Also includes the related impact to other income pursuant
to the Tax Sharing Agreement with Tyco International and Covidien.
(2) Consists of $7 million of income related to pre-separation
securities litigation.
(3) See description of non-GAAP measures contained in this release.
TYCO ELECTRONICS LTD.
CORRECTION OF IMMATERIAL ERRORS
(UNAUDITED)
The impact of correcting the immaterial errors on the Company's
Condensed Consolidated Statements of Operations is as follows:
For the Quarter Ended
September 25, 2009
------------------
Amounts
Previously
Reported As Corrected
----------- ------------
(in millions, except per share data)
Income tax (expense) benefit $(1) $(3)
Income (loss) from continuing
operations 84 82
Net income (loss) 94 92
Net income (loss) attributable
to Tyco Electronics Ltd. 93 91
Amounts attributable to Tyco
Electronics Ltd.:
Income (loss) from continuing
operations 83 81
Net income (loss) 93 91
Basic earnings (loss) per share
attributable to Tyco
Electronics Ltd.:
Income (loss) from continuing
operations $0.18 $0.18
Net income (loss) 0.20 0.20
Diluted earnings (loss) per
share attributable to Tyco
Electronics Ltd.:
Income (loss) from continuing
operations $0.18 $0.18
Net income (loss) 0.20 0.20
For the Year Ended
September 25, 2009
------------------
Amounts
Previously
Reported As Corrected
----------- ------------
(in millions, except per share data)
Income tax (expense) benefit $576 $567
Income (loss) from continuing
operations (3,094) (3,103)
Net income (loss) (3,250) (3,259)
Net income (loss) attributable
to Tyco Electronics Ltd. (3,256) (3,265)
Amounts attributable to Tyco
Electronics Ltd.:
Income (loss) from continuing
operations (3,100) (3,109)
Net income (loss) (3,256) (3,265)
Basic earnings (loss) per share
attributable to Tyco
Electronics Ltd.:
Income (loss) from continuing
operations $(6.75) $(6.77)
Net income (loss) (7.09) (7.11)
Diluted earnings (loss) per
share attributable to Tyco
Electronics Ltd.:
Income (loss) from continuing
operations $(6.75) $(6.77)
Net income (loss) (7.09) (7.11)
The impact of correcting the immaterial errors on the Company's
Condensed Consolidated Balance Sheets is as follows:
September 25, 2009
------------------
As
Amounts Corrected
Previously ----------
Reported
--------
(in millions)
Assets
Deferred income taxes $2,518 $2,397
Receivable from Tyco International Ltd. and
Covidien plc 1,211 1,130
Total Assets 16,220 16,018
Liabilities and Shareholders' Equity
Income taxes 2,312 2,130
Total Liabilities 9,194 9,012
Shareholders' Equity:
Contributed surplus 8,135 8,105
Accumulated deficit (2,274) (2,264)
Total Tyco Electronics Ltd. shareholders'
equity 7,016 6,996
Total Shareholders' Equity 7,026 7,006
Total Liabilities and Shareholders' Equity 16,220 16,018
The impact of correcting the immaterial errors on the Company's
Condensed Consolidated Statements of Cash Flows is as follows:
For the Quarter Ended
September 25, 2009
------------------
Amounts
Previously As
Reported Corrected
----------- ----------
(in millions)
Cash Flows From Operating Activities:
Net income (loss) $94 $92
Income (loss) from continuing operations 84 82
Adjustments to reconcile net cash provided by
operating activities:
Deferred income taxes 109 111
For the Year Ended
September 25, 2009
------------------
Amounts
Previously As
Reported Corrected
----------- ----------
(in millions)
Cash Flows From Operating Activities:
Net income (loss) $(3,250) $(3,259)
Income (loss) from continuing operations (3,094) (3,103)
Adjustments to reconcile net cash provided
by operating activities:
Deferred income taxes (583) (574)
SOURCE Tyco Electronics Ltd.
