PR Newswire | Apr 21, 2021 06:01AM EDT

04/21 05:00 CDT

TE Connectivity announces second quarter results for fiscal year 2021Significant growth in sales and EPS year over year, exceeding company expectations SCHAFFHAUSEN, Switzerland, April 21, 2021

SCHAFFHAUSEN, Switzerland, April 21, 2021 /PRNewswire/ -- TE Connectivity Ltd. (NYSE: TEL) today reported results for the fiscal second quarter ended March 26, 2021.

Second Quarter Highlights

* Net sales were $3.7 billion, up 17% on a reported basis, and 11% on an organic basis year over year. * Orders of $4.6 billion, up 36% year over year. * GAAP diluted earnings per share (EPS) from continuing operations were $1.51, and adjusted EPS were $1.57, up 22% year over year. * Cash flow from operating activities was $580 million and free cash flow was $477 million, with approximately $340 million returned to shareholders.

"I am very pleased with our performance as well as our team's ability to deliver double digit sales growth and record quarterly adjusted EPS that exceeded our expectations," said TE Connectivity CEO Terrence Curtin. "We delivered strong earnings this quarter, and year-to-date generated free cash flow of $1 billion, also a record for the first half of a fiscal year. It is also encouraging that we are benefiting from both a recovering economic backdrop as well as our leadership positions in long-term technology trends that drive content growth. I am proud of our team's perseverance to serve our customers through a global economic recovery and resulting challenges in the broader supply chain."

Third Quarter FY21 OutlookFor the third quarter of fiscal 2021, the company expects net sales of approximately $3.7 billion, compared to $2.5 billion in the prior year. GAAP diluted EPS from continuing operations are expected to be approximately $1.51, compared to a loss of $0.18 in the prior year. Adjusted EPS are expected to be approximately $1.57, compared to adjusted EPS of $0.59 in the prior year.

Information about TE Connectivity's use of non-GAAP financial measures is provided below. For reconciliations of these non-GAAP financial measures, see the attached tables.

Conference Call and WebcastThe company will hold a conference call today beginning at 8:30 a.m. ET. The dial-in information is provided here:

* At TE Connectivity's website: investors.te.com * By telephone: For both "listen-only" participants and those participants who wish to take part in the question-and-answer portion of the call, the dial-in number in the United States is (866) 211-4092, and for international callers, the dial-in number is (647) 689-6620. * A replay of the conference call will be available on TE Connectivity's investor website at investors.te.com at 11:30 a.m. ET on April 21, 2021.

About TE ConnectivityTE Connectivity Ltd. (NYSE: TEL) is a global industrial technology leader creating a safer, sustainable, productive, and connected future. Our broad range of connectivity and sensor solutions, 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 MeasuresWe 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. 25, 2020 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 Six Months Ended

March 26, March 27, March 26, March 27,

2021 2020 2021 2020

(in millions, except per share data)

Net sales $ 3,738 $ 3,195 $ 7,260 $ 6,363

Cost of sales 2,528 2,166 4,904 4,304

Gross margin 1,210 1,029 2,356 2,059

Selling, general, and administrative expenses 401 352 762 719

Research, development, and engineering expenses 174 158 336 319

Acquisition and integration costs 6 12 14 19

Restructuring and other charges, net 17 22 184 46

Impairment of goodwill - 900 - 900

Operating income (loss) 612 (415) 1,060 56

Interest income 8 5 11 11

Interest expense (13) (11) (28) (23)

Other income, net 4 11 3 16

Income (loss) from continuing operations before income taxes 611 (410) 1,046 60

Income tax expense (106) (42) (166) (489)

Income (loss) from continuing operations 505 (452) 880 (429)

Income (loss) from discontinued operations, net of income taxes 1 (4) 7 (1)

Net income (loss) $ 506 $ (456) $ 887 $ (430)

Basic earnings (loss) per share:

Income (loss) from continuing operations $ 1.53 $ (1.35) $ 2.66 $ (1.28)

Income (loss) from discontinued operations - (0.01) 0.02 -

Net income (loss) 1.53 (1.37) 2.68 (1.29)

Diluted earnings (loss) per share:

Income (loss) from continuing operations $ 1.51 $ (1.35) $ 2.64 $ (1.28)

Income (loss) from discontinued operations - (0.01) 0.02 -

Net income (loss) 1.51 (1.37) 2.66 (1.29)

Weighted-average number of shares outstanding:

Basic 331 334 331 334

Diluted 334 334 333 334

TE CONNECTIVITY LTD.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

March 26, September 25,

2021 2020

(in millions, except share data)

Assets

Current assets:

Cash and cash equivalents $ 1,748 $ 945

Accounts receivable, net of allowance for doubtful accounts of $35 and $29, 2,921 2,377respectively

Inventories 2,134 1,950

Prepaid expenses and other current assets 619 512

Total current assets 7,422 5,784

Property, plant, and equipment, net 3,662 3,650

Goodwill 5,342 5,224

Intangible assets, net 1,548 1,593

Deferred income taxes 2,204 2,178

Other assets 789 813

Total assets $ 20,967 $ 19,242

Liabilities, redeemable noncontrolling interests, and shareholders' equity

Current liabilities:

Short-term debt $ 919 $ 694

Accounts payable 1,793 1,276

Accrued and other current liabilities 2,327 1,720

Total current liabilities 5,039 3,690

Long-term debt 3,602 3,452

Long-term pension and postretirement liabilities 1,299 1,336

Deferred income taxes 140 143

Income taxes 277 252

Other liabilities 827 874

Total liabilities 11,184 9,747

Commitments and contingencies

Redeemable noncontrolling interests 114 112

Shareholders' equity:

Common shares, CHF 0.57 par value, 338,953,381 shares authorized and issued 149 149

Accumulated earnings 10,541 10,348

Treasury shares, at cost, 8,520,155 and 8,295,878 shares, respectively (775) (669)

Accumulated other comprehensive loss (246) (445)

Total shareholders' equity 9,669 9,383

Total liabilities, redeemable noncontrolling interests, and shareholders' $ 20,967 $ 19,242equity

TE CONNECTIVITY LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

For the Quarters Ended For the Six Months Ended

March 26, March 27, March 26, March 27,

2021 2020 2021 2020

(in millions)

Cash flows from operating activities:

Net income (loss) $ 506 $ (456) $ 887 $ (430)

(Income) loss from discontinued operations, net of income taxes (1) 4 (7) 1

Income (loss) from continuing operations 505 (452) 880 (429)

Adjustments to reconcile income (loss) from continuing operations to net cashprovided byoperating activities:

Impairment of goodwill - 900 - 900

Depreciation and amortization 193 180 380 354

Deferred income taxes (6) (49) (48) 345

Non-cash lease cost 29 25 59 52

Provision for losses on accounts receivable and inventories 16 (2) 22 18

Share-based compensation expense 30 15 49 37

Other (41) 1 (20) 11

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

Accounts receivable, net (268) (116) (567) (140)

Inventories (67) 25 (212) (151)

Prepaid expenses and other current assets 57 48 (30) 25

Accounts payable 161 (45) 510 49

Accrued and other current liabilities 37 5 125 (180)

Income taxes 17 (9) 34 1

Other (83) (45) 38 -

Net cash provided by operating activities 580 481 1,220 892

Cash flows from investing activities:

Capital expenditures (142) (133) (284) (309)

Proceeds from sale of property, plant, and equipment 57 1 58 3

Acquisition of businesses, net of cash acquired - (244) (107) (359)

Other 8 (2) 10 (2)

Net cash used in investing activities (77) (378) (323) (667)

Cash flows from financing activities:

Net decrease in commercial paper - (210) - (219)

Proceeds from issuance of debt 661 593 661 593

Repayment of debt (250) - (280) -

Proceeds from exercise of share options 44 13 119 27

Repurchase of common shares (140) (269) (259) (408)

Payment of common share dividends to shareholders (159) (153) (318) (307)

Other (5) (5) (24) (31)

Net cash provided by (used in) financing activities 151 (31) (101) (345)

Effect of currency translation on cash (4) (18) 7 (11)

Net increase (decrease) in cash, cash equivalents, and restricted cash 650 54 803 (131)

Cash, cash equivalents, and restricted cash at beginning of period 1,098 742 945 927

Cash, cash equivalents, and restricted cash at end of period $ 1,748 $ 796 $ 1,748 $ 796

Supplemental cash flow information:

Interest paid on debt, net $ 29 $ 20 $ 33 $ 24

Income taxes paid, net of refunds 96 101 181 144

TE CONNECTIVITY LTD.

RECONCILIATION OF FREE CASH FLOW (UNAUDITED)

For the Quarters Ended For the Six Months Ended

March 26, March 27, March 26, March 27,

2021 2020 2021 2020

(in millions)

Net cash provided by continuing operating activities $ 580 $ 481 $ 1,220 $ 892

Excluding:

Cash (collected) paid pursuant to collateral requirements related to cross- (18) (38) 12 (32)currency swap contracts

Capital expenditures, net (85) (132) (226) (306)

Free cash flow ^(1) $ 477 $ 311 $ 1,006 $ 554

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

TE CONNECTIVITY LTD.

CONSOLIDATED SEGMENT DATA (UNAUDITED)

For the Quarters Ended For the Six Months Ended

March 26, March 27, March 26, March 27,

2021 2020 2021 2020

($ in millions)

Net Sales Net Sales Net Sales Net Sales

Transportation Solutions $ 2,287 $ 1,857 $ 4,511 $ 3,725

Industrial Solutions 952 962 1,825 1,889

Communications Solutions 499 376 924 749

Total $ 3,738 $ 3,195 $ 7,260 $ 6,363

Operating Operating Operating Operating Operating Operating Operating Operating

Income Margin Income (Loss) Margin Income Margin Income (Loss) Margin

Transportation Solutions $ 398 17.4 % $ (606) (32.6) % $ 706 15.7 % $ (290) (7.8) %

Industrial Solutions 111 11.7 142 14.8 187 10.2 257 13.6

Communications Solutions 103 20.6 49 13.0 167 18.1 89 11.9

Total $ 612 16.4 % $ (415) (13.0) % $ 1,060 14.6 % $ 56 0.9 %

Adjusted Adjusted Adjusted Adjusted Adjusted Adjusted Adjusted Adjusted

Operating Operating Operating Operating Operating Operating Operating Operating

Income ^(1) Margin ^(1) Income ^(1) Margin ^(1) Income ^(1) Margin ^(1) Income ^(1) Margin ^(1)

Transportation Solutions $ 413 18.1 % $ 322 17.3 % $ 844 18.7 % $ 647 17.4 %

Industrial Solutions 119 12.5 145 15.1 237 13.0 277 14.7

Communications Solutions 105 21.0 52 13.8 180 19.5 97 13.0

Total $ 637 17.0 % $ 519 16.2 % $ 1,261 17.4 % $ 1,021 16.0 %

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

TE CONNECTIVITY LTD.

RECONCILIATION OF NET SALES GROWTH (DECLINE) (UNAUDITED)

Change in Net Sales for the Quarter Ended March 26, 2021

versus Net Sales for the Quarter Ended March 27, 2020

Net Sales Organic Net Sales Acquisitions/

Growth (Decline) Growth (Decline) ^(1) Translation ^(2) (Divestiture)

($ in millions)

Transportation Solutions ^(3):

Automotive $ 265 19.4 % $ 184 13.5 % $ 81 $ -

Commercial transportation 88 29.9 73 24.8 15 -

Sensors 77 38.9 27 13.4 8 42

Total 430 23.2 284 15.3 104 42

Industrial Solutions ^(3):

Aerospace, defense, oil, and gas (51) (16.0) (66) (20.8) 7 8

Industrial equipment 59 21.1 44 15.7 15 -

Medical (25) (13.4) (25) (13.4) - -

Energy 7 3.9 7 4.0 9 (9)

Total (10) (1.0) (40) (4.2) 31 (1)

Communications Solutions ^(3):

Data and devices 60 27.5 52 24.0 8 -

Appliances 63 39.9 56 35.3 7 -

Total 123 32.7 108 28.7 15 -

Total $ 543 17.0 % $ 352 11.0 % $ 150 $ 41

Change in Net Sales for the Six Months Ended March 26, 2021

versus Net Sales for the Six Months Ended March 27, 2020

Net Sales Organic Net Sales Acquisitions/

Growth (Decline) Growth (Decline) ^(1) Translation ^(2) (Divestiture)

($ in millions)

Transportation Solutions ^(3):

Automotive $ 489 17.7 % $ 345 12.4 % $ 144 $ -

Commercial transportation 161 29.2 138 24.9 23 -

Sensors 136 33.7 34 8.2 13 89

Total 786 21.1 517 13.8 180 89

Industrial Solutions ^(3):

Aerospace, defense, oil, and gas (110) (17.5) (134) (21.4) 13 11

Industrial equipment 91 16.8 65 11.8 26 -

Medical (48) (13.2) (49) (13.5) 1 -

Energy 3 0.8 - 0.1 12 (9)

Total (64) (3.4) (118) (6.3) 52 2

Communications Solutions ^(3):

Data and devices 75 17.2 62 14.4 13 -

Appliances 100 32.1 89 28.3 11 -

Total 175 23.4 151 20.2 24 -

Total $ 897 14.1 % $ 550 8.6 % $ 256 $ 91

^(1) Organic net sales growth (decline) is a non-GAAP financialmeasure. See description of non-GAAP financial measures.

^(2) Represents the change in net sales resulting from changes inforeign currency exchange rates.

^(3) Industry end market information is presented consistently with ourinternal management reporting and may be periodically revised asmanagement deems necessary.

TE CONNECTIVITY LTD.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES

For the Quarter Ended March 26, 2021

(UNAUDITED)

Adjustments

Acquisition- Restructuring

Related and Other Adjusted

U.S. GAAP Charges ^(1) Charges, Net ^(1) (Non-GAAP) ^(2)

($ in millions, except per share data)

Operating income:

Transportation Solutions $ 398 $ 5 $ 10 $ 413

Industrial Solutions 111 3 5 119

Communications Solutions 103 - 2 105

Total $ 612 $ 8 $ 17 $ 637

Operating margin 16.4 % 17.0 %

Other income, net $ 4 $ - $ - $ 4

Income tax expense $ (106) $ (2) $ (2) $ (110)

Effective tax rate 17.3 % 17.3 %

Income from continuing operations $ 505 $ 6 $ 15 $ 526

Diluted earnings per share from $ 1.51 $ 0.02 $ 0.04 $ 1.57continuing operations

^(1) The tax effect of each non-GAAP adjustment is calculated based on thejurisdictions in which the expense (income) is incurred and the tax laws ineffect for each such jurisdiction.

^(2) See description of non-GAAP financial measures.

TE CONNECTIVITY LTD.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES

For the Quarter Ended March 27, 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 $ (606) $ 10 $ 18 $ 900 $ - $ 322

Industrial Solutions 142 2 1 - - 145

Communications Solutions 49 - 3 - - 52

Total $ (415) $ 12 $ 22 $ 900 $ - $ 519

Operating margin (13.0) % 16.2 %

Other income, net $ 11 $ - $ - $ - $ (8) $ 3

Income tax expense $ (42) $ (2) $ (4) $ (4) $ (31) $ (83)

Effective tax rate (10.2) % 16.1 %

Income (loss) from continuing operations $ (452) $ 10 $ 18 $ 896 $ (39) $ 433

Diluted earnings (loss) per share from $ (1.35) $ 0.03 $ 0.05 $ 2.67 $ (0.12) $ 1.29continuing operations ^(3)

^(1) The tax effect of each non-GAAP adjustment is calculated based on thejurisdictions in which the expense (income) is incurred and the tax laws ineffect for each such jurisdiction.

^(2) Includes an income tax benefit related to pre-separation tax mattersand the termination of the tax sharing agreement with Tyco Internationaland Covidien, as well as the related impact to net other income.

^(3) U.S. GAAP diluted shares excludes one million of nonvested shareawards and options outstanding as the inclusion of these securities wouldhave been antidilutive because of our loss during the period. Such amountsare 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 Six Months Ended March 26, 2021

(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 $ 706 $ 10 $ 128 $ - $ 844

Industrial Solutions 187 7 43 - 237

Communications Solutions 167 - 13 - 180

Total $ 1,060 $ 17 $ 184 $ - $ 1,261

Operating margin 14.6 % 17.4 %

Other income, net $ 3 $ - $ - $ - $ 3

Income tax expense $ (166) $ (4) $ (34) $ (29) $ (233)

Effective tax rate 15.9 % 18.7 %

Income from continuing operations $ 880 $ 13 $ 150 $ (29) $ 1,014

Diluted earnings per share from $ 2.64 $ 0.04 $ 0.45 $ (0.09) $ 3.05continuing operations

^(1) The tax effect of each non-GAAP adjustment is calculated based on thejurisdictions in which the expense (income) is incurred and the tax laws ineffect for each such jurisdiction.

^(2) Income tax benefits related to an Internal Revenue Service approved changein the tax method of depreciating or amortizing certain assets.

^(3) See description of non-GAAP financial measures.

TE CONNECTIVITY LTD.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES

For the Six Months Ended March 27, 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 $ (290) $ 15 $ 22 $ 900 $ - $ 647

Industrial Solutions 257 4 16 - - 277

Communications Solutions 89 - 8 - - 97

Total $ 56 $ 19 $ 46 $ 900 $ - $ 1,021

Operating margin 0.9 % 16.0 %

Other income, net $ 16 $ - $ - $ - $ (8) $ 8

Income tax expense $ (489) $ (3) $ (4) $ (4) $ 324 $ (176)

Effective tax rate 815.0 % 17.3 %

Income (loss) from continuing operations $ (429) $ 16 $ 42 $ 896 $ 316 $ 841

Diluted earnings (loss) per share from $ (1.28) $ 0.05 $ 0.13 $ 2.67 $ 0.94 $ 2.50continuing operations ^(3)

^(1) The tax effect of each non-GAAP adjustment is calculated based on thejurisdictions in which the expense (income) is incurred and the tax laws ineffect for each such jurisdiction.

^(2) Includes income tax expense related to the tax impacts of certainmeasures of Swiss tax reform. Also includes an income tax benefit relatedto pre-separation tax matters and the termination of the tax sharingagreement with Tyco International and Covidien, as well as the relatedimpact to net other income.

^(3) U.S. GAAP diluted shares excludes two million of nonvested shareawards and options outstanding as the inclusion of these securities wouldhave been antidilutive because of our loss during the period. Such amountsare 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 Quarter Ended June 26, 2020

(UNAUDITED)

Adjustments

Acquisition- Restructuring

Related and Other Adjusted

U.S. GAAP Charges ^(1) Charges, Net ^(1) Tax Items ^(2) (Non-GAAP) ^(4)

($ in millions, except per share data)

Operating income (loss):

Transportation Solutions $ (1) $ 6 $ 55 $ - $ 60

Industrial Solutions 70 2 40 - 112

Communications Solutions 65 - 3 - 68

Total $ 134 $ 8 $ 98 $ - $ 240

Operating margin 5.3 % 9.4 %

Other income, net $ 4 $ - $ - $ - $ 4

Income tax expense $ (185) $ (1) $ (21) $ 170 $ (37)

Effective tax rate 145.7 % 15.9 %

Income (loss) from continuing operations $ (58) $ 7 $ 77 $ 170 $ 196

Diluted earnings (loss) per share from $ (0.18) $ 0.02 $ 0.23 $ 0.51 $ 0.59continuing operations ^(3)

^(1) The tax effect of each non-GAAP adjustment is calculated based on thejurisdictions in which the expense (income) is incurred and the tax laws ineffect for each such jurisdiction.

^(2) Income tax expense related to an increase to the valuation allowance forcertain non-U.S. deferred tax assets.

^(3) U.S. GAAP diluted shares excludes one million of nonvested share awardsand options outstanding as the inclusion of these securities would have beenantidilutive because of our loss during the period. Such amounts are includedin 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 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 $ (0.78) $ 0.10 $ 0.63 $ 2.68 $ 1.62 $ 4.26continuing operations ^(3)

^(1) The tax effect of each non-GAAP adjustment is calculated based on thejurisdictions in which the expense (income) is incurred and the tax laws ineffect for each such jurisdiction.

^(2) Includes $355 million of income tax expense related to the tax impactsof certain measures of Swiss tax reform and $226 million of income taxexpense related to increases to the valuation allowance for certaindeferred tax assets, partially offset by a $31 million income tax benefitrelated to pre-separation tax matters and the termination of the taxsharing agreement with Tyco International and Covidien.

^(3) U.S. GAAP diluted shares excludes two million of nonvested shareawards and options outstanding as the inclusion of these securities wouldhave been antidilutive because of our loss during the period. Such amountsare included in adjusted (non-GAAP) diluted shares.

^(4) 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 April 21, 2021

(UNAUDITED)

Outlook for

Quarter Ending

June 25,

2021

Diluted earnings per share from continuing operations $ 1.51

Restructuring and other charges, net 0.04

Acquisition-related charges 0.02

Adjusted diluted earnings per share from continuing operations ^(1) $ 1.57

Net sales growth (decline) 45.2 %

Translation (5.1)

(Acquisitions) divestitures, net 0.4

Organic net sales growth (decline) ^(1) 40.5 %

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

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SOURCE TE Connectivity Ltd.