PR Newswire | Oct 27, 2021 06:01AM EDT

2021

10/27 05:00 CDT

TE Connectivity announces fourth quarter and full year results for fiscal year 2021Q4 earnings per share exceed expectations; full year results demonstrating market outperformance and strength and diversity of portfolio SCHAFFHAUSEN, Switzerland, Oct. 27, 2021

SCHAFFHAUSEN, Switzerland, Oct. 27, 2021 /PRNewswire/ -- TE Connectivity Ltd. (NYSE: TEL) today reported results for the fourth quarter and fiscal year ended Sept. 24, 2021.

Fourth Quarter Highlights

* Net sales were $3.8 billion, up approximately 17% versus prior year on a reported basis. * Operating margin expansion year over year with strong performance across all segments. * GAAP diluted earnings per share (EPS) from continuing operations were $2.40, and adjusted EPS were $1.69, an increase of 46% versus the prior year. * Cash flow from continuing operating activities was $774 million and free cash flow was $536 million. * Completed acquisition of ERNI Group AG (ERNI), a European connector manufacturer focused on factory automation markets.

Full Year Highlights

* Net sales were $14.9 billion, up 23% from fiscal year 2020. * Operating margin expansion year over year, with increases across all segments. * GAAP EPS from continuing operations were $6.77 versus a loss of $0.78 in fiscal year 2020, and adjusted EPS were $6.51, versus $4.26 in fiscal year 2020. * Cash flow from continuing operating activities was $2.7 billion and free cash flow was $2.1 billion, with approximately $1.5 billion returned to shareholders and over $400 million deployed for acquisitions. * Company set new ESG commitment to decrease greenhouse gas emissions by over 40% on an absolute basis by 2030.

"We had a strong finish to fiscal 2021 with sales and adjusted earnings in the fourth quarter exceeding expectations despite broader global supply challenges," said TE Connectivity CEO Terrence Curtin. "I am very pleased with our teams' ongoing execution in a very dynamic backdrop. Our performance demonstrates the strength and diversity of our portfolio, which is reflected in sales and earnings above pre-COVID levels. We will continue to benefit from our leadership positions in long-term technology trends of electric vehicles, data and cloud, factory automation and renewable investments, which are enabling us to grow above the markets we serve. We expect to deliver continued growth in both sales and earnings in the first quarter of fiscal 2022."

First Quarter FY22 Outlook

For the first quarter of fiscal 2022, the company expects net sales of approximately $3.7 billion, reflecting an increase of 5% on a reported basis and 4% on an organic basis year over year. GAAP EPS from continuing operations is expected to be approximately $1.50 year over year, with adjusted EPS of approximately $1.60, up 9% year over year.

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

Conference Call and Webcast

The company will hold a conference call 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 (888) 330-3417 and for international callers, the dial-in number is (646) 960-0804. * A replay of the conference call will be available on TE Connectivity's investor website at investors.te.com at 11:30 a.m. ET on Oct. 27, 2021.

About TE Connectivity

TE Connectivity Ltd. (NYSE: TEL) is a global industrial technology leader creating a safer, sustainable, productive, and connected future. Our broad range of connectivity and sensor solutions, proven in the harshest environments, enable advancements in transportation, industrial applications, medical technology, energy, data communications, and the home. With more than 85,000 employees, including over 8,000 engineers, working alongside customers in approximately 140 countries, TE ensures that EVERY CONNECTION COUNTS. Learn more at www.te.com and on LinkedIn, Facebook, WeChat and Twitter.

Non-GAAP Financial Measures

We present non-GAAP performance and liquidity measures as we believe it is appropriate for investors to consider adjusted financial measures in addition to results in accordance with accounting principles generally accepted in the U.S. ("GAAP"). These non-GAAP financial measures provide supplemental information and should not be considered replacements for results in accordance with GAAP. Management uses non-GAAP financial measures internally for planning and forecasting purposes and in its decision-making processes related to the operations of our company. We believe these measures provide meaningful information to us and investors because they enhance the understanding of our operating performance, ability to generate cash, and the trends of our business. Additionally, we believe that investors benefit from having access to the same financial measures that management uses in evaluating our operations. The primary limitation of these measures is that they exclude the financial impact of items that would otherwise either increase or decrease our reported results. This limitation is best addressed by using these non-GAAP financial measures in combination with the most directly comparable GAAP financial measures in order to better understand the amounts, character, and impact of any increase or decrease in reported amounts. These non-GAAP financial measures may not be comparable to similarly-titled measures reported by other companies.

The following provides additional information regarding our non-GAAP financial measures:

* Organic Net Sales Growth (Decline) - represents net sales growth (decline) (the most comparable GAAP financial measure) excluding the impact of foreign currency exchange rates, and acquisitions and divestitures that occurred in the preceding twelve months, if any. Organic Net Sales Growth (Decline) is a useful measure of our performance because it excludes items that are not completely under management's control, such as the impact of changes in foreign currency exchange rates, and items that do not reflect the underlying growth of the company, such as acquisition and divestiture activity. This measure is a significant component in our incentive compensation plans. * Adjusted Operating Income (Loss) and Adjusted Operating Margin - represent operating income (loss) and operating margin, respectively, (the most comparable GAAP financial measures) before special items including restructuring and other charges, acquisition-related charges, impairment of goodwill, and other income or charges, if any. We utilize these adjusted measures in combination with operating income (loss) and operating margin to assess segment level operating performance and to provide insight to management in evaluating segment operating plan execution and market conditions. Adjusted Operating Income (Loss) is a significant component in our incentive compensation plans. * Adjusted Other Income (Expense), Net - represents net other income (expense) (the most comparable GAAP financial measure) before special items including tax sharing income related to adjustments to prior period tax returns and other items, if any. * Adjusted Income Tax (Expense) Benefit and Adjusted Effective Tax Rate - represent income tax (expense) benefit and effective tax rate, respectively, (the most comparable GAAP financial measures) after adjusting for the tax effect of special items including restructuring and other charges, acquisition-related charges, impairment of goodwill, other income or charges, and certain significant tax items, if any. * Adjusted Income (Loss) from Continuing Operations - represents income (loss) from continuing operations (the most comparable GAAP financial measure) before special items including restructuring and other charges, acquisition-related charges, impairment of goodwill, tax sharing income related to adjustments to prior period tax returns and other tax items, other income or charges, and certain significant tax items, if any, and, if applicable, the related tax effects. * Adjusted Earnings (Loss) Per Share - represents diluted earnings (loss) per share from continuing operations (the most comparable GAAP financial measure) before special items including restructuring and other charges, acquisition-related charges, impairment of goodwill, tax sharing income related to adjustments to prior period tax returns and other tax items, other income or charges, and certain significant tax items, if any, and, if applicable, the related tax effects. This measure is a significant component in our incentive compensation plans. * Free Cash Flow (FCF) - is a useful measure of our ability to generate cash. The difference between net cash provided by continuing operating activities (the most comparable GAAP financial measure) and Free Cash Flow consists mainly of significant cash outflows and inflows that we believe are useful to identify. We believe Free Cash Flow provides useful information to investors as it provides insight into the primary cash flow metric used by management to monitor and evaluate cash flows generated from our operations. Free Cash Flow is defined as net cash provided by continuing operating activities excluding voluntary pension contributions and the cash impact of special items, if any, minus net capital expenditures. Voluntary pension contributions are excluded from the GAAP financial measure because this activity is driven by economic financing decisions rather than operating activity. Certain special items, including net payments related to pre-separation tax matters and cash paid (collected) pursuant to collateral requirements related to cross-currency swap contracts, are also excluded by management in evaluating Free Cash Flow. Net capital expenditures consist of capital expenditures less proceeds from the sale of property, plant, and equipment. These items are subtracted because they represent long-term commitments. In the calculation of Free Cash Flow, we subtract certain cash items that are ultimately within management's and the Board of Directors' discretion to direct and may imply that there is less or more cash available for our programs than the most comparable GAAP financial measure indicates. It should not be inferred that the entire Free Cash Flow amount is available for future discretionary expenditures, as our definition of Free Cash Flow does not consider certain non-discretionary expenditures, such as debt payments. In addition, we may have other discretionary expenditures, such as discretionary dividends, share repurchases, and business acquisitions, that are not considered in the calculation of Free Cash Flow.

Forward-Looking Statements

This release contains certain "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to risks, uncertainty and changes in circumstances, which may cause actual results, performance, financial condition or achievements to differ materially from anticipated results, performance, financial condition or achievements. All statements contained herein that are not clearly historical in nature are forward-looking and the words "anticipate," "believe," "expect," "estimate," "plan," and similar expressions are generally intended to identify forward-looking statements. We have no intention and are under no obligation to update or alter (and expressly disclaim any such intention or obligation to do so) our forward-looking statements whether as a result of new information, future events or otherwise, except to the extent required by law. The forward-looking statements in this release include statements addressing our future financial condition and operating results, and the impact on our operations resulting from the coronavirus disease 2019 ("COVID-19"). Examples of factors that could cause actual results to differ materially from those described in the forward-looking statements include, among others, the extent, severity and duration of COVID-19 negatively affecting our business operations; business, economic, competitive and regulatory risks, such as conditions affecting demand for products in the automotive and other industries we serve; competition and pricing pressure; fluctuations in foreign currency exchange rates and commodity prices; natural disasters and political, economic and military instability in countries in which we operate; developments in the credit markets; future goodwill impairment; compliance with current and future environmental and other laws and regulations; and the possible effects on us of changes in tax laws, tax treaties and other legislation, including the effects of Swiss tax reform. In addition, the extent to which COVID-19 will impact our business and our financial results will depend on future developments, which are highly uncertain and cannot be predicted. Such developments may include the geographic spread of the virus, the severity of the virus, the duration of the outbreak, the impact on our suppliers' and customers' supply chains, the actions that may be taken by various governmental authorities in response to the outbreak in jurisdictions in which we operate, and the possible impact on the global economy and local economies in which we operate. More detailed information about these and other factors is set forth in TE Connectivity Ltd.'s Annual Report on Form 10-K for the fiscal year ended Sept. 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 Years Ended

September 24, September 25, September 24, September 25,

2021 2020 2021 2020

(in millions, except per share data)

Net sales $ 3,818 $ 3,261 $ 14,923 $ 12,172

Cost of sales 2,555 2,292 10,036 8,437

Gross margin 1,263 969 4,887 3,735

Selling, general,and administrative 384 352 1,512 1,392expenses

Research,development, and 173 148 677 613engineering expenses

Acquisition and 8 9 31 36integration costs

Restructuring and 38 113 233 257other charges, net

Impairment of - - - 900goodwill

Operating income 660 347 2,434 537

Interest income 3 2 17 15

Interest expense (14) (12) (56) (48)

Other income (22) - (17) 20(expense), net

Income fromcontinuing 627 337 2,378 524operations beforeincome taxes

Income tax (expense) 167 (109) (123) (783)benefit

Income (loss) fromcontinuing 794 228 2,255 (259)operations

Income fromdiscontinued - 2 6 18operations, net ofincome taxes

Net income (loss) $ 794 $ 230 $ 2,261 $ (241)

Basic earnings(loss) per share:

Income (loss) fromcontinuing $ 2.42 $ 0.69 $ 6.83 $ (0.78)operations

Income fromdiscontinued - 0.01 0.02 0.05operations

Net income (loss) 2.42 0.70 6.85 (0.73)

Diluted earnings(loss) per share:

Income (loss) fromcontinuing $ 2.40 $ 0.69 $ 6.77 $ (0.78)operations

Income fromdiscontinued - 0.01 0.02 0.05operations

Net income (loss) 2.40 0.69 6.79 (0.73)

Weighted-averagenumber of sharesoutstanding:

Basic 328 330 330 332

Diluted 331 332 333 332

TE CONNECTIVITY LTD.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

September 24, September 25,

2021 2020

(in millions, except share data)

Assets

Current assets:

Cash and cash equivalents $ 1,203 $ 945

Accounts receivable, net of allowance for doubtful accounts of $41 and 2,928 2,377$29, respectively

Inventories 2,511 1,950

Prepaid expenses and other current assets 621 512

Total current assets 7,263 5,784

Property, plant, and equipment, net 3,778 3,650

Goodwill 5,590 5,224

Intangible assets, net 1,549 1,593

Deferred income taxes 2,499 2,178

Other assets 783 813

Total assets $ 21,462 $ 19,242

Liabilities, redeemable noncontrolling interests, and shareholders'equity

Current liabilities:

Short-term debt $ 503 $ 694

Accounts payable 1,911 1,276

Accrued and other current liabilities 2,242 1,720

Total current liabilities 4,656 3,690

Long-term debt 3,589 3,452

Long-term pension and postretirement liabilities 1,139 1,336

Deferred income taxes 181 143

Income taxes 302 252

Other liabilities 847 874

Total liabilities 10,714 9,747

Commitments and contingencies

Redeemable noncontrolling interests 114 112

Shareholders' equity:

Common shares, CHF 0.57 par value, 336,099,881 shares authorized and 148 149 issued, and 338,953,381 shares authorized and issued, respectively

Accumulated earnings 11,709 10,348

Treasury shares, at cost, 9,060,919 and 8,295,878 shares, respectively (1,055) (669)

Accumulated other comprehensive loss (168) (445)

Total shareholders' equity 10,634 9,383

Total liabilities, redeemable noncontrolling interests, and $ 21,462 $ 19,242shareholders' equity

TE CONNECTIVITY LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

For the Quarters Ended For the Years Ended

September 24, September 25, September 24, September 25,

2021 2020 2021 2020

(in millions)

Cash flows fromoperatingactivities:

Net income (loss) $ 794 $ 230 $ 2,261 $ (241)

Income fromdiscontinued - (2) (6) (18)operations, net ofincome taxes

Income (loss) fromcontinuing 794 228 2,255 (259)operations

Adjustments toreconcile income(loss) fromcontinuingoperations to netcash provided byoperatingactivities:

Impairment of - - - 900goodwill

Depreciation and 179 181 769 711amortization

Deferred income (292) 76 (354) 535taxes

Non-cash lease cost 30 29 120 108

Provision for losseson accounts 14 (14) 46 14receivable andinventories

Share-based 21 20 94 74compensation expense

Other (16) 14 (61) 54

Changes in assetsand liabilities, netof the effects ofacquisitions anddivestitures:

Accounts receivable, 120 (245) (518) (63)net

Inventories (74) 253 (556) (89)

Prepaid expenses and (5) 24 (19) 51other current assets

Accounts payable (86) 1 560 (80)

Accrued and other 63 105 173 (99)current liabilities

Income taxes 45 (29) 106 (9)

Other (19) 76 61 143

Net cash provided bycontinuing operating 774 719 2,676 1,991activities

Net cash provided bydiscontinued - 1 - 1operating activities

Net cash provided by 774 720 2,676 1,992operating activities

Cash flows frominvestingactivities:

Capital expenditures (236) (121) (690) (560)

Proceeds from saleof property, plant, 1 11 86 17and equipment

Acquisition ofbusinesses, net of (297) (11) (423) (339)cash acquired

Other (8) 4 (10) 17

Net cash used in (540) (117) (1,037) (865)investing activities

Cash flows fromfinancingactivities:

Net decrease in - - - (219)commercial paper

Proceeds from - - 661 593issuance of debt

Repayment of debt (2) - (708) (352)

Proceeds fromexercise of share 37 26 167 55options

Repurchase of common (313) - (831) (523)shares

Payment of commonshare dividends to (164) (159) (647) (625)shareholders

Transfers fromdiscontinued - 1 - 1operations

Other (1) (2) (28) (34)

Net cash used incontinuing financing (443) (134) (1,386) (1,104)activities

Net cash used indiscontinued - (1) - (1)financing activities

Net cash used in (443) (135) (1,386) (1,105)financing activities

Effect of currency (4) 3 5 (4)translation on cash

Net increase(decrease) in cash, (213) 471 258 18cash equivalents,and restricted cash

Cash, cashequivalents, and 1,416 474 945 927restricted cash atbeginning of period

Cash, cashequivalents, and $ 1,203 $ 945 $ 1,203 $ 945restricted cash atend of period

Supplemental cashflow information:

Interest paid on $ 18 $ 19 $ 58 $ 50debt, net

Income taxes paid, 80 62 371 257net of refunds

TE CONNECTIVITY LTD.

RECONCILIATION OF FREE CASH FLOW (UNAUDITED)

For the Quarters Ended For the Years Ended

September 24, September 25, September 24, September 25,

2021 2020 2021 2020

(in millions)

Net cash provided bycontinuing operating $ 774 $ 719 $ 2,676 $ 1,991activities

Excluding:

Cash (collected)paid pursuant tocollateral (3) 39 9 34requirements relatedto cross-currencyswap contracts

Capital (235) (110) (604) (543)expenditures, net

Free cash flow ^(1) $ 536 $ 648 $ 2,081 $ 1,482

^(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 Years Ended

September 24, September 25, September 24, September 25,

2021 2020 2021 2020

($ in millions)

Net Sales Net Sales Net Sales Net Sales

Transportation Solutions $ 2,198 $ 1,865 $ 8,974 $ 6,845

Industrial Solutions 1,017 959 3,844 3,713

Communications Solutions 603 437 2,105 1,614

Total $ 3,818 $ 3,261 $ 14,923 $ 12,172

Operating Operating Operating Operating Operating Operating Operating Operating

Income Margin Income Margin Income Margin Income (Loss) Margin

Transportation Solutions $ 387 17.6 % $ 198 10.6 % $ 1,526 17.0 % $ (93) (1.4) %

Industrial Solutions 134 13.2 85 8.9 469 12.2 412 11.1

Communications Solutions 139 23.1 64 14.6 439 20.9 218 13.5

Total $ 660 17.3 % $ 347 10.6 % $ 2,434 16.3 % $ 537 4.4 %

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 $ 395 18.0 % $ 245 13.1 % $ 1,679 18.7 % $ 952 13.9 %

Industrial Solutions 162 15.9 133 13.9 557 14.5 522 14.1

Communications Solutions 149 24.7 95 21.7 465 22.1 260 16.1

Total $ 706 18.5 % $ 473 14.5 % $ 2,701 18.1 % $ 1,734 14.2 %

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

TE CONNECTIVITY LTD.

RECONCILIATION OF NET SALES GROWTH (DECLINE) (UNAUDITED)

Change in Net Sales for the Quarter Ended September 24, 2021

versus Net Sales for the Quarter Ended September 25, 2020

Organic Net Net Sales Sales Acquisition/

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

($ in millions)

TransportationSolutions ^(3):

Automotive $ 184 13.8 % $ 160 11.7 % $ 24 $ -

Commercial 106 39.8 103 37.9 3 -transportation

Sensors 43 16.3 38 15.4 5 -

Total 333 17.9 301 16.0 32 -

IndustrialSolutions ^(3):

Industrial 96 33.1 91 31.5 5 -equipment

Aerospace,defense, oil, (51) (16.5) (57) (18.1) 4 2and gas

Energy 5 2.6 15 7.7 - (10)

Medical 8 4.7 8 4.7 - -

Total 58 6.0 57 6.2 9 (8)

CommunicationsSolutions ^(3):

Data and 97 37.3 91 35.5 6 -devices

Appliances 69 39.0 65 35.7 4 -

Total 166 38.0 156 35.6 10 -

Total $ 557 17.1 % $ 514 15.8 % $ 51 $ (8)

Change in Net Sales for the Year Ended September 24, 2021

versus Net Sales for the Year Ended September 25, 2020

Net Sales Organic Net Acquisitions/ Sales

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

($ in millions)

TransportationSolutions ^(3):

Automotive $ 1,476 30.1 % $ 1,243 25.0 % $ 233 $ -

Commercial 416 39.6 377 35.2 39 -transportation

Sensors 237 26.6 119 13.4 29 89

Total 2,129 31.1 1,739 25.1 301 89

IndustrialSolutions ^(3):

Industrial 299 27.2 253 22.7 46 -equipment

Aerospace,defense, oil, (166) (13.8) (209) (17.4) 25 18and gas

Energy 21 2.9 30 4.1 20 (29)

Medical (23) (3.3) (25) (3.6) 2 -

Total 131 3.5 49 1.3 93 (11)

CommunicationsSolutions ^(3):

Data and 225 23.1 199 20.5 26 -devices

Appliances 266 41.5 242 37.2 24 -

Total 491 30.4 441 27.2 50 -

Total $ 2,751 22.6 % $ 2,229 18.2 % $ 444 $ 78

^(1) Organic net sales growth (decline) is a non-GAAP financial measure. Seedescription of non-GAAP financial measures.

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

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

TE CONNECTIVITY LTD.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES

For the Quarter Ended September 24, 2021

(UNAUDITED)

Adjustments

Acquisition- Restructuring Adjusted Related and Other

U.S. GAAP Charges ^(1) Charges, Net ^(1) Other Items ^(1) (2) Tax Items ^(3) (Non-GAAP) ^(4)

($ in millions, except per share data)

Operating income:

Transportation Solutions $ 387 $ 3 $ 5 $ - $ - $ 395

Industrial Solutions 134 4 24 - - 162

Communications Solutions 139 1 9 - - 149

Total $ 660 $ 8 $ 38 $ - $ - $ 706

Operating margin 17.3 % 18.5 %

Other income (expense), net $ (22) $ - $ - $ 28 $ - $ 6

Income tax (expense) benefit $ 167 $ (1) $ 3 $ (6) $ (304) $ (141)

Effective tax rate (26.6) % 20.1 %

Income from continuing operations $ 794 $ 7 $ 41 $ 22 $ (304) $ 560

Diluted earnings per share from continuing operations $ 2.40 $ 0.02 $ 0.12 $ 0.07 $ (0.92) $ 1.69

^(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) Charge related to the transfer of certain U.S. pension plan liabilities toan insurance company through the purchase of a group annuity contract.

^(3) Represents a $327 million income tax benefit for the net reduction invaluation allowances associated primarily with certain tax planning actions aswell as improved current and expected future operating profit and taxableincome, and $23 million of income tax expense associated with the tax impactsof an intercompany transaction.

^(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 September 25, 2020

(UNAUDITED)

Adjustments

Acquisition- Restructuring Adjusted Related and Other

U.S. GAAP Charges ^(1) Charges, Net ^(1) Tax Items ^(2) (Non-GAAP) ^(3)

($ in millions, except per share data)

Operating income:

Transportation Solutions $ 198 $ 11 $ 36 $ - $ 245

Industrial Solutions 85 2 46 - 133

Communications Solutions 64 - 31 - 95

Total $ 347 $ 13 $ 113 $ - $ 473

Operating margin 10.6 % 14.5 %

Income tax expense $ (109) $ (4) $ (21) $ 56 $ (78)

Effective tax rate 32.3 % 16.8 %

Income from continuing $ 228 $ 9 $ 92 $ 56 $ 385operations

Diluted earnings pershare from continuing $ 0.69 $ 0.03 $ 0.28 $ 0.17 $ 1.16operations

^(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 increases to the valuation allowance forcertain deferred tax assets.

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

TE CONNECTIVITY LTD.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES

For the Year Ended September 24, 2021

(UNAUDITED)

Adjustments

Acquisition- Restructuring Adjusted Related and Other

U.S. GAAP Charges ^(1) Charges, Net ^(1) Other Items ^(1) (2) Tax Items ^(3) (Non-GAAP) ^(4)

($ in millions, except per share data)

Operating income:

Transportation Solutions $ 1,526 $ 18 $ 135 $ - $ - $ 1,679

Industrial Solutions 469 15 73 - - 557

Communications Solutions 439 1 25 - - 465

Total $ 2,434 $ 34 $ 233 $ - $ - $ 2,701

Operating margin 16.3 % 18.1 %

Other income (expense), net $ (17) $ - $ - $ 28 $ - $ 11

Income tax expense $ (123) $ (7) $ (35) $ (6) $ (333) $ (504)

Effective tax rate 5.2 % 18.9 %

Income from continuing operations $ 2,255 $ 27 $ 198 $ 22 $ (333) $ 2,169

Diluted earnings per share from continuing $ 6.77 $ 0.08 $ 0.59 $ 0.07 $ (1.00) $ 6.51operations

^(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) Charge related to the transfer of certain U.S. pension plan liabilities toan insurance company through the purchase of a group annuity contract.

^(3) Represents a $327 million income tax benefit for the net reduction invaluation allowances associated primarily with certain tax planning actions aswell as improved current and expected future operating profit and taxableincome, $29 million of income tax benefits related to an Internal RevenueService approved change in the tax method of depreciating or amortizing certainassets, and $23 million of income tax expense associated with the tax impactsof an intercompany transaction.

^(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 Adjusted Related and Other Impairment

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

($ in millions, except per share data)

Operating income (loss):

Transportation Solutions $ (93) $ 32 $ 113 $ 900 $ - $ 952

Industrial Solutions 412 8 102 - - 522

Communications Solutions 218 - 42 - - 260

Total $ 537 $ 40 $ 257 $ 900 $ - $ 1,734

Operating margin 4.4 % 14.2 %

Other income, net $ 20 $ - $ - $ - $ (8) $ 12

Income tax expense $ (783) $ (8) $ (46) $ (4) $ 550 $ (291)

Effective tax rate 149.4 % 17.0 %

Income (loss) from continuing operations $ (259) $ 32 $ 211 $ 896 $ 542 $ 1,422

Diluted earnings (loss) per share from continuing $ (0.78) $ 0.10 $ 0.63 $ 2.68 $ 1.62 $ 4.26operations ^(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 impacts ofcertain measures of Swiss tax reform and $226 million of income tax expenserelated to increases to the valuation allowance for certain deferred taxassets, partially offset by a $31 million income tax benefit related topre-separation tax matters and the termination of the tax sharing agreementwith Tyco International and Covidien.

^(3) U.S. GAAP diluted shares excludes two 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 Quarter Ended December 25, 2020

(UNAUDITED)

Adjustments

Acquisition- Restructuring Adjusted Related and Other

U.S. GAAP Charges ^(1) Charges, Net ^(1) Tax Items ^(2) (Non-GAAP) ^(3)

($ in millions, except per share data)

Operating income:

Transportation Solutions $ 308 $ 5 $ 118 $ - $ 431

Industrial Solutions 76 4 38 - 118

Communications Solutions 64 - 11 - 75

Total $ 448 $ 9 $ 167 $ - $ 624

Operating margin 12.7 % 17.7 %

Other expense, net $ (1) $ - $ - $ - $ (1)

Income tax expense $ (60) $ (2) $ (32) $ (29) $ (123)

Effective tax rate 13.8 % 20.1 %

Income from continuing $ 375 $ 7 $ 135 $ (29) $ 488operations

Diluted earnings pershare from continuing $ 1.13 $ 0.02 $ 0.41 $ (0.09) $ 1.47operations

^(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) description of non-GAAP financial measures.

TE CONNECTIVITY LTD.

RECONCILIATION OF FORWARD-LOOKING NON-GAAP FINANCIAL MEASURES

TO FORWARD-LOOKING GAAP FINANCIAL MEASURES

As of October 27, 2021

(UNAUDITED)

Outlook for

Quarter Ending

December 24,

2021

Diluted earnings per share from continuing operations $ 1.50

Restructuring and other charges, net 0.12

Acquisition-related charges 0.03

Tax items (0.05)

Adjusted diluted earnings per share from continuing operations $ 1.60^(1)

Net sales growth 5.0 %

Translation 0.6

(Acquisitions) divestitures, net (1.5)

Organic net sales growth ^(1) 4.1 %

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

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SOURCE TE Connectivity Ltd.