Tyco Electronics Reports Fiscal Fourth Quarter and Full-Year 2008 Results

PRNewswire-FirstCall
PEMBROKE, Bermuda
(BSX:TEL)
Nov 6, 2008

PEMBROKE, Bermuda, Nov. 6 /PRNewswire-FirstCall/ --

  Fourth Quarter Highlights
  -- Net Sales Increased 6 Percent to $3.7 Billion; Organic Sales Growth of
     2 Percent
  -- Earnings Per Share (EPS) From Continuing Operations of $0.23 on a GAAP
     Basis; Adjusted EPS of $0.69, an Increase of 19 Percent Over Prior Year

  Full-Year Highlights
  -- Net Sales Increased 14 Percent to $14.8 Billion; Organic Sales Growth
     of 8 Percent
  -- EPS From Continuing Operations of $3.28 on a GAAP Basis; Adjusted EPS
     of $2.67, an Increase of 25 Percent Over Prior Year

  First Quarter Outlook
  -- Company Expects a Sales Decline of 16 to 19 Percent With Organic Sales
     Decline of 12 to 15 Percent
  -- EPS From Continuing Operations Expected to be $0.19 to $0.23; Adjusted
     EPS Expected to be in Range of $0.24 to $0.28, Which Includes
     Approximately $0.10 of Currency Losses

Tyco Electronics Ltd. (NYSE: TEL)(BSX: TEL) today reported results for the fiscal fourth quarter and full-year ended Sept. 26, 2008. The company reported net sales of $3.7 billion for the fiscal fourth quarter, an increase of 6 percent over the prior-year period. Excluding currency effects, organic sales growth was 2 percent. GAAP diluted earnings per share (EPS) from continuing operations were $0.23 for the quarter, compared to $0.48 in the prior-year period. Included in EPS from continuing operations were $0.46 of net charges -- primarily related to $0.29 per share of restructuring costs and $0.23 per share of charges related to asset impairments, partially offset by $0.06 per share of income related to tax and other items. This compares to $0.10 per share of charges in the prior-year quarter. Adjusted EPS from continuing operations were $0.69 in the quarter, an increase of 19 percent over last year's adjusted EPS of $0.58.

For the full-year ended Sept. 26, 2008, net sales were $14.8 billion, an increase of 14 percent over the prior year. Organic sales growth was 8 percent, driven by growth in all segments. GAAP diluted EPS from continuing operations were $3.28 for the year, compared to a loss of $0.36 in the prior year. Included in EPS from continuing operations was $1.23 per share of income related to tax items which was partially offset by $0.37 per share of restructuring costs, $0.25 per share of charges related to asset impairments and other charges -- compared to $0.14 per share of restructuring costs and $2.36 per share of other charges in the prior year. Adjusted EPS from continuing operations were $2.67 for the year, an increase of 25 percent over last year's adjusted EPS of $2.14.

"Our fourth quarter results were in line with our expectations and capped a solid first year of progress toward our strategic objectives," said Tyco Electronics Chief Executive Officer Tom Lynch. "However, since late September we have seen a sharp decrease in demand in most of our key end markets, especially in European automotive. This is driving the significant decline in our first quarter outlook. In response to these conditions, we are taking actions to accelerate our restructuring efforts and to reduce overhead."

Organic Sales Growth, Adjusted Operating Income, Adjusted EPS, Adjusted Operating Margin and Free Cash Flow are all non-GAAP financial measures and are described at the end of this press release. For a reconciliation of these non-GAAP measures, see the attached tables. All dollar amounts are pre-tax and stated in millions. All comparisons are to the quarter ended Sept. 28, 2007 unless otherwise indicated.

  ($ in millions)        Sept. 26, 2008  Sept. 28, 2007   $ Change  % Change
  Net Sales                    $3,706         $3,488        $218         6%
  Operating Income               $236           $416       $(180)       NM
  Restructuring-Related Costs   $(131)          $(58)
  Other Items, Net              $(137)          $(15)
  Adjusted Operating Income      $504           $489         $15         3%
  Operating Margin                6.4%          11.9%
  Adjusted Operating Margin      13.6%          14.0%

GAAP operating income was $236 million, compared to $416 million in the prior-year period. The operating margin on a GAAP basis was 6.4 percent. Included in the current quarter operating income were restructuring costs of $131 million and $137 million of impairment charges related to goodwill and other assets. Included in prior-year operating income were $58 million of restructuring costs, $19 million of separation-related costs and $4 million of income for the company's share of an insurance recovery related to Tyco International's securities class action litigation settlement. Excluding these items in both periods, adjusted operating income was $504 million compared to $489 million a year ago, an increase of 3 percent. The adjusted operating margin was 13.6 percent, compared to 14.0 percent a year ago -- primarily reflecting declines in the company's Electronic Components and Network Solutions segments partially offset by higher volumes in the Undersea Telecommunications segment.

CASH FLOW

Free cash flow was $476 million in the quarter, a slight decrease from the prior-year quarter, primarily reflecting higher capital expenditures. For the full year, free cash flow was $1.4 billion compared to $837 million a year ago. The increase was primarily due to higher income levels and lower capital expenditures compared to the prior-year period.

  OTHER ITEMS
  -- The company completed the sales of the Radio Frequency Components and
     Subsystems business for $427 million in cash and the automotive radar
     sensors business for $42 million in cash during the fourth quarter.  As
     a result, the company recorded pre-tax gains of $215 million, which are
     included in Income from Discontinued Operations.
  -- The company entered into a definitive agreement to sell its Battery
     Systems business for $30 million in cash.  A pre-tax impairment charge
     of $22 million was recorded in the fourth quarter to write the carrying
     value down to the negotiated sale price.  The results of this business
     are included in the Electronic Components segment.  The company expects
     to complete this transaction in the spring of 2009.
  -- As a result of its annual goodwill assessment, the company recorded a
     goodwill impairment of $103 million related to its Application Tooling
     business in the Electronic Components segment.
  -- The company recorded $22 million of income related to various tax
     matters, including a tax settlement.


  ORDERS

Total company orders grew 2 percent compared to the prior year. On an organic basis, excluding the effects of currency translation, orders declined 2 percent and the book-to-bill ratio was 0.90. Excluding the company's Undersea Telecommunications and Wireless Systems segments, which are project-oriented businesses with uneven order patterns, orders declined 1 percent overall and 6 percent organically in the quarter, and the book-to-bill ratio was 0.94. Order rates in the Electronic Components segment declined 8 percent organically compared to the prior year, reflecting weakness in most end markets.

FIRST QUARTER FISCAL 2009 OUTLOOK

For the first quarter of fiscal 2009, the company expects a sales decline of 16 to 19 percent below prior-year sales of $3.6 billion, with an organic sales decline of 12 to 15 percent. The company further expects diluted EPS from continuing operations of $0.19 to $0.23, which includes restructuring costs of approximately $0.05 per share. Adjusted EPS from continuing operations are expected to be $0.24 to $0.28, compared to adjusted EPS of $0.62 in the prior-year period. The adjusted EPS guidance includes $0.10 per share of estimated losses related to foreign currency hedging activity. These estimated losses include the mark-to-market of forward exchange currency contracts due to significant volatility in currencies during the month of October, particularly in Eastern European countries. This outlook assumes current foreign exchange rates.

SEGMENT RESULTS

Tyco Electronics is comprised of four reporting segments: Electronic Components, Network Solutions, Undersea Telecommunications and Wireless Systems.

Electronic Components

The Electronic Components segment is one of the world's largest suppliers of passive electronic components, including connectors and interconnect systems, relays, switches, circuit protection devices, touchscreens, sensors, and wire and cable.

                                                                     Organic
  ($ in millions) Sept. 26, 2008 Sept. 28, 2007  $ Change  % Change   Growth
  Net Sales             $2,713         $2,630       $83         3%     (2)%
  Operating Income         $99           $347     $(248)     (71)%
  Restructuring-
   Related Costs         $(125)          $(23)
  Other Items            $(145)            $0
  Adjusted Operating
   Income                 $369           $370       $(1)        0%
  Operating Margin         3.6%          13.2%
  Adjusted Operating
   Margin                 13.6%          14.1%

Sales in the segment grew 3 percent year over year and declined 2 percent organically. On an organic basis, growth in the industrial (+13 percent), aerospace and defense (+9 percent) and communications (+4 percent) markets was more than offset by sales declines in the automotive (-6 percent) and computer (-11 percent) markets. In automotive, growth of 8 percent in Asia was more than offset by declines of 7 percent in Europe and 26 percent in North America.

Operating income decreased by $248 million and adjusted operating income was flat. The adjusted operating margin decreased due primarily to the organic sales decline. Restructuring costs in the quarter were $125 million and other charges were $145 million, compared to $23 million of restructuring costs in the prior-year quarter.

Network Solutions

The Network Solutions segment is one of the world's largest suppliers of infrastructure components and systems for the communication service provider, building networks and energy markets.

                                                                    Organic
  ($ in millions) Sept. 26, 2008 Sept. 28, 2007  $ Change  % Change  Growth
  Net Sales              $561           $522       $39         7%       3%
  Operating Income        $66            $46       $20        43%
  Restructuring-
   Related Costs          $(5)          $(31)
  Adjusted Operating
   Income                 $71            $77       $(6)      (8)%
  Operating Margin       11.8%           8.8%
  Adjusted Operating
   Margin                12.7%          14.8%

Segment sales grew 7 percent compared to the prior-year quarter, or 3 percent organically. On an organic basis, sales to the building networks and energy markets grew 6 percent and 5 percent respectively, while sales to the communication service provider market declined 4 percent.

Operating income increased by $20 million and adjusted operating income decreased by $6 million. The decrease in the adjusted operating margin primarily relates to a lower-margin sales mix and lower productivity levels in the communication service provider business due to the sales decline. Restructuring costs in the quarter were $5 million, compared to $31 million in the prior-year quarter.

Undersea Telecommunications

The company's Undersea Telecommunications segment is a world leader in developing, manufacturing, installing and maintaining the world's most advanced fiber optic undersea networks.

                                                                     Organic
  ($ in millions) Sept. 26, 2008 Sept. 28, 2007  $ Change  % Change   Growth
  Net Sales              $301           $213       $88        41%      42%
  Operating Income        $39            $19       $20       105%
  Restructuring-
   Related Costs          $(2)           $(2)
  Adjusted Operating
   Income                 $41            $21       $20        95%
  Operating Margin       13.0%           8.9%
  Adjusted Operating
   Margin                13.6%           9.9%

Sales in the segment grew 42 percent organically versus the prior year, due to continued investment in undersea fiber optic network capacity, primarily in emerging markets. Adjusted operating income increased $20 million and the adjusted operating margin increased to 13.6 percent, driven by higher sales levels. Restructuring-related costs were $2 million in both the current and prior-year quarters.

Wireless Systems

The Wireless Systems segment is a leading innovator of wireless technology for critical communications.

                                                                     Organic
  ($ in millions)  Sept. 26, 2008  Sept. 28, 2007 $ Change  % Change  Growth
  Net Sales              $131           $123        $8         7%       6%
  Operating Income        $24            $19        $5        26%
  Restructuring-
   Related Costs           $1            $(2)
  Adjusted Operating
   Income                 $23            $21        $2        10%
  Operating Margin       18.3%          15.4%
  Adjusted Operating
   Margin                17.6%          17.1%

Sales in the segment grew 6 percent organically, primarily due to increased radio systems deployments and implementations. Adjusted operating income increased $2 million due to the higher sales volumes. Restructuring-related income in the quarter was $1 million, compared to $2 million of costs in the prior-year quarter. Sales and operating income in both periods benefitted from the federally-mandated rebanding efforts of a customer.

ABOUT TYCO ELECTRONICS

Tyco Electronics Ltd. is a leading global provider of engineered electronic components, network solutions, undersea telecommunication systems and wireless systems, with 2008 sales of $14.8 billion to customers in more than 150 countries. We design, manufacture and market products for customers in industries from automotive, appliance and aerospace and defense to telecommunications, computers and consumer electronics. With nearly 8,000 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. EST. The call can be accessed in three ways:

  -- At Tyco Electronics' website: http://investors.tycoelectronics.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 telephone dial-in number in the United States is
     (800) 398-9367.  The telephone dial-in number for participants outside
     the United States is (612) 338-1917.
  -- An audio replay of the conference call will be available beginning at
     10:30 a.m. on Nov. 6, 2008 and ending at 11:59 p.m. on Nov. 13, 2008.
     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 962724.


  NON-GAAP MEASURES

"Organic Sales Growth," "Adjusted Operating Income," "Adjusted Earnings Per Share," "Adjusted Operating Margin," 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. It is also a component of the company's compensation programs. 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 numbers. 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 unusual items including costs related to the separation, legal settlements, restructuring costs, impairment charges 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 related to litigation settlement costs, separation-related costs and restructuring 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 adjusted diluted earnings per share, which is earnings per share from continuing operations before unusual items, including costs related to the separation, legal settlements, restructuring costs, impairment charges, loss on retirement of debt and other income or charges ("Adjusted Earnings Per Share"). The company presents Adjusted Earnings Per Share because we believe that it is appropriate for investors to consider results excluding these items in addition to our results in accordance with GAAP. We believe such a measure provides a picture of our results that is more comparable among periods since it excludes the impact of unusual items, which may recur occasionally, 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 earnings per share (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 unusual items including costs related to the separation, legal settlements, restructuring costs and other income or charges ("Adjusted Operating Margin"). The company presents and forecasts its Adjusted Operating Margin before unusual 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.

"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 number 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 unusual 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 future such contributions. In addition, the company's forecast excludes the cash impact of unusual 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 numbers.

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.

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 or achievements to differ materially from anticipated results, performance 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. The forward-looking statements in this release include statements addressing the following subjects: future financial condition and operating results. Business, competitive, regulatory and/or economic factors (including recent developments in the credit markets and volatility in currencies) affecting Tyco Electronics' businesses are examples of factors, among others, that could cause actual results to differ materially from those described in the forward-looking statements. In addition, Tyco Electronics' historical combined financial information is not necessarily representative of the results it would have achieved as an independent, publicly-traded company and may not be a reliable indicator of its future results. 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. 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 September 28, 2007, as retrospectively adjusted to reflect the Radio Frequency Components and Subsystem and Automotive Sensors businesses as discontinued operations in the Company's Current Report on Form 8-K filed June 27, 2008, and Quarterly Reports on Form 10-Q for the quarterly periods ended December 28, 2007, March 28, 2008 and June 27, 2008, as well as in current reports on Form 8-K filed by Tyco Electronics.

                          TYCO ELECTRONICS LTD.
 CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS (UNAUDITED)

                        For the Quarters Ended     For the Years Ended
                        Sept. 26,    Sept. 28,    Sept. 26,    Sept. 28,
                           2008         2007         2008         2007
                               (in millions, except per share data)

  Net sales               $3,706       $3,488      $14,834      $12,959
  Cost of sales            2,795        2,605       11,064        9,620
    Gross income             911          883        3,770        3,339
  Selling, general, and
   administrative expenses   423          402        1,680        1,600
  Litigation settlement, net  (8)          (4)          22          887
  Separation costs             -           19            -           44
  Restructuring and other
   charges, net              123           50          185           92
  Impairment of goodwill
   and long-lived assets     137            -          137            -
    Income from operations   236          416        1,746          716
  Interest income              7           13           32           53
  Interest expense           (46)         (56)        (188)        (231)
  Other income (expense)     (39)          13          567         (219)
    Income from continuing
     operations before
     income taxes
     and minority interest   158          386        2,157          319
  Income taxes               (50)        (144)        (558)        (491)
  Minority interest           (1)          (3)          (5)          (6)
    Income (loss) from
     continuing operations   107          239        1,594         (178)
  Income (loss) from
   discontinued operations,
   net of income taxes        95           17          188         (376)
    Net income (loss)       $202         $256       $1,782        $(554)

  Basic earnings (loss)
   per share:
    Income (loss) from
     continuing operations $0.23        $0.48        $3.30       $(0.36)
    Income (loss) from
     discontinued
     operations             0.20         0.04         0.39        (0.75)
    Net income (loss)      $0.43        $0.52        $3.69       $(1.11)

  Diluted earnings (loss)
   per share:
    Income (loss) from
     continuing operations $0.23        $0.48        $3.28       $(0.36)
    Income (loss) from
     discontinued
     operations             0.20         0.03         0.39        (0.75)
    Net income (loss)      $0.43        $0.51        $3.67       $(1.11)

  Weighted-average number
   of shares outstanding:
    Basic                    470          496          483          497
    Diluted                  473          500          486          497



                          TYCO ELECTRONICS LTD.
            CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

                                               Sept. 26,          Sept. 28,
                                                  2008               2007
                                            (in millions, except share data)
  Assets
  Current Assets:
    Cash and cash equivalents                     $1,086              $942
    Accounts receivable, net of allowance
     for doubtful accounts of $42 and
     $57, respectively                             2,726             2,594
    Inventories                                    2,312             2,049
    Class action settlement escrow                     -               928
    Class action settlement receivable                 -             2,064
    Prepaid expenses and other current
     assets                                          767               589
    Deferred income taxes                            204               325
    Assets of discontinued operations                  -               505
      Total current assets                         7,095             9,996
  Property, plant, and equipment, net              3,517             3,412
  Goodwill                                         7,068             7,177
  Intangible assets, net                             486               526
  Deferred income taxes                            1,915             1,397
  Receivable from Tyco International
   Ltd. and Covidien                               1,218               844
  Other assets                                       301               336
      Total Assets                               $21,600           $23,688

  Liabilities and Shareholders' Equity
  Current Liabilities:
    Current maturities of long-term debt             $20                $5
    Accounts payable                               1,469             1,343
    Class action settlement liability                  -             2,992
    Accrued and other current liabilities          1,596             1,417
    Deferred revenue                                 247               181
    Liabilities of discontinued
     operations                                        -               266
      Total current liabilities                    3,332             6,204
  Long-term debt                                   3,161             3,373
  Long-term pension and postretirement
   liabilities                                       721               607
  Deferred income taxes                              289               271
  Income taxes                                     2,291             1,242
  Other liabilities                                  723               599
      Total Liabilities                           10,517            12,296
  Commitments and contingencies
  Minority interest                                   10                15
  Shareholders' equity:
      Preferred shares, $0.20 par
       value, 125,000,000 shares
       authorized; none outstanding                    -                 -
      Common shares, $0.20 par value,
       1,000,000,000 shares authorized;
       500,241,706 and 497,467,930 issued,
       respectively                                  100                99
      Capital in excess:
        Share premium                                 61                13
        Contributed surplus                       10,106            10,029
      Accumulated earnings                         1,141               186
      Treasury stock, at cost, 36,904,702
       and 44,454 shares, respectively            (1,264)               (2)
      Accumulated other comprehensive
       income                                        929             1,052
        Total Shareholders' Equity                11,073            11,377
        Total Liabilities and Shareholders'
         Equity                                  $21,600           $23,688



                          TYCO ELECTRONICS LTD.
 CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (UNAUDITED)

                               For the Quarters Ended  For the Years Ended
                                   Sept. 26, Sept. 28, Sept. 26, Sept. 28,
                                      2008      2007     2008     2007
                                                (in millions)
  Cash Flows From Operating Activities:
  Net income (loss)                    $202     $256   $1,782    $(554)
    (Income) loss from discontinued
     operations, net of income taxes    (95)     (17)    (188)     376
  Income (loss) from continuing
   operations                           107      239    1,594     (178)
  Adjustments to reconcile net cash
   provided by operating activities:
    Class action settlement               -       (4)    (936)     887
    Depreciation and amortization       145      133      559      514
    Deferred income taxes               (29)      42      174      163
    Tax sharing expense (income)         39      (13)    (567)     (13)
    Impairment of goodwill and
     long-lived assets                  137        -      137        -
    Loss on retirement of debt            -        -        -      232
    Other                                64        9      131       96
    Changes in assets and liabilities,
     net of the effects of acquisitions
     and divestitures:
      Accounts receivable, net           54      (12)    (106)     (96)
      Inventories                        27      113     (280)     (89)
      Accounts payable                  (28)      43       49       84
      Accrued and other liabilities     166      129      126      103
      Income taxes                       15       54       15     (109)
      Deferred revenue                   (3)     (25)     112       33
      Other                             (54)     (74)       6     (119)
        Net cash provided by continuing
         operating activities           640      634    1,014    1,508
        Net cash (used in) provided by
         discontinued operating
         activities                      (2)       9      (25)      17
        Net cash provided by operating
         activities                     638      643      989    1,525
  Cash Flows From Investing Activities:
  Capital expenditures                 (169)    (143)    (619)    (875)
  Proceeds from sale of property,
   plant, and equipment                   5        9       42       41
  Class action settlement escrow          -       (7)     936     (928)
  Proceeds from divestiture of
   discontinued operations, net of cash
   retained by businesses sold          469        -      571      227
  Other                                  (8)     (14)     (29)      (3)
        Net cash provided by
         (used in) continuing
         investing activities           297     (155)     901   (1,538)
        Net cash (used in) provided
         by discontinued investing
         activities                      (1)      24       (6)      10
        Net cash provided by (used in)
         investing activities           296     (131)     895   (1,528)
  Cash Flows From Financing Activities:
  Net (decrease) increase in commercial
   paper                                (21)       -      630        -
  Repayment of long-term debt          (400)  (2,381)  (1,751)  (2,455)
  Proceeds from long-term debt          400    2,045      900    5,676
  Allocated debt activity                 -        -        -   (3,743)
  Net transactions with former parent     -      (27)       -    1,112
  Repurchase of common shares          (410)       -   (1,242)       -
  Payment of common dividends           (66)       -     (271)       -
  Proceeds from exercise of share
   options                                3       13       54       13
  Transfers to discontinued operations  (69)      47      (80)    (134)
  Other                                   -      (12)     (12)     (15)
        Net cash (used in) provided
         by continuing financing
         activities                    (563)    (315)  (1,772)     454
        Net cash provided by
         (used in) discontinued
         financing activities            21      (34)      33      (23)
        Net cash (used in) provided by
         financing activities          (542)    (349)  (1,739)     431
  Effect of currency translation
   on cash                              (18)      24        1       46
  Net increase in cash and cash
   equivalents                          374      187      146      474
  Less: net (increase) decrease in
   cash and cash equivalents
   related to discontinued operations   (18)       1       (2)      (4)
  Cash and cash equivalents at
   beginning of period                  730      754      942      472
  Cash and cash equivalents at end
   of period                         $1,086     $942   $1,086     $942

  Supplemental Cash Flow Information:
  Income taxes paid, net of refunds     $64      $62     $369     $450

  Reconciliation to Free Cash Flow:
  Net cash provided by continuing
   operating activities                $640     $634   $1,014   $1,508
  Capital expenditures, net            (164)    (134)    (577)    (834)
  Class action settlement                 -        -      936        -
  Income tax advance payment              -        -        -      163
  Free cash flow (1)                   $476     $500   $1,373     $837


  (1) Free cash flow is a non-GAAP measure.  See description of non-GAAP
      measures contained in this release.



                          TYCO ELECTRONICS LTD.
            CONSOLIDATED AND COMBINED SEGMENT DATA (UNAUDITED)

                   For the Quarters Ended       For the Years Ended
                    Sept. 26,    Sept. 28,     Sept. 26,      Sept. 28,
                      2008         2007          2008           2007
                                     ($ in millions)

  Net Sales:
  Electronic
   Components        $2,713       $2,630        $11,043        $10,111
  Network Solutions     561          522          2,163          1,897
  Undersea
   Telecommunications   301          213          1,165            565
  Wireless Systems      131          123            463            386
    Total            $3,706       $3,488        $14,834        $12,959

  Income from
   Operations:
  Electronic
   Components           $99   3.6%  $347  13.2%  $1,287  11.7%  $1,339 13.2%
  Network Solutions      66  11.8%    46   8.8%     254  11.7%     231 12.2%
  Undersea
   Telecommunications    39  13.0%    19   8.9%     160  13.7%      38  6.7%
  Wireless Systems       24  18.3%    19  15.4%      67  14.5%      39 10.1%
  Litigation
   settlement, net
   and separation
   costs                  8          (15)           (22)          (931)
    Total              $236   6.4%  $416  11.9%  $1,746  11.8%    $716  5.5%



                          TYCO ELECTRONICS LTD.
               NET SALES GROWTH RECONCILIATION (UNAUDITED)

                                                               Percentage of
                                                                  Segment's
                                                                  Total Net
                                    Change in Net Sales for the      Sales
                                   Quarter Ended Sept. 26, 2008     for the
                                 versus Net Sales for the Quarter   Quarter
                                       Ended Sept. 28, 2007          Ended
                                                Trans-
                                                lation             Sept. 26,
                                    Organic(1)    (2)       Total      2008
                                             ($ in millions)
  Electronic Components (3):
    Automotive                     $(60)  (6.0)%  $62      $2    0.2%    37%
    Computer                        (32) (11.2)     8     (24)  (8.3)    10
    Communications                    9    4.0     14      23   10.0      9
    Industrial                       21   13.1     12      33   20.8      7
    Aerospace and Defense            14    8.9      4      18   11.8      6
    Appliance                         -    0.3      7       7    5.3      5
    Consumer Electronics              2    2.5      2       4    7.0      2
    Other                            (1)  (0.1)    21      20    3.3     24
      Total                         (47)  (1.8)   130      83    3.2    100%
  Network Solutions (3):
    Energy                           11    4.8     14      25   10.7     46%
    Communication Service Provider   (5)  (4.0)     3      (2)  (1.4)    26
    Building Networks                 7    5.8      6      13   10.2     25
    Other                             2   11.7      1       3   20.0      3
      Total                          15    2.8     24      39    7.5    100%
  Undersea Telecommunications        88   41.5      -      88   41.3
  Wireless Systems                    7    6.1      1       8    6.5
      Total                         $63    1.8%  $155    $218    6.3%


                                                                  Percentage
                                                                       of
                                                                   Segment's
                                                                   Total Net
                             Change in Net Sales for the Year Ended   Sales
                                 Sept. 26, 2008 versus Net Sales     for the
                                      for  the Year Ended             Year
                                        Sept. 28, 2007               Ended
                                                Trans-
                                                lation             Sept. 26,
                                   Organic(1)     (2)      Total       2008
                                          ($ in millions)
  Electronic Components (3):
    Automotive                     $110    2.8%  $354    $464   11.8%    40%
    Computer                        (66)  (6.2)    38     (28)  (2.6)     9
    Communications                   98   12.1     58     156   19.2      9
    Industrial                       87   15.0     55     142   24.5      6
    Aerospace and Defense            51    8.7     30      81   13.9      6
    Appliance                        (9)  (1.8)    33      24    4.7      5
    Consumer Electronics             (7)  (3.1)    12       5    2.3      2
    Other                           (21)  (0.9)   109      88    3.7     23
      Total                         243    2.4    689     932    9.2    100%
  Network Solutions (3):
    Energy                           49    5.7     78     127   15.0     45%
    Communication Service
     Provider                        17    3.2     31      48    9.0     27
    Building Networks                51   11.3     37      88   19.3     25
    Other                            (1)  (2.5)     4       3    4.9      3
      Total                         116    6.1    150     266   14.0    100%
  Undersea Telecommunications       597  105.7      3     600  106.2
  Wireless Systems                   69   18.0      8      77   19.9
      Total                      $1,025    7.9%  $850  $1,875   14.5%


  (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.
          ADJUSTED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
                   For the Quarter Ended Sept. 26, 2008

                                                 Adjustments

                                               Impairment
                                                   of
                                       Restruc- Goodwill
                                       turing     and               Adjusted
                                         and     Long-       Other  Results
                                        Other    lived  Tax  Items,  (Non-
                                 U.S.  Charges, Assets Items  Net    GAAP)
                                 GAAP    Net      (1)   (2)   (3)     (4)
                                    (in millions, except per share data)

  Net sales                    $3,706     $-      $-    $-    $-    $3,706
  Cost of sales                 2,795     (8)      -     -     -     2,787
    Gross income                  911      8       -     -     -       919
  Selling, general, and
   administrative expenses        423      -       -     -    (8)      415
  Litigation settlement, net       (8)     -       -     -     8         -
  Restructuring and other
   charges, net                   123   (123)      -     -     -         -
  Impairment of goodwill and
   long-lived assets              137      -    (137)    -     -         -
    Income from operations        236    131     137     -     -       504
  Interest income                   7      -       -     -     -         7
  Interest expense                (46)     -       -     -     -       (46)
  Other income                    (39)     -       -    54     -        15
    Income from continuing
     operations before income
     taxes and minority
     interest                     158    131     137    54     -       480
  Income taxes                    (50)     5     (27)  (76)   (4)     (152)
  Minority interest                (1)     -       -     -     -        (1)
    Income from continuing
     operations                  $107   $136    $110  $(22)  $(4)     $327

  Basic earnings per share:
    Income from continuing
     operations                 $0.23                                $0.70
  Diluted earnings per share:
    Income from continuing
     operations                 $0.23                                $0.69

  Weighted-average number of
   shares outstanding:
    Basic                         470                                  470
    Diluted                       473                                  473




    ADJUSTED CONSOLIDATED INCOME FROM OPERATIONS BY SEGMENT (UNAUDITED)
                 For the Quarter Ended Sept. 26, 2008

                                                  Adjustments

                                               Impairment
                                                  of
                                       Restruc- Goodwill
                                        turing   and               Adjusted
                                         and     Long-       Other  Results
                                        Other   lived   Tax  Items,  (Non-
                                  U.S. Charges, Assets Items  Net    GAAP)
                                 GAAP    Net      (1)   (1)   (1)    (2)
                                                 (in millions)
  Income from Operations:
  Electronic Components           $99   $125    $137    $-    $8       $369
  Network Solutions                66      5       -     -     -         71
  Undersea Telecommunications      39      2       -     -     -         41
  Wireless Systems                 24     (1)      -     -     -         23
  Litigation settlement, net        8      -       -     -    (8)         -
    Total                        $236   $131    $137    $-    $-       $504


  (1) Consists of goodwill impairment of $103 million and long-lived
      asset impairment of $34 million.
  (2) Includes $22 million of income related to various tax matters,
      including a tax settlement.
  (3) Consists of $8 million of income related to insurance recoveries on
      legacy securities litigation and $8 million of costs related to a
      customs settlement.
  (4) Adjusted results is a non-GAAP measure.  See description of non-
      GAAP measures contained in this release.



                           TYCO ELECTRONICS LTD.
         ADJUSTED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
                 For the Quarter Ended Sept. 28, 2007

                                                  Adjustments

                                                 Restructuring
                                                   and Other
                                                   Charges,
                                                     Net            Adjusted
                                        Separation   and    Other   Results
                                          Related  Related  Items,   (Non-
                                    U.S.   Costs    Costs    Net     GAAP)
                                    GAAP    (1)      (2)     (3)      (4)
                                     (in millions, except per share data)

  Net sales                       $3,488      $-      $-      $-    $3,488
  Cost of sales                    2,605       -      (8)      -     2,597
    Gross income                     883       -       8       -       891
  Selling, general, and
   administrative expenses           402       -       -       -       402
  Litigation settlement, net          (4)      -       -       4         -
  Separation costs                    19     (19)      -       -         -
  Restructuring and other
   charges, net                       50       -     (50)      -         -
    Income from operations           416      19      58      (4)      489
  Interest income                     13       -       -       -        13
  Interest expense                   (56)      -       -       -       (56)
  Other expense                       13       -       -       -        13
    Income from continuing
     operations before income
     taxes and minority interest     386      19      58      (4)      459
  Income taxes                      (144)     (6)    (18)      -      (168)
  Minority interest                   (3)      -       -       -        (3)
    Income from continuing
     operations                     $239     $13     $40     $(4)     $288

  Basic earnings per share:
    Income from continuing
     operations                    $0.48                             $0.58
  Diluted earnings per share:
    Income from continuing
     operations                    $0.48                             $0.58

  Weighted-average number of
   shares outstanding:
    Basic                            496                               496
    Diluted                          500                               500




    ADJUSTED CONSOLIDATED INCOME FROM OPERATIONS BY SEGMENT (UNAUDITED)
                  For the Quarter Ended Sept. 28, 2007

                                                   Adjustments

                                                  Restructuring
                                                   and Other
                                                    Charges,
                                                     Net            Adjusted
                                         Separation  and    Other   Results
                                          Related  Related  Items,  (Non-
                                    U.S.   Costs    Costs    Net    GAAP)
                                    GAAP    (1)      (2)     (3)     (4)
                                                  (in millions)
  Income from Operations:
  Electronic Components             $347      $-     $23      $-      $370
  Network Solutions                   46       -      31       -        77
  Undersea Telecommunications         19       -       2       -        21
  Wireless Systems                    19       -       2       -        21
  Litigation settlement, net and
   separation costs                  (15)     19       -      (4)        -
    Total                           $416     $19     $58     $(4)     $489


  (1) Includes $19 million of separation costs, primarily related to
      employee costs.
  (2) Includes $55 million of net restructuring and other charges, of
      which $5 million is recorded in cost of sales, and $3 million of
      restructuring related moving costs (recorded in cost of goods sold).
  (3) Consists of $4 million of income related to an insurance recovery on
      legacy securities litigation.
  (4) Adjusted results is a non-GAAP measure.  See description of non-GAAP
      measures contained in this release.



                            TYCO ELECTRONICS LTD.
          ADJUSTED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
                    For the Year Ended Sept. 26, 2008

                                                Adjustments

                                              Impairment
                                                  of
                                      Restruc- Goodwill
                                       turing    and                Adjusted
                                        and     Long-        Other   Results
                                       Other    lived   Tax  Items,  (Non-
                               U.S.   Charges, Assets  Items  Net     GAAP)
                               GAAP     Net     (1)     (2)   (3)     (4)
                                   (in millions, except per share data)
  Net sales                 $14,834      $-      $-     $-    $-    $14,834
  Cost of sales              11,064      (9)      -      -     -     11,055
    Gross income              3,770       9       -      -     -      3,779
  Selling, general, and
   administrative expenses    1,680       -       -      -    28      1,708
  Litigation settlement,
   net                           22       -       -      -   (22)         -
  Restructuring and other
   charges, net                 185    (185)      -      -     -          -
  Impairment of goodwill and
   long-lived assets            137       -    (137)     -     -          -
    Income from operations    1,746     194     137      -    (6)     2,071
  Interest income                32       -       -      -     -         32
  Interest expense             (188)      -       -      -     -       (188)
  Other income                  567       -       -   (518)    -         49
    Income from continuing
     operations before income
     taxes and minority
     interest                 2,157     194     137   (518)   (6)     1,964
  Income taxes                 (558)    (14)    (27)   (76)   16       (659)
  Minority interest              (5)      -       -      -     -         (5)
    Income from continuing
     operations              $1,594    $180    $110  $(594)  $10     $1,300

  Basic earnings per share:
    Income from continuing
     operations               $3.30                                   $2.69
  Diluted earnings per share:
    Income from continuing
     operations               $3.28                                   $2.67

  Weighted-average number of
   shares outstanding:
    Basic                       483                                     483
    Diluted                     486                                     486



     ADJUSTED CONSOLIDATED INCOME FROM OPERATIONS BY SEGMENT (UNAUDITED)
                    For the Year Ended Sept. 26, 2008

                                                  Adjustments

                                              Impairment
                                                  of
                                      Restruc- Goodwill
                                      turing    and                 Adjusted
                                        and    Long-         Other  Results
                                       Other   lived    Tax  Items, (Non-
                               U.S.   Charges, Assets  Items  Net    GAAP)
                               GAAP     Net     (1)     (2)   (3)     (4)
                                                 (in millions)
  Income from Operations:
  Electronic Components      $1,287    $166    $137     $-   $(28)   $1,562
  Network Solutions             254      23       -      -      -       277
  Undersea Telecommunications   160       5       -      -      -       165
  Wireless Systems               67       -       -      -      -        67
  Litigation settlement, net    (22)      -       -      -     22         -
    Total                    $1,746    $194    $137     $-    $(6)   $2,071


  (1) Consists of goodwill impairment of $103 million and long-lived asset
      impairment of $34 million.
  (2) In connection with the adoption of FIN 48, the Company recorded other
      income of $545 million pursuant to its Tax Sharing Agreement with Tyco
      International and Covidien.  The Company also recorded income of $49
      million related to various tax matters,
  (3) Consists of $22 million of net costs related to the settlement of
      legacy securities litigation, $36 million gain on the sale of real
      estate, and $8 million of costs related to a customs settlement.
  (4) Adjusted results is a non-GAAP measure.  See description of non-GAAP
      measures contained in this release.



                            TYCO ELECTRONICS LTD.
    ADJUSTED CONSOLIDATED AND COMBINED STATEMENT OF OPERATIONS (UNAUDITED)
                For the Twelve Months Ended Sept. 28, 2007

                                                   Adjustments

                                                Restructuring
                                                  and Other
                                                   Charges,
                                                     Net            Adjusted
                                        Separation   and    Other   Results
                                          Related  Related  Items,   (Non-
                                    U.S.   Costs    Costs    Net     GAAP)
                                    GAAP    (1)      (2)     (3)      (4)
                                      (in millions, except per share data)

  Net sales                      $12,959     $-       $-      $-    $12,959
  Cost of sales                    9,620      -       (8)      -      9,612
    Gross income                   3,339      -        8       -      3,347
  Selling, general, and
   administrative expenses         1,600    (41)       -       -      1,559
  Litigation settlement, net         887      -        -    (887)         -
  Separation costs                    44    (44)       -       -          -
  Restructuring and other
   charges, net                       92      -      (92)      -          -
    Income from operations           716     85      100     887      1,788
  Interest income                     53      -        -       -         53
  Interest expense                  (231)     -        -       -       (231)
  Other (expense) income, net       (219)     -        -     232         13
    Income from continuing
     operations before income
     taxes and minority interest     319     85      100   1,119      1,623
  Income taxes                      (491)   (25)     (32)      -       (548)
  Minority interest                   (6)     -        -       -         (6)
    Income (loss) from continuing
     operations                    $(178)   $60      $68  $1,119     $1,069

  Basic earnings (loss) per share:
    Income (loss) from continuing
     operations                   $(0.36)                             $2.15
  Diluted earnings (loss) per
   share:
    Income (loss) from continuing
     operations                   $(0.36)                             $2.14

  Weighted-average number of
   shares outstanding:
    Basic                            497                                497
    Diluted                          497                                500



   ADJUSTED CONSOLIDATED AND COMBINED INCOME FROM OPERATIONS BY SEGMENT
                                (UNAUDITED)
              For the Twelve Months Ended Sept. 28, 2007

                                                   Adjustments

                                                Restructuring
                                                  and Other
                                                   Charges,
                                                     Net            Adjusted
                                        Separation   and    Other   Results
                                          Related  Related  Items,   (Non-
                                    U.S.   Costs    Costs    Net     GAAP)
                                    GAAP    (1)      (2)     (3)      (4)
                                                 (in millions)
  Income from Operations:
  Electronic Components           $1,339    $33      $57      $-     $1,429
  Network Solutions                  231      5       35       -        271
  Undersea Telecommunications         38      1        5       -         44
  Wireless Systems                    39      2        3       -         44
  Litigation settlement, net and
   separation costs                 (931)    44        -     887          -
    Total                           $716    $85     $100    $887     $1,788

  (1) Includes $44 million of separation costs, primarily related to
      employee costs, and $41 million of costs related to building separate
      company functions that did not exist in the prior year.
  (2) Includes $97 million of net restructuring and other charges, of
      which $5 million is recorded in cost of sales, and $3 million of
      restructuring related moving costs (recorded in cost of goods sold).
  (3) Consists of $887 million of net costs related to legacy securities
      litigation and a $232 million loss on retirement of debt.
  (4) Adjusted results is a non-GAAP measure.  See description of non-
      GAAP measures contained in this release.

SOURCE: Tyco Electronics Ltd.

CONTACT: Media Relations, Sheri Woodruff, +1-610-893-9555, Office, or
+1-609-933-9243, Mobile, swoodruff@tycoelectronics.com; Investor Relations,
John Roselli, +1-610-893-9559, Office, john.roselli@tycoelectronics.com, or
Keith Kolstrom, +1-610-893-9551, Office, keith.kolstrom@tycoelectronics.com,
all of Tyco Electronics Ltd.

Web site: http://www.tycoelectronics.com/
http://investors.tycoelectronics.com/


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