10-KPeriod: FY2007

TE Connectivity plc Annual Report, Year Ended Sep 28, 2007

Filed December 14, 2007For Securities:TEL

Summary

Tyco Electronics Ltd. (now TE Connectivity Ltd.) is a global provider of engineered electronic components, network solutions, wireless systems, and undersea telecommunication systems. The company completed its separation from Tyco International Ltd. on June 29, 2007, becoming an independent, publicly traded entity. For fiscal year 2007, the company reported net sales of $13.46 billion. The Electronic Components segment was the largest contributor, accounting for 75% of net sales, serving diverse markets including automotive, telecommunications, and computer. The company faced challenges including raw material price increases and industry-wide price erosion, which impacted gross margins. Significant events in 2007 included substantial class action settlement costs and separation expenses, leading to a net loss for the year. Despite these challenges, the company highlighted its competitive strengths such as global leadership in passive components, strong customer relationships, and process/product technology leadership.

Financial Highlights

30 data points
Beta

Revenue

$12.57B

29.6% Gross Margin

Net Income

-$554.00M

-4.4% Net Margin

EPS (Diluted)

$-1.11

Cash & Equivalents

$944.00M

Free Cash Flow

$662.00M

Financial Statements
Beta
Revenue$12.57B
Cost of Revenue$8.86B
Gross Profit$3.72B
SG&A Expenses$1.51B
Operating Income$655.00M
Interest Expense$232.00M
Net Income-$554.00M
EPS (Basic)$-1.11
EPS (Diluted)$-1.11
Shares Outstanding (Basic)497.00M
Shares Outstanding (Diluted)497.00M

Key Highlights

  • 1Completed separation from Tyco International Ltd. to become an independent, publicly traded company on June 29, 2007.
  • 2Reported net sales of $13.46 billion for fiscal year 2007.
  • 3Electronic Components segment was the largest revenue driver (75% of net sales), with strong performance in Automotive, Computer, and Industrial markets.
  • 4Faced increased raw material costs (copper, gold) and industry price erosion, impacting gross margins.
  • 5Incurred significant class action settlement costs ($887 million net) and separation costs ($45 million) in fiscal year 2007, resulting in a net loss of $554 million.
  • 6Invested heavily in capital expenditures ($892 million) to support new programs and manufacturing enhancements, including the purchase of cable-laying sea vessels.
  • 7Demonstrated a balanced geographic sales mix, with 37% from the Americas, 36% from EMEA, and 27% from Asia-Pacific.

Frequently Asked Questions

In fiscal year 2007, Tyco Electronics reported net sales of $13.46 billion. However, the company experienced a net loss of $554 million, impacted by significant class action settlement costs of $887 million (net) and separation costs of $45 million. The company's gross margin also decreased due to higher raw material costs and lower plant productivity in certain regions.

Tyco Electronics operates through four segments: Electronic Components (75% of net sales), Network Solutions (14%), Wireless Systems (7%), and Undersea Telecommunications (4%). The Electronic Components segment is the largest contributor, serving diverse industries such as automotive, computer, and telecommunications.

The most significant event was the company's separation from Tyco International Ltd. on June 29, 2007, marking its debut as an independent public company. Other key events included a large class action settlement allocation, increased capital expenditures, and ongoing initiatives for manufacturing simplification and cost reduction.

In 2007, Tyco Electronics raised significant capital through the issuance of senior notes totaling $1.8 billion and entered into substantial credit facilities. Net cash provided by operating activities was $1.54 billion. The company also used a portion of its operating cash flow to fund capital expenditures of $892 million, including the purchase of sea vessels. Debt levels decreased from the prior year, and the company was in compliance with its debt covenants.