01—Abstract
Summary
Summary of the 10-K filed November 12, 2014. Cited figures are marked; the original filing is the authoritative source.
TE Connectivity Ltd. reported strong performance for the fiscal year ended September 26, 2014, with net sales increasing by 4.8% to $13.9 billiona, driven primarily by growth in its Transportation Solutions segment.
The company highlighted its competitive strengths, including a diverse product portfolio, strong customer relationships, and a global presence. Management expressed optimism for fiscal year 2015, forecasting net sales between $14.7 billionb and $15.3 billion, supported by anticipated growth in automotive production and contributions from acquisitions.
The company's financial health remains robust, with significant cash flow generation and a manageable debt level, although it continues to navigate economic uncertainties and foreign currency fluctuations. Key investments in research and development and strategic acquisitions underscore its commitment to innovation and market expansion.
02—Key points
Key Highlights
- Net sales increased by 4.8% to $13.9 billion in fiscal year 2014, primarily driven by a 11.0% increase in the Transportation Solutions segment.
- The company completed the acquisition of Measurement Specialties for approximately $1.7 billion in October 2014, expanding its sensor capabilities.
- Organic net sales grew by 4.6% in fiscal 2014, indicating underlying business strength beyond currency impacts and acquisitions.
- Operating income increased to $2.05 billion in fiscal 2014, reflecting improved gross margins and operational efficiencies.
- Free cash flow remained strong, totaling $1.73 billion in fiscal 2014, enabling robust capital allocation for share repurchases and strategic investments.
- The company repurchased approximately $604 million of its common shares in fiscal 2014, demonstrating a commitment to returning value to shareholders.
- Fiscal 2014 results included a significant income tax benefit of $282 million related to a reduction in the valuation allowance for certain tax loss carryforwards.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2014, TE Connectivity plc kept $0.15.
- Revenue$11.97B100.0%
- Cost of revenue−$8.00B66.8%
- Gross profit$3.97B33.2%
- Operating costs−$2.17B18.1%
- Operating income$1.80B15.1%
- Interest, other & tax−$24.0M0.2%
- Net income$1.78B14.9%
Where FY2014 revenue went
$11.97B- Cost of revenue: $8.00B, 67% of revenue
- Net income: $1.78B, 15% of revenue
- SG&A: $1.53B, 13% of revenue
- R&D: $484.0M, 4.0% of revenue
- Other operating costs: $149.0M, 1.2% of revenue
Kept 15% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2014filed November 12, 2014Financial Statements
FY2014 against FY2013
| Line item | FY2014FY2013 | Change |
|---|---|---|
| Revenue | $11.97B$11.39B | +5.1% |
| Cost of Revenue | $8.00B$7.74B | +3.4% |
| Gross Profit | $3.97B$3.65B | +8.8% |
| R&D Expenses | $484.00M$494.00M | −2.0% |
| SG&A Expenses | $1.53B$1.44B | +6.5% |
| Operating Income | $1.80B$1.39B | +30.3% |
| Interest Expense | $127.00M$139.00M | −8.6% |
| Net Income | $1.78B$1.28B | +39.6% |
| EPS (Basic) | $4.34$3.05 | +42.3% |
| EPS (Diluted) | $4.27$3.02 | +41.4% |
| Shares Outstanding (Basic) | 410.00M418.00M | −1.9% |
| Shares Outstanding (Diluted) | 417.00M423.00M | −1.4% |
05—Questions
Frequently Asked Questions
What were TE Connectivity's main business segments and their contribution to revenue in fiscal year 2014?
TE Connectivity operated through four reporting segments: Transportation Solutions (44% of net sales), Industrial Solutions (24%), Network Solutions (21%), and Consumer Solutions (11%). The Transportation Solutions segment was the largest contributor to revenue.
How did the company's financial performance evolve from fiscal year 2013 to 2014?
Net sales increased by 4.8% to $13.9 billion in fiscal year 2014 from $13.3 billion in fiscal year 2013. This growth was driven by a 10.4% increase in organic net sales, particularly in the Transportation Solutions and Industrial Solutions segments. Operating income also saw a substantial increase, rising to $2.05 billion from $1.56 billion.
What were the significant acquisitions and their impact on the company's financial statements?
In fiscal 2014, TE Connectivity acquired six companies, including SEACON for $528 million. Most significantly, the acquisition of Measurement Specialties for approximately $1.7 billion was completed shortly after the fiscal year-end in October 2014. The Deutsch acquisition in fiscal 2012 had also significantly contributed to the company's scale and market position.
What is the company's outlook for fiscal year 2015?
TE Connectivity projected net sales for fiscal year 2015 to be between $14.7 billion and $15.3 billion, anticipating continued growth in its key markets, especially automotive, and further benefits from strategic acquisitions. Diluted earnings per share were expected to be in the range of $3.99 to $4.29.
06—Continue