Tyco Electronics Group S.A. (Tables)

6 Months Ended

Mar. 25, 2016

Tyco Electronics Group S.A.

Condensed Consolidating Statement of Operations

Condensed Consolidating Statement of Operations (UNAUDITED)
For the Quarter Ended March 25, 2016

	TE Connectivity Ltd.			TEGSA			Other Subsidiaries			Consolidating Adjustments			Total
	(in millions)
Net sales	$	—		$	—		$	2,952		$	—		$	2,952
Cost of sales		—			—			1,990			—			1,990
Gross margin		—			—			962			—			962
Selling, general, and administrative expenses(1)		49			65			253			—			367
Research, development, and engineering expenses		—			—			156			—			156
Acquisition and integration costs		—			—			3			—			3
Restructuring and other credits, net		—			—			(99	)		—			(99	)
Operating income (loss)		(49	)		(65	)		649			—			535
Interest income		—			—			4			—			4
Interest expense		—			(31	)		(1	)		—			(32	)
Other income, net		—			—			12			—			12
Equity in net income of subsidiaries		445			526			—			(971	)		—
Equity in net income (loss) of subsidiaries of discontinued operations		(9	)		60			—			(51	)		—
Intercompany interest income (expense), net		(7	)		15			(8	)		—			—
Income from continuing operations before income taxes		380			505			656			(1,022	)		519
Income tax expense		—			—			(130	)		—			(130	)
Income from continuing operations		380			505			526			(1,022	)		389
Income (loss) from discontinued operations, net of income taxes(2)		—			(69	)		60			—			(9	)
Net income		380			436			586			(1,022	)		380
Other comprehensive income		14			14			29			(43	)		14
Comprehensive income	$	394		$	450		$	615		$	(1,065	)	$	394

(1)	TEGSA selling, general, and administrative expenses include losses of $37 million related to intercompany transactions. These losses are offset by corresponding gains recorded by Other Subsidiaries.
(2)	Includes the internal allocation of gains and losses associated with the divestiture of our BNS business.

Condensed Consolidating Statement of Operations (UNAUDITED)
For the Quarter Ended March 27, 2015

	TE Connectivity Ltd.			TEGSA			Other Subsidiaries			Consolidating Adjustments			Total
	(in millions)
Net sales	$	—		$	—		$	3,082		$	—		$	3,082
Cost of sales		—			—			2,031			—			2,031
Gross margin		—			—			1,051			—			1,051
Selling, general, and administrative expenses(1)		37			(146	)		500			—			391
Research, development, and engineering expenses		—			—			160			—			160
Acquisition and integration costs		—			—			14			—			14
Restructuring and other charges, net		—			—			38			—			38
Operating income (loss)		(37	)		146			339			—			448
Interest income		—			—			4			—			4
Interest expense		—			(36	)		(1	)		—			(37	)
Other expense, net		—			—			(5	)		—			(5	)
Equity in net income of subsidiaries		351			229			—			(580	)		—
Equity in net income of subsidiaries of discontinued operations		283			283			—			(566	)		—
Intercompany interest income (expense), net		2			12			(14	)		—			—
Income from continuing operations before income taxes		599			634			323			(1,146	)		410
Income tax expense		—			—			(94	)		—			(94	)
Income from continuing operations		599			634			229			(1,146	)		316
Income from discontinued operations, net of income taxes		—			—			283			—			283
Net income		599			634			512			(1,146	)		599
Other comprehensive loss		(193	)		(193	)		(195	)		388			(193	)
Comprehensive income	$	406		$	441		$	317		$	(758	)	$	406

(1) TEGSA selling, general, and administrative expenses include gains of $123 million related to intercompany transactions. These gains are offset by corresponding losses recorded by Other Subsidiaries.

Condensed Consolidating Statement of Operations (UNAUDITED)
For the Six Months Ended March 25, 2016

	TE Connectivity Ltd.			TEGSA			Other Subsidiaries			Consolidating Adjustments			Total
	(in millions)
Net sales	$	—		$	—		$	5,785		$	—		$	5,785
Cost of sales		—			—			3,878			—			3,878
Gross margin		—			—			1,907			—			1,907
Selling, general, and administrative expenses(1)		85			37			585			—			707
Research, development, and engineering expenses		—			—			318			—			318
Acquisition and integration costs		—			—			8			—			8
Restructuring and other credits, net		—			—			(59	)		—			(59	)
Operating income (loss)		(85	)		(37	)		1,055			—			933
Interest income		—			—			10			—			10
Interest expense		—			(61	)		(1	)		—			(62	)
Other income, net		—			—			20			—			20
Equity in net income of subsidiaries		806			877			—			(1,683	)		—
Equity in net income of subsidiaries of discontinued operations		20			136			—			(156	)		—
Intercompany interest income (expense), net		(8	)		27			(19	)		—			—
Income from continuing operations before income taxes		733			942			1,065			(1,839	)		901
Income tax expense		—			—			(188	)		—			(188	)
Income from continuing operations		733			942			877			(1,839	)		713
Income (loss) from discontinued operations, net of income taxes(2)		—			(116	)		136			—			20
Net income		733			826			1,013			(1,839	)		733
Other comprehensive loss		(76	)		(76	)		(57	)		133			(76	)
Comprehensive income	$	657		$	750		$	956		$	(1,706	)	$	657

(1)	TEGSA selling, general, and administrative expenses include losses of $37 million related to intercompany transactions. These losses are offset by corresponding gains recorded by Other Subsidiaries.
(2)	Includes the internal allocation of gains and losses associated with the divestiture of our BNS business.

Condensed Consolidating Statement of Operations (UNAUDITED)
For the Six Months Ended March 27, 2015

	TE Connectivity Ltd.			TEGSA			Other Subsidiaries			Consolidating Adjustments			Total
	(in millions)
Net sales	$	—		$	—		$	6,131		$	—		$	6,131
Cost of sales		—			—			4,060			—			4,060
Gross margin		—			—			2,071			—			2,071
Selling, general, and administrative expenses(1)		78			(155	)		854			—			777
Research, development, and engineering expenses		—			—			320			—			320
Acquisition and integration costs		—			—			38			—			38
Restructuring and other charges, net		—			—			63			—			63
Operating income (loss)		(78	)		155			796			—			873
Interest income		—			—			9			—			9
Interest expense		—			(70	)		(1	)		—			(71	)
Other expense, net		—			—			(75	)		—			(75	)
Equity in net income of subsidiaries		825			715			—			(1,540	)		—
Equity in net income of subsidiaries of discontinued operations		320			320			—			(640	)		—
Intercompany interest income (expense), net		4			25			(29	)		—			—
Income from continuing operations before income taxes		1,071			1,145			700			(2,180	)		736
Income tax benefit		—			—			15			—			15
Income from continuing operations		1,071			1,145			715			(2,180	)		751
Income from discontinued operations, net of income taxes		—			—			320			—			320
Net income		1,071			1,145			1,035			(2,180	)		1,071
Other comprehensive loss		(399	)		(399	)		(403	)		802			(399	)
Comprehensive income	$	672		$	746		$	632		$	(1,378	)	$	672

(1) TEGSA selling, general, and administrative expenses include gains of $123 million related to intercompany transactions. These gains are offset by corresponding losses recorded by Other Subsidiaries.

Condensed Consolidating Balance Sheet

Condensed Consolidating Balance Sheet (UNAUDITED)
As of March 25, 2016

	TE Connectivity Ltd.		TEGSA		Other Subsidiaries		Consolidating Adjustments			Total
	(in millions)
Assets
Current assets:
Cash and cash equivalents	$	—	$	—	$	1,150	$	—		$	1,150
Accounts receivable, net		—		—		2,095		—			2,095
Inventories		—		—		1,635		—			1,635
Intercompany receivables		21		2,133		237		(2,391	)		—
Prepaid expenses and other current assets		8		10		516		—			534
Total current assets		29		2,143		5,633		(2,391	)		5,414
Property, plant, and equipment, net		—		—		2,899		—			2,899
Goodwill		—		—		4,673		—			4,673
Intangible assets, net		—		—		1,435		—			1,435
Deferred income taxes		—		—		2,458		—			2,458
Investment in subsidiaries		10,009		20,160		—		(30,169	)		—
Intercompany loans receivable		18		2,489		10,662		(13,169	)		—
Receivable from Tyco International plc and Covidien plc		—		—		679		—			679
Other assets		—		17		266		—			283
Total Assets	$	10,056	$	24,809	$	28,705	$	(45,729	)	$	17,841
Liabilities and Shareholders' Equity
Current liabilities:
Current maturities of long-term debt	$	—	$	150	$	2	$	—		$	152
Accounts payable		2		—		1,114		—			1,116
Accrued and other current liabilities		610		46		1,063		—			1,719
Deferred revenue		—		—		110		—			110
Intercompany payables		2,038		205		148		(2,391	)		—
Total current liabilities		2,650		401		2,437		(2,391	)		3,097
Long-term debt		—		3,731		1		—			3,732
Intercompany loans payable		—		10,661		2,508		(13,169	)		—
Long-term pension and postretirement liabilities		—		—		1,315		—			1,315
Deferred income taxes		—		—		291		—			291
Income taxes		—		—		1,552		—			1,552
Other liabilities		—		7		441		—			448
Total Liabilities		2,650		14,800		8,545		(15,560	)		10,435
Total Shareholders' Equity		7,406		10,009		20,160		(30,169	)		7,406
Total Liabilities and Shareholders' Equity	$	10,056	$	24,809	$	28,705	$	(45,729	)	$	17,841

Condensed Consolidating Balance Sheet (UNAUDITED)
As of September 25, 2015

	TE Connectivity Ltd.		TEGSA		Other Subsidiaries		Consolidating Adjustments			Total
	(in millions)
Assets
Current assets:
Cash and cash equivalents	$	—	$	—	$	3,329	$	—		$	3,329
Accounts receivable, net		—		—		2,120		—			2,120
Inventories		—		—		1,615		—			1,615
Intercompany receivables		813		389		66		(1,268	)		—
Prepaid expenses and other current assets		4		4		468		—			476
Deferred income taxes		—		—		345		—			345
Total current assets		817		393		7,943		(1,268	)		7,885
Property, plant, and equipment, net		—		—		2,920		—			2,920
Goodwill		—		—		4,824		—			4,824
Intangible assets, net		—		—		1,555		—			1,555
Deferred income taxes		—		—		2,144		—			2,144
Investment in subsidiaries		9,505		19,645		—		(29,150	)		—
Intercompany loans receivable		22		2,328		8,110		(10,460	)		—
Receivable from Tyco International plc and Covidien plc		—		—		964		—			964
Other assets		—		27		270		—			297
Total Assets	$	10,344	$	22,393	$	28,730	$	(40,878	)	$	20,589
Liabilities and Shareholders' Equity
Current liabilities:
Current maturities of long-term debt	$	—	$	498	$	—	$	—		$	498
Accounts payable		2		—		1,141		—			1,143
Accrued and other current liabilities		442		75		1,232		—			1,749
Deferred revenue		—		—		185		—			185
Intercompany payables		311		824		133		(1,268	)		—
Total current liabilities		755		1,397		2,691		(1,268	)		3,575
Long-term debt		—		3,385		1		—			3,386
Intercompany loans payable		4		8,106		2,350		(10,460	)		—
Long-term pension and postretirement liabilities		—		—		1,327		—			1,327
Deferred income taxes		—		—		329		—			329
Income taxes		—		—		1,954		—			1,954
Other liabilities		—		—		433		—			433
Total Liabilities		759		12,888		9,085		(11,728	)		11,004
Total Shareholders' Equity		9,585		9,505		19,645		(29,150	)		9,585
Total Liabilities and Shareholders' Equity	$	10,344	$	22,393	$	28,730	$	(40,878	)	$	20,589

Condensed Consolidating Statement of Cash Flows

Condensed Consolidating Statement of Cash Flows (UNAUDITED)
For the Six Months Ended March 25, 2016

	TE Connectivity Ltd.			TEGSA			Other Subsidiaries			Consolidating Adjustments			Total
	(in millions)
Cash Flows From Operating Activities:
Net cash provided by (used in) continuing operating activities	$	(119	)	$	(98	)	$	739		$	—		$	522
Net cash used in discontinued operating activities		—			—			(2	)		—			(2	)
Net cash provided by (used in) operating activities		(119	)		(98	)		737			—			520
Cash Flows From Investing Activities:
Capital expenditures		—			—			(270	)		—			(270	)
Proceeds from sale of property, plant, and equipment		—			—			1			—			1
Acquisition of businesses, net of cash acquired		—			—			(6	)		—			(6	)
Proceeds from divestiture of business, net of cash retained by business sold		—			199			62			—			261
Change in intercompany loans		—			(137	)		—			137			—
Other(1)		—			(132	)		161			—			29
Net cash provided by (used in) investing activities		—			(70	)		(52	)		137			15
Cash Flows From Financing Activities:
Changes in parent company equity(2)		358			173			(531	)		—			—
Net increase in commercial paper		—			150			—			—			150
Proceeds from issuance of long-term debt		—			349			1			—			350
Repayment of long-term debt		—			(500	)		—			—			(500	)
Proceeds from exercise of share options		—			—			61			—			61
Repurchase of common shares		(2,523	)		—			—			—			(2,523	)
Payment of common share dividends to shareholders		(248	)		—			3			—			(245	)
Loan activity with parent		2,532			—			(2,395	)		(137	)		—
Transfers to discontinued operations		—			—			(2	)		—			(2	)
Other		—			(4	)		(1	)		—			(5	)
Net cash provided by (used in) continuing financing activities		119			168			(2,864	)		(137	)		(2,714	)
Net cash provided by discontinued financing activities		—			—			2			—			2
Net cash provided by (used in) financing activities		119			168			(2,862	)		(137	)		(2,712	)
Effect of currency translation on cash		—			—			(2	)		—			(2	)
Net decrease in cash and cash equivalents		—			—			(2,179	)		—			(2,179	)
Cash and cash equivalents at beginning of period		—			—			3,329			—			3,329
Cash and cash equivalents at end of period	$	—		$	—		$	1,150		$	—		$	1,150

(1)	Includes the internal allocation of proceeds of $132 million between TEGSA and Other Subsidiaries associated with the divestiture of our BNS business.
(2)	Changes in parent company equity includes cash flows related to certain intercompany equity and funding transactions, and other intercompany activity.

Condensed Consolidating Statement of Cash Flows (UNAUDITED)
For the Six Months Ended March 27, 2015

	TE Connectivity Ltd.			TEGSA			Other Subsidiaries			Consolidating Adjustments			Total
	(in millions)
Cash Flows From Operating Activities:
Net cash provided by (used in) continuing operating activities	$	(72	)	$	105		$	522		$	—		$	555
Net cash provided by discontinued operating activities		—			—			138			—			138
Net cash provided by (used in) operating activities		(72	)		105			660			—			693
Cash Flows From Investing Activities:
Capital expenditures		—			—			(291	)		—			(291	)
Proceeds from sale of property, plant, and equipment		—			—			6			—			6
Acquisition of businesses, net of cash acquired		—			—			(1,729	)		—			(1,729	)
Change in intercompany loans		—			(1,816	)		—			1,816			—
Other		—			—			(2	)		—			(2	)
Net cash used in continuing investing activities		—			(1,816	)		(2,016	)		1,816			(2,016	)
Net cash used in discontinued investing activities		—			—			(14	)		—			(14	)
Net cash used in investing activities		—			(1,816	)		(2,030	)		1,816			(2,030	)
Cash Flows From Financing Activities:
Changes in parent company equity(1)		357			1,439			(1,796	)		—			—
Net decrease in commercial paper		—			(92	)		—			—			(92	)
Proceeds from issuance of long-term debt		—			617			—			—			617
Repayment of long-term debt		—			(250	)		(223	)		—			(473	)
Proceeds from exercise of share options		—			—			88			—			88
Repurchase of common shares		(285	)		—			—			—			(285	)
Payment of common share dividends to shareholders		(240	)		—			4			—			(236	)
Loan activity with parent		240			—			1,576			(1,816	)		—
Transfers from discontinued operations		—			—			124			—			124
Other		—			(4	)		2			—			(2	)
Net cash provided by (used in) continuing financing activities		72			1,710			(225	)		(1,816	)		(259	)
Net cash used in discontinued financing activities		—			—			(124	)		—			(124	)
Net cash provided by (used in) financing activities		72			1,710			(349	)		(1,816	)		(383	)
Effect of currency translation on cash		—			—			(40	)		—			(40	)
Net decrease in cash and cash equivalents		—			(1	)		(1,759	)		—			(1,760	)
Cash and cash equivalents at beginning of period		—			1			2,456			—			2,457
Cash and cash equivalents at end of period	$	—		$	—		$	697		$	—		$	697

(1) Changes in parent company equity includes cash flows related to certain intercompany equity and funding transactions, and other intercompany activity.