TEL 10-K & 10-Q changes, risk factors and insider trading

Our business and operating results have been and will continue to be affected by economic conditions regionally or globally, including new or increased tariffs and other barriers to trade, including escalation of trade and tariff tensions between the United States (“U.S.”), China, the EU, and other countries, changes to fiscal and monetary policy, inflation, slower growth or recession, higher interest rates, labor disruptions, the cost and availability of consumer and business credit, end demand from consumer and industrial markets, significant bank failures, government shutdowns, and concerns as to sovereign debt levels including credit rating downgrades and defaults on sovereign debt. Any of these economic factors could cause our customers to experience deterioration of their businesses, cash flow, financial condition, and ability to obtain financing. As a result, existing or potential customers may delay or cancel plans to purchase our products and may not be able to fulfill their obligations to us in a timely fashion or in full. Further, our vendors may experience similar problems, which may impact their ability to fulfill our orders or meet agreed service and quality levels. If regional or global economic conditions deteriorate, our results of operations, financial position, and cash flows could be materially adversely affected. Also, deterioration in economic conditions, expectations for future revenue, projected future cash flows, or other factors have triggered and could trigger additional recognition of impairment charges for our goodwill or other long-lived assets. Impairment charges, if any, may be material to our results of operations and financial position.

We are exposed to the effects of changes in foreign currency exchange rates on our costs and revenue. Approximately 60% of our net sales for fiscal 20242025 were invoiced in currencies other than the U.S. dollar, and we expect non-U.S. dollar revenue to continue to represent a significant portion of our future net sales. We have elected not to hedge this foreign currency exposure. Therefore, when the U.S. dollar strengthens in relation to the currencies of the countries where we sell our products, such as the euro or Asian currencies, our U.S. dollar reported revenue and income will decrease. InAlthough the value of the U.S. dollar fluctuated in fiscal 2025, in recent years, the strength of the U.S. dollar has generally increased as compared to other currencies, which has had, and may continue to have, an adverse effect on our operating results as reported in U.S. dollars.

We have suffered and could continue to suffer business interruptions, including impacts resulting from pandemics, severe weather conditions,events, and natural catastrophic events, including those caused or intensified by climate change and global warming,change, and other macroeconomic factors.

Our operations and those of our suppliers and customers, and the supply chains that support their operations, have been and may be in the future vulnerable to interruption by natural disasters such as hurricanes, earthquakes, tsunamis, typhoons, tornados, or floods, which may be exacerbated by the effects of climate change; other disasters such as fires, explosions, acts of terrorism, or war, including the continuing military conflicts in certain parts of the world; disease or other adverse health developments, including impacts resulting from the COVID-19 pandemicdevelopments; or failures of management information or other systems due to internal or external causes. These events could cause some of our operations to suffer from supply chain disruptions and potential delays in fulfilling customer orders or order cancellations altogether, lost business and sales, changing costs or availability of insurance, and/or property damage or harm to our people, each and all of which could have an adverse effect on our business operations, financial condition, and results of operations. In addition, such interruptions could result in a widespread crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could affect demand for our end customers’ products. If a business interruption occurs and we are unsuccessful in our continuing efforts to minimize the impact of these events, our business, results of operations, financial position, and cash flows could be materially adversely affected.

Concerns about deterioration in the global economy, together with concerns about tariffs, credit, inflation, or deflation, have caused and could continue to cause significant volatility in the price of all securities, including fixed income and equity securities, which has reduced and could further reduce the value of our pension plans’ investment portfolios. In addition, the expected returns on plan assets may not be achieved. A decrease in the value of our pension plans’ investment portfolios or a reduction in returns on plan assets could require us to significantly increase funding of such obligations, which would have an adverse effect on our results of operations, financial position, and cash flows.

Although we are an Irish company, application of certain U.S. tax law ownership attribution rules may cause non-U.S. subsidiaries to be treated as Controlled Foreign Corporations (“CFCs”) for U.S. federal income tax purposes. AUnder the current rules, a U.S. person that is treated for U.S. federal income tax purposes as owning, directly, indirectly, or constructively, 10% or more of our shares may be required to annually report and include in its U.S. taxable income its pro rata share of certain types of income earned by our subsidiaries that are treated as CFCs, whether or not we make any distributions to such U.S. shareholder. Under recently enacted legislation, the current attribution rules cease to apply for tax years of foreign corporations beginning after December 31, 2025, and, as a result, based on our current ownership structure, our non-U.S. subsidiaries will not be treated as CFCs as of our tax year beginning September 26, 2026. A U.S. person that owns 10% or more of our shares should consult a tax adviser regarding the potential implications. The risk of U.S. federal income tax reporting and compliance obligations with respect to our subsidiaries that are treated as CFCs may deter our current shareholders from increasing their investment in us, and others from investing in us, which could impact the demand for, and value of, our shares.

Companies across industries are facing increasing scrutiny from a variety of stakeholders related to their ESG and sustainability practices. Expectations regarding voluntary and potential mandatory ESG initiatives and disclosures may result in increased costs, changes in demand for certain products, enhanced compliance or disclosure obligations, or other adverse impacts to our business, financial condition, or results of operations. Further, our ability to achieve our current and future ESG goals is uncertain and remains subject to numerous risks, including evolvingincreasing regulatory requirements and stakeholder expectations, our ability to recruit, develop, and retain a diverse workforce, the availability of suppliers and other business partners that can meet our ESG expectations, the growth of our business, cost considerations, and the development and availability of cost-effective technologies or resources that support our goals. An inability to receive or maintain favorable ESG ratings could negatively impact our reputation or impede our ability to compete as effectively to attract and retain employees or customers, which may adversely impact our operations. Unfavorable ESG ratings could also lead to negative investor sentiment towards us or our industry, which could negatively impact the price of our shares as well as our access to and cost of capital.

Approximately 44%41% of our net sales for fiscal 20242025 were to customers in the automotive industry.end market. The automotive industry is dominated by large manufacturers that can exert significant price pressure on their suppliers. Additionally, the automotive industry has historically experienced significant downturns during periods of deteriorating global or regional economic or credit conditions. As a supplier of automotive electronics products, our sales of these products and our profitability have been and could continue to be negatively affected by significant declines in global or regional economic or credit conditions and changes in the operations, products, business models, part-sourcing requirements, financial condition, and market share of automotive manufacturers, as well as potential consolidations among automotive manufacturers. Further, work stoppages or slowdowns experienced by our customers in the automotive industryindustry, or changes in consumer preferences, could result in slowdowns or closures of assembly plants where our products are included in assembled vehicles.

The pace of technological change is increasing at an exponential rate. The continued creation, development, and advancement of new technologies such as artificial intelligence (“AI”),AI, blockchain, quantum computing, data analytics, 3-D printing, robotics, sensor technology, data storage, neural networks, and augmented reality, as well as other technologies in the future that are not foreseenforeseeable today, continue to transform our processes, products, and services.

In order to remain competitive, we will need to stay abreast of such technologies, require our employees to continue to learn and adapt to new technologies, be able to integrate them into our current and future business models, products, services, and processes, and also guard against existing and new competitors disrupting their business using such technologies. Our strategy, value creation model, operating model, and innovation ecosystem have important technological elements and certain of our products and offerings are based on technological advances, including AI, machine learning, advanced analytics, and the Internet of Things. IncreasingMeeting evolving industry requirements, including the increasing use of AI and machine learning technologies (including the need to run complex AI-based applications on devices), and introducing new products to the market in a timely manner and at prices that are acceptable to our customers are important factors in determining our competitiveness and success. Further, increasing use of AI may expose us to social and ethical issues, which may result in reputational harm and liability. In addition, we will need to compete for talent in a competitive market that is familiar with such technologies including upskilling our workforce. There can be no assurance we will continue to compete effectively with our industry peers due to technological changes, which could result in a material adverse effect on our business and results of operations.

Many of the industries to which we sell our products, as well as many of the industries from which we buy materials, have become more concentrated in recent years, including the automotive, digital data and devices,networks, and aerospace and defense industries. Consolidation of customers may lead to decreased product purchases from us. In addition, as our customers buy in larger volumes, their volume buying power has increased, enabling them to negotiate more favorable pricing and find alternative sources from which to purchase. Our materials suppliers similarly have increased their ability to negotiate favorable pricing. These trends have and may continue to adversely affect the margins on our products, particularly for commodity components.

We are a large buyer of resins, chemicals, additives, and metals, including copper, gold, silver, palladium, aluminum, brass, steel, and zinc. Many of these raw materials are produced in a limited number of countries around the world or are only available from a limited number of suppliers. The prices of many of these raw materials continue to increasefluctuate, and in many cases increase, and fluctuations may persist in the future. In addition, feedstock for resins and resins themselves, as well as certain other commodities, are increasingly subject to varied and unrelated force majeure events worldwide further impacting price and availability. In recent years, raw material prices and availability have been affected by worldwide economic conditions, including supply chain disruptions, and inflationary cost pressures.pressures, and tariff and trade policies. If we have difficulty obtaining raw materials, the quality of available raw materials deteriorates, or there are significant price increases for these raw materials, it could have a substantial impact on the price we pay for raw materials. To the extent we cannot compensate for cost increases through productivity improvements or price increases to our customers, our margins may decline, materially affecting our results of operations, financial position, and cash flows. In addition, we use financial instruments to hedge the volatility of certain commodities prices. The success of our hedging program depends on accurate forecasts of planned consumption of the hedged commodity materials. We could experience unanticipated hedge gains or losses if these forecasts are inaccurate.

The U.S. Foreign Corrupt Practices Act, the United Kingdom’s Bribery Act, and similar worldwide anti-bribery laws generally prohibit companies and their intermediaries from making improper payments to government officials for the purpose of obtaining or retaining business. Our policies mandate compliance with these anti-bribery laws. We operate in many parts of the world that have experienced governmental corruption to some degree, and in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices. Despite our training and compliance program, we cannot provide assurance that our internal control policies and procedures will always will protect us from reckless or criminal acts committed by our employees or agents. Violations of these laws, or allegations of such violations, could disrupt our business and result in a material adverse effect on our results of operations, financial position, and cash flows.

Irish law generally provides that a board of directors may allot and issue shares (or rights to subscribe for or convert into shares) without being required first to offer those shares to existing shareholders on a pro-rata basis, if authorized to do so by a company’s constitution or by an ordinary resolution of shareholders. Such authorization may be granted in respect of up to the entirety of a company’s authorized but unissued share capital and for a maximum period of five years from September 30, 2024,years, at which point it must be renewed by another ordinaryshareholder resolution. Our articles of association authorize our directors to allot shares up to the maximum of our authorized but unissued share capital for a period of five years.years Thisfrom authorizationSeptember 30, 2024. These authorizations will need to be renewed by ordinary resolution upon its expiration and at periodic intervals thereafter. Under Irish law, anthese allotment authorityauthorities may be given for up to five years at each renewal, but governance considerations may result in renewals for shorter periods or in respect of less than the maximum permitted number of shares being sought or approved.

For the majority of transfers of our ordinary shares, there will not be any Irish stamp duty. A transfer of our ordinary shares from a seller who holds shares beneficially (i.e., through Depository Trust Company (“DTC”)) to a buyer who holds the acquired shares beneficially (i.e., through DTC), which is effected by the debit/credit of book-entry interests representing the shares through DTC, will not be subject to Irish stamp duty. However, a transfer of our ordinary shares by a seller who holds shares directly (i.e., not through DTC) to any buyer, or by a seller who holds the shares beneficially to a buyer who holds the acquired shares directly, may be subject to Irish stamp duty (currently at the rate of 1% of the price paid or the market value of the shares acquired, if higher) generally payable by the buyer.. A shareholder who directly holds shares may transfer those shares into his or her own broker account to be held through DTC without giving rise to Irish stamp duty provided that the shareholder has confirmed to our transfer agent that there is no change in the beneficial ownership of the shares as a result of the transfer and the transfer into DTC is not effected in contemplation of a sale of such shares by the beneficial owner to a third party. Because of the potential Irish stamp duty on transfers of our ordinary shares, we strongly recommend that any person who wishes to acquire our ordinary shares acquire such shares through DTC.

We do not intend to pay any stamp duty levied on transfers of our shares on behalf of a buyer. However, our memorandum and articles of association allow us in our absolute discretion,discretion to pay (or to cause one of our affiliates to pay) any such stamp duty payable. In the event of any such payment, we will be entitled to (i) seek reimbursement from the buyer, (ii) set-off the amount of the stamp duty against future dividends on such shares, and (iii) claim a first and paramount lien on our ordinary shares acquired by such buyer and any dividends paid on such shares. Our directors have discretion to decline to register an instrument of transfer in the name of a buyer unless the instrument of transfer has been properly stamped (in circumstances where stamping is required).

Discussion of our financial condition and results of operations for fiscal 2025 compared to fiscal 2024 is presented below. The “Segment Results” section also discusses fiscal 2024 compared to fiscal 2023 isbecause presentedof the change in our segment structure discussed below. Discussion of our financial condition and consolidated results of operations for fiscal 20232024 compared to fiscal 20222023 can be found in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended September 29,27, 2023.2024.

We are a global industrial technology leader creating a safer, sustainable, productive, and connected future. OurAs a trusted innovation partner, our broad range of connectivity and sensor solutions enable the distribution of power, signal, and data to advance next-generation transportation, renewableenergy energy,networks, automated factories, data centers,centers medicalenabling technology,artificial intelligence, and more.

Our business and operating results have been and will continue to be affected by worldwide economic conditions. The global economy has been impacted in recent years by supply chain disruptions anddisruptions, inflationary cost pressures.pressures, and, most recently, tariff and trade policies. We are monitoring the current environment and its potential effects on our customers and the end markets we serve.

In the first quarter of fiscal 2025,2026, we expect our net sales to be approximately $3.9$4.5 billion as compared to $3.8 billion in the first quarter of fiscal 2024. As discussed below, we will have a new segment structure effective for fiscal 2025. UnderThis theincrease new structure, netreflects sales increasesgrowth in both the Industrial Solutions segment are expected to be partially offset by sales declines in theand Transportation Solutions segment.segments. The Industrial Solutions segment will benefit from the acquisition of Richards Manufacturing. We expect diluted earnings per share from continuing operations to be approximately $1.64$2.33 per share in the first quarter of fiscal 2025.2026. This outlook reflects the positive impact of foreign currency exchange rates on net sales and earnings per share of approximately $32$113 million and $0.04$0.02 per share, respectively, in the first quarter of fiscal 20252026 as compared to the same period of fiscal 2024.2025 and includes the impact of currently enacted tariffs. Also, this outlook is based on foreign currency exchange rates and commodity prices that are consistent with current levels.

During fiscal 2024, we sold one business for net cash proceeds of $59 million. In connection with the divestiture, we recorded a pre-tax gain on sale of $10 million. Additionally,Prior duringto fiscal 2023, we recorded a pre-tax impairment charge of $68 million whendivestiture, the business was reclassified to held for sale. The business sold was reported in our Transportation Solutions segment.

Net sales decreasedincreased $189$1,417 million, or 1.2%,8.9%, in fiscal 20242025 as compared to fiscal 2023.2024. The decreaseincrease in net sales resulted primarily from theorganic negativenet impactsales growth of foreign currency translation of 0.7% due to the weakening of certain foreign currencies6.4% and the net negativepositive impact of 0.3%2.2% from divestituresacquisitions and acquisitions.a divestiture. Richards Manufacturing, which was acquired on April 1, 2025, contributed net sales of $179 million in fiscal 2025. In fiscal 2024,2025, net pricing actions positively affected organic net sales by $105$51 million. See further discussion of net sales below under “Segment Results.”

Net Sales by Geographic Region. Our business operates in three geographic regions—EMEA, Asia–Pacific, EMEA, and the Americas—and our results of operations are influenced by changes in foreign currency exchange rates. Increases or decreases in the value of the U.S. dollar, compared to other currencies, will directly affect our reported results as we translate those currencies into U.S. dollars at the end of each fiscal period. We sell our products into approximately 130 countries, and approximately 60% of our net sales were invoiced in currencies other than the U.S. dollar in fiscal 2024.2025. The percentage of net sales in fiscal 20242025 by major currencies invoiced was as follows:

In fiscal 2024,2025, gross margin increased $401$623 million as compared to fiscal 20232024 primarily as a result of higher volume and improved manufacturing productivity and the positive impact of pricing actions.productivity.

Selling, General, and Administrative Expenses. In fiscal 2024,2025, selling, general, and administrative expenses increased $62$134 million as compared to fiscal 20232024 due primarily to theincreased impactselling ofexpenses inflation,to support higher sales levels, higher incentive compensation costs, and incremental expenses attributable to recently acquired businesses, partially offset by savings attributable to prior restructuring actions.actions and the release of reserves associated with trade compliance matters.

During fiscal 20242025 and 2023,2024, we initiated restructuring programs toassociated optimize our manufacturingwith footprint consolidation and improve the cost structure improvements in both of theour organization.segments. We incurred net restructuring charges of $144$113 million and $260$144 million in fiscal 20242025 and 2023,2024, respectively. Annualized cost savings related to actions initiated in fiscal 20242025 are expected to be approximately $85$80 million and weare expectexpected the majority of these savings willto be fully realized by the end of fiscal 2027.2026. Cost savings will be reflected primarily in cost of sales and selling, general, and administrative expenses. For fiscal 2025,2026, we expect total restructuring charges to be approximately $100 million and total spending, which will be funded with cash from operations, to be approximately $200$100 million.

During fiscal 2025 and 2024, we incurred costs of $11 million and $20 millionmillion, respectively, related to our change in place of incorporation from Switzerland to Ireland. See NotesNote 1 and 21 to the Consolidated Financial Statements for additional information regarding the change.

Net Sales. The following table presents the Transportation Solutions segment’s net sales and the percentage of total net sales by industry end market(1):

Net sales in the Transportation Solutions segment decreased $190$93 million, or 2.0%,1.0%, in fiscal 20242025 from fiscal 20232024 primarily as a result of theorganic negativenet impactsales declines of a divestiture of 1.7% and the negative impact of foreign currency translation of 0.6%.1.0%. Our organic net sales by industry end market were as follows:

Operating income in the Transportation Solutions segment decreased $62 million in fiscal 2025 as compared to fiscal 2024. Excluding the items below, operating income decreased in fiscal 2025 primarily as a result of net price erosion. In fiscal 2024, operating income in the Transportation Solutions segment increased $396$393 million in fiscal 2024 as compared tofrom fiscal 2023. Excluding the items below, operating income increased in fiscal 2024 due primarily as a result ofto improved manufacturing productivity.

Net Sales. The following table presents the Industrial Solutions segment’s net sales and the percentage of total net sales by industry end market(1):

In the Industrial Solutions segment, net sales decreasedincreased $70$1,510 million, or 1.5%,23.7%, in fiscal 20242025 from fiscal 20232024 due primarily to organic net sales declinesgrowth of 3.3%,17.6% partially offset byand the net positive impact of 2.3%5.7% from acquisitionsacquisitions. andRichards aManufacturing divestiture. In fiscal 2024, pricing actions positively affected organiccontributed net sales byof $179 million.million in fiscal 2025. Our organic net sales by industry end market were as follows:

Operating income in the Industrial Solutions segment decreasedincreased $14$477 million in fiscal 20242025 from fiscal 2024. Excluding the items below, operating income increased in fiscal 2025 primarily as a result of higher volume and the positive impact of net pricing actions. In fiscal 2024, operating income in the Industrial Solutions segment increased $99 million from fiscal 2023. Excluding the items below, operating income decreasedincreased in fiscal 2024 due primarily as a result of lower volume and higher operating costs, partially offset byto the positive impact of net pricing actions.

Our ability to fund our future capital needs will be affected by our ongoing ability to generate cash from operations and may be affected by our access to capital markets, money markets, or other sources of funding, as well as the capacity and terms of our financing arrangements. We believe that cash generated from operations and, to the extent necessary, these other sources of potential funding will be sufficient to meet our anticipated capital needs for the foreseeable future, including the paymentrepayment of €550$500 million of 0.00% euro-denominated4.50% senior notes and $350 million of 3.70% senior notes, both due in February 2025.2026. WeAlso, we may use excessfunds to acquire strategic businesses or product lines, reduce our outstanding debt, or return cash to purchaseshareholders athrough portiondividends on our ordinary shares or purchases of our ordinary shares pursuant to our authorized share repurchase program, to acquire strategic businesses or product lines, to pay dividends on our ordinary shares, or to reduce our outstanding debt.program. The cost or availability of future funding may be impacted by financial market conditions. We will continue to monitor financial markets and respond as necessary to changing conditions. We believe that we have sufficient financial resources and liquidity which will enable us to meet our ongoing working capital and other cash flow needs.

As of fiscal year end 2024,2025, our cash and cash equivalents were held in subsidiaries which are located in various countries throughout the world. Under current applicable laws, substantially all of these amounts can be repatriated to Tyco Electronics Group S.A. (“TEGSA”), our Luxembourg subsidiary, which is the obligor of substantially all of our debt, and to TE Connectivity plc, our nowIrish parent company; however, the repatriation of these amounts could subject us to additional tax expense. We provide for tax liabilities on the Consolidated Financial Statements with respect to amounts that we expect to repatriate; however, no tax liabilities are recorded for amounts that we consider to be retained indefinitely and reinvested in our global manufacturing operations. As of fiscal year end 2024,2025, we had approximately $4.7$3.5 billion of cash, cash equivalents, and intercompany deposits, principally in our subsidiaries, that we have the ability to distribute to TEGSA and now to TE Connectivity plc but we consider to be permanently reinvested. We estimate that an immaterial amount of tax expense would be recognized on the Consolidated Financial Statements if our intention to permanently reinvest these amounts were to change. Our current plans do not demonstrate a need to repatriate cash, cash equivalents, and intercompany deposits that are designated as permanently reinvested in order to fund our operations, including investing and financing activities.

Net cash provided by operating activities increased $345$662 million to $4,139 million in fiscal 2025 as compared to $3,477 million in fiscal 2024 as compared to $3,132 million in fiscal 2023.2024. The increase resulted primarily from higher pre-tax income,income partiallyand offseta by the impact of changesreduction in workingincome capitaltax levels.payments. The amount of income taxes paid, net of refunds, during fiscal 20242025 and 20232024 was $475$276 million and $425$475 million, respectively.

Pension contributions were $69 million andin $71 million inboth fiscal 20242025 and 2023, respectively.2024. We expect pension contributions to be approximately $70 million in fiscal 2025,2026, before consideration of any voluntary contributions. For additional information regarding pensions, see Note 14 to the Consolidated Financial Statements.

During fiscal 2024,2025, we acquired oneRichards businessManufacturing for approximately $2.3 billion, net of cash acquired. Also during fiscal 2025, we acquired two additional businesses for a combined cash purchase price of $339$321 million, net of cash acquired. We acquired one business for a cash purchase price of $110$339 million, net of cash acquired, during fiscal 2023.2024. See Note 4 to the Consolidated Financial Statements for additional information regarding acquisitions.

During fiscal 2024, we received net cash proceeds of $59 million related to the sale of one business. We received net cash proceeds of $48 million related to the sale of three businesses during fiscal 2023. See Note 3 to the Consolidated Financial Statements for additional information regarding divestitures.

During fiscal 2024,2025, TEGSA, our wholly-owned subsidiary, issued $350€500 million aggregate principal amount of 4.625%2.50% senior notes due in May 2028, $450 million aggregate principal amount of 4.50% senior notes due in February 2030.2031, €750 million aggregate principal amount of 3.25% senior notes due in January 2033, and $450 million aggregate principal amount of 5.00% senior notes due in May 2035. The notes issued during fiscal 2025 are TEGSA’s unsecured senior obligations and rank equally in right of payment with all existing and any future senior indebtedness of TEGSA and senior to any subordinated indebtedness that TEGSA may incur.

TEGSA entered intohas a new five-year unsecured senior revolving credit facility (“Credit Facility”) inwith a maturity date of April 20242029 withand aggregate commitments of $1.5 billion, which refinanced and replaced in full TEGSA’s existing $1.5 billion five-year unsecured senior revolving credit facility (the “Replaced Credit Facility”).billion. The Credit Facility maturescontains provisions that allow for incremental commitments of up to $500 million and borrowings in Aprildesignated 2029.currencies. TEGSA had no borrowings under the Credit Facility at fiscal year end 20242025 or the Replaced Credit Facility at fiscal year end 2023.2024.

The Credit Facility contains a financial ratio covenant providing that if, as of the last day of each fiscal quarter, our ratio of Consolidated Total Debt to Consolidated EBITDA (as defined in the Credit Facility) for the then most recently concluded period of four consecutive fiscal quarters exceeds 3.75 (or temporarily 4.25 following a qualified acquisition) to 1.0, an Event of Default (as defined in the Credit Facility) is triggered. The Credit Facility and our other debt agreements contain other customary covenants. None of our covenants are presently considered restrictive to our operations. As of fiscal year end 2024,2025, we were in compliance with all of our debt covenants and believe that we will continue to be in compliance with our existing covenants for the foreseeable future.

Periodically, TEGSA issues commercial paper to U.S. institutional accredited investors and qualified institutional buyers in accordance with available exemptions from the registration requirements of the Securities Act of 1933 as part of our ongoing effort to maintain financial flexibility and to potentially decrease the cost of borrowings. Borrowings under the commercial paper program are backed by the Credit Facility. At fiscal year end 2024,2025, TEGSA had no commercial paper outstanding. TEGSA had $255 million of commercial paper outstanding at a weighted-average interest rate of 4.95%. TEGSA had $330 million of commercial paper outstanding at a weighted-average interest rate of 5.50%4.95% at fiscal year end 2023.2024.

During fiscal 2024, TEGSA’s paymentPayment obligations under itsTEGSA’s senior notes, commercial paper, and Credit Facility wereare fully and unconditionally guaranteed on an unsecured basis by its thenTEGSA’s parent, TE Connectivity Ltd., and, as of September 24, 2024, also by TE Connectivity Ltd.’s wholly-owned subsidiary, TE Connectivity Switzerland Ltd. As a result of our change in place of incorporation, such guarantees are provided by TE Connectivity plc and its wholly-owned subsidiary, TE Connectivity Switzerland Ltd., inand fiscalits 2025.parent, TE Connectivity plc.

Payments of ordinary/common share dividends to shareholders were $760$803 million and $725$760 million in fiscal 20242025 and 2023,2024, respectively. See Note 17 to the Consolidated Financial Statements for additional information regarding dividends.

As a result ofFollowing our change in place of incorporation, beginning in our third quarter of fiscal 2025, future dividends on our ordinary shares, if any, willmay be declared on a quarterly basis by our board of directorsdirectors, as provided by Irish law. Shareholder approval is no longer required.required for interim dividends. In exercising theirits discretion to approve such dividends, our board of directors will consider our results of operations, financial condition, cash requirements, future business prospects, statutory requirements of applicable law, contractual restrictions, restrictions imposed by Irish law, and other factors that they may deem relevant.

During fiscal 2024,2025, our board of directors authorized an increase of $1.5$2.5 billion in our share repurchase program. We repurchased approximately 8 million of our ordinary shares for $1,356 million and approximately 14 million of our common shares for $1,991 million and approximately 8 million of our common shares for $946 million under the share repurchase program during fiscal 20242025 and 2023,2024, respectively. At fiscal year end 2024,2025, we had $245$1.4 millionbillion of availability remaining under our share repurchase authorization. On October 30, 2024, our board of directors authorized an additional increase of $2.5 billion in our share repurchase program.

As discussed above, our senior notes, commercial paper, and Credit Facility are issued by TEGSA and wereare fully and unconditionally guaranteed on an unsecured basis by TEGSA’s thenparent, TE Connectivity Switzerland Ltd., and its parent, TE Connectivity Ltd. during fiscal 2024 and, as of September 24, 2024, also by TE Connectivity Ltd.’s wholly-owned subsidiary, TE Connectivity Switzerland Ltd.plc. In addition to being the issuer of our debt securities, TEGSA owns, directly or indirectly, all of our operating subsidiaries. The following tables present summarized financial information, excluding investments in and equity in earnings of our non-guarantor subsidiaries, for TE Connectivity Ltd.,plc, TE Connectivity Switzerland Ltd., and TEGSA on a combined basis.

In the thirdfourth quarter of fiscal 2026, we expect our net sales to be approximately $5.0$5.25 billion, as compared to $4.5$4.75 billion in the thirdfourth quarter of fiscal 2025. This increase is due to sales growth in both the Industrial Solutions and Transportation Solutions segments. Additionally, we expect our sales in both the Industrial Solutions and Transportation Solutions segments to increase in the third quarter of fiscal 2026 as compared to the second quarter of fiscal 2026. In the thirdfourth quarter of fiscal 2026, we expect diluted earnings per share from continuing operations to be approximately $2.44$2.84 per share. This outlook reflects the positivenegative impact of foreign currency exchange rates on net sales and earnings per share of approximately $51$10 million and $0.02 per share, respectively, in the thirdfourth quarter of fiscal 2026 as compared to the same period of fiscal 2025. Also, this outlook is based on foreign currency exchange rates and commodity prices that are consistent with current levels. It does not include results related to our anticipated acquisition of Astrodyne TDI.

During the first sixnine months of fiscal 2026, we acquired one business for a cash purchase price of $200 million, net of cash acquired. The acquisition includes certain earn-out provisions based on business performance for which we have estimated the acquisition-date fair value to be approximately $150 million. The acquired business has been reported as part of our Industrial Solutions segment from the date of acquisition.

Net sales increased $601$626 million, or 14.5%,13.8%, in the secondthird quarter of fiscal 2026 as compared to the secondthird quarter of fiscal 2025 due to organic net sales growth of 7.2%,12.2% and the positive impact of foreign currency translation of 4.4%1.6% due to the strengthening of certain foreign currencies, and the positive impact of 2.9% from an acquisition. Richards Manufacturing, which was acquired in the third quarter of fiscal 2025, contributed net sales of $120 million in the second quarter of fiscal 2026.currencies. Net pricing actions positively affected organic net sales by $45$34 million in the secondthird quarter of fiscal 2026.

In the first sixnine months of fiscal 2026, net sales increased $1,434$2,060 million, or 18.0%,16.5%, as compared to the first sixnine months of fiscal 2025 due to organic net sales growth of 11.0%,11.4%, the positive impact of foreign currency translation of 3.6%2.9% due to the strengthening of certain foreign currencies, and the positive impact of 3.4%2.2% from acquisitions. Richards Manufacturing Co. (“Richards Manufacturing”), which was acquired on April 1, 2025, contributed incremental net sales of $227 million in the first six months of fiscal 2026.2026 over the same period in fiscal 2025. Net pricing actions positively affected organic net sales by $51$85 million in the first sixnine months of fiscal 2026.

Approximately 60% of our net sales were invoiced in currencies other than the U.S. dollar in the first sixnine months of fiscal 2026.

Gross margin increased $286$235 million and $665$900 million in the secondthird quarter and first sixnine months of fiscal 2026, respectively, as compared to the same periods of fiscal 2025 due primarily to higher volume and improved manufacturing productivity.

Selling, General, and Administrative Expenses. Selling, general, and administrative expenses increased $82$41 million and $193$234 million in the secondthird quarter and first sixnine months of fiscal 2026, respectively, as compared to the same periods of fiscal 20252025. The increase in the third quarter of fiscal 2026 resulted primarily from increased selling expenses to support higher sales levels. The increase in the first nine months of fiscal 2026 was due primarily to increased selling expenses to support higher sales levels, higher incentive compensation costs, the negative impact of foreign currency translation, higher incentive compensation costs, and the release of reserves associated with trade compliance matters in the second quarter of fiscal 2025.

During fiscal 2026, we initiated a restructuring program to optimize our manufacturing footprint and improve the cost structure of our organization. We incurred net restructuring charges of $13$96 million during the first sixnine months of fiscal 2026, of which $6$86 million related to our fiscal 2026 program. Annualized cost savings related to the fiscal 2026 actions commenced during the first sixnine months of fiscal 2026 are expected to be approximately $3$58 million and are expected to be fully realized by the end of fiscal 2027.2029. Cost savings will be reflected primarily in cost of sales and selling, general, and administrative expenses. For fiscal 2026, we expect total restructuring charges to be approximately $100 million and total cash spend, which will be funded with cash from operations, to be approximately $110 million.

Interest Expense. Interest expense increased $42$45 million in the first sixnine months of fiscal 2026 as compared to the first sixnine months of fiscal 2025 due primarily to higher average debt levels and cost of debt.

Net sales in the Transportation Solutions segment increased $108$162 million, or 4.7%,6.7%, in the secondthird quarter of fiscal 2026 from the secondthird quarter of fiscal 2025 due primarilyto toorganic net sales growth of 4.5% and the positive impact of foreign currency translation of 5.2%.2.2%. Net price erosion negatively affected organic net sales by $12 million in the secondthird quarter of fiscal 2026. Our organic net sales by industry end market were as follows:

In the first sixnine months of fiscal 2026, net sales in the Transportation Solutions segment increased $332$494 million, or 7.3%,7.1%, from the first sixnine months of fiscal 2025 due to organic net sales growth of 3.7% and the positive impact of foreign currency translation of 4.1% and organic net sales growth of 3.2%.3.4%. Net price erosion negatively affected organic net sales by $34$46 million in the first sixnine months of fiscal 2026. Our organic net sales by industry end market were as follows:

Operating income in the Transportation Solutions segment increaseddecreased $58 million and $113$18 million in the secondthird quarter of fiscal 2026 and increased $95 million in the first sixnine months of fiscal 2026, respectively,2026 as compared to the same periods of fiscal 2025. Excluding the items below, operating income increased in the secondthird quarter andof fiscal 2026 due primarily to improved manufacturing productivity. Excluding the items below, operating income increased in the first sixnine months of fiscal 2026 primarily as a result of improved manufacturing productivity.productivity, partially offset by price erosion.

In the Industrial Solutions segment, net sales increased $493$464 million, or 27.0%,21.9%, in the secondthird quarter of fiscal 2026 as compared to the secondthird quarter of fiscal 2025 due primarily to organic net sales growth of 16.9%, the positive impact of 6.6% from an acquisition, and the positive impact of foreign currency translation of 3.5%. Richards Manufacturing, which was acquired in the third quarter of fiscal 2025, contributed net sales of $120 million in the second quarter of fiscal 2026.21.0%. Net pricing actions positively affected organic net sales by $57$46 million in the secondthird quarter of fiscal 2026. Our organic net sales by industry end market were as follows:

Net sales in the Industrial Solutions segment increased $1,102$1,566 million, or 32.2%,28.3%, in the first sixnine months of fiscal 2026 as compared to the first sixnine months of fiscal 2025 due to organic net sales growth of 21.3%,21.2%, the positive impact of 7.9%4.9% from acquisitions, and the positive impact of foreign currency translation of 3.0%.2.2%. Richards ManufacturingManufacturing, which was acquired on April 1, 2025, contributed incremental net sales of $227 million in the first six months of fiscal 2026.2026 over the same period in fiscal 2025. Net pricing actions positively affected organic net sales by $85$131 million in the first sixnine months of fiscal 2026. Our organic net sales by industry end market were as follows:

Operating income in the Industrial Solutions segment increased $148$142 million and $366$508 million in the secondthird quarter and first sixnine months of fiscal 2026, respectively, as compared to the same periods of fiscal 2025. Excluding the items below, operating income increased in the secondthird quarter and first sixnine months of fiscal 2026 primarily as a result of higher volume.

Our ability to fund our future capital needs will be affected by our ongoing ability to generate cash from operations and may be affected by our access to capital markets, money markets, or other sources of funding, as well as the capacity and terms of our financing arrangements. We believe that cash generated from operations and, to the extent necessary, these other sources of potential funding will be sufficient to meet our anticipated capital needs for the foreseeable future. We may use excess cash to acquire strategic businesses or product lines, reduce our outstanding debt, or return cash to shareholders through dividends on our ordinary shares or purchases of our ordinary shares pursuant to our authorized share repurchase program. We may also use excess cash and other funding to make strategic acquisitions. We intend to fund the anticipated acquisition of Astrodyne TDI with a combination of available cash and the issuance of commercial paper and, if necessary, borrowing under our existing credit facility and/or new debt financing. The cost or availability of future funding may be impacted by financial market conditions. We will continue to monitor financial markets and respond as necessary to changing conditions. We believe that we have sufficient financial resources and liquidity which will enable us to meet our ongoing working capital and other cash flow needs.

In the first sixnine months of fiscal 2026, net cash provided by operating activities increased $281$279 million to $1,812$2,997 million from $1,531$2,718 million in the first sixnine months of fiscal 2025. The increase resulted primarily from higher pre-tax income, partially offset by the impact of changes in working capital levels and an increase in income tax payments. The amount of income taxes paid, net of refunds, during the first sixnine months of fiscal 2026 and 2025 was $223$353 million and $164$184 million, respectively.

Capital expenditures were $528$832 million and $435$665 million in the first sixnine months of fiscal 2026 and 2025, respectively. We expect fiscal 2026 capital spending levels to be approximately 6% of net sales. We believe our capital funding levels are adequate to support new programs, and we continue to invest in our manufacturing infrastructure to further enhance productivity and manufacturing capabilities.

During the first sixnine months of fiscal 2026, we acquired one business for a cash purchase price of $200 million, net of cash acquired. We acquired Richards Manufacturing for approximately $2.3 billion, net of cash acquired, during the first nine months of fiscal 2025. Also during the first nine months of fiscal 2025, we acquired two additional businesses for a combined cash purchase price of $321 million, net of cash acquired, during the first six months of fiscal 2025.acquired. See Note 3 to the Condensed Consolidated Financial Statements for additional information regarding acquisitions.

Total debt at MarchJune 27,26, 2026 and September 26, 2025 was $5,655$5,632 million and $5,694 million, respectively. See Note 7 to the Condensed Consolidated Financial Statements for additional information regarding debt.

During the secondfirst quarternine months of fiscal 2026, Tyco Electronics Group S.A. (“TEGSA”), our wholly-owned subsidiary, issued $200 million aggregate principal amount of 4.50% senior notes due in February 2031 and $550 million aggregate principal amount of 4.875% senior notes due in February 2036. The February 2031 senior notes represent a further issuance of TEGSA’s outstanding $450 million aggregate principal amount of 4.50% senior notes which were issued in fiscal 2025 and bring the total aggregate principal amount of the 4.50% senior notes due in February 2031 to $650 million. The new notes are TEGSA’s unsecured senior obligations and rank equally in right of payment with all existing and any future senior indebtedness of TEGSA and senior to any subordinated indebtedness that TEGSA may incur.

During the secondfirst quarternine months of fiscal 2026, TEGSA repaid, at maturity, $500 million of 4.50% senior notes and $350 million of 3.70% senior notes, both due in February 2026.

At MarchJune 27,26, 2026, TEGSA had $100 million of commercial paper outstanding at a weighted-average interest rate of 4.0%.3.95%. TEGSA had no commercial paper outstanding at September 26, 2025.

TEGSA entered into a new five-year unsecured senior revolving credit facility (“Credit Facility”) in February 2026 with aggregate commitments of $3.0 billion, which refinanced and replaced in full TEGSA’s existing $1.5 billion five-year unsecured senior revolving credit facility (the “Replaced Credit Facility”). The Credit Facility matures in February 2031 and contains provisions that allow for incremental commitments of up to $1.0 billion, subject to terms and conditions in the Credit Facility. TEGSA had no borrowings under the Credit Facility at MarchJune 27,26, 2026 or the Replaced Credit Facility at September 26, 2025.

Borrowings under the Credit Facility bear interest at a rate per annum equal to, at the option of TEGSA, (1) with respect to borrowings in U.S. dollars, (a) the term secured overnight financing rate (“Term SOFR”) (as defined in the Credit Facility) or (b) an alternate base rate equal to the highest of (i) Bank of America, N.A.’s base rate, (ii) the federal funds effective rate plus 1/2½ of 1%, (iii) the Term SOFR for a one-month interest period plus 1%, and (iv) 1%, (2) with respect to borrowings in euro, the Euro Interbank Offered Rate, (3) with respect to borrowings in sterling, the Sterling Overnight Index Average Reference Rate, and (4) with respect to borrowings in yen, the Tokyo Interbank Offered Rate, plus, in each case, an applicable margin based upon the senior, unsecured, long-term debt rating of TEGSA. TEGSA is required to pay an annual facility fee. Based on the applicable credit ratings of TEGSA, this fee ranges from 5.0 to 12.5 basis points of the lenders’ commitments under the Credit Facility.

The Credit Facility contains a financial ratio covenant providing that if, as of the last day of each fiscal quarter, our ratio of Consolidated Total Debt to Consolidated EBITDA (as defined in the Credit Facility) for the then most recently concluded period of four consecutive fiscal quarters exceeds 3.75 (or temporarily 4.25 following a qualified acquisition) to 1.0, an Event of Default (as defined in the Credit Facility) is triggered. The Credit Facility and our other debt agreements contain other customary covenants. None of our covenants are presently considered restrictive to our operations. As of MarchJune 27,26, 2026, we were in compliance with all of our debt covenants and believe that we will continue to be in compliance with our existing covenants for the foreseeable future.

Payments of ordinary share dividends to shareholders were $417$643 million and $382$594 million in the first sixnine months of fiscal 2026 and 2025, respectively.

In MarchJune 2026, our Board of Directors declaredapproved aan regular quarterlyinterim cash dividend of $0.78 per ordinary share, payable on JuneSeptember 12,11, 2026, to shareholders of record on MayAugust 22,21, 2026.

InDuring the secondfirst quarternine months of fiscal 2026, our Board of Directors authorized an increase of $3.0 billion in our share repurchase program. Ordinary shares repurchased under the share repurchase program were as follows:

At MarchJune 27,26, 2026, we had $3.6$3.0 billion of availability remaining under our share repurchase authorization.

At MarchJune 27,26, 2026, we had outstanding letters of credit, letters of guarantee, and surety bonds of $251$277 million to support normal business activities.

As previously reported, as part of our ongoing internal compliance activities, we haveconducted beenan investigatinginvestigation compliancerelated with relevantto country of origin for import mattersmatters. andDuring recentlythe madethird quarter of fiscal 2026, we filed a voluntaryperfected prior disclosure to the U.S. Customs and Border Protection Agency (“CBP”) regarding potential Section 301 unpaid duties, fees, and interest for certain imported products into the U.S. Weand arepaid unable$14 million to predictCBP to resolve this matter. Although CBP has not yet completed its review of the timingdisclosure, andwe finaldo not expect that the outcome of investigationthe intoreview thiswill matter.have Ana unfavorablematerial outcomeeffect may include unpaid duties, fees, interest, and penalties imposed in response toon our disclosures. Based on currently available information, we have reserved an aggregateresults of $27operations, millionfinancial relatedposition, toor thiscash exposure. The investigation into this matter has yet to be completed and the final outcome of such investigation and related duties, fees, interest, and potential penalties may differ from amounts currently reserved.flows.

Our accounting policies for revenue recognition, goodwill and other intangible assets, income taxes, and pension plans are based on, among other things, judgments and assumptions made by management. For additional information regarding these policies and the underlying accounting assumptions and estimates used in these policies, refer to “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” and the Consolidated Financial Statements and accompanying notes contained in our Annual Report on Form 10-K for the fiscal year ended September 26, 2025. There were no significant changes to this information during the first sixnine months of fiscal 2026.